Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

Plaintiffs owned two convertible notes issued by SBAC. After converting the notes into equity and/or cash, plaintiffs filed a breach of contract claim, alleging that SBAC failed to pay the interest owed on the underlying notes following the conversion. Plaintiffs assert two identical causes of action: a breach of contract claim for each set of notes. The district court dismissed the claim with prejudice, holding that there was no reasonable interpretation of the underlying contract that entitled plaintiffs to both the benefits of the conversion and the final interest payment. The court held that SBAC’s refusal to pay plaintiffs the final interest payment did not constitute a failure to perform under the indentures. Accordingly, the court affirmed the district court's judgment. View "Orchard Hill Master Fund v. SBAC Corp." on Justia Law

This case concerns a lease and a purported joint venture agreement entered into between defendant and his now-deceased father, the former president and majority shareholder of a real estate development corporation. The lease granted defendant control over a multi-million-dollar property for a period of 20 years in exchange for a payment of $20. AHC sought damages for defendant's use and occupancy of the property and a judgment declaring the lease and joint venture agreement void. Defendant counterclaimed. The district court granted AHC’s motion for partial summary judgment on its declaratory judgment claims and denied defendant's requests for additional discovery. The court concluded that the district court did not abuse its discretion in denying defendant's FRCP 56(d) motion seeking more discovery materials where none of the items defendant specifically requested is germane to the issues before the court; the court applied Pennsylvania law to its analysis of the joint‐venture dispute and New York law to the lease dispute; and the district court correctly concluded that the business judgment rule should not apply to the lease and thus the lease was void as a gift or act of corporate waste. As to the joint venture agreement, the court declined to certify the issue of parol evidence to the state court. The court concluded that the parol evidence rule applies in this case and that the integration clause in the lease retains its preclusive effect. Accordingly, the court affirmed the judgment. View "Alphonse Hotel Corp. v. Tran" on Justia Law

BNY appealed the district court's grant of summary judgment for Morgan Stanley, arguing that the district court erred in concluding, as a matter of law, that Morgan Stanley was not contractually obliged to repurchase a mortgage loan allegedly issued in breach of a contract representation because (1) the Trustee’s duty to give “notice to cure” within three business days of becoming aware of a material breach was a condition precedent to the seller’s repurchase obligation, and (2) that condition was not performed within the specified three days, but two to four weeks later. The court concluded that the contract at issue did not require notice to cure as a condition precedent to Morgan Stanley remedying breach where the phrase “notice to cure” does not appear in the contract. In this case, the contract contains distinct provisions for giving notice of breach and making request for cure, neither of which is cast in the express language of condition. Therefore, the request for cure is not a condition precedent to Morgan Stanley’s remedy obligations, and the timeliness of a request for cure, as well as of a notice of breach, is properly construed as a promise and reviewed for substantial performance. The court also concluded that the notice of breach and request for cure in this case cannot be held untimely as a matter of law, particularly when reviewed for substantial performance. Accordingly, the court reversed and remanded for further proceedings. View "Bank of New York Mellon Trust v. Morgan Stanley Mortgage" on Justia Law

This appeal stemmed from a dispute regarding a contract the parties entered into, which gave Lewmar the exclusive right to manufacture and sell Steinerʹs patented sailboat winch handle, a device used to control the lines and sails of a sailboat. The parties resolved the dispute when Lewmar made, and Steiner accepted, an offer of judgment under Rule 68 of the Federal Rules of Civil Procedure. After judgment was entered, Steiner moved for attorneysʹ fees of $383,804 and costs of $41,470. The district court denied attorneysʹ fees but awarded costs of $2,926. The court concluded that Steiner was precluded from seeking fees pursuant to the Agreement in addition to the $175,000 settlement amount because claims under the Agreement were unambiguously included in the Offer; Steiner was not precluded from seeking attorneysʹ fees under the Connecticut Unfair Trade Practices Act (CUTPA), Conn. Gen. Stat. 42‐110g(d), because the Offer did not unambiguously encompass claims for attorneysʹ fees under CUTPA; and the court remanded for the district court to clarify whether it considered the claim for attorneys' fees under CUTPA on the merits and if not, to do so. Finally, the court concluded that the district court correctly added costs under the ʺcosts then accruedʺ provision of Rule 68. View "Steiner v. Lewmar, Inc." on Justia Law

Plaintiff appealed the district court's dismissal of his claims against Staples for breach of contract and for violations of New York General Business Law (N.Y. G.B.L.) Sections 349 and 350 for failure to state a claim. Sections 349 and 350 prohibit deception of consumers and false advertising. Plaintiff alleged, among other things, that the district court erred in finding that the language of the Protection Plan Brochure (the Contract) that plaintiff purchased for his computer was unambiguous. The court concluded that plaintiff has adequately alleged both a materially misleading practice and an actual injury under N.Y. GBL Sections 349 and 350; with respect to the breach of contract claim, the district court erred in finding the Contract to be unambiguous, in requiring plaintiff to allege a “material” breach, and in finding that plaintiff had failed to adequately allege damages; construing the contract’s ambiguities in plaintiff’s favor, he has alleged Staples’s failure to perform in the first year of the contract and damages in the amount of his restitution interest; and should plaintiff seek damages beyond his restitution interest, he should amend his complaint. Accordingly, the court vacated and remanded with instructions. View "Orlander v. Staples, Inc." on Justia Law

Plaintiff filed suit against defendant, a travel company with which she booked a vacation tour, alleging negligence after one of defendant's employees sexually assaulted her during the trip. At issue was whether a hyperlink to a document containing a forum selection clause may be used to reasonably communicate that clause to a consumer. The court concluded that the forum selection clause in this case was enforceable. Therefore, the court agreed with the district court's holding that the United States was an improper forum because defendant had reasonably communicated the terms and conditions applicable to the tour, which included an enforceable forum selection clause that required plaintiff to litigate her claim in Canada. Accordingly, the court affirmed the judgment. View "Starkey v. G Adventures, Inc." on Justia Law

Plaintiffs filed suit against the United States seeking enforcement of a settlement agreement. At issue was whether the actions taken by the district court in 1985 - verbally expressing approval of the settlement terms, dismissing the case on the merits in a brief order, and subsequently signing and so‐ordering the parties’ settlement agreement - sufficed to retain jurisdiction over the enforcement of the agreement. The court concluded that the district court did not have jurisdiction over the enforcement of the settlement agreement because the district court’s order of dismissal failed expressly to retain jurisdiction or to incorporate the terms of the agreement, and because the district court’s so‐ordering of the settlement agreement took place after the court had already relinquished jurisdiction over the case and was thus ineffective to retain it. Accordingly, the court vacated and remanded. View "Hendrickson v. United States" on Justia Law

Beck filed suit against its franchisor, GM, for claims arising under the Motor Vehicle Dealer Act, N.Y. Vehicle & Traffic Law 460-473, and state contract law. The court certified the following questions to the New York Court of Appeals: (1) Is a performance standard that requires ʺaverageʺ performance based on statewide sales data in order for an automobile dealer to retain its dealership ʺunreasonable, arbitrary, or unfairʺ under New York Vehicle & Traffic Law section 463(2)(gg) because it does not account for local variations beyond adjusting for the local popularity of general vehicle types? and (2) Does a change to a franchiseeʹs Area of Primary Responsibility or AGSSA constitute a prohibited ʺmodificationʺ to the franchise under section 463(2)(ff), even though the standard terms of the Dealer Agreement reserve the franchisorʹs right to alter the Area of Primary Responsibility or AGSSA in its sole discretion?  Further, the court concluded that the district court did not err in dismissing plaintiffʹs vehicle allocation claim, denying plaintiffʹs request for attorneyʹs fees, or dismissing defendantʹs counterclaim for rescission. View "Beck Chevrolet v. General Motors" on Justia Law

These appeals stemmed from an opinion and order filed in March 2014 which: (1) granted summary judgment to Pandora on the issue of whether the consent decree governing the licensing activities of ASCAP unambiguously precludes partial withdrawals of public performance licensing rights and (2) set the rate for the Pandora-ASCAP license for the period of January 1, 2011 through December 31, 2015 at 1.85% of revenue. In this case, the partially withdrawn works at issue remain in the ASCAP repertory under the plain language of the consent decree. The court concluded that, since section VI of the decree provides for blanket licenses covering all works contained in the ASCAP repertory, it necessarily follows that the partial withdrawals do not affect the scope of Pandora's license. In regards to rate-setting, the court concluded that the district court did not commit clear error in its evaluation of the evidence or in its ultimate determination that a 1.85% rate was reasonable for the duration of the Pandora-ASCAP license. Further, the district court's legal determinations underlying the ultimate conclusion - including its rejection of various alternative benchmarks proffered by ASCAP - were sound. Accordingly, the court affirmed the district court's orders. View "Pandora Media v. American Society of Composers, Authors & Publishers" on Justia Law

Benihana America obtained a preliminary injunction in aid of arbitration of a dispute arising under its license agreement with Benihana of Tokyo, prohibiting Tokyo from: selling unauthorized food items at the restaurant it operates under the license agreement; using certain trademarks in connection with that restaurant in a manner not approved by the license agreement; and arguing to the arbitral panel, if it rules that Tokyo breached the license agreement, that Tokyo should be given additional time to cure any defaults. The Second Circuit affirmed with respect to the menu offering and trademark use injunctions. The court reasonably concluded that each of the relevant factors favored Benihana America. The court reversed the prohibition on arguing to the arbitral panel for an extended cure period. When a dispute is properly before an arbitrator, a court should not interfere with the arbitral process on the ground that, in its view of the merits, a particular remedy would not be warranted. Benihana America may challenge an arbitrator’s decision in court only after it has been issued. It may not subvert its agreement to arbitrate by obtaining an advance judicial determination that there are no grounds for the arbitrator to grant a particular remedy. View "Benihana, Inc. v. Benihana of Tokyo, LLC" on Justia Law