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Perceptron, Inc. v. Silicon Video

August 27, 2010

PERCEPTRON, INC., PLAINTIFF,
v.
SILICON VIDEO, INC.; AND PANAVISION IMAGING, INC., DEFENDANTS.



The opinion of the court was delivered by: Hon. Glenn T. Suddaby, United States District Judge

MEMORANDUM DECISION and ORDER

Currently pending in this breach-of-contract action is a motion for summary judgment filed by Perceptron, Inc. ("Plaintiff"), and a cross-motion for summary judgment filed by Silicon Video, Inc., and Panavision Imaging, LLC ("Defendants"). (Dkt. Nos. 43, 52.) For the reasons set forth below, Plaintiff's motion is denied, and Defendants' cross-motion is denied.

I. RELEVANT BACKGROUND

A. Plaintiff's Claims

Generally, in its Complaint, Plaintiff seeks a judgment declaring the rights of the parties with regard to the successor liability of Defendants for an arbitration award granted against non-party Photo Vision Systems, Inc. ("PVS") in favor of Plaintiff in the amount of $2,870,897.43 plus interest. (See generally Dkt. No. 2, Part 1, at 8-15 [Plf.'s Compl.].) More specifically, Plaintiff alleges that, after PVS breached a contract with Plaintiff in April 2002, but before Plaintiff obtained an arbitration award against PVS on March 24, 2004, PVS transferred its assets to Defendant Silicon Video, Inc., which in turn transferred those assets to Defendant Panavision Imaging, LLC. (Id.)

B. Undisputed Material Facts

Generally, the undisputed material facts of this case are as follows. On July 27, 1998, Plaintiff and PVS entered into a contract pursuant to which PVS was to develop and produce certain video imaging technology for Plaintiff. In April 2002, Plaintiff informed PVS that it was terminating its contract with PVS because PVS had breached that contract. On March 27, 2003, PVS's assets were transferred to Defendant Silicon Video, Inc. On July 8, 2003, Plaintiff filed for arbitration against PVS. On December 15, 2003, Defendant Silicon Video, Inc.'s assets were transferred to Defendant Panavision Imaging, LLC. On March 24, 2004, Plaintiff obtained an arbitration award against PVS in the amount of $2,870,897.43 for a breach of contract. (Compare Dkt. No. 43, Plf.'s Rule 7.1 Statement [asserting referenced facts] with Dkt. No. 52, Defs.' Rule 7.1 Response [admitting facts asserted by Plaintiff by not specifically controverting them].)

C. Summary of Parties' Motions

In its motion for summary judgment, Plaintiff argues that Defendants are liable under two separate theories. (Dkt. No. 43, Plf.'s Memo. of Law.) First, Plaintiff argues that Defendants are liable under what is called the "de facto merger" theory of successor liability, because (1) the transactions in question amounted to a consolidation or merger of the companies, and (2) Defendants Silicon Video, Inc., and Panavision were both "mere continuations" of PVS. (Id. at 12-17.) Second, Plaintiff argues that Defendants are liable under what is called the "fraudulent transaction" theory of successor liability, because they transferred PVS's assets with the intent to defraud Plaintiff. (Id. at 18-19.)

In their response to Plaintiff's motion, and their cross-motion for summary judgment requesting the dismissal of Plaintiff's Complaint, Defendants argue that they cannot be liable under a theory of successor liability for three reasons: (1) Plaintiff cannot recover from Defendants under a theory of successor liability because Plaintiff did not experience a loss or reduction of its position following the transfer of PVS's assets to Defendant Silicon Video, Inc., on March 27, 2003 (and the subsequent transfer of those assets to Defendant Panavision Imaging, LLC, on December 15, 2003); (2) Plaintiff should not be permitted to recover from Defendants for the transfer of PVS's assets because Defendants followed the loan, security and statutory foreclosure process under New York Uniform Commercial Code § 9-620; and (3) Plaintiff has failed to establish a de facto merger. (See generally Dkt. No. 52, Defs.' Memo. of Law, at 11-23.) However, Defendants fail to squarely address Plaintiff's fraudulent-transaction theory of successor liability. (Id.)

II. RELEVANT LEGAL STANDARDS

A. Standard Governing Motions for Summary Judgment

Under Fed. R. Civ. P. 56, summary judgment is warranted if "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 moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). In determining whether a genuine issue of material fact exists, the Court must resolve all ambiguities and draw all reasonable inferences against the moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).*fn1 In addition, "[the moving party] bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the . . . [record] which it believes demonstrate[s] the absence of any genuine issue of material fact." Celotex v. Catrett, 477 U.S. 317, 323-24 (1986). However, when the moving party has met this initial responsibility, the nonmoving party must come forward with "specific facts showing a genuine issue [of material fact] for trial." Fed. R. Civ. P. 56(e)(2).

What this burden-shifting standard means, when a non-movant has failed to respond to a movant's motion for summary judgment, is that "[t]he fact that there has been no [such] response . . . does not . . . [by itself] mean that the motion is to be granted automatically." Champion v. Artuz, 76 F.3d 483, 486 (2d Cir. 1996). Rather, practically speaking, the Court must (1) determine what material facts, if any, are disputed in the record presented on the movant's motion, and (2) assure itself that, based on those undisputed material facts, the law indeed warrants judgment for the movant. Champion, 76 F.3d at 486; Allen v. Comprehensive Analytical Group, Inc., 140 F. Supp.2d 229, 232 (N.D.N.Y. ...


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