Commercial Division Blog

Posted: August 22, 2016 / Categories Commercial, Contracts

Publicity Agent's Negative E-Mails Constitute Breach of Covenant of Good Faith and Fair Dealing

On August 18, 2016, the First Department issued a decision in Rebecca Broadway L.P. v. Hotton, 2016 NY Slip Op. 05839, holding that a publicity agent's e-mails disparaging its client breached the covenant of good faith and fair dealing.

In Rebecca Broadway, the defendant, a publicity agent, sent e-mails to a potential investor in a theatrical production that "made various highly negative allegations about" the agent's client "and urged the potential investor not to back" the production.

The trial court held that the plaintiff was "entitled to summary judgment as to liability on its claim for breach of contract against the publicity agent." The First Department affirmed, explaining:

The surreptitious and anonymous emails that the agent sent to the prospective investor — whose identity had been the producer's confidential information — apparently were intended to sink the project, and accomplished that goal. The publicity agent thus destroyed or injured the right of the producer to receive the fruits of its contract with the agent. That contract had been intended to facilitate the very theatrical production that the agent sabotaged by means of his emails, which he had only been able to send by misusing the producer's confidential information. This is the very definition of a breach of the covenant of good faith and fair dealing that the law of New York implies in every contract.

(Internal quotations and citations omitted).

NOTE: Schlam Stone & Dolan LLP represented the plaintiff in this action.