Claims of Breach of Contract and Failure to Satisfy Conditions Precedent Proceed Past Motion to Dismiss Stage

By: Jeffrey M. Haber

In Greer v. FAM Networks, LLC, 2026 N.Y. Slip Op. 04039 (1st Dept. June 25, 2026), the Appellate Division, First Department, held that a complaint alleging breach of a media exploitation agreement sufficiently pleaded the elements of a contract claim by identifying the agreement, claiming performance, alleging nonpayment and failure to account, and asserting resulting damages. The Court emphasized that damages need not be precisely quantified at the pre-discovery stage, particularly where defendants control the relevant financial information. It further rejected arguments that the action was premature, finding that defendants failed to establish that contractual notice and mediation provisions constituted mandatory conditions precedent.

In 2024, plaintiff and defendants FAM Networks, LLC (“FAM”) and Zohar Entertainment Group International Inc. (“Zohar”) entered into an agreement (the “Contract”) governing the exploitation of plaintiff’s name, likeness, and intellectual property, primarily consisting of online video content (“IP”). Under the Contract, defendants were authorized to distribute and monetize the IP through approved channels, with the resulting income to be shared between the parties.

Plaintiff is a public figure and content creator who describes himself as an expert on extraterrestrial intelligence and related technologies and maintains a substantial audience across multiple social media platforms. FAM is a social media management company with approximately four employees, and Zohar is a video editing company with approximately three employees. On October 4, 2024, plaintiff, acting through his representative, executed a Statement of Work (“SOW”) with defendants that set forth operational terms, including revenue sharing and reporting obligations.

The Contract included provisions addressing termination and dispute resolution. Under Section 10 of the Contract, a party seeking to terminate for breach of contract was required to provide written notice and allow a 30-day period to cure the alleged breach. The Contract also established a sequential dispute resolution process requiring (1) written notice of dispute, (2) a written mediation demand if the dispute remains unresolved after 14 days, and (3) the filing of any lawsuit no earlier than 45 days after service of a mediation demand.

On November 22, 2024, plaintiff’s representatives sent defendants a written notice by email purporting to terminate the Contract based on alleged unauthorized use of his content. The notice did not reference allegations of nonpayment, unpaid profit share, or absence of net income. No mediation demand was issued prior to the commencement of litigation.

Plaintiff subsequently filed a complaint alleging, among other things, that defendants exercised unauthorized control over the IP and continued to exploit it without consent. The complaint further alleged financial harm, asserting that defendants failed to pay plaintiff any share of the revenues and failed to provide the required accountings. Specifically, the complaint alleged that defendants retained all proceeds from the exploitation of the IP, failed to make payments required under Section 2(C) of the SOW, and asserted a right to use the IP without compensation.

Defendants disputed the allegations and contended, among other things, that the complaint failed to adequately state a claim for damages. Plaintiff maintained that defendants had exclusive control over revenue generated from the IP and were obligated under the SOW to provide monthly payments and accountings.

The complaint alleged two principal categories of asserted breach and resulting harm: (1) reputational and intellectual property-related harm arising from the alleged unauthorized posting and use of the IP, and (2) monetary damages related to defendants’ alleged failure to pay plaintiff his share of income and to provide accountings.

The motion court denied defendants’ motion to dismiss the breach of contract claim. On appeal, the First Department unanimously affirmed that decision and order.

The Court held that the motion court “properly denied defendants' motion to dismiss the breach of contract cause of action pursuant to CPLR 3211(a)(7).”[1] The Court explained that the “complaint sufficiently state[d] a claim for breach of contract, as it identifie[d] the agreement, and allege[d] plaintiff's performance, defendants’ breach of numerous provisions, including the profit-sharing agreement’s payment obligations, and resulting damages.”[2] 

Regarding damages, the Court held that “[a]lthough the pleaded damages were imprecise, it [was] not fatal” because the parties were “at [the] pre-answer, pre-discovery stage of the litigation.”[3] 

The Court also held that the “action was not premature, as defendants did not prove that there was no notice or that the agreement’s notice and mediation provisions were express conditions precedent.”[4] “That either party ‘may’ demand mediation,” said the Court, “suggests permissiveness.”[5]  

Finally, “[a]s to the argument that plaintiff failed to invoke the agreement’s audit procedures,” the Court found that “defendants’ alleged withholding of accountings frustrated the process.”[6]

Takeaway

Greer highlights several interrelated principles governing breach of contract claims, with an emphasis on the role and limits of contractual conditions precedent at the pleading stage.

To begin, the Court reaffirmed that a breach of contract claim will survive a motion to dismiss where the complaint plausibly alleges the core elements: the existence of a contract, the plaintiff’s performance, the defendant’s breach, and resulting damages. Notably, the Court emphasized that imprecision in damages is not fatal where the defendant allegedly controls the relevant financial information. In such circumstances, a plaintiff may plead damages generally and refine them through discovery, especially where the contract includes reporting and accounting obligations that the defendant is alleged to have ignored.

The decision then focuses on conditions precedent. Under New York law, conditions precedent must be expressed in clear, unmistakable language. Absent such clarity, Courts are reluctant to interpret notice, cure, or mediation provisions as mandatory prerequisites to suit. In Greer, although the Contract contemplated a sequence of notice and mediation steps, the Court found that defendants failed to demonstrate that those provisions were drafted as binding conditions precedent rather than permissive mechanisms.

In particular, the Court underscored that contractual language stating that a party “may” pursue mediation is generally construed as permissive, not mandatory. As a result, plaintiff’s failure to issue a formal mediation demand before commencing litigation did not render the action premature.

The decision also addresses, though not in any detail, the doctrine of frustration of performance. Even where contractual procedures exist (such as audit rights or reporting mechanisms), a party may be excused from strictly complying with them if the opposing party’s conduct has made compliance impracticable or impossible. In Greer, allegations that defendants withheld accountings supported the inference that they may have frustrated plaintiff’s ability to utilize contractual audit or reconciliation processes.

Finally, Greer reflects a broader theme: disputes involving compliance with contractual preconditions, such as whether sufficient notice was given, whether a cure period was triggered, or whether dispute resolution steps were required, are often fact-intensive and not well suited for resolution on a motion to dismiss. Unless the contract language and the alleged facts conclusively foreclose the claim, courts will allow the case to proceed to discovery.

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Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP.

This article is for informational purposes only and is not intended to be, and should not be, taken as legal advice.

Unless otherwise stated, Freiberger Haber LLP’s articles are based on recently decided published opinions or litigation releases and not on matters handled by the firm. ___________________________________

[1] Slip Op. at *1.

[2] Id., citing Harris v. Seward Park Hous. Corp., 79 A.D.3d 425, 426 (1st Dept. 2010).

[3] Id., citing Chanko v American Broadcasting Cos. Inc., 27 N.Y.3d 46, 56 (2016).

[4] Id., citing MCC Dev. Corp. v. Perla, 81 A.D.3d 474, 474 (1st Dept. 2011), lv. denied, 17 N.Y.3d 715 (2011); Oppenheimer & Co., Inc. v. Oppenheim, Appel, Dixon & Co., 86 N.Y.2d 685, 690 (1995).

[5] Id., citing (Oppenheimer, 86 N.Y.2d at 690-691.

[6] Id., citing MHR Capital Partners, 12 N.Y.3d at 646.