450 F. App'x 8
2d Cir.2011Background
- Best Payphones, Inc. appeals a district court judgment affirming a bankruptcy court ruling that MetTel held an allowed claim for lost profits of $238,082.43.
- The Natelco Contract provided dial-tone services to Best and was assigned to MetTel during Natelco’s Chapter 11 proceedings.
- Best contends MetTel’s Disconnect Notice from 2001 was an unequivocal repudiation eliminating the notice-and-cure requirement.
- Best challenges whether the Asset Purchase Agreement effectively assigned rights under the Natelco Contract to MetTel at the breach time.
- Best disputes MetTel’s recovery including an FCC line charge included in lost profits.
- Best separately appeals a district court decision denying its sanctions motion under 28 U.S.C. § 1927; the record shows the district court treated Best’s pre-motion letter as the sanctions motion and denied it.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Disconnect Notice was an unequivocal repudiation | Best argues the Notice repudiated the contract by conditioning on an unrelated judgment. | MetTel contends the Notice was ambiguous and not a clear repudiation. | Disconnect Notice ambiguous; not a futile notice to cure. |
| Whether the Natelco Contract was effectively assigned to MetTel at breach | Best contends assignment was conditional or ineffective before Sale Order finalization. | MetTel argues assignment was valid; the Sale Order not expressly conditioning assignment on FCC/PSC compliance. | Assignment effective; Sale Order not conditionally tying transfer; consent issues do not void assignment. |
| Whether the FCC line charge was properly included in damages | Best argues the tariff-based line charge was not properly supported or applicable. | MetTel offered industry-practice testimony supporting inclusion; tariff specifics insufficiently challenged. | Court accepted the line charge as part of damages. |
| Whether the district court properly denied sanctions under § 1927 | Best contends sanctions should be awarded for improper conduct by MetTel’s counsel. | MetTel argues the pre-motion letter was meritless but properly denied sanctions. | District court did not abuse its discretion; sanctions denied. |
Key Cases Cited
- Bausch & Lomb, Inc. v. Bressler, 977 F.2d 720 (2d Cir. 1992) (repudiation concept and notice/cure interplay under contract law)
- Filmline (Cross-Country) Prods., Inc. v. United Artists Corp., 865 F.2d 513 (2d Cir. 1989) (repudiation and contract termination standards)
- In re Baker, 604 F.3d 727 (2d Cir. 2010) (standard of review for bankruptcy court findings of law and fact)
- Spillone United States v. Spallone, 399 F.3d 415 (2d Cir. 2005) (contract interpretation and order construction principles)
- Richardson Greenshields Secs., Inc. v. Lau, 825 F.2d 647 (2d Cir. 1987) (district court power to deny filings; record preservation)