Court Opinion

ID: 2648325
Source: CourtListenerOpinion
Date Created: 2014-01-07 15:19:18.531897+00
Date Added: 2024-06-11T09:08:38.153776
License: Public Domain

13-0963-cv
Cacchillo v. Insmed, Inc.

                                    UNITED STATES COURT OF APPEALS
                                       FOR THE SECOND CIRCUIT

                                             SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed
on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this Court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.

       At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 7th day of January, two thousand fourteen.

PRESENT:
                      JOSÉ A. CABRANES,
                      RICHARD C. WESLEY,
                      PETER W. HALL,
                                   Circuit Judges.

_____________________________________

ANGELINE CACCHILLO,

                      Plaintiff-Appellant,

                               v.                                      No. 13-0963-cv

INSMED, INC.,

            Defendant-Appellee.
_____________________________________

FOR PLAINTIFF-APPELLANT:                                 Kevin A. Luibrand, Luibrand Law Firm,
                                                         PLLC, Albany, NY.

FOR DEFENDANT-APPELLEE:                                  Robert P. Charrow, Laura Metcoff Klaus,
                                                         Greenberg Traurig, LLP, Washington, DC;
                                                         Cynthia Neidl, Greenberg Traurig, LLP,
                                                         Albany, NY.

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       Appeal from a February 19, 2013 decision of the United States District Court for the
Northern District of New York (Thomas J. McAvoy, Judge).

     UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment of the District Court be AFFIRMED.

         Plaintiff Angeline Cacchillo appeals from an order of the District Court granting summary
judgment to defendant Insmed, Inc. (“Insmed”) on Cacchillo’s claims, brought under New York law,
for breach of contract, fraud, and negligent misrepresentation. We assume familiarity with the
underlying facts and procedural history of this case.
         We review de novo an order granting summary judgment, “resolving all ambiguities and
drawing all permissible factual inferences in favor of the party against whom summary judgment is
sought.” Burg v. Gosselin, 591 F.3d 95, 97 (2d Cir. 2010) (internal quotation marks omitted). We
affirm when “there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). However, “conclusory statements or mere
allegations [are] not sufficient to defeat a summary judgment motion.” Davis v. New York, 316 F.3d
93, 100 (2d Cir. 2002).

                                           DISCUSSION

   1. Breach of Contract

         Cacchillo asserts that there was a binding contract between herself and Insmed, under which
she would participate in a Phase IIB Trial of the IPLEX drug in exchange for Insmed’s promise to
supply her with IPLEX—either through the market after FDA approval, through “compassionate
use,” or through future trials of the drug—until Cacchillo either died or was cured.
          “To state a claim in federal court for breach of contract under New York law, a complaint
need only allege (1) the existence of an agreement, (2) adequate performance of the contract by the
plaintiff, (3) breach of contract by the defendant, and (4) damages.” Harsco Corp. v. Segui, 91 F.3d
337, 348 (2d Cir. 1996). Cacchillo contends that multiple disputes of fact remain with regards to
several of these elements and that the District Court erred by holding that there were essential terms
lacking such that a contract could not be implied-in-fact.

           a. Statute of Frauds

        Even if we assume, without deciding, that there was a contract implied-in-fact, Cacchillo’s
claim still fails to satisfy the requirements of New York’s Statute of Frauds. “New York law
provides that an agreement will not be recognized or enforceable if it is not in writing and
subscribed by the party to be charged therewith and if the agreement by its terms is not to be

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performed within one year from the making thereof.” Guilbert v. Gardner, 480 F.3d 140, 151 (2d Cir.
2007) (internal quotation marks and alterations omitted). The requirement means that “full
performance by all parties must be possible within a year,” but it does not matter “how improbable
it may be that performance will actually occur within that time frame.” Id. (internal quotation marks
omitted).
        Cacchillo argues that the contract at issue here is not governed by the Statute of Frauds
because it could have been completed by both parties within a one-year period. In particular, she
argues that Insmed’s obligations to provide her with IPLEX could have been completed within one
year in any of the following ways: she could have had a poor response to IPLEX in the trial study;
her “compassionate use” application to the FDA could have been denied; a better therapy could
have been found for Cacchillo’s condition; or Cacchillo could have passed away.
          We hold that none of these possibilities would in fact allow Insmed to legally fulfill the
terms of the putative contract within one year. First, if Cacchillo did not respond well to IPLEX or
an alternative cure was found, that presumably would cause her to relinquish Insmed from its
obligations under the contract. Under New York law, “a termination contingency that is exercisable
only by the plaintiff,” does not constitute a means by which a contract can be fulfilled within one
year for Statute of Frauds purposes. Burke v. Bevona, 866 F.2d 532, 537 (2d Cir. 1989).
        Second, if the FDA denied Cacchillo’s “compassionate use” application, or she
unfortunately passed away, that would effectively terminate the contract rather than constitute
performance by Insmed. See Darby Trading Inc. v. Shell Int’l Trading and Shipping Co. Ltd., 568 F. Supp.
2d 329, 340 (S.D.N.Y. 2008) (“Plaintiff confuses actions which would fulfill the terms of the
contract with actions that would defeat the purpose of the contract,” such as “insolvency,
bankruptcy, dissolution of defendant’s business, . . . , impossibility of performance and breach of
contract” (internal quotation marks omitted)). Since, under the putative contract, Insmed’s
obligation to supply Cacchillo with IPLEX was indefinite and incapable of being fulfilled within one
year, we conclude that the Statute of Frauds bars her breach of contract claim.

            b. Promissory Estoppel

        Cacchillo argues that even if the contract is found to be unenforceable under the Statute of
Frauds, the court should still find Insmed liable under a theory of promissory estoppel. “In New
York, promissory estoppel has three elements: a clear and unambiguous promise; a reasonable and
foreseeable reliance by the party to whom the promise is made; and an injury sustained by the party
asserting the estoppel by reason of the reliance.” Cyberchron Corp. v. Calldata Sys. Dev., Inc., 47 F.3d
39, 44 (2d Cir. 1995) (internal quotation marks omitted). When promissory estoppel is asserted to
overcome a defense based on the Statute of Frauds, an “unconscionable” injury is required under
New York law. See id.; Robins v. Zwirner, 713 F. Supp. 2d 367, 376 (S.D.N.Y. 2010).
        Upon a close review of the record, we conclude that Cacchillo has not shown that she
suffered an “unconscionable” injury by participating in the study. She asserts that she only
participated in the study in reliance upon: (1) the statements on Insmed’s website about
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“compassionate use”; (2) Christine O’Neil’s statement to the Cacchillos that pharmaceutical
companies generally provide drugs to participants of clinical trials after their conclusion if the patient
had done well; and (3) Amy Bartlett’s representation that she would be put on “compassionate care”
if she did well on IPLEX during the trial. Appellant’s Br. at 4, 19.
         However, the record shows that Cacchillo had been interested in participating in a trial of
IPLEX since 2005, when she attempted to enroll in a study being conducted at the University of
Rochester but could not because her age exceeded the eligibility limit. She subsequently offered to
participate on an unofficial basis. Additionally, Cacchillo’s husband testified that the couple was
hoping that there would be a Phase III trial under which Cacchillo could continue to obtain the drug
upon the completion of the Phase IIB trial. In recounting Amy Bartlett’s statement about
compassionate care, he stated, “we relied on it 100 percent, but the main focus was to get her in the
trial.” A429-30.
         When asked whether she would have participated in the clinical trial if she had not seen the
representations about “compassionate use” on the Insmed website, Cacchillo replied, in relevant
part,

        I would probably say that without the compassionate use, I would probably not
        participate. If I—if I was sure that it was going to be—it was going to end at the
        end of six months, I’d have to be sure, there would have to be absolutely no
        possibility, somebody would have to tell me that you can’t have it and it just
        doesn’t exist, so I guess I can’t argue with that, but if there’s something out there,
        I’m going to go for it. I’m going to go after it. A103

        We conclude, based upon this evidence and the record as a whole, that Cacchillo has not
shown that she suffered “unconscionable” injury as a result of reasonable reliance upon the
statements of Christine O’Neil and Amy Bartlett, and the representations on the Insmed website.
Rather, the evidence indicates that Cacchillo would have participated in the Phase IIB trial regardless
of these representations, in the hopes that there would be a subsequent Phase III trial or some other
means of continuing on the drug. The record does not support a conclusion that after years of
attempting to secure a spot in a clinical trial of IPLEX, Cacchillo would have decided not to
participate had Christine O’Neil or Amy Bartlett not made the comments at issue and the Insmed
website not contained information about compassionate use.

    2. Fraud and Negligent Misrepresentation

        To prove fraud under New York law, a plaintiff must show “(1) a material misrepresentation
or omission of fact (2) made by defendant with knowledge of its falsity (3) and intent to defraud; (4)
reasonable reliance on the part of the plaintiff; and (5) resulting damage to the plaintiff.” Crigger v.
Fahnestock and Co., Inc., 443 F.3d 230, 234 (2d Cir. 2006).
        To prove negligent misrepresentation under New York law, a plaintiff must show that “(1)
the defendant had a duty, as a result of a special relationship, to give correct information; (2) the
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defendant made a false representation that he or she should have known was incorrect; (3) the
information supplied in the representation was known by the defendant to be desired by the plaintiff
for a serious purpose; (4) the plaintiff intended to rely and act upon it; and (5) the plaintiff
reasonably relied on it to his or her detriment.” Hydro Investors, Inc. v. Trafalgar Power Inc., 227 F.3d 8,
20 (2d Cir. 2000). The alleged misrepresentation cannot be a promise of future conduct, which are
not actionable as negligent misrepresentations under New York law. See id. at 20–21; Murray v. Xerox
Corp., 811 F.2d 118, 123–24 (2d Cir. 1987).
        Cacchillo argues that the response allegedly made by Amy Bartlett to the Cacchillos—after
they asked her what would happen if Cacchillo “d[id] well” on IPLEX—that “they’ll put her on
compassionate care,” constituted fraud. A108; Appellant’s Br. at 22. Cacchillo further contends that
the statement of Amy Bartlett, together with the representations on the Insmed website, constituted
negligent misrepresentations.
        Upon an independent review of the record, viewing all evidence in the light most favorable
to Cacchillo, we agree with the District Court and hold that she has not presented sufficient
evidence of fraud or negligent misrepresentation to defeat a summary judgment motion. We reach
this conclusion substantially for the reasons stated by the District Court in its comprehensive and
well-reasoned opinion. Cacchillo v. Insmed, Inc., No. 1:10 Civ. 01199(TJM/RFT), 2013 WL 622220
(N.D.N.Y. Feb. 19, 2013).

                                            CONCLUSION

       We have considered all of Cacchillo’s arguments on appeal and find them to be without
merit. Accordingly, we AFFIRM the February 19, 2013 decision of the District Court.

                                                          FOR THE COURT:
                                                          Catherine O’Hagan Wolfe, Clerk

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