PAUL G. GARDEPHE, District Judge.
These are breach of contract actions. Donald Drapkin alleges that Mafco Consolidated Group, Inc. breached a separation agreement by failing to pay him $2.5 million, while MacAndrews & Forbes LLC — successor to MacAndrews & Forbes, Inc., and parent of Mafco Consolidated Group, Inc. (together, the "Company") — claims that Drapkin violated the separation agreement, by breaching provisions concerning return of Company files and documents, reimbursement of medical expenses, non-disparagement, and attempts to induce or influence employees to leave the Company.
Drapkin has moved for summary judgment in both actions, which are mirror images of each other. In 09 Civ. 1285, his motion seeks an order granting him summary judgment on his breach of contract claim and dismissing a counterclaim asserted against him for breach of contract. (09 Civ. 1285, Dkt. No. 58 (Notice of Motion)). In 09 Civ. 4513, Drapkin seeks summary judgment on the Company's breach of contract claim against him and on the breach of contract counterclaim he filed in that action. (09 Civ. 4513, Dkt. No. 62 (Notice of Motion)). For the reasons stated below, Drapkin's motions for summary judgment will be granted in part and denied in part.
Drapkin joined the Company in 1987 as vice chairman and served in that capacity until 2007. (Drapkin R. 56.1 Stmt. ¶¶ 10, 31)
Before Drapkin's departure, he and the Company agreed to a separation package that required the Company to pay Drapkin a total of approximately $27.5 million over five years. (Company R. 56.1 Stmt. ¶ 171; Keane Decl., Ex. 24 (Separation Agreement) Section 3(a); Keane Decl., Ex. 34 (Stock Purchase Agreement) ¶ 3) The terms of the separation package are set forth in a Separation Agreement and Stock Purchase Agreement, both dated April 25, 2007. (Drapkin R. 56.1 Stmt. ¶¶ 21-22, 24, 31) The Separation Agreement provides that MacAndrews & Forbes LLC will pay Drapkin approximately $15.5 million in seven installments:
(Keane Decl., Ex. 24 (Separation Agreement) Section 3(a))
The Stock Purchase Agreement provides that Mafco Consolidated Group, Inc. will buy back 200,000 shares of M & F Worldwide Corp. from Drapkin, paying him $5 million upon delivery of these shares and an additional $7 million in three installments: $2.25 million on January 1, 2008; $2.25 million on July 1, 2008; and $2.5 million on January 1, 2009. (Keane Decl., Ex. 34 (Stock Purchase Agreement) Section 3(a)-(b))
Drapkin also has a right to reimbursement of medical expenses under the Separation Agreement:
(Keane Decl., Ex. 24 (Separation Agreement) Section 3(b))
Drapkin has a number of obligations under the Separation Agreement, including (1) to return, under certain circumstances, Company-related documents and files, whether in hard copy or electronically stored; (2) not to disparage the Company or its management; and (3) not to induce or attempt to induce any Company employee — other than Link — to leave the Company.
(Id. at Section 6(a))
(Id. at Section 6(h))
With respect to non-disparagement, the Separation Agreement states:
(Id. at Section 5)
With respect to inducing employees to leave the Company, the Separation Agreement states:
(Id. at Section 6(c))
The Separation Agreement further provides that "any material breach" of those terms would enable the Company to rescind the agreements, reclaim the benefits provided to Drapkin thereunder, and stop performing. (Id. at Section 9) As to waiver, the Separation Agreement states:
(Id. at Section 11)
In late April 2007, Steven Fasman, an in-house lawyer at the Company (August 2, 2010 Fasman Decl., ¶ 1), met with Drapkin, explained that he "was following up on the agreement and [] wanted to know if [Drapkin] had anything he wanted to turn over." (Company Resp. to Drapkin R. 56.1 Stmt. ¶ 77) Drapkin told Fasman that he did not.
On April 30, 2007, Drapkin told Link, his assistant, that they would be moving to Lazard and instructed her to "get rid of any documents we do not need." (Company R. 56.1 Stmt. ¶¶ 226, 227) Drapkin testified that he did not have "anything crisp and clear in [his] mind when [he] said it," but that he "certainly wanted [Link] to save [his] personal emails" and "get rid of things that related to MacAndrews & Forbes that [he] didn't need or want or care about." (Company R. 56.1 Stmt. ¶ 229) Link testified that she went through documents on her laptop computer and deleted "[a]nything that wasn't personal" and also deleted "a few" word processing files, but "was doing it very quickly because [she] was leaving quickly." (Company R. 56.1 Stmt. ¶¶ 230, 231) Although the parties disagree as to the number of Company-related documents that were not deleted from Link's laptop computer, they agree that — after this litigation was commenced — 849 e-mails and 79 other Company-related documents were found on Link's laptop. (Drapkin R. 56.1 Counter-Stmt. ¶ 244)
Drapkin joined Lazard on May 1, 2007. (Drapkin R. 56.1 Stmt. ¶ 31) While Lazard offers health insurance to its employees, Drapkin did not enroll in the Lazard health insurance plan between May 1, 2007 and December 31, 2008. (Drapkin R. 56.1 Stmt. ¶¶ 53, 54) The parties disagree as to whether Drapkin, under the Separation Agreement, was required to obtain health insurance from Lazard. Drapkin asserts that he "was not obligated to acquire health insurance coverage from Lazard," and that "[w]ithin days of [his] departure from [the Company, Company] personnel wrongly removed [him] and his family from health insurance coverage . . . effective as of May 1, 2007." (Drapkin R. 56.1 Stmt. ¶¶ 49, 52) The Company disagrees, stating that "Drapkin began employment following his M & F employment with an employer that had available a primary care plan, and he was therefore no longer entitled to coverage under the Company's Basic Plan." (Company Resp. to Drapkin R. 56.1 Stmt. ¶ 49) The Company further alleges that Drapkin breached the Separation Agreement by "seeking and receiving reimbursement for medical expenses [from the Company]" since his departure. (Keane Decl., Ex. 3 (Company Cmplt.) at ¶ 15)
On May 14, 2007, Drapkin had dinner with Dr. Eric Rose, a friend who worked at the Company. (Drapkin R. 56.1 Stmt. ¶¶ 148, 150) Drapkin had helped recruit Rose — formerly at Columbia-Presbyterian
The Company made two $2.25 million payments to Drapkin on January 1 and July 1, 2008. (Drapkin R. 56.1 Stmt. ¶ 35) The Company did not, however, make the $2.5 million payment scheduled for January 1, 2009, claiming that Drapkin had breached the Separation Agreement. (Drapkin R. 56.1 Stmt. ¶¶ 35-37) Drapkin then filed suit, contending that the Company had breached the Separation Agreement by failing to make the January 1, 2009 payment. (Cogan Decl., Ex. 46 (Drapkin Cmplt.)) The Company then sued Drapkin, claiming that he had breached the Separation Agreement by failing to return Company documents and files and improperly seeking reimbursement for medical expenses. (Keane Decl., Ex. 3 (Company Cmplt.))
Summary judgment is appropriate where "there is no genuine dispute as to any material fact" and a party "is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). "A dispute about a `genuine issue' exists for summary judgment purposes where the evidence is such that a reasonable jury could decide in the non-movant's favor." Beyer v. Cnty. of Nassau, 524 F.3d 160, 163 (2d Cir.2008). "`[W]here the nonmoving party will bear the burden of proof at trial, Rule 56 permits the moving party to point to an absence of evidence to support an essential element of the nonmoving party's claim.'" Longview Equity Fund, L.P. v. iWorld Projects & Sys., Inc., No. 05 Civ. 6745(RJS), 2008 WL 833230, at *2 (S.D.N.Y. Mar. 26, 2008) (quoting Bay v. Times Mirror Magazines, Inc., 936 F.2d 112, 116 (2d Cir.1991)).
A court deciding a summary judgment motion must "`resolve all ambiguities, and credit all factual inferences that could rationally be drawn, in favor of the party opposing summary judgment.'" Spinelli v. City of New York, 579 F.3d 160, 166 (2d Cir.2009) (quoting Brown v. Henderson, 257 F.3d 246, 251 (2d Cir. 2001)). However, a "`party may not rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment. . . . [M]ere conclusory allegations or denials. . . cannot by themselves create a genuine issue of material fact where none would otherwise exist.'" Hicks v. Baines, 593 F.3d 159, 166 (2d Cir.2010) (alterations in original) (quoting Fletcher v. Atex, Inc., 68 F.3d 1451, 1456 (2d Cir.1995)).
In a breach of contract action, "[i]n order for [a party] to prevail on its summary judgment motion, it must be clear at the outset that there are no genuine issues of material fact that either [the party] did not breach an agreement, or if it did, that its breach does not rise to the appropriate level of materiality to justify
Where a breach of contract is alleged, "there may be circumstances in which the question of materiality is a question of law for the judge." Id. at 295 (citing Frank Felix Assocs., Ltd. v. Austin Drugs, Inc., 111 F.3d 284, 284 (2d Cir. 1997); Jafari v. Wally Findlay Galleries, 741 F.Supp. 64 (S.D.N.Y.1990); McDonald's Corp. v. Robert A. Makin, Inc., 653 F.Supp. 401 (W.D.N.Y.1986)). "However, in most cases, the question of materiality of breach is a mixed question of fact and law — usually more of the former and less of the latter — and thus is not properly disposed of by summary judgment." Bear, Stearns Funding, Inc., 361 F.Supp.2d at 295-96; see also Teachers Ins. and Annuity Ass'n of Am. v. Coaxial Commc'ns of Cent. Ohio, Inc., 807 F.Supp. 1155, 1160 (S.D.N.Y.1992) ("It is for the jury to determine materiality with respect to any alleged breach."); F. Garofalo Elec. Co., Inc. v. New York University, 300 A.D.2d 186, 189, 754 N.Y.S.2d 227 (1st Dept.2002) ("The question of whether there has been substantial performance — or a breach — is to be determined, whenever there is any doubt, by the trier of fact.").
"`[A] written contract is to be interpreted so as to give effect to the intention of the parties as expressed in the unequivocal language they have employed.'" Rockland Exposition, Inc. v. Alliance of Auto. Serv. Providers of N.J., 08-CV-7069 (KMK), 08-CV-11107 (KMK), 2009 WL 1154094, at *5 (S.D.N.Y. Mar. 19, 2009) (quoting Terwilliger v. Terwilliger, 206 F.3d 240, 245 (2d Cir.2000)). "Typically, the best evidence of intent is the contract itself; if an agreement is `complete, clear and unambiguous on its face[, it] must be enforced according to the plain meaning of its terms.'" Eternity Global Master Fund Ltd. v. Morgan Guar. Trust Co. of N.Y., 375 F.3d 168, 177 (2d Cir.2004) (quoting Greenfield v. Philles Records, Inc., 98 N.Y.2d 562, 569, 750 N.Y.S.2d 565, 780 N.E.2d 166 (2002)). Accordingly, where a "`contract is clear and unambiguous on its face, the intent of the parties must be gleaned from 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) (quoting De Luca v. De Luca, 300 A.D.2d 342, 342, 751 N.Y.S.2d 766 (2d Dept.2002)).
"If the contract is ambiguous, extrinsic evidence may be considered `to ascertain the correct and intended meaning of a term' or terms." Eternity Global Master Fund Ltd., 375 F.3d at 177-78 (quoting Greenfield, 98 N.Y.2d at 569, 750 N.Y.S.2d 565, 780 N.E.2d 166). As the Second Circuit has said:
Eternity Global Master Fund Ltd., 375 F.3d at 178.
"Where there are alternative, reasonable constructions of a contract, i.e., the contract is ambiguous, the issue `should be submitted to the trier of fact.'" K. Bell & Assocs. v. Lloyd's Underwriters, 97 F.3d 632, 637 (2d Cir.1996) (quoting Consarc Corp. v. Marine Midland Bank. N.A., 996 F.2d 568, 573 (2d Cir.1993)): see also Haber v. St. Paul Guardian Ins. Co., 137 F.3d 691, 695 (2d Cir.1998) ("Language in a . . . contract will be deemed ambiguous if reasonable minds could differ as to its meaning."); State v. Home Indem. Co., 66 N.Y.2d 669, 671, 495 N.Y.S.2d 969, 486 N.E.2d 827 (1985) (per curiam) ("If . . . the language in the . . . contract is ambiguous and susceptible of two reasonable interpretations, the parties may submit extrinsic evidence as an aid in construction, and the resolution of the ambiguity is for the trier of fact."). However, "[l]anguage whose meaning is otherwise plain does not become ambiguous merely because the parties urge different interpretations in the litigation." Hunt Ltd. v. Lifschultz Fast Freight, Inc., 889 F.2d 1274, 1277 (2d Cir.1989). "Thus, the court should not find the contract ambiguous where the interpretation urged by one party would `strain [] the contract language beyond its reasonable and ordinary meaning.'" Law Debenture Trust Co. of New York v. Maverick Tube Corp., 595 F.3d 458, 467 (2d Cir.2010) (quoting Bethlehem Steel Co. v. Turner Constr. Co., 2 N.Y.2d 456, 459, 161 N.Y.S.2d 90, 141 N.E.2d 590 (1957)).
The Company's Complaint alleges that Drapkin breached the Separation Agreement by "seeking and receiving reimbursement for medical expenses [from the Company]" when health insurance was available to him at Lazard. (Keane Decl., Ex. 3 (Company Cmplt.) at ¶¶ 15-19; see also Company Opp. Br. 37) According to the Company, "[a]t the very least, the language of Section 3(b) [of the Separation Agreement] is ambiguous as to whether Drapkin had an obligation to obtain coverage from Lazard," and that it was the parties' intent and "clear understanding that Drapkin would obtain basic healthcare coverage from his new employer." (Company Opp. Br. 37)
Drapkin moves for summary judgment on this claim, arguing that "[t]he Separation Agreement unambiguously provides that Drapkin is entitled to reimbursement for medical expenses so long as he has not sought or obtained reimbursement under another plan." (Drapkin Br. 11) Drapkin further contends that "[n]othing in the plain language requires Drapkin to seek reimbursement through any other health insurance plan potentially available to him before seeking reimbursement from the Company." (Id.)
With respect to reimbursement of medical expenses, the Separation Agreement provides:
(Keane Decl., Ex. 24 (Separation Agreement) Section 3(b))
Nothing in this provision requires Drapkin to obtain health insurance from a new employer. "[Where] an agreement is `complete, clear and unambiguous on its face[, it] must be enforced according to the plain meaning of its terms.'" Eternity Global Master Fund Ltd., 375 F.3d at 177 (quoting Greenfield, 98 N.Y.2d at 569, 750 N.Y.S.2d 565, 780 N.E.2d 166).
While the Company contends that "Barry Schwartz, who negotiated the provision on behalf of the Company, testified that the parties shared the clear understanding that Drapkin would obtain basic healthcare coverage from his new employer" (Company Br. 37), that alleged understanding is not reflected in Section 3(b). Where a "`contract is clear and unambiguous on its face, the intent of the parties must be gleaned from within the four corners of the instrument, and not from extrinsic evidence.'" RJE Corp., 329 F.3d at 314 (quoting De Luca, 300 A.D.2d 342, 751 N.Y.S.2d 766). Here, the plain language of the Separation Agreement does not require Drapkin to seek health insurance from his future employer.
Because there is no evidence that Drapkin was reimbursed by Lazard for medical expenses that he submitted to the Company for reimbursement, there is no credible argument that he acted improperly in seeking reimbursement from the Company. Drapkin is entitled to summary judgment on the Company's claim that he breached Section 3(b) of the Separation Agreement.
The Company contends (Company Br. 23) that Drapkin breached the non-disparagement clause in Section 5 of the Separation Agreement, which provides:
(Keane Decl., Ex. 24 (Separation Agreement) Section 5)
The Company has offered evidence that Drapkin, at a dinner with Dr. Eric Rose, made comments "denigrating Ron [Perelman] as a person" and "denigrating MacAndrews as a workplace." (Cogan Decl., Ex. 62 (Rose Dep.) at 96-98) In moving for summary judgment, Drapkin does not dispute that he disparaged Perelman and the Company, but instead argues that (1) the Company failed to give notice and an opportunity to cure, as required by Section 5 of the Separation Agreement; and (2) the Company has not offered proof that Drapkin's remarks to Dr. Rose did, or were "reasonably likely to, enter the public domain." (Drapkin Br. 26-28; Drapkin Reply Br. 11-13)
The Company argues that its admitted failure to give notice and an opportunity to cure is excused, because "`adherence to the cure provision of a contract is not required where it would be a futile act.'" (Def. Br. 24) (citing Sea Tow Servs. Intern., Inc. v. Pontin, 607 F.Supp.2d 378, 389 (E.D.N.Y.2009)). The Company contends that once Drapkin disparaged the Company and Perelman, he committed an incurable breach. (Id. at 25)
As an initial matter, adopting the Company's interpretation would render the notice and opportunity to cure provision meaningless. "New York law clearly `disfavors interpretations that render contract provisions meaningless or superfluous.'" Palm Bay Int'l, Inc. v. Marchesi Di Barolo S.P.A., 796 F.Supp.2d 396, 413, (E.D.N.Y.2011) (quoting Manley v. AmBase Corp., 337 F.3d 237, 250 (2d Cir. 2003)); see also USI Ins. Servs. LLC v. Miner, 801 F.Supp.2d 175, 184, No. 10 Civ. 8162(LAP), 2011 WL 2848139, at *5 (S.D.N.Y. July 7, 2011) (quoting LaSalle Bank N.A. v. Nomura Asset Capital Corp., 424 F.3d 195, 206 (2d Cir.2005)); Legal Aid Soc'y v. City of New York, 114 F.Supp.2d 204, 229 (S.D.N.Y.2000) ("[B]asic principles of contract interpretation militate against the adoption of an interpretation that would render any portion of the contract language a nullity.").
Moreover, "[t]he [futility] exception to the general rule favoring enforcement of notice and cure provisions is a narrow one." Point Prod. A.G. v. Sony Music Entm't, Inc., No. 93 Civ. 4001, 2000 WL 1006236, at *4 (S.D.N.Y. July 20, 2000). Futility is found "only in limited circumstances," which include "where the non-performing party (1) expressly repudiated the parties' contract or (2) abandons performance thereunder." Id. (internal quotation and citation omitted). Here, the Company makes no such allegations.
Finally, none of the cases cited by the Company (Company Br. 24-25) involves a non-disparagement clause or supports the Company's argument that a notice and opportunity to cure provision may be ignored in this context.
Because the Company did not give Drapkin notice and an opportunity to cure as required under Section 5, it may not contend that he breached this provision. Accordingly, Drapkin is entitled to summary judgment on this claim.
Even if the notice and opportunity to cure provision could be disregarded, the Company has not offered evidence creating a material issue of fact as to whether Drapkin's remarks to Dr. Rose entered the public domain, or were made under circumstances in which it was "reasonably likely [that they would] enter the public domain." (Keane Decl., Ex. 24 (Separation Agreement) Section 5)
It is undisputed that at the time Drapkin spoke with Dr. Rose, Dr. Rose was a friend and current employee of the Company.
The Company has offered no reasonable interpretation of "public domain" that would include disclosure to a friend and current employee of the Company. Nor has the Company articulated a theory under which Drapkin's remarks to a friend and current employee of the Company were "reasonably likely [] to enter the public domain." The Company has not argued, for example, that Dr. Rose had any motive to share Drapkin's remarks with the general public, nor is there any evidence that he did so.
The Company alleges that Drapkin improperly retained Company-related documents and files and thereby breached Sections 6(a) and 6(h) of the Separation Agreement. (Keane Decl., Ex. 3 (Company Cmplt. ¶¶ 12, 13, 23-27)) The documents and files at issue were stored on the laptop computer of Drapkin's assistant, Nancy Link. (Id. at ¶¶ 13-14)
In Section 6(a) of the Agreement, Drapkin agreed
(Keane Decl., Ex. 24 (Separation Agreement) Section 6(a) (emphasis added))
As is clear from the language of Section 6(a), it is not self-executing. The Company has the right to demand that Drapkin turn over all Company-related documents
Drapkin moves for summary judgment, arguing that the Company has not offered evidence demonstrating that it asked Drapkin to turn over all Company-related documents and files in his custody or control. In opposing Drapkin's motion, the Company relies on the following testimony from its in-house lawyer, Steven Fasman, concerning a conversation he had with Drapkin during his last week of employment at the Company:
(Cogan Decl., Ex. 53 (Fasman Dep.) at 123-25) (emphasis added); see also Company Br. 11 (citing Company R. 56.1 Stmt. ¶ 221) Drapkin denies that any such conversation with Fasman took place. (Drapkin Resp. to Company Rule 56.1 Stmt. ¶ 221; Company R. 56.1 Stmt. ¶ 224)
Fasman's testimony is not sufficient to create a material issue of fact as to whether the Company ever demanded, pursuant to Section 6(a) of the Separation Agreement,
Because the Company has not produced evidence showing that it demanded that Drapkin produce documents and files as required by Section 6(a) of the Separation Agreement, Drapkin is entitled to summary judgment on this claim.
Drapkin also moves for summary judgment on the Company's claim that he violated Section 6(h) of the Separation Agreement. That provision states:
(Keane Decl., Ex. 24 (Separation Agreement) Section 6(h))
Section 6(h), in contrast to Section 6(a), is self-executing, in the sense that if Drapkin decides to keep Company-provided electronic equipment, he must give the Company-copies of all Company-related electronic files on his or his assistant's computers—to the extent that such files are "not otherwise available to the Company—and to then delete all Company-related electronic files in his possession. It is undisputed that hundreds of Company-related emails and other documents were found on Link's laptop after this litigation ensued. (Drapkin R. 56.1 Counter-Stmt. ¶ 244)
Drapkin argues that "Section 6(h) clearly requires return only of documents that were otherwise unavailable to the Company at the time of Drapkin's departure," and the Company cannot show that the documents were not "otherwise available." (Drapkin Br. 16) Drapkin further argues that to the extent he or his assistant may have unwittingly retained any documents, such "inadvertent retention of these documents (among the thousands of files on the laptop) is not a material breach that could be found to excuse the Company's performance." (Drapkin Br. 22) The Company argues that "Section 6(h) affirmatively obligated Drapkin to delete (and not attempt to recover) all electronic files relating to the Company or its affiliates in his or in Link's possession,
Drapkin is not entitled to summary judgment on this claim. The obvious purpose of the disputed language in Section 6(h) is to require Drapkin to (1) give the Company copies of Company-related electronic files "not otherwise available" to the Company; and (2) delete and "not attempt to recover" electronically-stored, Company-related documents and files. To the extent that Drapkin argues that he was only required to delete documents "not otherwise available to the Company" (Drapkin Reply Br. 8), that interpretation
Drapkin's argument that any breach of Section 6(h) is not material likewise cannot be resolved, at this stage of the litigation, as a matter of law. As noted above, "in most cases, the question of materiality of breach is a mixed question of fact and law—usually more of the former and less of the latter—and thus is not properly disposed of by summary judgment." Bear, Stearns Funding, Inc., 361 F.Supp.2d at 295; see also Teachers Ins. and Annuity Ass'n of Am., 807 F.Supp. at 1160 ("It is for the jury to determine materiality with respect to any alleged breach.") On the record presently before it, this Court cannot rule as a matter of law that any breach by Drapkin of Section 6(h) is not material.
Accordingly, Drapkin is not entitled to summary judgment on the Company's claim that he violated Section 6(h) of the Separation Agreement by failing to delete electronically-stored Company-related documents and files.
Drapkin has moved for summary judgment on the Company's claim that he breached Section 6(c) of the Separation Agreement, which states:
(Keane Decl., Ex. 24 (Separation Agreement) Section 6(c))
In opposing Drapkin's motion, the Company cites the following testimony from Dr. Rose concerning his dinner conversation with Drapkin on May 14, 2007:
(Keane Decl., Ex. 20 (Rose Dep.) at 97-98)
Drapkin argues that he is entitled to summary judgment on the Company's Section 6(c) claim because (1) this claim was not pled until after briefing on dispositive motions had begun; (2) the Company is estopped from claiming a violation of Section 6(c) because it continued making payments to Drapkin even after learning about his remarks to Dr. Rose; and (3) Drapkin's comments do not, as a matter of law, constitute an "attempt to influence" Rose to leave the Company. (Drapkin Reply Br. 16) None of these arguments has merit.
Drapkin's estoppel argument is likewise misplaced. "The doctrine of equitable estoppel can be raised `where the enforcement of the rights of one party would work an injustice upon the other party due to the latter's justifiable reliance upon the former's words or conduct.'" Garrett v. Music Publ'g Co. of Am., LLC, 740 F.Supp.2d 457, 463 (S.D.N.Y.2010) (quoting Kosakow v. New Rochelle Radiology Assocs., P.C., 274 F.3d 706, 725 (2d Cir.2001)). "Under New York law, `[t]he elements of estoppel are with respect to the party estopped: (1) conduct which amounts to a false representation or concealment of material facts; (2) intention that such conduct will be acted upon by the other party; and (3) knowledge of the real facts. The party asserting estoppel must show with respect to himself: (1) lack of knowledge of the true facts; (2) reliance upon the conduct of the party estopped; and (3) a prejudicial change in his position.'" Aetna Cas. & Sur. Co. v. Aniero Concrete Co., 404 F.3d 566, 607 (2d Cir.2005) (quoting Airco Alloys Div., Airco Inc. v. Niagara Mohawk Power Corp., 76 A.D.2d 68, 81-82, 430 N.Y.S.2d 179 (4th Dept 1980)). Here, Drapkin's estoppel argument fails because, inter alia, he has not alleged reliance on the Company's conduct. See Aetna Cas. & Sur. Co., 404 F.3d at 607.
To the extent that Drapkin presents a waiver argument, that argument is barred by the Section 11 of the Separation Agreement, which provides:
(Keane Decl., Ex. 24 (Separation Agreement) Section 11)
Finally, it is a jury question whether Drapkin's remarks to Dr. Rose were an attempt to influence him to leave the Company. The fact that Rose stayed at the Company is not dispositive of this claim, because Section 6(c) forbids an "attempt to influence," whether successful or not. (Id. at Section 6(c))
Accordingly, Drapkin is not entitled to summary judgment on the Company's claim that he breached Section 6(c) of the Separation Agreement.
For the reasons stated above, Drapkin's motions for summary judgment in 09 Civ. 1285 and 09 Civ. 4513 are granted in part
The Clerk of the Court is directed to terminate the following motions: 09 Civ. 1285, Dkt No. 58, and 09 Civ. 4513, Dkt. No. 62.
The parties are directed to consult and comply with this Court's Individual Rules concerning the preparation of a joint pretrial order.
SO ORDERED.
Donald Drapkin has requested reconsideration of this Court's September 23, 2011 Memorandum Opinion & Order ("Order") (09 Civ. 1285, Dkt No. 74; 09 Civ. 4513 Dkt No. 80) granting in part and denying in part his motion for summary judgment. Familiarity with the Order is presumed. For the reasons set forth below, Drapkin's motion for reconsideration is DENIED.
These two breach of contract actions are mirror images of each other: Drapkin alleges that Mafco Consolidated Group, Inc. breached a separation agreement by failing to pay him $2.5 million, while MacAndrews & Forbes LLC—successor to MacAndrews & Forbes, Inc., and parent of Mafco Consolidated Group, Inc. (together, the "Company")—claims that Drapkin violated the separation agreement by breaching provisions concerning return of Company files and documents, reimbursement of medical expenses, non-disparagement, and attempts to induce or influence employees to leave the Company.
The Court's decision on summary judgment permits two alleged breaches to proceed to trial: (1) Drapkin's failure to return company documents stored on his assistant's laptop, in alleged violation of Section 6(h) of the separation agreement, and (2) Drapkin's alleged attempt to influence Dr. Eric Rose to leave his position at M & F, in violation of Section 6(c) of the separation agreement. In denying summary judgment, the Court held that if any breach of these provisions occurred, the materiality of any such breach presented a question of fact for a jury. (Order at 692-95) Drapkin now seeks reconsideration of these determinations, arguing that materiality may be decided as a matter of law.
A motion for reconsideration is "an extraordinary remedy to be employed sparingly in the interests of finality and conservation of scarce judicial resources," In re Initial Public Offering Sec. Litig., 399 F.Supp.2d 298, 300 (S.D.N.Y.2005) (internal citation and quotation omitted), aff'd sub nom. Tenney v. Credit Suisse First Boston Corp., Nos. 05 Civ. 3430, 05 Civ. 4759, & 05 Civ. 4760, 2006 WL 1423785, at *1 (2d Cir.2006), and may be granted only where a court has overlooked "controlling decisions or factual matters that were put before it on the underlying motion" and which, if examined, might reasonably have led to a different result. Eisemann v. Greene, 204 F.3d 393, 395 n. 2 (2d Cir. 2000). "Reconsideration should not be granted where the moving party seeks solely to relitigate an issue already decided; in addition, the moving party may not `advance new facts, issues or arguments not previously presented to the Court.'" Christoforou v. Cadman Plaza N., Inc.,
Motions for reconsideration are properly granted only if there is a showing of: (1) an intervening change in controlling law; (2) the availability of new evidence or (3) a need to correct a clear error or prevent manifest injustice. Bergerson v. New York State Office of Mental Health, Central New York Psychiatric, 652 F.3d 277 (2d Cir.2011) (citing Virgin Atlantic Airways, Ltd. v. National Mediation Bd., 956 F.2d 1245, 1255 (2d Cir.1992); Almonte v. City of Long Beach, 2005 WL 1971014 *1 (E.D.N.Y.2005)).
Drapkin claims that the Court "overlooked controlling case law that mandates a finding here that the remaining alleged `breaches' of the Separation Agreement, under the circumstances presented, are immaterial as a matter of law." (Drapkin Reconsideration Br. at 1) However, Drapkin has not cited any "overlooked controlling case law." Instead, he rehashes arguments previously rejected and presents several new arguments that could have been, but were not, presented at summary judgment. A motion for reconsideration is not the proper vehicle for any of these arguments. Accordingly, the motion will be denied.
In his brief in support of his motion for summary judgment, Drapkin argued that any retention of Company documents did not go to the root of the separation agreement and that the Company could not show any harm resulting from the retention of these documents. (Drapkin Br. at 22-23) The Court addressed these arguments in its Order and found that, on the present record, it could not determine as a matter of law that any breach of Section 6(h) was immaterial. (Order at 693) ("Drapkin's argument that any breach of Section 6(h) is not material likewise cannot be resolved, at this stage of the litigation, as a matter of law.") Drapkin cannot re-litigate that determination on a motion for reconsideration.
Drapkin likewise may not use a motion for reconsideration to strengthen arguments he made in his original briefing. Drapkin now cites to case law and the Restatement (Second) of Contracts for his contention that the Court must consider the "disparity in the consequences of an alleged breach of contract in determining whether a breach is material." (Drapkin Reconsideration Br. at 13-14) This is an expansion of the disparity argument which he made on summary judgment. (Drapkin Br. at 22-23) ("In essence, the Company contends that the inadvertent retention of 79 largely inconsequential documents excuses the Company's obligation to pay Drapkin $18 million and justifies rescission of the Separation Agreement. It does not.") A motion for reconsideration "is not a vehicle to offer additional support for an argument rejected previously by the Court." Capitol Records, Inc. v. MP3Tunes, LLC, 2009 WL 5102794 (S.D.N.Y.2009). This argument will therefore not be entertained.
With respect to his alleged breach of Section 6(c), Drapkin argued at summary judgment that his alleged comments to Rose did not constitute an "attempt to influence" Rose to leave the Company. (Drapkin Reply Br. at 16-18) This Court found that it was a "jury question whether Drapkin's remarks to Dr. Rose were an attempt to influence him to leave the Company." (Order at 694) A motion for reconsideration is not "a second bite at the
Drapkin also cites Frank Felix Assocs., Ltd. v. Austin Drugs, Inc., 111 F.3d 284, 289 (2d Cir.1997), for the principle that the materiality of a breach may, under certain circumstances, be decided as a matter of law. (Drapkin Reconsideration Br. at 5-6) This Court cited to Frank Felix in the Order. See Order at 686 ("Where a breach of contract is alleged, `there may be circumstances in which the question of materiality is a question of law for the judge.'") (quoting Bear, Stearns Funding, Inc. v. Interface Group-Nevada, Inc., 361 F.Supp.2d 283, 295 (S.D.N.Y.2005) (citing Frank Felix, 111 F.3d at 289 (2d Cir. 1997))) Accordingly, Frank Felix is not new or overlooked controlling case law; the Court was aware of this case, applied the standard, and decided that it could not resolve this issue as a matter of law based on the record at summary judgment.
Just as Drapkin may not rehash old arguments, neither may he offer new theories or arguments that could have been presented before. Drapkin argues, for example, that materiality of a breach cannot be determined by a jury where plaintiffs chosen remedy is rescission. (Drapkin Reconsideration Br. at 5 n. 2) This argument was not made in the summary judgment briefing. "A motion for reconsideration is not an opportunity for a losing party to advance new arguments to supplant those that failed in the prior briefing of the issue." Fredericks v. Chemipal, Ltd., No. 06 Civ. 966, 2007 WL 1975441, at *1 (S.D.N.Y. July 6, 2007); see also Sequa Corp. v. GBJ Corp., 156 F.3d 136, 144 (2d Cir.1998) (a party may not use Rule 59 to "present[] the case under new theories"). Accordingly, any new theories will not be considered.
For the reasons stated above, Drapkin's motions for reconsideration in 09 Civ. 1285 and 09 Civ. 4513 are denied. The Clerk of the Court is directed to terminate the following motions: 09 Civ. 1285, Dkt No. 78, and 09 Civ. 4513, Dkt No. 83.
SO ORDERED.
To the extent that the Complaint contends that a claim concerning Drapkin's adult daughter constitutes proof of breach, the Company does not address this issue in its opposition brief. Accordingly, the claim has been abandoned. See, e.g., Taylor v. City of New York, 269 F.Supp.2d 68, 75 (E.D.N.Y. 2003) ("Federal courts may deem a claim abandoned when a party moves for summary judgment on one ground and the party opposing summary judgment fails to address the argument in any way.") (citing Douglas v. Victor Capital Grp., 21 F.Supp.2d 379, 393 (S.D.N.Y.1998) (collecting cases)). In any event, it is undisputed that Drapkin had no knowledge of his adult daughter's alleged claim and that the claim was not paid. (Drapkin R. 56.1. Stmt. ¶¶ 73-74) Accordingly, even if such a claim was submitted and could be viewed as a breach of the Separation Agreement, any breach would be immaterial.
