Opinion ID: 8407625
Heading Depth: 2
Heading Rank: 3

Heading: Absence of Genuine Issue of Material Fact

Text: Opals next contends that the district court erred in finding that no genuine issue of material fact existed as to whether Bodylines and Opals had entered into a valid and enforceable agreement to arbitrate as alleged in the complaint. Opals argues that the district court should have taken into account each of the various documents that were faxed back and forth between the parties throughout 1997. According to Opals, these documents, taken together, show a clear and unequivocal intent by the parties to arbitrate any disputes between them, and that applying the presumption in favor of arbitration that is so well established in federal law, the court should have ordered the parties to proceed to arbitration. We find this argument unpersuasive. The Supreme Court has stated that the Federal Arbitration Act (FAA) “is a congressional declaration of a liberal federal policy favoring arbitration agreements,” and “establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). But it is also true that “the FAA’s proarbitration policy does not operate without regard to the wishes of the contracting parties.” Mastrobuono v. Shearson Lehman Hutton, 514 U.S. 52, 57, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995). “Arbitration under the Act is a matter of consent, not coercion.” Volt Info. Scis. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 479, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989). “[T]he purpose of Congress in 1925 was to make arbitration agreements as enforceable as other contracts, but not more so.” Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404 n. 12, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967) (emphasis added). Thus, though the presumption in favor of arbitration is strong, the law still requires that parties actually agree to arbitration before it will order them to arbitrate a dispute.
The complaint in this case is based entirely on one document: the Karnick Agreement. The complaint does not allege that a series of documents, or some other agreement, gave rise to a valid and enforceable agreement to arbitrate. The complaint simply asks the court to declare the Karnick Agreement valid, and to order Bodylines to participate in arbitration as directed by the Karnick Agreement. Bodylines and Opals agree that the signature of Sautter on the Kar-nick Agreement was “cut and pasted”-—-in other words, that it is a forgery, not a genuine signature. 3 “Under [New York] State law and general contract law, a forged signature renders a contract void ab initio. Because there can be no meeting of the minds of the parties when a forgery has been perpetrated, no contract existed in the case at hand.” Orlosky v. Empire Sec. Sys., 230 A.D.2d 401, 403, 657 N.Y.S.2d 840, 842 (N.Y.App.Div.1997) (internal citations and footnote omitted). Because the Karnick Agreement is void and unenforceable, Opals is not entitled to the relief sought in its complaint: a declaration that the Karnick Agreement is valid, and an injunction forcing Bodylines to comply with its provisions. As the district court noted, Opals did not move to amend its complaint when it discovered that the Karnick Agreement was a forgery, and if Opals’ suggestion that the court consider the other purported agreements was intended to be construed as a motion to amend the complaint, such a motion would have been untimely. See Fed.R.Civ.P. 15(a). Accordingly, the district court was correct in granting summary judgment in favor of Bodylines and dismissing Opals’ case.
Opals argues that although the complaint does not refer to any documents other than the Karnick Agreement, the complaint should be construed as alleging that Opals and Bodylines had an agreement to arbitrate that was embodied in some other document, or combination of documents. Specifically, Opals contends that Bodylines agreed to arbitrate either because (1) Bodylines signed the 10/97 Agreement, which Opals also signed, without any addendum, or (2) Bodylines signed the 12/97 Addendum which includes an arbitration clause, and Opals signed the 10/97 Agreement which includes an arbitration clause, so both parties agreed to arbitration. We do not find these theories persuasive. First, we consider the 10/97 Agreement. Opals has produced a copy of this document which is signed by both DiVito and Sautter, and contains no addendum or mention of any such addendum. Body-lines has produced a copy of this document, signed by both parties but with a note beneath Sautter’s signature stating that the Agreement is subject to the 11/97 Addendum, which is attached. The forensic experts retained by the parties were unable to render a conclusive opinion as to whether either the Opals version or the Bodylines version of the 10/97 Agreement was legitimate. Neither side has produced an original of the document. Opals contends that the disagreement between the parties as to which version of the 10/97 Agreement is authentic gives rise to a genuine issue of material fact. However, this argument fails to recognize that Opals’ copy of the 10/97 Agreement is not admissible in evidence, and therefore cannot be considered in ruling on the motion for summary judgment. Rule 56(e) provides that affidavits in support of and against summary judgment “shall set forth such facts as would be admissible in evidence.” Fed. R.Civ.P. 56(e) (emphasis added); see also Community of Roquefort v. William Faehndrich, Inc., 303 F.2d 494, 498 (2d Cir.1962) (“Since the object [of summary judgment] is to discover whether one side has no real support for its version of the facts, the Rule specifically states that affidavits shall ‘set forth such facts as would be admissible in evidence.’ ”) (citation omitted). Therefore, only admissible evidence need be considered by the trial court in ruling on a motion for summary judgment. Raskin v. Wyatt Co., 125 F.3d 55, 66 (2d Cir.1997). Rule 1003 of the Federal Rules of Evidence states: “A duplicate is admissible to the same extent as an original unless (1) a genuine question is raised as to the authenticity of the original or (2) in the circumstances it would be unfair to admit the duplicate in lieu of the original.” Fed. R.Evid. 1003. Opals has produced a photocopy only of the 10/97 Agreement and has conceded that it cannot produce either an original fax copy or a copy with an original signature. Bodylines contends that Opals “whited out” the note below Sautter’s signature making the 10/97 Agreement subject to the 11/97 Addendum. Sautter stated in her affidavit that she made the note regarding the addendum at the time she signed the document, and that the version she faxed back to Opals contained a cover letter referring to (1) the addendum, (2) the note below her signature making the Agreement subject to the addendum, and (3) the 11/97 Addendum itself. Accordingly, Bodylines has raised a genuine question as to the authenticity of the original. Furthermore, because no original of the signed 10/97 Agreement can be located, because Body-lines has produced a copy of the 10/97 Agreement which is materially different from the copy produced by Opals, and because at least one other photocopied document produced by Opals in this case has been conceded to be a forgery, it would be unfair in these circumstances to admit Opals’ copy. Accordingly, under either prong of Rule 1003, Opals’ version of the 10/97 Agreement is not admissible. Second, Opals argues that because Bodylines drafted and signed the 12/97 Addendum, which included a provision for arbitration in California, Bodylines manifested its consent to arbitration. According to Opals, it does not matter that there is no valid contract signed by both parties; Opals signed one contract calling for arbitration, and Bodylines signed another. Taken in conjunction, and in light of the strong presumption in favor of arbitration, Opals contends, these documents show that each party agreed to arbitration. This argument fails because it is clear from the record that there was no meeting of the minds, and no contract was ever formed. Under New York contract law, the fundamental basis of a valid, enforceable contract is a meeting of the minds of the parties. If there is no meeting of the minds on all essential terms, there is no contract. This is because an enforceable contract requires mutual assent to the essential terms and conditions thereof. Schurr v. Austin Galleries of Ill., 719 F.2d 571, 576 (2d Cir.1983) (internal citations and quotation marks omitted). The documents drafted and signed by Opals each call for arbitration in New York, governed by New York law. The only documents undisputedly signed by Bodylines which contain an arbitration clause — the 11/97 Addendum and the 12/97 Addendum — each call for arbitration in California, governed by California law. This difference is significant and indicates that there was no meeting of the minds as to an agreement to arbitrate. Opals cites a New York Appellate Division case, Lory Fabrics v. Dress Rehearsal, 78 A.D.2d 262, 434 N.Y.S.2d 359 (N.Y.App.Div.1980), for the proposition that a disagreement over where arbitration should take place is not sufficient to negate an otherwise clear showing that both parties agreed to arbitration. We do not find this case to be controlling. In Lory Fabrics, the parties agreed that they had a valid contract for the sale of goods; the only dispute was whether or not that contract included an agreement to arbitrate. See id. at 266, 434 N.Y.S.2d at 363. Here, by contrast, the parties do not agree that any valid contract was ever made. The differences between the 10/97 Agreement as signed by Opals and the 11/97 Addendum and 12/97 Addendum signed by Bodylines are dramatic; indeed, the proposed addenda drafted by Bodylines would change the whole character of the 10/97 Agreement. The 11/97 Addendum and the 12/97 Addendum each provides for circumstances under which Opals’ designs would not be deemed confidential. Each also provides that Bodylines would not be precluded from marketing lingerie products other than those belonging to Opals. Likewise, the Confidentiality Agreement that was drafted by Bodylines and faxed to Opals at the same time as the 12/97 Addendum includes terms which DiVito apparently considered material to the parties’ relationship; on her copy of the 12/97 Addendum DiVito wrote “I will NOT SIGN!!” There is no genuine issue of material fact as to whether Opals and Bodylines reached a meeting of the minds as to the material terms of any agreement; the evidence in the record shows that they did not. Therefore, even if we were to accept Opals’ invitation to consider agreements other than the Karnick Agreement, we conclude that no genuine issue of fact exists as to whether there was a valid contract between the parties, and Bodylines was entitled to summary judgment.