Waldman v. New Phone Dimensions, Inc.

• Decision Date: 28 March 1985
• Docket Number: TELE-MATE
• Citation: Waldman v. New Phone Dimensions, Inc., 109 A.D.2d 702, 487 N.Y.S.2d 29 (N.Y. App. Div. 1985)
• Parties: Herbert H. WALDMAN, Plaintiff-Respondent, v. NEW PHONE DIMENSIONS, INC., et al., Defendants-Appellants, v.CONSUMER PRODUCTS, CORP., et al., Counterclaim-Defendants.
• Court: New York Supreme Court — Appellate Division

Page 29

487 N.Y.S.2d 29

109 A.D.2d 702

Herbert H. WALDMAN, Plaintiff-Respondent, v. NEW PHONE DIMENSIONS, INC., et al., Defendants-Appellants, v. TELE-MATE CONSUMER PRODUCTS, CORP., et al., Counterclaim-Defendants.

Supreme Court, Appellate Division First Department.

March 28, 1985.

M.S. Zeiberg, New Rochelle, for plaintiff-respondent.

L.A. Mandelker, New York City, for defendants-appellants.

M.S. Zeiberg, New Rochelle, for counterclaim-defendants.

Before MURPHY, P.J., and SANDLER, CARRO, FEIN and MILONAS, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County, entered June 13, 1984, denying defendants' motion and plaintiff's cross-motion, both for summary judgment, modified on the law, to grant defendants' motion for summary judgment dismissing the first, second, third, fifth and sixth causes of action of plaintiff's complaint, and is otherwise affirmed, with costs.

Plaintiff Waldman, an inventor of telephone related devices, constructed and patented a device which, when connected to a telephone, prevents the placement of unauthorized long distance calls. To promote the device, Waldman entered into a business arrangement with defendant Basile and New Phone Dimensions (NPD) of which Basile is sole officer, director and stockholder. On October 30, 1978, Waldman and NPD executed a "Patent Purchase Agreement" whereby all right, title and interest in Waldman's device was assigned to NPD which undertook to market it through the tax-advantaged sale of exclusive, territorial licenses to persons in high tax brackets. As consideration Waldman was to receive $25,000 on November 1, 1978, $25,000 on November 15, 1978 and 9 1/4% of the "Cash Portion" above $540,540 generated by the sale of the exclusive licenses. The Patent Purchase Agreement also provided that if Waldman had not received the aggregate sum of $100,000 from NPD by December 31, 1978, NPD would reassign the patent to him. In this event, all exclusive license agreements sold by NPD were to remain in full force and effect and Waldman was obliged to accept an unconditional assignment of these contracts. Although he received the two payments of $25,000 each, by December 31, 1978 Waldman had not received $100,000. The patent and the exclusive licensing agreements were reassigned to Waldman on September 18, 1979 and May 27, 1980 respectively. Subsequent to December 31, 1978, Waldman received payments which, together with the $50,000 received in November, 1978, totaled $143,000 representing 9 1/4% of the Cash Portion received by NPD through its marketing efforts.

Plaintiff argues that, subsequent to December 31, 1981 he was entitled to collect the entire amount of the Cash Portion due and outstanding from the licensees and that NPD, by virtue of its failure to pay $100,000 by that date, was not entitled to retain 90 3/4% of the Cash Portion subsequently collected. Plaintiff's position in this regard is without foundation and is contravened by the clear and unequivocal language of the Patent Purchasing Agreement. As plaintiff himself admits, the agreement gave NPD the option of continuing its relationship with Waldman by making a further $50,000 payment. NPD, in the exercise of its business judgment, chose not to exercise this option but this failure did not, as plaintiff contends, automatically abrogate the...