Silverman v. Riker-Maxson Corp.

91 A.D.2d 524, 456 N.Y.S.2d 775, 1982 N.Y. App. Div. LEXIS 19343

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: December 9, 1982
• Status: Published

Opinions

— Judgment of the Supreme Court, New York County (Dontzin, J.), entered November 16, 1981, which, inter alia, granted defendant’s motion for summary judgment dismissing the amended complaint, reversed, on the law, without costs, and defendant’s motion for summary judgment is denied. Appeal from the order of the Supreme Court, New York County (Dontzin, J.), entered October 14, 1981, is dismissed, without costs, as subsumed within said judgment. Plaintiffs Silverman and Kalnick are attorneys and accountants who are partners. Defendant Riker-Maxson Corp. is a publicly owned corporation that manufactures and sells electronic equipment. The amended complaint alleges that plaintiffs were granted rights under two separate contracts, each of which was signed by defendant on August 12, 1968. Under the first, the “Acquisition Agreement”, Riker-Maxson’s predecessor purchased the assets of J. F. D. Electronics from a religious corporation, Stratford Retreat House, in exchange for approximately 300,000 unregistered shares of Riker stock. The acquisition agreement provided that Stratford Retreat House would transfer some of the 300,000 shares to members of the Finkel family (who operated J. F. D for Stratford), and to the brokers who brought about the 1965 and 1968 transactions. The Acquisition Agreement also provided that the Stratford Retreat House and its immediate assignees could compel the registration of those shares at certain times and under certain conditions. Under the second agreement (the Guarantee), Riker promised the seller, Stratford, and others receiving shares directly from the seller, including any brokers who brought about the sale, that when the stock was sold, Riker would guarantee a minimum of $45 per share. The plaintiffs’ amended complaint alleging four causes of action, is basically premised on two contentions: (1) that the plaintiffs were brokers in the 1968 transaction; and (2) that they were guaranteed the price of $45 per share for 9,662 shares issued to them. Special Term found that the Acquisition Agreement is clear and unambiguous and the brokers are only those specifically named in paragraph 9 of the Acquisition Agreement, which does not specify the plaintiffs. Special Term concluded that parol evidence seeking to substantiate plaintiff Kalnick’s participation as a broker in this matter, could not therefore be considered. It granted summary judgment to defendant. Parol evidence is admissible to supply omissions or explain ambiguities in the writing (Long Is. Trust Co. v International Inst, for Packaging Educ., 38 NY2d 493, 497-498; 67 Wall St. Co. v Franklin Nat. Bank, 37 NY2d 245, 248-249). The miasma which obscures the precise nature of the relationship between the two agreements as well as the transaction itself warrants the receipt of extrinsic evidence to explain whether the plaintiffs were among the intended recipients of the registration privilege and the guarantee of the price of the shares. Among other issues to be resolved are the cross claims of estoppel, the nature of plaintiffs’ assignment of shares from Stratford, and the content of the assurances from defendant Riker which allegedly induced plaintiffs to withdraw their shares from registration. Concur — Carro and Asch, JJ.; Sandler, J. P., concurs in a memorandum and Bloom, J., dissents on the opinion of Dontzin, J., at Special Term.