TrueNorth Capital Partners LLC v. Hitachi Metals America, Ltd. ( 2018 )

17-523
TrueNorth Capital Partners LLC v. Hitachi Metals America, Ltd.
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 COURT=S
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 ASUMMARY ORDER@). A PARTY
CITING TO 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
29th day of January, two thousand eighteen.
PRESENT:
DENNIS JACOBS,
PETER W. HALL,
CHRISTOPHER F. DRONEY,
Circuit Judges.
_____________________________________
TRUENORTH CAPITAL PARTNERS LLC,
TNCP, LLC,
Plaintiffs-Appellants,
-v.- 17-523
HITACHI METALS, LTD., HITACHI
METALS AMERICA, LLC, HITACHI
METALS AUTOMOTIVE COMPONENTS USA,
LLC., HITACHI METALS FOUNDRY
HOLDINGS, INC., n/k/a HITACHI
METALS AMERICA HOLDINGS, INC.,
Defendants-Appellees.
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____________________________________
FOR PLAINTIFFS-APPELLANTS: LAWRENCE M. SEGAN, Law Office of
Lawrence M. Segan, New York, NY.
FOR DEFENDANTS-APPELLEES: DAVID B. SALMONS (with Troy S.
Brown, Margot G. Bloom, and
Michael E. Kenneally on the
brief), Morgan, Lewis & Bockius
LLP, Philadelphia, PA and
Washington, DC.
Appeal from a judgment of the United States District Court
for the Southern District of New York (Daniels, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court is AFFIRMED.
TrueNorth Capital Partners LLC and its subsidiary TNCP, LLC
(collectively “TrueNorth”) brought this contract action
against various entities in the Hitachi, Ltd. corporate family
(collectively “Hitachi”), claiming entitlement to a $6.8
million “Completion Fee” allegedly due under the parties’
written agreement. The United States District Court for the
Southern District of New York (Daniels, J.) granted summary
judgment for Hitachi on two independent grounds, and TrueNorth
now appeals. We assume the parties’ familiarity with the
underlying facts, the procedural history, and the issues
presented for review.
“In reviewing a written contract, a [] court's primary
objective is to give effect to the intent of the parties as
revealed by the language they chose to use.” Seiden Assocs.,
Inc. v. ANC Holdings, Inc., 959 F.2d 425, 428 (2d Cir. 1992).
When, as here, the operative language is unambiguous, the proper
effect to give it is a question of law that may be resolved on
summary judgment. See id.
TrueNorth contracted to advise Hitachi in its efforts to
invest in a “Target” company, which the contract defined as any
“ductile iron producer having production facilities in the U.S.,
Canada and/or Mexico.” App’x at 31. The contract guaranteed
TrueNorth an up-front retainer and a monthly fee. A Completion
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Fee was contingent upon Hitachi’s “consummation of an[]
Investment [in] a[] Selected Target.” Id. at 34 (emphasis
added). The contract further provided that the parties “shall
agree in writing” on which “Targets” constitute “Selected
Targets.”1 Id. at 31. That unambiguous writing requirement
dooms TrueNorth’s claim.
TrueNorth claims that when Hitachi consummated an
investment in Waupaca Foundry, Inc.--which was undisputedly a
Target under the parties’ contract--Hitachi was required to pay
TrueNorth a Completion Fee of $6.8 million. Hitachi counters
that TrueNorth’s claim is foreclosed because the contract
allowed for a Completion Fee only if Hitachi invested in a
Selected Target, and the parties did not “agree in writing” that
Waupaca was a Selected Target. The district court cited the
absence of a written agreement designating Waupaca a Selected
Target as one ground for awarding Hitachi summary judgment. On
de novo review, see Sousa v. Marquez, 702 F.3d 124, 127 (2d Cir.
2012), we affirm on that ground.
TrueNorth argues that the writing requirement was
(1) satisfied or (2) waived.
1. TrueNorth asserts that “writings between the parties
. . . conclusively establish[ed] an agreement that Waupaca was
a Selected Target.” Appellant’s Br. at 25. This assertion is
belied by the record. It is undisputed that in March 2012, the
parties agreed in writing to a list of 22 Selected Targets, which
did not include Waupaca.2 And TrueNorth points to no subsequent
writing in which Hitachi manifested its assent to any
modification to that list.
1The distinction between Targets and Selected Targets was
written into the contract at Hitachi’s behest, after an earlier
iteration required payment of a Completion Fee upon Hitachi’s
“consummation of an[] Investment [in] any Target.” Appellee’s
Br. at 9.
2 The list actually included only 21 distinct entities, as
one of the entities listed was owned by another, but both parties
stipulate to the irrelevance of this discrepancy.
3
TrueNorth identifies as the requisite writing its
unilateral inclusion of Waupaca on spreadsheets summarizing its
research efforts, which it emailed in updated versions to
Hitachi three times during April 2012. Those spreadsheets were
organized into tabs labeled “Targets,” “Comments,” and
“Unlikely”; but Waupaca never appeared on the “Targets” tab,
which included only the companies on the parties’ agreed-upon
March 2012 list of Selected Targets. Moreover, Waupaca’s
inclusion on the spreadsheets was not inherently meaningful,
given that TrueNorth conducted research on numerous companies
that it concedes were not Selected Targets and included
summaries of that research on similar spreadsheets that it also
emailed to Hitachi.
Even assuming that, through its spreadsheets, TrueNorth
communicated in writing its intent to add Waupaca to the list,
no writing from Hitachi evinced its agreement. Hitachi did not
respond to the emails that contained the spreadsheets, and no
writing from Hitachi to TrueNorth so much as mentioned Waupaca.
True, an email from Hitachi to TrueNorth attached an unaltered
version of one of the spreadsheets, which included Waupaca; but
the body of that email merely sought an update on information
provided in the spreadsheet about a different company. This
cannot satisfy the unambiguous contractual requirement that the
parties “agree in writing” before a given Target may become a
Selected Target capable of generating a Completion Fee, and we
are “required to give effect to” that requirement. U.S. Tr.
Co. of N.Y. v. Jenner, 168 F.3d 630, 632 (2d Cir. 1999) (internal
quotation marks omitted).
2. TrueNorth asserts in the alternative that Waupaca became
a Selected Target notwithstanding the unambiguous force of the
contract’s writing requirement because that requirement was
either modified or waived. This assertion lacks merit in view
of the contract as a whole. See Postlewaite v. McGraw-Hill,
Inc., 411 F.3d 63, 67 (2d Cir. 2005) (“Contracts must be read
as a whole . . . .”). The contract specifically stated that
the parties could “modif[y] . . . or waive[]” its requirements
only through a “writing signed by the parties.” App’x at 36.
4
It is undisputed that the parties did not execute a signed
writing modifying or waiving the writing requirement.3
New York law (which the parties agree governs) enforces the
requirement of a signed writing before the parties may depart
from a contractual term. See, e.g., Towers Charter & Marine
Corp. v. Cadillac Ins. Co., 894 F.2d 516, 521–22 (2d Cir. 1990)
(citing N.Y. Gen. Oblig. Law § 15-301). There are only two
showings that a party can make in order to circumvent such a
provision, and TrueNorth attempts to make only one of them:
TrueNorth attempts to establish that the parties “partial[ly]
perform[ed]” an unwritten agreement to depart from the writing
requirement, and that the conduct allegedly constituting
partial performance was “unequivocally referable to the”
departure, meaning it was “[in]compatible with the original
agreement.” Id. at 522 (internal quotation marks omitted).
TrueNorth cannot, “as a matter of law,” make such a showing.
Id.
TrueNorth relies (in part) on Hitachi’s apparent
acquiescence to TrueNorth’s memorialization in its initial
spreadsheet of the Selected Targets list to which the parties
agreed in writing. No reasonable factfinder could conclude
from that conduct that Hitachi acceded to a new arrangement
under which any company placed on a subsequent TrueNorth
spreadsheet became a Selected Target once the spreadsheet was
received by Hitachi over email without objection. To the
contrary, that conduct was “[]consistent with the agreement as
written.” Id. “[N]othing in the written agreement[]
precluded” TrueNorth from documenting its work in spreadsheets
or required Hitachi “to object” if it did not endorse
TrueNorth’s organization of its spreadsheets. Id. TrueNorth
fails to identify conduct that is “explainable only [by the
existence of a new] agreement.” Merrill Lynch Interfunding,
Inc. v. Argenti, 155 F.3d 113, 122 (2d Cir. 1998) (internal
quotation marks omitted).
3 In contrast, the parties did execute a signed writing
modifying other provisions in the contract--namely, those
governing the agreement’s duration.
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TrueNorth fares no better to the extent that it relies on
Hitachi’s oral grant of permission to TrueNorth to contact
Waupaca. Hitachi authorized TrueNorth to contact numerous
companies that (TrueNorth concedes) were not Selected Targets.
This was consistent with the contract’s requirement that
TrueNorth abstain from “contact[ing] any Target without
[Hitachi’s] approval.” App’x at 32 (emphasis added). As the
district court noted, “it [was] not inconsistent for
[TrueNorth] to [contact] Waupaca with [Hitachi’s] oral approval
as a ‘Target,’ but still lack [Hitachi’s] written consent to
designate Waupaca as a ‘Selected Target.’” Truenorth Capital
Partners LLC v. Hitachi Metals Am., LLC, No. 15 CIV. 651, 2017
WL 532407, at *7 (S.D.N.Y. Feb. 3, 2017) (emphasis added).
Accordingly, the conduct at issue “is reasonably explained”
without reference to a departure from the contract as written.
Argenti, 155 F.3d at 122 (internal quotation marks omitted).
In sum, TrueNorth cannot circumvent the contract’s express
proscription of unwritten departures. For the same reasons,
its argument premised on ratification is foreclosed. See id.
We have considered TrueNorth’s remaining arguments and
find them to be without merit. We AFFIRM the judgment of the
district court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
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