Caren v. Collins
696 F. App'x 19
| 2d Cir. | 2017Background
- Plaintiffs Eric C. Caren and Caren Archive, Inc. sued defendants (the Collins family and Brown Brothers LLP) for breach of an exclusive brokerage agreement to market/sell a vintage photograph collection.
- The Agreement granted Plaintiffs exclusive marketing rights but contained a clause (Clause Five) making the Agreement void if Plaintiffs did not present a viable purchaser to Brown Brothers within 90 days.
- Plaintiffs alleged three breaches: (1) defendants refused to meet with potential buyers identified by Plaintiffs (breach of good faith), (2) defendants sold the collection without using Plaintiffs’ services, and (3) defendants informed Plaintiffs they would not honor the Agreement five months after contracting.
- Defendants moved to dismiss under Rule 12(b)(6); the district court dismissed Plaintiffs’ breach claim and denied leave to amend. The Second Circuit previously remanded to confirm jurisdiction and now affirms the dismissal.
- The Court held Plaintiffs failed to plausibly allege (a) satisfaction of the 90‑day condition precedent and (b) any contractual duty requiring defendants to meet potential buyers, so no plausible breach or breach of implied good faith was alleged.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard for 12(b)(6) dismissal | District Court applied too strict a pleading standard | Court applied Twombly/Iqbal plausibility standard properly | Affirmed: plausibility standard correct |
| Failure to allege performance/condition precedent | Caren alleged he performed (publicized collection, contacted buyers) so Agreement remained in effect | Plaintiffs did not allege they presented viable buyers within 90 days as required by Clause Five | Affirmed: Plaintiffs failed to plead satisfaction of the 90‑day condition precedent |
| Breach by selling without Plaintiffs’ involvement | Sale and repudiation after 90 days constituted breach | If Agreement had terminated for failure to meet the 90‑day condition, no breach occurred | Affirmed dismissal because Agreement plausibly not in effect when alleged breaches occurred |
| Breach of duty of good faith by refusing to meet buyers | Refusal to communicate with buyers violated implied duty of good faith and fair dealing | Agreement did not impose any duty on defendants to meet with buyers; negotiation duty was on Plaintiffs | Affirmed: no plausible allegation that Agreement imposed a duty on defendants to meet buyers; good faith claim fails |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (clarifies plausibility pleading standard)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (establishes plausibility requirement for complaints)
- Operating Local 649 Annuity Trust Fund v. Smith Barney Fund Mgmt. LLC, 595 F.3d 86 (Rule 12(b)(6) review draws inferences for plaintiff)
- Suburban Transfer Serv., Inc. v. Beech Holdings, Inc., 716 F.2d 220 (contract language can create condition precedent)
- Mellon Bank, N.A. v. Aetna Bus. Credit, Inc., 619 F.2d 1001 (burden of proving a condition precedent rests with party alleging breach)
- W. Run Student Hous. Assocs., LLC v. Huntington Nat. Bank, 712 F.3d 165 (breach of implied good faith must relate to contractual terms)
- InfoComp, Inc. v. Electra Prod., Inc., 109 F.3d 902 (conditions precedent and contract formation under Pennsylvania law)