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Gold v. Ziff Communications Co.

March 31, 2001

ANTHONY R. GOLD, PC BRAND, INC., SOFTWARE COMMUNICATIONS, INC., HANSON & CONNORS, INC., PLAINTIFFS AND COUNTERDEFENDANTS-APPELLEES,
v.
ZIFF COMMUNICATIONS COMPANY, D/B/A ZIFF-DAVIS PUBLISHING COMPANY, DEFENDANT AND COUNTERPLAINTIFF-APPELLANT.



Appeal from the Circuit Court of Cook County No. 95 L 8516 The Honorable Richard E. Neville, Judge Presiding.

The opinion of the court was delivered by: Justice Cousins

Plaintiffs Anthony Gold (Gold), PC Brand, Inc. (PC Brand), Software Communications, Inc. (SCI), and Hanson & Connors, Inc. (Hanson), sued defendant Ziff Communications Company, doing business as Ziff-Davis Publishing Company (Ziff), for breach of contract, seeking damages arising from Ziff's alleged breach of an agreement which provided that any company controlled by Gold could advertise in Ziff's publications at reduced rates. This action was previously before this court in Gold v. Ziff Communications, 265 Ill. App. 3d 953, 638 N.E.2d 756 (1994) (Gold II), which remanded for trial the "control" issue, i.e., "the question of whether Gold violated the terms of the amended Ad/List agreement with his holdings in PC Brand." Gold II, 265 Ill. App. 3d at 965.

After a five-week trial, the jury found Ziff liable and awarded two verdicts: (1)$44,580,000 to PC Brand, Inc./Gold for future lost profits and business value damages; and (2) $10,800,000 to Hanson & Connors, Inc./SCI/Gold for future lost profits and business value damages. The trial court subsequently awarded prejudgment interest of $26,773,834.58 to PC Brand, Inc./Gold and $6,486,265.27 to Hanson & Connors, Inc./SCI/Gold.

Ziff now appeals, arguing that: (1) the trial court erred by accepting the claims of multiple plaintiffs on a single verdict form; (2) PC Brand and Hanson were not proper plaintiffs; (3) evidence failed to support the jury's verdict that Ziff breached the contract as to PC Brand and caused damages; (4) damages awarded to Gold and PC Brand were based on speculation; (5) evidence failed to support the jury's verdict that Ziff breached the contract as to Hanson and caused damages; (6) the trial court erred by awarding prejudgment interest; and (7) certain errors occurred at trial which entitle Ziff to a new trial. Additionally, plaintiffs cross-appeal a ruling concerning the return of funds that it deposited into escrow.

BACKGROUND

In 1981, Gold founded PC Magazine for users of personal computers. In 1982, Ziff, a publisher of specialty magazines, bought the magazine from Gold for more than $10 million. In connection with the purchase, Gold and Ziff signed a letter dated November 19, 1982, providing Gold or a company he "owned and controlled" a right to advertise at an 80% discount on a limited number of pages in PC Magazine, as well as free usage of Ziff's subscriber lists (collectively, the ad/list rights). Gold intended to use these ad/list rights as the foundation for computer mail order companies he planned to set up.

In 1983, Gold formed SCI to use the ad/list rights. SCI, wholly owned by Gold, conducted a mail order software business and advertised in PC Magazine at the 80% discount. On September 15, 1986, Gold and Ziff signed another agreement (Ad/List Agreement) which modified the 1982 agreement. Paragraph 4(i) of the Ad/List Agreement, which presented the control issue remanded for trial, stated that the ad/list rights:

"may only be used by you [Gold] personally or by a company which you control (that is, in which you own at least 51% of the voting stock) and may not be assigned, transferred or allocated to any other person or entity".

Gold was to receive the 80% ad discount and free subscribers' list usage, and those rights were expanded to other Ziff publications. Gold's ads were to be subject to the current rate card in effect for the particular publication. Rate cards contained price lists and conditions.

Paragraph 2(ii) stated that Ziff could withhold approval of list usage if it determined that the mailing could injure Ziff's business reputation and Ziff had to make its objections within seven days. Paragraph 4(ii) prohibited Gold from advertising products of existing advertisers, and paragraph 4(iii) prohibited Gold from competing with Ziff in the sale of ad space in its magazine. Paragraph 6(b) stated that a failure by Ziff to "insist upon strict adherence to any term of this agreement on any occasion shall not be considered a waiver." The Ad/List Agreement also contained a December 31, 1992, expiration date and a right to terminate upon breach of a "material provision" and failure to cure within 30 days. Explicitly, New York law governed.

To maximize the use of the ad/list rights, Gold formed two new mail order companies in late 1987 and early 1988 -- Hanson and PC Brand. Gold formed Hanson to sell software by sending catalogs to names on Ziff's subscriber lists. Hanson took over SCI's business and assumed most of its assets. Gold hired Howard Gosman to operate Hanson as its president.

Gold also contacted Stephen Dukker and they negotiated a structure for a new business which became PC Brand. On January 15, 1988, Gold and Dukker signed a number of interrelated agreements drafted by their attorney, Richard Friedman. One agreement provided that Gold assigned ad/list rights to PC Brand and, in return, PC Brand was to pay Gold or SCI the cash value of the 80% discount used by PC Brand once it became profitable. Also, Gold owned 90% of PC Brand's stock while Dukker owned 10%. Gold, however, agreed to transfer shares to Dukker each year, so that Dukker would hold 51% record ownership when the Ad/List Agreement expired on December 31, 1992. Dukker was named president though December 31, 1992, and had sole responsibility for determining the amount of directors' fees, so long as he and Gold were paid equally.

PC Brand's certificate of incorporation defined voting shares as shares of stock "which confer unlimited voting rights in the election of one or more directors." PC Brand's certificate and bylaws also provided that: (1) only two directors, Dukker and Gold, would serve on the board until December 31, 1992; (2) the Dukker-Gold board composition could only be changed unanimously; (3) upon death or incapacity of either Gold or Dukker, the remaining director would become sole director; and (4) the certificate of incorporation could not be amended without unanimous consent of the stockholders.

PC Brand began operations in May 1988. Gold's capital contribution to PC Brand was about $1,000. Several internal memoranda to Ziff's in-house counsel, Malcolm Morris, indicated that fullrate advertisers learned of Gold's ad/list rights and demanded similar treatment. Plaintiffs allege that complaints by full-rate advertisers motivated Ziff to breach the Ad/List Agreement as to PC Brand and Hanson.

Three contract disputes arose between Gold and Ziff in 1988. The first dispute involved Hanson's use of the discounted space in PC Magazine to place full-page ads of other advertiser's products. On May 13, 1988, Morris declared a breach of the Ad/List Agreement based on these ads, stating that they constituted a transfer of Gold's discount to the manufacturers whose products appeared in the ads. Plaintiffs allege that the objectionable ads were nearly identical to ads Gold had run for several years through SCI without objection. In July 1988, Gold told Morris that Hanson was voluntarily refraining from placing the large ads for third-party products. At trial, Hanson claimed damages resulting from Ziff's refusal to run the large ads.

The second dispute concerned Hanson's use of Ziff's subscriber lists. The Ad/List Agreement gave Gold access to Ziff's lists six times per year. On May 10, 1989, Hanson requested the lists for a sixth mailing. On May 22, 1989, Morris wrote to Gold that Ziff would release its lists only if Hanson paid outstanding invoices and provided Ziff with other financial assurances. Plaintiffs allege that even after Hanson paid the outstanding amount, Ziff refused to release the subscriber list unless Hanson provided proof that it had working capital and inventory of goods to fill orders from the catalog mailing. Ziff, on the other hand, alleges that Hanson was insolvent and unable to pay its debts and its request for assurances was reasonable. Plaintiffs also allege that Ziff delayed in providing a subscriber list for Hanson's second catalog. Howard Gosman, president of Hanson, testified that in June 1989 Hanson ceased active business operations because Ziff erected roadblocks when Hanson attempted to utilize the ad/list rights.

The third dispute centered around the issue of whether Gold "controlled" PC Brand for purposes of utilizing the Ad/List Agreement. Ziff alleges that it first learned of PC Brand through a May 13, 1988, letter in which Gold stated he owned and controlled PC Brand. PC Brand began placing ads at the 80% discount rate in May 1988. After reviewing PC Brand's corporate records, Ziff informed Gold in a letter dated November 8, 1988, that "PC Brand is not eligible for allocation of the rights under the Ad/List Agreement" based on Ziff's conclusion that PC Brand was not controlled by Gold. The letter stated that Gold's 90% record ownership of stock was meaningless and that Dukker, as president, had greater control of the company. The letter also stated that PC Brand must pay full price for ads it had placed at the 80% discount and that if the matter was not resolved in 30 days, Ziff would have to consider other appropriate steps.

Gold testified that he contacted Morris repeatedly in the days following November 8, 1988, but Morris would not reveal what changes in PC Brand's structure would cure the perceived problem. Gold, Dukker, Morris and Ziff's senior vice president, Phil Sine, met on December 6, 1988, to discuss PC Brand. At the meeting, Sine stated that the 20% rate Gold's companies paid for advertising was too little and that Ziff wanted to double the price to 40% of the full rates.

On December 13, 1988, plaintiffs obtained a preliminary injunction requiring Ziff to continue to give PC Brand six pages of ads in each issue of PC Magazine at the 80% discount. On September 26, 1989, this court affirmed the granting of the injunction in Gold v. Ziff Communications Co., 196 Ill. App. 3d 425, 553 N.E.2d 404 (1989) (Gold I). In January 1989, PC Brand requested that Gold's 80% discount also be made available in PC Week. Ziff agreed if some additional security was provided or if 40% was paid for the additional ads, but PC Brand refused.

In November 1989, Gold and Dukker amended PC Brand's articles of incorporation to require annual election of directors. Gold testified that the amendments were designed to meet the objections in Morris' November 8, 1988, letter. Morris characterized the amendments as "cosmetic changes" which did not eliminate the problem of the basic arrangement of PC Brand.

In September 1990, the trial court granted partial summary judgment in plaintiffs' favor on the issue of whether Gold controlled PC Brand after the November 1989 corporate amendments. In October 1990, Ziff allowed PC Brand to place ads in PC Week and permitted more than six pages in PC Magazine at the 20% rate. Dukker testified that it was too late, however, because PC Brand's shortage of working capital and inability to raise capital from outside sources had already damaged the company.

In December 1990, Tandon Corporation, an international computer manufacturer, contacted PC Brand about a possible investment. On March 12, 1991, the trial court entered summary judgment in favor of Ziff on the question of Gold's control of PC Brand before the November 1989 corporate amendments. On March 21, 1991, Dukker and Gold signed a letter of intent to sell PC Brand's stock to Tandon for $4,577,045 plus payment of its debts before the injunction against Ziff was lifted. PC Brand was receiving the full ad/list benefits at this time. On March 26, 1991, the trial court vacated the September 1990 summary judgment it had entered in plaintiff's favor and dissolved the preliminary injunction which required Ziff to give PC Brand six pages of discounted ad space. By March 29, 1991, Tandon learned of the dissolution of the injunction and terminated the letter of intent. In June 1991, PC Brand was sold to Tandon for $1.5 million plus assumption of corporate debt. Ziff alleges that the $3,077,045 difference between the value in the letter of intent and final sale was solely attributable to the lost value of the ad/list rights.

On July 8, 1993, the trial court granted Ziff's motion for summary judgment regarding the "control" issue and awarded Ziff $6,562,555.26 on its counterclaim. On August 9, 1994, this court reversed and remanded for a new trial, holding that the control issue was a jury question that could not be resolved as a matter of law. The court held that "the record is replete with factual questions, the most important of which is the subjective intent of Gold and Dukker when they created PC Brand and entered into the interrelated agreements." Gold II, 265 Ill. App. 3d at 965.

At trial, Gold testified that he initially owned 90% of PC Brand's stock while Dukker owned 10%. When PC Brand's assets were sold in 1991, Dukker had acquired 18% of the stock while Gold owned 82%. Gold stated that at all times, he owned 51% or more of PC Brand's stock. Gold and Dukker both testified that their intent was to structure PC Brand to conform with the Ad/List Agreement.

Dukker testified that he was not completely satisfied with the interrelated agreements he had signed when PC Brand was formed for several reasons. First, he believed that Gold could fire him at will because a provision of the employment agreement stated that Dukker had to comply with the annual budget. Dukker explained that, as an experienced business person, he knew that budgets are never complied with 100%, even if there are positive sales. Second, Dukker believed that Gold had the right to liquidate PC Brand at any time and sell the assets to another company owned by Gold. Third, Dukker stated that Gold "controlled the money." Gold exercised sole power to control the flow of loans obtained from an outside firm called Microvest. Finally, Dukker stated that Gold controlled the relationship with Ziff and that Gold could change the balance of how ads were placed in favor of other entities. In sum, Dukker "clearly viewed [Gold] as [his] boss and [he] felt [he] had to kind of consign [himself] to *** the goodwill of the working relationship [they] developed. [He] wasn't thrilled with it, but [he] thought it was a fair approach."

Ziff's expert on corporate governance, David Ruder, was previously chairman of the Security and Exchange Commission and dean of Northwestern Law School. Ruder testified that Gold did not control PC Brand through majority voting stock ownership because Gold did not have the unlimited voting rights as majority shareholder to elect directors or amend the certificate or bylaws. Rather, PC Brand's board had equal voting rights vested in Dukker and Gold. According to Ruder, Gold also did not have shareholder power to establish company policy or to dissolve, merge or reorganize PC Brand. Ruder admitted that his opinion was based upon PC Brand's incorporation documents and his general understanding of the way business organizations work, and not upon the subjective intent of Gold or Dukker.

Ziff called several witnesses to testify that Ziff's conduct did not cause harm to PC Brand, including Stanley Seitz, Paul Yeh and John Kleiman. Seitz was responsible for PC Brand's day-to-day operations; Yeh prepared PC Brand's budgets and monitored actual performance to budget; and Kleiman was PC Brand's controller in 1990. Seitz, Yeh and Kleiman variously testified that PC Brand failed because of low prices and high expenses; inventory theft; and lack of access to new technology. Seitz also believed that PC Brand's financial problems were not caused by Ziff.

On the other hand, Steve Dukker testified that after October 1989, PC Brand was forced to pay for full-priced ads in non-Ziff publications and to pay Ziff 40% for ads above six pages in PC Magazine to remain competitive. Dukker stated this was not part of PC Brand's business plan and hurt the company's cash flow. Plaintiffs also allege that investors declined to invest in PC Brand because of Ziff's denial of PC Brand's right to use the ad/list benefits. Stan Seitz also testified that the money PC Brand spent on non-Ziff advertising alone exceeded the maximum amount of working capital that PC Brand required. Similarly, one of Ziff's damages experts, Alan Peterson, conceded that it would have made a difference if the money PC Brand spent on non-Ziff advertising, Ziff advertising above the 20% rate, and legal fees associated with the ad/list litigation had been available as working capital.

Plaintiffs called Mark Hosfield to testify concerning lost profits and lost business value damages. Hosfield was a partner at Arthur Andersen, an international accounting and consulting firm. He was also a certified public accountant since 1982. He worked in a group called complex claims and events, specializing in analysis of the financial and economic issues related to disputes. Based on a court ruling, Hosfield calculated lost profits for PC Brand and Hanson until December 31, 1992 (expiration of the Ad/List Agreement), and business value damages beyond that date. He was asked to assume that both companies would continue in business until December 31, 1992, and would enjoy the benefits of the ad/list agreement unchallenged by litigation. Hosfield calculated lost profits and business value damages to be $29,606,686 for Hanson and $45,392,491 for PC Brand.

Hosfield used the discounted cash flow (DCF) approach to value PC Brand. DCF projects a future income stream based upon the company's past performance and the growth rates of companies in the same industry. The analyst projects the cash flow of the company for some period into the future and then determines the terminal value of the business at the conclusion of the projected period. The future cash flows and terminal value are then discounted to present value, in this case December 31, 1992, by using an appropriate discount rate. Finally, the analyst adds the present values of the future cash flows and the terminal value to arrive at the business value of the company.

Hosfield first created a historical sales base from which to project profits. He used PC Brand's actual net sales for 1989 and 1990, except that he "normalized" the sales figure for the fourth quarter of 1990 to take into account the litigation effect on the company. Using the 1989 and 1990 sales figures, Hosfield then forecasted profits over several years (1993, 1994 and 1995) by projecting sales based on an expected growth rate for PC Brand.

To calculate PC Brand's expected growth rate, Hosfield selected 16 companies that were PC Brand's competitors for sales of microcomputers, including Apple, Dell, IBM, Hewlett Packard, Tandy, Texas Instruments, Data General, and Compaq. Hosfield stated that Dell was most like PC Brand because, like PC Brand, it assembled computers and sold them through the mail. Other companies (Texas Instruments, Hewlett Packard, Tandy, Data General, Compaq) competed with PC Brand by selling microcomputers, but they also sold a number of other items. Hosfield admitted that IBM was nothing like PC Brand, but was included in the growth rate calculation because it was PC Brand's competitor.

After determining individual growth rates in sales for each company, Hosfield averaged all of the growth rates except for Dell. He assigned a one-third weight to Dell and two-thirds weight to the average of the other 15 companies to calculate PC Brand's growth rate. He explained that Dell was assigned extra weight because Dell sold computers in the same manner as PC Brand. Hosfield also tested whether the growth rate calculated for PC Brand was reasonable by using PC Brand's growth rate to forecast the sales of the 16 companies. Hosfield then calculated terminal value by taking the projected earnings for 1995 and dividing them by a capitalization rate. Applying the discount rate to the cash flow projections and the terminal value, Hosfield concluded that PC Brand would have a value of $41,263,142 as of December 31, 1992. Hosfield employed the same method to conclude that Hanson would have a value of $25,769,445 as of December 31, 1992.

Adding lost profits and subtracting debt, Hosfield estimated that PC Brand was entitled to $45,392,491 damages while Hanson was entitled to recover $29,606,686. The jury awarded $44,580,000 to PC Brand, Inc./Gold for future lost profits and business value damages and $10,800,000 to Hanson & Connors, Inc./SCI/Gold for future lost profits and business value damages. The trial court subsequently awarded prejudgment interest of $26,773,834.58 to PC Brand, Inc./Gold and $6,486,265.27 to Hanson & Connors, Inc./SCI/Gold.

Ziff appeals. We affirm in part, reverse in part, and remand for a new trial limited to the issue of damages.

ANALYSIS

I. VERDICT FORMS

Ziff argues that the verdict forms used by the jury created a legal and logical impossibility. Specifically, the jury awarded $44,580,000 in a verdict for plaintiffs "PC Brand, Inc./Gold" and awarded $10,800,000 in a verdict for plaintiffs "Hanson & Connors, Inc./SCI/Gold." Ziff contends that plaintiffs Gold and SCI proved no damages and should not have been included in the verdict forms.

"If several plaintiffs properly join, but their causes of action are separate and distinct and their damages may be different, the judgment should not be for an aggregate sum but should segregate and award to each the damages or relief to which he is properly entitled." Caton v. Flig, 343 Ill. App. 99, 101, 98 N.E.2d 162 (1951). Separate verdicts are appropriate only when recovery on different demands is sought. Gausselin v. Commonwealth Edison Co., 260 Ill. App. 3d 1068, 1077, 631 N.E.2d 1246 (1994). Additionally, the form of verdicts is a matter within the sound discretion of the trial court. Gausselin, 260 Ill. App. 3d at 1077.

Here, the plaintiffs on each verdict form were not seeking separate claims for damages based on separate and distinct transactions. In fact, Ziff admits that neither Gold nor SCI was seeking damages at all. Furthermore, the jury instructions made clear that damages were sought only as to the businesses PC Brand and Hanson. The jury was instructed:

"PC Brand,Inc./Gold claim damages relating to the Illinois business that was operated under the name PC Brand, Inc. Hanson & Connors/Gold/SCI claim damages relating to the New York business operated by Hanson & Connors, Inc."

Thus, the inclusion of multiple plaintiffs on a single verdict form was proper because each set of plaintiffs sought a single recovery -- one for harm to PC Brand, the other for harm to Hanson.

The other cases Ziff cites in support of its argument, Eggimann v. Wise, 41 Ill. App. 2d 471, 191 N.E.2d 425 (1963), and In re Estate of Payton, 79 Ill. App. 3d 732, 398 N.E.2d 977 (1979), are factually distinguishable. In Eggiman, verdict forms permitted a single finding based on whether the jury found defendant guilty of both negligence and wilful and wanton conduct. The court concluded that this was a "logical, and legal, impossibility." Eggiman, 41 Ill. App. 2d at 484. Unlike Eggiman, the verdict forms in the instant case did not contain two inconsistent forms of liability. Payton is similarly inapposite. Payton, 79 Ill. App. 3d at 739 (Jury forms were erroneous and confusing by requiring jury to incorrectly make a blanket finding of competency or incompetency as to all of the transactions at issue). We hold that the trial court did not abuse its discretion relative to the verdict forms.

II. PROPER PLAINTIFFS

Next, Ziff contends that PC Brand and Hanson were not parties to the Ad/List Agreement and lacked standing to sue for its breach. Generally, only a party to a contract or those in privy with him may sue to enforce it. Bescor, Inc. v. Chicago Title & Trust Co., 113 Ill. App. 3d 65, 69, 446 N.E.2d 1209 (1983). "In order for a third party to enforce a contract, it must be shown that there was a contractual intent to benefit the third person." Bescor, 113 Ill. App. 3d at 69. A third-party beneficiary may sue to enforce the terms of the contract even though the beneficiary did not exist at the time of the contract's execution. S.&B. Rubber & Chemical Corp. v. Stein, 7 N.Y.S.2d 553, 555 (1938).

In the instant case, the agreement explicitly provided that the ad/list rights could be used by Gold "personally or by a company which [Gold] control[led]." It also stated that Gold could use the rights in a "business which [Gold] set up which is engaged in mail order sales or similar distribution of products." Mail order businesses like PC Brand and Hanson were the direct and intended beneficiaries of the contract. As such, they had standing to sue under the Ad/List Agreement. S.&B. Rubber, 7 N.Y.S.2d at 555. Ziff also argues that Gold never properly reassigned his rights under the amended ad/list agreement from SCI to PC Brand and Hanson. We agree with plaintiffs that assignments can be implied from circumstances. "[N]o particular mode or form *** is necessary to effect a valid assignment, and any acts or words are sufficient which show an intention of transferring or appropriating the owner's interest." Adams v. Garzillo, 279 N.Y.S. 398, 399, 155 Misc. 358, 359 (1935).

In the instant case, it is undisputed that Gold owned 100% of SCI. In a letter dated May 13, 1988, Gold, as president of SCI, instructed Ziff that he was allocating the ad/list rights to Hanson and PC Brand. See Delbrueck & Co. v. Manufacturers Hanover Trust Co., 609 F. 2d 1047, 1051 (1979) (assignment could be manifested by conduct and, in part, exists where assignor instructs his obligor to pay the specific fund owing to him to the assignee). Additionally, SCI stopped using the ad/list rights when PC Brand and Hanson were formed. Dukker and Gosman both testified that Gold told them PC Brand and Hanson could use the ad/list rights. Gold's behavior toward his companies and his conduct toward the obligor, Ziff, implied that the ad/list rights were assigned to PC Brand and Hanson.

III. PC BRAND: BREACH & CAUSATION

A. BREACH

Ziff initially contends that it did not breach the Ad/List Agreement as to PC Brand because Ziff did not repudiate the agreement, but merely asserted a litigation position. Ziff argues that it had a constitutional right to defend its position that Gold did not control PC Brand. See Philip I. Mappa Interests, Ltd. v. Kendle, 196 Ill. App. 3d 703, 709, 554 N.E.2d 1008 (1990) ("Efforts to seek redress through the judicial process are protected by the first amendment right to petition the government for redress of grievances").

Plaintiffs respond that their claims are not based on Ziff's litigation position but, rather, Ziff's extra-judicial conduct before the motion for preliminary injunction was filed on December 6, 1988. Plaintiffs point to a letter dated November 8, 1988, from Morse to Gold which stated in pertinent part:

"After reviewing the documents provided by PC Brand's counsel, we have reached the conclusion that PC Brand, Inc. is not eligible to receive the benefits of the Ad/List Agreement since it is not a company controlled by you and that your sale of those benefits was in violation of that agreement.

***

Therefore, the ad pages which it has used should have been paid at the regular rate. Although we haven't calculated the exact amount, we estimate that the additional amount owed through the November 29 issue of PC is approximately $350,000. We must, therefore, request that arrangements be made for the payment of the amount within the next thirty days. If we cannot resolve this matter within that period, we will have to consider other appropriate steps."

Although the letter mentions "appropriate steps," there is nothing to indicate that Ziff was asserting a litigation position in this letter.

Ziff further argues that this letter does not constitute a breach because there was no absolute or unqualified refusal to perform. To establish a breach, the "defendant's renunciation of the contract must be an unqualified and positive refusal to perform and must go to the whole of the contract." Gittlitz v. Lewis, 212 N.Y.S.2d 219, 220, 28 Misc. 2d 712, 713 (1961). In our view, the letter's terms indicated an unqualified refusal to perform unless payment was made within 30 days.

Even if the letter did not constitute a breach, Gold and Dukker also testified that Ziff breached the Ad/List Agreement by imposing an extracontractual condition at a meeting that took place on December 6, 1988. Gold, Dukker, Morris, and senior vice president of Ziff, Phil Sine, were present at the meeting. Gold and Dukker testified that Sine stated the 20% rate Gold's companies paid was too little and that Ziff wanted ...


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