Team Marketing Usa Corporation v. Power Pact, LLC

• Decision Date: 07 June 2007
• Docket Number: 501907.
• Citation: 839 N.Y.S.2d 242,2007 NY Slip Op 04751,41 A.D.3d 939
• Parties: TEAM MARKETING USA CORPORATION, Appellant, v. POWER PACT, LLC, Respondent.
• Court: New York Supreme Court — Appellate Division

41 A.D.3d 939

839 N.Y.S.2d 242

2007 NY Slip Op 04751

TEAM MARKETING USA CORPORATION, Appellant, v. POWER PACT, LLC, Respondent.

501907.

Appellate Division of the Supreme Court of the State of New York, Third Department.

Decided June 7, 2007.

Appeal from an order of the Supreme Court (Kavanagh, J.), entered October 4, 2006 in Ulster County, which, inter alia, granted defendant's motion to dismiss the complaint.

Mercure, J.P.

In March 2005, the parties entered into a contract in which plaintiff agreed to staff various Toyota promotional marketing events. The proposed schedule of events, which was incorporated into the contract by reference, called for 17 to 22 events from April through December 2005. After the first event, defendant advised plaintiff that Toyota had changed the proposed schedule and that the future of the entire program was in question. Defendant asserts that plaintiff thereafter agreed to staff promotions on an "event-by-event basis"; plaintiff asserts that defendant cancelled the contract and that plaintiff separately agreed to staff only events that were not part of the original schedule. In June 2005, plaintiff informed defendant that due to defendant's "inefficient practices," plaintiff had "decided not to staff the Toyota program going forward." Plaintiff sent defendant an invoice for $7,826.55, representing a cancellation fee pursuant to the original contract. Defendant denied any obligation to pay this cancellation charge, claiming that plaintiff itself had cancelled the contract.

Plaintiff then commenced this action against defendant for breach of contract, unjust enrichment, account stated and reasonable counsel fees under the terms of the contract. Supreme Court granted defendant's motion to dismiss the complaint,¹ finding that plaintiff failed to state a cause of action and had waived its entitlement to the cancellation fee because it failed to send an invoice to defendant within 30 days of the claimed cancellation date, as required by the contract. Plaintiff appeals and we now reverse that part of Supreme Court's order that dismissed plaintiff's breach of contract and reasonable counsel fees claims.

In resolving a CPLR 3211 (a) (7) motion to dismiss for failure to state a cause of action, "the court must afford the pleadings a liberal construction, take the allegations of the complaint as true and provide plaintiff the benefit of every possible inference" (EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19 [2005]; see AG Capital Funding Partners, L.P. v State St. Bank & Trust Co., 5 NY3d 582, 591 [2005]). Moreover, "a court may freely consider affidavits submitted by the plaintiff to remedy any defects in the complaint" (Leon v Martinez, 84 NY2d 83, 88 [1994]). Here, the contract, which was annexed to the complaint, expressly provides that a cancellation charge of "10% of [t]otal staffing fee is payable for coordination, talent fees and accounting if cancellation [occurs] after execution of agreement." Cancellations are stated to include, among other things, "[p]ostponements, reschedules, weather issues and refusal of event site or [defendant] to allow talent to execute event." It is undisputed that on May 13, 2005—after only a single promotional even—the remaining events were either rescheduled or cancelled. In our view, given the express language of the contract, plaintiff has sufficiently pleaded a cause of action for breach of contract (see Leon v Martinez, supra at 88-89; cf. EBC I, Inc. v Goldman, Sachs & Co., supra at 22).

We further agree with plaintiff that Supreme Court erred in dismissing the complaint on the ground that plaintiff waived its right to the cancellation fee. The court—evidently treating defendant's motion as one for summary judgment (see CPLR 3211 [c])—determined that defendant established as a matter of law that plaintiff waived its claim to the cancellation fee by its conduct in failing to claim the fee within 30 days of the alleged termination of the contract and by staffing other promotional events for defendant without mentioning or seeking the fee. The relevant provisions of the contract state that "[p]romotions will be invoiced monthly and payment [is] due within 30 days of receipt of invoice" and that "invoices must be received by [defendant] no later than thirty (30) days after performance of the Services, in order to be considered for prompt payment." Giving "fair and reasonable meaning to the language used" with "reference to other provisions of the contract" (Abiele Contr. v New York City School Constr. Auth., 91 NY2d 1, 9-10 [1997]), neither provision is applicable here.

Plaintiff attempted, prior to the scheduled date of a number of the promotions, to collect a cancellation fee pursuant to a liquidated damages provision. It did not, as defendant asserts, invoice a "promotion" or seek payment for "Services" which are defined in the contract's "Standard of Services" provision as including plaintiff's employees "interact[ing] with the general public, hand[ing] out samples, do[ing] demonstrations and conduct[ing] requested tests or events." In addition, the contract, on its face, provides that the 30-day deadline is a condition for the issuance of prompt payment by defendant, rather than a condition on defendant's obligation to pay for "Services." Moreover, assuming without deciding that the payment provision is ambiguous, plaintiff submitted evidence that the parties acted in accord with that understanding.

In any event, waiver—which is the voluntary and intentional abandonment of a contract right—"`should not be lightly presumed' and must be based on `a clear manifestation of intent' to relinquish a contractual protection" (Fundamental Portfolio Advisors, Inc. v Tocqueville Asset Mgt., L.P., 7 NY3d 96, 104 [2006], quoting Gilbert Frank Corp. v Federal Ins. Co., 70 NY2d 966, 968 [1988]). Thus, "[g]enerally, the existence of an intent to forgo such a right is a question of fact" (Fundamental Portfolio Advisors, Inc. v Tocqueville Asset Mgt., L.P., supra at 104; see AXA Global Risks U.S. Ins. Co. v Sweet Assoc., 302 AD2d 844, 846 [2003]). Here, while plaintiff provided staffing for additional events and did not immediately seek to enforce the contract's cancellation provision when defendant informed it that Toyota had either postponed or cancelled future promotions, the parties dispute whether defendant proposed the additional events as a separate and distinct program or part of the original contract. In addition, the parties dispute whether plaintiff indicated to defendant that the cancellation fee was waived. Under these circumstances, questions of fact exist regarding whether plaintiff waived its right to collect such a fee, and an award of summary judgment is premature (see Fundamental Portfolio Advisors, Inc. v Tocqueville Asset Mgt., L.P., supra at 104-106; AXA Global Risks U.S. Ins. Co. v Sweet Assoc., supra at 846).

Finally, we reject defendant's argument, advanced as an alternative ground for...