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Sang Lan v. Time Warner

April 19, 2013


The opinion of the court was delivered by: Honorable Leonard B. Sand, U.S.D.J.



Plaintiff Sang Lan filed this action on April 28, 2011. Defendant Time Warner, Inc. ("Time Warner") and defendants Kao-Sung Liu, Gina Hiu-Hung Liu, and Hugh Hu Mo (collectively, the "Individual Defendants") separately move to dismiss the plaintiff's Fourth Amended Complaint ("4th Am. Compl.") under Rule 12(b)(6) of the Federal Rules of Civil Procedure. I recommend that Time Warner's motion to dismiss be granted and that the Individual Defendants' motion be granted in part and denied in part.


The following facts from the Fourth Amended Complaint are taken as true for the purposes of these motions to dismiss. See Erickson v. Pardus, 551 U.S. 89, 93-94 (2007) (per curiam).

Ms. Sang*fn1 is a former world-class gymnast from China. (4th Am. Compl., ¶¶ 11-19). She was slated to compete in the 1998 Goodwill Games (the "Games"), a quadrennial competition conceived by Ted Turner and later sold to Time Warner as a consequence of Mr. Turner's company merging with AOL.*fn2 (4th Am. Compl., ¶¶ 20, 22, 28). While warming-up for the vault event, Ms. Sang was seriously injured, allegedly through the negligence of Time Warner and other organizers of the competition. (4th Am. Compl., ¶¶ 29-34, 55-56). Her injuries are extensive: the fall fractured two vertebrae and injured her spinal cord, rendering her permanently paralyzed from the mid-chest down; she suffers from additional complications related to the paralysis. (4th Am. Compl., ¶¶ 38-52).

In the aftermath of the accident, various people associated with the Games made public statements regarding Ms. Sang. Michael Plant, President of the Games, stated that Ms. Sang's "immediate medical needs" would be taken care of by insurance. (1998 Goodwill Games Press Conference Quotes dated July 22, 1998 ("July 22 Press Conference"), attached as Exh. F to 4th Am. Compl., at 2).*fn3 He continued, "I can't speak to the long-term, but it is our commitment to do what we can. As I said, Ted Turner and [then-Chief Executive Officer of Time Warner] Gerald Levin are both concerned. We had a lot of insurance that will provide adequate care for Sang Lan."

(July 22 Press Conference at 2). According to a newspaper article, Mr. Plant solicited contributions for Ms. Sang from corporate sponsors of the Games and also stated that Ms. Sang's family "won't have to worry about digging into their pockets to help their daughter in any way." (Bill Egbert, Injured Gymnast, Turner Reneged, NY Daily News, June 3, 1999 ("NY Daily News Article"), attached as Exh. J to 4th Am. Compl.). In response to a question as to whether the corporations involved had "discussed how far Goodwill and Turner and Time Warner's responsibility extends . . . not necessarily financially, but emotionally and morally," Dr. Harvey Schiller, then President of Turner Sports, stated that executives throughout the company had offered to assist in any way possible. What we don't want to do is take away the focus away [sic] from the care that she is getting right now and you can be assured that this corporation and hand-in-hand with US Gymnastics, as well as the International Federation, will do everything within our power to assure that her future is secure.*fn4 (1998 Goodwill Games Press Conference Quotes dated July 24, 1998 ("July 24 Press Conference"), attached as Exh. G to 4th Am. Compl., at 2). In an article dated July 24, 1998 on the CNN/Sports Illustrated website, Dr. Schiller is reported to have said, "In terms of our organization, we will do all we can to make sure that Sang Lan and her family are accommodated in the best possible way . . . . We are not out to exploit this. Our focus is on today. We want her to get the best possible care." (Paralyzed gymnast's parents begin sad journey to her bedside, CNN Sports Illustrated, July 24, 2008 ("CNN Article"), attached as Exh. H to 4th Am. Compl., at 2-3). And Dr. Brock Schnebel, Chief Medical Officer of the Games, stated:

Now[] that her surgery has been performed, she has a long way to go to recover from this. There will be a long period of rehabilitation so all these different issues have to be considered. The surgery isn't the biggest part of this, there is a lot more to come. Mike Plant of the Goodwill Games, Turner Broadcasting, and Time Warner . . . ha[ve] reassured me . . . that they will do everything in their collective power to provide the necessary resources to continue her care. So we can feel comfortable that we've done everything we can for her. (1998 Goodwill Games Press Conference Transcript dated July 26, 1998 ("July 26 Press Conference"), attached as Exh. I to 4th Am. Compl., at 3).

The leaders of the Chinese gymnastics team selected Mr. Liu and Ms. Liu, his wife, to be Ms. Sang's "'guardians' to handle all matters related to [her]," including dealing with Time Warner. (4th Am. Compl., ¶¶ 99, 101). The Lius, along with their attorney Mr. Mo, informed Ms. Sang that, if Time Warner were challenged, such as in a negligence action concerning the accident, "any hope of getting assistance from Time Warner would be extinguished." (4th Am. Compl., ¶¶ 84, 87). A fund, called the Goodwill for Sang Lan Fund (the "Fund"), which Time Warner asserted that it contributed to and solicited donations for, was set up for Ms. Sang's benefit. (4th Am. Compl., ¶¶ 3, 90-92, 124). Shortly after it was established in 1998, the Lius began serving as the Fund's trustees or managers, exercising exclusive control over the money, as well as over Ms. Sang's medicine and medical supplies. (4th Am. Compl., ¶¶ 3, 102, 120-121, 152, 154, 156, 160). Mr. Mo and his law firm provided legal and professional assistance to the Fund, Ms. Sang, and the Lius.*fn5 (4th Am. Compl., ¶¶ 103-106, 109-111, 122-123).

According to Ms. Sang, the Lius and Mr. Mo failed in their duty to "work out the specifics of the oral contract or agreement with Time Warner to secure [Ms. Sang's] future," and, in 1999, Ms. Sang accused Turner of reneging on a promise to help her financially. (4th Am. Compl., ¶ 168; NY Daily News Article). In addition, the Lius purportedly made false claims about the management, legal compliance, and expenditure of the Fund. (4th Am. Compl., ¶¶ 126-128, 133, 135). When the Lius turned over the "alleged remaining balance of the Fund" in July 2008, they failed to provide accounting records or reports, making it impossible to determine the amount of money donated to the Fund. (4th Am. Compl., ¶¶ 136, 141, 143-144, 169-172). Ms. Sang requested access to the records, but was told by the Lius to seek them from Abacus Bank, a financial institution that held part of the corpus of the Fund. (4th Am. Compl., ¶¶ 125, 139-140). Abacus Bank, in turn, directed her to contact Mr. Mo, as the Fund's attorney, to receive authorization for the release of the information. (4th Am. Compl., ¶ 140). In addition, Ms. Sang asserts that the Lius failed to return to her gifts and other items donated by various well-wishers during her sojourn in the United States. (4th Am. Compl., ¶ 76).

Ms. Sang further alleges that, from 1998 to the present, the Lius have used her likeness or other identifiable characteristics without her consent for the purpose of promoting their business. (4th Am. Compl., ¶¶ 179-180). In January 2011, the Lius purportedly made statements to the public that Ms. Sang was lazy, could not urinate or have bowel movements on her own, and planned to seek asylum in the United States. (4th Am. Compl., ¶ 185). These statements were broadcast via a website maintained and managed by Sinovision. (4th Am. Compl., ¶ 186). Ms. Sang also accuses the Lius of using the Sinovision site to "spew[] vulgur, obscene, and derogatory remarks . . . designed to cast [Ms. Sang] in a false light." (4th Am. Compl., ¶¶ 194, 199).

As noted above, Ms. Sang filed this action on April 28, 2011.


A. Legal Standard

To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, "a complaint must contain sufficient factual matter . . . to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). While a complaint need not make "'detailed factual allegations,'" it must contain more than mere "'labels and conclusions' or '[f]ormulaic recitation[s] of the elements of a cause of action.'" Id. (quoting Twombly, 550 U.S. at 555). A complaint with "'naked assertions' devoid of 'further factual enhancement'" is insufficient. Id. (quoting Twombly, 550 U.S. at 557). Further, where the complaint's factual allegations permit the court to infer only a possible, but not a plausible, claim for relief, it fails to meet the minimum standard. Id. at 679. In ruling on a motion to dismiss, the court's task "'is merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof.'" GVA Market Neutral Master Ltd. v. Veras Capital Partners Offshore Fund, Ltd., 580 F. Supp. 2d 321, 327 (S.D.N.Y. 2008) (quoting Eternity Global Master Fund Ltd. v. Morgan Guaranty Trust Co. of New York, 375 F.3d 168, 176 (2d Cir. 2004)).

In assessing a motion to dismiss, a court must take as true the factual allegations in the complaint and draw all reasonable inferences in the plaintiff's favor. Erickson, 551 U.S. at 93-94; DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 110--11 (2d Cir. 2010). However, a court is "'not bound to accept as true a legal conclusion couched as a factual allegation.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555).

The court is generally limited to reviewing the allegations in the complaint and documents attached to it or incorporated by reference. See Chambers v. Time Warner, Inc., 282 F.3d 147, 152-54 (2d Cir. 2002). "[W]hen matters outside the pleadings are presented in response to a 12(b)(6) motion, a district court must either exclude the additional material and decide the motion on the complaint alone or convert the motion to one for summary judgment under Fed. R. Civ. P. 56 and afford all parties the opportunity to present supporting material." Friedl v. City of New York, 210 F.3d 79, 83 (2d Cir. 2000) (alteration in original) (internal quotations marks omitted); see also Quick Cash of Westchester Avenue LLC v. Village of Port Chester, 11 Civ. 5608, 2013 WL 135216, at *3 (S.D.N.Y. Jan. 10, 2013) (quoting Friedl, 2010 F.3d at 93). "A district court, however, 'is not obliged to convert a 12(b)(6) motion to one for summary judgment in every case in which a party seeks to rely on matters outside the complaint in support of a 12(b)(6) motion; it may, at its discretion, exclude the extraneous material and construe the motion as one under Rule 12(b)(6)." PNCEF, LLC v. Oz General Contracting Co., No. 11 CV 724, 2012 WL 4344538, at *3 (E.D.N.Y. Aug. 2, 2012) (quoting United States v. International Longshoremen's Association, 518 F. Supp. 2d 422, 450-51 (E.D.N.Y. 2007)).

The Individual Defendants attach a single additional document to their motion papers. (Letter of Gina Liu dated June 5, 1999, attached as Exh. A to Declaration of Hugh H. Mo, Esq. dated Dec. 27, 2012 ("Mo Decl.")). Neither the Fourth Amended Complaint nor any previous complaint relies on this document. However, it was previously submitted by the plaintiff in opposition to a motion to dismiss an earlier complaint (Mo Decl., ¶ 4; Exh. H to Affidavit of Sang Lan dated July 21, 2011), and it is mentioned in my report and recommendation on that motion. (Report and Recommendation dated Nov. 21, 2011 ("Nov. 21 R&R" or "November 21 R&R") at 14). Nevertheless, in an abundance of caution, I will exclude this document from consideration here. See Global Network Communications, Inc. v. City of New York, 458 F.3d 150, 155 (2d Cir.2006) ("[T]he conversion of a Rule 12(b)(6) motion into one for summary judgment under Rule 56 when the court considers matters outside the pleadings is strictly enforced and mandatory." (internal brackets and quotation marks omitted)).

B. Time Warner's Motion to Dismiss

The plaintiff seeks damages from Time Warner for breach of contract, promissory estoppel, and "undertaking and reliance."*fn6

1. Breach of Contract

Ms. Sang claims that she and Time Warner had an enforceable contract in which Time Warner promised to secure her financial future in return for her promise not to sue Time Warner regarding the accident. (4th Am. Compl., ¶¶ 222-242; Plaintiff's Memorandum of Law in Opposition to Defendant Time Warner Inc.'s Motion to Dismiss the Fourth Amended Complaint ("Pl. Opp. Memo. to Time Warner") at 9-10). Time Warner's promise was allegedly embodied in public comments that it would secure Ms. Lan's future and that her parents would not have to use their own money to care for her. (4th Am. Compl., ¶ 85; July 22 Press Conference; July 24 Press Conference; CNN Article; July 26 Press Conference; NY Daily News Article). Specifically, the plaintiff points to Mr. Plant's statements that (1) Time Warner had "committ[ed] to do what we can" and to "provide adequate care for Sang Lan" (4th Am. Compl., ¶ 85(a); July 22 Press Conference) and (2) Ms. Sang's parents would not have to "dig[] into their pockets to help their daughter in any way" (4th Am. Compl., ¶ 85(e); NY Daily News Article); Dr. Schiller's statements that Time Warner, along with the U.S. and International Gymnastics Federation, would "do everything within our power to ensure that Sang Lan's future is secure" and that Time Warner would "do all we can to make sure that [she] and her family are accommodated in the best possible way" (4th Am. Compl., ¶ 85(b); July 24 Press Conference at 2; CNN Article at 2-3); and Dr. Schnebel's comment that Mr. Plant had reassured him that Time Warner would "do everything in their collective power to provide the necessary resources to continue her care" (4th Am. Compl., ¶ 85(d); July 26 Press Conference at 3).

Before a promise will be enforced by a court, "it must be sufficiently certain and specific so that what was promised can be ascertained. . . . Thus, definiteness as to material matters is the very essence of contract law." Joseph Martin, Jr. Delicatessen, Inc. v. Schumacher, 52 N.Y.2d 105, 109, 436 N.Y.S.2d 247, 249 (1981). The statements Ms. Sang identifies do not clear this hurdle. They contain "no specifics as to the form, frequency and amount of payment," and are therefore "too vague to spell out a meaningful promise."*fn7 In re Estate of Kittay, 118 A.D.2d 647, 648, 500 N.Y.S.2d 6, 7 (2d Dep't 1986) (promise that decedent would "'take care of' and 'support' [plaintiff] for the rest of her life" insufficiently definite to be enforceable); see also Yedvarb v. Yedvarb, 237 A.D.2d 433, 434, 655 N.Y.S.2d 84, 85 (2d Dep't 1997) ("[T]he alleged promise by the defendant to 'always take care of' the plaintiff, which contained no specifics as to the form, frequency, and amount of payment, was too vague to spell out a meaningful promise"); Saunder v. Baryshnikov, 110 A.D.2d 511, 512, 487 N.Y.S.2d 51, 52 (1st Dep't 1985) (statement that defendant "would 'take care of [plaintiff] and her financial needs for the rest of her life'" too "vague[] as to material details" to form enforceable promise).

The plaintiff attempts to distinguish Kittay and Yedvarb by pointing out that those cases "involved defendants in a marital or living companion relationship with a plaintiff." (Pl. Opp. Memo. to Time Warner at 9). However, nothing in those decisions indicates that the courts found the personal or social relationship between the parties relevant to the question of whether a contract had been formed. Rather, the courts pointed out that the absence of specifics as to form, frequency, and amount of payment was fatal to the claim that any enforceable promise had been made. Kittay, 118 A.D.2d at 648, 500 N.Y.S.2d at 7; Yedvarb, 237 A.D.2d at 434, 655 N.Y.S.2d at 85. Thus, the social relationship between the parties is not determinative of the question at issue. See Saunder, 110 A.D.2d at 512, 487 N.Y.S.2d at 52 (holding vague promise to take care of employee for life unenforceable).

Alternatively, Ms. Sang alleges that the contract for Time Warner to secure her financial future was implied in fact. (Pl. Opp. Memo. to Time Warner at 6-8). This argument suffers from the same deficiencies as her argument that there was an express contract. "[A]n implied-in-fact contract arises when the agreement and promise have simply not been expressed in words, but a court may justifiably infer that the promise would have been explicitly made, had attention been drawn to it." National Gear and Piston, Inc. v. Cummins Power Systems, LLC, 861 F. Supp. 2d 344, 359 (S.D.N.Y. 2012) (alteration in original) (internal quotation marks omitted). But even an implied-in-fact contract must be "reasonably certain in its material terms." Id. (internal quotation marks omitted). That is, when a plaintiff cannot point to "sufficient specific, concrete, factual representations such that they could be interpreted to supply the terms of an implied contract," she has failed to state a cause of action. Fink v. Time Warner Cable, 810 F. Supp. 2d 633, 645 (S.D.N.Y. 2012). In Gallas v. Greek Orthodox Archdiocese of North & South America, 154 Misc. 2d 494, 587 N.Y.S.2d 82 (N.Y. Sup. Ct. 1991), the court held, on a motion to dismiss, that there was no implied-in-fact contract where the defendant allegedly promised "to compensate [the plaintiff] for all her injury and damage" and in fact paid for her initial medical expenses because the alleged promise was "without limitation as to time, extent or amount." Id. at 504-05, 587 N.Y.S.2d at 89-90. So it is here.

Because the complaint does not allege an enforceable agreement between Ms. Sang and Time Warner, I recommend this claim be dismissed.

2. Promissory Estoppel

In New York, promissory estoppel has three elements: (1) a clear and unambiguous promise; (2) reasonable and foreseeable reliance by the party to whom the promise is made; and (3) an injury sustained by the party to whom the promise was made. Cyberchron Corp. v. Calldata Systems Development, Inc., 47 F.3d 39, 44 (2d Cir. 1995). To support this claim, Ms. Sang relies on the same statements discussed above. This claim should be dismissed for the same reason that the breach of contract claim should be dismissed: the statements made by Time Warner did not constitute a clear and unambiguous promise which could support Ms. Sang's reasonable and foreseeable reliance.

3. Undertaking and Reliance

The cause of action for undertaking and reliance is based on the theory that "'[o]ne who assumes to act, even though gratuitously, may thereby become subject to the duty of acting carefully if he acts at all.'" Suthers v. Amgen Inc., 441 F. Supp. 2d 478, 489 (S.D.N.Y. 2006) (alteration in original) (quoting H.R. Moch Co. v. Rensselaer Water Co., 247 N.Y. 160, 167, 159 N.E. 896, 898 (1928)). Such "assumed duties" arise in two situations: where the danger of harm is increased by the partial performance of the defendant, or where the harm is caused because the plaintiff foreseeably relied on the undertaking to her detriment. See Tavarez v. Lelakis, 143 F.3d 744, 747 (2d Cir. 1998); see also Heard v. City of New York, 82 N.Y.2d 66, 72-73, 603 N.Y.S.2d 414, 417-18 (1993). According to the plaintiff, Time Warner assumed a duty to provide her financial support and partially performed this duty by providing for her care; she relied on this assumption of duty and was damaged by that reliance when she refrained from asserting her rights in a legal action. (Pl. Opp. Memo. to Time Warner at 15-16). There are fatal problems with this theory, however.

First, the operative inquiry in an assumed duty case of the first type is "'whether the putative wrongdoer has advanced to such a point as to have launched a force or instrument of harm, or has stopped where inaction is at most a refusal to become an instrument for good.'" Nallan v. Helmsley-Spear, Inc., 50 N.Y.2d 507, 522, 429 N.Y.S.2d 606, 615 (1980) (quoting H.R. Moch, 247 N.Y. at 168, 159 N.E. at 898). To the extent that Time Warner's actions can be shoehorned into this scenario, they cannot be said to state a claim. According to the operative complaint, Time Warner had ceased its support by, at the latest, 1999, when Ms. Sang asserted that it had reneged on its promise. At that point, Time Warner had not placed her in a more dangerous position than she would have been had it failed to act. Time Warner had provided for some of her care; the Fund had been established for her benefit and, according to the allegations, funded. Nothing Time Warner did prevented Ms. Sang from engaging in any course of action that was available to her prior to Time Warner's intervention. Indeed, at that point, she would even have been able to file a timely legal action against Time Warner for her injuries at the Games.

That last point is also dispositive of an assumed duty claim of the second type. When Time Warner allegedly withdrew its support -- which it had the right to do, as long as the withdrawal did not place Ms. Sang at an unreasonable risk of harm, see Taverez, 143 F.3d at 747 -- the plaintiff had not suffered any damage in reliance on that support. The path that she asserts was foreclosed -- that of asserting rights against Time Warner in a legal action -- was still open to her in 1999, whether the hypothetical case would have been based on a contract theory or a negligence theory. See N.Y.C.P.L.R. ("CPLR") § 213(2) (six year statute of limitations for breach of contract); CPLR § 214(5) (three year statute of limitations for most actions for personal injury).

Moreover, Ms. Sang's detrimental reliance tort claim also fails for reasons similar to those that dispatched her contract and quasi-contract claims. The reliance that underlies the assumed duty must be reasonable. See Heard, 82 N.Y.2d at 74, 623 N.E.2d at 545 ("No liability arises, however, when the statements are made in circumstances where reliance is unforeseeable or unjustified."). Thus, the "[d]efendant must have imparted the information under circumstances and in such a way that it would be reasonable to believe a plaintiff will rely upon it; [the] plaintiff must rely upon it in the reasonable belief that such reliance is warranted." Id. at 75; 623 N.E.2d at 546. Here, various Time Warner representatives made vague and indefinite statements to the press about taking care of Ms. Sang. There is no allegation that any such statements were made directly to her or even to her purported guardians. Indeed, the operative complaint states that Ms. Sang had no contact with representatives from the company and that the Lius failed to negotiate the details of any purported agreement for her care. (4th Am. Compl., ¶¶ 168, 236). Under these circumstances, it would not be reasonable for Time Warner to have believed that Ms. Sang would rely on its representations. Nor was it reasonable for Ms. Sang to have done so. I therefore recommend dismissal of this claim.

4. Statute of Limitations

The counts against Time Warner should be dismissed for an additional, independent reason: they are all barred by the statute of limitations. As noted above, the statute of limitations for a contract action is six years, as it is for an equitable estoppel claim. See Schmidt v. McKay, 555 F.2d 30, 36 (2d Cir. 1977). For an ordinary negligence or personal injury claim (like Ms. Sang's assumed duty claim) the statute of limitations is three years. See Mancuso v. Kaleida Health, 100 A.D.3d 1468, 1469, 954 N.Y.S.2d 313, 314 (4th Dep't 2012). Ms. Sang knew of the alleged breaches before June 3, 1999, the date on which an article was published in which she stated that Turner had reneged on its promises to support her. (NY Daily News Article). Pursuant to CPLR § 105(j) (stating that person who has not attained age of 18 is "infant") and CPLR § 208 (tolling statutes of limitations until plaintiff is no longer infant), the causes of action accrued on her 18th birthday, June 11, 1999. (4th Am. Compl., ¶ 12). Therefore, the latest these causes of action would have been timely is June 2002 and June 2005. They were not, however, filed until April 2011.

The plaintiff's reliance on Zane v. Minion, 63 A.D.3d 1151, 882 N.Y.S.2d 255 (2d Dep't 2009), is misplaced. In that case, the plaintiff alleged that, in exchange for conveying a one-half interest in real property to the defendant, the defendant would, at a later date, agree to refinance the property. Id. at 1152, 882 N.Y.S.2d at 256. When, ten years later, the plaintiff asked that the defendant do so, she refused. Id. at 1153, 882 N.Y.S.2d at 257. Ms. Sang seems to believe that this case stands for the proposition that the refusal of a demand to perform under a contract triggers the statute of limitations. (Pl. Opp. Memo. to Time Warner at 17-18). That is, of course, true if the refusal of the demand is the breach. But here, the purported breach occurred in 1999. The fact that Ms. Sang allegedly made a tardy demand in 2011 does not restart the statute of limitations.*fn8 If that were the rule, a statute of limitations would not afford any repose, because a putative plaintiff could merely demand a supposed contractual (or other) right at any time -- no matter how long --after an alleged breach and thereafter file a timely action.

Finally, the plaintiff's argument that the statute of limitations must be tolled because Time Warner fraudulently concealed its failure to provide for her fares no better. This assertion relies on the notion that, after Ms. Sang complained that Time Warner had reneged, in 1999, the company asserted that it had solicited donations for her Fund. (Pl. Opp. Memo. to Time Warner at 19; 4th Am. Compl., ΒΆ 85(e); NY Daily News Article). However, the statement that Time Warner had, in the past, solicited donations for the Fund does not indicate that it continued to support Ms. Sang, as she alleges was promised. Therefore, this is not a misrepresentation. Moreover, as Time Warner points out, "[A] party seeking to avoid the bar of the statute of limitations on account of fraud ...

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