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Raymond Weil, S.A. v. Theron - 585 F. Supp. 2d 473 (S.D.N.Y. 2008)

Rule:

To establish fraud under New York law, a plaintiff must show that (1) the defendant made a material false representation, (2) the defendant intended to defraud the plaintiff thereby, and (3) the plaintiff reasonably relied upon the representation, and (4) the plaintiff suffered damage as a result of such reliance. In a breach of contract claim, which also alleges fraud, a plaintiff must either: (i) demonstrate a legal duty separate from the duty to perform under the contract; or (ii) demonstrate a fraudulent misrepresentation collateral or extraneous to the contract.

Facts:

Plaintiff luxury watchmaker, Raymond Weil, S.A. sued defendants, movie star Charlize Theron and her film production company, seeking damages for alleged breaches of an endorsement contract and for fraud. The watchmaker moved for summary judgment in its favor on its breach of contract claim. The movie star moved for her dismissal as a party to the case, and defendants cross-moved for summary judgment dismissing all the claims asserted against them.

The parties entered into an agreement whereby the watchmaker paid the movie star for the use of her image in an advertising campaign for its products. Under the agreement, the star was prohibited from publicly wearing or endorsing other watches and certain jewelry. In the event of a breach, the nonbreaching party was required to provide the breaching party notice and five days to cure. T

Issue:

Did the luxury watchmaker prove its claim of fraudulent inducement?

Was the luxury watchmaker entitled to summary judgment on its breach of contract against the actress and her company?

Answer:

a) No; b) Yes.

Conclusion:

The court summarily rejected the watchmaker's fraudulent inducement claim because there was no evidence that Theron never intended to comply with the agreement. In addition, the court found that Theron was a proper party to the breach of contract claim, and that defendants cured a breach of contract based on the display, at a prestigious watch and jewelry trade show, of a poster showing the star holding a competitor's necklace. However, the watchmaker was entitled to summary judgment on its breach of contract claim based on Theron's appearance at a press conference wearing a competitor's watch. The court found that the watchmaker was not entitled to rescission damages for this breach, and directed the parties to discuss settlement prior to a hearing to determine the watchmaker's damages.

The court denied the star's motion to dismiss her from the case, and granted defendants' motion to dismiss the fraud claim. The court granted the watchmaker's summary judgment motion only on one of its breach of contract claims. The court also denied defendants' motion to dismiss the reports of the watchmaker's experts regarding damages and directed the parties to engage in settlement negotiations prior to a hearing on the watchmaker's damages.

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