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% DEFENDANT'S REQUESTS TO CHARGE SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK - - - - - - - - - - - - - - - - - - - x ROBERT BRIAN ASSOCIATES, INC., . 1264 Plaintiff, : Index No. 6859/77 -against- . Calendar No. 14838 DEFENDANT'S REQUESTS LOEWS THEATRES, INC., . TO CHARGE Defendant. . - - - - - - - - - - - - - - - - - - - x Defendant requests the Court to charge the jury as follows: Burden Of Proof _..1. The burden of proof rests on the plaintiff, Robert Brian Associates. That means that Robert Brian must establish by a fair preponderance of the credible evidence that the claims it makes are true. The credible evidence means the testimony or exhibits that you find to be worthy to be believed. A preponderance means the greater part of such evidence. That does not mean the greater number of witnesses or the greater length of time taken by either side. The phrase refers to the quality of the evidence, that is, its convincing quality, the weight and the effect that it has on your minds. The law requires that, in order for Robert Brian to prevail, the evidence that supports its claim must appeal to you as more nearly 1% 0

DEFENDANT'S REQUESTS TO CHARGE . 1265 representing what took place than the evidence introduced by Lorillard. If it does not, or if it weighs so evenly that you are unable to say that there is a preponderance on either side, then you must resolve the question in favor of the defendant, Lorillard. [1 New York Pattern Jury Instructions § 1:23] Interested Witness 2. Some of the witnesses you have heard during -.-this trial have testified that at one time they were employed.by the defendant, Lorillard or by the plaintiff, Pobert Brian Associates. You may consider this fact in determining whether this employment relationship may - have influenced their testimony. __3. Mr. Sandleman has testified at length during this trial. He has testified that during the time period in question, and to the present day, he is the sole share- s holder of the plaintiff, Robert Brian Associates. You may consider, in determining the weight you will give Mr. Sandleman's testimony, the fact that if the plaintiff is successful in this action, and recovers on its claim for lost profits, Mr. Sandleman, as the owner of the business, will receive the benefit of that recovery. [See, N.Y. Pattern Jury Instruc- tions, pp. 93-96.] 2 r

DDFE:IDA:^T' S RE:QUI:STS TO CFIARGE Credibility 1266 4. You will recall that during Mr. Sandleman's testimony, portions of the transcripts of his examination before trial, and his statements to the Federal Trade Commission were introduced. You may treat these prior state- ments as admissions, and as evidence against his company. In addition, if you find that there are inconsistencies between Mr. Sandleman's prior testimony, and his testimony at this trial, you may consider this fact in determining whether you-wil'1 accept all, or just a part, or even none of the testimony he gave during this trial, and what weight you should give this testimony. [See, 1 N.Y. Pattern Jury Instructions, S 1:66 and comments thereto.] _ 5. If you find that any witness has wilfully testi- fied falsely as to any material fact, the law permits you to disregard completely the entire testimony of that witness upon the principle that one who testifies falsely about one material fact is quite likely to testify falsely about everything. Of course, you must disregard that part you find to be false, but you may disregard all of his testimony, or any portion of it. You are not required to do so, but you may. [See, 1 N.Y. Pattern Jury Instructions 1:22] Failure to Produce Documents 6. At various times during this trial, there have been references to certain documents which were never actually produced and put into evidence.

. J DE.FF.2tiDAk:T' S RE:QCI:STS TO CHARGr 1267 7. The failure of either side to produce a document can be used against it if you are satisfied from the evidence in this case, first, that there is a document in the party's possession, the contents of which relate materially to an issue in this case, and, second that the party has not shown a reasonable explanation for failure to produce the document. If you are so satisfied, you may, in weighing the evidence in this case, though you are not required to, infer that the document if produced would not have supported that party on the issue that the document relates to. In this light you may consider the failure of Robert Brian to pro- duce at the trial copies of the following items: -(a) -The contract plaintiff alleges it signed with the defendant; (b)- The general books and ledgers of Robert Brian Associates, which would show the actual profits, losses and expenses of the plaintiff, and billings to, and payments,by defendant; (c) All invoices, which would show plaintiff's art and production costs for past promotions -it did for Rent, other than those for the Rent Castle contest. (d) The graphics plaintiff contends it prepared for the steak knife promotion, the coffee mug promotion, and the Kent Gallery promotion. [See, 1 N.Y. Pattern Jury Instructions S 1:77] d

DEFENDANT'S REQUESTS TO CHARGE , . 1253 Liability 8. In this action, Robert Brian Associates says I that it submitted several promotional ideas to the defendant, and that the defendant, in breach of its agreement with Robert Brian, failed to allow it to supply the finished art work, and did not let the plaintiff bid on the final produc- tion work. 9. As I explained to you earlier, Robert Brian bears the burden of proving these claims by a preponderance of the credible evidence. First, it must prove to your satis- faction that it in fact had an agreement with Lorillard which provided that it was to provide the finished art work for promotional ideas accepted by Lorillard, and that it was to have the right to bid on the production rights for these promotions. 10. There seems to be little dispute that Robert Brian had some type of Qral agreement with Lorillard, and that for a monthly fee, it was to submit new, novel and unique promotional ideas. The question you must resolve is whether there was ever also an agreement reached between the parties regarding finished art and production work. 11. Mr. Sandelman says that as part of the agree- ment, he was to have the right to produce camera ready art work on promotions accepted by Lorillard, and the right to --II -. . , f

f , J the agreementand says that it reserved the right to award art work and production to whatever company it wanted and that Robert Brian was never to receive 15% of the successful bid- der's invoices. 12. sf you find that there never was an agreement between the parties that Robert Brian would have the right to provide the finished art work and the right to bid for ' production rights then you must find in favor of the defen- dant and against Robert Brian. DEFENDn:.:' S Ri.Qj:i.STS TO Ci:ARGf.' bid on production. He says that if Robert Brian was the low bidder and in Lorillard's sole opinion, the best supplier, then Robert Brian would be-awarded production rights. He also says that it was part of the agreement that if Robert Brian was the low bidder, but Lorillard thought it was not the best supplier, then it did not have to get the production rights, but would receive 15% of the successful bidder's total in- voices. Lorillard denies that these terms were ever part of 13. If, on the other hand, you find that there was.an agreement between the parties that Robert Brian was to do the finished art work and was to have the right to bid on promotional ideas that were accepted, you must answer another question: Were the ideas submitted by Robert Brian actually used in the Kent promotions? 14. If Robert Brian fails to convince you that its ideas were used, then you must find for the defendant. Thus, if you decide, as the defendant argues, that the promotional ideas in dispute resultedfrom ideas submitted by people and C

DEFENDAaTIS REQUESTS TO CHARGE 1270 companies other than Robert Brian or were generated within Lorillard itself, then you must find for the defendant. In reaching this conclusion,~you may consider the evidence intro- duced by the defendant that the advertising promotions it en- gaged in were substantially different from those suggested by the plaintiff. 15. If, on the other hand, you find that the Kent promotions were substantially similar to those submitted by plaintiff, and you find that the Kent promotions did not re- sult-from ideas brought to Lorillard by people and companies unconnected with Robert Brian, then you must find for the plaintiff. You may find that all of Robert Brian's ideas were used, or that just some of them were used, or that none of them were used. Damages 16. The final question you must consider is whether the plaintiff is entitled to any damages. You will reach this question, however, only if you first decide that the defendant used promotional ideas submitted by Robert Brian and, in violation of an agreement Robert Brian says it had, refused to let Robert Brian do the finished art work and bid for production rights. 17. The fact that I am giving you instructions with respect to damages should not be understood by you as i L

DEPEtdD'.',*^. ' S a^uiQUi::STS TO CIIARG~.' suggesting that I think that Robert Brian has sufficiently proven that its ideas were in fact used by Lorillard, or that I think it is necessary foryou to consider the question of damages at all. These questions are for you to decide, and nothing I have said, or will be saying, is intended to suggest how I think you should decide them. As I told you before, you may find that some, all, or none of Robert Brian's ideas were improperly used by Lorillard. You may award damages only for the specific ideas you determine were so used. 18. [Charge paragraph 18 if the issue of damages for denial of a right to bid is not before the jury. Charge paragraph 19 if the issue is before the jury.] If you determine that Robert Brian is entitled to receive damages, - then with respect to each of the four ideas which you find to have been used by Lorillard in breach of its agreement, the proper measure of damages would be the net profits which Robert Brian would have received if it had been allowed to do the finished art work. In no event is Robert Brian entitled to re- cover on its claim for lost net profits for denial of a right to bid on final production. - OR 19. [Charge paragraph 18 if the issue of damages for denial of a right to bid is not before the jury. Charge paragraph 19 if the issue is before the jury.] If you deter- mine that Robert Brian is entitled to receive damages, then 12?i

, I J D$F.ENDAN.T'S REQUESTS TO CHARGE 1272 with respect to each of the four ideas which you find to have been used by Lorillard in breach~of its agreement, the proper measure of damages would be the net profits which Robert Brian would have received if it had been allowed to do the finished art work. If you determine that if Robert Brian had been permitted to bid on the production work for these promotions, it would have been the low bidder, and in Lorillard's opinion, the best supplier, and that as part of its agreement with Lorillard that if these con- ditions were satisfied Lorillard had to give Robert Brian the production rights, then you may also award the plaintiff the net profits it would have made on the production work. _. 20. If you find that there was another term of the agreement that provided that Robert Brian was to receive 15% of another company's invoices if Robert Brian was the low bid- der but did not get the production rights, then you may award plaintiff this 15% if you decide that it would have been the low bidder. 21. What do I mean when I say that you may award "net lost profits"? Quite simply, this means the money that Robert Brian would have earned., minus the money Robert Brian saved by not having to do the work and minus Robert Brian's adjusted overhead expenses. The following example may help. If Robert Brian would have billed Lorillard $10 for finished art work, you would have to subtract from that number the amount 9

DEFENHANT' S REQ.U.FS_T3 ._TD-LFIARGE_.. ... ~_.~_.~ _.~ . J 1273 , Robert Brian saved because it did not actually have to produce the artwork. Let us say,hypothetically, that it would have cost Robert Brian $7 to do the art work. This leaves $3 as lost gross profit ($10 minus $7). To reach lost net profit you must go one step further, you must allocate Robert Brian's overhead costs. That is, you must consider what Robert Brian paid for rent, salaries to employees, telephone, electricity and the like, and allocate a portion of this expense to the promotion campaigns at issue. For example, if Robert Brian's overhead was $6 per year, and it conducted three similar promotional campaigns a year, then the overhead allocation for each promotion would be $2. To go back to the example I used before, if Robert Brian's lost gross profits were $3 and the overhead allocation was $2, the lost net profit, the amount to be awarded as damages, would be $1. [See, Carter v. Gudebrod Bros. Co., 190 N.Y. 252 (1907); 342 Holding Corp. v. Carlyle Const. Co., 31 A.D.2d 604 (lst Dept. 1968); Bates Chevrolet Corp. v. Haven Chevrolet, Inc., 16 A.D.2d 914 (lst Dept. 1962), aff'd, 13 N.Y.2d 644 (1963) (no opinion) and defendant's memorandum of law.] 22. It is possible that, if and when you make this calculation, you may determine that after costs and overhead are subtracted, Robert Brian would not have made money -- in fact might even have lost money -- if it had been allowed to do finished art work and production. Zf you determine that t