WILLIAM F. KUNTZ, II, District Judge.
Vornado Realty Trust ("Vornado"), Alexander's Inc., Alexander's of Brooklyn, Inc., Alexander's Kings Plaza Center, Inc. ("AKPC"), and Commerce and Industry Company a/s/o Alexander's Kings Plaza, LLC ("AKP") (collectively, "Plaintiffs"), initiated this action for damages against the above-captioned defendants based on an oil leak discovered on July 6, 2006 at the Kings Plaza Shopping Center ("the Site") in Brooklyn, New York. Plaintiffs seek to recover from the named defendants clean-up and remediation costs allegedly resulting from the leak. On September 30, 2011, the Court denied motions for summary judgment brought by Defendant IVI Environmental Inc. ("IVI") and Defendant Castlton Environmental Contractors, LLC ("CEC") (collectively, "Defendants"). On November 16, 2011, the Court denied Defendants' respective motions for reconsideration. Before the Court are Defendants' Renewed Motions for Summary Judgment pursuant to Federal Rule of Civil Procedure 54(b). For the reasons set forth below, the Court grants Defendants' Renewed Motions for Summary Judgment and directs the Clerk of Court to enter judgment in favor of Defendants.
Pursuant to a "Master Agreement" dated June 4, 1998, with Vornado, as agent for AKPC and AKP, IVI agreed to perform certain site investigation and remediation services at the Site, including the replacement of existing underground soil storage tanks ("USTs") and the installation of new USTs. IVI 56.1 St. at ¶ 1. On May 3, 2002, Vornado terminated the Master Agreement and revoked all permission for IVI to access the Site. Id. at ¶ 2.
On July 23, 2002, IVI commenced an action in the Supreme Court of the State
The Release states, in pertinent part:
McNulty Decl., Ex. F.
IVI subcontracted removal and replacement work to Castlton Excavating, Inc. d/b/a Castlton Environmental Contractors, Inc. ("Old Castlton") at the Kings Plaza Shopping Center. CEC 56.1 St. at ¶ 1. Old Castlton was owned and operated by a parent company, commonly known as Invatech, Inc. ("Invatech"). Id. at ¶ 6. On or about September 30, 2003, Invatech filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"), and the board of directors filed an application for Chapter 11 bankruptcy protection for Old Castlton. Id. at ¶¶ 7-8.
Environmental Acquisition Company, LLC ("EAC") submitted bids to the Bankruptcy Court and, on April 16, 2004, the Bankruptcy Court issued an Order ("the Sale Order"), approving the sale of certain assets bid on by EAC. Id. at ¶ 9. The Bankruptcy Court ordered that the transfer of assets to EAC did not and would not subject it to any liability for claims against Old Castlton. Id. These assets were later transferred to Defendant CEC. Id. at ¶ 10.
On July 6, 2006, Plaintiffs discovered an oil leak at the Site. Second Am. Compl. at ¶ 34. An investigation determined that the oil leak was caused by a problem with the UST system, which had been installed by Old Castlton as subcontractor for IVI. Id. at ¶¶ 36-39, 87, 90, Plaintiffs brought this action against Defendants, as well as other parties, to recover the costs of environmental investigation, removal, remediation, and clean up arising from the oil leak.
In this action, IVI and CEC previously moved for summary judgment to dismiss Plaintiffs Complaint on the basis that in July 2003, the Plaintiffs released all claims against IVI related to IVI's work at the Site. IVI 56.1 St. at ¶ 10. On September 30, 2011, the Court denied Defendants' motions for summary judgment, finding that although "[a]t first glance the language of the Release is clear and unambiguous," the several "Whereas" statements that reference the claims at issue in the State Court Action "imply that, although the Release contains general language releasing the parties from any further liability,
On October 11, 2011, this matter was reassigned from Judge Dora Irizarry to Judge William F. Kuntz, II. Though Defendants filed motions for reconsideration after the case was reassigned to Judge Kuntz, Judge Irizarry entertained the motions for the sake of judicial economy because they concerned Judge Irizarry's earlier order denying summary judgment. On October 19, 2011, this Court stayed discovery. See Dkt. No. 209.
On November 16, 2011, the Court denied Defendants' respective motions for reconsideration. Vornado Realty Trust v. Castlton Envtl. Contractors, LLC ("Vornado II"), No. 08-CV-4823, 2011 WL 5825688, at *2 (E.D.N.Y. Nov. 16, 2011) (Irizarry, J.). The Court found that it did not err in its previous order denying summary judgment, stating that "[a]lthough the court did not discuss all instances of ambiguity in the Release in its Opinion, it did consider them in its decision." Id. Following this statement, the Court discussed instances of ambiguity in the operative language of the Release. See id. Specifically, the Court determined it noteworthy that Paragraph Four of the Release "implies that the parties intended the Release to apply only to the claims that were disputed in the state court action." Id.
On September 20, 2012, the Court lifted the stay of discovery. See Dkt. No. 227.
Joseph Macnow was the signatory of the Release on behalf of AKPC and AKP. IVI 56.1 St. at ¶ 17. When IVI filed its Answer to the First Amended Complaint on January 29, 2009, it attached a copy of the Release, which bore Mr. Macnow's signature. See Dkt. No. 29.
In their initial discovery responses, dated March 31, 2009, Plaintiffs did not identify any individuals with information regarding the scope or meaning of the Release. McNulty Decl., Ex. A. Plaintiffs did not identify Mr. Macnow as an individual likely to have information regarding the terms of the Release until it produced supplemental disclosures on March 5, 2013. McNulty Decl., Ex. B at 2-3 ("Mr. Macnow has knowledge of ... the scope of the Settlement Agreement and Mutual Releases (`Release') dated September 11, 2003, which resolved the prior state court litigation between Plaintiffs [AKPC] and [AKP] and IVI."). Indeed, the only corporate representative or witness identified by Plaintiff's supplemental disclosures as having knowledge or information regarding the Release was Mr. Macnow.
On April 30, 2013, IVI took the deposition of Mr. Macnow. IVI 56.1 St. at ¶ 17. When asked about the scope of the Release, Mr. Macnow testified as follows:
McNulty Decl., Ex. M at 118:5-119:8, 121:14-122:3.
Mr. Macnow also testified as to the parties' intent with respect to any exceptions or carve-outs in the Release so as to allow Plaintiffs to file another lawsuit against IVI for claims arising from the Master Agreement:
McNulty Decl., Ex. D. at 125:2-126:3.
Mario De Stefanis is the Vice President of IVI and executed the Release on behalf
Mr. De Stefanis' deposition testimony reflects his understanding that the Release would prevent Plaintiffs from bringing any future claims arising out of the Master Agreement:
McNulty Decl., Ex. H at 17:19-22, 50:17-18, 88:10-11, 88:19-20, 150:24-151:4.
Federal Rule of Civil Procedure 54(b) provides that "any order or other decision ... that adjudicates fewer than all the claims ... does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities." Rule 54(b) gives district courts broad discretion to reconsider, reverse, or modify interlocutory orders previously entered in a case. See, e.g., Parmar v. Jeetish Imports, Inc., 180 F.3d 401, 402 (2d Cir.1999) ("All interlocutory orders remain subject to modification or adjustment prior to the entry of a final judgment adjudicating the claims to which they pertain.") (citing Fed.R.Civ.P. 54(b)); Wright v. Cayan, 817 F.2d 999, 1002 n. 3 (2d Cir.1987) ("[I]t is clear that a second judge has the power to grant summary judgment despite another judge's previous denial of summary judgment."); Corporacion de Mercadeo Agricola v. Mellon Bank Int'l, 608 F.2d 43, 48 (2d Cir. 1979) ("The first judge always has the power to change a ruling; further reflection may allow a better informed ruling in accordance with the conscience of the court. A fortiori, if the first judge can change his mind after denying summary judgment and change his ruling, a second judge should have and does have the power to do so as well."); Williams v. County of Nassau, 779 F.Supp.2d 276, 280 (E.D.N.Y.2011) (Mauskopf, J.) ("A district court retains absolute authority to reconsider or otherwise affect its interlocutory orders any time prior to appeal.").
However, "[e]ven if Rule 54(b) allows parties to request district courts to revisit earlier rulings, the moving party must do so within the strictures of the law of the case doctrine." Virgin All. Airways, Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir.1992). "The law of the case doctrine is admittedly discretionary and does not limit a court's power to reconsider its own decisions prior to final judgment." Id. (citations omitted). But "where litigants have once battled for the court's decision, they should neither be required, nor without good reason permitted,
"[B]ecause the denial of a motion for summary judgment is an interlocutory order, the trial court is free to reconsider and reverse its decision for any reason it deems sufficient, even in the absence of new evidence or an intervening change in or clarification of the substantive law." Nabisco v. Warner-Lambert Co., 32 F.Supp.2d 690, 694-95 (S.D.N.Y.1999) (Motley, J.) (quoting Lavespere v. Niagara Machine & Tool Works, Inc., 910 F.2d 167, 185 (5th Cir.1990)), affd 220 F.3d 43 (2d Cir.2000); see also Jacques v. DiMarzio, 200 F.Supp.2d 151, 163-64 (E.D.N.Y.2002) (Block, J.) (quoting Nabisco, 32 F.Supp.2d at 694); Jackson v. Roach, 364 Fed.Appx. 138, 139 (5th Cir.2010) ("[T]he denial of a motion for summary judgment is an interlocutory order, which the trial court may reconsider and reverse for any reason it deems sufficient.").
The Court concludes that it must reverse the September 30, 2011 and November 16, 2011 decisions of this Court to prevent manifest injustice. Those earlier decisions rested on the Court's finding that the Release was ambiguous as to whether it applied only to the specific claims and counterclaims at issue in the State Court Action or whether the parties intended to release any and all past, present, and future claims arising from IVI's work at the Site. This Court now finds that the broad language of the Release is unambiguous. The language of the Release is clear, and it would be a manifest injustice to deprive IVI of the benefit of the bargain it struck with Plaintiffs to settle the State Court Action, Therefore, to prevent manifest injustice, the Court grants summary judgment to IVI.
"Where a contract is clear and unambiguous on its face, the intent of the parties must be gleaned within the four corners of the instrument, and not from extrinsic evidence." RJE Corp. v. Northville Indus. Corp., 329 F.3d 310, 314 (2d Cir.2003) (citations and internal quotation marks omitted); see also Appel v. Ford Motor Co., 111 A.D.2d 731, 732, 490 N.Y.S.2d 228 (N.Y.App.Div. 2d Dep't 1985) (where a valid release is "clear and unambiguous on its face" and is "knowingly and voluntarily entered into," it "will be enforced as a private agreement between [the] parties"). "Whether a contract is ambiguous is a question of law." RJE Corp., 329 F.3d at 314. The terms of a contract are not ambiguous if they "have a definite and precise meaning and are not reasonably susceptible to differing interpretations." Id. (citations and internal quotation marks omitted). If the court determines that an agreement is ambiguous, it "may resort to extrinsic evidence to determine the parties' intent," "so long as the evidence is not inconsistent with the express terms of the contract." Golden Pac. Bancorp v. F.D.I.C., 273 F.3d 509,
When a release is executed "in a commercial context by parties in roughly equivalent bargaining positions and with ready access to counsel, the general rule is that if `the language of the release is clear... the intent of the parties [is] indicated by the language employed.'" Consorcio Prodipe, S.A. de C.V. v. Vinci, S.A., 544 F.Supp.2d 178, 189 (S.D.N.Y.2008) (Castel, J.) (quoting Locafrance U.S. Corp. v. Intermodal Sys. Leasing, Inc., 558 F.2d 1113, 1115 (2d Cir.1977)); see also Kay-R Elec. Corp. v. Stone & Webster Const. Co., Inc., 23 F.3d 55, 58 (2d Cir.1994) ("The law of New York states that where the language with respect to the parties' intent is clear and unambiguous, it will be given effect, regardless of one party's claim that he intended something else.") (citation, internal quotation marks, and editing omitted). And when general language is used in the releasing document, "the release is to be construed most strongly against the releaser." Middle E. Banking Co. v. State Street Bank. Int'l, 821 F.2d 897, 907 (2d Cir.1987). "[T]he burden is on the releaser to establish that the release should be limited." Id.
General releases are sometimes "avoided with respect to uncontemplated transactions despite the generality of the language in the release form." Mangini v. McClurg, 24 N.Y.2d 556, 562, 301 N.Y.S.2d 508, 249 N.E.2d 386 (1969). However, the New York Court of Appeals has cautioned against setting aside a general release simply because it might preclude an action based on unrelated transactions:
Id. at 563, 301 N.Y.S.2d 508, 249 N.E.2d 386. Indeed, the Mangini court emphasized that even in the case of a mutual mistake between the settling parties as to the existence of an unknown injury, "there are many reasons, including doubtful liability, the willingness to take a calculated risk, the desire to obtain an earlier rather than a later settlement, and perhaps others, why releasers may wish to effect a settlement and intend to give the release a discharge of liability for any unknown injuries — in short to bargain for general peace. When general peace is the consideration there can be no mutual mistake as to the extent of the injuries, known or unknown." Id. at 566, 301 N.Y.S.2d 508, 249 N.E.2d 386.
The Court concludes the Release is clear and unambiguous. Therefore, the Court must glean the parties' intent from the four corners of the document. Paragraph Three of the Release expressly released IVI from "all actions, causes of action, [or] suits ... whatsoever," which Plaintiffs "now have or hereafter can, shall or may, have for, upon, or by reason of any matter, cause or thing arising from or relating to services rendered by IVI ... in connection with the Kings Plaza Shopping
Contrary to the findings of the previous interlocutory orders, this Court concludes the Release is not rendered ambiguous by the introductory "Whereas" statements or by Paragraph Four. While it is true that general words of release are sometimes "limited by the recital of a particular claim," Green v. Lake Placid 1980 Olympic Games, 147 A.D.2d 860, 862, 538 N.Y.S.2d 82, 84 (N.Y.App.Div. 3d Dep't 1989), the mere recitation of the specific claims underlying a settlement will not undermine the broad prophylactic effect of general release language. Thus, in Green, the court found a general release was limited to a payment dispute under a contract and did not extend to a dispute under a different contract because, contrary to the facts in this case, the release referenced the specific claim at issue, the releasing party's attorney had not reviewed the release prior to execution, and the defendants' attorney had told a representative of the plaintiffs that the settlement would not affect the second action. Id. at 862, 538 N.Y.S.2d 82. The other cases cited by Plaintiffs are similarly distinguishable as involving releases arising from disputes unrelated to later litigation. See Gettner v. Getty Oil Co., 226 A.D.2d 502, 641 N.Y.S.2d 73 (N.Y.App.Div. 2d Dep't 1996) (general release arising from payment dispute did not extend to later action based on alleged environmental damage); Perritano v. Town of Mamaroneck, 126 A.D.2d 623, 511 N.Y.S.2d 60 (N.Y.App.Div. 2d Dep't 1987) (general release arising from defamation suit did not necessarily extend to unrelated contract claims).
Unlike in Green, the State Court Action and the present dispute both arose from IVI's work under a single contract. Unlike in Gettner, the State Court Action did not involve a mere payment dispute. Plaintiffs lodged counterclaims against IVI for breach of contract, negligence, malpractice and conversion arising from IVI's work at the Kings Plaza Shopping Center. As such, the "Whereas" statements and Paragraph Four of the Release did not limit the Release to the specific claims and counterclaims in the State Court Action. Instead, because Plaintiffs' counterclaims in the State Court Action arose from IVI's
Because the Release expressly applies to IVI's agents, and because Old Castlton was an agent of IVI, CEC is also entitled to summary judgment.
To determine whether an unsigned agreement constitutes a binding contract between two parties, courts in the Second Circuit consider the following factors: "(1) whether there is an expressed reservation of the right not to be bound in the absence of a writing; (2) whether there has been partial performance of the contract; (3) whether all of the terms of the alleged contract have been agreed upon; and (4) whether the agreement at issue is the type of contract that is usually committed to writing." Brown v. Cara, 420 F.3d 148, 154 (2d Cir.2005).
The first factor is "frequently the most important." Id. The cover page of the unsigned agreement between IVI and Old Castlton directs a representative of Old Castlton to "sign the enclosed Contract Agreement form and mail the original copy back to our office." Barnes Decl., Ex. F. The signature page similarly requests Old Castlton to "acknowledge acceptance of the terms and conditions of this Contract Agreement by signing and returning to us an original copy." Id. Despite this repeated language, the agreement does not contain any signatures acknowledging acceptance of the terms and formation of a contract. Furthermore, the signature page states the agreement "represents the entire agreement between IVI and the CONTRACTOR, supersedes all prior agreements and understandings, and may be changed only by written amendment executed by both parties." Id. Paragraph Nine of the unsigned agreement contains a similar clause, stating "[t]he terms, instructions and conditions on the face and in the body of this Contract Agreement ... constitute the entire agreement between the parties hereto and any modification of this Contract Agreement to be valid must be in writing and signed by the Construction Manager's authorized representative." Id. "The presence of such a merger clause is persuasive evidence that the parties did not intend to be bound prior to the execution of the written agreement." Nat'l Gear & Piston, Inc. v. Cummins Power Sys., 861 F.Supp.2d 344, 357 (S.D.N.Y.2012) (Karas, J.) (quoting Ciaramella v. Reader's Digest Ass'n, Inc.,
The record is sparse as to the three remaining factors. However, as noted earlier, the first factor is frequently the most important. Indeed, "the second factor of partial performance is not dispositive, and in some cases it is given little weight." Id.; see also United States v. U.S. Currency in the Sum of $660,200, 423 F.Supp.2d 14, 28 (E.D.N.Y.2006) (Azrack, M.J.) (noting "it is the second factor that appears to have had the least sway with courts"). As to the third factor, though there is no indication that there were any terms yet to be agreed upon, that fact "does not foreclose a holding that a proposed agreement is unenforceable because the parties did not intend to be bound until it was in writing and signed." Cummins, 861 F.Supp.2d at 358. Likewise, even assuming the unexecuted agreement between IVI and Old Castlton is the sort of contract that is usually committed to writing and signed as a matter of industry custom, that would not outweigh the "first and most important factor," which "looks to the language of the preliminary agreement for indication whether the parties considered it binding or whether they intended not to be bound until the conclusion of final formalities." Teachers Ins. & Annuity Ass'n of Am. v. Tribune Co., 670 F.Supp. 491, 499 (S.D.N.Y.1987) (Leval, J.). Because the unsigned agreement between IVI and Old Castlton contains no indication of Defendants' intent for the agreement to become operative absent formal execution, the Court concludes the agreement does not support Plaintiffs argument that Old Castlton disclaimed an agency relationship with IVI. See Cummins, 861 F.Supp.2d at 358 ("[T]he language of the Agreement makes clear that Defendants did not intend to be bound until the Agreement was executed, and Plaintiff has not offered plausible allegations to the contrary.").
As the record does not reflect a binding written agreement defining the nature of the relationship between IVI and Old Castlton, the Court must determine whether an agency relationship existed through the parties' conduct. In New York, an agency relationship requires the following elements: "(1) manifestation by the principal that the agent shall act for him; (2) the agent accepted the undertaking; and (3) an understanding between the parties that the principal is to be in control of the undertaking." Spagnola v. Chubb Corp., 264 F.R.D. 76, 89 (S.D.N.Y.2010) (Baer, J.). "The consent necessary for actual authority may be `either express or implied from the parties' words and conduct as construed in light of the surrounding circumstances.'" Id. (citation omitted).
Based on the record, no reasonable jury could fail to conclude that Old Castlton was the agent of IVI. According to the Master Agreement between Plaintiffs and IVI, IVI had authority to remove and replace USTs at the Site. McNulty Decl., Ex. A at 8.
For the reasons stated above, Defendants' renewed motions for summary judgment are granted in their entirety. All claims against Defendants are dismissed with prejudice. The Clerk is directed to enter judgment for Defendants in accordance with this Decision and Order and to close the case.