1

11-698-cv

Sokol Holdings v. BMB Munai

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

S U M M A R Y O R D E R

Rulings by summary order do not have precedential effect. Citation to summary orders

filed after January 1, 2007, is permitted and is governed by this court’s Local Rule

32.1.1 and Federal Rule of Appellate Procedure 32.1. 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 a summary

order must serve a copy of it on any party not represented by counsel.

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

the Second Circuit, held at the Daniel Patrick Moynihan United

States Courthouse, 500 Pearl Street, in the City of New York, on

the 26th day of September, two thousand eleven.

Present: RALPH K. WINTER,

BARRINGTON D. PARKER,

DENNY CHIN,

 Circuit Judges.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

SOKOL HOLDINGS, INC., BRIAN SAVAGE and THOMAS SINCLAIR,

Plaintiffs-Appellants,

 v. 11-698-cv

BMB MUNAI, INC., ALEXANDRE AGAIAN, BAKHYTBEK BAISEITOV, GEORGES

BENARROCH, BORIS CHERDABAYEV, MIRGALI KUNAYEV, CREDIFINANCE

CAPITAL, INC. and CREDIFINANCE SECURITIES, LTD.,

Defendants-Appellees.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Jerome M. Marcus, Jonathan Auerbach,

Marcus & Auerbach LLC, Jenkintown, PA, 

Thomas E. L. Dewey, Dewey Pegno &

Kramarsksky, LLP, New York, NY, for

Plaintiffs-Appellants.

Robert A. O’Hare Jr., Andrew C. Levitt,

O’Hare Parnagian LLP, New York, NY,

Brent V. Manning, Sammi V. Anderson,
2

James E. Ji, Manning Curtis Bradshaw &

Bednar LLC, Salt Lake City, UT, for

Defendants-Appellees.

Appeal from United States District Court for the Southern

District of New York (Wood, J.).

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

AND DECREED that the judgment of said court be and hereby is

AFFIRMED.

We assume familiarity with the underlying facts, the

procedural history, and the issues presented for review.

Appellants assert that appellees tortiously interfered with

their contract with Emir Oil. To establish a prima facie case of

tortious interference with contract under New York law,

appellants must show (i) the existence of a valid contract

between them and a third party; (ii) the "defendant's knowledge

of the contract"; (iii) the "defendant's intentional procurement

of the third-party's breach of the contract without

justification"; (iv) "actual breach of the contract"; and (v)

"damages resulting therefrom." Kirch v. Liberty Media Corp., 449

F.3d 388, 401-02 (2d Cir. 2006) (quoting Lama Holding Co. v.

Smith Barney Inc., 88 N.Y.2d 413, 424 (1996)).

The Emir-Sokol agreement would have allowed appellants to

acquire 100% of Tolmakov’s 70% interest in the ADE fields

venture. Appellants seek as damages the value of a 20% interest

in the ownership bloc that would have been acquired by them under

their contract with Emir Oil. However, it is undisputed that

appellants failed to perform their obligations under the Emir-
1

Appellants claim that they had an oral investment agreement with the BM&B

Defendants but do not assert a claim for breach of that agreement.

3

Sokol contract. 

The district court held that appellants could not establish

damages because they “were unable to perform.” Appellants

challenge that holding and assert that they could have performed. 

However, the only evidence relied upon is a bank account

containing $700,000, which, they state, was available to be

transferred to Emir Oil. However, the evidence is clear that

this account belonged to the BM&B Defendants and was under their

exclusive control.1

Appellants nevertheless insist that they could have raised

the necessary funds to perform the Emir-Sokol agreement. Taking

them at their word, however, merely returns the issue to their

decision to not perform. If they had the ability to perform, but

did not, then they were unwilling to do so, and their tortious

interference claim fails for that reason.

Appellants argue that they were not required to perform

because Tolmakov anticipatorily repudiated the Sokol-Emir

contract when he accepted a $200,000 cash payment from Kunayev on

the same day he signed the Emir-Sokol contract. To establish an

anticipatory breach under New York law, appellants must show

either (i) "a statement by the obligor to the obligee indicating

that the obligor will commit a breach that would of itself give
4

the obligee a claim for damages for total breach," or (ii) "a

voluntary affirmative act which renders the obligor unable or

apparently unable to perform without such a breach." Computer

Possibilities Unlimited, Inc. v. Mobil Oil Corp., 747 N.Y.S.2d

468, 474-75 (App. Div. 1st Dep’t 2002) (citation and internal

quotation marks omitted). An anticipatory repudiation also

occurs where a party voluntarily "disable[s] itself from

complying with its contractual obligations." Id. at 475

(citation and internal quotation marks omitted).

Once an anticipatory repudiation occurs, the other party

need not continue performing under the contract; however, that

party must “demonstrate that he had the willingness and ability

to perform before the repudiation and that [he] would have

rendered the agreed performance if the defendant had not

repudiated." Record Club of Am., Inc. v. United Artists Records,

Inc., 890 F.2d 1264, 1275 (2d Cir. 1989). This rule is an

application of the general principle that the plaintiff must

demonstrate the breach caused him injury; under an anticipatory

breach theory, “he must prove that he intended to and was able to

perform when his performance was due." Id. (citation and

internal quotation marks omitted); see also Ross Bicycles, Inc.

v. Citibank, N.A., 606 N.Y.S.2d 192, 193 (App. Div. 1st Dep’t

1994). Because appellants cannot demonstrate that they were able

and willing to perform, this rule bars their claim.
5

Appellants rely upon case law suggesting that a party does

not need to prove a willingness and ability to perform once there

has been an anticipatory breach. See Am. List Corp. v. U.S. News

& World Report, 75 N.Y.2d 38, 44-45 (1989). However, where the

plaintiff seeks expectancy, rather than restitutionary, damages,

as is the case here, the plaintiff "must make a prima facie

showing in its moving papers [at the summary judgment stage]

that, but for the other party's anticipatory breach, it was

ready, willing and able, including financially able, to perform

its obligations under the contract." Emposimato v. CIFC

Acquisition Corp., No. 601728 2008, 2011 WL 833801, at *13 (N.Y.

Sup. Ct. Mar. 7, 2011). 

Appellants cannot make such a showing. The alleged

anticipatory breach is Kunayev’s payment in April 2003.

However, appellants first learned of this alleged breach during

Kunayev’s deposition in May 2008, after this case had been

brought and five years after they failed to perform under the

Emil-Sokol contract. They cannot, therefore, show that they were

willing to perform but for the alleged anticipatory breach.

Not having performed, and now, the value of the deal having

been determined in hindsight, appellants seek by a lawsuit to

reap the benefits, without ever having incurred the risks. The

district court, therefore, did not err in dismissing the

appellants’ claim for tortious interference with contract.
6

Appellants also assert a claim for unfair competition. The

measure of damages under a claim for unfair competition is "the

amount which the plaintiff would have made but for the

defendant's wrong, and not the profits received by the

defendants." Suburban Graphics Supply Corp. v. Nagle, 774

N.Y.S.2d 160, 163-64 (App. Div. 2d Dep’t 2004). Again, because

the appellants could have performed under the Emir-Sokol contract

and reaped its benefits, they are not entitled to lost profits. 

The only damages to which appellants may be entitled is the value

of their work product. Appellants’ briefs paint their efforts as

critical to the final product; but, when the district court

offered to hold a trial determining the worth of those efforts,

appellants stipulated that it was too meager to justify a trial.

We need not consider this issue further, therefore.

Appellants’ claim for unjust enrichment may well be barred

by New York’s statute of frauds contained in General Obligations

Law § 5-701(a)(10). See Snyder v. Bronfman, 13 N.Y.3d 504, 506-

09 (2009) (rejecting the plaintiff’s claim for breach of an oral

agreement to form a joint venture under similar facts and holding

that the “essence” of the claim was that his efforts led to the

defendant’s deal, precisely the type of claim barred by the

statute of frauds). Even if the New York statute of frauds did

not foreclose this claim, however, the only damages appellants

would be entitled to recover is the “reasonable value of the
7

services [they] rendered” to the BM&B Defendants. Collins Tuttle

& Co. v. Leucadia, Inc., 544 N.Y.S.2d 604, 605 (App. Div. 1st

Dep’t 1989). As discussed immediately supra, they have already

refused a trial on these damages.

We have considered appellants’ remaining arguments and find

them to be without merit. For the foregoing reasons, the

judgement of the district court is hereby AFFIRMED.

FOR THE COURT:

Catherine O’Hagan Wolfe, Clerk