Opinion ID: 182383
Heading Depth: 2
Heading Rank: 2

Heading: The Dismissal of Diesel's Contract Claims against Greystone

Text: In order to recover from a defendant for breach of contract, a plaintiff must prove, by a preponderance of the evidence, (1) the existence of a contract between itself and that defendant; (2) performance of the plaintiff's obligations under the contract; (3) breach of the contract by that defendant; and (4) damages to the plaintiff caused by that defendant's breach. See, e.g., Eternity Global Master Fund Ltd. v. Morgan Guaranty Trust Co. of New York, 375 F.3d 168, 177 (2d Cir.2004); Harsco Corp. v. Segui, 91 F.3d 337, 348 (2d Cir.1996). Causation is an essential element of damages in a breach of contract action; and, as in tort, a plaintiff must prove that a defendant's breach directly and proximately caused his or her damages. National Market Share v. Sterling National Bank, 392 F.3d 520, 525 (2d Cir. 2004) (emphasis in original); see, e.g., Wakeman v. Wheeler & Wilson Manufacturing Co., 101 N.Y. 205, 209, 4 N.E. 264, 266 (1886). Recovery is not allowed if the claimed losses are the result of other intervening causes. Id.; see, e.g., National Market Share v. Sterling National Bank, 392 F.3d at 526; Kenford Co. v. County of Erie, 67 N.Y.2d 257, 261, 502 N.Y.S.2d 131, 132, 493 N.E.2d 234 (1986). The district court concluded that Diesel's claim against Greystone for breach of the TPA notice provisions should be dismissed for lack of sufficient proof that the failures to give Diesel notice of many of GBMI's defaults caused Diesel's losses. Although Diesel argues that this was error because its witnesses testified that Diesel would have ceased shipping shoes to GBMI if Greystone had notified Diesel of each of GBMI's defaults, the court's refusal to credit that testimony was entirely permissible. The court found, inter alia, that in January 2007, Diesel faxed a request to Greystone for GBMI default information within two business days but did not bother to await a response, instead shipping more than three-quarters of a million dollars worth of shoes to GBMI on the day of the inquiry; that in February 2007, in the four days following its receipt of a notice from Greystone that GBMI was in default, Diesel shipped to GBMI $1.7 million worth of shoes; that in the three months following that first notice of default, Diesel sent GBMI more than $13 million dollars worth of shoes; that in July 2007, in the two weeks after it received notice of another GBMI default, Diesel shipped GBMI more than $1 million worth of shoes; and that Diesel was still shipping shoes to GBMI on September 3, 2007, one day before sending GBMI the conditional notice of termination. These findings are supported by documentary evidence, and the court as factfinder was entitled to find that the testimony of Diesel's witnessesthat Diesel would have stopped shipping had it received any additional notices of defaultwas not credible, as that testimony [wa]s belied by the events as they actually unfolded, Diesel, 2009 WL 2514033, at . The court correctly applied the legal principles as to causation, and its findings of fact are not clearly erroneous. There is thus no basis for overturning its ruling that Diesel failed to prove the causation element of its claim against Greystone for breach of the TPA notice provisions. The district court concluded that Diesel failed to establish its claim that Greystone breached the TPA payment provisions because, inter alia, Greystone had not received the relevant copies of Customer Purchase Orders, receipt of which the court found was a condition precedent to Greystone's duty to pay. A contract imposes a condition precedent when it provides that an act or event, other than a lapse of time, unless excused, must occur before a duty to perform a promise in the agreement arises. Oppenheimer & Co. v. Oppenheim, Appel, Dixon & Co., 86 N.Y.2d 685, 690, 636 N.Y.S.2d 734, 737, 660 N.E.2d 415 (1995) (internal quotation marks omitted). `Since an express condition [precedent]. . . depends for its validity on the manifested intention of the parties, it has the same sanctity as the promise itself.' Id. at 690-91, 636 N.Y.S.2d 734, 660 N.E.2d 415 (quoting 5 Williston, Contracts § 669, at 154 (3d ed.1961)). In this case, the December 2 Letter provided that the TPA would only be applied to orders placed by GBMI upon receipt of a purchase order for product from a bona fide customer of Diesel Products. And in the TPAs, GBMI agreed that it would not order shoes from Diesel before receiving such a Customer Purchase Order and agreed to provide copies of such purchase orders to both Diesel and Greystone; Diesel agree[d] to provide [Greystone] with a copy of any invoice for its products delivered to [GBMI] (a `Diesel Invoice' ) and agree[d] that each Diesel Invoice shall be delivered prior to the delivery of the products ordered by the applicable Diesel Customer to [GBMI] (emphasis in original). The TPAs provided that Greystone would be obligated to make payment to Diesel after GBMI furnished Greystone with a copy of a GBMI invoice to a Diesel customer in the amount of the corresponding Diesel Invoice. The district court, having determined that the contract documents were somewhat ambiguous as to whether the Customer Purchase Order requirement was a condition precedent to Greystone's duty to pay Diesel, admitted extrinsic evidence as to the parties' intent. The court found that the parties intended the Customer Purchase Order requirement to be a condition precedent, based on, inter alia, a March 2007 e-mail sent by Diesel to GBMI stating that under the current agreements, any GBMI orders to Diesel submitted prior to confirmation of GBMI customers orders . . . are not subject to the tripartite and should be assisted by a letter of credit (first emphasis in original; second emphasis added), and evidence that in fact when Diesel was paid for shoes it shipped pursuant to a GBMI order that was not preceded by a Customer Purchase Order, Diesel was paid through a different mechanism, not through the TPAs. We see no error in the district court's determination that the contract documents were ambiguous in this regard; and, in light of the evidence, we see no clear error in its finding that the parties intended that satisfaction of the Customer Purchase Order requirement be a condition precedent to Greystone's duty to make payments from GBMI's credit account to Diesel. As there is no dispute that that condition was not fulfilled, Diesel's claim against Greystone for failure to make payments to Diesel with respect to those shipments was properly dismissed.