| Contacare, Inc. v CIBA-Geigy Corp. |
| 2008 NY Slip Op 02281 [49 AD3d 1215] |
| March 14, 2008 |
| Appellate Division, Fourth Department |
| Contacare, Inc., Appellant, v CIBA-Geigy Corporation,Now Known as CIBA Vision Corporation, Respondent. |
—[*1] Kelley Drye & Warren LLP, New York City (Robert E. Crotty of counsel), fordefendant-respondent.
Appeal from an order and judgment (one paper) of the Supreme Court, Erie County (John M.Curran, J.), entered June 4, 2007. The order and judgment granted defendant's motion forsummary judgment dismissing the amended complaint.
It is hereby ordered that the order and judgment so appealed from is unanimously affirmedwithout costs.
Memorandum: Plaintiff commenced this breach of contract and fraud action seeking royaltiesbased on defendant's alleged use of plaintiff's technology for extended wear soft contact lensesknown as TC-75 lenses. Trans-Canada Contact Lens, Ltd. (Trans-Canada) and CIBA Vision Care(CIBA), a division of defendant, entered into an option agreement pursuant to which CIBA wasentitled to enter into one of two license agreements. CIBA exercised its option and entered intothe license agreement whereby Trans-Canada granted to CIBA a license to practice the"Know-How," defined as, inter alia, all technology relating to TC-75. Trans-Canada subsequentlytransferred its contact lens technology to plaintiff. Plaintiff requested an accounting and paymentof royalties from defendant pursuant to the license agreement but, according to defendant, it didnot use TC-75 technology to produce its contact lenses. We conclude that Supreme Courtproperly granted defendant's motion for summary judgment dismissing the amended complaint.
The first cause of action, for breach of contract, alleged that defendant had marketed TC-75lenses or minor derivations thereof but had not compensated plaintiff for that use of thetechnology pursuant to the license agreement. Defendant met its initial burden on the motionwith respect to the first cause of action by submitting evidence establishing that the lensesproduced by defendant were not derivations of TC-75, and plaintiff failed to raise a triable issueof fact in opposition (see generally Zuckerman v City of New York, 49 NY2d 557, 562[1980]). Indeed, the only evidence submitted by plaintiff was the affirmation of an attorney wholacked personal knowledge of the issue (see id. at 563; Marinelli v Shifrin, 260AD2d 227, 228-229 [1999]), and who was not an expert in the relevant field (see generallyDaum v Auburn Mem. Hosp., 198 AD2d 899 [1993]). Defendant also established itsentitlement to judgment as a matter of law dismissing the [*2]second cause of action, for fraud, because it was based on the sameallegations as those in the first cause of action, for breach of contract, and thus is duplicative ofthat cause of action (see Tasseff v Nussbaumer & Clarke, 298 AD2d 877 [2002];Welch Foods v Wilson, 277 AD2d 882, 888 [2000]; Crawford Furniture Mfg. Corp. vPennsylvania Lumbermens Mut. Ins. Co., 244 AD2d 881, 881-882).
In the third cause of action, for fraud, plaintiff alleged that defendant had a duty to use itsbest effort to exploit the TC-75 technology, that defendant falsely represented that it would fulfillthat duty, and that Trans-Canada relied on that representation in entering into the licenseagreement. A necessary element of a fraud cause of action is a misrepresentation of a materialfact (see Small v Lorillard Tobacco Co., 94 NY2d 43, 57 [1999]; Lama Holding Co. vSmith Barney, 88 NY2d 413, 421 [1996]), and defendant established in support of its motionthat it made no representations to Trans-Canada that it would use its best effort to exploit theTC-75 technology. In opposition, plaintiff alleged that, because the license agreement wasexclusive, defendant thereby represented that it would use its best effort to exploit the TC-75technology (see generally Wood v Duff-Gordon, 222 NY 88, 90-91 [1917], reargdenied 222 NY 643 [1918]; Havel v Kelsey-Hayes Co., 83 AD2d 380, 382-383[1981]).
Article 2.1 of the license agreement expressly provided that Trans-Canada granted toCIBA "a perpetual worldwide non-exclusive license, with the right to grant sublicenses, topractice the Know-How." Nevertheless, plaintiff contended that the license agreement wasexclusive based on article 8.1, which provided that Trans-Canada "agrees to disclose theKnow-How to [CIBA] and not to third parties." Those two provisions cannot be interpreted in away to avoid the inconsistency (cf. Comprehensive Health Solutions v Trustco Bank,N.A., 277 AD2d 861, 863 [2000]) and, although the specific provision controls when there isan inconsistency between a general provision and a specific provision (see Muzak Corp. vHotel Taft Corp., 1 NY2d 42, 46 [1956]; Bank of Tokyo-Mitsubishi, Ltd., N.Y. Branch vKvaerner a.s., 243 AD2d 1, 8 [1998]), here both provisions are specific.The court properly concluded that article 2.1 was controlling, based on the court's review ofthe option agreement and attached exhibits, and thus properly concluded that the licenseagreement was not exclusive. CIBA exercised its option to enter into the license agreement setforth as exhibit B to the option agreement, rather than the license agreement set forth as exhibitA. A comparison of the two proposed license agreements demonstrates that exhibit A was theexclusive license agreement, whereas exhibit B was the nonexclusive license agreement. Article2.1 of exhibit A defined the license as "exclusive," and a comparison of article 3 of each of thetwo exhibits demonstrates that CIBA was to pay more royalties to Trans-Canada under exhibitA's exclusive license agreement. Article 8.1 of each of the two exhibits was identical, whichsuggests that the language of exhibit A was inadvertently copied into exhibit B. Plaintiffcontends that the court should not have considered exhibit A in interpreting the executed licenseagreement because exhibit A was not executed by the parties. Exhibit A, however, was part ofthe executed option agreement, and the court properly considered the option agreement ininterpreting the license agreement because the documents were part of the same transaction(see Nau v Vulcan Rail & Constr. Co., 286 NY 188, 197 [1941], rearg denied287 NY 630 [1941]; BWA Corp. v Alltrans Express U.S.A., 112 AD2d 850, 852 [1985]).Present—Scudder, P.J., Martoche, Centra and Peradotto, JJ.