Court Opinion

ID: 3195087
Source: CourtListenerOpinion
Date Created: 2016-04-18 15:00:38.902482+00
Date Added: 2024-06-11T12:30:37.524355
License: Public Domain

15-1118
      Edart Leasing Co., LLC v. Ryder Truck Rental, 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 TO 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 18th day of April, two thousand sixteen.

      PRESENT:
                         ROBERT A. KATZMANN,
                               Chief Judge,
                         JOSÉ A. CABRANES,
                               Circuit Judge,
                         LEWIS A. KAPLAN,
                               District Judge.*

      EDART LEASING COMPANY, LLC,

                                  Plaintiff-Appellant,

                         v.                                             No. 15-1118

      RYDER TRUCK RENTAL, INC.,

                                  Defendant-Appellee.

      For Plaintiff-Appellant:                             Jonathan David Warner, Warner &
                                                           Scheuerman, New York, NY.

      *
       The Honorable Lewis A. Kaplan, of the United States District Court for the Southern District of
      New York, sitting by designation.
For Defendant-Appellee:                               Martin L. Steinberg and Justin Brenner,
                                                      Hogan Lovells US LLP, Miami, FL; Roger
                                                      Juan Maldonado, Balber Pickard Maldonado
                                                      & Van Der Tuin, P.C., New York, NY.

       Appeal from a judgment of the United States District Court for the Southern District of

New York (Rakoff, J.).

       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment of the district court is AFFIRMED.

       Plaintiff-Appellant Edart Leasing Company, LLC appeals from the order of the United

States District Court for the Southern District of New York (Rakoff, J.), entered on July 8, 2015,

dismissing its complaint against Defendant-Appellee Ryder Truck Rental, Inc. with prejudice for

failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. We assume

the parties’ familiarity with the underlying facts, procedural history, and issues on appeal.

       We review de novo a district court’s grant of a Rule 12(b)(6) motion to dismiss. See

ACLU v. Clapper, 785 F.3d 787, 800 (2d Cir. 2015). Edart’s amended complaint asserted two

claims for breach of contract, both of which were dismissed with prejudice. See Edart Leasing

Co., LLC v. Ryder Truck Rental, Inc., No. 14-cv-7751 (JSR), 2015 U.S. Dist. LEXIS 89661, at

*14 (S.D.N.Y. July 6, 2015). Edart appeals the dismissal of the second claim only. We affirm the

dismissal of that claim for substantially the same reasons provided by the district court.

       In brief, the parties entered into an Asset Purchase Agreement under which Ryder

purchased all or substantially all of Edart’s truck-leasing and commercial truck-rental business

and related assets. Under that Agreement, Ryder was entitled to withhold $4.5 million to cover

the cost of environmental remediation and repairs at former Edart facilities that were transferred

to Ryder (the “Holdback Amount”). Under the Agreement, Ryder was required to make a

payment of $1.5 million, less any amounts incurred or reasonably believed to be incurred to

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cover the remediation, on each of the first three anniversaries of the Agreement’s closing date.

The Agreement also mandated that Ryder make a final payment of any remaining holdback

payments, less any amounts incurred or reasonably believed to be incurred to cover the

remediation or repairs, plus 4.5% interest on those remaining payments, to Edart “[u]pon the

final resolution of any pending claims for which [Ryder] has withheld any amounts.” J.A. 60.

Edart alleges that Ryder has wrongfully retained the remaining holdback payment. As Edart

itself acknowledges, however, the parties’ Agreement “stated that Ryder’s efforts to satisfy the

Remediation Requirements will be considered complete upon its receipt of a written

determination from the relevant state authority that no further remedial action is necessary or

required.” Appellant’s Br. 8 (citing J.A. 109). Edart points to nothing in the record that would

suggest that Ryder has received such a determination. Accordingly, we agree with the district

court’s conclusion that Edart’s claim that Ryder breached the Agreement by failing to pay the

remaining holdback payment is premature.

       Seeking to avoid this conclusion, Edart explains that its “claim was based primarily on

Ryder’s failure to complete the remediation requirements in a reasonably expeditious manner

and in failing to charge Edart for the costs actually occurred [sic].” Appellant’s Br. 22. Other

than pointing out that it has been more than six years since the contract closed, Edart does not

provide any factual allegations to support a finding that Ryder has failed to move in a reasonably

expeditious manner. Likewise, Edart fails to point to any factual allegations that would suggest

that Ryder has not incurred expenses for repairs to the transferred facilities in the amounts to

which it is entitled under the Agreement. Accordingly, we agree with the district court that

Edart’s complaint fails to state a claim for breach of contract.

       Edart also faults the district court for dismissing its complaint with prejudice. “We review

the district court’s dismissal of a complaint with prejudice for abuse of discretion.” Grain

Traders, Inc. v. Citibank, N.A., 160 F.3d 97, 106 (2d Cir. 1998). Edart argues that the district
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court should not have dismissed its complaint with prejudice because a Rule 12(b)(6) dismissal

will preclude it from pursuing its premature claim once it has matured. Edart is correct that, “[a]s

the sufficiency of a complaint to state a claim on which relief may be granted is a question of

law, the dismissal for failure to state a claim is a final judgment on the merits and thus has res

judicata effects.” Berrios v. N.Y. City Hous. Auth., 564 F.3d 130, 134 (2d Cir. 2009) (citations

omitted). But “[i]n ordinary circumstances a second action on the same claim is not precluded by

dismissal of a first action for prematurity or failure to satisfy a precondition to suit.” 18A Charles

A. Wright, et al., Fed. Practice & Procedure § 4437 (2d ed. 2002). In other words, at least as it

pertains to the premature aspect of Edart’s breach-of-contract claim, the district court’s

“dismissal is not an adjudication on the merits that would bar assertion of the same [premature]

claim after satisfying the precondition . . . , but it should preclude relitigation of the same

precondition issue.” Id.; see also St. Pierre v. Dyer, 208 F.3d 394, 400–01 (2d Cir. 2000)

(holding that res judicata did not bar plaintiff from asserting claims for indemnification and

contribution that could not have been asserted in plaintiff’s prior action because, at the time of

the prior action, no claims giving rise to indemnity or contribution rights had been brought

against plaintiff). Accordingly, the district court did not abuse its discretion in dismissing the

complaint with prejudice.

       We have considered all of Edart’s contentions on this appeal and have found in them no

basis for reversal. For the reasons stated herein, the judgment of the district court is

AFFIRMED.

                                               FOR THE COURT:
                                               Catherine O’Hagan Wolfe, Clerk

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