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Diesel Props S.r.l. v. Greystone Business Credit II LLC

January 13, 2009


The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge


The reader's familiarity with this Court's prior decisions is assumed.*fn1 Plaintiffs Diesel Props S.r.l. and Diesel Kid S.r.l. are referred to herein as "Props" and "Kid," or, collectively, "Plaintiffs." Defendants Greystone Business Credit II LLC and Global Brand Marketing Inc. are referred to as "Greystone" and "GBMI," or "Defendants." Third-party Defendant Diesel S.p.A. is referred to as "Diesel SpA." Plaintiffs and Diesel SpA are referred to as "Diesel."

This opinion resolves several motions. Greystone's motion to reconsider this Court's decision with respect to Diesel's motions to dismiss is denied. Greystone's motion to strike Plaintiffs' jury demand is granted. Greystone's motion for summary judgment is denied. Plaintiffs' motion for summary judgment with respect to their claim of breach of the Tripartite Agreements is denied. GBMI's motion for summary judgment is granted. Plaintiffs' motion for summary judgment dismissing all counterclaims is granted in part and denied in part. Diesel SpA's motion for summary judgment is granted.


Greystone urges this Court to reconsider its dismissal of Greystone's counterclaims for tortious interference with business relations, tortious interference with contract, breach of the Distribution Agreements, breach of alleged oral agreements, breach of the Sourcing Agreement, breach of the Non-Interference Agreements as to Props and unjust enrichment as to Kid and Diesel SpA. See Diesel Props S.r.l. v. Greystone Business Credit II LLC, No. 07 Civ. 9580, 2008 WL 4833001 (S.D.N.Y. Nov. 5, 2008) (hereinafter "Diesel (Nov. 5, 2008)").

The Court dismissed these claims because they are subject to a forum selection clause that identifies Milan, Italy as the locus for the resolution of disputes, and held that Plaintiffs did not waive their right to enforce the forum selection clause because all of Plaintiffs' claims arise under the Tripartite Agreements ("TPA"), pursuant to which this forum selection clause is applicable.

The fact that Plaintiffs recently indicated that their conversion claim arises under the Distribution Agreements does not change this Court's view. Moreover, as Plaintiffs have consistently maintained that their conversion claim is based on an interpretation of the Distribution Agreements, Greystone cannot point to any new development on which to base its motion for reconsideration. Plaintiffs' conversion claim did not constitute a waiver of the forum selection clause because it was brought in this forum in response to a perceived emergency, i.e., Defendants' intention to sell the "Warehouse Shoes" to a third party. See Lifeco Servs. Corp. v. Superior Court, 222 Cal. App. 3d 331, 336-37 (Cal. Ct. App. 1990); Rush v. Oppenheimer & Co., 779 F.2d 885, 887 (2d Cir. 1985) (waiver of a chosen forum "is not to be lightly inferred"). See also 2d Am. Compl. ¶ 34. Moreover, the conversion claim against Greystone does not arise under the Distribution Agreements, to which Greystone is not a party.

Further, Plaintiffs' conversion claim must be dismissed, as the parties have settled their dispute with respect to the Warehouse Shoes and Plaintiffs no longer pursue their conversion claim. See Settlement Agreement, Ex. A to Greystone's Reply in Support of Its Motion for Reconsideration, at 3-4. Greystone's motion to reconsider is denied.


In the TPA, Plaintiffs and Defendants waived "to the fullest extent permitted under applicable law the right to trial by jury in any action brought hereunder." See Greystone's Mot. to Strike Jury Demand, Oct. 17, 2008, Ex. A (hereinafter, "TPA") at 3. A jury trial may be knowingly and voluntarily waived by contract in a civil action. See Great Earth Int'l Franchising Corp. v. Milks Dev., 311 F. Supp. 2d 419, 437 (S.D.N.Y. 2004) (citing Herman Miller, Inc. v. Thom Rock Realty Co., 46 F.3d 183, 189 (2d Cir. 1995)).

In its prior opinion, this Court held that all of Plaintiffs claims depend on rights and duties expressed in the TPA and that filing suit in this district complied with the TPA's forum selection clause. See Diesel (Nov. 5, 2008), at *15. All Plaintiffs' claims, therefore, are subject to the TPA's jury waiver provision.

Further, Plaintiffs' claims that are based on equitable theories of relief are likely not to require a jury trial irrespective of their relationship to the TPA. See, e.g., CSC Holdings, Inc. v. Westchester Terrace at Crisfield Condo., 235 F. Supp. 2d 243, 264 (S.D.N.Y. 2002). Plaintiffs' second, fourth and sixth causes of action (unjust enrichment, account stated and promissory estoppel) are generally considered to be equitable in nature even though they seek monetary damages. See G.A. Modefine S.A. v. Burlington Coat Factory Warehouse Corp., 888 F. Supp. 44, 45-46 (S.D.N.Y. 1995); EMI Music Mktg. v. Avatar Records, Inc., No. 03 Civ. 2783, 2005 WL 743071, at *6 (S.D.N.Y. Mar. 31, 2005); Geneva Pharm. Tech. Corp. v. Barr Labs., Inc., No. 98 Civ. 861, 2003 WL 1345136, at *4-5 (S.D.N.Y. Mar. 19, 2003).

The jury waiver in the TPA is clear and conspicuous, as it is plainly worded and the only provision that appears in all capital letters. This Court thus strikes Plaintiffs' jury demand.


A. Legal Standard

A court will not grant a motion for summary judgment pursuant to Fed. R. Civ. P. 56 unless it determines that there is no genuine issue of material fact and the undisputed facts are sufficient to warrant judgment as a matter of law. Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Anderson v. Liberty Lobby Inc., 477 U.S. 242, 250 (1986). The court must resolve all ambiguities, and draw all inferences, against the moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962) (per curiam). "There is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson, 477 U.S. at 249.

B. Greystone's Motion for Summary Judgment on Plaintiffs' Breach of TPA Claim

Plaintiffs claim that Greystone breached the TPA by failing to make payments or to provide notice pursuant to its terms. Greystone contends that it was not required to make payments or provide notice because the parties failed to meet the following requirements, inter alia, which Greystone alleges were conditions precedent to its obligations: (1) GBMI's delivery to Greystone and Plaintiffs of a purchase order from its customer ("Customer Purchase Order"); (2) Plaintiffs' delivery to Greystone of its invoice to GBMI ("Diesel Invoice"); (3) GBMI's delivery to Greystone and Plaintiffs of its invoice to its customer ("Customer Invoice"); and (4) a matching of the Diesel Invoice to the Customer Invoice for any particular shipment of shoes.

"Under New York law, 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." Terwilliger v. Terwilliger, 206 F.3d 240, 245 (2d Cir. 2000). See also RJE Corp. v. Northville Indus. Corp., 329 F.3d 310, 314 (2d Cir. 2003) ("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.") (internal quotation marks omitted). If a contract is unambiguous, then its proper construction is a question of law. Metro. Life Ins. Co. v. RJR Nabisco, Inc., 906 F.2d 884, 889 (2d Cir. 1990). However, "[w]here the intent of the parties is too ambiguous to be gleaned from the contract alone, the Court should receive evidence that might better clarify that intent." Gitnik v. Home Depot U.S.A., Inc., No. 07 Civ. 1244, 2007 WL 2728358, at *2 (S.D.N.Y. Sept. 18, 2007) (internal quotation marks and citation omitted).

1. Genuine Issue: Whether Customer Purchase Order Was Condition Precedent

Greystone asserts that a Customer Purchase Order from one of GBMI's customers was a condition precedent to Greystone's payment and notice obligations. However, the unambiguous language of the TPA required only two events to occur before Greystone was required to pay Plaintiffs: (1) GBMI had to send to Greystone a copy of its Customer Invoice, and (2) the Customer Invoice had to correspond to a Diesel Invoice, which would determine the amount of Greystone's payment. To wit, the TPA provides that "[t]he delivery of the Customer Invoice to Greystone shall be deemed to be an irrevocable request for a Revolving Loan in the amount of the corresponding Diesel Invoice."*fn3 TPA at 2. The delivery of a Customer Invoice to Greystone also triggered Greystone's obligation to provide written notice to Plaintiffs if such a request for a revolving loan was prohibited by the Loan Agreement. See id. at 2-3.

The plain language of the TPA undermines Greystone's contention that the Customer Purchase Order was a condition precedent. "[I]t must clearly appear from the contract itself that the parties intended a provision to operate as a condition precedent . . . , and . . . where there is ambiguity in a contractual term, the law does not favor a construction which creates a condition precedent." Lui v. Park Ridge at Terryville Ass'n, Inc., 601 N.Y.S.2d 496, 499 (N.Y. App. Div. 1993) (internal citations omitted). There is no indication in the TPA that the parties intended the Customer Purchase Order requirement to be a ...

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