1 21

- 32

- cv JN Contemporary Art LLC v. Phillips Auctioneers LLC

UNITED STATES COURT OF APPEALS 1

FOR THE SECOND CIRCUIT 2

____________________ 3 4 August Term, 2021 5 6 (Argued: August 19, 2021 Decided: March 23, 2022 ) 7 8 Docket No. 21

- 32

- cv 9 10

____________________ 11 12 JN Contemporary Art LLC, 13 14 Plaintiff

- Appellant , 15 16

v. 17 18 Phillips Auctioneers LLC, 19 20 Defendant

- Appellee

. 21 22

____________________ 23 24 Before: POOLER, RAGGI, and CHIN, Circuit Judges

. 25
Appeal from the December 17, 2020 judgment of the United States District 26
Court for the Southern District of New York (Cote, J

. ). Phillips Auctioneers LLC 27
invoked the force majeure clause to terminate its agreement to sell a Rudolf 282 Stingel painting on behal f of JN Contemporary Art LLC, citing the COVID

- 19 1
pandemic and state government orders requiring nonessential businesses to 2

cease in

- person operations. J N sued for breach of contract, breach of the implied 3
covenant of good faith and fair dealing, breach of fiduciary duty, and equitable 4
estoppel. Phillips moved to dismiss the complaint for failure to state a claim 5
pursuant to Federal Rule of Civil Procedure 12(b)(6). The district court granted 6
the motion, finding the pandemic constituted “ a circumstance beyo nd the 7
parties ’ reasonable control ” as contemplated by their agreement. We agree. 8

Affirmed. 9

____________________ 10

RUSSELL I. ZWERIN, Aaron Richard Golub, Esquire, 11 P.C. (Aaron Richard Golub, Nehemiah S. Glanc , on the 12 brief ), New York, NY, for Plaintiff

- Appellant JN 13 Contemporary Art LLC

. 14 15 LUKE NIKAS , Quinn Emanuel Urquhart & Sullivan, 16 LLP (Maaren A. Shah, Neil T. Phil l ips, on the brief ), New 17 York, NY, for Defendant

- Appellee Phillips Auctioneers LLC. 18 19 POOLER, Circuit Judge : 20
Phillips Auctioneers LLC invoked the force majeure clause to terminate 21
its agreement to sell a Rudolf Stingel painting on behalf of JN Contemporary Art 22
LLC, citing the COVID

- 19 pandemic and state government orders requiring 233 nonessential businesses to cea se in

- person operations. JN sued for breach of 1
contract, breach of the implied covenant of good faith and fair dealing, breach of 2
fiduciary duty, and equitable estoppel. Phillips moved to dismiss the complaint 3
for failure to state a claim pursuant to Feder al Rule of Civil Procedure 12(b)(6). 4
The United States District Court for the Southern District of New York (Cote, J. ) 5
granted the motion, concluding that the pandemic constituted “ a circumstance 6
beyond the parties ’ reasonable control , ” as contemplated by their agreement. On 7

de novo review, we affirm

. 8

BACKGROUND 9
JN buys, sells, and exhibits works of art. Phillip s is an auction house that 10
takes works of art on consignment for auction. In June 2019, JN and Phillips 11
entered into two agreements. The first (the “ Basquiat Agreement ” ) required JN 12

to bid £ 3,000,000 for Untitled , by Jean

- Michel Basquiat (the “ Basquiat Pain ting ” ) 13
when Phillips auctioned it during its 20 th Century & Contemp or ary Art Evening 14
Sale scheduled to take place in London in June 2019 . Phillips agreed to pay JN a 15
financing fee of 20 percent of the sale amount above £ 3,000,000. T he Basquiat 16
Agreement was “ [c]onditional upon signature by [JN] of the Consignment 17
Agreement with Guarantee of Minimum Price in respect of the work by Rudolf 184 Stingel, Untitled, 2009 . . . and conditional upon the [ Basquiat Painting] being 1

offer ed for sale with a comm itment by Phillips to pay the Seller a Guaranteed 2

Minimum [

. ] ” App ’ x at 50. 3
On the same day, the parties entered into the second agreement (the 4

“ Stingel Agreement ” ) , which required JN to consign to Phillips Untitled, 2009 , a 5
painting by Rudolph Stingel (the “ Stingel Painting ” ), with a guaranteed 6
minimum amount of $5,000,000 to be paid to JN. The Stingel Agreement 7
stipulated that the painting was to be “ offered for sale in New York in [Phillips ’ s ] 8
major spring 2020 evening auction of 20 th Century & Contemporary Art currently 9
scheduled for May 2020 ” (the “ New York Auction ” ). App ’ x at 56. 10
The Stingel Agreement contained a force majeure clause: 11
In the event that the auction is postponed for 12 circumstan ces beyond our or your reasonable control, 13 including, without limitation, as a result of natural 14 disaster, fire, flood, general strike, war, armed conflict, 15 terrorist attack or nuclear or chemical contamination, we 16 may terminate this Agreement with immedia te effect. In 17 such event, our obligation to make payment of the 18 Guaranteed Minimum shall be null and void and we 19 shall have no other liability to you. 20 21 App ’ x at 60 ¶ 12(a) . The Stingel Agreement also allowed Phillips “ the sole right 22

in our reasonable disc retion, and as we deem appropriate: (i) to select, change or 235 reschedule the place, date and time for the auction but any change to a later date 1
than May 2020 would be subject to [JN ’ s] prior written consent [

. ] ” App ’ x at 56. 2
Both parties performed as requi red by the Basquiat Agreement. JN 3

obtained a $5 ,000,000 loan from Muses Funding I LLC secured by the Stingel 4
Painting . In December 2019 , JN, Phillips, and Muses entered into an amendment 5
to the Stingel Agreement that memorialized the Muses lien (the “ Security 6

Amendment ” ). The Security Amendment required the Stingel Painting to be sold 7

“ during the 20 th Century & Contemporary Art

— NY Auction to be held by 8
Phillips in New York in May 2020. ” App ’ x at 67 ¶ 1(c). 9
In March 2020, in response to the COVID

- 19 pandemic, then

- New York 10
Governor Andrew Cuomo issued a series of executive orders that eventually 11
banned nearly all nonessential in

- person business activities, including art 12
exhibitions and auctions. Phillips posted a public announcement on its website 13
on March 14 stating: 14
As more of our community of staff, clients and partners 15 becomes affected by the spread of the Coronavirus, we 16 have decided to postpone all of our sales and events in 17 the Americas, Europe and Asia

. . . . O ur upcoming 20th 18 Century & Co ntemporary Art sales in New York will be 19 held the week of 22 June 2020, consolidating New York 20 and London sales into one week of auctions. 21 226 App ’ x at 114 (bolding in original) . A n event entitled “ 20TH CENTURY AND 1

CONTEMPORARY ART EVENING SALE , NEW YORK AUCTION, ” was 2
eventually held on July 2, 2020, using a remote format. 3
On June 1, 2020, Phillips terminated the Stingel Agreement via electronic 4

message: 5
As you are well aware, due to the COVID

- 19 pandemic, 6 since mid

- March 2020 the New York Stat e and New York 7 City governments placed severe restrictions upon on all 8
non

- essential business activities. Certain government 9 orders were invoked that applied to and continue to 10 apply to Phillips ’ business activities. 11 12 Due to these circumstances and the co ntinuing 13 government orders, we have been prevented from 14 holding the Auction and have had no choice but to 15 postpone the Auction beyond its planned May 2020 date. 16 17 We are hereby giving you notice with immediate effect 18 that: (1) Phillips is invoking its righ t to terminate the 19 [Stingel Agreement]; (2) Phillips ’ obligation to make 20 payment of the Guaranteed Minimum to you for the 21 Property is null and void; and (3) Phillips shall have no 22 liability to you for such actions that [are] required under 23 applicable gover ning law. 24 25 Our rights to act are as mutually agreed by you and us 26 and are clearly set out in [the termination clause of the 27 Stingel Agreement] . . . . 28 29 App ’ x at 118. This notice was also mailed to JN on June 2, 2020. 307 JN sued Phillips on June 8, 2020, and on the same day moved for a 1
preliminary injunction and temporary restraining order to compel Phillips to 2
offer the Stingel Painting at its next auction. On July 15, the district court denied 3

the motion for a temporary restraining order. JN Contemporary Art LLC 4

v. Phillips Auctioneers LLC, 47 2 F. Supp. 3d 88, 89 (S.D.N.Y. 2020). Phillips moved 5
to dismiss, JN filed a second amended complaint, and Phillips again moved to 6
dismiss. The district court granted the motion. JN C ontemporary Art LLC 7

v. Phillips Auctioneers LLC, 507 F. Supp. 3d 490 (S.D.N.Y. 2020). Principally, the 8

district court concluded that the COVID

- 19 pandemic fell within the Stingel 9
Agreement ’ s force majeure clause, and thus there was no breach of the 10

agreeme nt. This appeal followed. 11

DISCUSSION 12

We review de novo a district court ’ s Rule 12(b)(6) dismissal. Trs. of Upstate 13
N.Y. Eng ’ rs Pension Fund v. Ivy Asset Mgmt. , 843 F.3d 561, 566 (2d Cir. 2016). So 14
long as an agreement is “ complete, clear and unambiguous on its face, ” under 15

New York law it is “ enforced according to the plain meaning of its terms. ” 16
Eternity Glob

. Master Fund Ltd. v. Morgan Guar. Trust Co. of N.Y

. , 375 F.3d 168, 177 17
(2d Cir. 2004) (internal quotation marks omitted). Contractual claims 188 unambiguously barred by an agreement between the parties may be de termined 1

on a motion to dismiss. Edwards v. Sequoia Fund, Inc ., 938 F.3d 8, 13 (2d Cir. 2019). 2

I. F orce Majeure 3 JN first argues that because the Stingel Agreement did not specifically 4
require Phillips to auction off the Stingel Painting live at the New York Auction 5
in May 2020, Phillips should have held the auction in another format, or delayed 6
it to some point in the future. We disagree. The Stingel Agreement provide d that 7

the Stingel Painting “ shall be offered for sale in New York at our major spring 8
2020 evening auction of 20 th Century & Contemp or ary Art currently scheduled 9
for May 2020. ” App ’ x at 56 ¶ 6(a). As JN itself alleged , the New York Auction is a 10

well

- known event in the industry, taking place take s place annually in May. The 11
language of the agreement is unambiguous: i t obligated Phillips to auction the 12
Stingel Painting for at least the Guaranteed Minimum at the May 2020 New York 13
Auction. Nothing i n the agreement obligated Phillips to sell the Stingel Painting 14

at a different auction, at a later time, or via different format. It is true , as JN 15

argues, that Phillips could have chosen to offer some sort of alternative 16
performance, but that is not the s ame as the Stingel Agreement requiring Phillips 17
to provide anything other than the bargained

- for performance. See, e.g. , 18
Harriscom Svenska, AB v. Harris Corp. , 3 F.3d 576, 580 (2d Cir. 1993) (noting that 199 when defendant was excused from performance by force majeure, defendant was 1
not required to “ provide substitute performance

. ” ). The Stingel Agreement 2
contains no such requirement. 3

We turn , then, to the issue of whether Phillips properly terminated the 4

Stin gel Agreement. A force majeure clause ’ s primary purpose is to “ relieve a 5
party from its contractual duties when its performance has been prevented by a 6
force beyond its control or when the purpose of the contract has been frustrated. ” 7
Phillips Puerto Rico Core, Inc. v. Tradax Petroleum, Ltd ., 782 F.2d 314, 319 (2d Cir. 8
1985). “ [W]hen the parties have themselves defined the contours of force majeure 9
in their agreement, those contours dictate the application, effect, and scope of 10
force majeure

. ” Constell ation Energy Servs. of N.Y., Inc. v. New Water St

. Corp ., 46 11
N.Y.S.3d 25, 27 (1st Dep ’ t 2017) (alteration in original) (internal quotation marks 12
omitted). 13

The force majeure clause here provided in relevant part that “ [i] n the event 14
that the auction is po stponed for circumstances beyond our or your reasonable 15
control, including, without limitation, as a result of natural disaster, fire, flood, 16
general strike, war, armed conflict, terrorist attack or nuclear or chemical 17
contamination, we may terminate this Agreement with immediate effect. ” App ’ x 1810 at 60 ¶ 12(a) . The district court found that “ [i]t cannot be seriously disputed that 1

the COVID

- 19 pandemic is a natural disaster. ” JN Contemporary , 507 F. Supp. 3d 2

at 501. JN argues that whether COVID

- 19 is a naturally occurring virus or one 3
created by man is unsettled, such that the district court erred in deeming the 4
pandemic a natural disaster as a matter of law. Instead, JN contends, it is an open 5
question of material fact, and that JN is entitled to discov ery as to “ whether 6

COVID

- 19 escaped from one of two labs in Wuhan working on coronaviruses or 7
whether such labs [] genetically engineer[ed] ” the COVID

- 19 virus. Appellant ’ s 8

Br. at 30. JN also argues that “ [n]atural disasters are localized events resulting 9
from natural processes of the earth

— i.e ., hurricanes, tsunamis, earthquakes, 10
tornadoes and other geological processes

— that generally are geographically 11
contained and relatively short in duration. ” Appellant ’ s Br. at 33. 12
We need not address these arguments to decide this appeal . We hold that 13

the COVID

- 19 pandemic and the orders issued by New York ’ s governor that 14

restricted how nonessential businesses could conduct their affairs during the 15
pandemic , constituted “ circumstances beyond our or your reasonable control , ” 16
App ’ x at 60 ¶ 12(a). Thus, we affirm the district court ’ s dismissal of the second 17
amended complaint on that ground without resolving the question of whether 1811 COVID

- 19 is a natural disaster within the meaning of the force majeure clause

. 1

See Thyroff v. Nationwide Mut

. Ins. Co. , 460 F .3d 400, 405 (2d Cir. 2006) ( “ [W]e are 2
free to affirm a decision on any grounds supported in the record

. . . . ” ). 3
New York law requires courts to construe force majeure clauses narrowly, 4

so that “ only if the force majeure clause specifically includes the event that 5
actually prevents a party ’ s performance will that party be excused

. ” Kel Kim 6
Corp. v. Cent

. Mkts

. , Inc. , 70 N.Y.2d 900, 902

- 03 (1987). A narrow construction also 7
applies when the force majeure clause contains a “ catchall, ” such as “ or other 8
similar causes beyond the control of such party, ” cabining the meaning to 9

“ things of the same kind or nature as the particular matters mentioned. ” Id. at 10

903; see also Team Mktg. USA Corp. v. Power Pact, LLC , 839 N.Y.S.2d 242, 246 ( 3d 11
Dep ’ t 2007) ( “ When the event that prevents performance is not enumerated, but 12
the clause contains an expansive catchall phrase in additio n to specific events, 13
the precept of ejusdem generis as a construction guide is appropriate

. . . . ” 14
(internal quotation marks omitted) )

. 15

Here, the COVID

- 19 pandemic, coupled with the state government ’ s 16
orders restricting the activities of nonessential businesses, constitute an 17
occurrence beyond the parties’ reasonable control, allowing Phillips to end the 1812 Stingel Agreement. T he pandemic and government shutdown orders are the 1
same type of events listed in the force majeure clause , which incl ude, “ without 2

limitation, ” natural disaster, terrorist attack, and nuclear or chemical 3

contamination

. App ’ x at 60 ¶ 12(a). Each of the enumerated events are of a type 4
that cause large

- scale societal disruptions, are beyond the parties ’ control , and 5

are not due to the parties ’ fault or negligence. By contrast, JN ’ s argument would 6
render meaningless both the catchall phrase and the force majeure clause ’ s 7
explicit statement that the non

- exhaustive list of events following the catchall 8
phrase did not limit i t

. See App ’ x at 60 ¶ 12(a). This would violate the principle of 9
New York contract law that any interpretation “ that has the effect of rendering at 10
least one clause superfluous or meaningless . . . is not preferred and will be 11
avoided if possible. ” Galli v. Metz , 973 F.2d 145, 149 (2d Cir. 1992) (internal 12
quotation marks omitted). 13
This reading is consistent with the approach the New York Court of 14
Appeals took in Kel Kim

. Kel Kim operated a roller skating rink in leased 15
premises. Kel Kim , 70 N.Y.2d at 901. The lease required Kel Kim to secure a 16
certain amount of liability insurance. Id. Kel Kim maintained the necessary 17
insurance for six years, but was unable to renew the policy , or obtain new 1813 coverage, because of a crisis in the insurance business. Id. Kel Kim sued, seeking 1
a declaratory judgment to avoid eviction. Id. Kel Kim argued in relevant part that 2

i t s performance was excused by the force majeure provision in the lease 3

agreem ent, which provided: 4
If either party to this Lease shall be delayed or prevented 5 from the performance of any obligation through no fault 6 of their own by reason of labor disputes, inability to 7 procure materials, failure of utility service, restrictive 8 gover nmental laws or regulations, riots, insurrection, 9 war, adverse weather, Acts of God, or other similar 10 causes beyond the control of such party, the performance 11 of such obligation shall be excused for the period of the 12 delay. 13 14 70 N.Y.2d at 90 2 n.*. The New York Court of Appeals determined that the force 15
majeure provision did not apply because the event that prevented Kel Kim ’ s 16
performance under the contract was neither specifically included in the force 17
majeure provision nor generally included within the provision ’ s catchall phrase , 18

“ or other similar causes beyond the control of such party. ” Id. at 902

- 03. The 19
court explained that the event (the inability of Kel Kim to procure and maintain 20
liability insurance) was of a different kind and nature from t he particular events 21
listed in the force majeure provision , such that it could not be considered a 22

“ similar cause. ” Id. at 903. The events listed “ pertain to a party ’ s ability to 2314 conduct day

- to

- day commercial operations on the premises , ” and the C ourt of 1

A ppeals rejected Kel Kim ’ s argument that “ a failure to procure and maintain 2

insurance ” fell within those parameter s

. Id. Rather, the court held, “ th e 3
requirement that specified amounts of public liability insurance at all times be 4
maintained goes n ot to frustrated expectations in day

- to

- day commercial 5
operations on the premises

— such as interruptions in the availability of labor, 6
materials and utility services

— but to the bargained

- for protection of the 7

landlord ’ s unrelated economic interests where th e tenant chooses to continue 8
operating a public roller skating rink on the premises. ” Id. 9

In contrast, here the COVID

- 19 pandemic and government shutdown 10
orders are exactly the sort of events that fall within the force majeure clause as 11

events “ beyond [the] reasonable control ” of either party, App ’ x at 60 ¶ 12(a), and 12

likewise qualify as events that “ frustrate[] expect ations ” as to how business 13

operates , see Kel Kim , 70 N.Y.2d at 903

. 14

II. Consent 15

JN a lso argues that Phillips was in breach of the Stingel Agreement before 16

it terminated because it “ fail[ed] to obtain JN ’ s prior written consent to 17

reschedule ” the New York Auction. Appellant ’ s Br. at 10. J N notes that Phillips 1815 postponed the New York Au ction on March 14

— before the order prohibiting 1
gatherings of 50 or more people issued on March 16

. Because it predated the 2
March 16 order, JN argues, Phillips ’ decision to postpone was discretionary, and 3
required JN ’ s consent. We disagree. The decision to postpone was dictated by the 4
pandemic and executive orders issued in response to the pandemic, and thus fell 5
within the force majeure clause. See, e.g. , Melendez v. City of New York, 16 F.4th 6

992, 99 7 (2d Cir. 2021) ( “

. . . New York State was hit early and hard by the 7
pandemic. B y the end of March 2020, the state had become the nation ’ s pandemic 8
epicenter, reporting approximately one third of infection cases nationwide, with 9
New York City alone then accounting for one quarter of the country ’ s virus

10

related deaths. ” ). As explained in Melendez : 11

I n an effort to control the pandemic within New York, 12 the state legislature, on March 3, 2020, granted then

13 Governor Andrew M. Cuomo broad authority to “ issue 14 any directive during a state disaster emergency ” that he 15 deemed “ necessary to cope with the disaster, ” and 16 expanded his existing authority temporarily to suspend 17

“ any statute, local law, ordinance, or orders, rules or 18 regulations. ” Four days later, the Governor declared the 19 COVID

- 19 pandemic a state disaster emergency, and 20 proceeded, over the next weeks and months, to issue 21 more than seventy executive orders to address the crisis. 22 23 Id. at 998

- 99 (citations omitted)

. 2416 Nor are we troubled that Phillips ’ s decision to postpone preceded the 1
particular executive order closing nonessential businesses by two days . F rom 2
March 7 onward the governor issued a series of executive orders imposing 3
restrictions on nonessential businesses and gatherings that became stric ter as 4
time went on, and were repeatedly extended. See , e.g. , 9 NYCRR 8.202.3, 8. 202.14, 5

8.202.18, and 8. 202.31 ; see also Melendez , 16 F.4 th at 999 ( “ C ertain orders issued 6
between March 16 and 19, 2020, closed or severely limited the in

- person 7
operation of large numbers of New York businesses. These shut

- down orders 8
were repeatedly extended and modified over the following months. ” (citations 9
omitted) ). Thus, e ven assuming arguendo that the March 14 postponement was 10
discretionary, by March 16 it would have been illegal for Phillips to hold the 11

New York Auction. There was every indication that the restrictions would 12

remain in effect for the foreseeable future , and indeed, the orders were still in 13
effect during May 2020

. As Phillips was barred by executive order from 14
conducting the auction as called for in the agreement two days after its allegedly 15
discretionary decision to postpone, any harm resulting from the alleged breach 16
was de minimis and cannot support a claim for breach of contrac t. See generally 17
Restoration Realty Corp. v. Robero , 58 N.Y.2d 1089, 1091 (1983) (rejecting 1817 allegations of breach of contract where “ the allegations are de minimis in nature 1
and the plaintiff has failed to show any prejudice resulting from the . . . allege d 2

breach ” ) ; Milan Music, Inc. v. Emmel Commc ’ ns Booking, Inc. , 829 N.Y.S.2d 485 (1st 3
Dep ’ t 2007) ( “ Without a clear demonstration of damages, there can be no claim 4

for breach of contract. ” ). 5
Finally, we conclude, as the district court did, that JN fails to raise a 6
question of material fact on the issue of whether Phillip s ’ s decision to invoke the 7
force majeure clause was pretextual. JN Contemporary , 507 F. Supp. 3d at 504. As 8
the district court aptly held, because Phillips properly “ exercise[d] its contractual 9
right to terminate the Stingel Agreement, its motives for doing so are irrelevant. ” 10

Id

. ; see also Big Apple Car, Inc. v. City of New York , 611 N.Y.S.2d 533, 534 (1st Dep ’ t 11
1994) (holding that where party terminates contract “ in accordance with the 12
express provisions of ” a termination clause, no “ court inquiry into whether the 13
termination was activated by an ulterior motive ” is merited). 14

III. The Basquiat Agreement 15
JN also argues that the district court erred in dismissing its claim for 16
breach of the Basquiat Agreement because that agreement operated in tandem 17
with the Stingel Agreement: JN guaranteed the sale of the Basquiat Painting 1818 while Phillips guaranteed the sale of the Stingel Agreement. By breaching the 1
Stingel Agreement, JN argue s, Phillips also breached the Basquiat Agreement. 2
In relevant part, the Basquiat Agreement states: 3
Conditional upon signature by you of the Consignment 4 Agreement with Guarantee of Minimum Price in respect 5 of the work by Rudolph Stingel, Untitled, 2009

. . . and 6 conditional upon the above mentioned Property being 7 offered for sale with a commitment by Phillips to pay the 8 Seller a Guaranteed Minimum you have agreed that you 9 will provide a third

- party guarantee obligation 10 ( ‘ Guarantee Obligati on ’ ) as follows . . . . 11 12 App ’ x at 50

. Both agreements contained integration clauses. 13

“ Whether the parties intended to treat both agreements as mutually 14
dependent contracts, the breach of one undoing the obligations under the other, 15
is a question of fact. In determining whether contracts are separable or entire, the 16
primary standard is the intent manifested, viewed in the surrounding 17

circumstances. ” Rudman v. Cowles Comm c ’ ns , 30 N.Y.2d 1, 13 (1972). “ Under New 18

York law, t he fundamental, neutral precep t of contract interpretation is that 19
agreements are construed in accord with the parties ’ intent. ” Eternity Glob

. Master 20

Fund , 375 F.3d at 177 (internal quotation marks and brackets omitted)

. 21

The plain language of the Basquiat Agreement makes clear that under that 22
agreement, Phillips was obligated only to sell the Basquiat Painting and JN was 2319 required only to enter into the Stingel Agreement. The Basquiat Agreement was 1
fully performed: JN signed t he Stingel Agreement, and Phillips auctioned off the 2
Basquiat Painting and paid the seller a guaranteed sum. The Basquiat Agreement 3
is completely silent as to any obligation Phillips had pursuant to the Stingel 4
Agreement. If the parties intended to enter i nto a “ trade, ” as JN argues, that is 5

not reflected in the agreements ’ unambiguous language

. As “ there was no 6
language of condition ” making the full performance of the Stingel Agreement 7
part of the performance of the Basquiat Agreement, the district court p roperly 8

dismissed the claim as a matter of law. Schron v. Troutman Saunders LLP , 945 9
N.Y.S.2d 25, 29 (1 st Dep ’ t 2012)

. The only link between the two was the 10
obligation of JN to enter into the Stingel Agreement. See, e.g., Rudman , 30 N.Y. 2d 11
at 13 ( “ [W] hen two parties have made two separate contracts it is more likely 12
that promises made in one are not conditional on performances required by the 13

other

. ” ) (internal quotation marks omitted) ). If the parties wished to condition 14
performance of one agreement o n the performance of the other, the agreements 15

could have been so drafted. Compare Applehead Pictures LLC v. Perelman , 913 16
N.Y.S.2d 165, 189 (1 st Dep ’ t 2010) ( “ Manifestly, one agreement may follow from 17

and even have as its raison d ’ etre another and yet be independently enforceable

. ” 1820 ( internal quotation marks omitted)) , with Movado Grp

. , Inc. v. Mozaffarian , 938 1
N.Y.S.2d 27, 28 (1 st Dep ’ t 2012) ( “ [T] he terms and c onditions of the extrinsic 2
document were incorporated into the credit agreement, and [] defendants [] 3
acknowledged receipt and agreed to be bound by the same. The credit 4
agreement, which identified the terms and conditions as those contained on each 5

invoice , was sufficient to put defendants on notice that there was an additional 6
document of legal import to the contract they were executin g. ” ). 7

Moreover, each agreement contained an integration clause

— further 8
evidence drawn from the agreements ’ four corners that the two are not 9
interdependent. And the integration clauses “ bar the use of parol evidence of the 10
parties ’ intent and of any other agreements or understandings

. ” Schron , 945 11

N.Y.S.2d at 29 ; see also id. ( “ [Where] there was absolutely no language of 12
condition making the funding of the loan an express condition precedent to the 13
right to exercise the $100 million option

. . . the parol evidence rule precluded the 14
use of extrinsic evidence to show the claimed interdependence. ” ). Finally, even 15
assuming the Basquiat Agreement required Phillips to fully perform the Stingel 16
Agreement, Phillips ’ proper invocation of the force majeure clause excused its 17
performance. 1821 IV. Remaining I ssues 1
JN also challenges the district court ’ s dismissal of its implied covenant 2

claim. Under New York law, “ implicit in every contract is a covenant of good 3
faith and fair dealing

. . . which encompasses any promises that a reasonable 4
promisee would understand to be included. ” Spinelli v. Nat ’ l Foot ball League , 903 5
F.3d 185, 205 (2d Cir. 2018) ( internal quotation marks omitted). The implied 6
covenant of good faith and fair dealing includes a promise that “ neither party to 7
a contract shall do anything that has the effect of destroying or injuring the r ight 8
of the other party to receive the fruits of the contract, or to violate the party ’ s 9
presumed intentions or reasonable expectations. ” Id

. ( internal quotation marks 10

and brackets omitted). A claim for violation of the covenant survives a motion to 11
dismiss only if it is based on allegations different from those underlying the 12
breach of contract claim, and the relief sought is not intrinsically tied to the 13
damages that flow from the breach of c ontract. See Harris v. Provident Life & 14

Accident Ins. Co ., 310 F.3d 73, 80 (2d Cir. 2002) (applying New York law). T he 15
district court correctly dismissed this claim as duplicative . Even 1622 a ccepting JN ’ s arguments that it set out a different factual basis for this claim 1

than the factual basis set out in its breach of contract claim, the damages sought 2
for both claims would be the same: compensation for the lost sale. 3
Nor are we persuaded that the district court erred in dismiss ing JN ’ s 4
claims that Phillips acted in bad faith. JN argues that its implied covenant claim 5

took in “ the full context of Phillips ’ bad faith actions surrounding its unlawful 6

termination decision. ” Appellant ’ s Br. at 48. A t bottom, regardless of whether it 7

was pre textual or not, Phillips exercised its negotiated right to terminate under 8
the force majeure clause. See 23 Williston on Contracts § 63:22 (4th ed. 20 21 ) 9
( “ [T]here can be no breach of the implied promise or covenant of good faith and 10
fair dealing where the contract expressly permits the actions being challenged, 11
and the defendant acts in accordance with the express terms of the contract. ” ). 12
Finally, JN argues that it properly stated a claim for breach of fiduciary 13
duty based on the theory that Phi llips owed JN a duty of loyalty b y virtue of the 14
consignment arrangement. Like the claim for breach of the implied covenant, the 15

breach of fiduciary duty claim fails as a matter of law because Phillips properly 16

terminate d the contract. See Marc Jancou Fine Art Ltd. v. Sotheby ’ s Inc. , 967 17
N.Y.S.2d 649 ( 1st Dep ’ t 2013) ( “ The consignment agreement between plaintiff 1823 and Sotheby ’ s permitted Sotheby ’ s to withdraw the artwork owned by plaintiff 1
from auction if Sotheby ’ s had any doubt, in its sole judgme nt, as to the work ’ s 2

‘ attribution, ’” such that Sotheby ’ s acted within its rights in withdrawing the art 3
from auction when the artist claimed her reputation would be harmed if the 4
work were offered for auction after being restored

. ). 5

CONCLUSION 6
For the reasons given above, the judgment is affirmed. 7