Telerep, LLC v. U.S. Intern. Media, LLC

• Decision Date: 01 June 2010
• Citation: 903 N.Y.S.2d 14,74 A.D.3d 401
• Parties: TELEREP, LLC, et al., Plaintiffs-Appellants, v. U.S. INTERNATIONAL MEDIA, LLC, et al., Defendants-Respondents.
• Court: New York Supreme Court — Appellate Division

903 N.Y.S.2d 14

74 A.D.3d 401

TELEREP, LLC, et al., Plaintiffs-Appellants,

v.U.S. INTERNATIONAL MEDIA, LLC, et al., Defendants-Respondents.

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

June 1, 2010.

Kelley Drye & Warren LLP, New York (Richard E. Donovan of counsel), for appellants.

Skadden, Arps, Slate, Meagher & Flom LLP, New York (Joseph N. Sacca of counsel), for U.S. International Media, LLC, respondent.

Sonnenschein Nath & Rosenthal LLP, New York (Reid L. Ashinoff of counsel), for Martin Retail Group, LLC, respondent.

GONZALEZ, P.J., MOSKOWITZ, FREEDMAN, RICHTER, ROMÁN, JJ.

Order, Supreme Court, New York County (Charles E. Ramos, J.), entered August 11, 2009, which granted defendants' motion to dismiss the complaint pursuant to CPLR 3211(a)(7), unanimously reversed, on the law, without costs, the motion denied, and the complaint reinstated.

Plaintiffs are national sales representatives for the sale of commercial advertising spots broadcast on their clients' television stations located throughout the United States. Plaintiffs sell national commercial spots to various media buyers who purchase air time on behalf of their client advertisers; local advertising time is sold by the television stations themselves. Defendants are media buyers.

Plaintiffs entered into 84 contracts with various television stations. These contracts provide that plaintiffs shall act as thestation's "sole and exclusive national sales representative for the sale of all of STATION'S time ... for advertising purposes, excluding only [local sales] advertising." ¹ The stations agreed that they would not "engage or use the services of any persons, firm or corporation other than [plaintiffs] in the sale of NATIONAL SPOT ADVERTISING."

Plaintiffs brought this action against defendants for tortious interference with contract and unfair trade practices. According to the complaint, defendants embarked on a campaign to induce and pressure the stations to sell national advertising spots directly to them in breach of the stations' obligations under the contracts. Defendants persisted, despite being warned that the stations' direct sales of national spots violated the exclusivity provisions of their contracts with plaintiffs. The complaint alleges that as a result of defendants' interference, the stations breached their contracts with plaintiffs, causing them to lose commissions and goodwill.

To plead a claim for tortious interference with contract, a plaintiff must allege, inter alia, actual breach of a contract between the plaintiff and a third party ( Lama Holding Co. v. Smith Barney, 88 N.Y.2d 413, 424, 646 N.Y.S.2d 76, 668 N.E.2d 1370 [1996] ). Defendants maintain that the complaint does not allege a breach because the contracts do not bar direct sales of national spots by the television stations themselves but only prohibit sales by competing sales representatives. Plaintiffs, on the other hand, argue that, read as a whole, the contracts prohibit direct sales of national air time by the stations. In the alternative, plaintiffs contend that the contracts are ambiguous.

"A contract is unambiguous if the language it uses has a definite and precise meaning, unattended by danger of misconception in the purport of the [agreement] itself, and concerning which there is no reasonable basis for a difference of opinion" ( Greenfield v. Philles Records, 98 N.Y.2d 562, 569-570, 750 N.Y.S.2d 565, 780 N.E.2d 166 [2002] [internal quotation marks and citation omitted] ). A contract is ambiguous if "on its face [it] is reasonably susceptible of more than one interpretation" ( Chimart Assoc. v. Paul, 66 N.Y.2d 570, 573, 498 N.Y.S.2d 344, 489 N.E.2d 231 [1986] ). If the court concludes that a contract is ambiguous, it cannot...