13‐2701‐cv

Jill Stuart (ASIA) LLC v. Sanei Int’l Co.

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL

EFFECT.    CITATION TO A SUMMARY ORDER FILED ON OR AFTER

JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY FEDERAL RULE

OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE

32.1.1.    WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED

WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL

APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION

“SUMMARY ORDER”).  A PARTY CITING TO A SUMMARY ORDER MUST

SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.   

1 At a stated term of the United States Court of Appeals for the Second

2 Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley

Square, in the City of New York, on the 14 3 th day of May, two thousand fourteen.

4 

5 PRESENT: AMALYA L. KEARSE,

6 RAYMOND J. LOHIER, JR.,

7 SUSAN L. CARNEY,

8      Circuit Judges.

9 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ 

10 

11 JILL STUART (ASIA) LLC, RONALD CURTIS, AS TRUSTEE  

12 FOR THE STUART‐CURTIS FAMILY TRUST,

13 

14 Plaintiffs‐Appellants,

15 

16 v. No. 13‐2701‐cv

17     

18 SANEI INTERNATIONAL CO., LTD.,

19 

     Defendant‐Appellee. * 20 

21 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ 

22 

 

* The Clerk of the Court is directed to amend the caption of this case as set forth

above.
2 

1 FOR APPELLANTS: MICHAEL J. SHEPPEARD, Ballon Stoll Bader &

2 Nadler, P.C., New York, NY.

3 

4 FOR APPELLEE: LISA T. SIMPSON (Emily J. Green, Daniel Kahn,

5 Marc R. Shapiro, on the brief), Orrick, Herrington

6 & Sutcliffe LLP, New York, NY.

7 

8 Appeal from a judgment of the United States District Court for the

9 Southern District of New York (Katherine B. Forrest, Judge).

10 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

11 AND DECREED that the judgment of the District Court is AFFIRMED.

12 Jill Stuart (Asia) LLC and Ronald Curtis, as Trustee for the Stuart‐Curtis

13 Family Trust (together, “Jill Stuart”), appeal from (1) the District Court’s order

14 entered on November 7, 2012 granting the motion of Sanei International Co., Ltd.

15 (“Sanei”) to dismiss Jill Stuart’s claims for unjust enrichment and breach of

16 contract, implied contract, and the covenant of good faith and fair dealing, all

17 stemming from Sanei’s allegedly unauthorized use of the Jill Stuart trademark,

18 and (2) the District Court’s June 17, 2013 order granting Sanei’s motion for

19 summary judgment on the issue of contract damages relating to Sanei’s

20 unauthorized copying and use of a Jill Stuart design and awarding nominal

21 damages only.  We assume the parties’ familiarity with the facts and record of

22 the prior proceedings, to which we refer only as necessary to explain our

23 decision to affirm.

24 1.  Motion to Dismiss

25 We review de novo the District Court’s partial grant of a motion to

26 dismiss.  See Standard Inv. Chartered, Inc. v. Nat’l Ass’n of Sec. Dealers, Inc., 637

27 F.3d 112, 115 (2d Cir. 2011).  Under New York law, which the parties agree

28 applies in this case, “the question of whether an ambiguity exists must be

29 ascertained from the face of an agreement without regard to extrinsic evidence.”  
3 

1 Reiss v. Fin. Performance Corp., 97 N.Y.2d 195, 199 (2001).  “An ambiguity exists

2 where the terms of a contract could suggest more than one meaning when

3 viewed objectively by a reasonably intelligent person who has examined the

4 context of the entire integrated agreement and who is cognizant of the customs,

5 practices, usages and terminology as generally understood in the particular trade

6 or business.”  Eternity Global Master Fund Ltd. v. Morgan Guar. Trust Co. of

7 N.Y., 375 F.3d 168, 173 (2d Cir. 2004) (quotation marks omitted).

8 The District Court concluded that the Permanent Assignment Agreement

9 (“PAA”), which assigned to Sanei the Jill Stuart trademark for certain categories

10 of goods in certain territories, does not contain a provision prohibiting Sanei’s

11 use of the mark on other products as to which the PAA is silent.  Relying

12 primarily on Two Guys from Harrison‐N.Y. v. S.F.R. Realty Associates, 63

13 N.Y.2d 396, 403 (1984), which stands for the unremarkable principle of New York

14 law that a contract should be interpreted to avoid rendering any of its provisions

15 meaningless or superfluous, Jill Stuart argues that the PAA must be read to

16 contain an implicit prohibition of such unauthorized uses because any other

17 reading “renders the [PAA] meaningless, as Sanei would thus be free to use the

18 [Jill Stuart trademark] in whatever manner it desired without payment or

19 meaningful reckoning.”  Appellant’s Br. 31.  We disagree that the PAA’s failure

20 to provide a contract‐based cause of action for Sanei’s alleged trademark

21 infringement renders the PAA meaningless in the way that Jill Stuart describes.  

22 To the contrary, in consideration for $45 million to the Stuart‐Curtis Family

23 Trust, the PAA assigns valuable intellectual property that Sanei would not

otherwise own.1 24    

 

1 Jill Stuart’s argument for an implied negative covenant under Harper Brothers

v. Klaw, 232 F. 609 (S.D.N.Y. 1916), is unpersuasive.  There, the court determined
4 

1 Moreover, whereas the PAA contains an explicit prohibition against uses

2 of Jill Stuart designs that infringe Jill Stuart’s copyright, it contains no similar

3 prohibition against unauthorized uses of Jill Stuart’s trademark.  This indicates

4 that the parties intended to omit such a contractual prohibition.

5 2.  Motion for Summary Judgment  

6 We review de novo the District Court’s grant of summary judgment.  

7 Garcia v. Hartford Police Dep’t, 706 F.3d 120, 126 (2d Cir. 2013).  Under New

8 York law, contract damages are intended to place the non‐breaching party in the

9 position it would have found itself had the contract been performed, “subject to

10 the limitations that the injury . . . was foreseeable, and that the amount of

11 damages claimed be measurable with a reasonable degree of certainty and, of

12 course, adequately proven.”  Freund v. Wash. Square Press, 34 N.Y.2d 379, 382

13 (1974).  “[P]roof of consequential damages cannot be speculative or conjectural,”

14 and lost profits “must be proven with reasonable certainty and be capable of

15 measurement based upon known reliable factors without undue speculation.”  

16 Bi‐Economy Mkt., Inc. v. Harleysville Ins. Co. of N.Y., 10 N.Y.3d 187, 193 (2008)

17 (quotation marks omitted).

18 Sanei admits that it breached the PAA by copying Jill Stuart’s Palm Tree

19 Print 1 (“Palm Print”) design and using it (1) on Sanei’s website, (2) in a

20 promotional booklet, and (3) on an iPhone cover.  On summary judgment,

21 however, Jill Stuart failed to show that any of these uses caused lost profits by

 

that a copyright license, like a license of real property, implicitly prohibited the

licensee from intentionally destroying the value of the licensed property.  Id. at

613.  But the PAA is an assignment, not a license.  Without deciding whether

New York continues to recognize an implied negative covenant in the intellectual

property context, we conclude that Harper Brothers is inapposite because Sanei

has no obligation to preserve the value of the property it purchased.    
5 

1 damaging the Jill Stuart brand.  Jill Stuart’s “reasonable royalty” theory also fails

2 because, even assuming that a hypothetical reasonable royalty amount could

3 support a non‐speculative consequential damages determination under New

4 York law, Jill Stuart failed to show sufficiently similar royalty contracts on which

5 to base such a determination.  Jill Stuart having failed to show reasonably certain,

6 adequately proven, and sufficiently non‐conjectural consequential damages, the

7 District Court did not err in awarding nominal damages only.

8 We have considered Jill Stuart’s remaining arguments and conclude that

9 they are without merit.  For the foregoing reasons, the judgment of the District

10 Court is AFFIRMED.

11       FOR THE COURT:

12       Catherine O’Hagan Wolfe, Clerk of Court  

13