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Axelrod v. CBS Publications

Decided: May 27, 1982.

DR. HERBERT R. AXELROD, PLAINTIFF-APPELLANT,
v.
CBS PUBLICATIONS, THE CONSUMER PUBLISHING DIVISION OF CBS, INC., ET ALS., DEFENDANTS-RESPONDENTS



On appeal from the Superior Court of New Jersey, Law Division, Monmouth County.

Bischoff, King and Polow. The opinion of the court was delivered by Polow, J.A.D.

Polow

Plaintiff Dr. Herbert R. Axelrod, an author, appeals from dismissal of his claim for punitive damages for fraud allegedly committed by his publishers and from dismissal of all of his asserted claims against other defendants associated with publication of his work but with whom he had no direct contractual relationship.

Defendant Fawcett Publications, Inc. (Fawcett) printed and published a "How-To" series of books designed as aids in the pursuit of a variety of avocations. The "How-To" books are characteristically graphically illustrated with expanded captions for ease of reading. Defendant CBS Publications (CBS) has assumed all rights and obligations previously enjoyed or incurred by Fawcett.

Pursuant to a contract dated July 27, 1964, Fawcett agreed to publish a "How-To" book on tropical fish to be authored by Axelrod. It provided for payment to Axelrod of an advance royalty of $2,750 for the first 125,000 softcover copies sold and for percentage royalties on additional paperback sales. Fawcett was given exclusive rights to "publish or license" the book in the English language. Paragraph 5 of the contract is the core of the present controversy. It provides:

Should the publisher cause the book to be placed on sale in hardcover form, the Author will receive 50 per cent of all licensing or royalty fees when received by the Publisher. [Emphasis supplied]

Axelrod contends that at the time the contract was signed the primary interest was in paperback distribution. According to his testimony, Fawcett represented that even should it be published in hardcover, only a "few thousand [copies would be] put into a library binding" and he would then receive half of the anticipated 10% royalties. A library edition is prepared with a special hardcover to withstand repeated use of the book.

Axelrod alleges that he was never advised of a 1956 agreement between Fawcett and defendant Arco Publishing, Inc., (Arco), which permitted Arco to elect to print certain "How-To" books for sale in hardcover. A number of the "How-To" titles were eventually published in both soft and hardcover editions. The Arco-Fawcett contract required Arco to pay Fawcett an author's royalty fee plus a "usage charge" on each copy sold in hardcover. The usage charge reflected Arco's election to print its own books rather than buy "signatures"*fn1 from Fawcett. The usage fee compensated Fawcett for the use of its "negatives and cellophanes."*fn2

In February 1965 Axelrod's tropical fish book was added to the list of "How-To" volumes to be published by Arco in hardcover. Arco paid Fawcett 14 cents in royalties and 9 cents in usage fees, for a total of 23 cents per book sold, in addition to a flat fee of $300 when the book was first printed. Thereafter, Axelrod received hardcover royalties from Fawcett in the following amounts:

October 1965 $203.00

October 1966 117.74

April 1967 72.52

October 1967 33.88

April 1968 67.83

October 1968 67.76

April 1969 67.83

October 1969 30.38

April 1979 34.58

October 1970 20.23

April 1971 11.76

October 1971 22.40

April 1972 30.94

October 1972 33.32

April 1973 27.02

October 1973 ...


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