Abundance Partners LP v. Quamtel, Inc.
840 F. Supp. 2d 758
S.D.N.Y.2012Background
- Plaintiff Abundance Partners LP loaned Syncpointe $100,000 on June 3, 2010, with 6% interest and a due date of October 1, 2010, secured by broad collateral including Source Code.
- Syncpointe defaulted on July 3, 2010 for failure to escrow Source Code; interest rose to 18% as remedy for default.
- Quamtel acquired Syncpointe on August 18, 2010; issued stock and share of future profits as consideration; later asset sale to Mobilelogik in June 2011 left Plaintiff with no proceeds.
- November 4, 2010 Amended Agreement added ongoing collateral security for Quamtel’s and Syncpointe’s obligations, clarified that Borrower remained Syncpointe, and exempted Quamtel from escrow of Source Code; provided for fees and costs
- March 31, 2011 default occurred again; extension to June 15, 2011; June 30, 2011 debt outstanding continued; July 2011 Demand Letter sought repayment from Quamtel; August 12, 2011 Gilder Note settled reducing senior liens
- Plaintiff asserts three claims: two for breach of contract (against Quamtel) and one for conversion; Plaintiff did not move against Syncpointe; court addresses cross-motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Quamtel is liable for the entire Amount Outstanding | Plaintiff argues Amended Agreement makes Quamtel fully liable | Quamtel contends only Syncpointe bears repayment obligation | First Cause dismissed without prejudice; no obligation on Quamtel to pay entire Amount Outstanding; liability depends on collateral or deficiency. |
| Whether Quamtel breached by not placing Source Code in escrow | Quamtel breached Amended Agreement by failing to escrow Source Code | Amended Agreement exempted Quamtel from escrow; Section 3 waives escrow until possession | Second Cause granted for Quamtel; escrow obligation not imposed on Quamtel under Amended Agreement. |
| Whether Plaintiff can pursue conversion against Quamtel | Quamtel exercised dominion over Source Code unlawfully | Quamtel did not have possession; claim premature | Conversion claim denied without prejudice; discovery may reveal superior rights and unauthorized dominion. |
| Attorney’s fees claim | Plaintiff seeks fees under the Agreements | (No explicit opposition) | Fees denied without prejudice pending case resolution. |
Key Cases Cited
- W.W.W. Assocs. v. Giancontieri, 77 N.Y.2d 157 (N.Y. 1990) (contract interpretation where terms are unambiguous)
- R/S Assocs. v. N.Y. Job Dev. Auth., 98 N.Y.2d 29 (N.Y. 2002) (parol evidence limited; contract interpretation at summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (U.S. 1986) (summary judgment standard; burden shifting)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (material fact must be genuine to defeat summary judgment)
- Cargo Partner AG v. Albatrans, Inc., 352 F.3d 41 (2d Cir. 2003) (de facto merger doctrine; limits in equity purchase)
- Fireman’s Fund Ins. Co. v. Meenan Oil Co., 755 F. Supp. 547 (E.D.N.Y. 1991) (illustrative authority on contract and liability)