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Koret, Inc. v. Dior

Appellate Division of the Supreme Court of New York, First Department
May 1, 1990
161 A.D.2d 156 (N.Y. App. Div. 1990)

Summary

holding that only a stranger to a contract can be liable for tortious interference with that contract

Summary of this case from Flash Electronics v. Universal Music Video Distr

Opinion

May 1, 1990

Appeal from the Supreme Court, New York County (Harold Baer, Jr., J.).


Koret, Inc. (Koret), which is a New York corporation, has for many years been in the business of designing, manufacturing, distributing, and selling, inter alia, ladies' handbags and luggage. Christian Dior, S.A., based in Paris, France, is the owner of "Christian Dior" and "Dior" trademarks, which are licensed for use on high-fashion clothing and accessories. In the United States, Dior-Paris conducted its business through a wholly owned subsidiary, under the name Christian Dior, New York, Inc. Until May 1984, Mr. Jacques Rouet served as managing director of Dior-Paris and chairman of Dior-New York.

In 1972, Koret was licensed to distribute Dior handbags throughout the United States. As a result of a dispute over that license, in 1978, Koret commenced an action against Dior-Paris and others in the United States District Court in the Southern District of New York. Thereafter, in 1980, the Federal litigation was settled when the parties entered into several contracts, which included: (1) a restated license and distributorship agreement, dated January 1, 1980, which extended Koret's handbag license agreement until December 31, 1984, and (2) a written agreement, dated March 3, 1980, which created a 50-50 joint venture between Koret and Dior-New York, which concerned Koret's development of a Dior luggage carrier, which would be marketed by the Dior companies.

Subsequently, in 1985, Koret commenced the instant action against Dior-Paris, Dior-New York, and others for damages. The complaint alleged, inter alia, causes of action for breach of the extended license agreement, tortious interference with the joint venture agreement, and fraud. In response, defendants served an answer which included counterclaims.

The trial resulted in a jury verdict which, inter alia, awarded plaintiff $250,000 against defendant Dior-New York for breach of the joint venture agreement, awarded plaintiff $500,000 against defendant Dior-Paris for tortious interference with the joint venture agreement, and awarded defendant Dior-New York $104,155 on its second counterclaim. Plaintiff appeals, and defendant Dior-Paris cross-appeals.

After our review of the record, we find that the award to plaintiff of $500,000 against defendant Dior-Paris for tortious interference with the joint venture agreement between Dior-Paris' wholly owned subsidiary, Dior-New York, and plaintiff should be vacated, since the weight of the evidence clearly indicates that Dior-Paris, as the corporate parent, had a right to interfere with the contract of its subsidiary in order to protect its economic interests (Felsen v. Sol Cafe Mfg. Corp., 24 N.Y.2d 682, 687). Dior-Paris was no stranger to the joint venture agreement, in view of the fact that Mr. Rouet, who was both managing director of Dior-Paris and chairman of Dior-New York, played a role in negotiation of the joint venture agreement and executed same. It is well established that only a stranger to a contract, such as a third party, can be liable for tortious interference with a contract (Greyhound Corp. v. Commercial Cas. Ins. Co., 259 App. Div. 317, 320-321 [1st Dept 1940]; Manley v Pandick Press, 72 A.D.2d 452, 454 [1st Dept 1980], appeal dismissed 49 N.Y.2d 981).

Further, we find that the award to defendant Dior-New York of $104,155 against plaintiff, on its second counterclaim for unpaid royalties under the extended handbag license agreement, should be reduced by $69,696.96 to $34,458.04, since the uncontradicted evidence indicates that plaintiff overpaid royalties by $69,696.96, and therefore is entitled to a credit for that amount. Accordingly, we find "there is simply no valid line of reasoning and permissible inferences which could possibly lead rational men [and women] to the conclusion reached by the jury on the basis of the evidence presented at trial [that plaintiff owed Dior-New York $104,155]" (Cohen v. Hallmark Cards, 45 N.Y.2d 493, 499).

Based upon our analysis supra, we modify the judgment, as indicated.

We have considered the other contentions of the parties, and find them to be without merit.

Concur — Kupferman, J.P., Ross, Asch, Kassal and Wallach, JJ.


Summaries of

Koret, Inc. v. Dior

Appellate Division of the Supreme Court of New York, First Department
May 1, 1990
161 A.D.2d 156 (N.Y. App. Div. 1990)

holding that only a stranger to a contract can be liable for tortious interference with that contract

Summary of this case from Flash Electronics v. Universal Music Video Distr

holding that only a stranger to a contract can be liable for tortious interference with that contract

Summary of this case from Shred-IT USA, Inc. v. Mobile Data Shred, Inc.

holding that parent corporation can not be liable for subsidiary's breach of contract where the contract was negotiated by an employee of both firms because the corporate parent had a right to interfere with the contract of its subsidiary

Summary of this case from DeLeonardis v. Credit Agricole Indosuez

holding that only a stranger to a contract can be liable for tortious interference with that contract

Summary of this case from New Paradigm Software Corp. v. New Era of Networks

finding that a corporate parent has the right to interfere with the contract of its subsidiary, in order to protect its economic interests

Summary of this case from MOMENTIVE PERFORMANCE MATERIALS USA v. ASTROCOSMOS MET

finding that a corporate parent has the right to interfere with the contract of its subsidiary, in order to protect its economic interests

Summary of this case from Multi-Juice, S.A. v. Snapple Beverage Corp.

vacating an award to plaintiff against defendant for tortious interference because defendant, the corporate parent, was protecting its economic interests, as evinced by its involvement in negotiations

Summary of this case from Serko v. Serko Simon Gluck Kane LLP

In Koret, the jury had awarded the plaintiff damages for breach of a joint venture agreement and for tortious interference with that agreement.

Summary of this case from MOMENTIVE PERFORMANCE MATERIALS USA v. ASTROCOSMOS MET

In Koret, Inc. v Christian Dior (161 A.D.2d 156, lv denied 76 N.Y.2d 714), this Court stated that a corporate parent has the right to interfere with the contract of its subsidiary in order to promote its economic interests.

Summary of this case from Foster v. Churchill

In Koret, the jury had found Dior-Paris, the parent entity, liable for tortiously interfering with a joint venture Agreement between the plaintiff and a co-defendant, subsidiary corporation Dior-New York (id.)

Summary of this case from LHR, Inc. v. T-Mobile USA, Inc.
Case details for

Koret, Inc. v. Dior

Case Details

Full title:KORET, INC., Appellant-Respondent, v. CHRISTIAN DIOR, S.A.…

Court:Appellate Division of the Supreme Court of New York, First Department

Date published: May 1, 1990

Citations

161 A.D.2d 156 (N.Y. App. Div. 1990)
554 N.Y.S.2d 867

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