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Tradex Europe SPRL v. Conair Corp.

May 6, 2008

TRADEX EUROPE SPRL ("TRADEX"), AND KYRA PAHLEN, PLAINTIFFS,
v.
CONAIR CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Kimba M. Wood, U.S.D.J.

OPINION AND ORDER

Plaintiffs Tradex Europe SPRL ("Tradex") and Kyra Pahlen ("Pahlen") bring this action against Defendant Conair Corporation for breach of contract.*fn1 Defendant moves for summary judgment, arguing that Plaintiffs have failed to prove that they suffered damages as a result of the alleged breach of contract. Plaintiffs oppose the motion. For the reasons set forth below, the motion is granted in part and denied in part.

BACKGROUND

Unless otherwise noted, the following facts are undisputed. On September 16, 2004, Plaintiff Tradex entered into a consultancy agreement with Scunci International, Inc. ("Scunci"), a Pennsylvania corporation that marketed, sold, and distributed hair accessories (the "Tradex Consultancy Agreement"). (Compl. ¶ 10.) On the same date, Plaintiff Pahlen entered into a similar consultancy agreement with Scunci (the "Pahlen Consultancy Agreement"). Pursuant to the Tradex Consultancy Agreement and the Pahlen Consultancy Agreement (collectively, the "parties' consultancy agreements" or the "consultancy agreements"), Plaintiffs promised to perform a variety of consulting services on behalf of Scunci in order to expand Scunci's business internationally. (Def.'s Local Rule 56.1 Statement ¶¶ 11, 29.) The sole compensation to be paid to Plaintiffs for services rendered was a 4 percent commission on net sales revenues collected by Scunci from transactions executed as a result of Plaintiffs' consulting services. (Def.'s Statement ¶¶ 12, 30.)

The parties' consultancy agreements included a "Limitations on Liability" provision, which stated:

EACH PARTY HERETO AGREES THAT ITS MAXIMUM, CUMULATIVE LIABILITY FOR ALL BREACHES OF ANY PROVISIONS OF THIS AGREEMENT OR ANY OTHER BREACHES OF CONDITIONS OR TERMS, OR IN ANY OTHER WAY ARISING OUT OF OR RELATED TO THIS AGREEMENT FOR ALL CAUSES OF ACTION WHATSOEVER AND REGARDLESS OF THE FORM OF ACTION (INCLUDING BREACH OF CONTRACT, TORT OR ANY OTHER LEGAL OR EQUITABLE THEORY), SHALL BE LIMITED TO SUCH PARTY'S ACTUAL DIRECT DAMAGES IN AN AMOUNT NOT TO EXCEED THE TOTAL AMOUNT PAID TO [PLAINTIFFS] BY SCUNCI UNDER [THE PARTIES' CONSULTANCY AGREEMENTS] DURING THE TWELVE MONTH PERIOD PRIOR TO THE DATE THE FIRST CAUSE OF ACTION HEREUNDER AROSE. (Def.'s Statement ¶¶ 17, 35.) The consultancy agreements also included a "Consequential Damages" provision, which stated:

UNDER NO CIRCUMSTANCES SHALL ANY PARTY BE LIABLE TO ANY OTHER PARTY . . . FOR SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE, MULTIPLE, CONSEQUENTIAL OR INDIRECT DAMAGES, INCLUDING WITHOUT LIMITATION, DAMAGES FOR LOSS OF GOODWILL OR FUTURE BUSINESS PROFITS, FUTURE LOSS OF REVENUE . . . WHETHER SUCH DAMAGES ARE ALLEGED IN TORT, CONTRACT OR OTHERWISE . . . . (Def.'s Statement ¶¶ 18, 36.) Plaintiffs and Scunci were all represented by counsel in negotiating and executing the consultancy agreements. (Def.'s Statement ¶¶ 4-6, 22-24.)

Following the execution of the consultancy agreements, Plaintiffs entered into discussions with a number of companies on behalf of Scunci in an effort to secure sales and distribution contracts for Scunci products. Plaintiffs claim that during the early part of 2005, they engaged in preliminary negotiations with at least eleven potential distributors and retailers. (Pls.' Local Rule 56.1 Counterstatement ¶¶ 63, 68.) Plaintiffs also allege that they secured letters of intent from two companies that expressed an interest in selling Scunci products in Brazil and Asia, respectively. (Pls.' Counterstatement ¶¶ 69-74.) By the end of March 2005, however, no sales or distribution contracts had been executed as a result of Plaintiffs' efforts.

On March 21, 2005, Defendant acquired substantially all of the assets of Scunci. (Def.'s Statement ¶¶ 3, 21.) As part of this acquisition, Defendant assumed Scunci's obligations under the parties' consultancy agreements. (Id.) Plaintiffs claim that following Defendant's acquisition of Scunci, Defendant began actively interfering with Plaintiffs' efforts to secure sales and distribution contracts for Scunci products, and thereby prevented Plaintiffs from earning commissions under the consultancy agreements. (Compl. ¶ 39; Pls.' Counterstatement ¶¶ 87-114.) Defendant denies any wrongdoing in its dealings with Plaintiffs under the parties' consultancy agreements. (Reply 5.)

DISCUSSION

I. THE SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate where "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Guilbert v. Gardner, 480 F.3d 140, 145 (2d Cir. 2007). A genuine issue of material fact exists if there is sufficient evidence to allow a "reasonable jury" to return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

The burden of demonstrating the absence of any genuine issue of material fact rests with the moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970); Grady v. Affiliated Cent., Inc., 130 F.3d 553, 559 (2d Cir. 1997). Once this initial burden has been met, the nonmoving party must set forth "specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e); Cifarelli v. Village of Babylon, 93 F.3d 47, 51 (2d Cir. 1996). At this stage, the Court must view the evidence presented "in the light most favorable to the non-moving party and ...


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