Opinion
No. C-03-2970 SC.
October 26, 2004
ORDER RE: DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
I. INTRODUCTION
Plaintiff Frank Morrow, on behalf of and as trustee for the General Unsecured Creditors' Liquidating Trust of At Home Corporation ("Plaintiff") has brought suit against Defendants Cablevision Systems Corp., CSC Holdings, Inc., and CSC At Home Holdings Corp. ("Defendants" or "Cablevision"). Plaintiff is the successor-in-interest to the now-defunct At Home Corporation ("At Home"). Plaintiff alleges breach of contract and related claims, arising out of alleged nonpayment by Defendants for connectivity and applications equipment and services provided to Defendants by At Home. Complaint at 1. Defendants have asserted a counterclaim against Plaintiff, seeking declaratory relief as to the scope of the transactions in dispute. Defendants' First Amended Answer and Counterclaim at 6-7. In the present motion, Defendants seek summary judgment in regard to their counterclaim. Having reviewed the parties' submissions and the relevant law, the Court finds that summary judgment is not appropriate.
II. BACKGROUND
During its existence, At Home provided facilities and services to cable companies so that they could offer high-speed Internet access to their subscribers. Plaintiff's Opposition at 3. In May 1997, At Home entered into an agreement with three cable companies, not including Defendants, to offer such services. Id. at 4. On October 2, 1997, At Home and Cablevision executed an agreement by which Cablevision joined the May agreement. Id. at 5. Under the agreement, At Home would be the exclusive provider of high-speed Internet connectivity services to Cablevision. Id. at 5-6. The agreement called for Cablevision to pay At Home 35% of its high-speed Internet subscriber fees. Id. at 1.
In deciding a motion for summary judgment, a court views the evidence in the light most favorable to the nonmoving party.Pride v. Exxon Corp., 911 F. 2d 251, 253 (9th Cir. 1990). Therefore, the Court mainly relies on the facts as portrayed in the Plaintiff's Opposition.
At the same time that it was working with At Home, Cablevision offered similar high-speed Internet services to some of its subscribers independent of the At Home network. Id. at 6. Certain geographic areas where Cablevision provided its own service were carved out from the parties' exclusivity agreement.Id. The parties dispute the scope of the exclusivity agreement and its effects on Cablevision's payments to Plaintiff. Plaintiff alleges that in 1999, Cablevision agreed to pay the 35% revenue split for at least some of its internally-served high-speed subscribers, not just the ones served by the At Home network.Id. at 8. The parties dispute whether such arrangements were part of the original agreement or, as Defendants assert, "an ad hoc interim payment arrangement . . . not covered by either the May 1997 MDA or the October 1997 Agreement." Defendants' Motion at 6. This dispute is at the heart of the present Motion.
III. LEGAL STANDARD
Defendants have moved for summary judgment on their counterclaim seeking declaratory relief as to the scope of the transactions in dispute. Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment in favor of the movant is proper if "there is no genuine issue as to any material fact."Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
IV. DISCUSSION
Having reviewed the papers submitted by the parties, the Court finds that there is a genuine issue as to a material fact. Therefore, summary judgment is improper. At issue is the scope of the October 1997 agreement between the parties and whether there were subsequent modifications to that agreement. If this Court could determine the scope from the four corners of the agreement, then the issue here might simply be one of contractual interpretation, which is a matter of law suitable for summary judgment. Rhone-Poulenc Basic Chemicals Co., v. Am. Motorists Ins. Co., 616 A.2d 1192, 1195 (Del. 1992); Bethlehem Steel Co. v. Turner Constr. Co. 2 N.Y.2d 456, 460 (N.Y. 1957). However, the parties' subsequent behavior and its effect on the scope of the 1997 agreement are in dispute. Plaintiff asserts that the "parties' subsequent behavior is among the best evidence of what they believed the contract terms meant." Plaintiff's Opposition at 13. Defendants assert that this subsequent behavior was "an ad hoc interim payment arrangement . . . not relevant to this motion because it is not covered by either the May 1997 [Agreement] or the October 1997 Agreement." Defendants' Motion at 6. Regardless of whether Delaware or New York law controls this dispute, this issue is not a matter for summary judgment. "When the intent of parties to be bound by an agreement must be determined by disputed evidence or inferences outside the written words of the instrument, a question of fact is presented."Ashland Mgmt. v. Janien, 82 N.Y.2d 395, 401-02 (N.Y. 1993) (internal quotations and citations omitted). Similarly, under Delaware law:
The parties dispute whether New York or Delaware law is controlling here. However, because the choice of law is not material to the question at hand, the Court at this time does not decide which law is applicable.
[T]he parties to the original contract may agree that a mere subsequent contract to perform some specified act will be accepted in full performance and satisfaction of the pre-existing duty. If that is their intent, the old agreement is wholly abrogated and superseded by the new contract, and thereafter the only remedy is on the latter. That is usually a question of fact.Empire Box Corp. v. Jefferson Island Salt Mining Co., 36 A.2d 40, 43 (Del. 1944) (internal quotations and citations omitted). Therefore, this Court holds that the issues in dispute here are questions of fact not suitable for summary judgment.
V. CONCLUSION
For the foregoing reasons, the Court finds that there are genuine issues of material fact. Therefore, Defendants' Motion for Summary Judgment is hereby DENIED.
IT IS SO ORDERED.