United States District Court, S.D. New York
MEMORANDUM OPINION & ORDER
VALERIE CAPRONI, United States District Judge
Anthony Choquette and Stephanie Pedroza are independent
distributors for Motor Information Systems
(“Motor”), which is an operating division of
Defendant Hearst Business Publishing, Inc. that publishes
manuals regarding vehicle service and repairs.Historically,
Motor's products were physical manuals; more recently it
has transitioned many of its products to online manuals. When
Motor discontinued one of the online manuals that Plaintiffs
had been authorized to distribute, Plaintiffs sued, alleging
breach of contract, “Deceit/Misrepresentation, ”
and “Intentional Interference with Advantageous
Business Relations.” Defendant has now moved for summary
judgment (“the Motion”). Plaintiffs have failed to
raise a genuine question of material fact as to any of their
claims. Accordingly, Defendant's Motion is GRANTED.
sells vehicle service and repair manuals. It does so both
through direct sales and through independent distributors.
Def. 56.1 Stmt. ¶¶ 1-4. Anthony Choquette and
Stephanie Pedroza are independent distributors, each in the
business of selling such manuals in or around Massachusetts
and Utah, respectively. Id. ¶¶ 5-8.
Choquette's and Pedroza's “Independent Sales
(“Agreements”) authorize them to sell Repair Manuals
(“Manuals”), Crash Manuals (“Crash”),
Motor/Alldata Systems (“MAS”), and Shop
Management Systems (“MSM”), collectively
“Products, ” to certain customers. Id.
¶ 19; Agreements §1.
provisions in the Agreements are relevant to Plaintiffs'
claims. Each Plaintiff is authorized to sell Products to
certain types of customers, designated as “Qualified
Customers, ” within a limited geographic territory that
is defined in each of the Agreements. Agreements §§2, 3;
Def. 56.1 Stmt. ¶¶ 23, 25. Motor may change the
authorized territory provided that any change is “not
 arbitrary and [is] predicated on the level of sales of the
Products compared to sales of the Products in other
territories in the same geographical area.” Agreements
§ 3; Def. 56.1 Stmt. ¶ 24. Each Plaintiff's
appointment as a distributor is “exclusive with respect
to sales of Manuals for direct personal sales calls on
Qualified Customers in the Territory.” Agreements
§ 1. This is the only exclusivity provided for in the
Agreements. Def. 56.1 Stmt. ¶ 28. Motor retains full
rights to market and distribute all Products in Pedroza's
territory, Pedroza Agreement § 2, and may market and
distribute Crash and MAS in Choquette's territory,
Choquette Agreement § 2, “directly, or indirectly,
to Qualified Customers and other prospects.” Agreements
§ 2; Def. 56.1 Stmt. ¶¶ 29-30. Each Agreement
allows for partial termination “by Motor . . . as to
any Product if Motor discontinues [the] Product . . .
.” Agreements § 8; Def. 56.1 Stmt. ¶ 39.
Finally, commissions are mentioned only with respect to sales
of MAS: “Distributor shall be entitled to the then
current renewal commission for renewals of MAS sold by the
Distributor while this Agreement is in effect.”
Agreements §6(e). The Agreements also contain an
integration clause, Agreements §11(c), a requirement
that all modifications be made in writing signed by both
parties, Agreements §11(b), and a New York choice of law
clause, Agreements §11(a). Beyond the 2000 amendment to
Choquette's contract, no written changes were made to
either Agreement, and the terms in the Agreements are the
only contractual terms between the parties. Def. 56.1 Stmt.
¶¶ 12-13, 17-18.
time Pedroza signed her Agreement in 2007, Motor and Alldata,
which developed and sold the MAS product to Motor, were
parties to a contract that allowed Motor to sell MAS through
2016. Id. ¶¶ 85-86. In December 2013,
Motor and Alldata mutually agreed to end their relationship.
Id. ¶ 87. On December 18, 2013, Motor notified
Plaintiffs, as well as other independent distributors, that
they must stop selling MAS. Id. ¶ 88. Since
then, Plaintiffs have not sold MAS. Id. ¶ 93.
In an attempt to encourage distributors to continue working
with Motor, Motor offered to pay its independent
distributors, including Plaintiffs, a lump sum to offset the
loss of MAS. Id. ¶ 89. Plaintiffs rejected the
offer and attempted to renegotiate their Agreements.
Id. ¶¶ 90-91. When those negotiations were
unsuccessful, Plaintiffs filed this Complaint in the United
States District Court for the District of Massachusetts. Dkt.
1. Upon Defendant's motion to transfer for improper
venue, the case was transferred to the Southern District of
New York on November 24, 2015. Dkt. 21.
Defendants' Motion for Summary Judgment
judgment is appropriate when “the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986). “Where the
record taken as a whole could not lead a rational trier of
fact to find for the nonmoving party, there is no genuine
issue for trial.” Scott v. Harris, 550 U.S.
372, 380 (2007) (quoting Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986)) (internal
quotation marks omitted). Courts “construe the facts in
the light most favorable to the non-moving party and resolve
all ambiguities and draw all reasonable inferences against
the movant.” Delaney v. Bank of Am. Corp., 766
F.3d 163, 167 (2d Cir. 2014) (per curiam) (quoting
Aulicino v. N.Y.C. Dep't of Homeless Servs., 580
F.3d 73, 79-80 (2d Cir. 2009)) (alteration omitted).
nonmoving party, however, “must do more than simply
show that there is some metaphysical doubt as to the material
facts, ” and “may not rely on conclusory
allegations or unsubstantiated speculation.”
Jeffreys v. City of New York, 426 F.3d 549, 554 (2d
Cir. 2005) (citations and internal quotation marks omitted).
Rather, the nonmoving party must come forward with
“specific facts showing that there is a genuine issue
for trial.” Sista v. CDC Ixis North America,
Inc., 445 F .3d 161, 169 (2d Cir. 2006) (citation
omitted). “The plain language of Rule 56(c) mandates
the entry of summary judgment . . . against a party who fails
to make a showing sufficient to establish the existence of an
element essential to that party's case, and on which that
party will bear the burden of proof at trial.”
Celotex, 477 U.S. at 322.
Plaintiffs' Breach of Contract Claim
prove breach of contract under New York law, a plaintiff must
prove “(1) a contract; (2) performance of the contract
by one party; (3) breach by the other party; and (4)
damages.” Terwilliger v. Terwilliger, 206 F.3d
240, 245-46 (2d Cir. 2000). Plaintiffs bear the burden of
proof as to all elements of a breach of contract claim.
See Barton Grp., Inc. v. NCR Corp., 796 F.Supp.2d
473, 498 (S.D.N.Y. 2011), aff'd, 476 F.
App'x 275 (2d Cir. 2012) (“Under the applicable New
York law, a ‘party asserting a breach of contract claim
has the burden of proving the material allegations in the
complaint by a fair preponderance of the
evidence.'” (quoting Raymond v. Marks, 116
F.3d 466, 466 (2d Cir. 1997))). New York law requires that
unambiguous contractual terms be given their plain meaning.
See, e.g., LaSalle Bank Nat'l Ass'n v.
Nomura Asset Capital Corp., 424 F.3d 195, 206 (2d Cir.
2005); see also CIBC World Markets Corp. v. TechTrader,
Inc., 183 F.Supp.2d 605, 610-11 (S.D.N.Y. 2001)
(“[W]hen parties set down their agreement in a clear,
complete document, their writing should as a rule be enforced
according to its terms.” (quoting W.W.W. Assocs.,
Inc. v. Giancontieri, 77 N.Y.2d 157 (1990))). Plaintiffs
appear to allege that Motor has breached their Agreements in
three ways. First, Plaintiffs allege that Motor
“arbitrarily erod[ed] [Plaintiffs'] sales
territories and accounts by interfering with their customers
in an attempt to lure them as a company account . . .
.” Compl. ¶ 13. The Agreements, however, allow
Motor to “change the Territory from time to time . . .
.” provided that such “[c]hanges . . . will not
be arbitrary . . . .” Agreements § 3.
“Territory, ” given its plain meaning and viewed
in light of each Agreement as a whole, refers exclusively to
the geographical area in which each Plaintiff can distribute
Products (rather than to whom or the quantity of Products
Plaintiffs can sell). Plaintiffs have presented no evidence to
show that their geographic territories have been changed, let
alone that the Defendant acted arbitrarily.Plaintiffs
“do not contend that the [Agreements] prohibit the
Defendant from marketing, selling, or distributing its
products within the territory” but rather take issue
with the effect that Defendant's practices have had on
Plaintiffs' businesses. Specifically, Plaintiffs believe
that Motor's marketing and sales activities within their
geographic territories have hurt Plaintiffs' businesses.
Choquette Interrog. ¶ 19 (Dkt. 69-5); Pedroza Interrog.
¶ 19 (Dkt. 69-6). Plaintiffs have presented no evidence
that Motor is marketing or selling Products within
Plaintiffs' geographic territories, but even if they had
presented such evidence, the Agreements expressly allow Motor
to market and distribute all Products in Pedroza's
territory, Pedroza Agreement § 2, and to market and
distribute Crash and MAS in Choquette's territory,
Choquette Agreement § 2. Accordingly, the only sale
Motor could make that would amount to a breach would be a
sale of a Manual to a “Qualified Customer” in
Choquette's territory. Choquette has not presented any
evidence that raises a genuine issue of material fact that
such a sale has occurred.
Plaintiffs allege that Motor refused to “pay
[Plaintiffs] direct or residual commissions” for their
sales of Motor products. Compl. ¶ 14. The Agreements
provide for commissions only with reference to MAS.
Agreements §6(e) (“Distributor shall be entitled
to the then current renewal commission for renewals of MAS
sold by the Distributor while this Agreement is in
effect.”). Plaintiffs have nowhere alleged that they
are owed commissions for sales that were made before Alldata
discontinued Motor's right to sell MAS. Rather, it
appears that Plaintiffs are suing for the prospective
commissions that they would have earned if Alldata had not
terminated its agreement with Motor as to MAS. But the plain
language of the Agreements allows for “partial
termination as to any Product if Motor discontinues any
Product . . . .” Agreements § 8. Once Motor
discontinued MAS, Plaintiffs did not make any sales (renewals
or otherwise), and they are thus not owed any commissions.
Plaintiffs allege that “Motor has wrongfully debited
money from certain accounts developed and funded by each of
their independent sales performance under the Distributor
Agreement.” Compl. ¶ 15. Because the Complaint
does not identify what provision of the Agreements Motor has
allegedly breached by wrongfully debiting money ...