Command Cinema Corp. v. Vca Labs, Inc.
| Decision Date | 17 November 2006 |
| Docket Number | No. 05 Civ. 6447(SAS).,05 Civ. 6447(SAS). |
| Citation | 464 F.Supp.2d 191 |
| Parties | COMMAND CINEMA CORP., Plaintiff, v. VCA LABS, INC. d/b/a Trac Tech Video Images, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Anthony Motta, New York City, for Plaintiff.
Jeffrey F. Reina, Lipsitz Green Scime Cambria LLP, Buffalo, NY, for Defendant.
Command Cinema ("Command") brings this action against VCA Labs ("VCA"), doing business as Trac Tech Labs,1 for breach of express contract, conversion, and breach of implied contract regarding the loss of two of Command's adult films. VGA now moves to dismiss Command's claim for conversion of both films, breach of implied contract covering both films, and breach of express contract for one of Command's adult films — The Firestorm Trilogy ("FT"). Command has cross-moved for summary judgment on its conversion claims for both films. VCA also moves in limine to exclude evidence of Command's lost profits as a measure of damages and to preclude Command's claim for punitive damages.
The following facts, drawn from the Amended Complaint, are assumed to be true for the purposes of this motion. Command is a New York corporation involved in the production of adult films, including four films entitled. "The Last Rated Movie" 1, 2, 3 and 4, and three films entitled "Firestorm" 1, 2 and 3.2 VCA is a California based corporation that does business nationally, involving reproduction and distribution of entertainment media.3
On or about July 7, 1992, Command and VCA entered into an agreement providing that VCA was to combine the four Last Rated Movies ("LXRM") with out-takes from the films to create a special edition of the film.4 Specifically, the parties agreed that VCA would use Command's four original ¾ inch master tapes of the individual films to create two one inch "sub masters."5 The contract required VCA to return the ¾ inch tapes "immediately after the one inch sub masters [were] made."6 The contract further provides that 7
On or about May 31, 1995, Command and VCA entered into an agreement similar to the LXRM contract to produce a special edition of Command's Firestorm ("FT") series, which was to be composed of all three Firestorm movies and out-takes.8 The contract required VCA to return Command's original ¾ inch masters after VCA created the one inch sub master.9 The contract further provided that
[Command] is delivering 4 ¾" video masters of the films to Trac Tech for the sole and only purpose of duping ½" video tapes as ordered by Command. It is understood that no copies of these films, other than those ordered by Command, are to be made, and that the masters will be held in safe keeping by Trac Tech until this Agreement is terminated by either party.10
The FT Contract further provides that "[s]hould the duplication master at any time become defective, Command, upon notification, will supply the appropriate ¾" work master(s) again to Trac Tech."11
Between 1995 and 2005, Command repeatedly contacted VCA regarding the masters of its tapes and was each time assured that they were safe.12 In reliance on VCA's assurances, Command disposed of its ¾ inch original copies of LXRM and FT around December 2004, when it down-sized into a new office.13 On or about February 2005, VCA discontinued its duplication services and contacted its customers — except for Command — and asked its customers what they wanted VCA to do with their masters.14 Through a bookkeeping error, which mistakenly labeled Command's videos as the property of Adam and Eve Productions ("A & E"), Command's masters were sent to RP Duplicating ("RP").15
On or about February 17, 2005, Command learned of the misdelivery of its sub masters to RP and requested their return from VCA.16 VCA made no attempt to retrieve the sub masters from RP, and Command attempted to obtain them directly from RP.17 Command was eventually able to retrieve all of its masters except for LXRM and FT, which were either lost or stolen at RP or in transit.18
Summary judgment is only appropriate where the record "show[s] that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law."19 An issue of fact is genuine if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party,"20 while a fact will be deemed material where it "might affect the outcome of the suit under the governing law."21
The moving party bears the burden of demonstrating that there exists no genuine issue of material fact.22 In turn, to defeat a motion for summary judgment, the nonmoving party must raise a genuine issue of material fact that does "not rely on conclusory allegations or unsubstantiated speculation."23 To do so, it must do more than show that there is "`some metaphysical doubt as to the material facts.'"24 In determining whether a genuine issue of material fact exists, the court must construe the evidence in the light most favorable to the non-moving party and draw all justifiable inferences in that party's favor.25
A district court may grant summary judgment sua sponte, as long as at least one party has moved for summary judgment.26 "[A] court may grant summary judgment to a non-moving party, provided that party has had a full and fair opportunity to meet the proposition that there is no genuine issue of material fact to be tried."27
To establish a claim for breach of contract under New York law, a party must prove "(1) a contract; (2) performance of the contract by one party; (3) breach by the other party; and (4) damages."28 The 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."29 In determining a party's obligations under a contract, it is not for the court to "supply a specific obligation the parties themselves did not spell out."30 "[I]mpossibility excuses a party's performance only when the destruction of the subject matter of the contract or the means of performance makes performance objectively impossible."31
If the language of the contract is ambiguous, New York law requires the court to interpret a written contract "so as to give effect to the intention of the parties as expressed in the unequivocal language they have employed."32
When the question is the contract's proper construction, summary judgment may be granted when [the contract's] words convey a definite and precise meaning absent any ambiguity.... Contract language is ambiguous if it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages, and terminology as generally understood in the particular trade or business.33
The language of a contract is not ambiguous, however, simply because the parties urge different interpretations,34 or if one party's view "strain[s] the contract language beyond its reasonable and ordinary meaning."35 "Ascertaining whether the language of a contract is clear or ambiguous is a question of law to be decided by the court."36 Ambiguous language, however, should be "construed against the interest of the drafting party."37 When a provision of the contract is ambiguous, the court may "consider extrinsic evidence such as the parties' course of conduct throughout the life of the contract."38
"Conversion is any unauthorized exercise of dominion or control over property by one who is not the owner of the property that interferes with and is in defiance of a superior possessory right of another in the property."39 When the original possession is lawful, "`conversion does not occur until the defendant refuses to return property after demand or until he sooner disposes of the property.'"40
To maintain a claim for conversion, "a plaintiff must show: (1) `legal ownership or an immediate superior right of possession to a specific identifiable thing' and (2) that the defendant `exercised an unauthorized dominion over the thing in question, to the alteration of its condition or to the exclusion of the plaintiffs rights.'"41 The determination as to whether the relationship is one of bailor and bailee turns on whether there is a relinquishment of exclusive possession, control and dominion over the property."42 In addition, there must be "either actual or constructive delivery of the bailed item, as well as actual or constructive acceptance by the bailee."43 Constructive delivery does not require that a formal transfer of physical property take place, merely the lawful possession of the personal property by another.44 Any misdelivery of a bailed good, whether made in a good faith or not, results in liability of the bailee for conversion.45 If a bailee returns property via a common carrier, it has satisfied its duty to deliver the goods to the owner.46
A conversion claim may only succeed if the party alleges a wrong that is distinct from any contractual obligations.47 There is no conversion action where damages are sought for breach of contract.48 Rather, a plaintiff must show acts that were unlawful or wrongful as opposed to violations of contractual rights.49
In the context of a contract dispute, "[t]he existence of a valid and enforceable written contract governing a particular subject matter...
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