Lewin v. Long

• Decision Date: 22 November 1999
• Docket Number: No. Civ. 97-2741 (JAG).,Civ. 97-2741 (JAG).
• Parties: Claude LEWIN, Plaintiff, v. James LONG, et al., Defendants.
• Court: U.S. District Court — District of New Jersey

70 F.Supp.2d 534

Claude LEWIN, Plaintiff, v. James LONG, et al., Defendants.

No. Civ. 97-2741 (JAG).

United States District Court, D. New Jersey.

November 22, 1999.

COPYRIGHT MATERIAL OMITTED

Gary S. Kull, Carroll, McNulty & Kull, L.L.C., Far Hills, NJ, for plaintiff.

Douglas J. Ehrenworth, Spector & Ehrenworth, P.C., Florham Park, NJ, for defendants James Long, Honest Entertainment Group, One Music Corporation, Telos Holdings, Inc., Robert Jenkins, and Bob Jenkins Music Services.

Peter Owen Hughes, Stanton, Hughes, Diana & Zucker, PC, Florham Park, NJ, for Jim Long Companies, Inc.

David Satnick, Loeb & Loeb, New York City, for OneMusic Corporation.

OPINION

GREENAWAY, District Judge.

This matter comes before the Court on defendants' consolidated motion for summary judgment on Counts III, VII, VIII, XI, XII, XIII, and XV. The defendants moving for summary judgment are Jim Long, ("Long")¹ (incorrectly named in the Complaint as James Long) Honest Entertainment Group, ("HEG")² OneMusic Corporation, ("OneMusic")³ Telos Holdings, Inc., ("THI")⁴ Robert Jenkins, ("Jenkins") and Bob Jenkins Music Services ("BJMS").⁵

This case arises out of an alleged breach of contract. Plaintiff Claude Lewin ("Plaintiff") is a salesman in the music library industry, which involves the compilation and licensing of music and sound effects for use in radio, television, and other media productions. Plaintiff contends that defendants Long and Jenkins used plaintiff to "leverage" a deal that inured to their benefit and financially injured plaintiff.

Specifically, plaintiff claims that Long and Jenkins induced plaintiff to resign from his position as FirstCom's Eastern Division Manager, and to sign an employment contract with OneMusic. OneMusic's employment contract promised to employ plaintiff as the marketing and sales director of OneMusic's music library at a future date. By the terms of the contract, however, OneMusic retained the right to terminate plaintiff's employment on one-month's notice.

In addition, plaintiff claims that he negotiated an agreement (the "OneMusic/Gotham agreement") with OneMusic, whereby OneMusic promised to market and to sell at a future date a new start-up music library company called Gotham City Music ("Gotham") in which plaintiff was a partner. The parties, however, never executed the OneMusic/Gotham agreement. Even so, plaintiff contends that these two promises constituted a "package deal" that enticed plaintiff to resign from his position with FirstCom.

Once plaintiff resigned from FirstCom, he signed an employment contract with OneMusic. Before plaintiff began working for OneMusic, however, FirstCom and OneMusic executed an agreement (the "FirstCom/OneMusic deal") that obviated OneMusic's need for plaintiff's services. Specifically, the FirstCom/OneMusic deal provided that FirstCom would purchase OneMusic, and that OneMusic could use FirstCom's marketing and sales force to sell the OneMusic music library. As a result of the FirstCom/OneMusic deal, OneMusic no longer needed to establish its own marketing and sales force. OneMusic, therefore, exercised its rights under its contract with plaintiff and terminated his employment. In addition, OneMusic ended its negotiations with plaintiff regarding Gotham.

In plaintiff's Amended Complaint, he claims that OneMusic broke the "package deal" promises. To support his position, plaintiff contends that OneMusic had a duty to disclose to plaintiff, prior to when they executed the OneMusic employment contract, the possibility that FirstCom might purchase part of OneMusic to the detriment of plaintiff and Gotham.

In plaintiff's Amended Complaint, he alleges Fraud, Breach of Contract, Intentional Interference with A Prospective Economic Advantage, and Estoppel. Plaintiff seeks compensatory and punitive damages from OneMusic, Long, and Jenkins regarding the Gotham transaction. In addition, plaintiff seeks back pay, front pay, and punitive damages regarding the OneMusic employment contract. The defendants seek summary judgment on all counts.

After reviewing the summary judgment proofs, this Court grants summary judgment on all Counts.

FACTS

In the fall of 1991, plaintiff became a salesman for defendant FirstCom. On January 31, 1997, plaintiff resigned from FirstCom. While employed with FirstCom, plaintiff established himself as an accomplished salesman, and developed a substantial and lucrative "book of business" that generated approximately $120,000 in commissions to plaintiff during his last year at FirstCom.

In September 1996, while still employed with FirstCom, plaintiff and another FirstCom employee, Emanuel Kallins ("Kallins") formed Gotham.⁶ The two men hoped to make Gotham a viable competitor in the music library industry. Kallins agreed to produce the music, and plaintiff agreed to be responsible for the sales and marketing of Gotham's music library.⁷ Because Gotham was in its early phase of development, plaintiff and Kallins concentrated on producing music and formulating Gotham's business and marketing plans.

Part of Gotham's business and marketing plan included acquiring financing and a viable distribution channel for Gotham's products. In late October 1996, plaintiff approached Jenkins to discuss whether BJMS would be interested in financing and distributing the Gotham music library. Eventually, while still employed with FirstCom, plaintiff mailed to Jenkins a joint venture proposal ("the BJMS/G proposal") addressing a possible BJMS — Gotham relationship.⁸

Specifically, the BJMS/G proposal expressly contemplated that BJMS would finance the selling and marketing of the Gotham music library to FirstCom's clients and customers. Throughout the proposal, plaintiff attempted to conceal his and Kallins' identities by "xxx"ing out all references to their names and to FirstCom. In addition, plaintiff believed that if the wrong people saw his BJMS/G proposal, his position at FirstCom could be jeopardized. Plaintiff conceded also that if the BJMS/G proposal were successful, he intended to resign from FirstCom and to compete for his FirstCom customer base.

After reviewing the BJMS/G proposal, Jenkins rejected it. Jenkins explained that he and Long were forming a new music library called OneMusic, of which Jenkins would become the president in January 1997. Jenkins suggested that plaintiff, instead, offer to Long, a Gotham joint venture proposal with OneMusic. Shortly thereafter, plaintiff followed Jenkins' advice and proposed to OneMusic an agreement, which essentially contemplated that, through a written license and royalty contract, OneMusic would represent the Gotham music library for a term of ten (10) years. Plaintiff and OneMusic discussed also the opportunity for OneMusic to hire both plaintiff and Kallins as employees —hence the "package deal."⁹ Jenkins responded that, due to the non-compete agreements that Jenkins and Long each had with FirstCom, neither he nor Long could discuss employment opportunities for plaintiff at OneMusic in connection with any arrangement with Gotham until after January 1, 1997.

Notwithstanding Jenkins' statement to the contrary, from October 1996 through January 1997, plaintiff discussed with Jenkins and Long, his potential employment with OneMusic. Furthermore, during that same period, plaintiff, Long, and Jenkins participated in numerous discussions and negotiations regarding the OneMusic/Gotham agreement. When OneMusic sent the final draft of the OneMusic/Gotham license and royalty agreement to plaintiff, plaintiff rejected it and requested further revisions. The undisputed facts show that the parties never executed the OneMusic/Gotham agreement.¹⁰

On January 28, 1997, Long faxed to plaintiff a draft copy of his OneMusic employment contract.¹¹ Plaintiff's OneMusic employment contract contained the express provision that either party could terminate plaintiff's employment upon one-month's notice.¹² After review, plaintiff made two handwritten changes, signed the contract, and sent it back to Long.¹³ On January 31, 1997, plaintiff and Long signed the altered employment contract, which incorporated plaintiff's two changes therein. Plaintiff then submitted a resignation letter to FirstCom on January 30, 1997, which "serve[d] as a two week notice.¹⁴ Plaintiff's resignation from his Regional Sales Manager position with FirstCom became effective February 14, 1997.

At the time plaintiff resigned, the OneMusic/Gotham agreement had not been signed. Plaintiff, however, alleges that a verbal agreement had been reached with respect to key terms. Plaintiff claims further that he, Long, and Jenkins agreed that their verbal agreement would be memorialized in writing.

OneMusic contends that it forwarded to plaintiff a written draft of the OneMusic/Gotham proposal on January 31, 1997. The facts show that plaintiff refused to accept OneMusic's initial draft. Approximately two weeks after plaintiff received the draft from OneMusic, his attorney¹⁵ sent to OneMusic, a four page letter requesting substantial revisions to the draft. Although negotiations between OneMusic and Gotham continued throughout February 1997, the parties never reached a meeting of the minds and never executed an agreement.

Nevertheless, on January 31, 1997, plaintiff entered into and signed an employment contract with OneMusic, which expressly provided that plaintiff's employment could be terminated by either party at any time, and for any reason, on one month's notice. The employment contract stated also that plaintiff's employment with OneMusic would begin on or before March 1, 1997; that plaintiff was to be paid $75,000 annually, or an average earned commission of 8%, whichever was greater; that plaintiff was to receive 1,000 shares of stock in OneMusic; that OneMusic would pay his COBRA medical coverage; and that OneMusic would contract with, market, and sell Gotham, (plaintiff's own music library), for a period of at least five years.

The...