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United States District Court, S.D. New York

April 29, 2004.


The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge


Plaintiffs, podiatry students at the New York College of Podiatric Medicine ("NYCPM"), have moved for partial summary judgment on their breach of contract claim against defendant National Board of Podiatric Medical Examiners ("NBPME"). For the reasons set forth below, this motion is granted, and NBPME is ordered to provide a hearing to those plaintiffs who renew their requests for same as set forth below.

Prior Proceedings

  This action was commenced on June 3, 2003 when plaintiffs filed their complaint and an order to show cause seeking a preliminary injunction compelling defendants NBPME and Chauncey Group International, Ltd. ("Chauncey") to release plaintiffs' scores from the July 2002 Part I NBPME Examination and to certify the validity of those scores. The request for a preliminary injunction was denied in an opinion dated June 19, 2003, familiarity with which is assumed. See Doe v. National Bd. of Podiatric Examiners, No. 03 Civ. 4034 (RWS), 2003 WL 21403698 (S.D.N.Y. June 19, 2003) ("Doe I").

  The instant motion was argued on December 10, 2003, and marked fully submitted at that time.*fn1 The Facts

  The facts are set forth based upon the undisputed portions of the attorney affidavit submitted by plaintiffs, the Local Rule 56.1 statement submitted by NBPME and the record, and are undisputed except as noted below.

  NBPME provides a series of examinations which are used to certify the proficiency of podiatric physician candidates. The results of these examinations are used by state licensing boards and other agencies to determine whether candidates have the minimum knowledge and competencies necessary to practice podiatric medicine, and whether to license such candidates as doctors of podiatric medicine.

  Plaintiffs sat for the NBPME Part I Examination adminis-tered in July 2002 (the "July 2002 Exam"). Prior to taking the July 2002 Exam, each plaintiff entered into a contract with NBPME embodied in NBPME's Bulletin of Information (the "Bulletin"). Each plaintiff paid $625 to take the July 2002 Exam.

  The Bulletin reserves to NBPME "the sole right to determine whether or not an examination is valid or invalid." (Bulletin at 11.) It further informs examination candidates that "any attempt to reproduce all or part of an examination is strictly prohibited," and "examination scores may be invalidated in the event of this type of suspected breach." (Id.)

  After the administration of the July 2002 Exam, Chauncey received evidence that the content of the examination had been accessible to students at certain schools of podiatric medicine both prior to and during the administration of the test. Chauncey investigated the distribution and availability of documents containing secure test questions and, as a result of its investiga-tion, recommended to NBPME that the scores of students at four of the seven schools of podiatric medicine in the United States, including NYCPM, on the July 2002 Exam be invalidated. NBPME accepted Chauncey's recommendation and invalidated the scores of the students at NYCPM and three other schools.

  In conjunction with its investigation, Chauncey received and forwarded to NBPME an anonymous mailing which enclosed various e-mails NYCPM students had purportedly sent during the administra-tion of the July 2002 Exam. In the e-mails sent to Chauncey, several NYCPM students, including some plaintiffs, transmitted test content they had recalled from the examination to a "2004" group e-mail address. This type of effort to reproduce the content of the examination is prohibited by the Bulletin. On or about October 21, 2002, plaintiffs received a notice from NBPME indicating that NBPME had declared the scores of all NYCPM students on the July 2002 Exam invalid and that NBPME had directed Chauncey to withhold plaintiffs' scores.

  Plaintiffs thereafter requested hearings to appeal NBPME's determination.

  Under the heading "Appeal Procedure," the Bulletin provides that:

If a candidate's scores are withheld or canceled, that candidate may, within 15 business days of the notifica-tion, submit a written request for a hearing. The purpose of the hearing will be to determine whether there exists sufficient, competent, and credible evidence that the candidate acted improperly at the time of the National Board examinations. The time, date, and place of the hearing will be set by the National Board.
(Bulletin at 8.)

  By a letter dated November 21, 2002, NBPME denied plaintiffs' requests on the grounds that the appeal procedure set forth in the Bulletin was not available to them, as it applied only when NBPME had withheld or canceled an individual candidate's score based on a finding that the candidate had acted improperly.

  NBPME offered all examination candidates affected by the invalidation of the July 2002 Exam scores an opportunity to take a specially scheduled re-test of the examination, free of charge, in January of 2003. Plaintiffs took the January 2003 re-test at no charge.

  I. The Summary Judgment Standard

  Summary judgment is granted only if there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); SCS Communications, Inc. v. Herrick Co., Inc., 350 F.3d 329, 338 (2d Cir. 2004); see generally 11 James Wm. Moore, et al., Moore's Federal Practice ¶ 56.11 (3d ed. 1997 & Supp. 2004). The court will not try issues of fact on a motion for summary judgment, but, rather, will determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).

  "The party seeking summary judgment bears the burden of establishing that no genuine issue of material fact exists and that the undisputed facts establish her right to judgment as a matter of law." Rodriguez v. City of New York, 72 F.3d 1051, 1060-61 (2d Cir. 1995). In determining whether a genuine issue of material fact exists, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Gibbs-Alfano v. Burton, 281 F.3d 12, 18 (2d Cir. 2002). Thus, "[s]ummary judgment may be granted if, upon reviewing the evidence in the light most favorable to the nonmovant, the court determines that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law." Richardson v. Selsky, 5 F.3d 616, 621 (2d Cir. 1993).

  A material fact is one that would "affect the outcome of the suit under the governing law," and a dispute about a genuine issue of material fact occurs if the evidence is such that "a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248; see also R.B. Ventures, Ltd, v. Shane, 112 F.3d 54, 57 (2d Cir. 1997).

  II. Plaintiffs Have Complied Sufficiently with Local Rule 56.1 and with Fed.R.Civ.P. 56

  NBPME argues that plaintiffs' motion should be denied because it does not comply with Local Rule 56.1. Plaintiffs failed to serve "a separate, short and concise statement of material facts as to which the moving party contends there is no genuine issue to be tried" in making their motion for partial summary judgment, as called for under the Local Rules of this District, instead providing only an attorney's affidavit in support of their motion. Local Rules of the United States District Courts for the Southern and Eastern Districts of New York, 56.1(a).*fn2 A moving party's failure to submit a Local Rule 56.1 statement "may constitute grounds for denial of the motion." Id., 56.1(a). On reply, plaintiffs attempted to amend their oversight by submitting a purported Local Rule 56.1 statement. This statement did not, however, follow each assertion of material fact with a "citation to evidence which would be admissible, set forth as required by Federal Rule of Civil Procedure 56(e)," as mandated by Local Rule 56.1. Id., 56.1(d).

  When a moving party fails to file a statement as required under Local Rule 56.1, it is within the discretion of the court to overlook that failure or to deny the motion. See United States v. Abady, No. 03 Civ. 1683 (SHS), 2004 WL 444081, at *2 (S.D.N.Y. Mar. 11, 2004) (collecting cases); see also Holtz v. Rockefeller & Co., Inc., 258 F.3d 62, 73 (2d Cir. 2001) ("A district court has broad discretion to determine whether to overlook a party's failure to comply with local court rules."). Plaintiffs' motion will not be denied simply for failure to file a Local Rule 56.1 statement.

  NBPME further argues that plaintiffs' motion should be denied because the attorney affidavit submitted in support of the motion does not comply with Fed.R.Civ.P. 56. Specifically, NBPME contends that the attorney affidavit submitted by plaintiffs contains factual statements of which the author, Warren Redlich ("Redlich"), has no personal knowledge, including statements regarding the basis for NBPME's decision to invalidate scores on the July 2002 Exam and what evidence NBPME did or did not rely on in reaching its decision; when e-mails containing content of the July 2002 Exam were sent; and a description of testimony provided by NBPME board members in other proceedings.*fn3 According to NBPME, Redlich's affidavit also contains improper legal conclusions and argument, including statements that NBPME breached its obligation to carry out its contractual duties in good faith, that NBPME breached the parties' contract, and that NBPME is required to conduct hearings for the plaintiffs as a result of the contract and of the holding in Doe I.

  A court may "strike portions of an affidavit that are not based upon the affiant's personal knowledge, contain inadmissible hearsay or make generalized and conclusory statements." Hollander v. American Cvanamid Co., 172 F.3d 192, 198 (2d Cir. 1999). Alternatively, a court may, in considering a motion for summary judgment, simply decline to consider those aspects of a supporting affidavit that do not appear to be based on personal knowledge or are otherwise inadmissible. See United States v. Private Sanitation Industry Ass'n of Nassau/Suffolk, Inc., 44 F.3d 1082, 1084 (2d Cir. 1995); Gatling v. Atlantic Richfield Co., 577 F.2d 185, 188 (2d Cir. 1978); Union Ins. Soc'y of Canton, Ltd, v. William Gluckin & Co., 353 F.2d 946, 952 (2d Cir. 1965) ("Conclusory statements and statements not made on personal knowledge do not comply with the requirements of Fed.R.Civ.P. 56(e) and, therefore, may not be considered."). The latter alternative will be followed here, and only those aspects of Redlich's affidavit that appear to be based on personal knowledge will be considered, in conjunction with the underlying record,*fn4 in evaluating plaintiffs' motion for partial summary judgment.

  "[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp., 477 U.S. at 323 (internal quotation marks omitted); see also Rodriguez, 72 F.3d at 1060-61. Plaintiffs have expressly incorporated by reference all papers filed by all parties on the initial application for a preliminary injunction. Thus, despite the procedural irregularities that mar plaintiffs' motion, plaintiffs are deemed to have sufficiently informed the Court of the basis for their motion.

  III. NBPME Has Breached the Contract with Plaintiffs

  "To succeed in a breach of contract claim, four elements must be satisfied: the making of a contract, performance of the contract by the plaintiff, breach of the contract by the defendant, and damages suffered by the plaintiff." Coastal Aviation, Inc. v. Commander Aircraft Co., 937 F. Supp. 1051, 1060 (S.D.N.Y. 1996).

  It is well settled that "[t]he primary objective in contract interpretation is to give effect to the intent of the contracting parties as revealed by the language they chose to use." Savers v. Rochester Tel. Corp. Supplemental Mgmt. Pension Plan, 7 F.3d 1091, 1094 (2d Cir. 1993) (internal quotation marks and citation omitted). Where the language of an agreement is unambiguous, courts must enforce the plain language of the agreement. See, e.g., Seabury Constr. Corp. v. Jeffrey Chain Corp., 289 F.3d 63, 68 (2d Cir. 2002). Contract language is not ambiguous "if it has a definite and precise meaning, unattended by danger of misconception in the purport of the [contract] itself, and concerning which there is no reasonable basis for a difference of opinion." Hugo Boss Fashions, Inc. v. Federal Ins. Co., 252 F.3d 608, 617 (2d Cir. 2001) (internal quotation marks and citations omitted). Unambiguous contract language may not be rendered ambiguous simply by virtue of "competing interpretations of it urged in litigation." Photopaint Technologies, LLC v. Smartlens Corp., 335 F.3d 152, 160 (2d Cir. 2003) (citing Hugo Boss Fashions, 252 F.3d at 616 (citing Seiden Assocs., Inc. v. ANC Holdings, Inc., 959 F.2d 425, 428 (2d Cir. 1992))). Determining whether the language of a contract is ambiguous is a question of law to be decided by the court. See, e.g., Lucente v. Int'l Bus. Machs. Corp., 310 F.3d 243, 257 (2d Cir. 2002).

  "Summary judgment is only proper in contract disputes if the language of the contract is wholly unambiguous." Mellon Bank, N.A. v. United Bank Corp. of New York, 31 F.3d 113, 115 (2d Cir. 1994) (internal quotation marks and citation omitted); see also Photopaint Technologies, 335 F.3d at 160; Lucente, 310 F.3d at 257. When the language of a contract is susceptible to conflicting, reasonable interpretations, the contract is deemed ambiguous and its interpretation becomes a question of fact, rendering summary judgment inappropriate, provided there is also relevant extrinsic evidence of the parties' actual intent. See, e.g., Mellon Bank, 31 F.3d at 116; Savers, 7 F.3d at 1094-95. Absent a showing of relevant extrinsic evidence of intent, however, ambiguity alone "presents not an issue of fact, but an issue of law for the court to rule on." Williams & Sons Erectors, Inc. v. South Carolina Steel Corp., 983 F.2d 1176, 1184 (2d Cir. 1993); see also Mellon Bank, 31 F.3d at 116. Neither side disputes the existence of an agreement between each plaintiff and NBPME, formed when each plaintiff accepted the standardized form agreement set forth in the Bulletin and thereby registered for the July 2002 Exam. Nor is there any argument made that plaintiffs have failed to perform under the agreement.*fn5 What is at issue is whether, by refusing to accept plaintiffs' request for hearings to appeal the invalidation, NBPME breached the appeal procedure set forth in the Bulletin, and thereby the contract itself.*fn6

  The contract at issue here was reviewed in Doe I and it was concluded that the contract "entitles students to a hearing before their test scores are invalidated." Doe I, at *5. Based on the analysis set forth in Doe I, plaintiffs argue that it is the law of the case that the Bulletin requires NBPME to conduct hearings. NBPME contends that the conclusions reached in Doe I concerning the applicability of the appeal procedure to plaintiffs' situation do not constitute a conclusive and final determination.

  Courts may depart from the law of the case "and reconsider their own decisions for cogent and compelling reasons if those decisions have not been ruled on by the appellate court." United States v. Quintieri, 306 F.3d 1217, 1230 (2d Cir. 2002) (citing DiLaura v. Power Auth., 982 F.2d 73, 77 (2d Cir. 1992) (citations omitted)); North River Ins. Co. v. Philadelphia Reinsurance Corp., 63 F.3d 160, 165 (2d Cir. 1995) (noting that, while a "court sometimes may review an earlier ruling, [n]evertheless, because there is a strong policy favoring finality the court exercises its underlying power to review earlier rulings sparingly") (internal quotation marks and citations omitted). "Application of the `law of the case' doctrine is `discretionary and does not limit a court's power to reconsider its own decisions prior to final judgment.'" Sagendorf-Teal v. County of Rensselaer, 100 F.3d 270, 277 (2d Cir. 1996) (quoting DiLaura, 982 F.2d at 76).

  Therefore, the conclusions reached in Doe I regarding the merits of plaintiffs' claims are not necessarily controlling. Moreover, as the Second Circuit has noted:

A preliminary determination of likelihood of success on the merits in a ruling on a motion for preliminary injunction is ordinarily tentative, pending a trial or motion for summary judgment. . . . It would therefore be anomalous at least in most cases, and here, to regard the initial ruling as foreclosing the subsequent, more thorough consideration of the merits that the preliminary injunction expressly envisions.
Goodheart Clothing Co., Inc. v. Laura Goodman Enterprises, Inc., 962 F.2d 268, 274 (2d Cir. 1992) (internal citation omitted); see also Commodity Futures Trading Comm'n v. Standard Forex, Inc., No. 93 Civ. 88 (CPS), 1996 WL 435440, at *8 (E.D.N.Y. July 25, 1996).

  According to NBPME, the Bulletin's appeal procedure is inapplicable to plaintiffs, since the appeal procedure is only relevant when there have been allegations of individual misconduct in connection with an examination and does not apply when candidates' scores have been invalidated in a wholesale manner. NBPME's argument was deemed flawed in Doe I and is similarly unavailing here, because the plain language of the appeal procedure set forth in the Bulletin is not so limited in its application. The opening clause of the appeal procedure provision addresses any examination candidate whose "scores are withheld or canceled" (Bulletin at 8), and it is undisputed here that plaintiffs have had their scores "withheld or canceled."*fn7 The opening clause, which contains broad and undifferentiating language, is notably devoid of any indication that the grounds on which the scores are withheld or canceled may be determinative as to whether the appeal procedure applies to a given examination candidate. In sum, this portion of the appeal procedure, which governs who may seek appeal hearings, provides no basis for NBPME's interpretation.

  That the "purpose of the hearing" stated in the second clause of the appeal procedure is focused on determining whether "the candidate acted improperly" does not alter this conclusion or otherwise express a limitation as to which examination candidates may seek hearings — nor has NBPME suggested it could be fairly read to do so. Indeed, a determination as to whether a particular candidate acted improperly may be of great personal and professional significance to any examination candidate and even, if not especially, to those candidates whose scores were invalidated on a group-wide basis and who may suffer from the taint of impropriety as a result. Moreover, as stated earlier:

It would make no sense for NBPME to invalidate the scores of candidates A and B, but only provide candidate A with a hearing since only this candidate was accused of misconduct. Such an interpretation would be arbitrary and irrational . . .[and] the "Court will not interfere with [the] discretionary determination [of a testing agency] unless it is performed arbitrarily and irrationally."
Doe I, at *5 (quoting Dalton v. Educ. Testing Serv., 87 N.Y.2d 384, 392, 639 N.Y.S.2d 977, 663 N.E.2d 289 (1995)) (emphasis added).

  NBPME urges that its own interpretation of the appeal procedure set forth in the Bulletin is reasonable, "given the purpose of the Part I examination and the irrefutable evidence of misconduct which was presented to NBPME and upon which its decision to invalidate the scores of the NYCPM students was based." (NBPME Opp. Mem. at 11.) NBPME has failed to point to anything in the language of the appeal procedure provision of the Bulletin to support NBPME's interpretation of limited applicability, instead insisting that it simply "would make no sense for individual hearings to be conducted in these types of situations. . . ." (NBPME Opp. Mem. at 11.) However, the plain language of the appeal procedure provision permits just that, by allowing any candidate whose scores are withheld or canceled to request a hearing, without regard to the reasons for which the candidate's scores were withheld or canceled. Thus, by refusing to provide plaintiffs with hearings on the grounds that the appeal procedure does not apply to plaintiffs, NBPME breached its agreement with each plaintiff.

  As the ambit of the appeal procedure has not been found to be ambiguous, the evidence offered by NBPME in support of its interpretation of limited availability need not be evaluated. See, e.g., International Multifoods Corp. v. Commercial Union Ins. Co., 309 F.3d 76, 83 (2d Cir. 2002) (explaining that "`[i]f the court finds that the contract is not ambiguous it should assign the plain and ordinary meaning to each term and interpret the contract without the aid of extrinsic evidence' and it may then award summary judgment") (quoting Alexander & Alexander Servs., Inc. v. These Certain Underwriters at Lloyd's, London, 136 F.3d 82, 86 (2d Cir. 1998)). Even if the appeal procedure had been deemed ambiguous with regard to its applicability, however, NBPME has not pointed to any extrinsic evidence that would be relevant to a determination of the parties `intent such as would preclude a grant of summary judgment to plaintiffs. See Compaqnie Financiere de GIG et de 1'Union Europeenne v. Merrill Lynch, Pierce, Fenner & Smith Inc., 232 F.3d 153, 158 (2d Cir. 2000) ("A court may also grant summary judgment regarding the interpretation of ambiguous language if the non-moving party fails to point to any relevant extrinsic evidence supporting that party's interpretation of the language."); Revson v. Cingue & Cinque, P.C., 221 F.3d 59, 66 (2d Cir. 2000); cf. Shepley v. New Coleman Holdings Inc., 174 F.3d 65, 72 n.5 (2d Cir. 1999) (concluding that summary judgment may be granted "when the language is ambiguous and there is relevant extrinsic evidence, but the extrinsic evidence creates no genuine issue of material fact and permits interpretation of the agreement as a matter of law") (internal quotation marks and citation omitted).*fn8 Even assuming, arquendo, that the Bulletin did not require NBPME to provide a hearing to every examination candidate who submitted a request pursuant to the Bulletin's appeal procedure,*fn9 NBPME's discretionary decision to refuse plaintiffs' requests on the grounds that the appeal procedure did not apply to them would still represent a breach of its contract with plaintiffs.

  In keeping with the leading decision from the New York Court of Appeals on the educational testing contract issues raised here, "[t]his Court will not interfere with [a] discretionary determination unless it is performed arbitrarily or irrationally." Dalton, 87 N.Y.2d at 392. Nonetheless, where a test-provider such as NBPME "refuses to exercise its discretion in the first instance by declining even to consider relevant material submitted by the test-taker, the legal question is whether this refusal breached an express or implied term of the contract, not whether it was arbitrary or irrational." Id. "Implicit in all contracts is a covenant of good faith and fair dealing in the course of contract performance," id. at 389, and NBPME was thus obligated to perform under the Bulletin in good faith. Therefore, even if the Bulletin did not require NBPME to provide hearings, by declining plaintiffs' requests on the grounds that the appeal procedure applies only where a candidate's score is withheld or canceled on an individual basis, contrary to the language of the appeal procedure itself, NBPME would have breached the covenant of good faith and fair dealing, thereby breaching the contract itself.

  IV. Plaintiffs Are Entitled to Specific Performance

  Plaintiffs urge that the proper remedy for NBPME's breach would be to order NBPME either to validate plaintiffs' scores or to provide plaintiffs with hearings according to standards prescribed by the Court. Undeniably,

  [w]hile courts as a matter of policy are reluctant to intrude upon academic discretion in educational matters, they stand ready as a matter of law and equity to enforce contract rights. Where a contract is breached, moreover, and the injured party is entitled to specific performance, the remedy must be a real one, not an exercise in futility. Dalton, 87 N.Y.2d at 394.*fn10 However, it is also true that, so long as the test-provider


fulfills its contractual obligation to consider relevant material provided by the test-taker and otherwise acts in good faith, the testing service — not the courts — must be the final arbiter of both the appropriate weight to accord that material and the validity of the test score. This Court will not interfere with that discretionary determination unless it is performed arbitrarily or irrationally.
Id. at 392. On these grounds, and in light of the policy concerns addressed in Dalton, see id. at 394, plaintiffs are entitled to relief that comports with NBPME's contractual promise: the good faith consideration of their requests for a hearing.

  NBPME has opined that "having hearings in this case would not make any difference in the outcome, and would be a fruitless exercise, because there is nothing any of the plaintiffs can say or present to refute the evidence that the July 2002 [Exam] was compromised by a breach in the security of the test content. . . ." (NBPME Opp. Mem. at 2.) Such statements raise concern, but they do not provide a sufficient basis for forestalling an order of specific performance, whatever import these statements may have at a later time, should NBPME fail to perform its obligation in good faith.*fn11


  Plaintiffs' motion for partial summary judgment is thereby granted. Each plaintiff, upon a showing that he or she has previously submitted a timely request for an appeal hearing with regard to his or her score on the July 2002 Exam, may submit to NBPME within 60 days of entry of this opinion and order a renewed request for a hearing. NBPME shall provide a hearing to each such plaintiff, to be conducted in accordance with the terms of the Bulletin and NBPME's obligation to act in good faith.

  It is so ordered.

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