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y , V-3465 SUPREME COORT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ---------------------------------------x ROBERT BRIAN ASSOCIATES, INC. . Plaintiff, -against- . AFFIDAVIT OF LOEWS THEATRES, INC., . NEAL JOHNSTON Defend ant. . ---------------------------------------x STATE OF NEW YORK ) . ss. COUNTY OF NEW YORK ) NEAL JOHNSTON, being duly sworn, d eposes and says: 1. I am a member of the bar of the State of New York a.nd am associated with the firm of Paul, Weiss, Rifkind, Wharton "& Garrison, attorneys for defendant Loews Theatres, Inc. (hereafter referred to as "Lorillard"). I am fully familiar with the facts of this case. 2. •-i submit this affidavit in support of Lorillard's motion for a protec tiv e order striking plaintiff's time barred and overbroad post-trial Notice for Discovery and Inspection. (A copy of this Notice is attached as Exhibit A.) 3. Plaintiff Robert Brian Associates, Inc. C ("Robert Brian") commenced this action in October 1974. ~ C ~ ~

Y y &[ (Copies o€.the complaint and verified answer are attached as Exhibit B.) Three years ago, in April, 1977, Robert Brian filed a note of issue and statement of readiness. (A copy of this document is attached as Exhibit C.) Robert Brian conducted no discovery whatsoever pursuant to any section of the C.P.L.R. at any point between the service of its com- plaint and the filing of its statement of readiness. 4. The matter was tried before a jury nearly two years ago, in May and June 1978, and the jury returned a verdict in plaintiff's favor in the amount of $90,000 on its first cause of action. (A $10,000 verdict on a second cause of action has since been satisfied and is not relevant to any of the issues at hand.) 5. A year later, in July 1979, the Appellate Divi- sion, First Department determined that plaintiff's proof of damages at trial was inadequate, and remanded the proceeding for a new trial on the question of damages. (Copies of the order and opinion of the Appellate Division are attached as Exhibit D.) ~ 6. Because of the decision to remand for a retrial on damages, the present judgment herein is not a final judgment and therefore Lorillard could not move the Court of Appeals for permission to appeal with respect to the underlying findings in Robert Brian's favor as to liability. Hence, _ 01 the next step ought to be the prompt retrial of the damage 2

A 4 'L Y issue. That, however, is not the step which plaintiff is m. taking in fact. 7. Rather, six years after starting its litiga- tion, three years after filing a statement of readiness, and two years after trial, Robert Brian, for the first time, seeks discovery by serving a notice for discovery and inspec- tion of documents pursuant to Rule 3120 of the Civil Practice Law and Rules. Lorillard seeks a protective order striking this notice on the ground that it is untimely and unspecific in its entirety and immaterial in most of its particulars. 8. Under the rules of this Court and under the separate rules of the Chief Administrative Judge applicable to all New York courts, once 20 days have passed after the filing of a Note of Issue and Statement of Readiness, no further discovery may be had without permission of the court. Such permission may only be granted upon motion and an evi- dentiary showing of "unusual and unanticipated" circumstances or conditions. Only conditions arising after the filing of the No te of Issue and Statement of Readiness are relevant to a motion for leave to reopen discovery. Mere laziness, forgetful- ness or oversight on the part of the party seeking discovery is not a basis for avoiding the strictures of trne Rule. 9. Robert Brian has made no motion, has pre- ~ pared no affidavit, and can make no showing of special ~ O _ CJ circumstdnces. To the extent the information Robert Brian „~ . W O 3

b 0 Y 4 3 . f Rt now seeks'is relevant to the issues on retrial, that relevance a. was apparent three years ago when Robert Brian filed its Statement of Readiness stating that "all necessary or proper preliminary proceedings . . . had been completed by all parties hereto; and the plaintiff does not intend to conduct these proceedings." 10. Further, each of Robert Brian' s 12 specific document requests is entirely unspecific in its formulation, and, in any event, much of the information which it now seeks is utterly irrelevant to the limited issues which can be raised on retrial. 11. Robert Brian is a sales promotion agency which was retained by Lorillard nearly a decade ago to develop novel and original sales promotion ideas for the Kent cigarette.brand. The retainer agreement between the parties was neve? reduced to writing. In early 1972, Lorillard fired Robert Brian. According to Robert Brian, Lorillard there- after ran four separate sales promotion programs for Kent cigarettes which in some fashion derived from Robert Brian's suggestions to Lorillard. The jury by returning a verdict in Robert Brian's favor, necessarily found that one or more of the Lorillard promotions did so derive, but because the four separate claims were stated in the form of a single cause of action and because the trial court refused to permit special jury intcfrrogatories, it is not known whether the jury found 4

ti Y 04 •t only one or two or three or all four of the actual Lorillard ~.. programs to have derived from Robert Brian's suggestions. 12. There is no dispute that the parties',oral agreement promised Robert Brian the right to prepare camera- ready art work at standard industry hourly rates with res- pect to any Robert Brian sales promotion suggestion accepted by Lorillard, and, further, that Robert Brian would receive a 25% override with respect to any outside purchases it made in connection with the preparatio n of such material. In its complaint, Robert Brian contended that Lorillard also promised that with respect to any accepted idea, Robert Brian would be given a right to bid on the actual production, -- i.e., the preparation of the cardboard display cases, flyers, brochures, and other such promotional paraphernalia used in any such scheme. In addition, at trial, the president of Robert Brian, Robert Sandelman, testified that Lorillard also promised that if this production work were awarded to any other company, Robert Brian would receive a 15% commission on payments to such other company; no such claim had been made by Sandelman in the course of pretrial discovery, and no such term was mentioned or alluded to in any document known to Loril lard . 13. According to the Appellate Division, Lorillard could have proven its damages with respect to any actual 5

Y Rt M Lorillard promotion derived from a Robert Brian suggestion by establishing its lost net profits with respect to the preparation of camera-ready finished art work which it was not permitted to perform. 14. With respect to damages for production work, Robert Brian had alternate remedies: here, too, it could show the lost net profits it would have earned had it been permitted to perform such work or, assuming the jury accepted the naked testimony that Lorillard had promised to pay a 15% commission on production work farmed out to a third party, it could simply have proven such third party payments and demanded 15% thereof. However, as the Appellate Division also observed, Robert Brian introduced no evidence whatso- ever concerning actual payments by Lorillard to third parties.-* 15. During recent discussions, Robert Brian, has advised Lorillard that at retrial of damages it intends to * When this matter comes on for retrial of damages, Robert Brian will certainly, this time, seek to prove what Lorillard paid the third parties to perform the actual production work in an effort to recover 15% of that figure; Lorillard will argue before the trial court that since Robert Brian introduced no evidence whatsoever on this subject at the original trial, it abandoned this line and may not now resurrect it. That evidentiary issue is not now before this Court. In any event, even assuming the admissibility of such evidence, and the timeliness of a request for it, discovery into such subject matter must necessarily be limited to areas material to the proof of damage: the cost of such third party work. 6

r s advance some wholly new damage claims never raised at trial. «. Specifically, Robert Brian wants to recover a 25% commission on all premium gifts purchased by or for Lorillard in connec- tion with any of the disputed promotions. Two of the four actual promotions did involve premiums: One promotion was a steak knife give-away and the other offered a thermal plastic coffee mug emblazoned with a Kent logo. Substantial sums of money were expended by Lorillard in connection with the purchase of these premiums. 16. Items 9 through 12 of plaintiff's notice for discovery and inspection seek to determine exactly how much money Lorillard spent in connection with such premium pur- ch as e s . 17. There is not one shred in the voluminous record suggesting that Lorillard had any contractual commitment whatsoe.ver to permit Robert Brian to purchase any premiums which might be involved in the execution of any sales promotion scheme suggested by Robert Brian. At no point in the original.trial did Robert Brian seek any recovery with respect to such premiums, though it was well aware of the existence of such premiums. In its brief to the Appellate Division, Robert Brian argued that it was entitled to receive a 25% commission of its cost on any purchases which Robert Brian made for Lorillard in connection with any sales promo- tion, b~t at no point suggested that it was entitled to any 7

commission with respect to the purchases made by Lorillard a. itself or by some third party on Lorillard's behalf. (Attached as Exhibit E are pages 11 and 12 of Robert Brian's brief to the Appellate Division setting forth its claims as to its entitlements under the contract.) 18. The opinio n of the Appellate Division is clear that on retrial for damages, Robert Brian may introduce competent evidence of its lost net profits with respect to finished art work and production work, but that court has nowhere authorized Robert Brian to introduce wholly new claims unsubstantiated in the original trial record involving such novel subjects as premium purchases by Lorillard. The purpose of the new trial which the Appellate Division demanded was to clarify existing proofs, and not to open up entirely new claims. °•19. In this connection, it must be understood that the purchase of premiums is not considered an aspect of pro- duction work. Indeed, the definition of "production work" which Robert Brian attaches to its notice for discovery and inspection expressly excludes premiums. (See Exhibit A, Parag raph G. ) 20. Items 7 through 9 of the notice for discovery and inspection seeks similar information with respect to 8

. ._ outside services purchased by Lorillard in connection with ..A the four contested promotions. This demand is similarly overbroad and irrelevant. Robert Brian does not define the term "services" and, if literally read, the Notice might be understood to call for information concerning payments by Lorillard to outside lawyers, outside accountants, or indeed outside travel agents in relation to any of these promotions. Whatever the meaning of the term, however, it is clear that Robert Brian has no claim for damages in connection with such third party services. The only services which Robert Brian has claimed it had a contractual right to perform were those which related to the preparation of camera-ready finished art work and, arguably, the physical production work involved in any sales promotion suggested by Robert Brian. As to any other services which might be imagined, while Lorillard could conceiv ably have retained Robert Brian to perform such services, there is no claim that Lorillard was required to do so, and therefore no basis for assessing damages against Lorillard for a failure to djo so. WHEREFORE, I respectfully urge that the notice of discovery and inspection served by Robert Brian Associates, Inc. be stricken in its entirety as violative of the rules binding this Court relating to the representatio ns contained in the note of issue and statement of readiness filed by ~ W ~ Robert Byian in April 1977 and with respect to the level of I Ca T. 9

t specificity required in any Rule 3120 Notice and, alternatively, «. that items 7 through 12 of such notice be stricken as over- broad efforts to obtain information immaterial to the limited issues of the circumscribed retrial of damages directed by the Appellate Division. Neal Johnston l 0 Sworn to before me this F r ^ -1 day of May, 1980 R;;TH A.I hrt'LL771 Nlc_9N \c. p~~!;°icc ir N=_•.v Ycrk Cc.;ntv r:pir.c C:larch 3C, 1982 0 10