The opinion of the court was delivered by: BECHTLE
Presently before the court are (1) defendants' motion for summary judgment on plaintiff's complaint, (2) plaintiff's motion to enlarge time to oppose summary judgment, (3) plaintiff's motion to strike certifications of Gary Robbins and Thomas Robbins, (4) plaintiff's motion to dismiss defendants' counterclaim, (5) third-party defendant's motion for summary judgment on defendants' third-party complaint, and (6) defendants' motion for summary judgment on third-party defendant's counterclaim. For the reasons stated herein, defendants' motion for summary judgment on plaintiff's claim will be granted.
In December, 1982, defendant Thomas Robbins and third-party defendant Michael Untermeyer founded Music Magazine Foundation for Education and Communication, Inc. ("Music Magazine") and Michael Untermeyer Syndications, Inc. for the purpose of producing a television show which would consist of music videos made by record companies. Robbins was Music Magazine's president. Untermeyer was the venture's attorney. Untermeyer also arranged broadcasts of Music Magazine's television show with television stations. Music Magazine's show was called the "Houghton/Worth Show, A Music Magazine."
In May, 1983, some of Untermeyer's family members and friends, after being solicited by Untermeyer, invested money in Music Magazine. The plaintiff Neil Dinces was among those whom Untermeyer solicited. Dinces invested $2500.00 in Music Magazine on May 1, 1983. As evidence of that investment, Robbins, on behalf of Music Magazine, gave a note promising to pay Dinces $2500.00 at 18% interest per annum on or before December 31, 1983. Subsequently, on May 6, 1983, Robbins, on behalf of Music Magazine, signed a letter of intent with respect to Dinces' investment in Music Magazine. That letter provided in pertinent part:
You shall make a loan to the Music Magazine Foundation for Education and Communication, Inc. (hereinafter referred to as "Foundation"), in the amount of Two Thousand Five Hundred Dollars, on or before May 1, 1983. The loan shall be paid in full on or before December 31, 1983, by the Foundation, with simple interest due and payable on that date at the rate of one and one-half (1-1/25) percent per month for a total payment of $2,500.00 $300.00 = $2,800.00. In the event that the loan is paid in full prior to December 31, 1983, the amount repaid shall be adjusted so that the money earns interest at a monthly rate of one and one-half (1-1/2%) percent per month.
After the principal amount of your investment has been repaid, you may, in lieu of receiving interest, elect to receive 1/4% (one quarter) percent (sic) of all gross receipts received by the Foundation for the sale of time in The Houghton/Worth Show, A Music Magazine. In the event that you make this election, you shall be entitled to 1/4% (one quarter) percent (sic) of the gross receipts of The Houghton/Worth Show, A Music Magazine, for its original term (26 weeks) and for all renewals of it as a once-a- week barter show.
In the event that your loan is not repaid on or before December 31, 1983, the due date of your note, you may conclude that the show has not been successful and you may elect either to grant an extension to the Foundation for repayment of the loan at a later date, with interest continuing to accrue at the rate of one and one-half (1-1/2%) percent per month, or to request a letter from the Foundation stating that the debt will not be repaid and you should be entitled to a bad debt deduction from your federal income taxes for the entire amount of the loan.
Music Magazine did not pay principal or interest on or before December 31, 1983. Thereafter, on January 16, 1984, plaintiff, by letter, inquired as to the status of his loan and the condition of Music Magazine. In particular, plaintiff sought a statement from Music Magazine's accountants setting forth the company's prospects and a statement from Robbins as to the company's need for loan extensions.
Defendants' attorney responded in a letter dated January 31, 1984, on behalf of, the court presumes, all of the defendants. Defendants did not seek an extension on plaintiff's loan, but, instead, tendered to plaintiff a check for the principal amount owed plus 1-1/2% per month computed on the remaining outstanding principal balance effective through the date on which the check was drawn. On the check were written the words "payoff of loan." In a letter accompanying the check, defendants set forth their expectations with regard to this check:
In review of your demand for payment, the Foundation has elected to satisfy your obligation in full at this time rather than request an extension as has been done with other creditors. Please find enclosed herewith a Music Magazine Foundation for Education and Communication, Inc. check in the amount of $ 2066.64 as your full and final payment in satisfaction of the loan made April 30, 1983 which was greatly appreciated and for which we deeply thank you. You will note that the amount of the check exceeds the amount of the principal balance remaining due to account for the additional interest to which you are entitled at the rate of 1-1/2% per month computed on the remaining outstanding principal balance effective through the date this check is drawn.
Plaintiff deposited the check.
Subsequently, on February 28, 1984, plaintiff wrote defendants seeking to exercise his "option to receive 1/4% (one quarter) percent (sic) gross receipts. . . ."
Defendants refused to honor plaintiff's election. Defendants' position is that at some time prior to February 28, 1984, ...