## Facts

- An author and a publisher entered a 1989 publishing agreement requiring the author to deliver five works over an indefinite period in exchange for a $2,000,000 advance and royalties.
- In connection with the agreement, the publisher obtained a $2,000,000 life insurance policy on the author to protect against noncompletion due to death.
- The publisher released the first contracted work in 1995.
- The author alleged the publisher breached the agreement by failing to spend required sums to promote the first work.
- The author submitted a draft of the second work in October 2002; he alleged the publisher promised to publish it but failed to do so.
- The author also alleged improper accounting for interest on the unrecouped portion of the advance (an “Excluded Claim” not challenged in the dismissal motion).
- The author asserted fraud based on alleged misstatements and concealment about the publisher’s intent and ability to perform the agreement’s publishing and promotional obligations and its handling of the advance/interest.

## Issues

1. Whether the fraud claim was independent of, or impermissibly duplicative of, the breach of contract claims under New York law.
2. Whether the complaint stated a breach of contract claim based on the publisher’s alleged failure to publish the second submitted work, given contractual provisions addressing discretion, acceptance, and timing.
3. Whether the complaint stated a breach of contract claim based on alleged failure to make required promotional expenditures for the first work, as opposed to challenging discretionary business judgments.
4. To what extent the challenged claims (excluding the interest-accounting claim) should be dismissed under Rule 12(b)(6).

## Decision

- The court granted the motion to dismiss the fraud claim.
- The court granted in part and denied in part the motion to dismiss the breach of contract claims.
- Limited breach-of-contract theories concerning failure to publish the second work and failure to make any definite, contractually required promotional expenditures were permitted to proceed.
- The interest-accounting “Excluded Claim” remained pending because it was not part of the motion.

## Legal Principles

- Under New York law, a breach of contract does not become a tort absent violation of a legal duty independent of the contract.
- A fraud claim pleaded alongside a contract claim requires at least one of: (i) an independent legal duty, (ii) a collateral or extraneous misrepresentation, or (iii) special damages not recoverable as contract damages.
- Allegations that a party misrepresented its intent to perform contractual obligations, seeking only the economic loss from nonperformance, state at most a contract claim and do not support a separate fraud claim.
- On a Rule 12(b)(6) motion, the court accepts well-pleaded factual allegations as true and draws reasonable inferences for the plaintiff, but contract claims may be limited where the agreement grants discretion or contradicts asserted obligations.

## Conclusion

The court confined the dispute largely to contract remedies by dismissing fraud as duplicative, while allowing only those breach-of-contract theories plausibly grounded in definite contractual commitments—particularly regarding publication of the second work and any specific promotional obligations—to go forward, with the separate interest-accounting claim left unresolved.


Helprin v. Harcourt, Inc., 277 F. Supp. 2d 327 (S.D.N.Y. 2003)