Kobrand Corporation v. Abadia Retuerta S.A.
1:12-cv-00154
S.D.N.Y.Nov 19, 2012Background
- Kobrand Corporation and Abadia Retuerta S.A. entered into a September 7, 2005 distribution agreement granting Kobrand exclusive rights to three Abadia wines in the assigned territory.
- The wines are Palomar, Seleccion Especial, and Rivola; the agreement sets minimum floor revenue targets to secure exclusivity.
- Abadia Retuerta agreed to supply Kobrand with at least as much wine as Kobrand was required to sell, subject to production outside Supplier’s control.
- The contract provides three termination provisions (Seventh B, Seventh F, Seventh E) and liquidated damages under Seventh B or Seventh F; Twelfth A requires written amendments.
- Abadia Retuerta notified Kobrand of termination effective August 31, 2011, claiming Kobrand failed to meet the revenue floor; Kobrand sued for breach of contract; both sides moved for summary judgment.
- The court granted Kobrand partial summary judgment on some grounds and denied others, with issues remaining for trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper invocation of Seventh B termination | Abadia Retuerta argues Kobrand’s shortfalls allow termination under Seventh B | Kobrand contends timing and production levels raise factual questions | Genuine issues of material fact exist; Seventh B invocation not resolved on summary judgment |
| Applicability of Seventh F liquidated damages | If termination is Seventh F, Kobrand should receive liquidated damages | Seventh F requires specific invocation or lack of other rights; timing disputes exist | Issue remains fact-bound; summary judgment denied on Seventh F interpretation as applied |
| Breach of other contract provisions and damages | Abadia Retuerta claims Kobrand breached multiple provisions (Exhibit A, First E, price changes, Exhibit A extension) | Kobrand allegedly failed to prove damages for these stand-alone claims | Court grants Kobrand summary judgment on stand-alone breaches due to lack of damages; limited to Seventh B analysis |
Key Cases Cited
- Savasta v. 470 Newport Assocs., 623 N.E.2d 1171 (N.Y. 1993) (reasonable time for performance hinges on case facts)
- Tedeschi v. Northland Builders, LLC, A.D.2d 1613 (N.Y. App. Div. 2010) (discusses reasonableness of timing in contract termination)
- Cable Sci. Corp. v. Rochdale Vill., Inc., 920 F.2d 147 (2d Cir. 1990) (contract interpretation; ambiguity governs summary judgment)