16‐916‐cv(L) Abcon Associates, Inc. v. Haas & Najarian

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 13th day of June, two thousand seventeen.

PRESENT: PIERRE N. LEVAL, PETER W. HALL, DENNY CHIN, Circuit Judges. ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x

ABCON ASSOCIATES, INC., Plaintiff‐Counter Defendant‐Appellant‐Cross Appellee,

v. 16‐916‐cv(L) 16‐1779‐cv(CON) HAAS & NAJARIAN, HAAS & NAJARIAN, LLP, 16‐964‐cv(XAP) Defendants‐Counter Claimants‐Appellees‐Cross Appellants. 16‐1851‐cv(XAP)

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FOR PLAINTIFF‐COUNTER RICHARD HAMBURGER, Hamburger, DEFENDANT‐APPELLANT Maxson, Yaffe & McNally, LLP, Melville, New ‐CROSS APPELLEE: York.

FOR DEFENDANTS‐COUNTER JEFFREY T. STRAUSS (Sara Spiegelman, on the CLAIMANTS‐APPELLEES brief), Wachtel Missry LLP, New York, New ‐CROSS APPELLANTS: York.

Consolidated appeals from the United States District Court for the Eastern

District of New York (Wexler, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED IN

PART AND VACATED IN PART, and the case is REMANDED for further

proceedings consistent with this order.

Plaintiff‐counter defendant‐appellant‐cross appellee Abcon Associates,

Inc. (ʺAbconʺ) appeals from the February 29, 2016 memorandum and order and May 4,

2016 judgment of the district court (Wexler, J.), entered after a bench trial, to the extent

the court awarded defendants‐counter claimants‐appellees‐cross appellants Haas &

Najarian and Haas & Najarian, LLP (together, ʺH&Nʺ) $568,845 in attorneysʹ fees, plus

interest, in quantum meruit. H&N cross‐appeals from the same decision and judgment

to the extent the court awarded Abcon $463,000, plus interest, in contract damages. We

assume the partiesʹ familiarity with the underlying facts, procedural history, and issues

on appeal.

ʺIn reviewing a judgment entered after a bench trial, we ʹmust not set

asideʹ the district courtʹs findings of fact ʹunless they are clearly erroneous.ʹʺ Krist v.

Kolombos Rest. Inc.,

(2d Cir. 2012) (alterations omitted) (quoting Fed. R.

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Civ. P. 52(a)(6)). ʺWe review the district courtʹs conclusions of law, and its application

of the law to the facts, de novo.ʺ

A. Award of Contract Damages

We agree with the district court that Abcon was not obligated to pay H&N

legal fees under the terms of their agreement. The June 27, 2007 letter agreement

contained a satisfaction clause, and Abcon acted reasonably in expressing its

dissatisfaction with the resolution of the matter, as its debt to New York Community

Bank increased from $257,361 to $1,161,490. Hence, Abcon reasonably exercised its

contractual right under the satisfaction clause to be relieved of its obligation to pay

H&N $463,000 in fees. See J.D. Cousins & Sons, Inc. v. Hartford Steam Boiler Inspection &

Ins. Co.,

(2d Cir. 2003) (holding that performance under satisfaction

clause is assessed for reasonableness if clause calls for satisfaction based on objective

criteria). Accordingly, we affirm the district courtʹs judgment with respect to its award

of contract damages to Abcon of $463,000, plus interest.

B. Award in Quantum Meruit

We vacate the district courtʹs judgment to the extent it awarded legal fees

to H&N in quantum meruit. ʺNew York law does not permit recovery in quantum

meruit, however, if the parties have a valid, enforceable contract that governs the same

subject matter as the quantum meruit claim.ʺ Mid‐Hudson Catskill Rural Migrant

Ministry, Inc. v. Fine Host Corp.,

(2d Cir. 2005). Thus, there can be no

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recovery in quantum meruit in this case because the valid and enforceable agreement

between the parties already addressed the conditions under which H&N would be paid

for its legal services. Moreover, even if recovery in quantum meruit were not precluded

here, H&N would still be ineligible for a quantum meruit recovery because it could not

have had a reasonable expectation that it would be entitled to fees if the satisfaction

clause were reasonably invoked. See

(requiring expectation of compensation for

recovery in quantum meruit). Accordingly, H&N is not entitled to recover legal fees in

quantum meruit.

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We have considered the remaining arguments and find them to be

without merit. Accordingly, we AFFIRM the judgment of the district court to the

extent it awarded Abcon $463,000 in contract damages, and we VACATE the judgment

to the extent it awarded H&N $568,845 in quantum meruit. We REMAND the matter for

further proceedings consistent with this opinion.

FOR THE COURT: Catherine OʹHagan Wolfe, Clerk

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