Opinion ID: 769029
Heading Depth: 2
Heading Rank: 2

Heading: Admissibility of the Common Trade Practice Evidence.

Text: 50 OMT argues that the district court erred in considering Bayway's evidence of industry custom and practice because it was submitted with Bayway's reply submission rather than with its moving papers. We review for abuse of discretion the district court's decision to rely upon this evidence. Cf. Cifarelli v. Village of Babylon, 93 F.3d 47, 53 (2d Cir. 1996) (reviewing for abuse of discretion the denial of a motion to amend the judgment, in which the non-moving party objected to the court's reliance on an affidavit submitted with the moving party's reply papers). 51 Bayway brought this suit alleging that the Tax Clause had been validly incorporated and that OMT had breached the contract by refusing to pay the tax. OMT's answer denied generally that the Tax Clause was ever incorporated, without alleging specifically that it was a material alteration under § 2-207(2)(b). When Bayway moved for summary judgment, its papers tracked the allegations of its complaint. The material alteration argument was raised for the first time in OMT's opposing papers. Bayway's reply submission was thus its first opportunity to rebut OMT's argument with custom and practice evidence. 52 We affirm the district court's decision because reply papers may properly address new material issues raised in the opposition papers so as to avoid giving unfair advantage to the answering party. Litton Indus. v. Lehman Bros. Kuhn Loeb Inc., 767 F. Supp. 1220, 1235 (S.D.N.Y. 1991), rev'd on other grounds, 967 F.2d 742 (2d Cir. 1992); see Bonnie & Co. Fashions, Inc. v. Bankers Trust Co., 945 F. Supp. 693, 708 (S.D.N.Y. 1996); Travelers Ins. Co. v. Buffalo Reinsurance Co., 735 F. Supp. 492, 495 (S.D.N.Y.), vacated in part on other grounds, 739 F. Supp. 209 (S.D.N.Y. 1990); United States v. International Bus. Machs. Corp., 66 F.R.D. 383, 384 (S.D.N.Y. 1975). 53 In addition to the timing of OMT's material alteration argument, three other reasons support the district court's acceptance of Bayway's evidence: 54 (i) OMT was not surprised by the affidavits in question. OMT knew that evidence of custom and practice in the industry could refute its material alteration argument, but chose not to introduce any evidence demonstrating that the Tax Clause was objectively surprising. Instead, OMT simply noted in its opposition papers that Bayway . . . has presented no evidence whatsoever of any custom in the industry to have such a tax indemnity term in such a contract. This statement undermines OMT's claim that it was treated unfairly by the court's acceptance of Bayway's evidence. See Cifarelli, 93 F.3d at 53. 55 (ii) OMT did not move the district court for leave to file a sur-reply to respond to Bayway's evidence. OMT thus failed to seek a timely remedy for any injustice. See, e.g., Litton Indus., 767 F. Supp. at 1235 (Where new evidence is presented in a party's reply brief or affidavit in further support of its summary judgment motion, the district court should permit the nonmoving party to respond to the new matters prior to disposition of the motion.). 56 (iii) OMT makes no claim that it has any contrary evidence to introduce even if it were given an opportunity to proffer it. OMT's real complaint seems to be that its attempt to surprise Bayway with its material alteration argument was thwarted by the district court's exercise of its discretion to receive evidence on the other side. 57 Under these circumstances, we conclude that the district court acted within its discretion in accepting and relying upon the affidavits submitted with Bayway's reply papers.