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Thomas Riggins & Construction Co., Inc. v. Contraves, Inc.

Judgment for plaintiffs in suit for royalty fees under license agreement reversed in part because contract did not mandate that minimum payments had to be made by defendant; denial of plaintiffs' claim for counsel fees affirmed.

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� 1 In these consolidated cross-appeals, Contraves, Inc. appeals the judgment entered in favor of the plaintiffs below, Thomas Rigging & Construction Company, Inc., t/d/b/a Thomas Technologies, Benjamin F. Thomas, Wayne Dash, and Pauline Doorley, as the executrix of the estate of Richard B. Doorley (collectively, “Licensors”), in their suit for royalty fees allegedly due under their license agreement with Contraves, and Licensors in turn appeal the trial court’s denial of their claim for counsel fees. *fn1 We reverse in part, affirm in part, and remand.

� 2 This case concerns a dispute over royalty payments allegedly due under an exclusive license agreement for the manufacture and sale of rail yard snowblowers which employ a “microjet” engine invented by Richard B. Doorley, now deceased. In October 1997, Contraves entered into this multi-year license agreement with Licensors (including Doorley). The license agreement provided for royalty payments by Contraves to Licensors based on the number of engines and snowblowers sold by Contraves. At issue in the present litigation was whether the agreement required yearly minimum payments of $75,000 in the first year and $100,000 in subsequent years. The agreement further provided for a minimum payment of $1,260,000 to Licensors after the first three years, and a similar payment of $2,800,000 after seven years, to avoid automatic termination of the agreement.

� 3 Contraves did not make any snowblower sales the first year of the agreement and Licensors brought suit in November 1998 when Contraves refused to make a $75,000 minimum payment which Licensors alleged was due. In year two, Contraves made royalty payments of $38,000 based on its actual sales, but did not make the allegedly-required minimum payment of $100,000. In response to Licensor’s suit, Contraves argued, inter alia, that the minimum payments of $75,000 after year one, and $100,000 at the end of years two and three were optional, and filed a motion for summary judgment to that effect. The Honorable Judith L. A. Friedman denied this motion but sua sponte granted summary judgment to Licensors for $251,687.84, concluding that certain minimum payments were required under the license agreement. Licensors’ additional claim for the three-year payment of $1,260,000, and their claim for counsel fees under the agreement, were tried before the Honorable Max Baer, who denied the claims. Post-trial motions were denied, and this timely appeal followed.

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