Source: http://law.justia.com/cases/federal/appellate-courts/F3/155/113/523528/
Timestamp: 2017-09-26 18:21:46
Document Index: 496362436

Matched Legal Cases: ['§ 15', '§ 15', '§ 15', '§ 15', '§ 15', '§ 15']

Merrill Lynch Interfunding, Inc., Plaintiff-appellant, v. Patrick Argenti and Jean Argenti,defendants-counter-claimants-appellees, 155 F.3d 113 (2d Cir. 1998) :: Justia
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Merrill Lynch Interfunding, Inc., Plaintiff-appellant, v. Patrick Argenti and Jean Argenti,defendants-counter-claimants-appellees, 155 F.3d 113 (2d Cir. 1998)
U.S. Court of Appeals for the Second Circuit - 155 F.3d 113 (2d Cir. 1998)
Argued April 2, 1998. Decided Aug. 28, 1998
Plaintiff-Appellant Merrill Lynch Interfunding, Inc. ("MLIF") appeals from a judgment entered July 17, 1997 in the United States District Court for the Southern District of New York (Thomas P. Griesa, Chief Judge) following a six-week bifurcated trial before the district court and a jury. MLIF also appeals from an Amended Opinion of the district court granting in part and denying in part MLIF's post-trial motions for judgment as a matter of law pursuant to Fed. R. Civ. P. 50(b), for a new trial pursuant to Fed. R. Civ. P. 59(a) or to alter or amend the judgment pursuant to Fed. R. Civ. P. 59(e).
We review a district court's decision denying a motion for judgment as a matter of law de novo, applying the same standards as the district court to determine whether judgment as a matter of law was appropriate. See Katara v. D.E. Jones Commodities, Inc., 835 F.2d 966, 970 (2d Cir. 1987).
Under Rule 50, judgment as matter of law is appropriate where "there is no legally sufficient evidentiary basis for a reasonable jury to find for" a party. Fed. R. Civ. P. 50(a) (1). As we have previously stated, a court may properly grant judgment as a matter of law where "viewed in the light most favorable to the nonmoving party, 'the evidence is such that, without weighing the credibility of the witnesses or otherwise considering the weight of the evidence, there can be but one conclusion as to the verdict that reasonable men could have reached.' " Samuels v. Air Transport Local 504, 992 F.2d 12, 14 (2d Cir. 1993) (quoting Simblest v. Maynard, 427 F.2d 1, 4 (2d Cir. 1970)). In ruling on a motion for judgment as a matter of law, we "must view the evidence in a light most favorable to the non-movant and grant that party every reasonable inference that the jury might have drawn in its favor." Id. at 16. We review the district court's decision in light of this well-established standard.
This holding is also premised on standard principles of agency; namely that an agent must have authority, whether apparent, actual or implied, to bind his principal. Here, there is no question that the paralegal working for MLIF's counsel lacked any authority to bind MLIF to the terms of the agreement. Therefore the cover letter is insufficient to amount to a writing sufficient to meet the requirements of § 15-301. See Longo v. Shore & Reich, Ltd., 25 F.3d 94, 96-97 (2d Cir. 1994) (holding that a letter signed by an attorney, together with enclosed unsigned agreements, was not sufficient to overcome the Statute of Frauds).
Having determined that § 15-301 applies to the oral agreement, and that there is no writing signed by MLIF or its agent reflecting the changes, we turn to the question of whether any partial performance on the part of the Argentis overcame the strictures of the statute. Doing so, we find that, as a matter of law, there was no partial performance sufficient to overcome the strictures of the statute. For partial performance to overcome § 15-301, that partial performance must be "unequivocally referable" to the new contract. Rose, 42 N.Y.2d at 343-44, 366 N.E.2d at 1283, 397 N.Y.S.2d at 926. As interpreted by the New York Court of Appeals, this standard means that the action taken must be "unintelligible or at least extraordinary, explainable only with reference to the oral agreement." Anostario v. Vicinanzo, 59 N.Y.2d 662, 664, 450 N.E.2d 215, 216, 463 N.Y.S.2d 409, 410 (1983) (citation and internal quotation omitted); see also Jim Bouton Corp. v. Wm. Wrigley Jr. Co., 902 F.2d 1074, 1080 (2d Cir. 1990) (applying § 15-301). Further, where the performance is "reasonably explained" by the possibility of other reasons for the conduct, the performance is equivocal. Anostario, 59 N.Y.2d at 664, 450 N.E.2d at 216, 463 N.Y.S.2d at 410. If "the performance undertaken by plaintiff is also explainable as preparatory steps taken with a view toward consummation of an agreement in the future," then that performance is not "unequivocally referable" to the new contract. Id. Finally, an action does not amount to partial performance sufficient to overcome the statute where that action confers no benefit on the party against whom enforcement is sought. See Philips Credit Corp. v. Regent Health Group, Inc., 953 F. Supp. 482, 515 (S.D.N.Y. 1997).
These standards are consistent with the principles underlying the doctrine of partial performance in contract law generally. The doctrine of partial performance is fundamentally premised on notions of estoppel and ratification. These notions are that a party seeking to avoid an agreement who accepts performance tendered by a party seeking to enforce that agreement either: (1) is estopped from denying the existence of the agreement because he accepted the benefit of the very agreement he is now seeking to avoid; or (2) that his conduct in accepting the tendered performance serves as an affirmative ratification of the existence of the agreement. See R.G. Group, Inc. v. The Horn & Hardart Co., 751 F.2d 69, 75-76 (2d Cir. 1984) (" [P]artial performance is an unmistakable signal that one party believes there is a contract; and the party who accepts performance signals, by that act, that it also understands a contract to be in effect.").
Second, the fundamental principles underlying the doctrine of partial performance are not implicated by the facts of this case because there was never any acceptance by MLIF of any partial performance tendered by the Argentis. The alleged partial performance, namely, the unilateral execution of the new note and amendments by the Argentis, was in no way directed toward or accepted by MLIF, and the execution of the new note alone conferred no benefit on MLIF, as promissory notes are not valid until delivered. See State v. Barclays Bank, N.A., 76 N.Y.2d 533, 536-37, 563 N.E.2d 11, 12-13, 561 N.Y.S.2d 697, 698-99 (1990) (holding that "a check has no valid inception until delivery"). The execution of the documents would therefore only benefit MLIF at such time as those documents were delivered to MLIF, which they never were. See Shearson Lehman CMO, Inc. v. TCF Banking & Savings, F.A., 710 F. Supp. 67, 71 (S.D.N.Y. 1989) ("As an initial matter, for there to be partial performance, [the party seeking enforcement of the agreement] must confer something of value on [the party seeking to avoid the agreement], which [the party seeking to avoid the agreement] accepts."). Accordingly, the unilateral execution of the new note and the amendments is legally insufficient to constitute partial performance so as to render the oral agreement enforceable because MLIF neither accepted nor benefitted from that action.
Finally, the other instances of partial performance alleged by the Argentis--the deferral of a payment by the Company on a note due in September 1991 and the search and selection of a new chairman of the board of the Company--occurred before the time the oral agreement was reached and thus can not be considered partial performance. See O & Y (U.S.) Financial Co. v. Chase Family Ltd. Partnership, No. 93 Civ. 1857, 1994 WL 250310 at * 5 (S.D.N.Y. May 31, 1994). Likewise, given that the oral agreement arose only on the evening of October 29, 1991, there was therefore no detrimental reliance on the oral agreement by the Argentis sufficient to equitably estop MLIF from asserting § 15-301, despite any culpable conduct in which MLIF might have engaged. See Cinema North Corp. v. Plaza at Latham Assocs., 867 F.2d 135, 141 (2d Cir. 1989) (noting that detrimental reliance is an element of equitable estoppel under New York law); see also Rose, 42 N.Y.2d at 344, 366 N.E.2d at 1283, 397 N.Y.S.2d at 927 (holding that "conduct relied upon to establish estoppel must not be otherwise compatible" with an explanation other than the alleged new contractual modification). Therefore, the oral agreement is unenforceable under § 15-301 as an oral modification of existing written agreements which contain clauses prohibiting such oral modification, and MLIF is entitled to judgment as a matter of law on the Argentis' breach of contract counterclaim.
Date Company Argenti Note Advance Participation Name 11/29/90 $1.5 million $750,000 1st Additional Argenti Note 3/11/91 $1.5 million $750,000 2d Additional Argenti Note 5/10/91 $3.0 million $1.5 million 3d Additional Argenti Note 9/18/91 $500,000 $250,000 4th Additional Argenti Note
Jurisdiction in this case is premised on diversity, and the parties both present arguments based on New York law, the law of the forum state. It is therefore appropriate for this Court to apply New York law. See Hannex Corp. v. GMI, Inc., 140 F.3d 194, 203 n. 7 (2d Cir. 1998)