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United States District Court, S.D. New York

December 22, 2004.

P.A. PROPERTIES, INC., Plaintiff,
B.S. MOSS' CRITERION CENTER CORP., Defendant/Third-Party Plaintiff, v. UNITED ARTISTS THEATRE CIRCUIT, INC., Third-Party Defendant.

The opinion of the court was delivered by: LAURA TAYLOR SWAIN, District Judge


In this breach of contract action,*fn1 Plaintiff P.A. Properties, Inc. ("PAP"), seeks to recover from Defendant B.S. Moss's Criterion Center Corporation ("Moss") amounts PAP claims are due and owing under a consulting agreement entered into in 1992 by PAP and United Artists Theatre Circuit, Inc. ("UA"), which was at the time Moss's partner in a joint venture. Moss has commenced a third-party action against UA, seeking, among other things, indemnification in connection with PAP's claim against Moss. The Court has jurisdiction of the main and third-party actions pursuant to 28 U.S.C. § 1332.

  Moss now moves, and PAP cross-moves, for summary judgment with respect to PAP's claims. Moss also seeks an order striking certain affidavits proffered by PAP in support of its cross-motion and in opposition to Moss's motion. UA moves for an order dismissing the Amended Third-Party Complaint. For the reasons that follow, the Court finds that the consulting agreement in question is an obligation of the Moss/UA joint venture with respect to periods in which a certain movie theatre, the lease for which was the subject of the consulting agreement, was operated for the joint venture, but that issues of fact preclude determinations on the current record as to whether PAP is entitled to any payments pursuant to the consulting agreement in respect of such periods. PAP's summary judgment motion is therefore denied, while Moss's summary judgment motion is granted only as to PAP's abandoned claims of quantum meruit, unjust enrichment and breach of contract as to which PAP was allegedly a third-party beneficiary, (see supra note 1), and Moss's motion to strike certain PAP affidavits is granted in part. UA's motion to dismiss the Amended Third-Party Complaint is denied.


  The Court finds pursuant to Rule 56(d) of the Federal Rules of Civil Procedure that the following facts are undisputed except to the extent otherwise specified below. Three agreements are material to the parties' dispute: a 1988 Joint Venture Agreement ("JV Agreement") between UA and certain entities referred to in the agreement as the Moss Venturers, a 1992 Consulting Agreement between UA and PAP ("Consulting Agreement") for lease recovery services, and a 1995 Assignment and Acceptance Agreement ("Assignment Agreement") between Moss and UA, regarding the Joint Venture.

  The Moss/UA Joint Venture

  On or about February 1, 1988, UA entered into a joint venture agreement with the Moss Venturers, a group of entities consisting of the Yonkers Joint Venture, the Movieland 8th Street Joint Venture and B & E Concessions Corporation. (JV Agreement, Nolan Aff. Ex. 3 at 5.) Defendant Moss is the successor in interest to the Moss Venturers under the JV Agreement (Def.'s Rule 56.1 Stat. ¶ 12.) Moss and UA agreed to operate the joint venture (which is hereinafter referred to as the "Joint Venture") under the working name "Moss/United Artists Joint Venture," (JV Agreement, § 2.2) with termination of the venture scheduled for July 31, 2034. (Id. § 2.4.) The JV Agreement was governed by New York partnership law (id. § 10.8) and provided that the members of the Joint Venture were "liable for all debts, liabilities and obligations of the Joint Venture in proportion to their Allocable Shares." (Id. § 3.5(a).) The stated purpose of the Joint Venture was to "manage, operate, lease, deal with and . . . dispose of, the [movie] Theatres" operated by the joint venturers, which included Movieland Yonkers, Movieland 8th Street and the theatre pertinent to the instant controversy, Movieworld Douglaston. (Id. § 2.3.) Under the JV Agreement, UA was designated Managing Venturer and by the express terms of that agreement had the "complete authority and responsibility to manage the Joint Venture, to operate the Theatres and to make all decisions regarding the day-to-day business of the Joint Venture." (Id. § 5.1.) These broad duties included, "without limitation, . . . maintenance of the Theatres, compliance with the terms of the leases for the Theatres, [and] payment of real property taxes." (Id.) Further, UA as Managing Venturer was required to "devote such time and personnel to the management and operation of the Theatres as may be necessary to ensure that the Theatres are operated in a first class manner." (Id. § 5.1(c).)

  The JV Agreement provides for dissolution of the Joint Venture by decision of the parties, expiration of the term of the agreement, or a "sale of all or substantially all of the Joint Venture's assets and the collection and distribution of the proceeds therefrom." (Id. § 8.1(a)-(c).) The agreement requires that, upon dissolution of the Joint Venture, the Managing Venturer ensure that an accounting is done and thereafter pay debts and distribute any remaining capital. (Id. § 8.2(a)-(b).) The agreement further provides that it is only upon compliance with the distribution and liquidation plan contained in Article VIII of the JV Agreement that the joint venture is terminated. (Id. § 8.3.) The JV Agreement also provides, however, that

[e]xcept as otherwise provided [in the JV Agreement], no dissolution or termination of the Joint Venture shall relieve, release or discharge any Joint Venturer . . . from any previous breach or default of, or any obligation theretofore incurred or accrued under, any provision of this Agreement, and any and all such liabilities, claims, demands or causes of action arising from any such breaches, defaults and obligations shall survive such dissolution and termination.
(Id. § 8.2(d).)

  1995 Assignment Agreement between Moss and UA

  On or about January 26, 1995, Moss and UA executed an Assignment Agreement which Moss claims terminated the Joint Venture. Under the Assignment Agreement, "Assignor" Moss assigned 98% of its 48% interest in the Joint Venture and the Joint Venture's assets (including theatre leases) to "Assignee" UA, in consideration for $10,099,014.00, plus certain additional consideration. (Assignment Agreement, Nolan Aff. Ex. 5 at 1.) This left Moss with a remaining 1% interest in the Joint Venture. (Id.) The Assignment Agreement provided that Moss would relinquish its outstanding 1% interest either when (1) UA and Moss "obtained the written consent of the landlord for the Movieland 8th Street lease held by the [Joint Venture], for the Assignment and/or the consent of such landlord to the assignment of such lease to [UA]," or (2) "upon the written request of Assignee," and that the Joint Venture Agreement would remain in effect pending such events, with certain modifications, including elimination of the limitations imposed by Section 5.2 of that Agreement on UA's powers to act for the Joint Venture. (Id.)

  The Assignment Agreement included provisions requiring Moss and UA to indemnify each other for certain lease-related obligations of the Joint Venture. Specifically, it required UA to indemnify Moss for 49% of any post-assignment Joint Venture liabilities, and further provided that "[Moss] shall receive or be liable for 49% of any net adjustment . . . arising out of the dispute between Moss/UA and the landlord for the Douglaston Theatre operated by Moss/UA." (Id. at 3-4.) There is no evidence in the record as to whether the conditions precedent to transfer of Moss's remaining 1% interest were ever satisfied and, although Moss has proffered the conclusory assertion that "[a]s of June 30, 1995, the Douglaston Plaza movie theatre and the lease thereto with landlord Yale University were the property of UA and not of either Moss or the Moss/United Artists Joint Venture," (Moss Aff., Nolan Aff. Ex. 8 ¶ 12), there is no evidence of any transfer of ownership of the Douglaston theatre lease from the Joint Venture to UA.


With regard to liability, the Assignment Agreement provided that
Assignee hereby agrees with and represents and warrants to Assignor that Assignee shall perform all of Assignor's obligations and liabilities, including payments of money obligations or liabilities under, pursuant or arising out of or created by [the Joint Venture] which arise after the date hereof except that Assignor shall remain liable for 1% of such obligations until such time as its remaining 1% interest . . . is transferred.
(Assignment Agreement at 3.) The Assignment Agreement further provided: "Assignor hereby warrants and represents that the interests conveyed herein are subject to no . . . claims or debt arising out of Assignor, and . . . Assignor expressly agrees that it shall indemnify and defend Assignee from any such . . . claims or debt." (Id.) Lastly, by the terms of the Assignment Agreement, Moss agreed to "receive or be liable for 49% of any net adjustment (including legal fees) arising out of the dispute between Moss/UA and the landlord for the Douglaston Theatre operated by [the Joint Venture]." (Id. at 4.)

  There is a dispute among PAP, Moss and UA as to whether the Assignment Agreement effectively terminated the Joint Venture. Although Moss alleges that the Joint Venture "ended by June 30, 1995," it also claims that specific events necessary under Section 8.2 of the JV Agreement to effect dissolution did not occur due to an alleged breach by UA. (Am. Third-Party Compl. ¶¶ 5, 7.) The 1992 Agreement between UA and PAP

  On or about September 15, 1992, UA and PAP entered into a written agreement whereby PAP would provide consulting and lease recovery services to discover possible overcharges on the Movieworld Douglaston lease. (See Grewe Decl. ¶ 4.) Yale University ("Yale") was the landlord of the Douglaston premises. The only entities named as parties to the Consulting Agreement were PAP and UA; the Joint Venture was not mentioned in the Agreement. (Consulting Agreement, Nolan Aff. Ex. 1.) At the time the Consulting Agreement was executed, UA was the Managing Venturer of the Joint Venture. (Pl.'s Rule 56.1 Stat. ¶ 20; Def.'s Rule 56.1 Stat. ¶ 14.)

  The Consulting Agreement provided that PAP's duties thereunder were principally to consist of the "Identification of Overpayments" by "analyz[ing] relevant records and source documents in order to identify opportunities for claiming Lease Charge Recoveries." (Consulting Agreement, cl. 1(A).) "Lease Charge Recoveries" are defined in the Consulting Agreement as including "audit deficiency offsets, credits, refunds, [and] interest on cash flow savings" arising from PAP's proper identification of lease charges (i.e., "rent, common area maintenance, real estate tax, insurance, utilities and promotional fees") overcharged by Movieworld Douglaston theatre landlord Yale. (Id. at cl. 9.) Under the Consulting Agreement, PAP's compensation was to consist of a contingency fee derived from two separate sources: (1) a percentage of the "Lease Charge Recoveries realized by [UA];" and (2) a percentage of "any Bona Fide Recovery Opportunity identified by PAP in an Interim or Final Report which [UA] declines to pursue." (Id. at cl. 2.) A "Bona Fide Recovery Opportunity" is defined in the Consulting Agreement as "[a] Lease Charge Recovery identified in an Interim or Final Report which is yet to be realized by the Client." (Id. at cl. 9.) "In October 1992, . . . PAP identified to UA Lease Recovery Opportunities pursuant to the [Consulting Agreement]" in an Interim Report. (Paquet Aff., Nolan Aff. Ex. 9 ¶ 14; see also Pickhardt Aff. Ex. L; Pl.'s 56.1 Stat. ¶ 9; Def.'s 56.1 Stat. ¶ 25.) Final reports were provided to UA on or about August 28, 1998, providing analyses of overcharges for the years 1989 through 1992 and 1993 through 1998. (Pickhardt Aff. Ex. N; Pl.'s 56.1 Stat. ¶ 31; Def.'s Response to Pl.'s 56.1 Stat. at 28.) Based upon the results of PAP's analyses, UA withheld disputed common maintenance lease charges from Yale. (Pl.'s 56.1 Stat. ¶ 33; Def.'s Response to Pl.'s 56.1 Stat. at 29.)

  Prior Related Litigation; UA's Bankruptcy Proceedings

  On November 21, 1994, the Joint Venture filed a petition in New York State Supreme Court against Yale for the appointment of an arbitrator to resolve the dispute over the Movieland Douglaston rent overcharges. (Pickhardt Aff. Ex. R.) The petition was granted in April 1995. (Id.)

  On December 28, 1998, PAP filed suit against UA in an Illinois state court, for breach of contract, seeking compensation due for its lease recovery services. (Compl., PA Properties, Inc. v. United Artists Theatre Circuit, Inc., (No. 98 L1007) (Ill. 1998), Nolan Aff. Ex. 6.) Specifically, PAP's complaint asserted that UA's alleged inaction in pursuit of its litigation against Yale triggered PAP's right to a fee based on failure to pursue "Bona Fide Recovery Opportunities" and that UA was in breach of the Consulting Agreement with PAP for refusal to pay such compensation. (Id. ¶¶ 23-24.)

  On September 5, 2000, UA filed a Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the District of Delaware ("Bankruptcy Court"). On September 7, 2000, the Bankruptcy Court issued a "Bar Order" setting a Bar Date for filing proofs of claim and interest and approving the form and manner in which the Bar Date Notice was to be served. (Order, In re: United Artists Theatre Co., et al., (No. 00-03514) (Bankr. D. Del. 2000) ("Bar Order"), Grewe Decl. Ex. C.) The Bar Date was set for November 15, 2000, at 4:00 p.m. EST. (Id. at 2.) Notice of that Bar Date was "to be mailed at least fifty . . . days before the Bar Date to each known Creditor . . . by first class United States mail, postage prepaid." (Id. at 3.) UA was also required to mail a blank proof of claim form to each Bar Date Notice recipient. (Id.) The Bar Order provided that creditors that failed to file a proof of claim against UA "prior to the Bar Date, shall be forever barred, estopped and enjoined from: (a) asserting claims or interests that such Creditor . . . possesses against or in [UA]; and (b) voting upon, or receiving distributions under, any confirmed plan for [UA]." (Id.) PAP and certain Moss entities*fn2 were included in UA's list of known creditors.

  The Bar Date Notice and a blank proof of claim form were mailed to all Creditors on UA's list on September 26, 2000. (Gerber Aff. of Mailing, Grewe Decl. Ex. E.) PAP filed a proof of claim on November 9, 2000 (Pickhardt Aff. Ex. BB at 1), in the approximate amount of $1,059,716.40 and, in February of 2002, entered into an agreement with UA pursuant to which its claim was allowed in the amount of $600,000.00, "in full and complete satisfaction of all prepetition claims held by PA[P] against [UA]," without prejudice to PAP's ability to seek to recover the monies from Moss. (Id. Ex. CC at 1.) Moss did not file a proof of claim in the UA bankruptcy proceeding. PAP has received approximately $35,000.00 through the UA bankruptcy in respect of its allowed $600,000.00 claim.

  UA filed a Second Amended Joint Plan of Reorganization (the "Plan") on December 8, 2000. The Plan detailed the various procedural elements of the reorganization, including the payment of allowed claims, and was approved by the Bankruptcy Court on January 22, 2001, with an effective date of March 2, 2001. (Grewe Decl. ¶¶ 10-11.)

  UA and Yale, which had filed a claim for more than $2.7 million in UA's bankruptcy proceeding, ultimately discontinued their litigation, executing a Release & Settlement Agreement ("Settlement Agreement") on September 18, 2003. (Mark W. Gaffney Supp. Aff. Opp. Pl. P.A. Properties, Inc.'s Cross-Mot. Summ. J. & in Reply on Def. Moss' Mot. Summ. J. ("Gaffney Supp. Aff.") Ex. 1 to Ex. A at 1.) The Settlement Agreement provided that UA was to pay Yale approximately $161,728.59 for withheld rents. (Id. ¶ 2.) It also provided for a mutual release between the parties from all liability in connection with prior litigation between them arising from the lease, as well as an agreement that "any and all litigation and lawsuits, including . . . the [claims arising from PAP's findings resulting from the lease audit] will promptly be discontinued with prejudice." (Id. ¶ 8, at 3.) The Settlement Agreement was approved by Order of the Bankruptcy Court on February 13, 2004. (See Order Pursuant to Fed.R.Bankr.P. 9019 Approving Release & Settlement Agreement, In re United Artists Theatre Co., (No. 00-03514) (Bankr. D. Del. 2004), Gaffney Supp. Aff. Ex. 1.)

  In the instant litigation, PAP seeks to hold Moss liable for the unpaid amount of its claim for compensation under the Consulting Agreement. In the Third-Party Action, Moss seeks indemnification and the payment of its defense costs by UA. DISCUSSION

  PAP v. Moss: Motion to Strike Affidavits

  Invoking Rule 56(e) of the Federal Rules of Civil Procedure, Moss seeks an order striking the two affidavits filed by David Pickhardt, PAP's principal, in support of PAP's motion and in opposition to Moss's motion. Moss correctly points out that the affidavits consist largely of legal argument rather than assertions of fact based on personal knowledge. Accordingly, Moss's motion is granted to the extent that the Court, in resolving the instant motions, has disregarded those portions of the affidavits that are not based on personal knowledge. Court papers that were attached to the affidavits as exhibits have been considered.

  PAP v. Moss: Motions for Summary Judgment

  Summary judgment shall be granted in favor of a moving party where the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). In the summary judgment context, a fact is material "if it `might affect the outcome of the suit under the governing law,'" and "[a]n issue of fact is `genuine' if `the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Holtz v. Rockefeller & Co., Inc., 258 F.3d 62, 69 (2d Cir. 2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The Second Circuit has explained that the "party against whom summary judgment is sought . . . `must do more than simply show that there is some metaphysical doubt as to the material facts. . . . [T]he nonmoving party must come forward with specific facts showing that there is a genuine issue for trial.'" Caldarola v. Calabrese, 298 F.3d 156, 160 (2d Cir. 2002) (quoting Matshushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (alteration and emphasis in original). "[M]ere conclusory allegations, speculation or conjecture," however, will not provide a sufficient basis for a non-moving party to resist summary judgment. Cifarelli v. Vill. of Babylon, 93 F.3d 47, 51 (2d Cir. 1996).

  When cross-motions for summary judgment are filed, "the standard is the same as that for individual motions for summary judgment." Natural Res. Def. Council v. Evans, 254 F. Supp. 2d 434, 438 (S.D.N.Y. 2003). "The court must consider each motion independently of the other and, when evaluating each, the court must consider the facts in the light most favorable to the non-moving party." Id. (citing Morales v. Quintel Entm't, Inc., 249 F.3d 115, 121 (2d Cir. 2001)).

  The Consulting Agreement was an Obligation of the Joint Venture

  The first issue to be decided on these motions for summary judgment is whether UA's Consulting Agreement with PAP was an obligation of the Joint Venture, such that the remaining solvent co-venturer, Moss, is liable thereon. The Court finds that it was such an obligation.

  The JV Agreement, entered into in 1988, provided that the entity formed was to be a "joint venture general partnership under and pursuant to the provisions of the [New York Uniform Partnership] Act," and that "[t]he rights and liabilities of the Joint Venturers [would] be as provided in th[at] Act except as herein expressly provided." (JV Agreement §§ 1.1, 2.1.)*fn3 The JV Agreement appointed UA as Managing Venturer, with "complete authority and responsibility to manage the Joint Venture . . . and to make all decisions regarding the day-to-day business of the Joint Venture," including "compliance with the terms of the leases for the Theatres . . ., preparing or causing to be prepared financial statements and reports for the Joint Venture and managing financial matters for the Joint Venture." Id. § 5.1(a).

  The Uniform Partnership Act, adopted as New York's Partnership Law, provides in pertinent part that "[e]very partner is an agent of the partnership for the purpose of its business, and the act of every partner, . . . for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership." NY Partnership Law § 20(1) (McKinney 1988). Partners are "liable . . . jointly for all . . . debts and obligations of the partnership," id. § 26(a)(2), and the general law of agency applies to partnerships governed by the statute. Id. § 4(3).

  Under the general law of agency, a principal may be liable to a third party on a transaction conducted by its agent if the agent was actually or apparently authorized to enter into the transaction, "or . . . the agent had a power arising from the agency relation and not dependent upon authority or apparent authority." Restatement (Second) Agency § 140 (1958) (the "Restatement"). Section 194 of the Restatement provides that

A general agent for an undisclosed principal authorized to conduct transactions subjects his principal to liability for acts done on his account, if usual or necessary in such transactions, although forbidden by the principal to do them.
Id. § 194. The commentary to Section 194 describes this as "inherent agency power," and explains that the liability of the undisclosed principal turns on the intent of the agent in entering into the transaction:
The undisclosed principal is not in general liable for acts by the agent intended by him to be wholly for his own account, since the principal becomes a party to a transaction conducted by the agent only because the agent so intends. Thus, if a general buying agent for a menagerie, directed to buy no more horses, were to buy one for himself, and by a separate contract, one for his employer, the principal would not be liable for the former. He would, however, be liable for the one purchased for the menagerie; in such case the agent, although knowingly disobedient, was intending to do an act of the sort he was employed to do, one normally done by such agents and one intended by him for his principal's business. If the agent intends the transaction to be part of the principal's business, . . . the principal is liable on the contract to the other party to the transaction, although the prevailing motive of the agent was his own benefit and he knowingly disregarded his principal's interests.
Id. cmt. b. Such an agent is termed a "general agent" under the Restatement and is defined as one who is "authorized to conduct a series of transactions involving a continuity of service." Id. § 3(1).

  New York case law likewise recognizes the power of general agents to bind their undisclosed principals as to matters within the general scope of the agency. See Indus. Mfrs., Inc. v. Bangor Mills, Inc., 126 N.Y.S.2d 508, 511 (1st Dep't 1953) ("The general rule is recognized that an undisclosed principal is liable to third parties on contracts made in his behalf by his agent acting within his actual authority."); Garrett v. McAllister, 244 N.Y.S. 283, 285-86 (N.Y. Sup. Ct. 1930) (party can be liable as principal or co-adventurer on contract made in individual name of agent); Harder v. Cont'l Printing & Playing Card Co., 117 N.Y.S. 1001, 1004 (N.Y.App. Term. 1909) ("The rule of agency, where the principal is undisclosed, is as follows: If the agent buy in his own name, but for the benefit of his principal, without disclosing the name of the principal, the latter as well as the former will be bound, provided that the goods are received by the principal, and the agent, in making the purchase, acted within his power as agent."); see also 2A N.Y. Jur. 2d, Agency and Independent Contractors ("N.Y. Jur. Agency"), §§ 348, 351-52, 356 (1998).

  Here, it is undisputed that the Consulting Agreement was entered into during the life of the Joint Venture, at a time when UA served as Managing Venturer and the Douglaston theatre was being operated for the benefit of the Joint Venture. It is equally undisputed that UA executed the Consulting Agreement in its own name, that neither the agreement nor the Douglaston lease itself mentions the Joint Venture at all, and that PAP was unaware of the existence of the Joint Venture when it contracted to perform its services. Moss thus contends, correctly, that it is not a party to the Consulting Agreement as a matter of contract law. Nor is there any basis for holding the Joint Venture, or Moss, responsible for the payment of liabilities under the contract on the agency law principle of apparent authority, as no conduct of Moss or of the Joint Venture led PAP to believe that UA was authorized to bind the Joint Venture. Cf. Ford v. Unity Hosp., 32 N.Y.2d 464, 473 (1973) ("The very basis of the doctrine of apparent authority indicates that the principal can be held liable under the doctrine only where he was responsible for the appearance of authority in the agent to conduct the transaction in question." (quoting 2 N.Y. Jur. Agency § 89)).

  The undisputed facts do make it clear, however, that the Consulting Agreement is an obligation of the Joint Venture (and thus of its component partners) by virtue of the doctrine of inherent liability of an undisclosed principal for acts within the scope of a general agency, at least with respect to PAP's claims relating to periods during which the Douglaston theatre was operated by and for the benefit of the Joint Venture. UA was the Managing Venturer of the Joint Venture at the time it entered into the Consulting Agreement. That agreement was clearly for the benefit of the Joint Venture, which operated the Douglaston theatre at that time. The contract was well within the scope of the broad powers granted to UA as Managing Venturer, as it related to the day-to-day operations of the theatre, compliance with the lease under which the theatre was operated, and the management of the Joint Venture's financial matters. The undisputed facts of record also show that UA intended to benefit the Joint Venture by virtue of the arrangement, the goal being to reduce the Joint Venture's lease payments, and that UA indeed withheld, on the basis of issues identified by PAP, substantial amounts of rent otherwise payable under the lease.

  Moss argues that, even if the matters contemplated by the Consulting Agreement were within the general scope of UA's powers as agent, PAP's claim is defeated by a provision of the JV Agreement denying UA unilateral authority to "retain or replace independent accountants to review and audit the books and records of the Joint Venture and the Theatres." (JV Agreement § 5.2(m).) This argument is unavailing for, as shown above, the doctrine of inherent authority is operative as to matters within the broad scope of a general agency even if, as between principal and agent, the particular action has been forbidden.

  Moss also argues that PAP is precluded from recovering on the basis of the contingent fee arrangements set forth in the Consulting Agreement by provisions of New York law that prohibit the payment of contingent fees to accountants under certain circumstances. Title 8, Section 29.10, of the Official Compilation of Codes, Rules and Regulations of the State of New York provides in pertinent part that "unprofessional conduct" in the "practice of public accountancy" includes "offering or rendering professional services under a contingency fee arrangement when serving a client for whom the licensee performs" certain enumerated accounting-related services. 8 N.Y.C.R.R. § 29.10(a)(6) (West 2004). That section by its terms refers, however, to services performed by a "licensee," and subsection (a)(13) of the regulation clearly limits the application of its prohibitions to "partnerships and corporations authorized to practice public accountancy." Id. § 29.10(a)(6). The record is devoid of any evidence that PAP is or was ever licensed or otherwise authorized to practice public accountancy. Accordingly, Moss's argument fails.

  Moss has also failed to establish that the January 1995 Assignment Agreement relieves it of liability to PAP in connection with the Consulting Agreement. The Assignment Agreement, which provides for the transfer of a portion of Moss's interest in the Joint Venture and property of the Joint Venture, on its face purports neither to terminate the Joint Venture nor to effect a complete divestment of Moss's interest therein. Rather, it contemplates Moss's retention of a 1% interest in the Joint Venture pending further transactions, and specifically contemplates continuing liabilities and entitlements as between UA and Moss with respect to the Douglaston theatre lease. (Assignment Agreement, at 2, 4.)*fn4 Other than Moss's own conclusory assertions, there is no evidence in the record that the preconditions to transfer of Moss's remaining interest in the Joint Venture were ever met. Moss's contention that the Joint Venture was terminated in 1995 is also belied by its own Amended Third-Party Complaint, in which Moss alleges that UA breached its duties under the liquidation provisions of JV Agreement; the JV Agreement provides that compliance with those provisions is a precondition to termination of the Joint Venture. (Am. Third-Party Compl. ¶ 7; JV Agreement § 8.3.)

  There is no evidence of compliance with the JV Agreement's termination provisions. Furthermore, the JV Agreement specifically provides that

no dissolution or termination of the Joint Venture shall relieve, release or discharge any Joint Venturer . . . from any . . . obligation theretofore incurred or accrued under, any provision of this Agreement, and any and all such liabilities, claims, demands or causes of action arising from any such breaches, defaults and obligations shall survive such dissolution and termination.
(JV Agreement § 8.2(d); Am. Third-Party Compl. ¶ 15.) This provision is consistent with New York partnership law, which clearly provides that "[t]he dissolution of the partnership does not of itself discharge the existing liability of any partner." N.Y. Partnership Law § 67(1) (McKinney 1988). In order to effect a valid termination of a partnership with regard to third-party obligations, New York law requires the partnership to execute an agreement between the exiting partner, the remaining partner and the partnership creditor, who must acknowledge the dissolution. Id. § 67(2). Thus, it is only when the partnership creditor has knowledge of, and consents to, the dissolution, that the exiting partner "shall be discharged from any liability" to that creditor. Id. § 67(3); see also Patrikes v. J.C.H. Serv. Stations, Inc., 41 N.Y.S.2d 158, 167-68 (N.Y. City Ct. 1943).

  Moss's argument that the Assignment Agreement relieved it of responsibility for all of the Joint Venture's obligations under the Consulting Agreement therefore fails on the facts and the law.*fn5

  The Assignment Agreement is, however, far from irrelevant to the analysis of the respective rights of Moss and PAP. As previously noted, Moss's affidavit asserts that, "[a]s of June 30, 1995, the Douglaston Plaza movie theatre and the lease thereto with landlord Yale University were the property of UA and not of either Moss or the Moss/United Artists Joint Venture." (Moss Aff., Nolan Aff. Ex. 8 ¶ 12.) The Assignment Agreement provides for the transfer of 98% of Moss's interest in the Joint Venture's property, including movie leases, as well as of Moss's interest in the Joint Venture itself, to UA. Although the affidavit is insufficient, in the absence of evidence of a transfer of the lease by the Joint Venture to UA, to establish that Moss had no interest in the Douglaston operations after June 1995, it suggests that the Douglaston theatre may have been operated by and for the sole benefit of UA after June 30, 1995. Thus, the affidavit raises material issues of fact as to the extent to which any liabilities under the Consulting Agreement relating to the post-June 30, 1995 period are chargeable to Moss as a Joint Venturer. In that PAP's claims are based on lease recovery amounts for periods before and after June 1995, the lease issues with Yale were not resolved until 2004, and the monetary value of the fixtures and withheld rent*fn6 that were at issue in the Yale dispute are not clear on this record, it is impossible to determine at this time whether PAP is entitled to recover against Moss as Joint Venturer for any Lease Charge Recoveries or foregone Bona Fide Recovery Opportunities. Accordingly, Moss's motion for summary judgment is denied as to the breach of contract cause of action. PAP's motion is likewise denied, as it cannot be determined on the current record whether Lease Charge Recoveries relating to the period during which the Joint Venture operated the theatre have been achieved, or whether Bona Fide Recovery Opportunities have been foregone in connection with that period.

  Moss v. UA Third-Party Action

  In the Amended Third-Party Complaint, Moss alleges that Third-Party Defendant UA breached its duty to wind up properly the affairs of the joint venture, in violation of Section 8.2 of the JV Agreement. (Am. Third-Party Compl. ¶ 7.) Moss also claims damages of over $1,000,000.00 arising from the alleged breach. (Id. ¶ 8.) Moss further asserts that, pursuant to the Assignment Agreement, UA must indemnify Moss for any losses that may result from PAP's lawsuit. (Id. ¶ 13.)

  UA moves to dismiss the Amended Third-Party Complaint, arguing that Moss failed to file any claims in the bankruptcy proceeding prior to the November 14, 2000, deadline set in the Bar Order and that, as a result, Moss's indemnification and legal expense claims are precluded by the Bar Order and confirmed Plan of Reorganization entered in UA's bankruptcy proceeding. Moss opposes the motion, arguing that UA cannot proceed under Rule 12(b)(6) because it is invoking an affirmative defense rather than attacking the sufficiency of the complaint, and that the Bankruptcy Court's orders are ineffective to preclude the third-party claim because Moss was not afforded sufficient notice of the bankruptcy proceeding to enable it to file a timely proof of claim. For the following reasons, UA's motion is denied. Rule 12(b)(6) Motion Standard

  "The task of the court in ruling on a Rule 12(b)(6) motion `is merely to assess the legal feasability of the complaint, not to assay the weight of the evidence which might be offered in support thereof.'" Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir. 1998) (quoting Ryder Energy Distribution Corp. v. Merrill Lynch Commodities Inc., 748 F.2d 774, 779 (2d Cir. 1984)). The court must accept as true the material facts alleged by the plaintiff and draw all reasonable inferences in the plaintiff's favor. Grandon v. Merrill Lynch & Co., Inc., 147 F.3d 184, 188 (2d Cir. 1998). Thus, dismissal of a complaint pursuant to Rule 12(b)(6) for failure to state a claim is proper where "it appears beyond doubt that the plaintiff can prove no set of facts in support of [its] claim which would entitle [it] to relief." Harris v. City of New York, 186 F.3d 243, 247 (2d Cir. 1999).

  UA May Properly Assert this Affirmative Defense in a Rule 12(b)(6) Motion to Dismiss

  In its opposition to UA's Motion to Dismiss, Moss first asserts that UA "has improperly raised an unpled affirmative defense as grounds for a motion to dismiss under Fed.R.Civ.P. 12(b)(6)," specifically, that Moss's claims are discharged due to UA's bankruptcy. (Moss's Mem. of Law Opp. UA's Mot. to Dismiss Third-Party Compl., at 4.) The Court finds that, in raising the affirmative defense of discharge in bankruptcy in response to Moss's third-party claims, UA has not gone beyond the proper scope of a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). See, e.g., Pani v. Empire Blue Cross Blue Shield, 152 F.3d 67, 74 (2d Cir. 1998) ("An affirmative defense may be raised by a pre-answer motion to dismiss under Rule 12(b)(6), without resort to summary judgment procedure, if the defense appears on the face of the complaint.").

  Numerous affirmative defenses are allowable in a 12(b)(6) motion to dismiss, the most common of which are based upon the expiration of the statute of limitations for the particular cause of action. See, e.g., Brooks v. City of Winston-Salem, North Carolina, 85 F.3d 178 (4th Cir. 1996) (statute of limitations); Day v. Moscow, 955 F.2d 807 (2d Cir. 1992) (res judicata). Further, dismissal is also "appropriate when the face of the complaint clearly reveals the existence of a meritorious affirmative defense." Brooks, 85 F.3d at 181. The court, however, is not always limited to the complaint in considering whether an affirmative defense has properly been raised in the context of a motion to dismiss. The court may take judicial notice of public documents and records, including those not specifically referenced in the complaint. See Pani, 152 F.3d at 75 ("It is well established that a district court may rely on matters of public record in deciding a motion to dismiss under Rule 12(b)(6), including case law and statutes."). Therefore, it is appropriate in the instant matter to look not only to the complaint, but also to public documents related to UA's bankruptcy proceedings, of which judicial notice is hereby taken.

  Moss's Claims Constitute Prepetition Claims

  It is well settled in bankruptcy law that claims arising from contracts executed prior to bankruptcy constitute claims within the meaning of section 101(5) of the Bankruptcy Code (11 U.S.C. § 101(5)), whether or not a cause of action has accrued at the time of the bankruptcy under otherwise-applicable non-bankruptcy law. Under the Bankruptcy Code, the term "claim" is broadly defined as a:

right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or . . . right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured.
11 U.S.C.A. § 101(5)(A)-(B) (West 2004). This definition "is sufficiently broad to encompass any possible right to payment." In re Mazzeo, 131 F.3d 295, 302 (2d Cir. 1997); see also Ohio v. Kovacs, 469 U.S. 274, 279 (1985).

  Moreover, in the context of indemnity agreements, a contingent right to payment is created at execution, such that the agreement becomes a contractual obligation upon signing, rather than at the moment when the contingent event triggering the indemnification occurs. See In re Houbigant, Inc., 188 B.R. 347, 358-59 (Bankr. S.D.N.Y. 1995) ("[A] contractual indemnification claim exists as a contingent claim against the indemnitor as of the date of the indemnification agreement is executed."); see also In re Chateaugay Corp., 102 B.R. 335, 352 (Bankr. S.D.N.Y. 1989); In re Amfesco Indus., Inc., 81 B.R. 777, 781-82 (Bankr. E.D.N.Y. 1988). Therefore, contingent rights to payment "need not be currently enforceable in order to constitute a claim." Pearl-Phil GMT (Far East) Ltd. v. The Caldor Corp., 266 B.R. 575, 581 (Bankr. S.D.N.Y. 2001). In the present case, then, Moss's demand for indemnification from UA is properly characterized as a contingent claim arising from the original JV Agreement and/or the Assignment Agreement. See, e.g., In re Mazzeo, 131 F.3d 295, 303 (2d Cir. 1997) ("It is generally agreed that a [claim] is contingent if it does not become an obligation until the occurrence of a future event."). Moss thus should have asserted its claim prior to the Bar Date set by the Bar Order, which required creditors to file proofs of claim and/or interest by such date.

  While Moss does not challenge the validity or scope of the Bar Order, it contends that the order is ineffective to defeat the instant third-party action because Moss did not receive proper notice of the Bar Order. Charles B. Moss, Jr., has proffered an affidavit denying actual knowledge of the provisions of the Bar Order, and Moss points out that UA's documentation of service of the Bar Order does not indicate that any of the Moss corporate entities involved in the Joint Venture were named in the list of creditors to whom notice of the order was mailed.

  In light of the parties' resort to evidentiary material outside the scope of the complaint and of matters of which the Court may take judicial notice, and the parties' dispute over the efficacy of the notice that was given, it cannot be said that the Amended Third-Party Complaint fails to state a claim upon which relief may be granted. Accordingly, UA's motion to dismiss the Amended Third-Party Complaint is denied.


  For the foregoing reasons, PAP's motion for summary judgment is denied, as is UA's motion to dismiss the Amended Third-Party Complaint. Moss's motion for summary judgment is granted only as to the second, third and fourth causes of action. Moss's motion to strike the affidavits of David Pickhardt is granted to the extent the Court has disregarded those aspects of the affidavits that are not based on personal knowledge or supported by copies of court documents, and is denied in all other respects.

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