WebMD v. RDA

Citation: WebMD, LLC v. RDA Int’l, Inc., 2009 WL 175036 (N.Y. Sup. Jan. 6, 2009).

Factual Background
On January 30, 2007, Plaintiff WebMD entered into an internet advertising contract with Defendant RDA International (RDA). The contract provided that WebMD would provide “36,000 visitors to WebMD Health Zone and WebMD related condition centers driving to www.eucerin.com website,” on which website RDA agreed to advertise.

On October 3 and December 12 of 2007, the parties again contracted for advertising space; this time WebMD guaranteed that there would be 6,791,727 impressions, pursuant to the December contract. According to the terms of the first contract, RDA agreed to pay WebMD a total of $358,590 in three equal installments. RDA was to pay plaintiff a total of $120,000 for the second contract, and $57,720.02 for the third contract.

RDA made two partial payments on the first contract, each in the amount of $59,765 in May and July of 2007. WebMD continued to send invoices. On January 17, RDA acknowledge that it owed WebMD $451,986.50, and offered a 48-month repayment schedule.

WebMD filed the instant lawsuit on February 22, 2008. WebMD later moved for summary judgment, pursuant to CPLR 3212, as to liability and damages for breach of contract in the amount of $362,276.50, and to strike defendant’s affirmative defenses. In its response, RDA asserted that WebMD failed to fully perform its contractual obligations, as it didn’t provide “unique users” to the site, but rather provided mostly repeat users and therefore did not fulfill its end of the contract.

Trial Court Proceedings
The court found that the contract provision provided that WebMD would provide 36,000 visitors, and did not specify as to whether or not those visitors had to be unique or not. Although the term “visitor” is not specifically defined in the contract, the lack of definition did not create an ambiguity. The term “visitor” is unambiguous in the present case. If RDA wished to be guaranteed “unique visitors,” then they should have specified such in the agreement.

Even if the term “visitors” were deemed to be ambiguous, its interpretation remains the exclusive function of the court unless the determination of the intent of the parties depends on the credibility of extrinsic evidence. In the present action, RDA wanted the court to reform an agreement without presenting any evidence that at the time the contract was executed, the parties intended something different than what appeared on the face of the contract. The court could not do this. RDA never complained about the term “visitor” until they were served with notice of the instant lawsuit and invoices. Additionally they attempted to work out a forty-eight month payment schedule and WebMD performed 70% of its obligations.

The court held that RDA had failed to rebut WebMD’s prima facie showing of entitlement to the total relief sought and the court entered judgment in favor of WebMD in the amount of $362,276.50 plus interest.