IDT Corp., et al., Respondents,v.Tyco Group, S.A.R.L., et al., Appellants.BriefN.Y.April 29, 2014APL-2013-00127 New York County Clerk’s Index No. 652097/10 Court of Appeals STATE OF NEW YORK IDT CORP. and IDT EUROPE, B.V.B.A., Plaintiffs-Respondents, against TYCO GROUP, S.A.R.L., TYCOM (US), INC., TYCO INTERNATIONAL, LTD., TYCO INTERNATIONAL (US) INC., and TYCOM LTD., Defendants-Appellants. >> >> BRIEF FOR PLAINTIFFS-RESPONDENTS ROBINS, KAPLAN, MILLER & CIRESI L.L.P. Attorneys for Plaintiffs-Respondents 601 Lexington Avenue, Suite 3400 New York, New York 10022 212-980-7400Of Counsel: Hillel I. Parness Richard A. Mescon Oren D. Langer Date Completed: September 16, 2013 To Be Argued By: Hillel I. Parness Time Requested: 30 Minutes i DISCLOSURE STATEMENT In compliance with Rule 500.1(f) of the Rules of Practice for the Court of Appeals of the State of New York, Plaintiffs-Respondents state the following: Plaintiff-Respondent IDT Corporation is a publicly-traded company with the following subsidiaries: 1-800-4Justice, Inc. (DE) 225 Old NB Road Inc. (NJ) 226 Old NB Road, Corp. (NJ) Advanced Data Services, Inc. (SC) AVWAY.COM, INC. (NJ) Broad-Atlantic Associates, LLC (DE) Broad-Atlantic Realty, LLC (DE) Entrix Telecom, Inc. (DE) FFPM Carmel Holdings I, LLC Hillview Avenue Realty JV, LLC (DE) Hillview Avenue Realty, LLC (DE) IDT 225 Old NB Road Enterprises, LLC (DE) IDT 225 Old NB Road Holdings, Inc. (DE) IDT 225 Old NB Road, LLC (DE) IDT 226 Old NB Road Holdings, Inc. (DE) IDT 226 Old NB Road, LLC (DE) IDT America of Virginia, LLC (DE) IDT America, Corp. (NJ) IDT Capital Real Estate Holdings, LLC (DE) IDT Capital, Inc. (DE) IDT Carmel Holdings, Inc. (DE) IDT Carmel Portfolio Management, LLC (DE) IDT Carmel, Inc. (DE) IDT Domestic Telecom, Inc. (DE) IDT Domestic-Union, LLC (DE) IDT Financial Services, LLC (DE) IDT Global Processing Services, Inc. (DE) IDT International Telecom, Inc. (DE) IDT International, Corp. (NJ) IDT Investments Inc. (NV) IDT Payment Services of New York, LLC (DE) IDT Payment Services, Inc. (DE) ii IDT Realty, LLC (NJ) IDT Stored Value Services, Inc. (DE) IDT Telecom, Inc. (DE) IDT Telecom, LLC (DE) IDT Venture Capital Corporation (DE) IDT Venture Capital, Inc. (NV) IDT Wireless, Inc. (DE) IDT Wizard Holding, LLC (DE) IDT-Postcash Holding Company, LLC (DE) Microwave Services, Inc. (DE) National Hispanic Media Corporation (DE) Net2Funds, LLC (DE) Net2Phone Cable Telephony, LLC (DE) Net2Phone Global Services, LLC (DE) Net2Phone, Inc. (DE) PICUP, LLC (DE) Stealth Holdings, LLC (DE) Telecard Network, L.L.C. (NJ) Touch-N-Buy, LLC (DE) TúYo Mobile, LLC (DE) Union Telecard Alliance, LLC (DE) Union Telecard Arizona, LLC (NV) Union Telecard Connecticut, LLC (DE) Union Telecom Texas LLC (TX) UTA Web Sales LLC (DE) Zedge Holdings, Inc. (DE) D.P.S.I. Digital Production Solutions Israel Ltd. (Israel) DirectTel Dutch Holdings B.V. (Netherlands) DYP C.V. (Netherlands) Elmion Netherlands B.V. (Netherlands) Expercom S.A. (Belgium) Fabrix T.V. Ltd. (Israel) Homer Dutch Holdings B.V. (Netherlands) HSJ Dutch Holdings B.V. (Netherlands) IDT Brasil Telecomunicações Ltda (Brazil) IDT Brazil Limitada (Brazil) IDT Brazil Telecom Limitada (Brazil) IDT Card Services Ireland Limited (Ireland) IDT Chile S.A. (Chile) IDT Corporation de Argentina S.A. (Argentina) iii IDT Direct Belgium B.V.B.A. in liquidation (Belgium) IDT Dutch Holdings B.V. (Netherlands) IDT Europe B.V.B.A. (Belgium) IDT Financial Services Holding Limited (Gibraltar) IDT Financial Services Limited (Gibraltar) IDT France SARL (France) IDT General Development Israel Ltd. (Israel) IDT Germany GmbH (Germany) IDT Global Limited (United Kingdom) IDT Hellas Telecoms E.P.E. (Greece) IDT Inter Direct Tel Sweden AB (Sweden) IDT Italia S.R.L. (Italy) IDT Mobile Services AB in liquidation (Sweden) IDT Netherlands B.V. (Netherlands) IDT Peru S.R.L. (Peru) IDT Retail Europe Limited (United Kingdom) IDT Spain S.L. (Spain) IDT Switzerland GmbH (Switzerland) IDT Telecom Asia Pacific (Australia) PTY. LTD. (Australia) IDT Telecom Asia Pacific Limited (Hong Kong) IDT Telecom Canada Corp. (Canada) IDT Telecom Corporation Israel Ltd (Israel) IDT Telecom South Africa (PTY) LTD (SouthAfrica) IDT Telecomunicaciones Chile Limitada (Chile) IDT Telekomünikasyon Hizmetleri Limited Şirketi (Turkey) Interdirect Tel Limited (Ireland) International Discount Telecommunications de Mexico, S. de R.L. de C.V. (Mexico) MJP C.V. (Netherlands) MST Dutch Holdings B.V. (Netherlands) NEO IP B.V. (Netherlands) NewPhone Dutch Holdings B.V. (Netherlands) Phonecards Dominicana C por A (Dominican Rep.) Prepaid Cards B.V.B.A. (Belgium) Pryd Dutch Holdings B.V. (Netherlands) SPD Dutch Holdings B.V. (Netherlands) SPD Puerto Rico Corp (Puerto Rico) STA Dutch Holdings B.V. (Netherlands) Strategic Dutch Holdings B.V. (Netherlands) Tele Comercializadora Peru S.A. (Peru) iv TimeTel Dutch Holdings B.V. (Netherlands) TLL Dutch Holdings B.V. (Netherlands) TLT Dutch Holdings B.V. (Netherlands) WorldTalk Dutch Holdings B.V. (Netherlands) Zedge Europe AS (Norway) Plaintiff-Respondent IDT Europe B.V.B.A. is a Belgian company and a wholly-owned subsidiary of IDT Corporation. It has the following subsidiary: IDT Spain S.L. (Spain). v TABLE OF CONTENTS Page PRELIMINARY STATEMENT ............................................................................... 1 FACTUAL OVERVIEW ........................................................................................... 4 I. 2000: The Settlement Agreement and its Key Provisions .................... 4 II. 2004: IDT Sued Tyco for Breach of the Settlement Agreement .......... 5 III. 2007: Supreme Court Found Tyco in Breach ....................................... 6 IV. 2008 and 2009: Appellate Division and this Court Found Tyco Did Not Breach ...................................................................................... 6 V. 2009–2010: Efforts to Document IRU Resumed ................................10 VI. 2010: IDT Filed the Instant Litigation ................................................13 VII. 2011: Supreme Court Granted Tyco’s Motion to Dismiss .................14 VIII. 2012: Appellate Division Unanimously Reversed the Supreme Court ...................................................................................................14 ARGUMENT ...........................................................................................................17 I. IDT Has Alleged Facts Sufficient to Support its Claims for Breach of Contract and Breach of the Duty to Negotiate in Good Faith ...........................................................................................17 II. IDT Has Sufficiently Pled Claims for Breach of Contract and Breach of the Duty to Negotiate in Good Faith, and Nothing Tyco Raises in its Opening Brief Changes That .................................20 A. No Court in the Prior Litigation Discharged Tyco From Its Obligations Under the Settlement Agreement .....................21 1. Tyco’s Interpretation of this Court’s 2009 Opinion is Wrong ...........................................................21 2. Tyco Never Raised the Issue of Discharge in the Prior Litigation ..........................................................24 B. Tyco Was Not Discharged From Its Obligations Under the Settlement Agreement By Operation of Law .....................27 C. The Decision of the Appellate Division and This Court in the Prior Litigation Have No Preclusive Effect ........................37 1. No Prior Court Decided Whether The Positions Asserted by Tyco Prior to 2004 TABLE OF CONTENTS (continued) Page vi Were Inconsistent With the Settlement Agreement .......................................................................37 2. The Two Lawsuits Concerned Two Different Sets of Negotiations Separated by Five Years, and IDT Claims That Tyco Acted Differently in 2009–2010 .....................................42 D. The “Documentary Evidence” Does Not Override the Presumption that the Facts in IDT’s Complaint Are True ........46 1. Tyco Did Not Preserve This Argument for Appeal .............................................................................46 2. The Issue Is Not Whether Tyco Was Willing to Keep Talking to IDT, But Whether It Had Insisted On Allegedly Improper Positions .....................47 3. The Tyco Email Does Not Come Close To Establishing That the Facts Alleged in IDT’s Complaint are False ........................................................48 E. The Decision Below Does Not Create New “Reservation of Rights” Law ..........................................................................50 CONCLUSION ........................................................................................................55 vii TABLE OF AUTHORITIES Page Cases Aniero Concrete Co., Inc. v. New York City Construction Authority, 94 Civ. 9111 (CSH), 95 Civ. 3506 (CSH), 2000 U.S. Dist. LEXIS 8833 (S.D.N.Y. June 27, 2000) ...............................32 Beal Sav. Bank v. Sommer, 8 N.Y.3d 318, 834 N.Y.S.2d 44 (2007) .........................................................49 Beattie v. Brown & Wood, 663 N.Y.S.2d 199, 243 A.D.2d 395 (1st Dep’t 1997) ...................................49 Best Payphones, Inc. v. Manhattan Telecomm. Corp., 432 B.R. 46 (S.D.N.Y. 2010) ........................................................................53 Bunny v. Coughlin, 593 N.Y.S.2d 354, 187 A.D.2d 119 (3d Dep’t 1993) ...................................45 Canali U.S.A., Inc. v. Solow Bldg. Co., L.L.C., 739 N.Y.S.2d 362, 292 A.D.2d 170 (1st Dep’t 2002) ...............................7, 39 Carlson v. Katonah Capital, L.L.C., 814 N.Y.S.2d 889, 10 Misc. 3d 1076(A) (Sup. Ct. N.Y. Co. 2006) .............48 Cauff, Lippman & Co. v. The Apogee Finance Group, Inc., 807 F. Supp. 1007 (S.D.N.Y. 1992) ..............................................................32 Cole v. Macklowe, 882 N.Y.S.2d 417, 64 A.D.3d 480 (1st Dep’t 2009) .....................................53 Colonial Pacific Leasing Corp. v. Brown, 958 N.Y.S.2d 60, 28 Misc. 3d 1214A (Sup. Ct. N.Y. Co. July 21, 2010) ..............................................................................................................32 Credit Suisse First Boston v. Utrecht-America Finance Co., 915 N.Y.S.2d 531, 80 A.D.3d 485 (1st Dep’t 2011) .....................................40 TABLE OF AUTHORITIES (continued) Page viii Devlin v. Video Servs. Acquisition, 591 N.Y.S.2d 775, 188 A.D.2d 370 (1st Dep’t 1992) ...................................46 Ellan Corp., Inc. v. Dongkwang Int’l Co., Ltd., No. 09 Civ. 414 (LAP), 2011 U.S. Dist. LEXIS 92632 (S.D.N.Y Aug. 15, 2011) ........................................................................................................32 EQT Infrastructure Ltd. v. Smith, 861 F. Supp. 2d 220 (S.D.N.Y. 2012) ...........................................................41 Exhibitors Poster Exch., Inc. v. Nat’l Screen Serv. Corp., 517 F.2d 110 (5th Cir. 1975) .........................................................................45 Ga Nun v. Palmer, 202 N.Y. 483, 96 N.E. 99 (1911) ........................................................... 39, 54 Habenicht v. Nassau County Dept. of Social Servs., 506 N.Y.S.2d 957, 123 A.D.2d 667 (2d Dep’t 1986) ...................................46 Haines v. City of New York, 41 N.Y.2d 769, 364 N.E.2d 820 (1977) ........................................................32 Hall v. People to People Health Foundation, Inc., 493 F.2d 311 (2d Cir. 1974) ............................................................. 32, 33, 34 HGCD Retail Services, LLC v. 44–45 Broadway Realty Co., 826 N.Y.S.2d 190, 37 A.D.3d 43 (1st Dep’t 2006) .......................................31 Honess 52 Corp. v. Town of Fishkill, 698 N.Y.S.2d 718, 266 A.D.2d 510 (2d Dep’t 1999) ...................................45 Huck v. Dawson, 106 F.3d 45 (3d Cir. 1997) ............................................................................45 In re Hofmann (Chadboune & Parke LLP v. Warshaw), 733 N.Y.S.2d 168, 287 A.D.2d 119 (1st Dep’t 2001) ...................................45 In re Hunter, 4 N.Y.3d 260, 827 N.E.2d 269 (2005) ..........................................................45 TABLE OF AUTHORITIES (continued) Page ix Lawrence v. Miller, 11 N.Y.3d 588, 901 N.E.2d 1268 (2008) ............................................... 17, 48 Levy v. Friedman, 628 N.Y.S.2d 265, 216 A.D.2d 18 (1st Dep’t 1995) .....................................32 Marcel Fashions Grp., Inc. v. Lucky Brand Dungarees, Inc., No. 11 Civ. 5523 (LTS), 2012 U.S. Dist. LEXIS 138608 (S.D.N.Y. Sept. 25, 2012) ..........................45 McCloskey & Co. v Minweld Steel Co., Inc., 220 F.2d 101 (3d Cir. 1955) ..........................................................................39 Merritt Hill Vineyards Inc. v. Windy Heights Vineyard, Inc., 61 N.Y.2d 106, 460 N.E.2d 1077 (1984) ......................................................31 MHR Capital Partners LP v. Presstek, Inc., 12 N.Y.3d 640, 912 N.E.2d 43 (2009) ....................................... 28, 29, 30, 31 Misicki v. Caradonna, 12 N.Y.3d 511, 909 N.E.2d 1213 (2009) ......................................................47 N.F.L. Insurance Ltd. v. B&B Holdings, Inc., 874 F. Supp. 606 (S.D.N.Y. 1995) ................................................................31 NRP Holdings LLC v. City of Buffalo, No. 11–CV-472S, 2012 WL 2873899 (W.D.N.Y. July 12, 2012) ................41 O’Donnell, Fox & Gartner, P.C. v. R-2000 Corp., 604 N.Y.S.2d 67, 198 A.D.2d 154 (1st Dep’t 1993) .....................................49 Perna v. Desai, 475 N.Y.S.2d 883, 101 A.D.2d 857 (2nd Dep’t 1984) .......................... 31, 33 Preferred Mortgage Brokers, Inc. v. Byfield, 723 N.Y.S.2d 230, 282 A.D.2d 589 (2nd Dep’t 2001) .......................... 32, 33 Pricaspian Dev. Corp. (Texas) v. Royal Dutch Shell, PLC, No. 09–2857, 382 Fed. Appx. 100 (2d Cir. 2010).........................................45 TABLE OF AUTHORITIES (continued) Page x Quesada v. Global Land, Inc., 826 N.Y.S.2d 667, 35 A.D.3d 575 (2nd Dep’t 2006) ............................ 17, 48 Rachmani Corp. v. 9 E. 96th St. Apartment Corp., 629 N.Y.S.2d 382, 211 A.D.2d 262 (1st Dep’t 1995) ...................................39 Ramallo Bros. Printing, Inc. v. El Dia, Inc., 490 F.3d 86 (1st Cir. 2007) ............................................................................45 Record Club of Am., Inc. v. United Artists Records, Inc., 643 F. Supp. 925, 936 (S.D.N.Y. 1986), vacated on other grounds, 890 F.2d 1964 (2d Cir. 1989) .............................52 Rotella v. Rotella, 577 N.Y.S.2d 342, 178 A.D.2d 755 (3rd Dep’t 1991) ..................................32 Roth v. Robbins, 499 N.Y.S.2d 617, 117 A.D.2d 794 (2d Dep’t 1986) ...................................46 Rovello v. Orofino Realty Co., 40 N.Y.2d. 633, 357 N.E.2d 970 (1976) .......................................................48 Scavenger, Inc. v. GT Interactive Software Corp., 734 N.Y.S.2d 141, 289 A.D.2d 58 (1st Dep’t 2001) .....................................53 Scooper Dooper, Inc. v. Kraftco Corp., 494 F.2d 840 (3d Cir. 1974) ..........................................................................45 SHS Baisley L.L.C. v. Res Land, Inc., Index No. 13931/09, 2009 N.Y. Misc. LEXIS 6472 (Sup. Ct. Queens Co. Dec. 8, 2009) ..............................................................35 Smith v. Russell Sage College, 54 N.Y.2d 185, 429 N.E.2d 746 (1981) ........................................................45 Snakepit Automotive, Inc. v. Superformance International, LLC, 859 N.Y.S.2d 906, 19 Misc. 3d 114(A) (Sup. Ct. Nassau Co. 2008) ...........32 Solutia Inc. v. FMC Corp., 456 F. Supp. 2d 429 (S.D.N.Y. 2006) .................................................... 33, 34 TABLE OF AUTHORITIES (continued) Page xi Sta-Brite Services, Inc. v. Sutton, 794 N.Y.S.2d 70, 17 A.D.3d 570 (2nd Dep’t 2005) .....................................48 Staebell v. Bennie, 443 N.Y.S.2d 487, 83 A.D.2d 765 (4th Dep’t 1981) ....................................53 Stanton v. Power, 679 N.Y.S.2d 293, 254 A.D.2d 153 (1st Dep’t 1998) ...................................32 Sterngass v. Soifer, 810 N.Y.S.2d 362, 27 A.D.3d 549 (2d Dep’t 2006) .....................................45 Suntrust Bank v. Wasserman, No. 151094/2013, 2013 N.Y. Misc. LEXIS 3642 (Sup. Ct. N.Y. Co. Aug. 12, 2013) ................................................................48 Teachers Ins. & Annuity Association of America v. Tribune Co., 670 F. Supp. 491 (S.D.N.Y 1987) ......................................................... passim Vemics, Inc. v. Meade, 06 Civ. 8716 (RLC), 2009 U.S. Dist. LEXIS 64921 (S.D.N.Y. July 23, 2009) ...............................................................................31 Waldman v. Vill. of Kiryas Joel, 207 F.3d 105 (2d Cir. 2000) ..........................................................................45 Statutes and Other Authorities New York Civil Practice Law and Rules (CPLR) § 3211 .......................................48 1 PRELIMINARY STATEMENT This is an appeal from a 5 - 0 reversal by the Appellate Division, First Department, of a New York County Supreme Court decision granting Tyco’s1 motion to dismiss. Tyco’s opening brief ignores the procedural posture of this case, and as a result, the sole issue that is before this Court: assuming the truth of the factual allegations in its 2010 complaint, has IDT2 properly stated claims against Tyco for breach of contract and breach of the duty to negotiate in good faith? The Appellate Division unanimously answered this question in the affirmative, and IDT respectfully submits that this Court should do the same and affirm. In reaching that conclusion, this Court should also find—like the Appellate Division—that Tyco has not been discharged of its obligations, either by this Court’s 2009 decision or by operation of law, and that IDT’s claims are not barred by the doctrines of res judicata or collateral estoppel. Tyco argues at length that the Appellate Division made serious errors that need to be corrected. Tyco is wrong; and the key to understanding why requires unraveling and correcting Tyco’s misstatements about the record. IDT’s and Tyco’s prior litigation from 2004 through 2009 resulted from IDT’s claims that 1Unless otherwise stated, “Tyco” refers collectively to Defendants-Appellants Tyco Group, S.A.R.L., Tycom (US), Inc., Tyco International, Ltd., Tyco International (US) Inc., and Tycom Ltd. 2 Unless otherwise stated, “IDT” refers collectively to Plaintiffs-Respondents IDT Corp. and IDT Europe, B.V.B.A. 2 Tyco had breached the parties’ 2000 Settlement Agreement (“Settlement Agreement”) by taking improper positions during the parties’ negotiations prior to 2004 (“the Prior Litigation”). Questions regarding the substance of the positions Tyco took in the pre-2004 negotiations were not resolved by either the Appellate Division or this Court during the Prior Litigation. Instead, those courts found that Tyco’s behavior was a “mere proposal,” rather than a “definite and final communication” of “an intent to forgo its obligations” under the Settlement Agreement, and therefore not actionable. Additionally, no party ever raised the issue of discharge, and no court ever decided that Tyco was discharged from its obligations under the Settlement Agreement. The current litigation, initiated in 2010, concerns negotiations between the parties that took place in 2009 and 2010—after the Appellate Division’s and this Court’s respective 2008 and 2009 decisions. IDT claims, and the Appellate Division found, that IDT had adequately pled, that in those negotiations, Tyco did take definite and final positions reflecting an intent to forgo its obligations under the Settlement Agreement. For example, the complaint alleges that on at least seven different occasions, Tyco expressed to IDT that it was discharged from any further obligations under the Settlement Agreement, and that Tyco made further assertions that were inconsistent with—and thus violated—the Settlement Agreement. As such, the Appellate Division unanimously and appropriately 3 reversed the Supreme Court’s 2011 decision granting Tyco’s motion to dismiss. The Appellate Division’s 2012 decision correctly found that: (i) neither the Appellate Division in 2008 nor this Court in 2009 discharged Tyco from further obligations under the Settlement Agreement, nor should they have as a matter of law; (ii) because Tyco was not discharged, IDT’s allegations in its 2010 complaint—presumed to be true—are sufficient to support its claims for breach of contract and breach of the duty to negotiate in good faith; and (iii) because the 2010 complaint concerns a new round of negotiations, and because none of the courts in the Prior Litigation reached the question of whether the positions Tyco asserted were inconsistent with the Settlement Agreement, the Prior Litigation opinions of the Appellate Division and Court of Appeals have no preclusive effect here. Contrary to Tyco’s belief, the court below did not rule that “the duty to negotiate can never be extinguished absent a contractual end point” (Tyco Br. at 1), that “Tyco is obligated to negotiate in perpetuity” (id. at 34), that “an obligation is discharged only where a condition precedent can never be satisfied by a ‘date certain’….” (id. at 37), or that “where a contract contains no built-in endpoint for negotiations that are a condition to a party’s performance, the parties must reach an agreement—or they will be forever bound to negotiate” (id. at 44). Indeed, the court below did not order—and IDT does not seek—further negotiations. To the 4 contrary, IDT believes that Tyco’s behavior in 2009 and 2010 constituted a definite and final breach of its obligations under the Settlement Agreement, and IDT seeks damages. The Appellate Division also did not hold that “a party cannot reserve its rights yet continue to negotiate” (Tyco Br. at 1), or that a reservation of rights is an anticipatory breach of contract (id. at 27, 61). Rather, it held that IDT’s allegations, if proven, could constitute a “definite and final communication of an intent to forgo” Tyco’s obligations under the Settlement Agreement, and thus could constitute an anticipatory breach of contract under settled principles of New York law. The dispute between IDT and Tyco has been going on for a long time, but it is not nearly as complicated as Tyco makes it seem. Based on the record evidence and the allegations in IDT’s complaint, it is clear that the Supreme Court erred in 2011. The Appellate Division unanimously recognized and rectified that error in 2012, and this case should proceed to assess the issues of liability and damages without any further delay. FACTUAL OVERVIEW I. 2000: The Settlement Agreement and its Key Provisions On October 10, 2000, IDT and Tyco entered into the Settlement Agreement, resolving all pending litigation between them. R. 56–77. In addition to exchanging 5 mutual releases, Tyco agreed to provide IDT with capacity, “free of charge,” on the yet-to-be-built “TyCom Global Network,” or “TGN,” consisting of two segments spanning the Atlantic Ocean, and two segments spanning the Pacific Ocean, each arranged in a “ring” configuration. R. 57–59, 75–77. Specifically, Tyco agreed to give IDT “a fifteen (15) year indefeasible right to use,” or “IRU,” relating to the four segments comprising the TGN. IDT and Tyco agreed that the IRU would “be documented pursuant to definite agreements to be mutually agreed upon and, in any event, containing terms and conditions consistent with those described herein.” R. 58.3 The Settlement Agreement provided substantial additional detail as to the conditions of the IRU. R. 58–65. II. 2004: IDT Sued Tyco for Breach of the Settlement Agreement The parties’ initial efforts to document the IRU failed. In 2004, IDT sued Tyco for breach of the Settlement Agreement (R. 152–58), alleging that Tyco had advanced terms inconsistent with the Settlement Agreement on June 12, 2001. R. 203–05, 264, 49. Tyco filed counterclaims against IDT for breach of contract and libel, and IDT and Tyco moved for summary judgment against each other. R. 48, 282. 3 Unless stated otherwise, all emphasis is added. 6 III. 2007: Supreme Court Found Tyco in Breach On July 11, 2007, the Supreme Court (Ramos, J.) granted summary judgment to IDT on its breach of contract claim, and denied Tyco’s cross-motion for summary judgment on its breach of contract counterclaim. R. 255. The court also granted IDT’s motion for summary judgment on Tyco’s libel counterclaim and denied Tyco’s motion for sanctions. R. 256, 261. IV. 2008 and 2009: Appellate Division and this Court Found Tyco Did Not Breach On August 19, 2008, the Appellate Division reversed the Supreme Court’s decision that Tyco breached the Settlement Agreement, and ordered that the complaint be dismissed. R. 262–65. The Appellate Division made its reasoning very clear. After finding that the Settlement Agreement was valid, and that the IRU had to be documented before Tyco was obligated to make the capacity available to IDT, the Appellate Division considered IDT’s argument that Tyco had anticipatorily breached the Settlement Agreement: Plaintiffs erroneously contend that defendants breached the settlement agreement when, on June 12, 2001, defendants proposed an IRU that contained terms—such as a provision that would have required plaintiffs to relinquish their right to use the fiber optic network without charge for 15 years, and another provision that would have required plaintiffs to forgo their damages remedies in the event defendants breached the settlement agreement—that plaintiffs contend were inconsistent with the settlement agreement. Nothing in the settlement agreement prohibited defendants or plaintiffs from 7 merely proposing terms that were inconsistent with the settlement agreement. The proposal that defendants made, moreover, was hardly “the sort of definite and final communication” of “an intent to forgo [their] obligations” that is “necessary to justify a claim of anticipatory breach.”…. Because the parties’ submissions on the motion and cross motion establish that defendants never made a “definite and final communication” of “an intent to forgo [their] obligations” [] prior to the commencement of this action, defendants did not, as a matter of law, breach the settlement agreement. R. 264–65 (citing Canali U.S.A., Inc. v. Solow Bldg. Co., L.L.C., 739 N.Y.S.2d 362, 363, 292 A.D.2d 170, 171 (1st Dep’t 2002)).4 On October 22, 2009, this Court affirmed. R. 46–49C. First, this Court agreed with the Appellate Division that “Tyco’s proposal of purportedly inconsistent terms did not constitute a breach of contract.” R. 48. Next, this Court agreed with both IDT and the Appellate Division that the Settlement Agreement was valid, and that “[a]lthough there was a valid settlement agreement in this case, Tyco’s obligation to furnish capacity never became enforceable because agreed- upon conditions, were not met.” R. 49A. The preceding statement was further explained as follows: Here, the settlement agreement contemplated the occurrence of numerous conditions, i.e., the negotiation and execution of four additional agreements, most importantly, the IRU. Regarding the IRU, the clear intent 4 As discussed below, Canali is part of a series of cases holding that a party can breach a contract by taking definite and final positions that are inconsistent with its obligations under the contract. 8 of the parties was that it had to be executed before any handover of capacity. As such, it cannot be said that defendants breached the settlement agreement by merely proposing an IRU which allegedly contained terms inconsistent with settlement. R. 49B. After finding that “the IRU was never executed,” the Court re-stated its previous conclusion: “Finally, the record does not support a finding that Tyco breached any of its obligations.” R. 49C.5 The issue decided in both the Appellate Division’s 2008 opinion and this Court’s 2009 opinion was limited to the question of whether Tyco’s proposal of what IDT claimed were inconsistent terms rose to the level of breach. Both courts answered in the negative and found that “merely proposing” terms cannot support a breach of contract claim. Although the parties briefed the question of whether the positions Tyco took were inconsistent with the Settlement Agreement, neither court addressed, let alone decided, this question. This is plainly evidenced by, for example, the Appellate Division’s use of the word “contend” in the phrase “that plaintiffs contend were inconsistent with the settlement agreement,” and this Court’s careful use of the words “purportedly” and “allegedly.” R. 264, 48, 49B. As discussed below, Tyco ascribes unwarranted significance to the words “never” (as in “never became enforceable”) and “any” (as in “any of its obligations”). Nothing in this Court’s 2009 opinion suggests that either of those 5 Tyco rearranges the order of these statements in an attempt to rewrite this Court’s 2009 opinion. Tyco Br. at 38. 9 words should be ascribed any meaning beyond the express holding of the Court, namely the conclusion that because Tyco had “merely proposed” terms, no claim for breach could stand. Furthermore, Tyco never asserted before any court at any time prior to 2009 that it should be discharged from further performance under the Settlement Agreement for any reason. Tyco’s attempt to assert otherwise is a fabrication; to the extent the snippets offered up by Tyco relate to the concept of discharge (for some do not), they were conditioned upon a holding in favor of Tyco on its counterclaim in the Prior Litigation that IDT had breached the Settlement Agreement—which no court has ever made. Tyco never argued in the Prior Litigation that it should have been discharged if IDT’s motion was denied, or simply due to the passage of time. Rather, the Appellate Division and this Court provided the parties with a roadmap for future negotiations: under prevailing New York law the parties were to continue negotiations over the documentation of the IRU unless they reached agreement or one of the parties committed an anticipatory breach of the Settlement Agreement.6 And as to such an anticipatory breach, a “mere proposal” of terms 6 There is, of course, a third possibility. The parties could abandon their negotiations or circumstances could so radically change as to frustrate the very purpose of the negotiations. There has never been a claim that this was the situation in this case. The amount of time that is reasonable for negotiation is fact specific and here, where millions of dollars of telecom capacity are at stake, the 10 inconsistent with the Settlement Agreement would not satisfy that legal standard— only a “definite and final communication” of “an intent to forgo its obligations.” V. 2009–2010: Efforts to Document IRU Resumed On November 17, 2009, less than one month after this Court issued its roadmap opinion and put the Prior Litigation to rest, IDT reopened the process of documenting the IRU, demanding that Tyco “immediately comply with [its] obligations under the [Settlement Agreement] and provide IDT with the Wavelengths [] in a manner fully consistent with that described in the Settlement Agreement.” R. 270–71. On December 8, 2009, IDT asserts in the complaint, Tyco told IDT (for the first of at least eight times) that “in light of the rulings of the Appellate Division and the Court of Appeals, it does not have any further obligations under the Settlement Agreement.” R. 28 ¶ 34. Tyco repeated its position that it had been discharged from any further obligations on June 4 and 18, August 13, 24, and 27, and September 3, 2010. R. 29-32 ¶¶ 36, 38, 42, 44, 46, 48. On October 14, 2010, the final time Tyco said it was discharged before IDT brought the current lawsuit, very vigor of the litigation demonstrates that such a natural end point has not been reached. 11 Tyco wrote that it “does not have any further obligations of any kind under the Settlement Agreement (as we have advised on numerous occasions).” R. 309.7 Between May and October 2010, the parties corresponded, exchanged drafts and met regarding documenting the IRU. In nearly every instance, Tyco reiterated its position that it had been discharged. To preface every exchange among the parties with this position without a doubt affected the productivity of the negotiations. Specifically, although the Settlement Agreement required that the parties’ documentation of the IRU contain “terms and conditions consistent with those described” in the Settlement Agreement, Tyco expressed at every opportunity that it was no longer bound by any of the strictures of the Settlement Agreement, and behaved in a manner consistent with that position. IDT attempted to follow the Appellate Division’s and this Court’s roadmap opinions, pressing Tyco as to whether it was standing by what IDT believed were improper, inconsistent positions. As set forth in the operative complaint: 1. On May 18, 2010, IDT provided Tyco with a draft IRU, but on June 4, 2010, Tyco rejected it, reiterating that “in light of the rulings of the Appellate Division and the Court of Appeals, it does not have any further obligations of any kind under the Settlement Agreement.” R. 29 ¶¶ 35–36. 7 Tyco attempts to characterize its repeated assertions as a mere “reservation of rights.” As discussed below, this is revisionist history—the term “reservation of rights” made its first appearance in Tyco’s motion for reargument. 12 2. Shortly thereafter, IDT pressed Tyco to explain the reasons for its rejection or confirm that it was unwilling to go forward. Id. at ¶ 37. Tyco did neither, reiterating on June 18 that it had been discharged from all of its obligations under the Settlement Agreement, but nevertheless asking for a meeting. Id. at ¶ 38. 3. In July 2010, Tyco provided IDT with a copy of the IRU that Tyco had entered into with VSNL, suggesting that Tyco assign its rights under the VSNL IRU to IDT. IDT rejected that proposal because IDT believed that the terms of the VSNL IRU were inconsistent with the Settlement Agreement. R. 30 ¶ 40. 4. On July 23, 2010, Tyco provided IDT with a “redline” markup of IDT’s May 18, 2010 draft IRU, but on August 11, 2010, IDT advised Tyco that its changes were inconsistent with the Settlement Agreement in at least ten ways, which it enumerated. IDT again pressed Tyco to decide where it stood, writing “please advise promptly whether Tyco is insisting on the above changes in connection with the IRU referenced in the Settlement Agreement or whether Tyco will fulfill its obligations as set forth in the Settlement Agreement.” Id. at ¶ 41; R. 307–08. 5. On August 17, 2010, IDT wrote to Tyco and enumerated again how the changes reflected in its July 23, 2010 markup were inconsistent with the Settlement Agreement, pressing Tyco once again to clarify if its positions were final: “If…Tyco is insisting on the provisions in its July 23, 2010 comments to the May 18 IRU draft, IDT will have no choice but to seek Court intervention.” R. 30–31 ¶ 43; R. 297. 6. On at least four additional occasions—on August 25 and 31, September 7 and October 13—IDT pressed Tyco to abandon its inconsistent positions so as to avoid having to go to the court for relief, and each time Tyco responded by repeating its position that it was discharged by the Appellate Division’s and this Court’s prior 13 opinions, and refusing to change its mind about terms that were important to IDT. R. 31–32 ¶¶ 44–50. 7. IDT’s efforts culminated in an October 13 meeting that IDT characterized as follows: “Tyco continued to insist on terms that conflicted with the Settlement Agreement and made a definite and final communication to IDT of Tyco’s intent to forgo its obligations under the Settlement Agreement….” R. 32 ¶ 50.8 VI. 2010: IDT Filed the Instant Litigation In November 2010, IDT sued Tyco alleging breach of the Settlement Agreement and breach of the duty to negotiate in good faith. The complaint reiterated the events leading up to this Court’s 2009 opinion (R. 22-28 ¶¶ 1–32), and then recited IDT’s 2009–2010 efforts to work with Tyco to document the IRU. R. 28-32 ¶¶ 33–51. In the complaint, IDT describes seven instances where Tyco allegedly took the position that it was discharged. R. 28–32 ¶¶ 34, 36, 38, 42, 44, 46, 48). IDT further alleges instances, presumed true for purposes of this appeal, where Tyco took positions that were inconsistent with the Settlement Agreement or otherwise acted inconsistently with its obligations under the Settlement Agreement. Those facts culminated in IDT’s allegations that on October 13, 2010, 8 Tyco places undue emphasis on an email its lawyer sent to IDT’s lawyers the next day (R. 299-301), but that email does not undermine IDT’s allegations in paragraph 50 of the complaint. In addition to Tyco’s failure to preserve this argument for appeal, and problems with Tyco’s use of the document in such a manner at the pre-discovery phase of the case (see pp. 46-50 below for further detail), the document at a minimum reflects that Tyco was continuing to insist that it was discharged from “any further obligations of any kind under the Settlement Agreement,” and that it was standing firm on at least four positions that IDT believed were inconsistent with the Settlement Agreement. 14 “Tyco continued to insist on terms that conflicted with the Settlement Agreement and made a definite and final communication to IDT of Tyco’s intent to forgo its obligations under the Settlement Agreement….” R. 32 ¶ 50. VII. 2011: Supreme Court Granted Tyco’s Motion to Dismiss On June 20, 2011, the Supreme Court (Schweitzer, J.) granted Tyco’s motion to dismiss the complaint finding that Tyco had been discharged. R. 8-18. The Supreme Court stated, “[b]ased on the plain language of the [2009] Court of Appeals decision, this court is of the view that Tyco has no further obligations under the Settlement Agreement.” R. 17. The Supreme Court ruled that this Court discharged Tyco from any further obligation because of the use of the word “never” in the phrase “Tyco’s obligation to furnish capacity never became enforceable.” Id. The Supreme Court explained that it interpreted the words “never became enforceable” to mean “Tyco does not have any further obligations under the Settlement Agreement.” R. 18. Had this Court intended not to discharge Tyco, Justice Schweitzer hypothesized, it “would have indicated as much” with the words “had not yet become enforceable,” rather than “never became enforceable.” R. 17-18 (emphasis in original). VIII. 2012: Appellate Division Unanimously Reversed the Supreme Court On December 27, 2012, the Appellate Division unanimously reversed the Supreme Court’s decision. R. 333-50. All five Appellate Division justices agreed 15 with IDT’s understanding of the holdings of the 2008 and 2009 decisions by the Appellate Division and this Court, respectively. Specifically, the Appellate Division found the following: 1. The Supreme Court erred when it interpreted the words “never became enforceable” in this Court’s 2009 decision to mean “no further obligations under the [s]ettlement [a]greement” (R. 340, 348); 2. The Appellate Division reversed and this Court affirmed the reversal of the lower court’s grant of IDT’s motion for summary judgment in the Prior Litigation because Tyco had not made a “definite and final” communication to IDT, but rather had “merely proposed” terms that IDT maintained were allegedly inconsistent with the 2000 Settlement Agreement (R. 338-39, 348); 3. Neither the Appellate Division nor this Court reached the question in 2008 and 2009, respectively, of whether the positions that Tyco had “merely proposed” were, in fact, inconsistent with the Settlement Agreement (R. 346, 349-50); 4. Because the Appellate Division and this Court did not reach the inconsistency question in the Prior Litigation, and because the instant litigation concerns events in 2009 and 2010, the decisions of the Appellate Division and this Court in the Prior Litigation had no preclusive effect here (R. 345-46, 349-50); and 5. Because Tyco had not been discharged from its obligation to continue to negotiate with IDT in good faith, and accepting the facts alleged by IDT in its 2010 complaint as true, IDT adequately stated claims for breach of contract and breach of the duty of good faith (R. 342-45, 349). 16 In addition, the Appellate Division majority considered—and rejected— Tyco’s argument that it had been discharged as a matter of law, separate and apart from the Supreme Court’s erroneous interpretation of the words “never became enforceable.” The Appellate Division explicitly rejected Tyco’s “enough was enough” argument, finding “[t]here simply is no support for this proposition,” because “[t]he defendants’ obligations in this case did not have an expiration date, nor, as defendants urge, did one arise through the passage of time.” R. 341-42. The Appellate Division further criticized Tyco for its “disingenuous” cobbling together of disparate quotes from this Court’s 2009 opinion to misstate its holding. R. 341 and n. 1. The Appellate Division did not hold that parties must perform their agreements forever unless until there is a specified termination event or termination date. What it did hold was that on the particular facts of this case, Tyco’s obligations under the Settlement Agreement had not expired. The Appellate Division also did not hold that asserting a “reservation of rights” always amounts to anticipatory breach of contract. What it did hold was that on the particular facts of this case alleged by IDT in the operative complaint, Tyco’s repeated statements that it was discharged from any further obligations of any kind under the Settlement Agreement was sufficient to state a claim for an anticipatory breach of contract. R. 343. 17 On May 21, 2013, the Appellate Division denied Tyco’s motion for reargument, but granted its motion, in the alternative, for leave to appeal to this Court. R. 332. ARGUMENT I. IDT Has Alleged Facts Sufficient to Support its Claims for Breach of Contract and Breach of the Duty to Negotiate in Good Faith This appeal concerns the Appellate Division’s reinstatement of the two claims in IDT’s complaint. On such a motion, which takes place before discovery or trial, the facts alleged by IDT in its complaint are assumed to be true, without reference to documents outside the complaint, except in the rare circumstance when such documents unassailably and irrefutably show that plaintiff’s allegations could not be true. Lawrence v. Miller, 11 N.Y.3d 588, 595, 901 N.E.2d 1268, 1271 (2008); Quesada v. Global Land, Inc., 826 N.Y.S.2d 667, 668, 35 A.D.3d 575, 575–576 (2nd Dep’t 2006).9 In the complaint, IDT describes its efforts in 2009 and 2010 to document the IRU agreement for the transfer of subsea telecommunications capacity following this Court’s 2009 opinion, which provided a roadmap for further negotiations. R. 9 Tyco asks the Court to ignore this bedrock principle based on “documentary evidence” in the form of a single email authored by Tyco’s counsel. R. 299-302. As explained below, the standard for the “documentary evidence” exception is very high, and is not met by Tyco’s counsel’s email. The cases Tyco cites are inapposite, as they all concern agreements signed by all of the parties that the courts found to be unambiguous. 18 28-32 ¶¶ 33-51. IDT alleges that during that period, Tyco took the position on at least seven occasions that it had no further obligations of any kind under the Settlement Agreement. Id. at ¶¶ 34, 36, 38, 42, 44, 46, 48.10 IDT further alleges that Tyco asserted positions that were inconsistent with the terms of the Settlement Agreement, thereby violating the Settlement Agreement. Tyco’s actions culminated in an October 13, 2010 meeting at which Tyco reiterated that it had no further obligations under the Settlement Agreement, and “continued to insist on terms that conflicted with the Settlement Agreement and made a definite and final communication to IDT of Tyco’s intent to forgo its obligations under the Settlement Agreement….” R. 32 ¶ 50. The Appellate Division unanimously found that IDT had met its burden in alleging both claims in its complaint. The Appellate Division majority opinion found that Tyco had not been discharged by the 2008 Appellate Division decision, the 2009 decision by this Court, or by operation of law. It held that: [E]ven though the parties apparently continued to negotiate, defendants’ statements that they had no further obligations to negotiate would constitute “a definite and final communication of an intent to forgo [the defendants’] obligations,” which as we previously held, is an anticipatory breach of the contract. 10 An eighth instance is found in the opening of Tyco’s October 14, 2010 email to IDT: “Even though Tyco does not have any further obligations of any kind under the Settlement Agreement (as we have advised on numerous occasions)….” R. 309. 19 R. 343 (citing R. 264-65). The Appellate Division was referencing its opinion in the Prior Litigation and making the following distinction: in the Prior Litigation, IDT had not shown that Tyco met the accepted standard for anticipatory breach of contract—a definite and final communication of an intent to forgo its obligations— but that IDT’s factual allegations in its 2010 complaint did meet the requisite standard.11 The Appellate Division majority opinion also found that IDT satisfied the requirements for pleading a claim for breach of the duty to negotiate in good faith, based on IDT’s allegations that Tyco had advanced terms that were inconsistent with the Settlement Agreement, and had refused to change those positions. R. 344. The Appellate Division concurring opinion found that IDT’s allegations concerning Tyco’s advancement of inconsistent terms was sufficient to support both causes of action, explaining that paragraph 50 of the complaint “suffices to sustain the causes of action asserted therein for breach of the settlement agreement and breach of the obligation to negotiate in good faith.” R. 349. The Appellate Division did not decide whether Tyco had actually breached the Settlement Agreement in 2009 by asserting that it had been discharged, nor did it decide whether Tyco had actually breached the Settlement Agreement by 11 As discussed below, IDT does not allege, and the Appellate Division did not understand IDT to be alleging, that Tyco made a “reservation of rights,” and therefore the Appellate Division did not make new law in the area of reservations of rights, as Tyco argues. 20 advancing terms that were inconsistent with the Settlement Agreement. Instead, the Appellate Division properly accepted IDT’s allegations as true for purposes of a motion to dismiss, afforded every possible favorable inference to IDT, and decided that the two causes of action in IDT’s complaint were pled sufficiently. R. 342, 349. II. IDT Has Sufficiently Pled Claims for Breach of Contract and Breach of the Duty to Negotiate in Good Faith, and Nothing Tyco Raises in its Opening Brief Changes That Tyco ignores the procedural posture of this case. In doing so, it makes several arguments in the hopes of overriding the presumption of truth afforded to the facts alleged by IDT in its complaint. But all of those arguments fail because: (i) neither the Appellate Division in 2008 nor this Court in 2009 discharged Tyco from its obligations under the Settlement Agreement; (ii) Tyco was not discharged by operation of law; (iii) the decisions in the Prior Litigation do not bar this case under the principles of res judicata or collateral estoppel; (iv) the documents submitted by the parties in connection with Tyco’s motion to dismiss do not override the presumption of truth that is afforded to IDT’s factual allegations in its complaint—indeed, if anything the documents serve to strengthen those allegations; and (v) the Appellate Division in 2012 did not create new law in the area of reservation of rights, nor does its opinion require correction by this Court. 21 A. No Court in the Prior Litigation Discharged Tyco From Its Obligations Under the Settlement Agreement 1. Tyco’s Interpretation of this Court’s 2009 Opinion is Wrong Tyco argues that the plain language of this Court’s 2009 opinion discharged Tyco from any further obligations under the Settlement Agreement. Tyco relies on the word “never” in the following sentence from that decision: “Although there was a valid settlement agreement in this case, Tyco’s obligation to furnish capacity never became enforceable because agreed-upon conditions, were not met.” R. 49A. Tyco’s position is untenable because a straightforward reading of the decisions by the Appellate Division and this Court in the Prior Litigation shows that neither court discharged Tyco from its obligations under the Settlement Agreement, or even considered whether to do so. This Court wrote the “never” sentence as part of its explanation for why it was affirming the denial of IDT’s motion for summary judgment, and affirming the grant of Tyco’s summary judgment motion. In the Prior Litigation, IDT claimed that Tyco breached the Settlement Agreement by not handing over the telecommunications capacity at issue. This Court “agree[d] with IDT that the parties entered into a valid settlement agreement,” (R. 49A), which provided that the handover of the telecommunications capacity was not to occur until the IRU documentation was finalized. R. 49B. In the context of cross motions for summary judgment—not the denial of a 22 motion to dismiss—this Court, in the Prior Litigation, held that Tyco’s actions during the 2001-2004 time period (specifically Tyco’s June 12, 2001 proposal of a draft IRU) had not risen to the level of a breach. At that time, Tyco had proposed IRU terms—not insisted upon them in a definite and final manner—and therefore Tyco’s actions could not support IDT’s claim of breach of contract. R. 49B-49C. With the Settlement Agreement not breached, and without final IRU documentation, this Court concluded that Tyco was not required at that time to hand over the telecommunications capacity to IDT. When this Court wrote that “Tyco’s obligation to furnish capacity never became enforceable” (R. 49A), it was referring to the dispute and time period in question; namely, negotiations that took place prior to 2004. Put another way, before 2004, Tyco’s obligation to hand over the capacity never ripened because the IRU documentation was not finalized, and that requirement was not excused because of Tyco’s mere proposals. Indeed, far from holding that Tyco’s obligations to IDT had been discharged, the decisions of the Appellate Division and this Court in the Prior Litigation suggested a roadmap for future negotiations by the parties: negotiations were to continue until: (i) an agreement was reached; (ii) one party or the other expressed a “definite and final communication” (R. 265) not to continue performing; or (iii) one of the parties invoked its “right to require conformance with Tyco’s standard agreements, except to the extent that any term conflicted with 23 the settlement agreement” (R. 49B). Beginning in November 2009, IDT embraced the roadmap, and over the course of the following year, pressed Tyco to either agree to terms consistent with the Settlement Agreement or take a definite and final position on contrary terms. Id. Tyco elected the latter course and IDT filed the instant complaint. Tyco accuses IDT—as it has previously—of trying to rewrite this Court’s 2009 opinion, but the opposite is true. The unaltered plain language of this Court does not support Tyco’s argument that it had been discharged. Furthermore, this Court’s use of the word “became” is completely understandable because it was asked to decide in 2009 whether a breach had occurred prior to May 2004. Rather, it was Tyco (and the Supreme Court) that read new material into this Court’s 2009 opinion, effectively equating “Tyco’s obligation to furnish capacity never became enforceable” (this Court’s words) (R. 49A) with “Tyco does not have any further obligations under the Settlement Agreement” (Justice Schweitzer’s words) (R. 18). As there was no basis for Tyco and the Supreme Court to have made this leap, a unanimous Appellate Division correctly rejected this “plain language” argument and reversed.12 12 On the question of interpreting this Court’s 2009 opinion, IDT recognizes that it is put in the strange position of arguing the intended meaning of a few spare words to a Court, four of whose members participated in the 2009 decision, and therefore know better than anyone whether those words were meant to discharge Tyco from all future obligations, or whether the issue was even considered. 24 2. Tyco Never Raised the Issue of Discharge in the Prior Litigation Tyco’s “plain language” argument is wrong, but it becomes even harder to accept because the discharge issue was never raised by Tyco in the Prior Litigation before any of the courts that considered that case. Tyco asserted for the first time that it had been discharged from its obligations under the Settlement Agreement only after this Court’s October 22, 2009 decision. Because Tyco never raised the issue, and certainly never made any effort to prove that it had been discharged from its obligation, the Prior Litigation tribunals never decided that Tyco was discharged. To the contrary, it was critical to the Appellate Division’s 2008 decision that it believed that Tyco “never made a definite and final communication of an intent to forgo [its] obligation.” R. 265 (internal citations omitted). Had the Appellate Division understood Tyco to have told IDT before May 2004 that it had negotiated for long enough and would not continue to do so any more, the Appellate Division could instead have affirmed Justice Ramos’s finding that Tyco had breached the parties’ agreement to negotiate. In an attempt to rebut this critical point, Tyco now—as it has previously— quotes documents out of context and claims that it actually did argue that it had been discharged during the Prior Litigation. But this is not true. Tyco falsely claims that it pled in its Answer and Counterclaims that Tyco had been “reliev[ed] … from any further obligations under the Settlement Agreement.” Tyco Br. at 36 25 (citing Original R. 2939-40). What Tyco in fact said was “by refusing to accept the standard product offering, plaintiffs breached their obligations under the Settlement Agreement, relieving all defendants in this action from any further obligations under the Settlement Agreement.” Tyco also falsely claims that in its Rule 19A Statement it had asserted that “Tyco has no further obligations under the Settlement Agreement.” Tyco Br. at 36 (citing Original R. 3267.78). What Tyco in fact wrote in its 19A Statement was “because IDT failed to honor its obligation to renegotiate in good faith the open terms for the provision of fiber optic capacity, Tyco has no further obligations under the Settlement Agreement.” When read in the proper context, it is clear that both statements concern Tyco’s breach of contract counterclaim—based on the allegation that IDT had breached the Settlement Agreement first. In both instances, Tyco linked its request for relief to a finding that IDT had failed to negotiate in good faith, and no court has ever made that finding. In both statements, Tyco was making the unexceptional argument that if IDT was found to have breached its obligations, then further performance by Tyco would be excused.13 No court has ever found IDT to be in breach of the 13 The third and fourth excerpts offered by Tyco do not even address discharge, which becomes even more clear when reproduced in their entirety (with the missing words shown in italics): Alternatively, even if the Settlement Agreement were viewed as a “definitive” agreement, Tyco argued that it had performed its obligations under the Agreement, while IDT had breached them. 26 Settlement Agreement—in fact the only court ever to rule that either party had committed a breach was Justice Ramos, who decided in 2007 that Tyco had breached. Prior to November 2009, Tyco never asserted that it would be discharged if, without fault by any party, a condition precedent to its obligation to turn over capacity to IDT was not satisfied. There is no language in the 2008 and 2009 opinions in the Prior Litigation, and no basis in fact, to imagine that the Appellate Division or this Court either took up the issue or discharged Tyco. The Supreme Court took the position that “[i]f the [Court of Appeals] intended to reserve a future right of action in IDT, it would have indicated as much” (R. 18), but this approach would only make sense if there was any reason to believe that this Court was even thinking about whether Tyco had discharged its obligations, or whether IDT had a future right of action. As there is nothing to suggest that the issue of discharge was on this Court’s mind, the Supreme Court’s “would have” argument is without force. Tyco’s 4/16/09 Court of Appeals Brief at 22. Thus, there can be no dispute that TyCom satisfied each and every obligation it had under the Settlement Agreement. The allegations that are the basis of IDT’s cause of action for breach of contract are utterly baseless and completely contradicted by the undisputed factual record. Tyco’s 4/24/07 Mem. of Law at 12. 27 B. Tyco Was Not Discharged From Its Obligations Under the Settlement Agreement By Operation of Law Tyco insists that it was automatically discharged from its obligations under the Settlement Agreement, apparently by the mere passage of time (the Appellate Division referred to this as Tyco’s “enough was enough” argument). Tyco argues that because the parties did not reach agreement on the documentation of the IRU during the pre-2004 negotiations, it was automatically absolved in 2004 (or perhaps earlier) of its obligation to continue negotiating in good faith the documentation of the IRU, and provide IDT with the agreed-upon telecommunications capacity upon the finalization of that documentation. As the valuable telecommunications capacity is the very consideration that IDT bargained for, Tyco is saying that it has been relieved of the obligation to provide IDT with that consideration. Tyco is wrong. Tyco argues—as it did to the Appellate Division—that whenever “(i) there is a condition precedent, (ii) the condition has not been fulfilled, and (iii) the party has not frustrated fulfillment of the condition—the conditional obligation is discharged.” Tyco Br. at 31-32. Tyco then goes on to say that “because the Court found that, through no fault of Tyco, the parties could not agree to the terms of an IRU after almost three years of negotiation, Tyco’s obligations under the Settlement Agreement necessarily were discharged as a matter of law.” Id. Tyco mischaracterizes the law and its application to the facts in this case. Some courts 28 on some occasions have discharged parties from ongoing obligations under contracts as a result of unfulfilled conditions precedent. In those cases, however, the inquiry is fact-intensive, and where the courts do grant such relief they typically identify the factual reasons for discharging the party in question from future obligations. This case, by contrast, does not embody such facts, and because no party raised the issue, and no court considered the issue in the Prior Litigation, it is wrong to conclude that Tyco has been discharged. This was the unanimous conclusion of the Appellate Division. One of the more common fact patterns in which courts will consider discharging a party to a contract from future obligations arises where the condition precedent has not been met—and cannot be met—often due to the passage of a specific date by which the contract required that something had to occur. This fact pattern characterizes both of the cases cited by the Supreme Court (and Tyco), and is not found in the present case. In MHR Capital Partners LP v. Presstek, Inc., 12 N.Y.3d 640, 912 N.E.2d 43 (2009), plaintiff claimed that defendant had breached a stock purchase agreement when it did not make the agreed-upon payment and transfer of stock to plaintiff. MHR, 12 N.Y.3d at 643-644, 912 N.E.2d at 46. This Court concluded that defendant had not breached the stock purchase agreement, because plaintiff had to perform an obligation that was a condition precedent to defendant’s payment and transfer. MHR, 12 N.Y.3d at 646-647, 912 N.E.2d at 47- 29 48. Specifically, plaintiff was obligated to obtain a particular bank’s agreement by close of business on June 22, 2004—a date certain—and plaintiff failed to obtain the required consent by the deadline. Id. The second case referenced by both Tyco and the Supreme Court, Teachers Ins. & Annuity Association of America v. Tribune Co., 670 F. Supp. 491 (S.D.N.Y 1987), likewise turned on the passage of a specific date. In Teachers, an institutional lender sued a prospective borrower charging the borrower with breach of a commitment letter agreement for a 14-year, $76 million loan yielding 15.25%. Id. at 491. The contemplated loan was an element of an arrangement for the sale by the borrower of a New York City building. Id. at 492. Moreover, it was important that the transaction be accomplished during the calendar year 1982 so that the loss realized from another part of the arrangement could be offset against taxable gain realized from the sale of the building. Id. Therefore—and unlike the facts of the instant case—there was a date certain by which the parties explicitly sought to finalize their arrangement. Id. at 492. After December 31, 1982, the purpose of the contract in Teachers was impossible to achieve.14 14 The Supreme Court misstated the holding of Teachers. The language it quoted (“if, through no fault on either party, no final contract were reached, either because the parties in good faith failed to agree on the open secondary terms, … no enforceable rights would survive” (R. 18; Teachers, 670 F. Supp. at 505–506)), suggests that the holding of Teachers was that no agreement was reached due to mutual lack of interest. In reality, Judge Leval concluded that defendant “refused to negotiate unless [plaintiff] agreed to add a condition that was outside the scope 30 In both MHR and Teachers, the respective plaintiffs failed and missed deadlines by which to satisfy a condition precedent, thereby terminating any further obligation on the part of defendants. The Settlement Agreement here, by contrast, did not (and does not) require execution of final agreements by any date. Thus, although the execution of final documentation had not occurred by the time IDT brought the Prior Litigation, it does not follow that the parties could not still execute final agreements when they resumed negotiations. Unlike the MHR and Teachers cases, a point of no return has not passed and the parties’ obligations under the Settlement Agreement have not been discharged. The Appellate Division agreed. R. 340-41 (“Obviously, in those cases [citing MHR and Teachers], the defendants had no further duty to perform under the contract because, having passed the date certain, the condition precedent could never be satisfied.”). The Appellate Division further criticized Tyco for its “disingenuous use of block quoting” to “imply that the Court of Appeals agreed and found that ‘enough was enough,’” reiterating that Tyco’s “obligations in this case did not have an expiration date, nor, as the defendants urge, did one arise through the mere passage of time.” R. 341-42. Tyco falls prey to the same temptation once again, linking three partial quotes, out of order, to misrepresent to this Court what it said in 2009. of the bargain. The existence of open points and the failure of the parties to satisfy the condition of execution of final documentation is, therefore, chargeable to [defendant],” and found the defendant liable for breach. Id. at 506. 31 See Tyco Br. at 38 (citing language from R. 49B, 49A and 49C to suggest that this Court discharged Tyco from all future obligations under the Settlement Agreement). The numerous additional cases cited by Tyco concerning this issue are not only distinguishable, but also do nothing to support Tyco’s argument or the conclusions of the Supreme Court on the issue of discharge. Of those seventeen cases, four (like MHR and Teachers) involve the passage of dates certain or other facts that made continued performance impossible or moot,15 six stand for the more basic proposition that if a condition precedent to performance has not yet occurred, and the non-moving party has not engaged in any inappropriate behavior, the non- moving party’s obligation to perform is not yet triggered (as opposed to discharged),16 and seven are simply irrelevant to the question of whether and when 15 HGCD Retail Services, LLC v. 44–45 Broadway Realty Co., 826 N.Y.S.2d 190, 199, 37 A.D.3d 43, 54 (1st Dep’t 2006) (broker not required to pay fee because condition precedent (third party tenant’s payment of rent) had not occurred and would no longer possibly occur); Merritt Hill Vineyards Inc. v. Windy Heights Vineyard, Inc., 61 N.Y.2d 106, 113, 460 N.E.2d 1077, 1081-1082 (1984) (defendant’s failure to obtain title insurance policy and mortgage confirmation at the closing entitled plaintiff to return of deposit); N.F.L. Insurance Ltd. v. B&B Holdings, Inc., 874 F. Supp. 606, 612 (S.D.N.Y. 1995) (condition precedent of unanimous agreement did not occur and would not occur because one team was not present and specifically disavowed any agreements reached by the other teams); Perna v. Desai, 475 N.Y.S.2d 883, 884, 101 A.D.2d 857, 858 (2nd Dep’t 1984) (because condition precedent (rental of a store for a certain monthly amount) had not occurred by the closing date, plaintiffs’ obligations were not triggered). 16 Vemics, Inc. v. Meade, 06 Civ. 8716 (RLC), 2009 U.S. Dist. LEXIS 64921, at *6 (S.D.N.Y. July 23, 2009) (finding plaintiff’s obligation to pay defendants had not 32 a party should be discharged from future contractual obligations.17 been triggered due to defendants’ failure to deliver notes to plaintiff, court ordered defendants to perform); Aniero Concrete Co., Inc. v. New York City Construction Authority, 94 Civ. 9111 (CSH), 95 Civ. 3506 (CSH), 2000 U.S. Dist. LEXIS 8833, at *20-22 (S.D.N.Y. June 27, 2000) (failure of an external condition precedent (third party consent) meant plaintiff’s obligation had not ripened); Rotella v. Rotella, 577 N.Y.S.2d 342, 343-344, 178 A.D.2d 755, 757 (3rd Dep’t 1991) (where defendants’ fulfillment of certain obligations were conditions precedent to plaintiff’s obligation to perform, and defendants were in breach for failure to perform, plaintiff’s duty was not triggered); Snakepit Automotive, Inc. v. Superformance International, LLC, 859 N.Y.S.2d 906, 19 Misc. 3d 114(A), at *13- 14 (Sup. Ct. Nassau Co. 2008) (exclusive territorial rights had not transferred via oral agreement or incomplete contract, as Statute of Frauds required written dealership agreement, which did not exist); Levy v. Friedman, 628 N.Y.S.2d 265, 216 A.D.2d 18 (1st Dep’t 1995) (plaintiff’s entitlement to its fee did not arise because title did not close pursuant to a signed written contract); Stanton v. Power, 679 N.Y.S.2d 293, 254 A.D.2d 153 (1st Dep’t 1998) (where defendants’ duty to pay plaintiff was conditioned upon plaintiff’s written presentation of potential merger candidates, absent evidence that plaintiff had made a written presentation, the court declined to find condition satisfied). 17 Cauff, Lippman & Co. v. The Apogee Finance Group, Inc., 807 F. Supp. 1007, 1023 (S.D.N.Y. 1992) (defendant insisted on conflicting terms, so the court found the breach “chargeable to Apogee”) (citing Teachers, 670 F. Supp. at 506); Ellan Corp., Inc. v. Dongkwang Int’l Co., Ltd., No. 09 Civ. 414 (LAP), 2011 U.S. Dist. LEXIS 92632, at *10 (S.D.N.Y Aug. 15, 2011) (because entire agreement was conditioned on the plaintiff delivering a written authorization, but before that could happen defendant affirmatively cancelled the entire agreement, “the agreement was never effective”); Haines v. City of New York, 41 N.Y.2d 769, 772–73, 364 N.E.2d 820, 822-823 (1977) (Court of Appeals did not discharge defendant, obligating City of New York to maintain and expand sewage disposal facility under 50–year- old contract unless doing so would overload system); Hall v. People to People Health Foundation, Inc., 493 F.2d 311, 313 (2d Cir. 1974) (plaintiff’s delay in counter-signing settlement agreement, which allows defendants time to withdraw settlement proposal, results in unenforceable settlement agreement); Colonial Pacific Leasing Corp. v. Brown, 958 N.Y.S.2d 60, 28 Misc. 3d 1214A, at *12-13 (Sup. Ct. N.Y. Co. July 21, 2010) (finding no condition precedent existed for termination of defendants’ guarantees, court granted summary judgment to defendants); Preferred Mortgage Brokers, Inc. v. Byfield, 723 N.Y.S.2d 230, 231, 33 Tyco asserts the existence of the “principle that when a condition precedent remains unfulfilled after a reasonable time, the conditional duty is discharged” (Tyco Br. at 38), yet the first case that Tyco cites had a time-bound condition precedent, and the second case reflected a situation where the court made an express finding that there was no excuse for plaintiff’s delay. In Perna, 475 N.Y.S.2d at 884, 101 A.D.2d at 858, because the condition precedent—rental of a store for a certain monthly amount—had not occurred by the closing date, plaintiffs’ obligations were not triggered. In Hall, 493 F.2d at 313, after agreeing to settle their case, defendant presented plaintiff with a signed release, but plaintiff refused for five months to countersign. In language Tyco purposefully left out of the block quote in its brief (Tyco Br. at 39), the Second Circuit made an express determination of what would or would not be reasonable on the facts before it: “[a] reasonable time to sign in this case is a few days or, at most, a few weeks after May 16. Counsel had reached a settlement to which Hall had agreed in principle. After sending the letter it was incumbent upon him to act promptly to sign the release or to abandon the settlement agreement.” Hall, 493 F.2d at 313. The Court specifically found that with a five-month delay, “[t]he other parties would then 282 A.D.2d 589, 590 (2d Dep’t 2001) (where defendant failed to sign document, defendant’s obligation to pay plaintiff’s fee never arose in the first place; no discussion of discharge); Solutia Inc. v. FMC Corp., 456 F. Supp. 2d 429, 443 (S.D.N.Y. 2006) (court concluded that it was dealing with a less binding “Type II” agreement). 34 naturally have assumed that he had no intention of signing and would change their positions accordingly.” Id. The facts of the present case are not analogous, nor did any of the courts make any findings as to what would or would not be reasonable. IDT has never abandoned its interest in the telecommunications capacity or in concluding the documentation of the IRU. To the contrary, IDT has spent years trying to bring the negotiations to closure, but has been repeatedly stymied by what IDT believes is Tyco’s failure to engage in good faith negotiations. Later in its brief (Tyco Br. at 40), Tyco cites Solutia, 456 F. Supp. 2d at 443 for the principle that “If the parties fail to reach such a final agreement after making a good faith effort to do so, there is no further obligation.” That language, however, comes from a description of a “Type II” agreement, which in federal court parlance refers to an open-ended agreement that does not bind parties to their ultimate contractual objectives. In this case, both this Court and the Appellate Division found that the Settlement Agreement was an agreement with more force than a “Type II.” The Appellate Division classified it as a “contingent Type I” agreement, and this Court declined to classify it altogether, but both courts agreed that the Settlement Agreement did bind the parties to their ultimate contractual objective, upon the documentation of the terms of the IRU. R. 49 n. 2. When parties enter into an agreement to negotiate final terms and one party sues the other for breach of contract, and the court of final instance determines that 35 no breach has taken place, the contract remains operative unless circumstances have materially changed. Under such circumstances, the parties are to return to the bargaining table and continue to negotiate, unless performance has become impossible or moot, or there has been a clear and explicit end to the contractual relationship. The Appellate Division agreed with this fundamental proposition, and reversed the erroneous holding of the Supreme Court. IDT’s understanding is also consistent with the reasoning of the one decision (before the Appellate Division’s 2012 decision) where a court demonstrated that it understood that this Court’s 2009 holding was limited to a finding that Tyco had not breached, without affecting the parties’ ongoing obligations under the contract. In SHS Baisley L.L.C. v. Res Land, Inc., Index No. 13931/09, 2009 N.Y. Misc. LEXIS 6472 (Sup. Ct. Queens Co. Dec. 8, 2009), Justice Kitzes gave this Court’s 2009 decision the exact same interpretation as did IDT and the Appellate Division. On plaintiff’s motion for summary judgment on its claim that defendant had breached a settlement agreement and a lease, Justice Kitzes drew upon this Court’s 2009 opinion and found that the defendant had not breached the agreement because “conditions precedent for defendant to have performed the subject obligations have not arisen.” Id. at *14 (citing IDT Corp., 13 N.Y.3d at 209, 918 N.E.2d at 913). Finding no breach of the agreement to negotiate, Justice Kitzes ordered the parties to continue to negotiate: “Despite the fact that the parties have negotiated various 36 open terms on and off since January, issues remain. The parties are obligated to continue their negotiations....” Id. Justice Kitzes reached the right result, because he understood that absent impossibility or an express judicial analysis and determination that a party should be excused, parties to contracts must continue to live up to their obligations, even if an ultimately unsuccessful lawsuit intervenes. There is nothing in the record associated with the Prior Litigation to suggest that the parties ever lost interest in getting a final deal done or that carrying out the terms of the Settlement Agreement had become moot, even in 2009.18 The parties’ negotiations were simply suspended during the pendency of the Prior Litigation. This conclusion is fully supported by the conduct of the parties. Thus, • Tyco “never made a ‘definite and final communication’ of ‘an intent to forgo [its] obligations’ prior to the commencement of this action” (R. 265), and thus remained ready to continue negotiating; • Tyco affirmatively argued in 2007 that “the Wavelengths remain available for IDT today” (R. 183 ¶ 61), and that Tyco remained ready to hand over the telecommunications capacity throughout the Prior Litigation; and • Tyco returned to the bargaining table after the Prior Litigation ended (albeit in bad faith, in IDT’s view) and made counter-proposals, thus demonstrating that the subject of the transfer of the telecommunications capacity was alive and viable (R. 299-302). The subsea fiber-optic telecommunications capacity remains valuable to IDT and available for IDT, and IDT is still interested in getting the benefit of the 18 This Court noted that negotiations had gone on for three years before IDT initiated the Prior Litigation (R. 49)), but this factual finding is not coupled with any other finding that Tyco is discharged by the mere passage of three years’ time. 37 bargain struck in the Settlement Agreement. Tyco’s obligation to continue negotiating with IDT, without insisting upon terms inconsistent with the Settlement Agreement and without manifesting an intent to forgo its obligations under the Settlement Agreement, was not discharged. C. The Decision of the Appellate Division and This Court in the Prior Litigation Have No Preclusive Effect IDT has no issue with Tyco’s recitation of the principles of res judicata or collateral estoppel. As Tyco explains, res judicata—or claim preclusion—would bar IDT from bringing claims against Tyco that were brought or could have been brought in the Prior Litigation. Collateral estoppel—or issue preclusion—would bar IDT from litigating legal issues in this case that it had lost in the Prior Litigation. It is in the application of these doctrines where Tyco’s reasoning continues to go astray. Tyco argues that “the claims in IDT’s 2010 complaint are exactly the same claims litigated and rejected in the prior action” (Tyco Br. at 47), but that is not correct. Nor is it correct to characterize Tyco’s behavior in 2009-2010 as “additional instances of what was previously asserted.” Id. at 50. 1. No Prior Court Decided Whether The Positions Asserted by Tyco Prior to 2004 Were Inconsistent With the Settlement Agreement Tyco argues that this Court in 2009 was “required to resolve the ‘merits’ issue” (Tyco Br. at 45) and to decide whether the positions Tyco had advanced 38 prior to the commencement of the Prior Litigation were inconsistent with the terms of the Settlement Agreement, thereby breaching that agreement. For this, Tyco relies on the word “any” in the sentence “[t]he record does not support a finding that Tyco breached any of its obligations.” R. 49C. Just because a party makes an argument, however, does not in any way mean that a court needs to address or decide the question. It goes without saying (or at least it should) that courts regularly dispose of motions and entire cases without reaching and deciding every disputed issue. That is what happened here.19 As discussed at length above, in the Prior Litigation IDT claimed that Tyco had advanced terms during their 2001-2004 negotiations that were inconsistent with the Settlement Agreement, but neither the Appellate Division in 2008 nor this Court in 2009 reached the issue, having based their conclusion on the finding that Tyco had merely proposed terms, rather than making a definite and final communication of an intent to forego its obligations under the Settlement Agreement. Thus, neither court reached or decided the question of whether the positions Tyco took in 2001-2004—positions that IDT claimed in the Prior Litigation were inconsistent with the Settlement Agreement, were (a) actually inconsistent, or (b) a breach of the Settlement Agreement. 19 Similarly, the concurring justices of the Appellate Division found that the allegations in paragraph 50 of the complaint “suffice[] to sustain the causes of action asserted therein.” R. 349. 39 The principle that a party has breached its obligation when it takes definite and final positions that are inconsistent with an enforceable contract is well-settled New York law. In 1995, the Appellate Division, First Department, explained that the doctrine of anticipatory breach rests on the principle that “[o]nce a party has indicated an unequivocal intent to forgo performance of his obligations under a contract, there is little to be gained by requiring a party who will be injured to await the actual breach before commencing suit,” adding that “it is clear that there must be a definite and final communication of the intention to forego performance before the anticipated breach may be the subject of legal action.” Rachmani Corp. v. 9 E. 96th St. Apartment Corp., 629 N.Y.S.2d 382, 385, 211 A.D.2d 262, 266–67 (1st Dep’t 1995) (citing McCloskey & Co. v Minweld Steel Co., Inc., 220 F.2d 101, 104 (3d Cir. 1955); Ga Nun v. Palmer, 202 N.Y. 483, 488, 96 N.E. 99, 101 (1911)). This principle was reiterated by the Appellate Division in 2002, Canali USA, 739 N.Y.S.2d at 363, 292 A.D.2d at 171 (citing Rachmani), and again in the Prior Litigation in 2008, when the Appellate Division, citing Canali, stated: Nothing in the settlement agreement prohibited defendants or plaintiffs from merely proposing terms that were inconsistent with the settlement agreement. The proposal that defendants made, moreover, was hardly “the sort of definite and final communication” of “an intent to forgo [their] obligations” that is “necessary to justify a claim of anticipatory breach”….Because the parties’ submissions on the motion and cross motion establish that defendants never made a “definite and final communication” of “an intent to forgo [their] 40 obligations” (id.) prior to the commencement of this action, defendants did not, as a matter of law, breach the settlement agreement. R. 264. Similarly, in 2011, the First Department explained that “the obligation to negotiate in good faith ‘bar[s] a party from…insisting on conditions that do not conform to the preliminary agreement.’” Credit Suisse First Boston v. Utrecht- America Finance Co., 915 N.Y.S.2d 531, 534, 80 A.D.3d 485, 487 (1st Dep’t 2011) (quoting Teachers, 670 F. Supp. at 498). The critical issue in cases such as this is whether the defendant “insisted” or made a “definite and final communication” to plaintiff, which would give rise to anticipatory breach, or merely made a “non-final” proposal, which is not a breach. Thus, in 2009 this Court affirmed the Appellate Division’s holding in the Prior Litigation that Tyco had not breached, and it did so for the same reasons.20 This Court, like the Appellate Division, held that “Tyco’s proposal of purportedly inconsistent terms did not constitute a breach of contract.” R. 48. That finding turned on the fact that Tyco had proposed—not insisted upon—terms to which IDT had objected. It did not depend upon or involve a resolution of the question of whether the “purportedly” inconsistent terms were actually inconsistent. Ultimately, this Court held that “it cannot be said that defendants breached 20 The only area of material divergence between the two courts was over whether to classify the Settlement Agreement as a “Type I,” “Type II” or “hybrid” agreement. This disagreement had no impact on the holding, however, as both courts found the agreement to be enforceable against Tyco. 41 the settlement agreement by merely proposing an IRU which allegedly contained terms inconsistent with settlement.” R. 49B. The words “breached” and “merely proposing” in the preceding sentence show that this Court, like the Appellate Division, held that Tyco’s assertion of deal terms amounted to a “mere proposal,” rather than a “definite and final insistence.” The word “allegedly” suggests that this Court did not reach the question of whether the terms advanced by Tyco were in fact inconsistent with the Settlement Agreement. The sentence upon which Tyco rests its entire argument—”the record does not support a finding that Tyco breached any of its obligations”— occurs just three sentences later, and there is no reference in those three sentences to the alleged inconsistencies raised by IDT, or even a hint that this Court considered, let alone decided, those detailed, multi-part, and disputed factual issues. R. 49B-C. Indeed, one would reasonably expect that if this Court had made a decision on the various disputed issues relating to consistency, there would have been discussion of these points in the decision. Tyco claims that the reasoning in the Appellate Division’s decision below construing this Court’s decision in the Prior Litigation is “flatly contradicted by other courts’ interpretations,” (Tyco Br. at 44) but this, too, is not true. The two federal district court decisions Tyco cites21 merely indicate that this Court found no 21 NRP Holdings LLC v. City of Buffalo, No. 11–CV-472S, 2012 U.S. Dist. LEXIS 97027, at *16 n. 11 (W.D.N.Y. July 12, 2012); EQT Infrastructure Ltd. v. Smith, 861 F. Supp. 2d 220, 226 n. 7 (S.D.N.Y. 2012). 42 breach of the duty to negotiate in good faith, without any mention of whether this Court reached or decided the question of whether the positions Tyco had taken were inconsistent with the Settlement Agreement. They provide no insight into this discussion, and certainly do not support Tyco’s statement that the Appellate Division’s understanding of this Court’s decision is “flatly contradicted” by them. Because the Appellate Division and this Court in the Prior Litigation did not decide the fact-intensive questions of whether each of Tyco’s proposed terms was or was not inconsistent with the Settlement Agreement, those 2008 and 2009 decisions do not have preclusive effect here. 2. The Two Lawsuits Concerned Two Different Sets of Negotiations Separated by Five Years, and IDT Claims That Tyco Acted Differently in 2009–2010 Furthermore, the lawsuits involve different courses of conduct during different time periods, albeit with both relating to attempts to document the IRU. The current lawsuit involves Tyco’s behavior during negotiations in 2009–2010, whereas the Prior Litigation involved its behavior during the negotiations in 2001– 2004. Although Tyco suggests that some of the positions it asserted in 2009–2010 were the same as some of the positions it asserted in 2001–2004, Tyco certainly cannot show that its behavior in the two time periods was identical. The current record (which is the record that was before Justice Schweitzer and the Appellate Division) contains almost none of the actual correspondence between the parties, 43 providing little opportunity for a court—even if it were so inclined—to meaningfully analyze Tyco’s behavior in the two distinct time periods. And thus even if it were the case that the courts in the Prior Litigation decided whether Tyco’s behavior in 2001-2004 was improper, Tyco cannot at this procedural stage establish that its 2009-2010 behavior was identical to its 2001-2004 behavior. More importantly, IDT claims and the record reflects that Tyco’s behavior was meaningfully and materially different in the 2009-2010 time period, especially in the manner in which Tyco asserted its positions, including: (i) the seven or more times that Tyco approached the negotiations by stating that it had been discharged from any further obligations under the Settlement Agreement (R. 28-32 ¶¶ 34, 36, 38, 42, 44, 46, 48); and (ii) the asserted fact that by the end of the negotiations, Tyco “insisted on terms that conflicted with the Settlement Agreement and made a definite and final communication to IDT of Tyco’s intent to forgo its obligations under the Settlement Agreement, including its obligation to provide to IDT the use of the Wavelengths described in the Settlement Agreement for fifteen years and in a manner fully consistent with that described in the Settlement Agreement.” R. 32. All five justices of the Appellate Division agreed with this conclusion in 2012: [T]he plaintiffs’ current claims arise from the alleged actions and omissions of the defendants after the Court of Appeals decision. Thus, the conduct complained of now could not have been the basis for the breach of contract 44 action previously dismissed by this Court and the Court of Appeals. Because this claim does not arise out of the same transactions or series of transactions previously litigated, this action is not barred by res judicata. Similarly, this action is not barred by collateral estoppel because the issues raised here were not raised or decided in the prior litigation. The defendants’ assertions to the contrary, the defendants never argued in opposition to the previous breach of contract action that they had discharged their obligation to negotiate with the plaintiffs, nor did any court address that issue. It should also be noted that the Court of Appeals did not previously determine the issue of whether the defendants’ proposals were a breach of the duty to negotiate in good faith; it did not consider the substance or merit of the proposals; it simply held that the making of proposals was not a breach of the settlement agreement. R. 345-46 (majority). Again, it has never been adjudicated that Tyco's obligations under the settlement agreement have been discharged. Further, the conduct described in paragraph 50 of the present complaint allegedly occurred after the dismissal of the previous action, and neither of the appellate decisions dismissing the previous complaint held that conduct of that kind, if proven, would not constitute a breach of Tyco's obligations. Accordingly, the dismissal of the previous action does not bar the present action as either res judicata or collateral estoppel. R. 349-50 (concurrence). Tyco cites numerous cases on the issue of preclusion, but all are distinguishable from the present case, as each involved clear instances of parties seeking to re-litigate settled facts or issues that were necessarily decided in the 45 prior litigation.22 Tyco’s preclusion arguments should once again be rejected. The decisions of the Appellate Court and this Court in the Prior Litigation have no 22 On the issue of res judicata, see, e.g., In re Hunter, 4 N.Y.3d 260, 269–70, 827 N.E.2d 269, 274-275 (2005) (where first case was brought to final conclusion through judicially-settled accounting decree, res judicata prevented party from raising new challenge involving old facts that it could have raised before); Smith v. Russell Sage College, 54 N.Y.2d 185, 193, 429 N.E.2d 746, 749-750 (1981) (plaintiff barred from bringing case of wrongful discharge, because the lawfulness of his discharge had been adjudicated previously); Sterngass v. Soifer, 810 N.Y.S.2d 362, 363, 27 A.D.3d 549, 550 (2d Dep’t 2006) (failure to raise prior breach of contract issue in first litigation, where issue could have been raised and case was disposed of on merits, has res judicata effect in second litigation); Marcel Fashions Grp., Inc. v. Lucky Brand Dungarees, Inc., No. 11 Civ. 5523 (LTS), 2012 U.S. Dist. LEXIS 138608, at *12 (S.D.N.Y. Sept. 25, 2012) (prior case involved “final adjudication on the merits”); Pricaspian Dev. Corp. (Texas) v. Royal Dutch Shell, PLC, No. 09–2857, 382 Fed. Appx. 100, 102 (2d Cir. 2010) (same claims found to be time-barred in prior litigation); Waldman v. Vill. of Kiryas Joel, 207 F.3d 105, 107–08 (2d Cir. 2000) (as condition of settlement reached during trial, prior suit dismissed with prejudice); Huck v. Dawson, 106 F.3d 45, 49 (3d Cir. 1997) (where first court determined that conduct was legal, repetition of “precisely the same conduct challenged in the earlier suit” was not actionable). On the issue of collateral estoppel, see, e.g., Bunny v. Coughlin, 593 N.Y.S.2d 354, 357, 187 A.D.2d 119, 122 (3d Dep’t 1993) (question “necessarily and actually litigated in the prior Federal class action”); Honess 52 Corp. v. Town of Fishkill, 698 N.Y.S.2d 718, 719, 266 A.D.2d 510, 511 (2d Dep’t 1999) (arguments “clearly raised and decided” previously); In re Hofmann (Chadboune & Parke LLP v. Warshaw), 733 N.Y.S.2d 168, 172–73, 287 A.D.2d 119, 123–24 (1st Dep’t 2001) (validity of will was conceded in prior proceeding and could not be challenged later); Ramallo Bros. Printing, Inc. v. El Dia, Inc., 490 F.3d 86, 88–89 (1st Cir. 2007) (where first court found policy did not violate the antitrust laws, issue could not be re- litigated); Scooper Dooper, Inc. v. Kraftco Corp., 494 F.2d 840, 843, 850 (3d Cir. 1974) (after arbitrator and first court ruled that marketing policy violated bargaining agreement, issue could not be re-litigated in the absence of changed circumstances); Exhibitors Poster Exch., Inc. v. Nat’l Screen Serv. Corp., 517 F.2d 110, 116 (5th Cir. 1975) (where prior court determined no monopoly behavior, second court bound by collateral estoppel not to allow re-litigation of issue). 46 preclusive effect, and the decision of the Appellate Division below should be affirmed. D. The “Documentary Evidence” Does Not Override the Presumption that the Facts in IDT’s Complaint Are True 1. Tyco Did Not Preserve This Argument for Appeal Tyco argues, for the first time on this appeal, that an email its lawyer wrote in 2010 renders IDT’s factual allegations impossible. Specifically, Tyco alleges that its lawyer’s October 14, 2010 email to IDT’s lawyer (R. 299-302; see also R. 309-10) definitively establishes that IDT’s allegation in paragraph 50 of its complaint—that “Tyco continued to insist on terms that conflicted with the Settlement Agreement and made a definite and final communication to IDT of Tyco’s intent to forgo its obligations under the Settlement Agreement” (R. 32)— cannot be true. As Tyco never raised this argument before, it would be very unusual for the Court to consider and act upon this unpreserved argument now. Devlin v. Video Servs. Acquisition, 591 N.Y.S.2d 775, 776, 188 A.D.2d 370 (1st Dep’t 1992); Habenicht v. Nassau County Dept. of Social Servs., 506 N.Y.S.2d 957, 957, 123 A.D.2d 667, 668 (2d Dep’t 1986); Roth v. Robbins, 499 N.Y.S.2d 617, 117 A.D.2d 794 (2d Dep’t 1986); Abacus Real Estate Fin. Co. v. P.A.R. Constr. & Maintenance Corp., 496 N.Y.S.2d 237, 238, 115 A.D.2d 576, 577 (2d Dep’t 1985). As this Court explained under similar circumstances in 2009, “[w]e are not in the business of blindsiding litigants, who expect us to decide their 47 appeals on rationales advanced by the parties, not arguments their adversaries never made.” Misicki v. Caradonna, 12 N.Y.3d 511, 519, 909 N.E.2d 1213, 1218 (2009). Were the Court to consider this unpreserved argument, however, it should reject it on both legal and factual grounds. 2. The Issue Is Not Whether Tyco Was Willing to Keep Talking to IDT, But Whether It Had Insisted On Allegedly Improper Positions Tyco’s argument that it expressed a willingness to continue talking to IDT, and that its willingness to do so was enough to overcome the presumption of truth in favor of the factual allegations of the complaint, is wrong. IDT does not allege that Tyco was not willing to meet or talk; indeed, IDT recites several times that the parties exchanged emails and met in 2010. IDT does allege, however, that on all those occasions Tyco unwaveringly took the position that it had been discharged from any further obligations under the Settlement Agreement, which would include Tyco’s obligation to negotiate terms not inconsistent with the Settlement Agreement. IDT further alleges that on October 13, 2010, Tyco definitively and finally insisted on terms that were inconsistent with the Settlement Agreement. Whether or not the October 14 email shows that Tyco was willing to keep talking to IDT is immaterial; the question is whether the October 14 email shows without any room for debate or doubt that IDT’s allegations are false. The document does not meet that standard. 48 3. The Tyco Email Does Not Come Close To Establishing That the Facts Alleged in IDT’s Complaint are False In the context of a motion to dismiss, “[a]ffidavits submitted by a respondent will almost never warrant dismissal under CPLR 3211 unless they ‘establish conclusively that [petitioner] has no [claim or] cause of action.’” Lawrence, 11 N.Y. 3d at 595, 901 N.E.2d at 1271 (quoting Rovello v. Orofino Realty Co., 40 N.Y.2d. 633, 636, 357 N.E.2d 970, 972–973 (1976)). See also Quesada, 826 N.Y.S.2d at 668, 35 A.D.3d at 575–576 (internal citations omitted) (“Where evidentiary material is submitted on a CPLR 3211(a)(7) motion, it may be considered by the court, but unless the defendant demonstrates, without significant dispute, that a material fact alleged by the complaint is not a fact at all, the motion will not be granted.”); Sta-Brite Services, Inc. v. Sutton, 794 N.Y.S.2d 70, 71–72, 17 A.D.3d 570, 571 (2nd Dep’t 2005) (“unless the defendant demonstrates that a material fact alleged by the plaintiff ‘is not a fact at all’ and that ‘no significant dispute exists regarding it,’ the complaint should not be dismissed.”). A court should not dismiss the complaint unless the document alone “definitively dispose[s] of plaintiff’s claim.” Carlson v. Katonah Capital, L.L.C., 814 N.Y.S.2d 889, 10 Misc. 3d 1076(A) (Sup. Ct. N.Y. Co. 2006). Here, Tyco cites to an email authored by Tyco’s lawyer, about which IDT has not had the opportunity to conduct discovery. See Suntrust Bank v. Wasserman, No. 151094/2013, 2013 N.Y. Misc. LEXIS 3642, at *15 (Sup. Ct. N.Y. Co. Aug. 49 12, 2013) (emails do not qualify as “documentary evidence” for purposes of supporting a motion to dismiss). All of the cases cited by Tyco are characterized by documents that the courts determined could be interpreted as a matter of law— agreements signed by the two parties.23 The October 14 email, by contrast, is a one-sided communication, authored by Tyco’s lawyer, which has yet to be subjected to any scrutiny. Moreover, the October 14 email is the same email that confirms IDT’s allegations that Tyco repeatedly took the incorrect position that it had been discharged from any further obligations under the Settlement Agreement. See R. 299 (“Even though Tyco does not have any further obligation of any kind under the Settlement Agreement (as we have advised on numerous occasions)…”). This, alone, would be enough to sustain IDT’s claims, because – as the Appellate Division correctly found in this case—if Tyco indeed repeatedly took that incorrect legal position during its negotiations with IDT, it could form the basis for a breach of the Settlement Agreement, because it is perhaps the ultimate expression of Tyco’s intent to forgo its obligations under that agreement. 23 See Beal Sav. Bank v. Sommer, 8 N.Y.3d 318, 326, 834 N.Y.S.2d 44,49 (2007) (finding agreement signed by the parties unambiguous as a matter of law); O’Donnell, Fox & Gartner, P.C. v. R-2000 Corp., 604 N.Y.S.2d 67, 68–69, 198 A.D.2d 154, 154 (1st Dep’t 1993) (ruling on interpretation of proxy and agreement as matter of law); Beattie v. Brown & Wood, 663 N.Y.S.2d 199, 199, 243 A.D.2d 395, 395 (1st Dep’t 1997) (finding allegations “flatly contradicted by the agreement itself”). 50 Furthermore, there is no mention in the October 14 email of four of the ten points of contention between the parties, which suggests that Tyco was not willing to compromise on those points, and thus providing support for—not undermining—IDT’s allegation in paragraph 50 of its complaint. R. 32. The Complaint does not say that Tyco’s insistence was on all ten points of contention; even if Tyco was insisting on four terms that allegedly conflicted with the Settlement Agreement, that is certainly enough to survive a motion to dismiss. As such, Tyco’s reliance on the October 14, 2010 email is misplaced—it cannot override the presumption of truth afforded IDT’s factual allegations. E. The Decision Below Does Not Create New “Reservation of Rights” Law Tyco argues that “[t]he Appellate Division also erred in holding that Tyco’s December 8, 2009 reservation of rights—a routine occurrence in commercial disputes constituted an anticipatory repudiation of the contract.” Tyco Br. 61. “Reservation of rights” is a revisionist gloss that Tyco seeks to apply to its 2009– 2010 behavior, now that a unanimous Appellate Division held that Tyco had not been discharged from its obligations under the Settlement Agreement. The term appeared nowhere in Tyco’s briefs to Justice Schweitzer or its February 2012 brief to the Appellate Division. To the contrary, Tyco’s position on discharge has been unwavering and unqualified, just as it is today. See, e.g., Tyco Br. at 30 (“[T]his Court’s Opinion terminated any remaining obligations of either party under the 51 2000 Settlement Agreement as a matter of law.”); 30 (“Tyco’s obligations under the Settlement Agreement were discharged as a matter of law by this Court’s 2009 holding….”); 32 (“Tyco’s obligations under the Settlement Agreement necessarily were discharged as a matter of law.”); 34 (“this Court’s holding that the condition precedent had not been satisfied despite protracted, good faith efforts by Tyco to reach agreement – relieved both parties of any extant obligations under the 2000 Settlement Agreement.”); 34 (“Rather th[a]n rely on this well-established law, the Appellate Division embarked on a series of misguided tangents….”); 35 (“no party had any remaining obligation under the 2000 Settlement Agreement.”); 39 (“In short, the language and logic of this Court’s Opinion – and the principles on which it relied are clear: nothing remained of the 2000 Settlement Agreement following that Opinion.”). Similarly, IDT does not allege just one instance of Tyco asserting that it had been discharged—December 8, 2009 was simply the first time. As set forth in its complaint, IDT alleges that Tyco asserted this position on at least seven separate occasions, and an eighth is found in a Tyco email of record. R. 28–32 ¶¶ 34, 36, 38, 42, 44, 46, 48; R. 299. IDT’s allegations and the Tyco email also resist any characterization as a “reservation of rights” because Tyco was forcefully asserting this position at every opportunity. See, e.g., R. 32 ¶ 48 (“On or about September 3, 2010, Tyco reaffirmed its position that it does not have any other obligations of 52 any kind under the Settlement Agreement and again refused to accept the language proffered by IDT in the May 18 draft with regard to the ten significant areas enumerated in the parties’ earlier correspondence.”); R. 299 (“Even though Tyco does not have any further obligation of any kind under the Settlement Agreement (as we have advised on numerous occasions)…”).24 One of the cases cited by Tyco presents a strikingly similar set of facts to those alleged by IDT in the complaint. In Record Club of Am., Inc. v. United Artists Records, Inc., 643 F. Supp. 925, 936 (S.D.N.Y. 1986), vacated on other grounds, 890 F.2d 1964 (2d Cir. 1989), the court found that defendant had anticipatorily breached the parties’ agreement by stating that the agreement “was over” and that they “had no contract.” The court wrote that “[i]t is difficult to conceive of a more positive and unequivocal statement of an intention not to perform.” Id. The court’s conclusion was not affected by the fact that defendant continued to supply plaintiff with product, because defendant “indicated that it was doing so only as an accommodation during the pendency of negotiations for a new contract on terms substantially more favorable to [defendant] than those of the existing agreement.” Likewise, Tyco’s continued expression of a willingness to 24 The referenced email ends two pages later with the sentence that begins, “Tyco reserves all of its rights….” R. 301. But that sentence appears at the end of a paragraph of boilerplate language concerning offers to sell goods and services, and in any event does not change the fact that the email opens with an actual assertion of the position, not a reservation of the right to assert it later. 53 negotiate does not impact the conclusion that if Tyco repeatedly and unwaveringly said that it was discharged from any further obligations, and then conducted its negotiations in accordance with that principle (as alleged by IDT), it may have anticipatorily breached the contract. Tyco criticizes Cole v. Macklowe, 882 N.Y.S.2d 417, 419, 64 A.D.3d 480, 480 (1st Dep’t 2009), the case cited by the Appellate Division, where the court found that “defendant breached the parties’ contract in April 1999 when he indicated to plaintiff that he did not consider the agreement binding.” That decision, however, is directly applicable to this case. IDT alleges (and the record reflects) that Tyco took the unequivocal position that it was discharged from any further obligations under the Settlement Agreement, which would include the obligation to refrain from insisting on terms that were inconsistent with the Settlement Agreement. Thus while Tyco continued to negotiate, it was doing so with the unequivocal belief that it was discharged from the constraints of the Settlement Agreement, which—in IDT’s view—was a breach.25 Thus, the 25 The cases Tyco cites, by contrast, are distinguishable because the courts identified facts that undermined the alleged finality of the positions in question. Scavenger, Inc. v. GT Interactive Software Corp., 734 N.Y.S.2d 141, 142, 289 A.D.2d 58, 59 (1st Dep’t 2001) (claim failed because “letter included an opportunity to cure and was therefore not an unequivocal repudiation”); Best Payphones, Inc. v. Manhattan Telecomm. Corp., 432 B.R. 46, 58 (S.D.N.Y. 2010) (telephone company’s threat to suspend service if unrelated payment was not made, coupled with “invitation to engage in a dialogue about the disconnect notice does not convey finality”); Staebell v. Bennie, 443 N.Y.S.2d 487, 488, 83 A.D.2d 54 Appellate Division did not “establish[] a new rule of law that a party’s mere utterance of its belief that it is no longer obligated under an agreement is … anticipatory repudiation.” Tyco Br. at 66. Rather, IDT alleged that Tyco repeatedly and unwaveringly took the erroneous position that it had been discharged, and then acted in accordance with that belief by advancing and ultimately insisting on improper positions. The Appellate Division concluded that if the alleged facts are assumed to be true, they could support a claim for anticipatory repudiation. The Appellate Division did not enunciate any kind of new rule about reservations of rights and anticipatory breach. The majority decision reviewed IDT‘s allegations (assuming them to be true for purposes of Tyco’s motion to dismiss), and concluded that IDT had stated a claim for breach of contract based on Tyco’s repeated incorrect assertion that it had been discharged. R. 342 (citing R. 265)) (“statements that [Tyco] had no further obligations to negotiate would constitute ‘a definite and final communication of an intent to forgo [the 765, 766 (4th Dep’t 1981) (where defendant was customarily late in his payments, leaving the property and failing to make a payment without a “repudiation of the contract and refusal to perform” insufficient to constitute abandonment); Ga Nun v. Palmer, 202 N.Y. 483, 96 N.E. 99 (1911) (reversing dismissal of complaint and directing trial court to determine when breach and right of action arose; Court of Appeals specifically declined to decide the question of fact). IDT does not allege, and the October 14, 2010 email does not reflect, any willingness on the part of Tyco to discuss whether or not Tyco was, in fact, discharged, or as to the four points of disagreement not referenced in the letter. If anything, IDT’s allegations and Tyco’s counsel’s email show that Tyco was past the point of no return on these issues. 55 defendants’] obligations,’ which as we previously held, is an anticipatory breach of the contract.”).26 The Appellate Division did not rule that Tyco had breached, but rather that IDT’s complaint adequately states a claim for anticipatory breach, and should not be dismissed.27 CONCLUSION In 2000 Tyco and IDT settled a group of suits and counter suits with regard to the use of certain undersea telecommunications capacity. The Settlement Agreement required Tyco to allow IDT to use that capacity for a specified period of time. For the past thirteen years, IDT has been seeking to enforce this right whose value, though variable, has always been in the many millions of dollars, only to be met with obstruction and obfuscation by Tyco. This appeal is yet another attempt by Tyco to terminate IDT’s claims without addressing them on the merits. 26 The Appellate Division is not “divided” on this issue, as Tyco would have this Court believe. All five Appellate Division justices found a well-pled complaint. The majority identified two ways in which IDT had stated a claim for relief (Decision at 9–11), and the concurrence mentioned only one (id. at 16), with both accepting IDT’s allegations as true, as they were required to do. The concurrence did not reject or even mention the second ground identified by the majority, writing “the above-quoted allegation of paragraph 50 of the present complaint suffices to sustain the causes of action asserted therein.” Id. at 16. 27 Tyco is of course free to argue at trial that its conduct during the 2009 – 2010 period did not, as a matter of fact, express an intent to forgo its obligations under the agreement. Similarly, IDT can argue that the repeated rejection of the binding effect of the Settlement Agreement is evidence of such an intent. But this is all for another day. 56 For the reasons set forth herein, IDT respectfully requests that this Court affirm the December 27, 2012 decision of the Supreme Court Appellate Division, First Department. Dated: September 16, 2013 New York, New York Respectfully submitted, ROBINS, KAPLAN, MILLER & CIRESI L.L.P. By: Hillel I. Parness Richard A. Mescon Oren D. Langer 601 Lexington Avenue, Suite 3400 New York, New York 10022 Telephone: (212) 980–7400 Facsimile: (212) 980–7499 E-mail: hiparness@rkmc.com ramescon@rkmc.com odlanger@rkmc.com Counsel for Plaintiffs-Respondents IDT Corp. and IDT Europe, B.V.B.A.