17-1477-cv S.A.R.L. Galerie Enrico Navarra v. Marlborough Gallery Inc. UNITED STATES COURT OF APPEALS FOR THE SECO ND CIRCUIT SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AF TER JANUARY 1, 2007, IS PERM ITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROC EDURE 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 APPEND IX OR AN ELECTRONIC DATAB ASE (WITH THE NOTATION

A 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 Cour t of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courth ouse, 40 Foley Square, in the City of New York, on the 21 st day of September, two thousand eighteen.
PRESENT: ROBE RT D. SACK, REENA RAGGI, Circuit Judges , LEWIS A. KAPLAN, District Judge. *

S.A.R.L. GALERIE ENRICO NAVARRA, ENRICO NAVARRA, Plaintiffs-Appellants , v. No. 17-1477-cv MARLBOROUGH GALLERY INC., PIERRE LEVAI, Defendants-Appellees , PHILIPPE KOUTOUZIS, Defendant

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* Judge Lewis A. Kaplan, of the United States District Court for the Southern District of New York, sitting by designation.2 APPEARING FOR APPELLANTS: JERE MY L. WALLISO N, Wallison & Wallison LLP, New York, New York.
APPEARING FOR APPELLEES: RICHAR D E. ROSBERGER (Harry W. Lipman, Robert A. Freilich, on the brief ), Rottenberg Lipman Rich, P.C., New York, New York. Appeal from a judgment of the United States District Court for the Southern District of New York (Kimba M. Wood, Judge ). UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment entered on Apr il 6, 2017, is VACATED and REMANDED. Plaintiffs S.A.R.L. Galerie Enrico Navarra (“Navarra Gallery”) and Enrico Navarra appeal from an award of summa ry judgment in favor of de fendants Marlborough Gallery Inc. (“Marlborough”) and one of its executives, Pierre Levai, on plaintiffs’ claim for tortious interference with Navarra Gallery’s 20 03 contract with Chinese-born French artist Chu Teh-Chun (“Chu”) for the pr oduction of a series of limited edition ceramic plates (the “Production Agreement”). 1 Plaintiffs allege that defend ants induced Chu to take various actions in 2007 and 2008, wh ich culminated in Chu breach ing the Production Agreement and publicly disputing the authenti city of plates exhibited and so ld by plaintiffs. Plaintiffs here challenge the district court’s determinat ion that they failed to adduce evidence that defendants deliberately or intentionally indu ced Chu’s breach. We review an award of summary judgment de novo , construing the evidence in the light most favorable to the nonmoving party and drawing all reasonable inferences and reso lving all ambiguities in that party’s favor, see Jaffer v. Hirji , 887 F.3d 111, 114 (2d Cir. 2 018), and we will affirm only

1 Plaintiffs have withdrawn th at portion of their appeal ch allenging the dismissal of their claim against another Marl borough agent, Philippe Ko utouzis, as untimely.3 if the record shows “no genuine dispute as to any material fa ct and the movant is entitled to judgment as a matter of law,” Fed. R. Civ. P. 56(a); see Garcia v. Hartford Police Dep’t , 706 F.3d 120, 126–27 (2d Cir. 2013). In appl ying that standard here, we assume the parties’ familiarity with the fa cts and procedural history of this case, which we reference only as necessary to explain our decision to vacate and remand. To prevail on a claim for tortious interfere nce with contract under New York law, a plaintiff must show (1) “‘the ex istence of a valid contract be tween the plaintiff and a third party,’” (2) “the ‘defendant’s knowledge of th e contract,’” (3) “the ‘defendant’s intentional procurement of the third-party’s breach of the contract without justific ation,’” (4) “‘actual breach of the contract,’” and (5) “‘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, 646 N.Y.S.2d 76, 82 (1996)). To satisfy the third element— upon which the district cour t resolved the moti on below—the alleged interference “must be intentional, not merely negligent or in cidental to some other, lawful, purpose.” Alvord & Swift v. Stewart M. Muller Const. Co. , 46 N.Y.2d 276, 281, 413 N.Y.S.2d 309, 312 (1978); see Reliance Ins. Co. v. Morris Assocs., P.C. , 200 A.D.2d 728, 730, 607 N.Y.S.2d 106, 108 (2d Dep’t 1994). On this element, as with any ot her, a non-movant must point to more than “mere specula tion or conjecture as to the true na ture of the facts” in order to survive summary judgment. Hicks v. Baines , 593 F.3d 159, 166 (2d Cir. 2010). But where facts raising a question of intent are sh own, “summary judgment is generally inappropriate,” Gelb v. Bd. of Elections of City of New York , 224 F.3d 149, 157 (2d Cir. 2000), because “intent is always a subjective matter of inference,” ITC Ltd. v. Punchgini,4 Inc. , 482 F.3d 135, 15 0 (2d Cir. 2007) (internal quotation marks omitted) (noting issues of intent “rarely amenable to summary judgment”). Plaintiffs rely on four acts by Chu to de monstrate breach: (1) sending a cease and desist letter to Navarra Gallery on February 19, 2007, demanding termination of the Production Agreement and return of any plates in its possession (the “Cease and Desist Letter”); (2) commencing a lawsuit against Na varra Gallery in France on April 4, 2007, seeking the same relief (the “French Laws uit”); (3) sending a May 16, 2008 email to Christie’s Hong Kong auc tion house notifying it of the ongoing legal proceedings and raising concerns about the authenticity of plat es scheduled for aucti on by Christie’s that month (the “Christie’s Email”); an d (4) running an advertisement in Le Journal des Arts in October 2008 advising the art market of Chu’s challenge to the plat es’ authenticity (the “Journal Ad”). Plaintiffs contend that these actions, particularly the Christie’s Email and the Journal Ad, breached the Pr oduction Agreement by rendering the plates “unsalable,” thereby depriving plaintiffs of their invest ment. App’x 86–87, 104. Defendants do not dispute that these events took place. Rathe r, they deny any involv ement in Chu’s actions and, thus, any intent to induce his breach. Plaintiffs, however, adduced evidence admitt ing a contrary inference. For example, evidence showed that Marlborough hired Philippe Koutouzis as its Director for Asia to assist it in developing business relationships w ith new artists, “especially artists in China.” Id. at 671. In 2005, Koutouzis met and deve loped a relationship with Chu, resulting in Marlborough hosting an exhibition of Chu’s work in June 2006. At his deposition, Levai testified that “when [Marlborough] make[s] an effo rt to do an exhibition, [it] expect[s] . . . to be the [artist’s] main distributor.” Id. at 371. In November 2006, defendants expressed5 interest in Chu’s other work s, including the ceramic plat es. Around that time, Chu complained to Francis Delille —a signatory to the Produc tion Agreement tasked with manufacturing the plates—about his remunera tion under the agreement and began telling Delille he had a “client” to “buy the whole thing.” Id. at 334–35. 2 Meanwhile, as Koutouzis later recounted in an internal email to Levai, Chu, in addition to speaking with him about the Production Agreement “many tim es,” eventually sh owed him a copy, whereupon Koutouzis identified a “flaw” in the agreement and “referred Chu to [William] Bourdon,” a lawyer and friend of Koutouzis. Id. at 385. Koutouzis further informed Levai that Bourdon determined plaintiffs “had not fulfilled [the ir] contractual obligations,” such that Chu “should recover half if not all of the rights” in the ceramic plates. Id. The parties agree that Bourdon, on Chu’s behalf, thereaft er took all the alleged actions breaching the Production Agreement. Nevert heless, defendants deny that they referred Chu to Bourdon intending such actions or that they had an y involvement in developing that strategy. The record, however, contains circumstantia l evidence that coul d allow a jury to find otherwise. For example, phone record s from February 2007 through October 2008, obtained during discovery, show that not onl y did Koutouzis regularly communicate with Bourdon and Chu’s son, Yvon, who “actively assi sted his elderly father” and served as his

2 Plaintiffs submit that it can be inferred th at Marlborough was the client. Defendants, however, argue that the statements by Ch u—who is now deceased—are inadmissible hearsay. While admissibility is ultimately an issue for the dist rict court, on review of the record in the light most favorab le to plaintiffs, there is a plausible basis to conclude that the statements may be admissible to show Ch u’s state of mind in committing the alleged breach, i.e. , his own belief that he had a new client for his plates. See Fed. R. Evid. 803(3); see generally United States v. Best , 219 F.3d 192 (2d Cir. 2000).6 point of contact, id. at 196, 691–92, 3 but also that Koutouzis spoke by phone with both Bourdon and Yvon Chu within minutes of eac h other—and, at times, more than once each—on dates relevant to the alleged interf erence. Such communications occurred the day after receipt of plaintiffs’ response to the Cease and Desist Letter; one day in the week preceding Bourdon’s filing of Chu’s French La wsuit; the day before and the day on which Bourdon served plaintiffs with Chu’s complaint; and the two days before the deadline to deliver the “technical elements” of Chu’s J ournal Ad, which Bourdon prepared, to the publisher. 4 Although defendants dispute the substan ce of these calls, arguing that their timing was “coincidental[]” and that they concerned “various issues unrelated to the Navarra dispute,” Appellees Br. 33–34, 43, the pattern admits an infe rence that the calls concerned Bourdon’s specific efforts to help Chu withdraw from the Production Agreement, and that defendants, through Koutouz is, knew of and supported those efforts. See In re Dana Corp. , 574 F.3d 129, 155–56 (2d Cir. 20 09) (concluding jury could infer substance of phone calls from timing and pattern); see also United States v. Anderson , 747 F.3d 51, 72 (2d Cir. 2014) (obser ving, in criminal context, th at jury could consider timing and pattern of phone calls in assessing intent). Moreover, also during discovery, an unsigne d draft of the Cease and Desist Letter was located in Marlborough’s files. While de fendants assert that the document could have come into their possession after transmittal, the fact that the letter contains minor differences from the final signed version supports an inference that it is an earlier draft

3 Yvon Chu, for his part, denied at his depos ition that he played any role in his father’s business before 2009 or had any involv ement in his father’s legal affairs.
4 In the week preceding the Chri stie’s Email, Koutouzis trave lled in China where he used pre-paid phone cards for which no records are available.7 shared with defendants in adva nce of any communications to pl aintiffs. Such a chronology would tend to undercut defendants’ innocent explanation of Koutouzis’s phone calls and support a further inference that defendants, through Koutouzis, knew and intended for the letter to be sent in order for Chu to escape the Production Agreement. In sum, viewing the record as a whole and construing the evidence in the light most favorable to plaintiffs, see Jaffer v. Hirji , 887 F.3d at 114, we concl ude that plaintiffs have offered evidence sufficient to raise a triable issue of fact as to defendants’ intent to procure Chu’s alleged breach. 5 In urging otherwise, defendants argue the l ack of evidence that they specifically intended for Chu to send the Christies’ Ema il or to place the Journal Ad, the alleged breaches resulting in plain tiffs’ claimed losses. 24/7 Records, Inc. v. Sony Music Entm’t,
Inc. , 429 F.3d 39 (2d Cir. 2005), relied on by defendants, doe s not require a showing of specific intent for each breaching action and, in fact, supports vacatur here. The 24/7 Records plaintiff alleged tortious interference from the defend ants’ alleged inducement of a third party to cease distributing a specific so ng recording and to te rminate its distribution agreement with the pl aintiff. Concluding th at only the latter conduct breached the agreement, we considered whether the plai ntiff produced sufficien t evidence that the defendants intentionally induced “ that breach.” Id. at 47 (emphasis in original). Based on evidence that the defendants contacted the th ird party to express displeasure with its distribution of the disputed song and to see “if there [was] a basis on which [the third party]

5 We do not, however, ourselves decide whet her plaintiffs are entitled to an adverse inference from Koutouzis’s deletion of all his emails from the relevant period. We leave it to the district court on a proper motion to decide whether spoliation sanctions are warranted here. See Chin v. Port Authority of N.Y. & N.J. , 685 F.3d 135, 162 (2d Cir. 2012).8 c[ould] withdraw it,” we concluded that a ju ry reasonably could infer that the defendant “intentionally caused” the third party not only to cancel distribution of the song, but also to terminate the distribut ion agreement entirely. Id. (internal quotation marks omitted). Similarly, here, defendants’ referral of B ourdon to Chu for the purpose of exploiting a “flaw” in the Production Agreement and recove ring “half if not all of the rights” in the ceramic plates, App’x 385, together with the pattern of Koutouzis’s calls with Bourdon and Yvon Chu at and about the time of the a lleged breaching activities, would allow a reasonable jury to infer that defendants intended for Chu to breach the Production Agreement and aided and abetted his doing so. Insofar as defendants dispute plainti ffs’ proffered motive for these actions— specifically, the incong ruity of defendants helping Chu de stroy the value of the plates, notwithstanding their purported interest in acquiring the plates for their own distribution— and offer competing inferences for other record evidence, reso lving these disputes is for the jury. See Kaytor v. Elec. Boat Corp. , 609 F.3d 537, 54 5 (2d Cir. 2010). Finally, defendants urge alternative argum ents for summary judgment not reached by the district court. See Appellees Br. 2–3, 47–72 . Although we are empowered to affirm a district court’s decision on any basis for whic h there is sufficient su pport in the record,

see Bruh v. Bessemer Venture Partners III L.P. , 464 F.3d 202, 205 (2 d Cir. 2006), “it is our distinctly preferred practice to remand” issues not addresse d by the district court for its consideration in th e first instance, Schonfeld v. Hilliard , 218 F.3d 164, 184 (2d Cir. 2000);9 accord Fulton v. Goord , 591 F.3d 37, 45 (2 d Cir. 2009). Accordingly, defendants may pursue these arguments on remand. 6 We have considered plaintiffs’ remaini ng arguments and conclude that they are without merit. For the reasons stated, we VA CATE the judgment of the district court and REMAND for further proceedings c onsistent with this order. Because the district court’s award of summary judgment as to plaintiffs ’ aiding and abetting cl aim depended on the analysis for which we identify error, the aiding and abetting cl aim will be restored to the district court. Moreover, while the distri ct court appears to exercise supplemental jurisdiction over plaintiffs’ state law claims, see 28 U.S.C. § 1367, it may choose on remand to review the basis for that jurisdiction and c onsider on the record whet her its exercise best serves economy, convenience, fairness, and comity. See In Touch Concepts, Inc. v. Cellco P’ship , 788 F.3d 98, 101 (2d Cir. 2015); Jones v. Ford Motor Credit Co. , 358 F.3d 205, 214 (2d Cir. 2004).
FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court

6 We further express no view on the partie s’ dispute as to whether Koutouzis was a Marlborough employee or an inde pendent contractor or how re solution of that issue, if capable of determination as a matter of law, might inform a decision on summary judgment.