CIER v. L-3 COMMUNICATIONS (S.D.N.Y. 3-10-2010)

06 Civ. 3157 (NRB).United States District Court, S.D. New York.
March 10, 2010

MEMORANDUM AND ORDER
NAOMI BUCHWALD, District Judge

Plaintiff Compagnia Importazioni Esportazioni Rappresentanze (“plaintiff” or “CIER”) brought this suit against L-3 Communications Corporation d/b/a L-3 Communications Corporation, Ocean Systems Division (“defendant” or “L-3OS”), alleging claims for declaratory relief, breach of contract, fraudulent concealment, breach of the duty of good faith and fair dealing, quantum meruit, promissory estoppel, and for an accounting, arising out of L-3OS’s alleged failure to pay CIER commissions earned pursuant to an International Representative Agreement signed in 2002. In an Order dated July 31, 2007, this Court dismissed all but the breach of contract and declaratory judgment claims. Presently before the Court are the parties’ cross-motions for summary judgment.

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FACTS[1] I. Background
Plaintiff CIER is an Italian company that provides services including consulting, technical advising, and sales assistance for advanced military sonar equipment suppliers within Italy and the broader European defense market. CIER Statement of Undisputed Material Facts (“CIER SOF”) ¶ 1. CIER markets itself based on its extensive contacts within the Italian military and defense market, through which it promotes and sells the products of clients. See CIER SOF ¶ 19.

Defendant L-3OS, a Delaware company and former client of CIER, is the current owner of the Ocean Systems (“OS”) business. First Amended Complaint, ¶ 3. CIER has served as the sales representative for the OS business since it was owned by Bendix, dating from at least 1983. L-3OS Statement of Undisputed Material Facts (“L-3 SOF”) ¶ 3. These business dealings have involved a range of products

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over time.[2] By October 1985, Allied Signal had acquired the OS business, becoming Allied Signal Ocean Systems (ASOS). ASOS continued the relationship with CIER. L-3 Communications Corporation’s Memorandum of Law on Cross-Motions for Summary Judgment (“L-3 Mem.”), 14; L-3 SOF ¶ 41; CIER Opp. ¶ 41. In March 1998 L-3 acquired the assets of the OS business from Allied Signal. L-3 Mem., 16. The resulting company, L-3OS, is the defendant here. The OS business is the developer and producer of Helicopter Long Range Active Sonar (“HELRAS”). L-3 SOF ¶¶ 14-18. HELRAS is a dipping sonar system that is lowered from a helicopter into the ocean. The system transmits and receives signals that detect submarine targets. L-3 SOF ¶ 16; CIER SOF ¶ 4.

In the late 1970s, ASOS demonstrated HELRAS successfully for the Italian Navy in an effort to promote sales in Italy. L-3OS SOF ¶¶ 18, 20. Subsequently, the Italian Navy became interested in pursuing production of a fleet of EH-101 helicopters with HELRAS dipping sonar technology. L-3 SOF ¶¶ 19, 20.

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Between October 1985 and the period of time at issue here, CIER was engaged by L-3OS and its predecessors to promote the HELRAS program under a series of Service and Consulting Agreements. L-3 SOF ¶ 3; CIER Opp. ¶ 3. Between 1985 and 1995, ASOS and CIER entered into a series of these agreements designed to compensate CIER for work promoting HELRAS to the Italian Navy, whereby CIER was paid $20,000 per quarter. L-3 SOF ¶¶ 35-37, 41. The Service Agreements were designed to compensate CIER for its role as the “eyes and ears” of ASOS in Italy and for its promotion of HELRAS. L-3 SOF ¶ 40. This mechanism of compensation was used because HELRAS was still in the developmental stage, so there were no products for CIER to sell on commission. Thus, while the Representative Agreements compensated CIER for sales made of various other products, the Service Agreements allowed CIER to be compensated for its work on HELRAS during the early stages of that program. L-3 SOF ¶¶ 46, 47.

During this period, CIER and L-3OS first worked to promote HELRAS as the official selection by the Italian Navy for its EH-101 helicopters. CIER SOF ¶ 20. While they succeeded in convincing the Italians as to the value of the product, interest throughout the industry shifted from the EH-101 series of Italian helicopters to a smaller

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NH-90 helicopter being developed under the auspices of NATO as part of a joint four nation program. L-3 SOF ¶ 21; CIER SOF ¶ 25. The four nation program was called the NATO Helicopter Management Agency (“NAHEMA”) and included representation from France, Germany, Italy, and the Netherlands. L-3 SOF ¶ 21; CIER SOF ¶ 27. The structure of the program was such that NAHEMA designated a joint venture called NH Industries S.A.S. (“NHI”) as the principal contractor for the program. NHI was composed of one contractor from each of the four representative countries. NHI was tasked with the design and production of the NH-90 helicopter program, a portion of which were to be equipped with long-range dipping sonar devices. The Italian representative to the joint venture, Agusta, was selected to lead the design and production of the platform technology for the helicopter’s sonar system. CIER SOF ¶ 30; L-3 Opp. ¶ 30.

HELRAS was one type of such dipping sonar, and thus CIER was retained by ASOS to promote the selection of HELRAS for incorporation into this program. There were several obstacles to the fulfillment of this goal, however, including that (1) the HELRAS design was at the time too large to be used effectively on the NH-90 helicopters, and (2) the NAHEMA program required that the sonar equipment be

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purchased from a manufacturer within one of the four participant countries. L-3 SOF ¶ 22. In an effort to comply with the nationality requirements of the program, ASOS bought German manufacturing company ELAC Nautik Gmbh (“ELAC”), and CIER helped broker a joint venture between ASOS and Finmeccanica, an Italian manufacturing company. Id. ¶¶ 23, 24, 32. As negotiations continued, Finmeccanica became the prime contractor for the venture’s NH-90 bid, leaving ASOS as a subcontractor receiving only a portion of the business from the contract bid. Id. ¶¶ 24, 30; CIER SOF ¶ 49. The bid was eventually made with FIAR S.p.A., a subsidiary of Finmeccanica (which later became Galileo Avionica S.p.A. [“Galileo”]), ELAC, and a Dutch company called Fokker. L-3 SOF ¶ 25; CIER SOF ¶ 49; see also Certification of Anthony J. Marchetta (“Marchetta Cert.”), Exh. 16 (Manufacturing License and Technical Assistance Agreement between Allied Signal Inc. and FIAR, dated Nov. 18, 1996). Under the July 1, 1995 Service Agreement, CIER’s fee was increased to $50,000 per quarter due to the increased effort on their part to arrange the bid and procure the subcontract. L-3 SOF ¶¶ 42, 62.

In early November 1996, Agusta selected a different sonar producer for the NH-90 program. CIER SOF ¶ 32; L-3 SOF ¶ 53. This was obviously disappointing to ASOS.

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Thereafter the Italian Navy, [3] ASOS, and CIER began a campaign to reverse Agusta’s decision. L-3 SOF ¶ 54. There is some dispute as to exactly how that campaign transpired, but no one contests that CIER played a role in the efforts and that the decision was reversed in early 1998, when Agusta selected the bid led by Finmeccanica and including ELAC to supply the dipping sonar. L-3 SOF ¶¶ 54-58; CIER Opp. ¶¶ 54-58. L-3 purchased the OS business from ASOS in March of 1998, becoming L-3OS. CIER SOF ¶ 84; L-3 Mem., 14.

By the end of 1999, the NH-90 program was in development but L-3OS had not been awarded a production sub-supply contract yet. L-3 SOF ¶¶ 59-62. HELRAS was thus still not bringing funds into L-3OS that could be used to compensate CIER on a commission bases. L-3 SOF ¶ 64. From October 1999 through the award of that sub-supply contract, discussed below, CIER’s service and consulting relationship continued through Consulting Agreements between CIER and L-3OS. L-3 SOF ¶ 62. There were also two Representative Agreements signed with varying provisions as

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to the specified products covered.[4] See, e.g. Affidavit of Alan M. Gelb (“Gelb Aff.”), Exh. 70 (signed by CIER on Sept. 14, 1999). The most recent agreements are discussed below.

II. The contracts between L-3OS and CIER at issue here.
At issue here are the International Representative Agreement (“Representative Agreement”) and the International Consulting Agreement (“Consulting Agreement”), both signed on April 1, 2002. Gelb Aff. Exhs. 26 (Representative Agreement), 65 (Consulting Agreement). The “Duties” section of the Representative Agreement is identical to the “Duties” section of the Consulting Agreement though they reference appendices with differently defined terms.See Gelb Aff., Exh. 26, App. A (covering products and services “for end use in the 4-Nation NH-90 Helicopter Program,” defining the Territory as Italy, and stating the term to be two years from date of final execution or earlier termination); Gelb Aff. Exh. 65, App.

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A (referencing Exh. A for definition of services as set out below).

In keeping with prior consulting agreements, the 2002 Consulting Agreement provided for a $50,000 fee payable quarterly for services performed in “[p]romotion and consulting for continued acquisition maintenance of NH-90 Design and Development Contract effort to ensure maximum follow-on production among the nations involved in the 4-Nation NH-90 Helicopter Program.” Gelb Aff. Exh. 65, App. A, Exh. A. As in past agreements, CIER’s payments were to be made following approval by L-3OS of CIER’s submissions regarding services rendered. By its terms, the 2002 Consulting Agreement expired upon the award of the Sub-Supply Contract to L-3OS. CIER SOF ¶ 103.

The 2002 Representative Agreement provided that the products and services it covered included “L-3OS products and services related to the 4-nation NH-90 Helicopter Program and services sold in connection with other NH-90 Helicopter programs for non-Italian end use.” Gelb Aff. Exh. 26, App. B, § 2. In the “Compensation for Services” section, the Representative Agreement provided that:

Company [L-3OS], either as a prime contractor or a subcontractor, agrees to pay to Representative [CIER] a commission as set forth in the applicable Appendix B, attached hereto, on the sale of the Products and Services for use in the

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Territory [Italy], provided that Representative has fulfilled its duties as set forth in Article 1 above in connection with such sale. For purposes of determining whether Representative is entitled to a commission, the determination whether Representative has fulfilled its duties in connection with such sale shall be within the sole judgment and discretion of Company which shall not be exercised in an unreasonable manner . . . Said commission will be paid in U.S. Dollars and . . . each such commission payment: shall be based on the Net Sales Price (as defined in Appendix B) on payments received from customer and shall be paid within sixty (60) days of receipt and acceptance by Company (as specified in Appendix B) of a proper original invoice and supporting document.

Gelb Aff. Exh. 26, § 4 (emphasis added). Appendix B of the agreement defined how compensation would be payable:

Subject to the requirements of Article 4 of this Agreement in which this Appendix B is incorporated, a commission for direct commercial sales, based on the Net Sales Price of Products and Services . . ., will be payable as follows: 1. Five percent (5%) on the products/programs coverage identified in Paragraph 2(a) and 2(b) preceding [including the NH-90 program] that are sold in the Territory as a result of services performed and pursuant to the terms and conditions of this Agreement.

Id. at App. B, § 3(A) (emphasis added). The contract goes on to define “net sales price” as “the U.S. dollar value of anycontract order entered into between Company and a customer in theTerritory [Italy] for the Products and Services. . . .” Id. at App. B, § 3(C) (emphasis added).

The Representative Agreement was to remain in effect for two years from the date of execution, but was extended

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through July 31, 2004. L-3 SOF ¶ 203. The Representative Agreement was not renewed thereafter. CIER SOF ¶ 115.

III. The contract awarded during the effective period of the 2002Representative Agreement.
On December 21, 2002, Galileo Avionica (the success or of Finmeccanica) awarded the production sub-supply contract to ELAC, L-3OS’s subsidiary. See Gelb Aff. Exh. 37 (Contract Between Galileo Avionica and ELAC Nautik GmbH for the Production Investment, Production and Product Support Phases of the Dipping Sonar Subsystem/LRU’s Set/Materials Kit [Equipment] for the NH90 Programme, signed December 21, 2002 (the “Sub-Supply Contract”));see also L-3 SOF ¶ 96. Through this agreement, Galileo contracted with ELAC for the latter to supply the sonar systems contemplated by the original contract between NAHEMA and NHI (“the Main Contract”).[5] CIER SOF ¶ 57; Gelb Aff. Exh. 37, Art. 3.1. The Sub-Supply Contract provided that:

The Buyer [Galileo] is hereby committed to buy from the Supplier [ELAC] a minimum quantity of Equipment composed by 5 (five) DSS, 5 (five) Materials KIT and 55 (fifty five) LRU’s SET. To

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fulfill this commitment the Buyer shall place multiple Purchase Orders in accordance with the following conditions:
• The first Purchase Order shall be placed by the Buyer for the supply of 5 (five) DSS, 5 (five) Materials KIT and 15 (fifteen) LRU’s SET, to be delivered in accordance with Annex D “Master Plan” and shall include the relevant PI activities.
• Each subsequent Purchase Order(s) shall be consequent to the Agusta S.P.A. Purchase Order(s) to the Buyer, and shall be placed in such a way that the continuity of production is guaranteed to the Supplier. This means that any subsequent Purchase Order(s) shall be placed by Agusta to the Buyer (and consequently by the Buyer to the Supplier) at least 18 (eighteen) months before the delivery date of the last Equipment under the previous Purchase Order and the related delivery dates shall be in accordance with Annex K (SOR) In the event that the Buyer will not fulfill the above obligations, the Supplier shall have the right to apply the provisions stated in Art. 5.3 or to terminate the Contract as per article 37.

Gelb Aff. Exh. 37, Art. 4.1 (emphasis added). Article 37 of the agreement provides for termination as a remedy for Galileo’s failure to fulfill the “obligations” under the agreement or upon certain other events. Id. at Art. 37. Article 5.3 provides for the price term of the products as well as the right to renegotiate if Buyer fails to fulfill its obligations under Article 4.1. Id. at Art. 5.3.

As contemplated by Article 4.1 of the Sub-Supply Agreement, Galileo issued Purchase Order No. 4541002913, dated December 20, 2002. CIER SOF ¶ 58. This purchase

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order requested delivery of 20 units of equipment: “5-DSS, 5-Kits, and 15-LRUs.”[6] L-3 SOF ¶ 96; CIER SOF ¶ 58. This is the only purchase order that has been issued to date. CIER SOF ¶ 66; L-3 SOF ¶ 103. CIER maintains that since that contract was signed, L-3OS has received, at least, $22,227,290.23 from Galileo for deliveries and milestones made under the first purchase order. CIER SOF ¶ 77. To date, L-3OS has paid CIER one commission under the Representative Agreement based on the advanced payment received from Galileo for certain milestones as set out in the Sub-Supply Contract. CIER SOF ¶ 126.

IV. The business relationship since the award of the Sub-SupplyContract.
The business relationship between L-3OS and CIER had begun to deteriorate by the end of 2002 and eroded further

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throughout 2003.[7] While the 2002 Representative Agreement was extended from March 31, 2004 to July 31, 2004, it was not renewed further. L-3 SOF ¶¶ 203, 204; CIER Opp. ¶¶ 203, 204. L-3OS acknowledges that commissions were owed and paid on certain milestone payments received by L-3OS prior to the Representative Agreement’s expiration. L-3 SOF ¶¶ 133, 134. However, L-3OS now maintains that no commissions are owed to CIER on payments received after the agreement’s expiration, which CIER disputes. Both sides acknowledge that all invoices for payments received prior to the expiration of the contract have been paid by L-3OS.[8]
L-3 SOF ¶ 219, CIER Opp. ¶¶ 219.

Since the expiration of the Representative Agreement, continuous delays in the production schedule of the NH-90 helicopter program have resulted in disruptions to the delivery schedule under the Sub-Supply Contract and thus the HELRAS production process. In November 2006, L-3OS stopped work on the sonar units and did not resume until March 2008. L-3OS ¶¶ 230. The second purchase order, which

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was to be issued by October 2007 under the Sub-Supply Contract, has not yet been issued. In a document dated April 11, 2008, Galileo and L-3OS executed Amendment 1 to the Sub-Supply Contract, including renegotiated terms[9] for the delivery schedule of the items under the first purchase order and extended delivery through June 2011. Gelb Aff. Exhs. 55, 56; CIER SOF ¶¶ 81, 82; L-3 SOF ¶¶ 234-236. The amended contract does not include dates for delivery beyond the remaining deliveries under the first purchase order, though, as CIER points out, the original language regarding the minimum deliverables under Sub-Supply Contract Article 4.1 also appears in the amended contract. L-3 SOF ¶ 238; CIER Opp. ¶ 238. While the expectation under the amendment is still that future purchase orders will be made, further deliveries are have not yet been ordered. L-3 SOF ¶ 243; CIER Opp. ¶ 243.

DISCUSSION
CIER now seeks relief on two counts. First, CIER seeks a declaratory judgment defining its right to collect commissions on any future deliveries made as part of the

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“minimum quantity” contemplated by the Galileo Sub-Supply Contract. Second, CIER alleges that defendant breached the 2002 Representative Agreement when it failed to pay CIER a commission on the payments it received from Galileo for deliveries of sonar equipment pursuant to the Sub-Supply Contract. Defendant disputes any claim of entitlement to post-expiration commissions under the Representative Agreement. To address either claim, we must determine what rights and obligations regarding post-expiration commissions accrue under the Representative Agreement.

For the reasons set out below, and subject to certain qualifications, we find that CIER is entitled to a judgment declaring that L-3OS is obligated to pay CIER commissions under the Representative Agreement for payments it receives under the Sub-Supply Contract, even though such payments are made after the expiration of the Representative Agreement. We also find that if Galileo has made payments to L-3OS either before or since the expiration of the Representative Agreement for which commissions have not been paid, CIER is entitled to recover those commissions under Count II.

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I. The Summary Judgment Standard
This matter is now before the court on the parties’ cross motions for summary judgment. Summary judgment is appropriate only if “there exists no genuine issue of material fact and, based on the undisputed facts, the moving party is entitled to judgment as a matter of law.” Beth Israel Med. Ctr. v. HorizonBlue Cross and Blue Shield of N.J., Inc., 448 F.3d 573, 579 (2d Cir. 2006) (quoting D’Amico v. City of New York, 132 F.3d 145, 149 (2d Cir. 1998)) (internal quotation marks omitted); see also
Fed.R.Civ.P. 56(c). Summary judgment should not be granted unless “no rational finder of fact could find in favor of the non-moving party.” Carlton, 202 F.3d at 134.

The mere existence, however, of an alleged factual dispute between the parties will not defeat a motion for summary judgment because “the requirement is that there be no genuine issue o material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (emphasis in original). In order to defeat such a motion, the non-moving party must affirmatively set forth facts showing that there is a genuine issue for trial. Id. at 256. An issue is “genuine . . . if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id. at 248

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(internal quotation omitted); see C.R. Bard, Inc. v. AdvancedCardiovascular Systems, Inc., 911 F.2d 670, 672-73 (Fed. Cir. 1990).

To raise a genuine issue, a non-moving party may not “rely on mere speculation or conjecture as to the true nature of the facts.” Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12 (2d Cir. 1986), cert. denied, 480 U.S. 932 (1987); see also Lipton v.Nature Co., 71 F.3d 464, 469 (2d Cir. 1995). “`Mere conclusory allegations or denials’ in legal memoranda or oral argument are not evidence and cannot by themselves create a genuine issue of material fact where none would otherwise exist.” Quinn v.Syracuse Model Neighborhood Corp., 613 F.2d 438, 445 (2d Cir. 1980) (citation omitted). Rather, the non-moving party must produce specific facts sufficient to establish the existence of a genuine issue of fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Lipton, 71 F.3d at 464. “If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at 248 (citations omitted).

II. Contract Interpretation
CIER claims that it is entitled to commissions on payments received by L-3OS under the Sub-Supply Contract,

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even after the expiration of their contractual relationship with L-3OS. Plaintiff bases this claim on the 2002 Representative Agreement’s compensation provisions. See Gelb Aff. Exh. 26, App. B (2002 Representative Agreement).

The threshold issue for a court in any contract dispute is to determine whether the language of a contract is unambiguous. In interpreting contractual agreements, the “fundamental objective” of the court “is to determine the intent of the contracting parties `as derived from the language employed in the contract.'”Consolidated Edison, Inc. v. Northeast Utilities, 426 F.3d 524, 527 (2d Cir. 2005) (citing Abiele Constructing v. N.Y. City Sch.Constr. Auth., 91 N.Y.2d 1, 9, 689 N.E.2d 864 (1997)). “Where the contract is clear and unambiguous on its face, the courts must determine the intent of the parties from within the four corners of the instrument.” Id. (quoting Meccico v. Meccico, 76 N.Y.2d 822, 824, 559 N.E.2d 668 (1990)). However, where a contract is ambiguous, “extrinsic evidence may be considered `to ascertain the correct and intended meaning of a term’ or terms.” EternityGlobal Master Fund Ltd. v. Morgan Guar. Trust Co. of N.Y.,375 F.3d 168, 178-79 (2d Cir. 2004) (quoting Alexander AlexanderServices, Inc. v. These Certain Underwriters at Lloyd’s, London,England, 136 F.3d 82, 86 (2d Cir. 1998)).

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Further, “[a]scertaining whether or not a writing is ambiguous is a question of law for the trial court.” Morse/Diesel, Inc. v.Trinity Industries, Inc., et al., 67 F.3d 435, 443 (2d Cir. 1995) (quoting Sayers v. Rochester Telephone Corp. Supplemental Mgmt.Pension Plan, 7 F.3d 1091 (2d Cir. 1993)). “Under New York law `contract language is ambiguous if it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business.'” Id. However, if the words of the contract convey a definite and precise meaning where there is no reasonable basis for a difference in opinion, summary judgment may be granted.Seiden Associates, Inc. v. ANC Holdings, Inc., 959 F.2d 425, 428
(2d Cir. 1992). Arguments made by the parties that include differing meanings for a provision do not necessarily mean a provision is ambiguous. Id.

III. Contracts at Issue HereA. The 2002 Representative Agreement
Plaintiff contends that the 2002 Representative Agreement provided for commissions on all sales related to

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the NH-90 program made during the effective period of the contract, including the Sub-Supply Contract. Defendant makes several arguments to the contrary, maintaining that plaintiff is not entitled to any commissions after the expiration of the Representative Agreement in 2004. Specifically, defendant argues that: (1) the Sub-Supply Contract was signed under the contemporaneous Consulting Agreement, rather than the Representative Agreement, so no commissions ever accrued under the Representative Agreement; (2) even if the Sub-Supply Contract was procured under the Representative Agreement, CIER had uncompleted continuing responsibilities after the order was placed so no commissions were earned prior to the expiration of the Representative Agreement; and (3) the course of dealings between L-3OS and CIER demonstrates that historically no payments were made in the absence of an effective agreement. Defendant also argues that the Sub-Supply Contract is not a binding commitment to purchase any specific quantity of equipment and therefore can not serve as the basis for a claim to commissions after the Representative Agreement had expired. We will address the first three arguments regarding the Representative Agreement then address the Sub-Supply Contract.

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1. The provision for commissions on all sales related to theNH-90 program is unambiguous.

Defendant argues that the intention of the parties was for CIER’s work in obtaining the Sub-Supply Contract to be compensated by the quarterly payments made under the International Consulting Agreement signed on the same day as the Representative Agreement, rather than through commissions under the Representative Agreement. This argument is advanced despite the facts that: (1) the Representative Agreement was clearly in force at the time of the signing of the Sub-Supply Contract on December 21, 2002;[10] (2) the Representative Agreement clearly states that the products and services upon which compensation will be awarded include “[a]ll L-3OS products and services related to the 4-nation NH-90 Helicopter Program,” Gelb Aff. Exh. 26, App. B, § 2(b), which is especially salient given that the parties clearly contemplated (and were actively seeking) the procurement of the Sub-Supply Agreement at the time of the Representative Agreement’s signing on April 1, 2002; (3) the Sub-Supply Contract is clearly a sale of NH-90

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90 products;[11] and (4) defendant offers no explanation of why there was a Representative Agreement with such terms in addition to the Consulting Agreement if it was not intended to cover commissions on these products.

Accordingly, we reject defendant’s position that the Representative Agreement did not provide for commissions on the Sub-Supply Contract, which explicitly included compensation for the sale of products relating to the NH-90 program.[12]
2. The commission accrual and payment provisions of theRepresentative Agreement are unambiguous.

Defendant argues that, under the terms of the Representative Agreement, CIER was required to complete certain continuing duties until delivery before it could be considered to have earned its commission. Based on that reading, L-3OS argues that no commissions are owed under the Sub-Supply Contract’s commitment because no deliveries had been made before the Representative Agreement had expired. Further, defendant asserts that plaintiff is not

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entitled to any post-expiration commissions, based on New York’sEntis line of cases. Defendant interprets this case law as holding that where a sales representative has a continuing role in procuring sales from its customer, commissions are not payable after the representative’s employment contract has expired. See
L-3 Mem. Point II(E). However, defendant misreads this line of case law, which actually stands for the proposition that the contract between the parties governs when the commissions are earned and therefore whether they are to be paid even after the expiration or termination of the contract. See Yale Security,Inc. v. Freedman Sales, Ltd., No. 97-1424, 1998 WL 690944 (7th Cir. 1998) (finding that “the key [to the holding of Entis] was which party’s interpretation of the contract was reasonable”); Inre Hudson Feather Down Products, Inc., 22 B.R. 247 (E.D.N.Y. 1982) (citing Entis for proposition that “[t]he right of a sales agent after his employment has been terminated to continue receiving commissions on accounts he has solicited depends upon the nature of the agreement between the parties.”); see alsoWorld Wide Communications, Inc. v. Rozar, et al.,
No. 96 Civ. 1056 (MBM) (NRB), 1997 WL 795750, *11 (S.D.N.Y.) (finding that the court is required to give effect to the parties’ intentions in entering the agreement as derived

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from the language employed) (citing Reefer and General ShippingCo., Inc. v. Great White Fleet, Ltd., 922 F.Supp. 935, 940
(S.D.N.Y. 1996), aff’d mem., 107 F.3d 4 (2d Cir. 1997)). If the sales representative is found to have a contractual obligation requiring the completion of continuing duties prior to the earning of such a commission, this line of cases holds that the termination of the commission agreement prior to the completion of such duties terminates the right to earn commissions. Thus no commissions would be due after the relationship has ended. However, if the triggering event for the earning of commissions has occurred prior to termination, the commissions are payable after termination.[13]

We turn now to the terms of the Representative Agreement at issue here. The relevant contract language

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addressing when commissions are earned states that commissions are earned “on the sale” of the relevant product, Gelb Aff. Exh. 37, § 4(A), to be paid “based on the Net Sales Price . . . on payments received” where Net Sales Price is defined as the “U.S. dollar value of any contract order.” Id. at § 4(B), App. B, § 3(C). Further, the Representative Agreement states that commissions are payable at five percent of the net sales price of products “that are sold.” Id. at App. B, § 3(A). Thus the contract clearly provides that the commissions are earned upon sale. Though there is additional language providing that L-3OS must confirm that CIER complied with its duties under the Representative Agreement in making the sale, [14] the operative

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time for evaluation is clearly the “sale.” Thus, while no deliveries had been made when the Representative Agreement expired, the commissions on the sales made in the Sub-Supply Contract had already accrued based on Galileo’s commitment to buy the equipment from L-3OS in the Sub-Supply Agreement.

This, however, does not end our analysis. While the 2002 Representative Agreement unambiguously provides that commissions are earned at the time of sale, the amount of the commissions is “based on Net Sales Price . . . on payments received from customer and shall be paid within sixty (60) days of receipt and acceptance by Company (as specified in Appendix B) of a proper invoice and supporting document.” Id. at § 4. The fact that the commissions are not payable until L-3OS receives payment from Galileo does not change the result as to when commissions areearned by CIER, although it does condition the payment to CIER of any commissions earned on the receipt of payment by L-3OS from Galileo. Thus, CIER is currently owed commissions on payments that L-3OS has received under the Sub-Supply

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Contract and will be owed commissions on future payments made by Galileo as they are received by L-3OS.[15]

At bottom, this reading not only accords with the language of the agreement, but it is also the reasonable construction of the Agreement because it accommodates for the inevitable gap between the placement of an order and the completion of the sonar equipment’s production. If read otherwise, the contract would be inequitable for one of the parties — either in that CIER could be deprived of compensation for its sales efforts by L-3OS’s unilateral decision not to renew the agreement or in that L-3OS might be forced to pay commissions immediately upon receipt of the order despite the long production phase prior to their own receipt of payment.[16]
3. The course of dealings between the parties is notinconsistent with our reading of the Representatxve Agreement.

As discussed above, where contract language is unambiguous, the court looks no further than the four

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corners of the document to determine the intention of the parties. Consolidated Edison, Inc., 426 F.3d at 527; see also R/SAssociates v. New York Job Development Auth., 98 N.Y.2d 29, 32, 771 N.E.2d 240 (2002) (“`when parties set down their agreement in a clear, complete document, their writing should as a rule be enforced according to its terms'”) (quoting Reiss v. FinancialPerformance Corp., 97 N.Y.2d 195, 198, 764 N.E.2d 958 (2001))). Thus, for the reasons discussed supra, we need not go beyond the text to make our ruling.

Nonetheless we note that, contrary to defendant’s arguments, the course of dealings between the parties is not contrary to the language of the Representative Agreement. In this regard, defendant argues that: (1) the two parties here have a long history of contractual relationships and L-3OS’s long-standing policy of “No Agreement, No Payment”[17] shows that that they did not intend to pay post-termination commissions; (2) CIER had previously signed a disclaimer letter indicating its awareness that it had no authority to act outside of a

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signed agreement; (3) payment to CIER had always been contingent on a determination of whether CIER’s services were satisfactory and thus their determination that payment is unwarranted now must stand; and (4) prior Representative Agreements specifically used language prohibiting payment for deliveries “more than one year after . . . termination or cancellation,” thus the absence of such language precludes the payment of post-expiration commissions on the 2002 Representative Agreement. L-3 SOF ¶ 189; Gelb Aff. Exh. 22, 5(F)(2) (Sales Representation Agreement signed Nov. 3, 1997).

CIER counters that, first, the alleged policy was not in fact adhered to during the course of dealing between the parties in that L-3OS allowed the backdating of agreements to create the appearance of continuity. See CIER Opp. ¶ 189. Further, we note that such an internal corporate policy does not provide legal cover for L-3OS to avoid liability under a contract it agreed to be bound by. Second, CIER correctly points out that the disclaimer letter was specific to a prior contract and is not applicable to the current conflict. See Gelb Aff. Exh. 40 (Letter from Victor M. Riehl of August 9, 2001, acknowledged by Roberto Bolla). Regardless, both of these arguments miss the mark because, contrary to fact, they

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assume that there was no governing contract in place when the commissions were earned. Defendant’s arguments in the third category are completely unavailing in that they have in fact already paid a commission to CIER after payment was received from Galileo under the Sub-Supply Contract, so to the extent the measuring date is the sale, L-3OS has already found that CIER’s efforts in producing the sale were adequate.[18] L-3OS’s final point is that, in light of its “No Agreement, No Payment” policy, and given the absence in the governing agreement of a specific authorization for one year of post-termination commissions as had been included in a prior contract, such post-termination payments would not have been authorized. L-3 SOF ¶ 189. However, as CIER points out, such language in prior agreements does not necessarily support L-3OS’s argument concerning the operative agreement. See id. If anything the omission of the language in the 2002

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Representative Agreement can as easily lead to the opposite conclusion: that there is no limitation on post-termination commissions absent contractual language to that effect because when the parties wanted to include a one-year limitation on post-termination payments they knew how to do so. Whether viewed singularly or in combination, the course of dealings arguments advanced by defendant do not undermine the unambiguous reading of the contract language, which is also the most reasonable.

B. The Sub-Supply Contract
Plaintiff claims that they are entitled to commissions on all sixty units contemplated by the Sub-Supply Contract, only twenty of which have been ordered by Galileo at this time. Defendant argues that (1) the claim of a “binding commitment” by Galileo to purchase all sixty units is not supported by the contract language in that agreement, and that (2) no binding contract is even formed until the condition precedent to formation occurs, namely that Agusta issues a purchase order to Galileo, and Galileo consequently issues a purchase order to L-3OS. Defendant further argues that the “dual level of conditions precedent” required before a contract is formed means that the contract that is formed once those conditions are met

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is not embodied in the Sub-Supply Contract, but rather in the form of a Purchase Order.[19]

The question is thus whether the Sub-Supply Contract is unambiguous as to (1) its commitment to purchase any units from L-3OS and (2) if binding, whether the commitment to purchase is for all 60 units contemplated in the agreement, or rather only the amount in the ensuing purchase order. We find that the Sub-Supply Contract, by its unambiguous terms, covers the purchase of 60 units as contemplated in Article 4.1.[20] We make this finding based on the “commitment” language of that section, language throughout the document referring to the agreement as a contract, and the lack of any explicit language as to conditions precedent required prior to formation. See Gelb Aff. Exh. 37, Art. 4.1. We also note language citing the unit price for the equipment, quoted as “fixed and firm,”

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Id. at Art. 5.1, as well as the language in Article 5.3, Id. at Art. 5.3 (“in the case of failure of [Galileo] to fulfill the obligations set forth in Article 4.1 the Parties will negotiate in good faith a mutually agreeable price adjustment.”), and Article 37’s termination provision. Defendant argues that because the remedy provided is only renegotiation or termination, it is not demonstrative of a binding commitment. We do not find this argument persuasive.[21] The Sub-Supply Contract also sets out the methods to be used for payment to L-3OS, Id. at Art. 6 (providing for milestone payments and purchase orders), and provides that L-3OS undertakes to deliver strictly in accordance with the delivery dates in Annex K, Id. at Art. 7.

In sum, while we recognize that the amount of commissions due CIER will ultimately depend on future events which involve a chain of orders, that chain does not affect the reading of the Representative Agreement insofar

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as the obligations of L-3OS to CIER are concerned. Obviously, other issues may arise between the defendant and Galileo, but those are separate from the issues before this Court.

IV. The Propriety of a Declaratory Judgment at this Time
Finally, defendant argues that a declaratory judgment is inappropriate at this time. Defendant argues that recent work stoppages at L-3OS and Galileo’s failure to comply with the original order schedule in the Sub-Supply Contract suggest that any future performance under the Sub-Supply Contract cannot be predicted with any certainty. Because there is no coercive remedy under the Sub-Supply Contract to enforce Galileo’s commitment, L-3OS argues, there is no contract to enforce, and thus no case or controversy. Defendant maintains that suit will not be ripe until compliance with the Sub-Supply Contract is achieved. Plaintiff counters that it is entitled to a declaratory judgment to clarify and settle the legal issue of contract interpretation and afford relief from the current uncertainty. Plaintiff argues that the court need not know what amount of commissions L-3OS will be obligated to pay CIER by the end of the relationship contemplated in

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the Sub-Supply Contract in order to award a declaratory judgment.

We agree with plaintiff in that we find this action ripe for consideration. We have been asked to interpret a valid contract that plaintiff argues continues to bind the parties regarding sales occurring during the contract’s effective period.[22] AetnaLife Ins. Co. v. Haworth, 300 U.S. 227, 241 (1937) (finding that in a “concrete case admitting of an immediate and definitive determination of the legal rights of the parties in an adversary proceeding upon the facts alleged, the judicial function may be appropriately exercised although the adjudication of the rights of the litigants may not require the award of process or the payment of damages.”) (citing Nashville, C. St. L. Ry. Co. v.Wallace, 228 U.S. 249, 263 (1933); Tutun v. United States, 270 U.S. 568, 576, 577; Fidelity Nat’l Bank v. Swope, 274 U.S. 123, 132; Old Colony Trust Co. v. Comm’r, 279 U.S. 716, 725 (1929)). The fact that commissions owed may be dependent on future events does not change this result. Associated Indem. Corp. v. Fairchild

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Industries, Inc., 961 F.2d 32, 35 (2d Cir. 1992) (collecting cases). The parties’ sealed submissions appear to indicate that defendant has received payments from Galileo for which CIER has not been paid commissions. If that is correct, we expect those unpaid commissions to be reflected in the proposed judgment discussed below.

CONCLUSION
For the foregoing reasons, we grant plaintiff’s motion for summary judgment on Counts I and II of the First Amended Complaint and declare that, pursuant to the 2002 Representative Agreement, L-3OS is obligated to pay CIER a commission equal to five percent of the Net Sales Price of all sonar equipment or component parts delivered pursuant to the Sub-Supply Contract, including any and all deliveries as contemplated in Article 4.1, upon L-3OS’s receipt of payment for such delivery. To the extent that such payments have been or will be received from Galileo by L-3OS, L-3OS must notify CIER in a manner that allows CIER to submit an invoice for its commissions. To the extent that L-3OS has not complied with its obligations under the 2002 Representative Agreement as set out above, it is in breach of that agreement. If the parties are unable to agree on the payments L-3OS has received to date and the

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consequent commissions due (as a mathematical matter), we would expect affidavit submissions to support the respective positions. The plaintiff is directed to submit a proposed judgment pursuant to this Order within five days on three days notice to the defendant.

SO ORDERED.

Dated: New York, New York March 9, 2010