Gate Five, LLC v. Knowles–Carter

• Decision Date: 08 November 2012
• Citation: 953 N.Y.S.2d 193,2012 N.Y. Slip Op. 07395,100 A.D.3d 416
• Parties: GATE FIVE, LLC, Plaintiff–Respondent, v. Beyoncé KNOWLES–CARTER, et al., Defendants–Appellants.
• Court: New York Supreme Court — Appellate Division

100 A.D.3d 416

953 N.Y.S.2d 193

2012 N.Y. Slip Op. 07395

GATE FIVE, LLC, Plaintiff–Respondent,

v.Beyoncé KNOWLES–CARTER, et al., Defendants–Appellants.

Supreme Court, Appellate Division, First Department, New York.

Nov. 8, 2012.

Reed Smith LLP, New York (Jordan W. Siev of counsel), for appellants.

Johnson Gallagher Magliery LLC, New York (Peter J. Gallagher of counsel), for respondent.

TOM, J.P., SWEENY, ACOSTA, DeGRASSE, RICHTER, JJ.

Order, Supreme Court, New York County (Charles E. Ramos, J.), entered on or about June 1, 2012, which denied defendants' motion for summary judgment dismissing the complaint and on their counterclaim for indemnification and reimbursement of attorneys' fees, unanimously affirmed, without costs.

The motion court correctly denied defendants' motion. Issues of fact remain as to whether defendants intended to forgo their right to terminate the licensing agreement, under a financing contingency clause, for plaintiff's failure to obtain “committed financing or additional capital” by a certain date ( see generally Fundamental Portfolio Advisors, Inc. v. Tocqueville Asset Mgt., L.P., 7 N.Y.3d 96, 817 N.Y.S.2d 606, 850 N.E.2d 653 [2006] ). The record shows that defendants never objected to and worked actively toward a closing on the loan which would not occur by that date. In addition, whether the non-finalized financing agreements obtained by plaintiff prior to the financing contingency deadline and prior to defendants' termination of the agreements constituted “committed financing,” which term is not defined in the agreement, remains an issue for the trier of fact. The record also raises issues as to whether defendants' own actions or bad faith caused or prevented plaintiff from securing financing by the deadline ( see generally Dalton v. Educational Testing Serv., 87 N.Y.2d 384, 389, 639 N.Y.S.2d 977, 663 N.E.2d 289 [1995] ) and whether plaintiff is entitled to an injunction to prevent defendants from utilizing their services in a competing video game project during the prescribed period ( see American Broad. Cos. v. Wolf, 52 N.Y.2d 394, 402, 438 N.Y.S.2d 482, 420 N.E.2d 363 [1981] ).

Defendants did not establish that the agreement's indemnification provision satisfied the exacting standard of language “exclusively or unequivocally referable to claims between the parties themselves” as opposed to third-party claims only ( see Hooper Assoc. v. AGS Computers, 74 N.Y.2d 487, 492, 549 N.Y.S.2d 365, 548 N.E.2d 903 [...