Surplus Equipment, Inc. v. Xerox Corp.

• Decision Date: 12 May 1986
• Citation: 502 N.Y.S.2d 491,120 A.D.2d 582
• Parties: SURPLUS EQUIPMENT, INC., Appellant, v. XEROX CORPORATION, Respondent.
• Court: New York Supreme Court — Appellate Division

Page 491

502 N.Y.S.2d 491

120 A.D.2d 582

SURPLUS EQUIPMENT, INC., Appellant, v. XEROX CORPORATION, Respondent.

Supreme Court, Appellate Division Second Department.

May 12, 1986.

Jack Strauss, New York City, for appellant.

Clark, Gagliardi & Miller, P.C., White Plains (Lawrence T. D'Aloise, Jr., of counsel), for respondent.

Before NIEHOFF, J.P., and RUBIN, KOOPER and SPATT, JJ.

MEMORANDUM BY THE COURT.

In an action to recover damages, inter alia, for breach of contract and misappropriation of a unique sales idea, the plaintiff appeals from a judgment of the Supreme Court, Rockland County (Donovan, J.), dated December 6, 1984, which dismisses its complaint, and, upon a jury verdict, is in favor of the defendant and against it in the principal sum of $26,325 on the defendant's counterclaim.

Judgment affirmed, without costs or disbursements.

The trial court properly dismissed the plaintiff's second cause of action at the close of the plaintiff's case. As the basis for that cause of action, the plaintiff alleged that defendant had "pirated away and usurped" a supposedly novel idea formulated by the plaintiff's principal. This supposedly novel idea was selling used copy machines at "Warehouse Sales" conducted at motels.

The plaintiff's second cause of action asserted two distinct legal theories. The first was that the defendant breached a promise, implied as a matter of fact, to reimburse the plaintiff for the use of its idea. The second is that, even in the absence of any such promise, equity requires that the plaintiff be reimbursed for the use of its idea. The latter theory of recovery forms the basis for a cause of action sounding in contract implied as a matter of law. These two separate theories--contract implied as a matter of fact, and contract implied as a matter of law (or quasi contract)--are conceptually different in fundamental ways (see, Grombach Productions, Inc. v. Waring, 293 N.Y. 609, 59 N.E. 425; Miller v. Schloss, 218 N.Y. 400, 406-407, 113 N.E. 337; Robbins v. Cooper Assoc., 19 A.D.2d 242, 241 N.Y.S.2d 259, revd on other grounds 14 N.Y.2d 913, 252 N.Y.S.2d 318, 200 N.E.2d 860). However, with respect to either of these two theories, recovery may be had only if the allegedly misappropriated idea was, indeed, novel (see, Ferber v. Sterndent Corp., 51 N.Y.2d 782, 433 N.Y.S.2d 85, 412 N.E.2d 1311, affg 73 A.D.2d 590, 422 N.Y.S.2d 131; Downey v. General Foods Corp., 31 N.Y.2d 56, 334 N.Y.S.2d 874, 286 N.E.2d 257, revg 37 A.D.2d 250, 323 N.Y.S.2d 578). We conclude, based on a review of the entire record, that, at most, the plaintiff's idea was a "useful adaptation of existing knowledge" (see, Educational Sales Programs v. Dreyfus Corp., 65 Misc.2d 412, 416, 317 N.Y.S.2d 840) and not a truly novel idea. We find, moreover, that any claim by the plaintiff to originality was lost when it exploited the idea on a commercial basis before ever dealing with the defendant. The plaintiff "published" its idea by conducting numerous well-publicized warehouse sales before it ever...