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RELLA v. NORTH ATLANTIC MARINE

United States District Court, S.D. New York


June 21, 2004.

FRANK RELLA, Plaintiff,
v.
NORTH ATLANTIC MARINE, LTD d/b/a FREEDOM MARINE, KENNETH TESSLER, and GLOBAL YACHTS INTERNATIONAL, LTD., Defendants.

The opinion of the court was delivered by: GERARD E. LYNCH, District Judge

OPINION AND ORDER

This dispute revolves around a joint venture agreement for the purchase and marketing of yachts. By letter dated January 23, 2004, defendant North Atlantic Marine d/b/a Freedom Marine ("Freedom") advised the Court that the parties had settled. The Court therefore issued an order, docketed by the Clerk's Office on January 30, 2004, discontinuing this case with leave to reopen within thirty days should the parties fail to consummate the settlement. On March 4, 2004, Frank Rella, the plaintiff, wrote the Court requesting its assistance because Global Yachts International, Ltd. ("Global") refused to comply with the terms of the alleged settlement. Global responded by disavowing any settlement. The Court thereafter exercised its discretion to reopen the action, and held a status conference on March 15, 2004, at which the parties indicated their intention to renew certain summary judgment motions that had been filed before the putative settlement. Rella and Freedom also requested leave to file a new motion seeking to enforce that settlement, which the Court granted.

  Before the Court are several motions. Rella moves for summary judgment against both defendants on count five of the complaint, which seeks recovery of $33,475 allegedly converted by defendants. Global cross-moves for summary judgment on counts four and five, which allege claims for unjust enrichment and conversion, respectively, against Global. Freedom also filed a motion, which, while not a model of clarity, apparently seeks four forms of relief: that the Court (1) enforce the settlement; (2) compel Global to deposit $33,475 with the Court for disbursement to Rella; (3) permit Freedom and Kenneth Tesler, a principal of Freedom, to cross-claim against Global; and (4) grant summary judgment to Tesler. Finally, Rella moves to enforce the putative settlement. For the reasons that follow, Rella's motion for summary judgment will be granted as against Freedom only; Global's cross-motion will be granted in part: Freedom's motion will be granted insofar as it seeks to exonerate Tesler from personal liability; and all other motions will be denied.

  BACKGROUND

  Rella and Freedom executed a joint venture agreement dated August 31, 2001 ("JVA"). (Berton Aff., Ex. A.) By the JVA, Rella agreed to purchase a 2002 Sealine 42/5 yacht ("Sealine 42/5"), which would be marketed and resold at a higher price, and to permit Freedom to use the yacht for promotional purposes. Freedom, in exchange, gave Rella a $114,045 discount on the yacht's list price and certain guarantees regarding maintenance, insurance, and registration of the yacht. (Id.) Freedom also promised "to use its best efforts to market and sell the Sealine." (Id. ¶ 6.) If Freedom succeeded, the JVA entitled Rella to receive from the proceeds of the sale the "Purchase Price" of $461,724 that he originally paid for the Sealine, as well as 50% of whatever profits remained after the payment of sales commissions, which were not to exceed 25% of those profits. (Id.) The JVA also gave Rella the option to buy additional Sealines.

  Pursuant to the JVA, Rella bought a 42/5 Sealine from Freedom (Tessler Cert. ¶ 9; Berton Aff. ¶ 5), which in turn acquired it from Global. Global purchases Sealines from their manufacturer and sells them to yacht vendors and at times directly to retail customers in Florida. (Berton Aff. ¶¶ 2-4.) Rather than delivering the Sealine 42/5 to Freedom's headquarters in New Jersey, however, Global delivered it to Florida. (Tessler Cert. ¶ 6.) There, Global enjoyed the right to display the yacht as an aid to its marketing efforts, and to use it at certain times subject to certain conditions; in exchange, Global allowed Freedom and Rella to dock the yacht at its marina. (Tessler Cert. ¶ 7; Berton Aff. ¶¶ 8-9, Ex. C.) Rella effectively concedes that Global had some right to use the Sealine 42/5, but disputes the extent of that right, alleging that Global damaged the boat through unauthorized use.*fn1 (P. Rule 56.1 Stmt. ¶ 6; Compl. ¶ 20; P. Br. 3-4; Wertheimer Reply Aff.2; Berton Aff., Ex. D.)

  On November 6, 2002, Rella paid Freedom a $33,475 deposit for a second Sealine 42/5. (P. Rule 56.1 Stmt. ¶ 1.) Freedom again intended to acquire the yacht from Global and therefore passed on to Global a check for the same amount of money as a down payment on the Sealine 42/5. (Wertheimer Aff., Ex. 6.) At some point, however, Rella decided that rather than purchase a second Sealine 42/5 from Freedom, he wanted a different model, the Sealine 47. (Berton Aff. ¶ 6; P. Rule 56.1 Stmt. ¶ 3; Wertheimer Decl., Ex. 2.) Freedom contracted with Global to buy this new model (Berton Aff. ¶ 7) and had Rella's deposit reallocated for that purpose. (Wertheimer Decl., Ex. 3.) But Rella never consummated the purchase, apparently because he concluded that Freedom had breached the JVA. (Freedom Rule 56.1 Stmt. ¶ 4.) He later demanded that defendants return his deposit. (Wertheimer Decl., Exs. 4, 5.) To date, neither has complied.*fn2

  On October 24, 2002, Rella sued Freedom, Tesler, and Global, alleging that (1) Freedom breached the JVA; (2) Freedom and Tesler converted Rella's Sealine 42/5 by recklessly misusing it; (3) Tesler fraudulently represented Freedom to be a "responsible dealer" to induce Rella to enter into the JVA; (4) Global and Freedom, by wrongfully converting the Sealine 42/5 and using it without authorization "as a demonstration boat," became unjustly enriched; and (5) Global and Freedom converted Rella's $32,475 deposit on the Sealine 47.

  On July 11, 2003, Rella moved for partial summary judgment on the fifth count, seeking recovery of his deposit. Pursuant to a scheduling order entered on August 8, defendants were to file opposition papers to that motion and any cross-motions by August 15; Rella was to respond to such cross-motions by September 15; and defendants were to reply by September 22. By two orders entered in late August, however, the parties withdrew all pending motions and agreed to a new case management plan, which extended the discovery deadline to September 23 and set a post-discovery conference for October 17. The Court heard nothing further from the parties until early October, when they asked to be referred to mediation. Mediation evidently failed, for in December and January, the parties began to refile their summary judgment motions. The Court then set a new briefing schedule. But before the motions were fully briefed, Freedom wrote the Court a letter, copied to Rella and Global, stating that the parties settled. Accordingly, the Court issued an order of discontinuance with leave to reopen within thirty days, and the Clerk of the Court closed this case on January 30, 2001.

  While Freedom's letter represented that the parties had settled, negotiations and exchange of draft settlement agreements continued for the next month. Ultimately, the putative settlement failed, apparently because Freedom had previously, on December 12, 2003, brought a related action against Global in New Jersey state court, and Global insisted that any settlement of this action be conditioned on Freedom's agreement to settle the New Jersey action. By order entered on March 17, 2004, the Court restored this action to the calendar and set a new briefing schedule, which encompassed both Global's and Rella's summary judgment motions and new motions by which Freedom and Rella seek to enforce the putative settlement agreement.

  DISCUSSION

  I. Enforcement of the Putative Settlement

  Because Rella's motion to enforce the settlement, in which Freedom joins, would dispose of all issues were it to prevail, the Court will address it first.

  Under New York law, a settlement agreement is a contract subject to the ordinary rules of contract interpretation and enforcement. Bank of New York v. Amoco Oil Co., 35 F.3d 643, 661 (2d Cir. 1994) (collecting cases). That means, among other things, that no valid and enforceable settlement exists unless there has been a meeting of the minds between the parties on all essential terms. Schurr v. Austin Galleries of Illinois, Inc., 719 F.2d 571, 576 (2d Cir. 1983). This is a question of fact that must be resolved by analyzing "the totality of the circumstances." United States v. Sforza, 326 F.3d 107, 116 (2d Cir. 2003); Ciaramella v. Reader's Digest Ass'n, Inc., 131 F.3d 320, 322 (2d Cir. 1997).

  Freedom and Rella plainly intended to settle this matter and thought that they had reached a binding agreement with Global. But despite exchanging several drafts, the parties never signed a written settlement agreement. (Doyle Aff. ¶¶ 5, 8-9, 12.) The existence of these drafts evinces an intent by at least some of the parties not to be bound until the terms of the putative settlement had been reduced to writing. See Banking and Trading Corp. v. Floete, 257 F.2d 765, 769 (2d Cir. 1958); see also ABC Trading Co. v. Westinghouse Elec. Supply Co., 382 F. Supp. 600, 602 (E.D.N.Y. 1974.) Indeed, on the same day that Freedom informed the Court that the parties had settled, it also wrote to Rella and Global enclosing a proposed stipulation of settlement for their review and approval. (Doyle Aff., Ex. C.) Shortly thereafter, on February 2, 2004, Global sent Freedom a revision, which, significantly, included a proviso stipulating that Freedom and Global would simultaneously settle the related New Jersey action. (Doyle Aff., Ex. E.) Hence, by that date, if not before, Global had clarified its position: Any settlement of this federal action must include a provision settling the New Jersey action between Freedom and Global, for Freedom's complaint in the latter action includes a claim for the same $33,475 at issue in this action. (Doyle Aff. ¶ 14.) Global's evidence unequivocally establishes that Rella, too, understood, albeit strenuously objected to, this demand (Doyle Aff. ¶¶ 11-14, Ex. K.)

  In short, while the parties desired to reach a settlement, they never agreed on its essential terms.*fn3 Because the parties never concluded a valid and binding settlement agreement, there is no agreement for the Court to enforce. Accordingly, the motions to enforce the settlement agreement are denied.

  II. The Summary Judgment Motions

  A. Standard

  Summary judgment must be granted where "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A fact is "material" if it "might affect the outcome of the suit under the governing law"; an issue of fact is genuine where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). On a motion for summary judgment, the evidence must be viewed in the light most favorable to the nonmoving party, and the Court must resolve all ambiguities and draw all reasonable inferences in its favor. Id. at 255; Cronin v. Aetna Life Ins. Co., 46 F.3d 196, 202 (2d Cir. 1995).

  To defeat summary judgment, however, the nonmoving party "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 (1986). "[C]onclusory allegations or unsubstantiated assertions" will not suffice. Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir. 1998). Rather, the nonmoving party must "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); Matsushita, 475 U.S. at 587 ("Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.") (internal quotation marks omitted).

  B. Rella's Motion

  Rella moves for partial summary judgment on the fifth count of his complaint. He claims that "Tesler, Freedom and Global, acting in concert or individually, converted" a $33,475 deposit that he gave to Freedom for the purchase of a yacht. (Wertheimer Decl., Ex. 1.) The parties do not dispute that (1) Rella wrote Freedom a check for $33,475 as a deposit for a Sealine 42/5 on November 6, 2001 (Wertheimer Decl., Ex. 2); (2) Freedom intended to acquire that yacht from Global and therefore paid an equal amount of money to Global as a deposit for it (Tesler Cert. ¶ 3; Berton Aff. ¶ 7; P. Rule 56.1 Stmt. ¶ 2.); (3) Rella subsequently decided to buy a Sealine 47 instead, and Global reallocated the $33,475 for this purpose (P. Rule 56.1 Stmt. ¶ 3; Global Br. in Opp. to P. Mot. 2); (4) Rella cancelled the Sealine 47 purchase (Berton Aff. ¶ 6); and (5) despite demands in writing by Rella's counsel, neither defendant has paid to Rella a sum of money equal to the amount of his deposit made with Freedom, that is, $33,475. (Wertheimer Decl., Exs. 5, 6.)

  Rella's opening brief, in its entirety, does nothing more than to set forth the summary judgment standard and state that summary judgment "is appropriate here since the undisputed fact is that Defendants, or one of them, is wrongfully withholding Plaintiff's deposit." (P. Br. 2.) Freedom did not oppose this motion; to the contrary, counsel for Freedom admits that Rella paid Freedom $33,475 (Freidrich Decl. ¶ 5), and in its letter memorandum. Freedom requests that the Court grant Rella's motion "compelling Global to pay to it the deposit monies" or, presumably in the alternative, to deposit $33,475 with the Clerk of the Court. (Freedom Ltr. Br. dated Mar. 29, 2004, at 2-3.) However, Rella seeks to recover his deposit from either or both defendants, and Freedom presents no argument whatsoever why it should not be required to return Rella's deposit. Global, for its part, argues that, as a non-party to the JVA, it has no contractual obligations to Rella.

  Rella's fifth claim, however, is for conversion, not breach of contract. Under New York law, "[t]he tort of conversion is established when one who owns and has a right to possession of personal property proves that the property is in the unauthorized possession of another who has acted to exclude the rights of the owner." Republic of Haiti v. Duvalier, 626 N.Y.S.2d 472, 475 (1st Dep't 1995). Specifically, the plaintiff must establish "(1) that he had a legal ownership interest . . . [in] the property and (2) that the defendant exercised unauthorized interference with the plaintiff's ownership or possession of that property." Rose v. Amsouth Bank, 296 F. Supp.2d 383, 397 (E.D.N.Y. 2003); see also Global View Ltd. Venture Capital v. Great Cent. Basin Exploration, 288 F. Supp.2d 473, 479 (S.D.N.Y. 2003) ("Under New York law, it is well settled that an action will lie for the conversion of money where there is a specific, identifiable fund and an obligation to return or otherwise treat in a particular manner the specific fund in question.") (internal quotation marks and alterations omitted). The unauthorized acts or interference, however, must be tortious; they cannot be mere breaches of contract. See id. (conversion requires "acts that are unlawful or wrongful as distinguished from acts that are a mere violation of contractual rights") (internal quotation marks omitted); Calcutti v. SBU, Inc., 224 F. Supp.2d 691, 702 (S.D.N.Y. 2002). Rather, "[f]or a conversion claim to succeed in the context of a dispute regarding a contract, the breach of contract must result in some `wrong' that is separately actionable." Briarpatch Ltd. L.P. v. Geisler Roberdeau, Inc., 148 F. Supp.2d 321, 328 (S.D.N.Y. 2001). Finally, where, as here, "the property is money, it must be specifically identifiable and be subject to an obligation to be returned or to be otherwise treated in a particular manner." Republic of Haiti, 626 N.Y.S.2d at 475.

  It is undisputed that Freedom received a $33,475 deposit from Rella for the purchase of a yacht, that Rella cancelled that purchase, and that Freedom has not returned the deposit despite Rella's demand (Wertheimer Decl., Ex. 5.) The sole question is whether Freedom's refusal to return Rella's deposit is unauthorized, that is, whether Freedom wrongfully refuses to return the $33,475 to Rella now that he has cancelled the purchase. See Magnin v. Dinsmore, 70 N.Y. 410, 417 (1877) ("A conversion implies a wrongful act, a mis-delivery, a wrongful disposition or withholding of the property."). Rella does not explain whether Freedom accepted his deposit pursuant to the JVA or some other contractual arrangement, oral or written, and the JVA itself is silent as to the treatment of deposits in the event that Rella decides to cancel a purchase.*fn4 The Court must therefore look to general principles of New York law governing contracts for the sale of goods. See Phoenix Ancient Art, S.A. v. Kimbell Art. Found., No. 03 Civ. 1008, 2003 WL 22705119, at *2 (S.D.N.Y. Nov. 17, 2003) (noting that "a contract for the sale of goods is governed by New York's version of the Uniform Commercial Code . . ., as interpreted in light of common law principles to the extent not inconsistent with the U.C.C."). Under New York law, if the buyer makes a deposit on a contract for the sale of goods, but the seller then justifiably withholds delivery of those goods because of the buyer's breach, the buyer can recover at least a portion of the deposit, the precise amount of which varies depending on the circumstances and nature of the breach. See N.Y.U.C.C. § 2-178(2).*fn5 But where, as here, there has been no breach, and the buyer simply decides to cancel a purchase, New York law — as well as common sense — requires that the seller must return the buyer's deposit in full. See Kahn v. Rosenstiel, 298 F. 656 (S.D.N.Y. 1924) (Hand, J.) (where buyer agreed to purchase 2000 cases of whisky and made a $10,000 deposit on the contract of sale, but subsequently discovered that permits authorizing the purchase and sale were void and hence declined to consummate the contract, buyer entitled to recover his deposit); cf. Kressel, Rothlein & Roth v. Gallagher, 547 N.Y.S.2d 653, 653 (2d Dep't 1989) (buyer of real estate who canceled contract in advance of closing entitled to return of deposit). Indeed, absent some contractual arrangement, if a purchase has been cancelled, the seller has no legitimate claim to a deposit, for without a pending purchase, the deposit can be deemed neither a down payment on the purchase price nor security to ensure performance by the buyer. Freedom does not argue that Rella remained under some contractual obligation to buy the Sealine 47. Nor does it offer any other reason why it should be entitled to retain Rella's deposit. Indeed, as noted, Freedom does not oppose Rella's motion except to insist that Global, not itself. be compelled to return $33,475 to Rella, because Freedom paid $33,475 to Global as a deposit of its own, in anticipation of purchasing the Sealine 47 from Global for delivery to Rella. Insofar as Rella is concerned, however, Freedom's dealings with Global are immaterial. Whether Freedom signed over Rella's deposit check to Global or spent the $33,475 in some other manner does not affect Freedom's obligation to return Rella's deposit now that the purchase has been cancelled, for Freedom had no right, contractual or otherwise, to retain the deposit after that time. Rella has thus established his "right to possession of personal property . . . in the unauthorized possession of another who has acted to exclude the rights of the owner." Republic of Haiti, 626 N.Y.S.2d at 475. Accordingly, Rella's motion for partial summary judgment on his fifth claim is granted as against Freedom.*fn6

  By contrast, so far as the evidence indicates, Global never received $33,475 from Rella; it received that amount from Freedom. (Wertheimer Aff., Ex. 6.) Rella does not allege, still less offer evidence, that Global had any contractual obligation linking this payment to the deposit he paid to Freedom. Global is not a party to the JVA. In fact, Global offers evidence, which neither Rella nor Freedom dispute, that it entered into an entirely separate contract with Freedom for the sale of a Sealine 47 from Global to Freedom. (Berton Aff. ¶ 7.) That Rella may have been the anticipated ultimate recipient of this boat does not establish privity between Rella and Global. Global and Rella had no contract with one another for the purchase and sale of a boat, and while they apparently had certain dealings that fall within the convoluted web of facts out of which this action arises, none of these dealings, so far as any of Rella's evidence establishes, involved Rella transferring $33,475 to Global under a contractual or other arrangement.

  In short, while Global may possess $33,475 rightfully belonging to Freedom,*fn7 no evidence indicates that Global possesses $33,475 rightfully belonging to Rella. Accordingly, Rella's motion for summary judgment on his fifth claim is denied as against Global.

  B. Global's Cross-Motion

  Global cross-moves for summary judgment on Rella's fourth and fifth claims for unjust enrichment and conversion, respectively; the remaining counts in the complaint do not implicate Global. As discussed in the preceding section and as Global argues (D. Br. 7-8), Rella offers no evidence that Global possesses $33,475 that rightfully belongs to Rella. Global's cross-motion must therefore be granted as to the fifth count of Rella's complaint.

  But genuine issues of material fact preclude summary judgment on Rella's fourth count, which alleges that Global, by "wrongfully employ[ing] [the Sealine 42/5] as a demonstration boat to make sales for [Global's] own account," converted the yacht and became unjustly enriched. (Compl. ¶ 20.) Global offers evidence, through its president. Gerald Berton, that while Global was not a party to the JVA, under an agreement with Freedom. Global had the right "to use and operate yachts purchased by Rella pursuant to the JVA." (Berton Aff. ¶ 8.) In particular, as relevant here, "Rella was allowed to dock the 42/5 yacht at Global's marina . . ., in exchange for Global's right to use that vessel when it was not being operated by plaintiff." (Id. ¶ 9; see also id., Exs. C, D.)

  Global fails to submit evidence, however, explaining the source, nature, and extent of its alleged right to use Rella's Sealine 42/5. Certainly, Freedom and Global could not, by agreement between themselves only, lawfully authorize Global to use Rella's yacht in any way they chose.*fn8 Furthermore, Global's own evidence shows that Rella disputed the extent of Global's right to use the yacht. Exhibit D to the Berton Affidavit contains two letters from Rella, one to Berton, and the other to Berton and Ralph Braca, another principal of Global. In the first letter, while acknowledging that he authorized Global to use the boat for certain purposes, Rella expressed concern and frustration about the extent and nature of the use to which Global had put it. He wrote, for example,

[W]e are totally frustrated and baffled with the way Global is treating our boat and us. . . . We understand that it is the only boat in the country and is needed to show, but let me stress again, It is OUR boat, not Global's. . . . When we were in Florida in November and December, per Ralph's suggestion, we offered our boat as a demo boat for Freedom and Global. Now you casually tell me our boat was going to be in the show! Did anyone think to ask us? . . . It is unfair of Global to keep changing the deal, and making decisions about our boat as though it were yours. . . . Imagine my shock and confusion, especially after one month ago, being assured by you that Global would discuss everything pertaining to our boats with us first.
(Berton Aff., Ex. D.) In the second letter, Rella articulates with more formality and in greater detail his objections to Global's treatment of the Sealine 42/5. He asserts, for example, that the yacht, after being shown by Global at boat shows, "arrived [back to him] in battered, awful condition." (Id.) He also asserts that "Global has had the luxury and benefit of this boat from which to sell six others with out [sic] having to pay any carrying charges." (Id.) Rella, referring to these letters, argues that the JVA "did not give Global the right [to] exercise dominion and control as alleged in paragraph 8 of Global's Statement of Facts. It only gave Global's Berton and Braca the right to pilot [the Sealine 42/5] in Florida." He also argues that "although Global had permission from defendant Freedom to use the boat, this use was clearly a limited use. The acts of extensive misuse and destruction as alleged by plaintiff go well beyond the bounds of permissive use." (Wertheimer Aff., Mar. 29, 2004, at 2.)

  While Rella's letters do not conclusively establish the merits of his conversion claim, a reasonable jury could conclude that Global "exercised unauthorized interference with [Rella]'s ownership or possession of [the Sealine 42/45]." Rose, 296 F. Supp.2d at 397; see also Kilmer v. Hutton, 116 N.Y.S. 127, 135-36 (1st Dep't 1909). Equally, a reasonable jury could find that Global benefitted from its unauthorized use of Rella's yacht (by selling additional yachts), at his expense (because of the damage sustained by the yacht), and that "equity and good conscience" require that Global pay Rella some restitution under the circumstances. See Kaye v. Grossman, 202 F.3d 611, 616 (2d Cir. 2000) ("To prevail on a claim for unjust enrichment in New York, a plaintiff must establish 1) that the defendant benefitted; 2) at the plaintiff's expense; and 3) that `equity and good conscience' require restitution.").

  Global contends, however, that summary judgment must be granted simply because Rella wrote Tesler, as a representative of Freedom, a letter in which Rella states that his "agreement was with [Freedom] and [Freedom] alone had the duty of full custody and control over the use of the boat. If Global was responsible for high hours or damage, it [wa]s up to [Freedom] to rectify that situation." (Berton Aff., Ex. E at 1.) Contrary to Global's argument, this letter does not establish that "Rella's allegations are governed by contract," which would bar recovery in quasi-contract. (D. Br. 5-6.)

  First, the proper interpretation of Rella's letter to Tesler is an issue for the jury. It is not at all clear, as a matter of law, that Rella meant, by the above-quoted statement, to exonerate Global for any misuse of the boat on the ground that he contracted with Freedom only.

  Second, Global's position on its legal status, if any, under the JVA is internally inconsistent and raises additional questions of fact. On the one hand, Global disavows any contractual obligation to Rella under the JVA. On the other, Global argues that its rights to use the Sealine 42/5, and hence Rella's claim against Global for misuse, is "governed" by the JVA. (D. Br. 5.) Similarly, Global argues that Rella's unjust enrichment claim must be dismissed because "the existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi contract [i.e., unjust enrichment] for events arising out of the same subject matter." (D. Br. 6, quoting MacDraw, Inc. v. The CIT Group Equip. Fin., Inc., 157 F.3d 956, 964 (2d Cir. 1998) (internal quotation marks omitted).) But in the very next paragraph, Global contends that the JVA "cannot bind Global nor impose duties on Global because Global was not a party nor signatory to that contract." (D. Br. 6.)

  Global cannot simultaneously invoke the JVA to avoid liability on a quasi-contractual remedy but then disavow any relationship to that contract in order to deflect potential contractual liability to another party. If, as Global contends, it had no rights or obligations under the JVA, then Rella's conversion and unjust enrichment claims for its alleged misuse of his Sealine 42/5 survive, for at least some evidence indicates that Global used the boat in ways not authorized by, or inconsistent with, whatever arrangements circumscribed Global's rights to use that yacht. (Berton Aff., Ex. D.) Accordingly, Global's motion for summary judgment on the fourth count of the complaint is denied.*fn9

  C. Freedom's Motion

  Freedom asks the Court to (1) enforce the settlement; (2) compel Global to deposit $33,475 with the Court; (3) permit Freedom and Tesler to cross-claim against Global; and (4) grant summary judgment to Tesler. For the reasons stated above, the first three requests will be denied. The Court cannot enforce the settlement because the parties never reached a binding settlement agreement. Freedom offers no legal or factual basis for compelling Global to deposit $33,475 with the Court for disbursement to Rella. And Freedom's time to cross-claim has long since passed. That leaves Tesler's motion for summary judgment. He argues that he acted only as an employee of Freedom and therefore bears no personal liability for its torts or other wrongs. (Freedom Ltr. Br. at 2.)

  In general, absent bad faith or fraud, corporate officers and directors acting within the scope of their employment cannot be held personally liable for breaches of contract or tortious acts committed by their corporations. Mills v. Polar Molecular Corp., 12 F.3d 1170, 1177 (2d Cir. 1993); Amour & Co. v. Celic, 294 F.2d 432, 439 (2d Cir. 1961). None of the parties dispute that with respect to the events giving rise to Rella's claims, Tesler, President of Freedom, acted at all times within the scope of his employment. Only one count in the complaint singles out Tesler individually. See Komatsu Invs., Ltd. v. Greater China Corp., No. 96 Civ. 3833, 1997 WL 16667, at *2 (corporate officers may be held individually liable if they participate in fraud or act in bad faith). The third count alleges that Tesler fraudulently represented to Rella "that Freedom was a responsible dealer and that he had such experience, talent and promotion ability in the field, that if plaintiff entered into the [JVA], he would, within a stated period of time, sell the [Sealine] 42/5 for plaintiff on such terms as would enable plaintiff to purchase and enjoy one or more Sealine vessels thereafter." (Compl. ¶ 15.) But Rella has offered absolutely no evidence or argument to support this allegation; indeed, he has not opposed Freedom's motion in any respect.

  Absent some evidence of fraud, or that Tesler acted in his personal, as opposed to official, capacity in committing any of the torts or breaches of contract alleged by Rella, Tesler cannot be held personally liable. See Mills, 12 F.3d at 1177; Celic, 294 F.2d at 439; In re JWP Sec. Litigation, 928 F. Supp. 1239, 1262 (S.D.N.Y. 1996). Rella neither introduces such evidence nor, at this juncture, even argues that Tesler committed personal torts or defrauded him. Tesler's motion for summary judgment will therefore be granted.

  CONCLUSION

  For the reasons stated, Rella's and Freedom's motion to enforce the putative settlement agreement is denied; Rella's motion for partial summary judgment is granted as against Freedom and denied as against Global; Global's cross-motion for summary judgment is granted as to the fifth count of Rella's complaint and denied as to the fourth count; and Freedom's motion is denied, except to the extent that summary judgment dismissing all claims against Tesler is granted.

  SO ORDERED.


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