Bonanni v. Straight Arrow Publishers, Inc.

• Decision Date: 22 October 1987
• Citation: 520 N.Y.S.2d 7,133 A.D.2d 585
• Parties: Peter BONANNI, Plaintiff-Respondent, v. STRAIGHT ARROW PUBLISHERS, INC., et al., Defendants-Appellants.
• Court: New York Supreme Court — Appellate Division

Page 7

520 N.Y.S.2d 7

133 A.D.2d 585

Peter BONANNI, Plaintiff-Respondent, v. STRAIGHT ARROW PUBLISHERS, INC., et al., Defendants-Appellants.

Supreme Court, Appellate Division,

First Department.

Oct. 22, 1987.

J.L. Rosner, New York City, for plaintiff-respondent.

P.L. Kerr, J.B. Burke, E.E. Koolyk, New York City, for defendants-appellants.

Before ROSS, J.P., and ASCH, ROSENBERGER, ELLERIN and WALLACH, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County (Harold Baer, Jr., J), entered December 26, 1986, which granted plaintiff-respondent's cross motion for leave to amend the complaint, denied individual defendant-appellant's motion for summary judgment with leave to renew, and ordered him to submit to discovery, reversed, on the law and the complaint dismissed in its entirety as to appellant Jann S. Wenner, without costs.

Respondent Peter Bonanni entered into an employment agreement with appellant Straight Arrow Publishers, Inc., ¹ in March 1982, to serve as Publisher of Rolling Stone Magazine and Executive Vice President of Rolling Stone Magazine Productions for three years. The agreement was negotiated and signed by James S. Dunning, Jr., who was then President and Chief Executive Officer of Straight Arrow. It is undisputed that appellant Jann S. Wenner, the principal shareholder and Chairman of Straight Arrow's Board of Directors, took no part in negotiating or finalizing this contract. Shortly after respondent assumed his post, Dunning left the company and respondent then reported directly to Wenner.

Under the agreement, respondent was to supervise and directly participate in Straight Arrow's marketing and sales efforts. He was given "direct responsibility for the profitability" of appellant's radio and other broadcast activities. In early 1982, Straight Arrow was experiencing difficulty in selling advertising time for its radio programs. Respondent hired a former colleague, Craig Vanderploeg, as Director of Marketing in April. However, advertising sales did not improve and, upon reorganization of the sales staff in May, Wenner demoted Vanderploeg to the position of Sales Representative. Respondent's choice for the position of Advertising Sales Manager was also vetoed by Wenner after Kent Brownridg Straight Arrow's General Manager, expressed doubts about the candidate's experience in broadcast advertising.

After consultation with the Board of Directors, Wenner sent respondent a lengthy memorandum on May 19, 1982, clarifying respondent's duties and responsibilities. The memorandum pointed out a number of "problem areas that must be corrected immediately," and stated that, while the company was without a president, respondent was to report to the Chairman of the Board, Wenner. Apparently, the problems were not satisfactorily resolved and, by letter dated June 1, 1982, respondent's employment was terminated.

Two months later respondent instituted this action seeking contractual damages from Straight Arrow for its alleged breach of contract and punitive damages from both Wenner and Straight Arrow. Appellants served their verified answer and counterclaims in September 1982 and the matter remained dormant until June 1986 when appellants moved to dismiss the complaint in its entirety against Wenner and to strike the claim for punitive damages. Although respondent opposed the motion, he did not seek leave to amend the complaint. The motion was denied without prejudice.

In October 1986, appellants renewed their motion to dismiss. They pointed out that the complaint alleged no factual basis for holding Wenner, a corporate officer, personally liable for the alleged breach of respondent's agreement with Straight Arrow. Respondent opposed the motion and cross-moved for leave to amend the complaint by consolidating his four claims into one cause of action, and by adding the statement that Wenner "is a shareholder of Straight Arrow, which is his alter ego under his complete dominion and control."

We find that the court below erred in denying appellants' motion to dismiss and abused its discretion in granting respondent leave to amend the complaint which, even as amended, was still deficient. The original complaint failed to state a cause of action against Wenner. As a corporate officer acting within the scope of his duties, Wenner could not be held personally liable for inducing the corporation to terminate its agreement with respondent absent evidence that Wenner accomplished this by "individual separate tortious acts" (A.S. Rampell, Inc. v. Hyster Co., 3 N.Y.2d 369 378, 165 N.Y.S.2d 475, 144 N.E.2d 371 [1957]; Robbins v. Panitz, 61 N.Y.2d 967, 969, 475 N.Y.S.2d 274, 463 N.E.2d 615 [1984] ). Nothing in the amended complaint gives rise to the inference that Wenner used fraud, misrepresentation, deceit or other tortious means, or that he acted purely from malice. Failure to plead in nonconclusory language facts establishing all the elements of...