Ophthalmic Surgeons, Ltd. v. Paychex, Inc., 632 F.3d 31

OSL contracted with Paychex in 1994 to process direct deposit payroll under NY law; the contract authorized withdrawals from OSL's bank account per client instructions.
Connor, OSL's payroll contact, routinely directed Paychex to issue more than one week’s pay or more than the annual salary, without objection from OSL.
Between 2001 and 2006, Paychex paid Connor $233,159 more than her authorized annual salary, based on Connor's instructions and without OSL’s verification.
Reports detailing all payments were sent to Connor’s attention; Dr. Andreoni testified he did not receive these reports directly.
OSL discovered the overpayments after Connor’s duties were reassigned; suit for breach of contract and related claims followed in Rhode Island state court, later removed to federal court.
The district court granted Paychex summary judgment; this appeal followed challenging the contract interpretation and agency questions.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Contract ambiguity about withdrawal limits	OSL argues the clause 'such amounts as are necessary' creates a duty to verify withdrawals.	Paychex contends the client specifies the withdrawal amounts and Paychex has no verification obligation.	The clause is clear: client specifies withdrawals; no verification duty on Paychex.
Apparent authority of Connor to authorize excess payments	OSL contends Connor had no authority to order overpayments and Paychex knew or should have known.	Paychex reasonably relied on Connor as payroll contact and OSL’s inaction created apparent authority.	Connor had apparent authority; Paychex reasonably relied; OSL’s acquiescence created the appearance of authority.
Implied covenant of good faith and fair dealing	OSL asserts Paychex breached the implied covenant by negligent checks on Connor's requests.	Paychex argues no breach of contract and that duty of good faith does not override explicit terms.	No breach of the implied covenant; no conduct destroying the contract’s fruits.

Lombardi, Inc. v. Smithfield, 11 A.3d 1180 (Del. 1989) (irreparable harm not required for preliminary injunction in some contexts)
Hearth Admins., Corp v. City of New York, 394 F.3d 382 (2d Cir. 2012) (public policy arguments rarely impact preliminary relief outcomes)
Barzingus v. Wilheim, 306 F.3d 17 (10th Cir. 2010) (arbitration motion standard resembles summary judgment standard)
Law Debenture Trust Co. of N.Y. v. Maverick Tube Corp., 595 F.3d 458 (2d Cir. 2010) (contract ambiguity determination is a question of law)
JA Apparel Corp. v. Abboud, 568 F.3d 390 (2d Cir. 2009) (contract interpretation hinges on integrated agreement context)
Riverside S. Planning Corp. v. CRP/Extell Riverside, L.P., 13 N.Y.3d 398 (N.Y. 2009) (interpretation must consider obligation as a whole and party intentions)
Fabozzi v. Lexington Ins. Co., 601 F.3d 88 (2d Cir. 2010) (ambiguity analysis considers words in context of entire contract)
Lightfoot v. Union Carbide Corp., 110 F.3d 898 (2d Cir. 1997) (contract terms viewed in light of industry customs and practices)
Minskoff v. American Express Travel Related Servs. Co., Inc., 98 F.3d 703 (2d Cir. 1996) (omission can create apparent authority; inaction doctrine)
Kirschner v. KPMG LLP, 15 N.Y.3d 446 (N.Y. 2010) (corporate agent authority principles inform apparent authority)