Opinion ID: 658305
Heading Depth: 2
Heading Rank: 4

Heading: The Quasi Contract and Tort Claims

Text: 48 The bankruptcy court granted LTV's motion for summary judgment which, inter alia, dismissed Frito-Lay's claims for (1) conversion; (2) unjust enrichment; and (3) fraud. Frito-Lay appeals from the district court's June 9, 1993 affirmance of those rulings. For substantially the same reasons stated in our discussion of Frito-Lay's indemnity claims, Frito-Lay's quasi contract and tort claims have not been rendered moot on appeal. 49 We review grants of summary judgment de novo. Healy v. Rich Products Corp., 981 F.2d 68, 72 (2d Cir.1992). Summary judgment must be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c). A genuine issue does not exist unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986) (citation omitted). We examine the evidence in the light most favorable to the party opposing the motion, and resolve ambiguities and draw reasonable inferences against the moving party. See Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir.1986), cert. denied, 480 U.S. 932, 107 S.Ct. 1570, 94 L.Ed.2d 762 (1987). 50 Frito-Lay's claims for conversion and unjust enrichment are premised on the idea that the Debtors unlawfully appropriated tax benefits belonging to Frito-Lay. Under New York law, which the parties agree is controlling, a denial or violation of the plaintiff's dominion, rights, or possession, is the basis of an action for conversion. Sporn v. MCA Records, Inc., 58 N.Y.2d 482, 487, 462 N.Y.S.2d 413, 415, 448 N.E.2d 1324, 1326 (1983) (quoting 23 N.Y.Jur.2d Conversion, and Action for Recovery of Chattel Sec. 3, at 210). A conversion implies a wrongful act, a misdelivery, a wrongful disposition, or withholding of the property. Magnin v. Dinsmore, 70 N.Y. 410, 417 (1877). A quasi contract claim for unjust enrichment is based on an obligation which the law creates, in the absence of any agreement, when and because the acts of the parties or others have placed in the possession of one person money, or its equivalent, under such circumstances that in equity and good conscience he ought not to retain it, and which ex ' quo et bono belongs to another. Miller v. Schloss, 218 N.Y. 400, 407, 113 N.E. 337 (1916). 51 Frito-Lay has introduced no evidence that it had a possessory interest, susceptible to conversion or unlawful appropriation, in any of the tax benefits associated with the retired, disqualified assets. 2 It is undisputed that (a) the Debtors retained the right to retire the qualified assets; and (b) once the retirements occurred, Frito-Lay retained no rights under the federal Tax Code to the tax benefits associated with the assets. The indemnity clause (requiring LTV to reimburse Frito-Lay for lost tax deductions and credits) is an implicit recognition of LTV's and Frito-Lay's respective rights. Moreover, Frito-Lay's successful assertion of its contractual right to that indemnification, even though its recovery has been impaired, is fatal to any quasi contractual claim: [t]he existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi contract for events arising out of the same subject matter. Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 70 N.Y.2d 382, 388, 521 N.Y.S.2d 653, 656, 516 N.E.2d 190 (1987) (citations omitted). It is also settled under New York law that a tort claim will not arise where plaintiff is essentially seeking enforcement of the bargain. Sommer v. Federal Signal Corp., 79 N.Y.2d 540, 552, 583 N.Y.S.2d 957, 961, 593 N.E.2d 1365 (1992). 52 According to Frito-Lay's fraud claim, the Debtors misrepresented that the qualified assets were retired in 1987, causing Frito-Lay to overpay its 1987 federal income taxes. The representative safe-harbor leases define retirement as the retirement from service of such item of [qualified] property by [LTV] or any other event or circumstance which may be defined as a retirement in the [temporary regulations or final regulations promulgated under Section 168(f)(8) of the Code]. After reviewing the record, we agree with Chief Judge Lifland that the evidence adduced by Frito-Lay at best raises a question as to whether the Debtors, pursuant to the Tax Code, abandoned the qualified property in 1987. However, a finding that the Debtors did not abandon the property in 1987 would not support a finding that the Buffalo and Aliquippa assets were not otherwise retired in 1987. Frito-Lay's evidence therefore does not begin to satisfy its burden to raise a genuine question of fact as to whether the property was fraudulently retired. 53 In sum, the district court properly concluded that the Debtors were entitled to judgment as a matter of law dismissing Frito-Lay's claims sounding in quasi contract and tort.