09-3610 -cv

Vem i c s, I n c . v. M ea d e UNI TED S TATES CO URT O F AP PEALS

F O R T H E S E C O N D C IR C U IT S UM M ARY OR DER R U L I N G S B Y S U M M A R Y OR D E R DO N OT HA V E P R E C E D E N T I A L E F F E C T . C I T A T I ON T O A S UM M ARY ORDE R F I L E D ON OR AF T E R J ANUARY 1 , 20 0 7 , I S P E RM I T T E D AND I S GOVE RNE D BY FED ERA L R U LE O F A PPELLA TE P R O C EDU R E 32. 1 A N D TH I S C O U R T' S LO C A L RU LE 32 . 1. 1. W H EN C I TI N G A S U M M A R Y O R D ER I N A D O C U M ENT FI LED W I TH TH I S C O U R T , A P A R T Y M U ST C I TE E I T HE R T HE F E D E R A L A PP E ND I X OR A N E L E C T R ON I C D A T A B A S E ( W I T H T HE N OT A T I ON " S UM M ARY O RDE R" ) . A PA RT Y CI T I NG A S UM M ARY O RDE R M US T S E RVE A COPY O F I T ON ANY PA R TY N O T REPR ESENTED BY CO U N SEL. A t a s tate d ter m o f

th e U n ited S tate s C o u rt o f A p p e a ls f

o r th e S e c o n d C irc u it, h e ld atthe D ani el Pat r i ck M oyni han U ni t ed St at es C our t hous e, 500 Pear l St r eet , i n t he C i tyof N ew Y or k, on t he 31 dayof M ar ch, tw o t hous and t en. st P RE S E NT : RO BE RT D. S AC K,

R E E N A R A G G I, PETE R W
. HA LL, C i r cui tJudges
.

--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- VE M I CS , I NC
. , a n d F RE D Z OL L A,

P l ai nt i f f s - C ount er - D ef

endant s -Appel l ees , v. N o. 09- 3610- cv L O U IS M E A D E JR
. , an d D O R O T H Y V A L E N T I,

D ef end an t s- C ou nter -C l aim an t

s-App el l an t

s, M I CH AE L J E S S E , RO N F RA NC E S CO , VI T O PETRUZZELLA, DEN NI S O’ BRI EN, ED PEDI CI NE, CO NR AD NOWI CK I , a n d J OS E P H T AL AR I CO ,

D ef end an t s-App el l an t

s.

--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- APPEARI NG FOR APPELLAN TS: PA U L F. C A R V E L L I ( M ar t i n J
. M u r r ay , N ew Y o rk , N e w Y o rk , on the br i ef ), M cC u sk er, A ns el m i , R os en & C arve l l i , P. C
. , N ew Y or k, N ew Y or k. A PPE A R I N G FO R A PPE L L E E S: SU SA N C O O PE R , Savad C hur gi n, N anuet , N ew Y o rk
.2

A p p ea l from the U n it ed S tat es D istri ct C o u rt fo r th e S o u thern D istri ct o f N ew Y o rk (R o b e rt L . C a rt e r, Judge ). UP ON DUE CO NS I DE RA T I ON, I T I S HE RE BY OR DE RE D, ADJ UDGE D, AND DE CR E E D th a tt h e j u d g me n t o f t h e d i s t r i c t c o u r t e n t e r e d o n J u l y2 3 , 2 0 0 9 , i s AF F I RMED , a n d d e f e n d a n ts’ a p p e a l is D IS M IS S E D in p a rt. D e f e n d a n ts, n in e in v e sto rs in p lai n ti f f V e m ics , In c ., a p p e a l f ro m th e d e n ial o f

th e ir
m ot i on t o enfor ce t he paym entpr ovi s i ons of a s ett l ementagr eementbetw een the part i es and fr om t he gr antof w hatt he di s t r i ct cour t cons t rued as a cr os s - m ot i on bypl ai nt i ffs t o enfor ce
s ur r enderpr ovi s i ons of the s ame agr eement . D efe ndant s fur t herappea l fr om s o m uch of the d i s tr i c tc o u r t ’ s o r d e ra s g r a n t e d p l a i n t i f f s l e a v e t o m o v e f

o rc o s t s a n d a t t o r n e y s ’ f e e s . We
a s s u me th e p a r t i e s ’ f

a mi l i a r i t ywi t h t h e f

a c t s a n d r e c o r d o f

p r i o rp r o c e e d i n g s , wh i c h we
r e f e r e n c e o n l ya s n e c e s s a r yt o e x p l a i n o u rd e c i s i o n t o a f f i r m. 1. I dent i fy i ng and C ons t rui ng the Par t i es ’ Set t l ementA gr eement D e f e n d a n ts s u b m it th a t th e d istric t co u rt m isc o n s tr u e d th e se ttl e m e n t ag re e m e n t to requi re theirsurr end er of ori ginal no t es as a precon dit i on t o p l ai nti ffs’ paym ent obl i gati on s. W e r evi ew a di s t r i ctcourt ’ s fac tual fi ndi ngs , i ncl udi ng i t s fi ndi ngs as t o t he exi s t ence of a
s et t l ementagr eementand the part i es ’ i nt entt o be bound ther eby , for cl ear err or . See O m ega E ng’ g, I nc. v. O m ega, S. A
. , 432 F. 3d 437, 443 ( 2d C i r . 2005)
. W e det ectno err or , l etal one cl ear err or , i n t he di s t r i ct cour t ’ s fi ndi ng t hatt he part i es agr eed t o be bound bya N ovemberT he s ett l ement agr eement pr ovi des t hat N ew Y or k l aw appl i es , a poi ntundi s put ed 1 b y the pa rt ies. S ee V K K C o rp. v . N at’l F o o tball L ea g u e, 2 4 4 F
. 3 d 1 1 4 , 1 2 9 n .1 0 (2 d C ir
. 2001) ( appl y i ng N ew Y or k l aw w her e contr act s peci fi ed appl i cat i on of N ew Y or k l aw and part i es pr ocee ded “on t he ass um pt i on t hat N ew Y or k l aw appl i es ”)
. I n anyevent , r es ol ut i on o f t h i s a p p e a l d o e s n o ttu r n o n c h o i c e o f l a w. 3 30, 2007 documentent i t l ed “Confi dent i al Set t l ementA gr eementand M utual R el eas e” ( the “A gr eement ”)
. I ndeed, defe ndant s at t ache d thi s document t o t hei r m ot i on t o enfor ce, s t at i ng thati ti ncl uded “a l l t erm s o f set t l ement , as agr eed t o bythe part i es , ” w i t h t he exc ept i on of “non- i nt er fer ence ” t erm s not r el evant t o t hi s appea l
. D efs
. ’ B r . i n Supp. of M ot . t o E nfor ce Set t l ementA gr . ( “D ef’ s M ot . B r . ”) at3. T hus , as a thresh o ld m att er , w e r ej ectas w i thout
m er i tdefe ndant s ’ r el i ance on ot her comm uni cat i ons betw een t he part i es as evi dence of the te rm s o f th e irs e ttle m e n t. We i n t e rp r e tt h e Ag r e e me n td e n o v o a c c o r d i n g t o g e n e r a l p r i n c i p l e s o f c o n t r a c tl a w. S e e P o w e ll v . O m n ico m , 4 9 7 F .3 d 1 2 4 , 1 2 8 (2 d C ir. 2 0 0 7 ); Je ss ica H o w a rd L td . v . N o rf o lk S . R .R
. C o ., 3 1 6 F .3 d 1 6 5 , 1 6 8 (2 d C ir. 2 0 0 3 ). L ik e th e d istric t co u rt, w e in d e p e n d e n tly 1 concl ude that t he pl ai n l anguage of t he A gr eementcondi t i ons pl ai nt i ffs ’ paym entobl i gat i ons on t hei rr ece i ptof al l o ri g inal not es i s s ued t o defe ndant s upon t hei ri nves t m enti n V emi cs betw een 2003 a nd 2004. See A gr eement at 4 ( s t at i ng t hat paym ent obl i gat i ons ar e tr i gger ed f o llo w in g p lain tiff

s’ r e c e ip t “ o f

a ll o f D e f e n d a n ts’ o rig in a l N o tes ” ). C o n sis ten t w ith th is l anguage , t he di s t r i ctcourtcorr ect l ydeni ed def endant s ’ m ot i on t o enfo rce p ay m entasD efe ndant s ’ compl ai ntt hatpl ai nt i ffs di d nott hemsel ves seek e nfor cementof the 2 A greem ent i s u nco nv i ncing i n li gh tof p l ai nti ffs’ m em orandu m i n o pp osi t i on t o d efen dan t s’ enfor cementm ot i on, w hi ch r eques t ed thatt he di s t r i ct cour t “or derD efe ndant s t o exec ut e the N o v e m b e r 3 0 a g re e m e n t o n c e a n d f o r a ll a n d b e g in p e rf

o rm in g th e iro b lig a tio n s th e re u n d e r.” P l.’s M e m . in O p p ’n to D e f s.’ M o t. t o E n f

o rc e S e ttl e m e n t A g r. at 1 0 -1 1 (e m p h a sis in o ri g in a l)
. 4 p re m a tu re a n d o rd e re d th a t d e f e n d a n ts f ir s t s u r re n d e r “ a ll o f

D e f e n d a n ts ’ o ri g in a l N o te s .” V em ics, Inc
. v . M ea d e, N o . 0 6 C iv. 87 1 6 , sli p o p at 6 (S
. D
. N
. Y
. Ju ly2 3 , 2 0 0 9 ). 2 D efe ndant s s ubm i tt hatt he A gr eem entand the di s t r i ctcourt ’ s or derar e ambi guous as t o w hetherpay m ent depen ds on t heirreturn o f a ll el even no t es ati ssue or onlytho se
or igina l n ot es i n t hei rpos s es s i on att he t i m e of the A gr eement . W e di s agr ee. T he A g r e e m e n t d e sc rib e s th e e x e c u tio n o f e a c h o f th e e lev e n n o tes , lab e lin g th e m c o llec tiv e ly

“ D e f e n d a n ts ’ N o te s .” A g re e m e n t at 3
. T he A gr eement fur t hers t at es t hat“ea ch D efe ndant
c o v e n a n ts th a t h e o r sh e is th e leg a l h o ld e r o f h is o r h e r N o te o r N o tes re f e re n c e d in th is A gr eement , ” and that“D efe ndant s w i l l caus e t o be sen t [ t o pl ai nt i ffs ] al l or i gi nal s of D e f e n d a n ts ’ N o te s .” Id
. a t 4 -5
. M o re o v e r, th e d istric t c o u rt f o u n d th a t, i n e x c h a n g e f o r th e ir inv estm en ts i n V emi cs , “ea ch D efe ndantr ece i ved one orm or e or i gi nal N ot es bear i ng the
s i gnatur e of t he D efe ndant not ehol der
. ” V emi cs , I nc. v. M eade , N o. 06 C i v. 8716, s l i p op
a t 3
. A l though defe ndant s di s put e t hi s fi ndi ng, i t i s s uffi ci ent l ys uppor t ed bythe evi dence t o pr ecl ude a f

i ndi ng of cl earerr or . O n t hi s r ecor d, w e i dent i fyno ambi gui t yi n the A g re e m e n t o r th e d istric t co u rt o rd e r; b o th a re p ro p e rly c o n stru e d to re q u ire th a t d e f e n d a n ts
r etur n al l el even or i gi nal not es as a pr econdi t i on t o pl ai nt i ffs ’ paym entof the agr eed- uponI n l i ghtof thi s det erm i nat i on, w e decline defe ndant s ’ i nvi t at i on t o enfor ce the 3 p ay m en t pro v isi o n s o f th e A g ree m en t o u rselve s o n the gro u n d s tha t, sinc e the d istri ct co u rt ’s o rd e r, d e f

e n d a n ts (1 ) h a v e sa tisf

ied th e ir o b lig a tio n s u n d e r th e o r d e r b ysu rre n d e rin g a ll or i gi nal not es i n t hei rpos s es s i on, or( 2) cannotcompl yw i t h t he or deras t o one orm or e not es o v er w h ich th eyca n n o t secu re p o sses sion
. N o thing w e h av e sa id in th is ord er, ho w ev er, p re c lu d e s d e f

e n d a n ts f ro m se e k in g to re o p e n p ro c e e d in g s in th e d istric t co u rt to d e m o n stra te thes e orot hergr ounds forenfor ci ng the paym entpr ovi s i ons orfr om r eques t i ng, i n t he al t ern ati v e, re l i ef s uch as r eform at i on of the agr eementorr es ci s s i on of the agr eementand r ei ns t at ementof the ca s e on the cour t’ s t r i al cal endar
. W e expr es s no vi ew as t o t he a p p ro p ria te d isp o sitio n o f a n ysu c h m o tio n o r re q u e st.

5 m oni es . See Et erni t yG l obal M as t erFund Lt d. v. M or gan G uar . T rus tC o. of N
. Y
. , 375 F. 3d

3 1 6 8 , 1 7 8 (2 d C ir. 2 0 0 4 ) (o b se rv in g th a t co n tra c t m a yb e u n a m b ig u o u s w h e n a p p lied to p arti cu lar fac ts)
. 2
. A tto rn e y s’ F e e s a n d C o sts D efe ndant s ’ char ge of err or as t o att orney s ’ fee s and cos t s i s pr ematur e, as t he di s tr i ct
cour thas onl yi nvi t ed a mot i on fr om pl ai nt i ffs on t hi s poi nt . I t has not y et m ade anyaw ar d. S ee O & G Indus. , I nc. v. N at ’ l R
. R
. Pas s engerC orp. , 537 F. 3d 153, 167 ( 2d C i r . 2008) ( hol di ng that “non- quant i fi ed aw ar d of att orney s ’ fee s and cos t s i s notappea l abl e unt i l t he
a m o u n t o f

th e f e e s h a s b e e n s e t b y th e d is tr ic t c o u rt ” ); K ru m m e v . W e s tP o in t S te v e n s , In c ., 143 F. 3d 71, 86 ( 2d C i r . 1998) ( hol di ng t hat , under 28 U
. S. C
. § 1291, di s t r i ctcourtdeci s i on is re v iew a b le o n lyw h e n th e re is “ n o th in g f o r th e c o u rt to d o b u t ex e c u te th e ju d g m e n t” ( i nt ernal quot at i on m arks om i t t ed) )
. W e t her efor e di s m i s s for l ack of j ur i s di ct i on s o m uch of thi s appea l as chal l eng es the d i stri ctcou rt ’s pu t at i ve aw ard of att orney s’ fees and cost s.6

W e have cons i der ed al l of defendant s ’ r emai ni ng ar gum ent s and conc l ude thatt hey
ar e w i thoutm er i t . A ccor di ngl y , t he j udgm ento f t he di s t r i ctcourti s A FFIRM E D , and d e f e n d a n ts’ a p p e a l is D IS M IS S E D in p a rt. FOR TH E CO UR T: C A T H E R IN E O ’H A G A N W O L F E , C lerk o f C o u rt