| Zinter Handling, Inc. v General Elec. Co. |
| 2012 NY Slip Op 08617 [101 AD3d 1333] |
| December 13, 2012 |
| Appellate Division, Third Department |
| Zinter Handling, Inc., Appellant-Respondent, v GeneralElectric Company, Respondent, and J.C. MacElroy Company, Inc., et al.,Respondents-Appellants. |
—[*1] Breedlove & Noll, LLP, Clifton Park (Carrie McLoughlin Noll of counsel), forrespondents-appellants. Bond, Schoeneck & King, PLLC, Albany (William E. Reynolds of counsel), forrespondent.
Egan Jr., J. Cross appeals from an order of the Supreme Court (Nolan Jr., J.), entered March20, 2012 in Saratoga County, which, among other things, granted a motion by defendant GeneralElectric Company for summary judgment dismissing the amended complaint against it.
Plaintiff specializes in designing and manufacturing overhead crane systems and, between1988 and 2003, provided defendant General Electric Company (hereinafter GE) with overheadbridge cranes for use in its gas turbine enclosures. Each crane was sold pursuant to a GEpurchase order and, in conjunction therewith, plaintiff would prepare a corresponding drawingfor GE's approval. Defendant J.C. MacElroy Company, Inc. (hereinafter JCM) also [*2]manufactures bridge cranes and, as such, is plaintiff's competitor.
In May 2004, plaintiff commenced an action in the United States District Court for theNorthern District of New York against, among others, GE, JCM and JCM's then president, BartSpota. The crux of plaintiff's claim was that GE misappropriated and/or shared certain ofplaintiff's designs—namely, the "new breed" and "high temperature" bridge cranedesigns—and, in so doing, violated the Lanham Act (see 15 USC § 1125).District Court (Sharpe, J.) granted motions by GE, JCM and Spota for summary judgment on theLanham Act claim, finding that, pursuant to the terms of the underlying purchase orders betweenplaintiff and GE, GE owned the drawings and information at issue and, therefore, could use ordisseminate such materials as it saw fit. District Court also declined to exercise supplementaljurisdiction over plaintiff's related state law claims, thereby disposing of the balance of thecomplaint.
Plaintiff appealed to the Second Circuit Court of Appeals and, while that appeal waspending, commenced this action in Supreme Court asserting state law claims arising out of thesame transactions (see CPLR 205 [a]). At oral argument before the Second Circuit,plaintiff withdrew its Lanham Act claim, thus divesting the court of direct federal jurisdiction.The Second Circuit then vacated District Court's award of summary judgment on that claim anddismissed plaintiff's remaining causes of action without prejudice to asserting them in state court.
Plaintiff thereafter amended its complaint in this action to allege six causes of action againstGE (unfair competition, conversion, defamation, tortious interference with prospective businessrelations and two breach of contract claims), five causes of action against JCM (unfaircompetition, tortious interference with prospective business relations, conversion, defamationand injurious falsehood) and two causes of action against Spota's estate (defamation andinjurious falsehood).[FN1]Following joinder of issue and discovery, defendants moved for summary judgment dismissingthe amended complaint. Supreme Court granted GE's motion in its entirety and partially grantedthe motions brought by JCM and Spota's estate, leaving intact only a portion of the tortiousinterference cause of action against JCM, as well as the defamation and injurious falsehoodcauses of action against JCM and Spota's estate. Plaintiff, as so limited by its brief, appeals andJCM and Spota's estate cross-appeal.[FN2]
Plaintiff initially contends that Supreme Court erred in granting GE's motion for summaryjudgment dismissing its breach of contract claims as there is, at the very least, a question of factas to which entity owned the drawings and/or specifications at issue.[FN3]We [*3]disagree.
In ascertaining the respective obligations of the parties to a contract, we first must look to theactual language employed (see Williamsv Village of Endicott, 91 AD3d 1160, 1161 [2012]) and, in so doing, are guided by the"familiar and eminently sensible proposition . . . that, when [the] parties set downtheir agreement in a clear, complete document, their writing should . . . be enforcedaccording to its terms" (W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162 [1990]; accord Vermont Teddy Bear Co. v 538Madison Realty Co., 1 NY3d 470, 475 [2004]). Whether an ambiguity exists in a writtenagreement is a question of law for a court to decide after reading the document "as a whole todetermine its purpose and intent" (W.W.W. Assoc. v Giancontieri, 77 NY2d at 162; accord Wiggins v Kopko, 94 AD3d1268, 1269 [2012]; see Currier,McCabe & Assoc., Inc. v Maher, 75 AD3d 889, 890-891 [2010]). "An ambiguity will befound only where reasonable minds could differ as to what was intended by the parties"(Wiggins v Kopko, 94 AD3d at 1269 [citations omitted]), and "provisions in a contractare not ambiguous merely because the parties interpret them differently" (Mount Vernon FireIns. Co. v Creative Hous., 88 NY2d 347, 352 [1996]; accord Currier, McCabe & Assoc.,Inc. v Maher, 75 AD3d at 891).
Here, as noted previously, each crane sold by plaintiff to GE originated with a GE purchaseorder and, in conjunction therewith, plaintiff would prepare a corresponding design drawing.Each drawing, in turn, contained an "approval box" that included the following language: "thisdrawing shall not be reproduced in part or in whole or used in any way without the writtenpermission of [plaintiff]."[FN4] Additionally, in February 2003, a GE engineer signed—at plaintiff's behest—aletter agreement authored by plaintiff's president, Scott Zinter, attesting to the confidential natureof the information related to the high temperature bridge crane. According to plaintiff, suchdocuments establish that it retained ownership of the relevant drawings and design informationrelated thereto and, therefore, GE breached its contract with plaintiff when, in 1999 (andthereafter), it reproduced and/or disseminated the new breed design to plaintiff's competitors,including JCM, without plaintiff's express written permission. Plaintiff similarly alleges that GEbreached its contractual agreement with plaintiff in 2003 (and thereafter) when GE shared thefunctional specifications for the high temperature bridge crane [*4]with, among others, JCM.
The flaw in plaintiff's argument on this point is that the sale of each crane to GE wasgoverned by certain standard terms and conditions of purchase, which—plaintiffacknowledges—were incorporated by reference into each of GE's purchase orders.Beginning in May 1998, and insofar as is relevant here, such terms and conditions provided that"[a]ny knowledge or information which [plaintiff] shall have disclosed or may hereafter discloseto [GE], and which in any way relates to the goods or services offered by this order. . . shall not, unless otherwise specifically agreed to in writing by [GE], bedeemed confidential or proprietary information, and shall be acquired by [GE], free from anyrestrictions (other than a claim for patent infringement)" (emphasis added).[FN5]Those standard terms and conditions "[took] precedence over any alternative terms andconditions in any other document connected with [the subject] transaction unless such alternativeterms and conditions [were] expressly incorporated by reference on the face of [the] [p]urchase[o]rder." Further, the underlying purchase order, together with any documents expresslyincorporated by reference therein, were intended to be both "a final expression of [the parties'][a]greement" and a "complete and exclusive statement of the terms of their [a]greement." Finally,with respect to the use of the approval box, the standard terms and conditions provided that"[u]nless otherwise specifically agreed in writing by [GE], any check or approval of drawings by[GE] shall be for [s]eller's convenience and will not relieve [s]eller of its responsibility to meetall requirements of [the] order."
Zinter acknowledged at his examination before trial that neither the approval box languagenor the 2003 letter agreement was expressly incorporated by reference into any of the applicablepurchase orders and, upon giving effect to the plain and unambiguous language employed in thestandard terms and conditions incorporated therein, two things become clear: (1) that thedocuments relied upon by plaintiff were neither intended to—nor did they infact—modify or supplant the contractual terms governing plaintiff and GE's relationship,and (2) that GE owned the drawings, specifications and information at issue and, therefore, didnot breach its agreement with plaintiff when it shared such materials with, among others, JCM.Accordingly, Supreme Court properly granted GE's motion for summary judgment dismissingplaintiff's breach of contract claims against it.[FN6][*5]
Turning to the claims asserted against JCM, to the extentthat plaintiff's unfair competition claim is premised upon a specific letter that Spota sent to GE inAugust 1999, such claim is barred by the applicable three-year statute of limitations (seeCPLR 214 [4]; Ullmannglass v Oneida,Ltd., 86 AD3d 827, 828 [2011]). Alternatively, to the extent that this claim stems fromJCM's alleged ongoing use of such drawings/designs, this portion of the claim, although nottime-barred, fails for the reasons already stated—namely, that GE owned the subjectmaterials. Accordingly, Supreme Court properly granted summary judgment dismissing thiscause of action as to JCM.[FN7]
We reach a similar conclusion with regard to plaintiff's claim for tortious interference withprospective business relations, which is established where one party either utilizes wrongful orunlawful means to secure an economic advantage over, or acts for the sole purpose of inflictingintentional harm upon, another (see NBT Bancorp v Fleet/Norstar Fin. Group, 215 AD2d990, 990 [1995], affd 87 NY2d 614 [1996]). Plaintiff's claim against JCM is based upon(1) JCM's "wrongful" use of plaintiff's designs to obtain bridge crane orders from GE in 1999,and (2) JCM's allegedly defamatory statement, made in 2003, that plaintiff engaged in "pricefixing and bid rigging." Again, our resolution of the ownership issue relative to the subjectdrawings and designs is fatal to the wrongful use portion of plaintiff's claim. As to the allegationsof price fixing, this is merely a repetition of plaintiff's defamation cause of action (seeinfra) and, as such, should have been dismissed (see Curren v Carbonic Sys., Inc., 58AD3d 1104, 1109 [2009], citing Demas v Levitsky, 291 AD2d 653, 658 [2002], lvdismissed 98 NY2d 728 [2002]). Accordingly, JCM is entitled to dismissal of this cause ofaction in its entirety.
Finally, with respect to plaintiff's defamation and injurious falsehood causes of action, wecannot say that Supreme Court erred in denying the motion brought by JCM and Spota's estatefor summary judgment dismissing these claims. Viewing the evidence in the light most favorableto the nonmoving party, as we must (seeU.W. Marx, Inc. v Koko Contr., Inc., 97 AD3d 893, 894 [2012]), we agree thatquestions of fact remain regarding, among other things, the availability of the qualified privilegeasserted by JCM and Spota's estate (see generally Curren v Carbonic Sys., Inc., 58 AD3dat 1106-1107). The parties' remaining contentions, to the extent not specifically addressed, havebeen examined and found to be lacking in merit.
Peters, P.J., Rose, Malone Jr. and Stein, JJ., concur. Ordered that the order is modified, onthe law, without costs, by reversing so much thereof as denied the motion of defendant J.C.MacElroy Company, Inc. for summary judgment dismissing the tortious interference withprospective business relations cause of action against it; motion granted to that extent and saidcause of action dismissed against said defendant; and, as so modified, affirmed.
Footnote 1: Spota died in December 2008and his son was appointed as his representative in this action.
Footnote 2: Plaintiff does not challenge thedismissal of its conversion, defamation and tortious interference with prospective businessrelations causes of action as to GE, nor does it contest the dismissal of its conversion claimagainst JCM.
Footnote 3: To the extent that plaintiffargues that the law of the case doctrine governs this issue, a review of the Second Circuit'ssummary order dismissing plaintiff's state law claims without prejudice reveals that there was noactual determination made regarding the ownership of the drawings; hence, there was no findingby which Supreme Court was to abide (see generally Matter of Giaquinto v Commissioner of the N.Y. State Dept.of Health, 91 AD3d 1224, 1226 [2012]). Additionally, to the extent that plaintiff and GEdebate the source of plaintiff's breach of contract claims (the breach of ongoing purchase ordersversus the breach of a discrete, identifiable agreement) and, in turn, the appropriate statute oflimitations to be applied thereto, we agree—for the reasons that follow—thatSupreme Court properly dismissed such claims on the merits. Accordingly, we see no need toparse out and ascertain the timeliness of the individual components of plaintiff's claims in thisregard.
Footnote 4: This language was modifiedslightly in 1999 to provide that "this drawing shall not be reproduced in part or in whole or usedin any way without written permission. Equipment design and concept is the exclusive propertyof [plaintiff]."
Footnote 5: The record does not disclose theprecise language employed by GE in this regard prior to May 1998. That issue need not detain us,however, as plaintiff's breach of contract claims are premised upon breaches alleged to haveoccurred after the subject language took effect.
Footnote 6: We reach a similar conclusionregarding plaintiff's unfair competition claim against GE, which is nothing more than arestatement of plaintiff's breach of contract claims. Plaintiff failed to plead—and, in lightof its concession on this point, could not prove—that it was in competition with GE forcommercial benefit (see Edelman vStarwood Capital Group, LLC, 70 AD3d 246, 249 [2009], lv denied 14 NY3d706 [2010]). Moreover, as should be obvious from our resolution of plaintiff's breach of contractclaims, GE cannot misappropriate that which it already owns.
Footnote 7: The balance of plaintiff's unfaircompetition claim is a reiteration of its defamation cause of action (see infra).