order to induce Zucker to consent to the Can Carriers' transaction, "made fraudulent representations, knowing full well that he would not perform them." See Complaint at P 117.
1. Defendants' Argument
Archer now moves for summary judgment with respect to Counts 12, 13 and 14 of the Third Amended Complaint on the grounds that (1) as the parties intended to be bound by a signed written agreement, and no signed agreement was ever executed, the proposed agreement is not enforceable; (2) the draft agreements are insufficient to constitute a writing, and thus, do not satisfy the New York Statute of Frauds; and (3) Zucker has failed to plead fraud with the specificity required by Rule 9 of the Federal Rules of Civil Procedure.
2. Plaintiff's Argument
Although Zucker concedes that "this is admittedly not a case in which there is a nice neat single document captioned "Settlement Agreement" embodying all of the terms and signed by all parties," see Memorandum of Law in Opposition to Defendants' Motion for Partial Summary Judgment and in Support of Plaintiff's Cross-Motion ("Pl. Mem."), at 2, he maintains that the settlement agreement should be enforced because: (1) a series of documents embody all of the material terms of the parties' agreement; (2) he partially performed his obligations under the agreed upon settlement to his detriment and Archer's benefit; and (3) there is a writing, signed by the party against whom enforcement is sought, confirming the fact that the parties had arrived at, and agreed to, a settlement. Zucker has not responded, however, to the alleged deficiency of the fraud claim (Count 14).
I. Standard of Law
Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, establish that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). In determining whether the movant has met this burden, the Court must resolve all ambiguities in favor of the party opposing the motion. Lopez v. S.B. Thomas, Inc., 831 F.2d 1184, 1187 (2d Cir. 1987) (citing United States v. Diebold, Inc., 369 U.S. 654, 655, 8 L. Ed. 2d 176, 82 S. Ct. 993 (1962)); Eastway Constr. Corp. v. New York, 762 F.2d 243, 249 (2d Cir. 1985). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact, Adickes v. S. H. Kress & Co., 398 U.S. 144, 157, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970), and may discharge this burden by demonstrating an absence of evidence supporting the opponent's defenses on which the opponent would have the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323
, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). The burden then shifts to the opponent who must come forward with "specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e).
The opponent must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986). Speculation, conclusory allegations and mere denials are not enough to raise genuine issues of fact. Anderson v. Liberty Lobby, 477 U.S. 242, 249-50, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); Knight v. United States Fire Ins. Co., 804 F.2d 9, 15 (2d Cir. 1986), cert. denied, 480 U.S. 932, 94 L. Ed. 2d 762, 107 S. Ct. 1570 (1987); Argus Inc. v. Eastman Kodak Co., 801 F.2d 38, 45 (2d Cir. 1986), cert. denied, 479 U.S. 1088, 94 L. Ed. 2d 151, 107 S. Ct. 1295 (1987). To avoid summary judgment, enough evidence must favor the opponent's case such that a jury could return a verdict in its favor. See Anderson v. Liberty Lobby, 477 U.S. 242 at 248 (interpreting the "genuineness" requirement).
II. The Parties' Intent to Be Bound in the Absence of a Signed, Written Agreement
Under New York law, a contract is unenforceable if the parties did not intend to be bound until after the execution of a formal written agreement. Jim Bouton Corp. v. WM. Wrigley Jr. Co., 902 F.2d 1074, 1080 (2d Cir. 1990), cert. denied, 498 U.S. 854, 112 L. Ed. 2d 116, 111 S. Ct. 150 (1990); Winston v. Mediafare Entertainment Corp., 777 F.2d 78, 80 (2d Cir. 1985); R.G. Group, Inc. v. Horn & Hardart Co., 751 F.2d 69, 74 (2d Cir. 1984); Scheck v. Francis, 26 N.Y.2d 466, 260 N.E.2d 493, 494, 311 N.Y.S.2d 841 (N.Y. 1970). "This rule holds true even if the parties have orally agreed upon all the terms of the proposed contract." R.G. Group, Inc. v. Horn & Hardart Co., 751 F.2d at 74. On the other hand, however, where the parties do not intend that an agreement must be reduced to writing to be binding, and there are no material terms of the contract left open for negotiation, an informal oral agreement may be binding even if the parties contemplate memorializing their agreement in writing. Winston v. Mediafare Entertainment Corp., 777 F.2d at 80; R.G. Group, Inc. v. Horn & Hardart Co., 751 F.2d at 74. Thus, "what matters are the parties' expressed intentions, the words and deeds which constitute objective signs in a given set of circumstances." R.G. Group, Inc. v. Horn & Hardart Co., 751 F.2d at 74.
The Second Circuit has set forth four factors to determine whether the parties intended to be bound prior to executing a written contract; namely, whether: (1) either party has expressly reserved the right not to be bound absent a written agreement; (2) there has been partial performance of the contract; (3) all of the terms of the alleged contract have been agreed upon "such that there is literally nothing left to negotiate or settle;" and (4) the agreement at issue is the type of contract that is generally committed to writing. R.G. Group, Inc. v. Horn & Hardart Co., 751 F.2d at 75-76; see also Winston v. Mediafare Entertainment Corp., 777 F.2d at 80. These factors may be shown by "oral testimony or by correspondence or other preliminary or partially complete writings." Winston v. Mediafare Entertainment Corp., 777 F.2d at 80 (quoting Restatement (Second) of Contracts § 27 comment c (1981)). Addressing each of these factors in turn, the Court finds that there is no genuine issue of material fact that the parties did not intend to be bound to the settlement agreement prior to the execution of a writing.
A. Express Reservation Not to Be Bound
Although no single factor of the four factors listed above is dispositive, see R.G. Group, Inc. v. Horn & Hardart Co., 751 F.2d at 75, "considerable weight" is placed upon a party's express statement that it intends to be bound only when a written agreement is signed. Id. "Courts are reluctant to discount such a clear signal, and it does not matter whether the signal is given during the course of bargaining, or at the time of the alleged agreement." Id. Although neither party in the case at hand expressly reserved the right not to be bound prior to the execution of the settlement agreement, the language of (1) the draft settlement agreement; (2) the Can Carriers Escrow Agreement; and (3) communications among the parties' counsel indicate that only a formal signing was intended to give rise to a binding contract.
1. The Documentary Evidence
The uncontested documentary evidence clearly establishes that the parties intended not to be bound prior to the execution of a formal written contract. First, the very language of the unsigned draft agreements, dated August 20, and October 9, 1987, make plain that a formal signing was intended to be essential to give rise to a binding contract. See Severance Agreement, dated 8/20/87, annexed to the Rubenstein Aff. as Exh. "D" (the "August 20th Draft"); see also Severance Agreement, dated 10/9/87, annexed to the Rubenstein Aff. as Exh. "F" (the "October 9th Draft").
Specifically, the August 20th and October 9th Drafts are replete with references to the fact that the rights and obligations of the parties are triggered "upon execution of this Agreement." See August 20th Draft, at PP 1, 2(a), 7.1, 7.2, 7.3; October 9th Draft at PP 1, 2(a), 5, 6.9, 7.1, 7.2, 7.3, 8.3. Neither party ever took exception to these provisions. Moreover, such language "conclusively establish[es]" a mutual intent not to be bound prior to the execution of a written contract. See Reprosystem, B.V. v. SCM Corp., 727 F.2d 257, 262 (2d Cir. 1984), cert. denied, 469 U.S. 828, 83 L. Ed. 2d 54, 105 S. Ct. 110 (1984).
In addition, both the August 20th and October 9th Drafts expressly provide that the severance agreement:
(which includes the Exhibits annexed hereto and all other documents being executed and delivered concurrently with the execution and delivery of this Agreement) contains the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, arrangements and understandings, written or oral, relating to the subject matter hereof.
August 20th Draft at P 8.3 (emphasis added); October 9th Draft at P 8.3 (emphasis added). The August 20th and October 9th Drafts further provide:
No amendment, modification, cancellation or extension of this Agreement or the other instruments to be executed pursuant hereto may be made . . . except by a written instrument executed by the parties hereto. . .