797 F. Supp. 2d 236
S.D.N.Y.2011Background
- 4Kids sues Upper Deck for breaches of three contracts: Huntik Term Sheet, Huntik Production Agreement, and Dinosaur King Production Agreement.
- Parties contemplate long-form agreements; Term Sheet states binding until a long form is executed; no long form ever signed.
- 4Kids filed for Chapter 11; Defendants’ counterclaim against debtors stayed; court adjudicates only plaintiffs’ claims against non-debtor defendants.
- Court grants partial summary judgment: Huntik Production Agreement fully complied by Defendants; Huntik Term Sheet quasi-contract claims are dismissed.
- Dinosaur King Production Agreement invoiced amount unpaid for 18 months; later paid in full but with damages for delayed payment considered.
- Huntik Production Agreement and related Huntik Term Sheet claims are analyzed for integration, parol evidence, and damages; other related claims and covenants are dismissed or limited.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Defendants breached Huntik Term Sheet by late payment | 4Kids alleges second advance unpaid on due date | Upper Deck argues ambiguity and non-integration | Liability for breach established; damages undecided due to ambiguity |
| Whether Term Sheet is integrated and governs parol evidence | Term Sheet is integrated despite no long form | Term Sheet may be incomplete | Term Sheet is integrated; parol evidence not needed to interpret advance |
| Damages for Huntik breach | Plaintiffs entitled to full damages for second installment | Damages uncertain due to unrecouped advance terms | Judgment for $175,000 plus interest; damages to be calculated for remaining ambiguity |
| Whether quasi-contract and account-stated claims survive given a contract exists | Quasi-contract and account stated support extra relief | Contract bars quasi-contract/ account stated | Quasi-contract and account stated claims dismissed as duplicative of contract claim |
| Whether Dinosaur King Production Agreement entitles fees and interest | Nonpayment breached contract; seeks interest and fees | Indemnification for fees not limited to disputes between parties; but request narrowed | Interest awarded on unpaid principal; attorneys’ fees awarded only to extent clearly referable to this contract claim; other fee requests denied |
Key Cases Cited
- First Financial Ins. Co. v. Allstate Interior Demolition Corp., 193 F.3d 109 (2d Cir. 1999) (summary judgment framework guidance; shift to evidence standard)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (Supreme Court 1986) (summary judgment standard; burden on movant and nonmovant)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (Supreme Court 1986) (references to material facts; importance of genuine issue)
- Celotex Corp. v. Catrett, 477 U.S. 317 (Supreme Court 1986) (burden-shifting framework for summary judgment)
- Investors Ins. Co. v. Dorinco Reins. Co., 917 F.2d 100 (2d Cir. 1990) (integration vs. parol evidence; complete agreement)
- W.W.W. Assocs., Inc. v. Giancontieri, www.n.y.2d 157 (New York 1990) (ambiguity determination in contract interpretation)
- George Backer Mgmt. Corp. v. Acme Quilting Co., Inc., 46 N.Y.2d 211 (N.Y. 1978) (integration presumption and contract understanding)
- Mid-Hudson Catskill Rural Migrant Ministry, Inc. v. Fine Host Corp., 418 F.3d 168 (2d Cir. 2005) (attorney’s fees via indemnification; third-party claims considerations)
- Bridgestone/Firestone, Inc. v. Recovery Credit Services, Inc., 98 F.3d 13 (2d Cir. 1996) (interpretation of indemnity clauses; third-party claims emphasis)
- Hooper Associates v. AGS Computers, 74 N.Y.2d 487 (N.Y. 1989) (indemnification and third-party vs. internal disputes)
- Harris v. Provident Life & Accident Ins. Co., 310 F.3d 73 (2d Cir. 2002) (implied covenant not independent of contract; duplicative claims)