INDEX NO.

652220/2015

FILED: NEW YORK COUNTY CLERK 08/12/2015 11:53 PM

NYSCEF DOC. NO. 8

RECEIVED NYSCEF: 08/12/2015

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK (COMMERCIAL DIVISION)

HARVEY KEITEL,
Plaintiff,

Oral Argument Requested

Index No. 652220/2015

v.
E*TRADE FINANCIAL CORP.,

Justice Charles E. Ramos

Defendant.

MEMORANDUM OF LAW IN SUPPORT OF

E*TRADE FINANCIAL CORPORATIONS MOTION TO DISMISS
QUINN EMANUEL URQUHART &
SULLIVAN, LLP
Faith E. Gay
Corey Worcester
Renita Sharma
51 Madison Avenue, 22nd Floor
New York, NY 10010
Tel.: (212) 849-7000
Fax: (212) 849-7100
Attorneys for E*TRADE Financial Corp.

TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT .....................................................................................................1
BACKGROUND .............................................................................................................................3
ARGUMENT ...................................................................................................................................7
I.

THE TERM SHEETS EXPLICIT STATEMENT THAT NEITHER PARTY

SHALL BE BOUND IS DISPOSITIVE OF PLAINTIFFS CLAIM OF A
BINDING AND ENFORCEABLE CONTRACT. ........................................................11

II.

NUMEROUS OTHER PROVISIONS OF THE TERM SHEET AND

SURROUNDING DOCUMENTS INDICATE THAT THERE WAS NO FINAL
MEETING OF THE MINDS. ............................................................................................15

III.

OCTAGONS USE OF THE PHRASE FIRM AND BINDING CANNOT

NEGATE THE EFFECT OF THE TERM SHEETS CLEAR LANGUAGE. .................18

IV.

THE PLAINTIFF RESPONDED TO E*TRADES TERM SHEET WITH

MATERIALLY DIFFERENT CONDITIONS; HIS RESPONSE
CONSTITUTED A COUNTER-OFFER THAT E*TRADE DID NOT ACCEPT. .........20

CONCLUSION ..............................................................................................................................22

TABLE OF AUTHORITIES
Page
Cases
150 Broadway N.Y. Assocs. L.P. v. Bodner,
14 AD3d 1 [1st Dept 2004]........................................................................................................9
Aksman v. Xiongwei Ju,
21 AD3d 260 [1st Dept 2005]......................................................................................14, 15, 16
Amcan Holdings, Inc. v. Canadian Imperial Bank of Commerce,
70 AD3d 423 [1st Dept 2010].......................................................................................... passim
Cent. Fed. Sav., F.S.B. v. Natl Westminster Bank, U.S.A.,
176 AD2d 131 [1st Dept 1991]............................................................................................8, 20
Century-Maxim Const. Corp. v. One Bryant Park, LLC,
23 Misc. 3d 1120(A), 886 N.Y.S.2d 70 [Sup. Ct. Westchester Cty. 2009] ...............................9
Chambers v. Weinstein,
44 Misc. 3d 1224(A), 997 N.Y.S.2d 668 [N.Y. Sup. Ct. 2014].................................................9
DSA Realty Servs., LLC v. Marcus & Millichap Real Estate Inv. Servs. of
New York, Inc.,
128 AD3d 587 [1st Dept 2015]..................................................................................................9
E. Consol. Props,., Inc. v. Morrie Golick Living Trust,
83 AD3d 534 [1st Dept 2011]..................................................................................................21
Fiala v. Metro. Life Ins. Co.,
6 AD3d 320 [1st Dept 2004]......................................................................................................7
Flushing Expo, Inc. v. New World Mall, LLC,
116 AD3d 826 [2d Dept 2014] .................................................................................................8
Fontanetta v. Doe,
73 AD3d 78 [2d Dept 2010] ..................................................................................................1, 8
Franklin v. Winard,
199 AD2d 220 [1st Dept 1993]............................................................................................7, 10
Gen. Motors Acceptance Corp. v. Clifton-Fine Cent. Sch. Dist.,
85 N.Y.2d 232 [1995] ..............................................................................................................19
Gephardt v. Morgan Guar. Trust Co. of New York,
191 AD2d 229 [1st Dept 1993]..................................................................................................7
Goshen v. Mutual Life Ins. Co. of New York,
98 N.Y.2d 314 [2002] ................................................................................................................8

ii

Guggenheim Corporate Funding, LLC v. Access.1 Commcns Corp.-NY

26 Misc. 3d 1210(A), 906 N.Y.S.2d 780 (Sup. Ct. 2009) ...............................................7, 8, 15
Jordan Panel Sys., Corp. v. Turner Const. Co.,
45 AD3d 165 [1st Dept 2007]......................................................................................13, 14, 15
King v. King,
208 AD2d 1143 [3d Dept 1994] ..............................................................................................22
Kolchins v. Evolution Markets, Inc.,
128 AD3d 47 [1st Dept 2015]....................................................................................................9
Longo v. Shore & Reich, Ltd.,
25 F.3d 94 (2d Cir. 1994).........................................................................................................19
In re Lyondell Chem. Co.,
491 B.R. 41 (Bankr. S.D.N.Y. 2013) affd, 505 B.R. 409 (S.D.N.Y. 2014) .....................14, 15
Mendoza v. Akerman Senterfitt LLP,
128 AD3d 480 [1st Dept 2015]..................................................................................................9
Naturopathic Labs. Intl, Inc. v. SSL Americas, Inc.,
18 AD3d 404 [1st Dept 2005]..................................................................................................19
Peter F. Gaito Architecture, LLC v. Simone Dev. Corp.,
46 AD3d 530 [2d Dept. 2007] .................................................................................................10
Prospect St. Ventures I, LLC v. Eclipsys Solutions Corp.,
23 AD3d 213 [1st Dept 2005].......................................................................................... passim
Roer v. Cross Cnty. Med. Ctr. Corp.,
83 AD2d 861 [2d Dept 1981] ..................................................................................................22
Scheck v. Francis,
26 N.Y.2d 466 [1970] ..............................................................................................................12
Shah v. Metro. Life Ins. Co.,
No. 108887/00, 2003 WL 728869 (N.Y. Sup. Ct. Feb. 21, 2003) .............................................7
Shehab v. Chas. H. Sells, Inc.,
No. 04 CIV 01534, 2006 WL 938715 (S.D.N.Y. Mar. 29, 2006) ...........................................20
Standard Chartered Bank v. D. Chabbot, Inc.,
178 AD2d 112 [1st Dept 1991]..................................................................................................7
StarVest Partners II, L.P. v. Emportal, Inc.,
101 AD3d 610 [1st Dept 2012]....................................................................................12, 13, 15
Thor Props., LLC v. Willspring Holdings LLC,
118 AD3d 505 [1st Dept 2014] .........................................................................................20, 21
Vacold LLC v. Cerami,
545 F.3d 114 (2d Cir. 2008).......................................................................................................8

iii

Wachtel v. Natl R.R. Passenger Corp.,

No. 11 CIV. 613 PAC, 2012 WL 292352 (S.D.N.Y. Jan. 30, 2012) .......................................20
Webster Estate of Webster v. State of New York,
No. M-65923, 2003 WL 728780 (N.Y. Ct. Cl. Jan. 30, 2003) ..............................................8, 9
Woodward v. Tan Holding Corp.,
32 AD3d 467 [2d Dept 2006] ..................................................................................................21
Rules / Statutes
N.Y. C.P.L.R. 3211(a)(1)..................................................................................................1, 7, 8, 9
N.Y. C.P.L.R. 3211(a)(7)..........................................................................................................1, 9

iv

Defendant E*TRADE Financial Corporation (E*TRADE) respectfully submits this

memorandum of law in support of its motion to dismiss with prejudice plaintiff Harvey Keitels
claim for breach of contract, pursuant to CPLR 3211(a)(1) and 3211(a)(7).
PRELIMINARY STATEMENT
This lawsuit concerns Mr. Keitels allegations that E*TRADE, in a space of less than
seventeen hours, formed and then breached a purportedly firm and binding contract for
Mr. Keitel to appear in a series of three commercials (Cmpl. 4) at a price of $1.5 million.
Even a cursory glance at the purported contract itself and at the emails exchanged between the
parties agents (all of which are repeatedly quoted and referenced in the Complaint) reveals that
no such breach occurred because no such contract existed. Tellingly, Plaintiff relied on and
partially quotedbut failed to attachthe alleged contract and the correspondence to his
Complaint. In such circumstances, the Court may properly consider both on a motion to dismiss
because having relied on, quoted from, and incorporated the documents into the Complaint, the
Plaintiff has conceded that the documents are essentially undeniable, Fontanetta v. Doe, 73
AD3d 78, 84-85 [2d Dept 2010], and constitute documentary evidence for the purposes of a
motion under CPLR 3211(a)(1).
First, the Complaint should be dismissed because the purported contract at the heart of
this dispute was not, in fact, a contract at alllet alone a binding one. On the contrary, in plain
English, the purported contract provides that neither party shall be bound until the parties
execute a more formal written agreement. (Sharma Aff., Ex. A, the Term Sheet, at 3
(emphasis added).) In light of the Term Sheets plain text, Mr. Keitels interpretation of it as a
fully formed and binding contract (Cmpl. 21-25) is not tenable.

Second, numerous other provisions in the Term Sheet demonstrate that it was not a final
agreement and that there was no final meeting of the minds. For example, the Term Sheet was
not signed, contained blanks to be filled in later, and invited Mr. Keitel to acknowledge his
understanding of the proposed negotiations (Ex. A at 4) concerning a proposed agreement
(id. at 1) for his potential participation in E*TRADEs advertising (id. at 3). It then concluded
by asking Mr. Keitels agent to be in contact to discuss the project further. (Id. at 4.) Taken
together, the provisions of the Term Sheet make clear that it was an invitation to negotiate and
not a contract.
Third, Mr. Keitels claim for breach of contract depends almost entirely on the allegation
that the cover email from Ogilvy & Mather (Sharma Aff., Ex. B, Cover Email) stated that the
Term Sheet was a firm and binding offer. (Cmpl. 21-25.) The Complaints partial quote of
the Cover Email is, however, misleading. Following the fragment that Mr. Keitel quotes, the
Cover Email continues on to state that the offer was contingent upon the results of the
background check, and of course coming to terms on scripts, compensation, etc. (Ex. B at 1
(emphasis added).) The expressly contingent nature of E*TRADEs proposal belies any
suggestion that the Term Sheet was binding in the manner that Mr. Keitel alleges. Moreover,
as a matter of law, such language cannot negate the plain language of the Term Sheet itself to
create a binding contract where one would not otherwise exist.
Fourth, the Complaint also fails because the documentary evidence referenced in the
Complaint makes clear that Mr. Keitel did not accept the purported offer. Instead, Mr. Keitels
agent reported only that Mr. Keitel has agreed to do the 3 commercials for E Trade. (Sharma
Aff., Ex. C, Email from K. Sellars to M. Conti, Jan. 28, 2014.)

Mr. Keitels purported

acceptance failed, however, because it is obvious on the face of the Term Sheet that the Term

Sheet includes proposals for six commercials and several other issues.1 Mr. Keitels purported
acceptance also failed because his agent included proposed conditions that amounted to a
counteroffer. The additional terms included a suggestion that E*TRADE hire Oscar-winning
director Ridley Scott to direct the commercial, provide rehearsal time, and critically, give Mr.
Keitels agent information on logistics that could be run . . . by Mr. Keitel. That counter-offer
was never accepted by E*TRADE. (Ex. C.)
For each of these four, independent reasons, the Court should dismiss Mr. Keitels
Complaint in its entirety with prejudice.
BACKGROUND
E*TRADE is a financial services company that provides retail brokerage and related
services and products to both individual and institutional investors under the brand E*TRADE
Financial. In January 2014, E*TRADE sought to develop a series of television commercials to
further its brand. (Cmpl. 5.) Specifically, E*TRADE worked with global marketing firm The
Ogilvy Group, Inc., d/b/a Ogilvy & Mather NY (Ogilvy) to develop a concept for an
advertising campaign that would involve a celebrity spokesperson. (Cmpl. 5, 6.) Ogilvy, in
turn, retained Octagon First Call (Octagon), a celebrity acquisition and engagement specialist,
to contact possible spokespersons for E*TRADEs new campaign. (Cmpl. 6.) E*TRADEs
campaign was scheduled to begin shooting four weeks later, in mid-February. (Cmpl. 18.)
Because of the short time until production commenced, discussions between E*TRADE and
Ogilvy regarding the direction of the campaign were occurring at the same time as discussions
between Octagon and the agents of various potential spokespersons.
1

For example, in addition to the three television commercials, the Term Sheet included
requirements related to two radio commercials, banner ads, digital material, B-Roll, and an
online video advertisement, as well as provisions related to, inter alia, the financial terms of the
deal. (Ex. A at 1-2.)

E*TRADE and Octagon considered several actors for the role, including Mr. Keitel.
(See, e.g., Cmpl. 8.) To gauge Mr. Keitels interest in working with E*TRADE, Octagon
reached out to his agent, Ms. Sellars, in late January of 2014. Ms. Sellars requested a firm and
binding offer to present to her client. (Cmpl. 17-19.)
Accordingly, at 7:15 p.m. EST on January 27, 2014, Octagons Maria Conti sent
Ms. Sellars the Cover Email which she said attached . . . a firm and binding offer [to Keitel] . . .
contingent upon the results of the background check, and of course coming to terms on scripts,
compensation, etc. (Ex. B at 1 (emphasis added).2) The attached Term Sheet was four pages
long and sent as an editable Microsoft Word document, not an Adobe Acrobat PDF, which Ms.
Sellars would have been unable to alter, mark up, or edit. It was not signed. (Ex. A at 43.) Nor
had it been placed on Ogilvy letterhead. (Id. at 1.) Moreover, the Term Sheet contained a
signature block for an individual at Ogilvy but that persons name and title had not yet been
provided. (Id. at 4.) Further highlighting its provisional nature, the Term Sheet did not identify
the counterparty who would act for Mr. Keitel, stating only that it covered a proposed
agreement between The Ogilvy Group, Inc. d/b/a Ogilvy & Mather NY (Agency), on behalf of
its client, E*TRADE Financial Corporation (Client), and __________ (Supplier) f/s/o Harvey
Keitel (Artist). (Id. at 1.)
The unsigned Term Sheet further stated E*TRADEs understanding as to [s]ome of the
principal terms of the proposed agreement, such as the cost,4 term, number of production days,

The Cover Email is referenced in the Complaint in, at least, Paragraphs 21, 22, 23, 24,
25, 26, 27, 28, 36, and 37.
3

The Term Sheet is referenced in the Complaint in, at least, Paragraphs 22, 24, 25, 26,
27, 36, and 37.
4

However, as E*TRADEs agent noted in her Cover Email, the parties had yet to
com[e] to terms on . . . compensation, etc. (Ex. B.)

and E*TRADEs rights to use the resulting materials. (Id. at 1-2.) However, as its use of the
phrase [s]ome of the principle terms indicates, the Term Sheet was not intended to be
exhaustive of all the terms in a typical retention agreement, nor was it intended to be binding.
On the contrary, the Term Sheet stated:
This letter sets forth the general intent of the parties to discuss in good faith the
terms and conditions of Artists potential participation in Clients advertising,
provided that neither party shall be bound until the parties execute a more
formal written agreement, which shall include terms and conditions standard for
agreements of this type, including Clients standard warranty, adjustment, force
majeure, termination, ownership, morals clause, confidentiality and
indemnification provisions, subject to good faith negotiations.
(Id. at 3-4 (emphasis added).) Consistent with E*TRADEs understanding that the Term Sheet
contemplated further discussion between the parties, the Term Sheet closed by stating that [i]f
the foregoing correctly sets forth [Ms. Sellars] understanding with respect to the proposed
negotiations, then Ms. Sellars should please contact [Ogilvy] as soon as possible to discuss this
project further. (Id. at 4 (emphasis added).)
An hour later, as detailed in the Complaint, Ms. Sellars replied, stating that Keitel has
agreed to do the 3 commercials for E Trade.5 (Ex. C6; Cmpl. 30.) Ms. Sellars email did not
state that Mr. Keitel agreed to all of E*TRADEs terms and the Complaint does not allege that it
did. Indeed, in addition to the three television commercials, the Term Sheet also contained
provisions concerning two radio commercials and an online advertisement (for a total of six
commercials), and provisions related to banner ads, digital materials, compensation, and other
things. (Ex. A at 1-3.)

Ms. Sellars purported acceptance of the offer was also not attached to Plaintiffs
Complaint and, again, the Complaint neglects to mention the conditions Ms. Sellars included.
6

Exhibit C is referenced in the Complaint in Paragraphs 30, 38, and 39.

Ms. Sellars email acceptance also did not state that she believed a deal had been
finalized. (Ex. C.) On the contrary, in apparent acknowledgment of the requirement set forth in
the Term Sheet for a formal written agreement, Ms. Sellars asked Octagon to please get us the
Long Form contract as soon as possible so that [she] can get it to your business affairs. (Id.
(emphasis added).) Before the execution of that long form contract, however, which would be
negotiated as described in the Term Sheet, Ms. Sellars set forth numerous conditions to be
run . . . by Mr. Keitel. Most consequentially, both in terms of cost and artistic vision,
Ms. Sellars asked that Octagon keep them in the loop in terms of the director. As I said, Harvey
really wants a director who knows his work. Maybe someone like Ridley Scott, etc. (Id.)
Ms. Sellars also pointed out that Mr. Keitel would like to have rehearsal time.7 (Id.) Finally,
Ms. Sellars stated that knowing the city and days of shooting are equally important so I can run
them by Harvey. (Id.)
Concurrently with Octagons discussions with Ms. Sellars, E*TRADE and Ogilvy
continued their internal discussions regarding the direction of the campaign, which resulted in
E*TRADE concluding that it did not wish to proceed with Mr. Keitel. (Cmpl. 31.) E*TRADE
believed correctly that it had no obligation to Mr. Keitel, as the Term Sheet wasas made clear
by its provisionsa preliminary document. As such, on E*TRADEs instructions, Octagon
communicated E*TRADEs decision to Ms. Sellars. (Cmpl. 31.) On January 29, 2014, less
7

Ms. Sellars and Ms. Conti also had a telephone conversation, as referenced in the
Complaint, in which Ms. Sellars purportedly communicated Mr. Keitels acceptance. (Cmpl.
28, 29.) This telephone conversation was memorialized in an email between Ms. Conti and her
principals at Ogilvy. While E*TRADE does not rely on that email for the purposes of its motion
to dismiss, the document memorializes nine other conditions to Keitels participation in
E*TRADEs advertising campaign, including a reduction in the number of hours Keitel would
work, limitations on E*TRADEs right to use the resulting material, and the necessity of
E*TRADE acceding to Keitels requests to hire his preferred hairstylist, makeup artist, wardrobe
person, tailor, and assistant. These conditions were to appear in a redline that Ms. Sellars
would provide. All these terms together would have materially altered the value of the contract.

than seventeen hours after the Term Sheet was first sent, Ms. Conti emailed Ms. Sellars to state
that the E*TRADE campaign was moving in a different direction and would not be negotiating
further with Mr. Keitel. (Id.)
Despite the clear indicia that there had been no meeting of the minds between
E*TRADE and Mr. Keitel, upon receiving notice that E*TRADE was no longer interested in
using Mr. Keitel, Ms. Sellars professed to have understood the parties to have a binding and fully
negotiated contract, and demanded that her understanding of the purported contract be honored
by E*TRADE. (Cmpl. 32-33.)
It is that purported contractthe terms of which were never mutually agreed, executed,
or memorialized in a final writing (despite a requirement that they be so)that underlies this
suit.
ARGUMENT
A party may move for judgment dismissing one or more causes of action asserted
against him on the ground that . . . a defense is founded upon documentary evidence. N.Y.
C.P.L.R. 3211(a)(1) (McKinney).

It is well settled that a defense based on documentary

evidence can succeed if the documents submitted resolve all of the factual issues as a matter of
law. Gephardt v. Morgan Guar. Trust Co. of New York, 191 AD2d 229, 229 [1st Dept 1993]
(citing Standard Chartered Bank v. D. Chabbot, Inc., 178 AD2d 112 [1st Dept 1991]).
Allegations consisting of bare legal conclusions, as well as factual claims either inherently
incredible or flatly contradicted by documentary evidence, are not entitled to . . . the benefit of
every favorable inference. Shah v. Metro. Life Ins. Co., No. 108887/00, 2003 WL 728869, at
*8 (N.Y. Sup. Ct. Feb. 21, 2003) affd in part sub nom. Fiala v. Metro. Life Ins. Co., 6 AD3d 320
[1st Dept 2004] (citing Franklin v. Winard, 199 AD2d 220 [1st Dept 1993]). Under New York

law, whether a binding agreement exists is a legal issue, not a factual one. Guggenheim
Corporate Funding, LLC v. Access.1 Commcns Corp.-NY, 26 Misc. 3d 1210(A), 906 N.Y.S.2d
780 (Sup. Ct. 2009) (quoting Vacold LLC v. Cerami, 545 F.3d 114, 123 (2d Cir. 2008)). In
determining whether a contract exists, the inquiry centers upon the parties intent to be bound,
i.e., whether there was a meeting of the minds regarding the material terms of the transaction.
Amcan Holdings, Inc. v. Canadian Imperial Bank of Commerce, 70 AD3d 423, 426 [1st Dept
2010] (quoting Cent. Fed. Sav., F.S.B. v. Natl Westminster Bank, U.S.A., 176 AD2d 131, 132
[1st Dept 1991]) (reversing trial court and granting defendants motion to dismiss breach of
contract claim).
While Plaintiff failed to attach either the alleged contract or the critical correspondence to
his Complaint, the Court may properly consider both on a motion to dismiss pursuant to CPLR
3211(a)(1).

Where, as here, the documents are extensively quoted from, relied upon, and

referenced in the Complaint, were exchanged between the parties, and are essentially
undeniable, dismissal is appropriate where the documentary evidence utterly refutes plaintiffs
factual allegations, conclusively establishing a defense as a matter of law. Flushing Expo, Inc.
v. New World Mall, LLC, 116 AD3d 826, 827 [2d Dept 2014] (quoting Goshen v. Mutual Life
Ins. Co. of New York, 98 N.Y.2d 314, 325 [2002]). [I]t is clear that judicial records, as well as
documents reflecting out-of-court transactions such as mortgages, deeds, contracts, and any other
papers, the contents of which are essentially undeniable, would qualify as documentary
evidence. Fontanetta, 73 AD3d at 84-85; see also Webster Estate of Webster v. State of New
York, No. M-65923, 2003 WL 728780, at *1 (N.Y. Ct. Cl. Jan. 30, 2003) (court may properly
consider a paper whose content is essentially undeniable and which, assuming the verity of its

contents and the validity of its execution, will itself support the ground on which the motion is
based) (quotation omitted).
The alleged contract, upon which Plaintiff rests the entirety of his Complaint, is clearly
documentary evidence under the standard of CPLR 3211(a)(1).

Where a written

agreement . . . unambiguously contradicts the allegations supporting a litigants cause of action

for a breach of contract, the contract itself constitutes the documentary evidence warranting the
dismissal of the complaint under CPLR 3211(a)(1). 150 Broadway N.Y. Assocs. L.P. v. Bodner,
14 AD3d 1, 6 [1st Dept 2004]; see also Century-Maxim Const. Corp. v. One Bryant Park, LLC,
23 Misc. 3d 1120(A), 886 N.Y.S.2d 70 [Sup. Ct. Westchester Cty. 2009].
Similarly, where Plaintiff describe[s] and quotes the correspondence between the
parties and relies upon it as the offer and acceptance in the Complaint, the correspondence
may also be properly considered. See Mendoza v. Akerman Senterfitt LLP, 128 AD3d 480, 482
[1st Dept 2015] (The court properly deemed the above emails that were described and quoted in
the complaint itself to be documentary evidence); see also DSA Realty Servs., LLC v. Marcus &
Millichap Real Estate Inv. Servs. of New York, Inc., 128 AD3d 587, 588 [1st Dept 2015]
(permitting consideration of correspondence as documentary evidence since there is no
dispute as to its genuineness, and its content is essentially undeniable); Kolchins v. Evolution
Markets, Inc., 128 AD3d 47, 58 [1st Dept 2015] (permitting consideration of emails as
documentary evidence in breach of contract case); Chambers v. Weinstein, 44 Misc. 3d
1224(A), 997 N.Y.S.2d 668 [N.Y. Sup. Ct. 2014] (on CPLR 3211(a)(7) motion, considering
emails as documentary evidence because emails demonstrated that the parties were still
negotiating at the time plaintiffs alleged the contract had been agreed). Plaintiff has assumed
the verity of [the documents] contents and the validity of [their] execution, Webster Estate,

2003 WL 728780, at *1, in relying upon the Term Sheet and correspondence as the basis of his
alleged contract.
Plaintiffs Complaint is also subject to dismissal pursuant to CPLR 3211(a)(7) because
the pleading fails to state a cause of action. N.Y. C.P.L.R. 3211(a)(7) (McKinney). On a
motion addressed to the sufficiency of a complaint pursuant to CPLR 3211(a)(7), the facts
pleaded are presumed to be true and accorded every favorable inference. However, allegations
consisting of bare legal conclusions, as well as factual claims either inherently incredible or
flatly contradicted by documentary evidence, are not entitled to such consideration. Franklin,
199 AD2d at 220 (citation omitted). If the documentary proof disproves an essential allegation
of the complaint, dismissal pursuant to CPLR 3211(a)(7) is warranted even if the allegations,
standing alone, could withstand a motion to dismiss for failure to state a cause of action. Peter
F. Gaito Architecture, LLC v. Simone Dev. Corp., 46 AD3d 530, 530 [2d Dept. 2007] (citation
omitted) (granting motion to dismiss where parties had exchanged unsigned draft agreement
and preliminary memorandum of understanding by email, because [u]nder the
circumstances, the parties evinced their intent not to be bound until the execution of a formal
contract, and no enforceable obligation arose).
In this case, despite Mr. Keitels protestations to the contrary, the clear text of the Term
Sheetthe purported contract at issueboth states that neither party shall be bound and
discusses future negotiations and a proposed agreement. (Ex. A at 1, 3.) Those provisions
demonstrate that there was no meeting of the minds between the parties concerning the final
terms. Furthermore, the correspondence from Mr. Keitels agent, which allegedly constitutes
Mr. Keitels acceptance of E*TRADEs offer, both failed to accept the entire offer and
contained numerous material modifications to the provisions outlined in the Term Sheet. (Ex.

10

C.) As such, Plaintiffs response was not an acceptance, but a counter-offer that was never
accepted by E*TRADE. For each of these independent reasons, no contract was ever created
between Mr. Keitel and E*TRADE, and Mr. Keitels suit for breach of contract must fail.
I.

THE TERM SHEETS EXPLICIT STATEMENT THAT NEITHER PARTY

SHALL BE BOUND IS DISPOSITIVE OF PLAINTIFFS CLAIM OF A
BINDING AND ENFORCEABLE CONTRACT.
The Complaint alleges that on January 27, 2014, E*Trade . . . made a firm binding

offer to Plaintiff, and that that offer contained all of the material terms necessary to create a
binding and enforceable contract. (Cmpl. 37, 38.) The Complaint did not attach the Term
Sheet that constituted the purported offer. The reason is clearthe Term Sheet conclusively
disproves any allegation that a binding and enforceable contract was created.
On its face, the Term Sheet states that neither party shall be bound until the parties
execute a more formal written agreement, which shall include terms and conditions standard for
agreements of this type . . . . (Ex. A at 3-4 (emphasis added).) Under New York law, that
provision is dispositive because where the parties to a negotiation clearly anticipate that a
signed writing is required, there is no contract until one [wa]s delivered. Amcan Holdings, Inc.
v. Canadian Imperial Bank of Commerce, 70 AD3d 423, 426 [1st Dept 2010] (emphasis added).
The First Departments ruling in Amcan Holdings is instructive. In that case, plaintiffs
sued to enforce an alleged financing agreement with defendant CIBC, manifested in a document
entitled the Summary of Terms and Conditions. Id. at 424. The Summary was fifteen pages
long and contained detailed descriptions of the credit lines, the amount of funding to be
provided under each, amortization and interest rates, fees, security, a proposed closing date and
definitions of key terms. Id. It also provided for fees of $50,000 and $150,000 immediately
payable to CIBC upon acceptance of [a draft and] this committed offer. Id. at 425 (emphasis
added). However, crucially, the Summary included the following disclaimer: [t]he Credit
11

Facilities will only be established upon completion of definitive loan documentation, including a
credit agreement . . . which will contain the terms and conditions set out in this Summary in
addition to such other representations . . . and other terms and conditions . . . as CIBC may
reasonably require. Id. at 424. Plaintiffs received the Summary, executed the document, and
purported to accept it by remitting it to CIBC along with the required deposit of $200,000.
After receipt of the deposit and prior to execution of the definitive loan documentation,
CIBC broke off negotiations, returned the plaintiffs deposit, and refused to complete the
financing agreement. Id. at 425. The plaintiffs then sued CIBC for breach of contract, breach of
the defendants obligation of good faith and fair dealing, and fraud, alleging that the Summary
was a binding agreement.
The First Department affirmed the grant of CIBCs motion to dismiss all claims. The
Court acknowledged that the Summary was extensive and contained specific information
regarding many of the terms to be contained in the ultimate loan documents and credit
agreements.

Id. at 427.

Moreover, the Summary had been signed and remitted, and a

significant deposit paid. Nonetheless, where the parties anticipate that a signed writing is
required, there is no contract until one is delivered. Id. (citing Scheck v. Francis, 26 N.Y.2d
466, 470-71 [1970]) (emphasis added). In that circumstance, even the detailed Summary d[id]
not change the fact that defendants clearly expressed an intent not to be bound until those
documents were actually executed. Id.
Amcan Holdings is just one of a litany of New York cases that enforce the requirement of
a signed writing. For example, in StarVest Partners II, L.P. v. Emportal, Inc., 101 AD3d 610
[1st Dept 2012], Emportal and StarVest executed a five-page term sheet, which provided for
StarVest to finance Emportal in return for a stake in the company. On the first page, the term

12

sheet stated that [b]inding agreements will be entered into only upon the execution by all parties
of the Stock Purchase Agreement and other related documents.

This Term Sheet is for

discussion purposes only and there is no obligation on the part of any party unless and until a
definitive stock purchase agreement is signed by all parties. Id. at 611. Approximately one
month later, StarVest advised [Emportal] that it could not proceed with [the] investment. Id. at
612. StarVest sought a declaratory judgment that, inter alia, it had not breached a contract. The
Court granted summary judgment in favor of StarVest, because [d]ismissal of the breach of
contract counterclaims is required where, as here, the parties have agreed that there would be no
binding agreement until their execution of a written contract, but no such contract was ever
executed. Id. at 612 (citing Amcan Holdings, 70 AD3d at 426-27) (emphasis added). Emportal
also argued that an oral contract had been created which waived the term that required
documentation. However, the Court found that the concept of freedom of contract includes the
freedom to avoid oral agreements, a freedom that is especially important when business
entrepreneurs and corporations engage in substantial and complex dealings.

We think it

preferable to allow sophisticated parties operating in the business world to decide when and how
they wish to enter into legally enforceable contracts. Id. at 613 (quoting Jordan Panel Sys.
Corp. v Turner Constr. Co., 45 AD3d 165, 173-174 [1st Dept 2007] (quotations omitted)).
Just as in Amcan Holdings, the Term Sheet in this case anticipated a signed writing,
and as in StarVest Partners, it explicitly disclaimed any obligation until that signed document
was executed.

Moreover, the four page Term Sheet upon which Keitel is relying was

significantly less extensive than the fifteen page Summary relied upon in Amcan Holdings.
Amcan Holdings and StarVest Partners are squarely on point with the case presented by
Plaintiff, and require the dismissal of this suit.

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Numerous other cases have reached similar holdings. See, e.g., In re Lyondell Chem.
Co., 491 B.R. 41, 55-56 (Bankr. S.D.N.Y. 2013) affd, 505 B.R. 409 (S.D.N.Y. 2014) (relying on
Amcan Holdings and granting motion to dismiss claim for interference with contract where under
New York law, there was no enforceable contract; the repeated references in the Information
Memorandum to the future definitive documentation that later would need to be executed, and
Highlands statement, in the Commitment Letter, that Highlands commitment was subject to
the execution of definitive documentation, strongly compel a conclusion that binding contractual
relations did not come into being before definitive documentation was drafted and executed.);
Jordan Panel, 45 AD3d at 166 (It is well settled that, if the parties to an agreement do not
intend it to be binding upon them until it is reduced to writing and signed by both of them, they
are not bound and may not be held liable until it has been written out and signed.) (citation
omitted); Aksman v. Xiongwei Ju, 21 AD3d 260, 261-62 [1st Dept 2005] (In our view, the letter
of intent, which is clearly a preliminary, nonbinding proposal to agree, conclusively negates
plaintiffs breach of contract claim . . . . [T]he letter of intent expresses the parties intention to
enter into a contract at a later date and nowhere states that they intend to be legally bound until
such future agreement is reached. Moreover, the letters opening line, setting forth its purpose as
a basis for conducting business between [the parties] during the Development and Test Trading
Phases, as well as the letters repeated statement that it will be replaced by a contract, reflects
the parties intent not to be bound until an agreement establishing the proposed joint venture
(Quantitative Strategies Group) is reached.) (internal citations omitted); Prospect St. Ventures I,
LLC v. Eclipsys Solutions Corp., 23 AD3d 213, 213 [1st Dept 2005] (The letter agreement
dated July 15, 1998, upon which plaintiffs rely, was a mere agreement to agree rather than an
enforceable contract, since it was expressly conditioned on the execution of a definitive

14

agreement satisfactory in form and substance to both sides, and nothing in the complaint or
record reflects that this condition was waived. The continued applicability of this condition
precluded the formation of a contract in the form of the letter agreement, since that document
manifested an intent not to be bound unless there was such a definitive agreement or a waiver
thereof.) (citations omitted); Guggenheim Corporate (The September Term Sheet states that
the parties consent to the proffered terms and conditions, was subject to the execution and
delivery of definitive documentation in form and substance acceptable to the parties by no later
than September 26, 2008, unless such date is extended by the agreement of all the parties. The
law is clear that a party is not contractually bound to an agreement where such agreement
provides that it is not binding until the execution of a formal agreement.) (citation omitted).
As were the agreements in Amcan Holdings, StarVest, Jordan Panel, Lyondell, Aksman,
Prospect St., and Guggenheim Corporate, the Term Sheet at issue in this case is clear: neither
party shall be bound by its terms until the parties execute a more formal written agreement.
(Ex. A at 3.) That more formal written agreement was never executed, and therefore no contract
was ever formed between E*TRADE and Plaintiff. Plaintiffs attempts to characterize the Term
Sheet as a firm and binding offer (Cmpl. 26) in clear contravention of its explicit language
are unavailing.
II.

NUMEROUS OTHER PROVISIONS OF THE TERM SHEET AND

SURROUNDING DOCUMENTS INDICATE THAT THERE WAS NO FINAL
MEETING OF THE MINDS.
Mr. Keitels argument for an enforceable and binding contract is not only fatally

undermined by the Term Sheets requirement of a more formal written agreementbut also by
numerous other provisions of the Term Sheet, the Cover Email, and Ms. Sellars purported
acceptance, which clearly demonstrate that the parties had not yet come to an agreement on the
material terms of any agreement. A contract requires a finding of the parties intent to be
15

bound, i.e., whether there was a meeting of the minds regarding the material terms of the
transaction. Amcan Holdings, 70 AD3d at 426. Where there is no intent to be boundor an
expressed intent not to be boundthere is no meeting of the minds and no contract. Here, it is
clear from the Term Sheet and all of the other documents that there was no intent to be bound.
The Term Sheet contains numerous indicia of its preliminary nature. The first sentence
of the Term Sheet states that it cover[s] a proposed agreement. (Ex. A at 1 (emphasis added).)
The next sentence repeats that phrase. On the third page of the document, the Term Sheet refers
to Mr. Keitels potential participation in E*TRADEs advertising, and the final paragraph of
the document invites Mr. Keitel to participate in proposed negotiations. (Id. at 3-4.) Under
New York law, an intent not to be bound is also manifested in the references . . . to a proposed
commitment and a proposed transaction. Prospect St., 23 AD3d at 21; see also Aksman Ju, 21
AD3d at 261-62 ([T]he letters opening line, setting forth its purpose as a basis for conducting
business between [the parties] during the Development and Test Trading Phases, as well as the
letters repeated statement that it will be replaced by a contract, reflects the parties intent not
to be bound).
Second, the Term Sheet was not signed by Ogilvy, sent on Ogilvy letterhead, or even sent
in PDF form so that it could not be altered. (Ex. A.) It was, in fact, sent unsigned as a Microsoft
Word document, for ease of editing.
Third, the Term Sheet was not complete. For example, in the first sentence, the Term
Sheet states that the proposed agreement will be between the Ogilvy Group . . . and
__________ (Supplier) f/s/o Harvey Keitel (Artist). (Id. at 1.) Similarly, the Term Sheet
was to be signed by someone at Ogilvy, but the By: and Title: lines were both blank and
waiting to be filled. (Id. at 4.) In other words, the purportedly binding contract between

16

E*TRADE and Mr. Keitel had not established either the name of the entity who was entering
into the proposed agreement on behalf of Mr. Keitel nor the individual who was doing so on
behalf of E*TRADE.
Fourth, as discussed above, the Term Sheet closes with an explicit statement that it sets
forth the general intent of the parties to discuss in good faith the terms and conditions of Artists
potential participation in Clients advertising, provided that neither party shall be bound until the
parties execute a more formal written agreement, which shall include terms and conditions
standard for agreements of this type . . . . (Id. at 3-4 (emphasis added).)
Fifth, the Term Sheet asks that, if Ms. Sellars agrees with the Term Sheets
understanding with respect to the proposed negotiations, she please contact [Ogilvy] as soon
as possible to discuss this project further. (Id. at 4 (emphasis added).) Both of these phrases
indicate that the parties clearly contemplated further discussion and negotiation before an
agreement would be formed.
Sixth, the Term Sheet makes clear that it contains only some of the principal terms of the
proposed agreement. (Id. at 1.) Telling are the terms that are not contained in the Term Sheet,
and which awaited a more formal written agreement, which shall include terms and conditions
standard for agreements of this type. (Id. at 3-4.) The Term Sheet contained no provision
regarding the mechanism of payment, the script, or who the director would be. It expressly left
open negotiations over schedule. It did not include an integration clause, a termination clause, a
provision regarding the severability of terms, a choice of law provision, a choice of forum or
arbitration provision, or a provision providing for the resolution of disputes regarding the
interpretation of the agreement. In fact, it specifically left all of those things for that more
formal agreement and the negotiation of standard warranty, adjustment, force majeure,

17

termination, ownership, morals clause, confidentiality and indemnification provisions. (Id.)

This is precisely the type of language that signals the need for and expectation of further
dialogue, not a final meeting of the minds.
In addition to the Term Sheet, both the Cover Email (Ex. B) and the email purportedly
accepting the offer (Ex. C) clearly anticipate further discussions. The Cover Email states that
the offer is contingent upon the results of the background check, and of course coming to
terms on scripts, compensation, etc. (Ex. B.) Scripts and compensation are clearly material
terms to any agreement to produce commercials.

And the purported acceptance of

E*TRADEs offer asked Ogilvy to forward the long form agreement which would be shared
with a business affairs team for review. (Ex. C.)
Under clear New York precedent, as a matter of law, such documents cannot be said to be
the type of offer that evidences E*TRADEs intent to be bound. See Prospect St., 23 AD3d at
213. Absent such an intent, E*TRADE cannot be said to have made a binding offer.
III.

OCTAGONS USE OF THE PHRASE FIRM AND BINDING CANNOT

NEGATE THE EFFECT OF THE TERM SHEETS CLEAR LANGUAGE.
To dispute the Term Sheets clear requirement of a written agreement, and the many

indicia that E*TRADE had no intent to be bound, the Complaint relies upon a single document,
again referenced and quoted from but not attached to the Complaint: the Cover Email, which
stated in part that the offer was firm and binding, had the subject line Harvey Keitel Firm
Offer, and included a Microsoft Word version of the Term Sheet with the file name
Keitel_Ogilvy_eTrade_Term_sheet.DOC. (Cmpl. 21-23.) Under New York law, such
statements (even if they were complete quotes from the document) are insufficient to override
the explicit language in the Term Sheet.

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Where a written contract is clear, representations that are contrary to the contract
language will not be sufficient to override the text unless the waiver of a specific provision is
both clear and unmistakable. See Prospect St., 23 AD3d at 213 (a letter agreement expressly
conditioned on the execution of a definitive agreement satisfactory in form and substance to
both sides was not an enforceable contract where nothing . . . reflects that this condition was
waived); Gen. Motors Acceptance Corp. v. Clifton-Fine Cent. Sch. Dist., 85 N.Y.2d 232, 236
[1995] (Waiver requires the voluntary and intentional abandonment of a known right which, but
for the waiver, would have been enforceable) (citations omitted); see also Longo v. Shore &
Reich, Ltd., 25 F.3d 94, 97 (2d Cir. 1994) (no contract of employment existed where contract
stated that it was not valid until counter-signed, even though employee signed and worked for a
year; offer was never counter-signed by the company).
The case of Naturopathic Labs. Intl, Inc. v. SSL Americas, Inc., 18 AD3d 404, 405 [1st
Dept 2005], is instructive. In that case, the court dismissed a complaint for breach of contract,
where a written contract was never executed by the defendant who stated with respect to a draft
that the deal was done. Id. As the Court held, [t]o the extent that plaintiffs profess reliance
on Heaps remark that the deal was done, and that the contract was complete but for the
resolution of a pending lawsuit, it was not reasonable for them to have believed that SSL
International had committed to purchasing the stock since the written language consistently used
in SSL Internationals communications, and included in the July 30, 2002 draft agreement,
provided that the execution and delivery of an agreement would be essential to the existence of a
valid and binding contract. Id. This Court should likewise dismiss Mr. Keitels claim for
breach of contract where the very contract to which he supposedly agreed says that neither party
shall be bound until the parties execute a more formal written agreement. (Ex. A at 3.)

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Moreover, even if the language of the Cover Email could override the Term Sheet
which it cannotMr. Keitels Complaint is misleading. While the Complaint quotes the Cover
Email as stating the offer was firm and binding, it conspicuously fails to continue the
quoteor even attach the email so that the Court could read the quote for itself. The full quote
reads as follows: [p]lease consider the attached term sheet a firm and binding offer for the
services of your client, Harvey Keitel on behalf of E*TRADE, contingent upon the results of the
background check, and of course coming to terms on scripts, compensation, etc. (Ex. B
(emphasis added).) Obviously, a contingent offer cannot result in a contract unless and until all
of the conditions have been met. Wachtel v. Natl R.R. Passenger Corp., No. 11 CIV. 613 PAC,
2012 WL 292352, at *2 (S.D.N.Y. Jan. 30, 2012) (Since Plaintiff did not complete all of the
conditions precedent, no contract was formed, and Defendants were under no implied obligation
not to frustrate or prevent the performance of the conditions precedent.) (citation omitted);
Shehab v. Chas. H. Sells, Inc., No. 04 CIV 01534, 2006 WL 938715, at *6 (S.D.N.Y. Mar. 29,
2006) (Because these conditions [in his offer] were not satisfied, [the defendant] incurred no
contractual obligation, and no claim of breach can lie.); Cent. Fed., 176 AD2d at 132 (granting
defendants motion for summary judgment on breach of contract claim where defendants offer
was contingent upon agreement as to certain material terms and those material terms remained
open.).
IV.

THE PLAINTIFF RESPONDED TO E*TRADES TERM SHEET WITH

MATERIALLY DIFFERENT CONDITIONS; HIS RESPONSE CONSTITUTED A
COUNTER-OFFER THAT E*TRADE DID NOT ACCEPT.
The Complaint should also be dismissed because Mr. Keitel did not accept the purported

offer. To enter into a contract, a party must clearly and unequivocally accept the offerors
terms. If instead the offeree responds by conditioning acceptance on new or modified terms, that
response constitutes both a rejection and a counteroffer which extinguishes the initial offer.
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Thor Props., LLC v. Willspring Holdings LLC, 118 AD3d 505, 507 [1st Dept 2014] (citations
omitted) (finding that no contract was created and granting summary judgment where receiving
party proposed slight modifications; those modifications were not immaterial and constituted a
counter-offer, which was never accepted); Woodward v. Tan Holding Corp., 32 AD3d 467, 469
[2d Dept 2006] (where defendants acceptance of the purchase agreement was conditioned upon
the plaintiffs agreement to the terms set forth in the first rider, and where plaintiff unilaterally
modified one of its material terms by inserting the word not into the assignment provision,
each modification constituted a counteroffer that was not accepted, so no contract was formed).
Ms. Sellars responses to Octagon were not clear and unequivocal. In fact, she
requested, on behalf of her client, information on several undecided issues, which needed to be
run . . . by Keitel. (Ex. C.) These included the identity of the director (including a request for
Ridley Scott, a major star), the rehearsal schedule, the location, and the days of shooting. (Id.)
Terms such as thesewhich had the potential to greatly affect the scope, cost, and artistic
direction of the finished productwere clearly material. She also stated only that Mr. Keitel
has agreed to do the 3 commercials for E Trade without stating that he also agreed to do the
two radio commercials, the on-line video, the B-Rolls, the digital materials, or any of the other
items spelled out in the Term Sheet. Nor does the Complaint allege anywhere that Mr. Keitel
had agreed to those things. On the contrary, the Complaint alleges that Mr. Keitel accepted
E*TRADEs offer to star in a series of three commercials (Cmpl. 4) without mentioning that
the Term Sheet covered three other commercials and several additional items (Ex. A at 1-3).
Courts in New York have determined that even small variances in terms constitute a
counteroffer. See E. Consol. Props,., Inc. v. Morrie Golick Living Trust, 83 AD3d 534, 535
[1st Dept 2011] (no contract for sale of property where [t]he potential buyers attorney

21

responded with concerns about inspection, zoning, air rights, parking and artist certification for
Joint Living Working Quarters. These negotiations demonstrate that there never was a meeting
of the minds on all essential terms.); King v. King, 208 AD2d 1143, 1144 [3d Dept 1994]
(plaintiff did not validly accept separation agreement where she stated that she had no objection
to any of the material provisions and requested one week, instead of one day, to vacate the
property; her response fail[ed] to make clear that the proposed separation agreement would be
acceptable to defendant even if the requested changes were not granted and thus was a rejection
and counteroffer); see also Roer v. Cross Cnty. Med. Ctr. Corp., 83 AD2d 861, 862 [2d Dept
1981] (holding that where plaintiffs reply was not an absolute and unqualified assent . . . no
binding contract was formed.).
Here, the proposed conditions could have radically increased the overall cost of the
advertising campaign. Any one of the alterations that Ms. Sellars proposed was sufficient to
render her response not an absolute and unqualified assent, Roer, 83 AD2d at 862; taken
together, all of them make clear that the parties had not reached mutual agreement.
CONCLUSION
The Court should dismiss Mr. Keitels Complaint in its entirety with prejudice for each of
the four independent reasons discussed above. First, the Complaint should be dismissed because
the purported contract at the heart of this dispute was not, in fact, a contract at allinstead, the
Term Sheet provides that neither party shall be bound until the parties execute a more
formal written agreement. (Ex. A at 3.) Second, numerous other provisions in the Term
Sheet demonstrate that it was not a final agreement and that there was no meeting of the
minds.

Third, Mr. Keitels claim for breach of contract depends almost entirely on the

allegation that the Cover Email stated that the Term Sheet was a firm and binding offer;

22

however, the Complaint omits that the offer was explicitly contingent upon . . . [the parties]
coming to terms on open issues (Ex. B), and could not supersede the Term Sheets clear
requirement of a written agreement. Fourth, the Complaint also fails because Mr. Keitel never
accepted the purported offer, but instead responded with a counteroffer that was never accepted
by E*TRADE. For the foregoing reasons, E*TRADE respectfully requests that this Court
dismiss the Complaint.
DATED: New York, NY
August 12, 2015
QUINN EMANUEL URQUHART &
SULLIVAN, LLP

/s/ Corey Worcester

Faith E. Gay
Corey Worcester
Renita Sharma
51 Madison Avenue, 22nd Floor
New York, NY 10010
Tel.: (212) 849-7000
Fax: (212) 849-7100
Attorneys for E*TRADE Financial
Corporation

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CERTIFICATE OF SERVICE
I hereby certify that, this 12th day of August, 2015, I have electronically filed a copy of
the above and foregoing with Clerk of the Court using the NYS Courts Electronic Filing system,
which sent notification of such filing to counsel of record.
/s/ Corey Worcester
Corey Worcester

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