Spanski Enterprises, Inc. v. Telewizja Polska S.A.
1:10-cv-04933
S.D.N.Y.Jan 8, 2013Background
- SEI sued TVP for breach of contract, copyright, and related claims over the 1994 contract and its amendments.
- Settlement negotiations culminated in a 2009 Settlement Agreement and release aiming to dismiss claims with prejudice and provide mutual releases.
- Prior Action (2007–2009) was resolved by the Settlement Agreement; no long-form agreement was signed, but the settlement outlined terms for dismissal with prejudice.
- TVP later asserted counterclaims for royalties underpayment and breach of contract post-settlement, seeking cancellation or rescission of the agreements.
- The Court must interpret the Settlement Agreement to determine which pre- and post-2009 claims are released, and whether post-2009 breaches survive.
- SEI moved for partial summary judgment; the court granted in part and denied in part, addressing release scope, breach issues, and rescission claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2009 Settlement Agreement release bars TVP's pre‑2009 counterclaims | TVP contends release excludes pre‑execution claims and allows such counterclaims. | SEI argues the release is broad and extinguishes all claims arising under the Contract as of execution. | Settlement release bars pre‑2009 TVP counterclaims. |
| Whether post‑settlement breach claims survive given the release | TVP argues ongoing contractual breaches post‑settlement are not released. | SEI contends the release covers all Contract claims, pre‑ and post‑execution. | Post‑settlement breach claim survives to extent not barred by the release. |
| Whether SEI breached the Contract by failing to maximize subscribers | TVP argues SEI had an implied best‑efforts obligation to maximize subscribers. | SEI disputes a contractual obligation to maximize subscribers exists or is adequately evidenced. | Issue of material fact on whether SEI breached the implied best‑efforts duty survives. |
| Whether expert and Rule 30(b)(6) testimony defeat TVP's breach claim | SEI contends Nadolna’s deposition undermines TVP's claims and the experts should be excluded. | TVP contends the deposition does not negate the breach and experts support the claim. | Genuine issues of material fact exist; expert testimony and deposition binding effects preclude summary judgment on this issue. |
| Whether TVP’s cancellation/rescission claim is available | SEI argues no basis for rescission because breaches were not material or fundamental. | TVP seeks rescission based on willful breach and bad faith; argues contract was fundamentally frustrated. | Rescission claim dismissed; continued performance defeats rescission. |
Key Cases Cited
- Interpharm, Inc. v. Wells Fargo Bank, N.A., 655 F.3d 136 (2d Cir. 2011) (valid release forecloses claims covered by the agreement)
- Bank of New York v. Amoco Oil Co., 35 F.3d 643 (2d Cir. 1994) (contract interpretation and release scope guiding enforcement)
- Omaha Indem. Co. v. Johnson & Towers, Inc., 599 F. Supp. 215 (E.D.N.Y. 1984) (application of release language to pre‑existing disputes)
- Najjar Indus., Inc. v. City of New York, 57 N.Y.2d 647 (1982) (New York law on releases and settlement scope)
- Readco, Inc. v. Marine Midland Bank, N.A., 81 F.3d 295 (2d Cir. 1996) (contractual interpretation and integration of releases)
- Ruskay v. Waddell, 552 F.2d 392 (2d Cir. 1977) (considering surrounding circumstances to interpret releases)
- Powell v. Omnicom, 497 F.3d 124 (2d Cir. 2007) (settlement decisions cannot be undone by later insights)
- Kay-R Elec. Corp. v. Stone & Webster Constr. Co., 23 F.3d 55 (2d Cir. 1994) (plain meaning of general releases)
- Times Mirror Magazines, Inc. v. Field & Stream Licenses Co., 103 F. Supp. 2d 711 (S.D.N.Y. 2000) (continuation of performance limits rescission/damages analysis)
- ESPN, Inc. v. Office of Commissioner of Baseball, 76 F. Supp. 2d 383 (S.D.N.Y. 1999) (non‑breaching party may recover damages while continuing contract)