Deep Woods Holdings, L.L.C. v. Savings Deposit Insurance Fund of the
745 F.3d 619
2d Cir.2014Background
- SDIF and Deep Woods entered into a Stipulation governing a call option on Aksoy’s shares as part of Park Avenue Bank’s control transition.
- The Stipulation allowed Lichtenstein to exercise a call within 45 days after SDIF could deliver the shares; SDIF later could deliver on July 12, 2005 when attachments were entered.
- Park Avenue Bank closed the Stock Purchase Agreement on June 30, 2004, with shares placed in escrow per the Stipulation; SDIF secured attachment orders against Aksoy’s shares.
- Lichtenstein purportedly exercised the call on November 2, 2005, but SDIF did not remit the shares, leading to Deep Woods’ breach/constructive trust claims.
- The district court found SDIF could deliver the shares on July 12, 2005 and that Lichtenstein’s call was timely or untimely based on later findings; ultimately Deep Woods was awarded damages.
- The Second Circuit reversed, holding that Lichtenstein’s call was untimely and that SDIF properly preserved the timeliness issue; the case is remanded to grant summary judgment for SDIF.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Lichtenstein timely exercised the call option | Deep Woods contends timely exercise within 45 days after delivery. | SDIF argues exercise was untimely under the Stipulation. | Untimely exercise; reversed in favor of SDIF. |
| Whether SDIF preserved the timeliness issue in district court | Deep Woods contends issue was not properly preserved. | SDIF preserved the issue in its summary judgment briefing. | Issue preserved; properly before appellate court. |
| Whether SDIF’s admission in answer bindingly foreclosed timeliness | Deep Woods argues the admission shows timely exercise. | SDIF argues admission is not specific enough to constitute timely exercise and was not binding on appeal. | Admission not binding; timeliness still found for untimely exercise. |
Key Cases Cited
- Bar Barclays Capital Inc. v. Theflyonthewall.com, Inc., 650 F.3d 876 (2d Cir. 2011) (deference to factual findings; assigned de novo review for questions of law)
- Green Mountain R.R. Corp. v. Vermont, 404 F.3d 638 (2d Cir. 2005) (time is of the essence in option contracts; strict construction of terms)
- Pahuta v. Massey-Ferguson, Inc., 170 F.3d 125 (2d Cir. 1999) (post-trial findings review; summary judgment standards differ from trial findings)
- United States v. Quiroz, 22 F.3d 489 (2d Cir. 1994) (abandonment principle for arguments not raised on appeal)