Spinner Consulting LLC v. Bankruptcy Management Solution ( 2020 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
______________
No. 19-2371
______________
SPINNER CONSULTING LLC,
Appellant
v.
BANKRUPTCY MANAGEMENT SOLUTIONS, INC.
______________
Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 2:18-cv-12258)
District Judge: Hon. Kevin McNulty
_____________
Argued November 20, 2019
Before: CHAGARES, MATEY, and FUENTES, Circuit Judges.
(Opinion filed: January 3, 2020)
William Dunnegan (Argued)
Dunnegan & Scileppi
350 Fifth Avenue
Suite 7610
New York, NY 10118
Counsel for Appellant
Jonathan M. Herman (Argued)
Kaleb McNeely
Dorsey & Whitney
51 West 52nd Street
New York, NY 10019
Michael A. Lindsay
Dorsey & Whitney
50 South Sixth Street
Suite 1500
Minneapolis, MN 55402
Counsel for Appellee
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OPINION*
______________
FUENTES, Circuit Judge.
Spinner Consulting LLC (“Spinner”) appeals the District Court’s dismissal of this
antitrust action against Bankruptcy Management Solutions, Inc. (“BMS”). Because we
conclude that Spinner’s claim against BMS was released, we will affirm.
I.
As we write solely for the parties, we recite only the facts essential to our decision.
This action arises out of the Chapter 7 petition filed by Robert Fusari in the United States
Bankruptcy Court for the District of New Jersey. Alan E. Gamza was appointed trustee
of the Fusari estate and, in June 2015, contracted on its behalf with BMS to receive
certain banking and software support services necessary to carry out his responsibilities
as trustee. Pursuant to the contract, BMS received fees from the Fusari estate during the
bankruptcy proceeding.
*
This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7, does not
constitute binding precedent.
2
In May 2016, the Bankruptcy Court entered an order enforcing and approving a
settlement agreement (the “Settlement Order”), resolving the Fusari bankruptcy
proceedings. The Settlement Order contained a general release provision, in which “the
estate and the Debtor on his own behalf and on behalf of his Entities, . . . successors and
assigns” agreed to “release, acquit and forever discharge the Parties . . . and their . . .
independent contractors [and] agents . . . from any and all . . . suits [and] claims . . . that
the Debtor or any of the Entities has, had or may have, arising from facts . . . from the
beginning of time until the Effective Date of this Settlement Agreement, including . . . all
claims . . . that were raised or could have been raised in this Bankruptcy Case or relating
to the Bankruptcy Case.”1
The Settlement Order defined “Parties” to include Fusari, his wholly-owned
business entities, and Gamza as trustee.2 The Settlement Order further specified that “the
Bankruptcy Code and to the extent applicable,” New Jersey law would govern its
interpretation.3
After the remaining property of the Fusari estate revested in Fusari, he assigned all
remaining claims arising from the bankruptcy to Spinner, which brought an antitrust
action under Section 1 of the Sherman Act,4 alleging a horizontal price-fixing conspiracy
with its competitors. According to the complaint, the harm occurred between June and
December 2015, when the Fusari estate’s bank collected BMS’ fee.
1
App. 103–04.
2
App. 93.
3
App. 112.
4
15 U.S.C. § 1.
3
BMS moved to dismiss the complaint, arguing, inter alia, that Spinner lacked
antitrust standing and that its claim was released by the Settlement Order. The District
Court granted the motion to dismiss for lack of antitrust standing without considering
BMS’ remaining arguments. This appeal followed.
II.5
We conclude that the Settlement Order released any claim Fusari, and thus
Spinner, might have had following the bankruptcy proceeding.6 According to Spinner, its
antitrust claim arose during the Bankruptcy proceeding, when BMS’ intermediary
deducted its allegedly anticompetitive fees, thus falling within the release period.7
Whether BMS acted as a contractor for Gamza, the trustee, or the Fusari estate, the
Settlement Order bars Spinner’s complaint. First, the Settlement Order released BMS as
an independent contractor or agent of the trustee, one of the “Parties” covered by the
5
The District Court had jurisdiction pursuant to 28 U.S.C. § 1331, and we have
jurisdiction pursuant to 28 U.S.C. § 1291. “We review de novo a district court’s grant of
a motion to dismiss and construe all facts in the light most favorable to the nonmoving
party.” Hanover 3201 Realty, LLC v. Vill. Supermarkets, Inc., 806 F.3d 162, 170 n.8 (3d
Cir. 2015). We can affirm on any basis that finds support in the record. See Fairview
Twp. v. U.S. Envtl. Prot. Agency, 773 F.2d 517, 525 n.15 (3d Cir. 1985).
6
See In re Complaint of Bankers Tr. Co., 752 F.2d 874, 883 (3d Cir. 1984) (“It is well-
established that a release is the giving up or the abandoning of a claim or right to the
person against whom the claim exists or the right is to be enforced or exercised . . . .”).
We agree with the parties that, pursuant to the Settlement Order’s choice-of-law
provision, New Jersey law applies to our interpretation of its terms. App. 112; see also
Mullen v. N.J. Steel Corp., 733 F. Supp. 1534, 1548 (D.N.J. 1990) (“New Jersey follows
traditional contract principles on release of actionable claims.”).
7
W. Penn Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85, 105–06 (3d Cir. 2010)
(“[A]n antitrust cause of action generally ‘accrues . . . when a defendant commits an act
that injures a plaintiff’s business.’”) (quoting Zenith Radio Corp. v. Hazeltine Research,
Inc., 401 U.S. 321, 338 (1971)).
4
release.8 As Spinner’s complaint acknowledges, “BMS entered into a contract with
Gamza,” even though he was acting in his capacity as trustee, making BMS his
contractor.9
Second, even if BMS was not released as a contractor of the trustee, it was
released as a contractor of the estate itself. The expansive language of the Settlement
Order operated to release each of the “Parties” involved in the bankruptcy case, including
the estate, of all potential claims against the other parties.10
Spinner argues that the scope of the release is limited to claims of the “Debtor or
any of the Entities,” excluding claims of the Fusari estate.11 Not so. The Settlement
Order explicitly defined the terms “Entities,” the “Debtor,” and “Fusari” to encompass
collectively “Robert Fusari, on behalf of himself, his chapter 11 estate, and each of his
wholly owned entities.”12 Unlike other sections of the Settlement Order, which explicitly
excluded certain parties, the release language contained no such carveout.13 Spinner’s
reading is also inconsistent with the inclusion of the Fusari estate earlier in the paragraph
and with the broad framing of the release.
8
App. 93.
9
App. 48; see MacLean Assocs., Inc. v. Wm. M. Mercer-Meidinger-Hansen, Inc., 952
F.2d 769, 778 (3d Cir. 1991) (“An independent contractor is a person who contracts with
another to do something for him but who is not controlled by the other nor subject to the
other’s right to control with respect to his physical conduct in the performance of the
undertaking.”) (quoting Restatement (Second) of Agency § 2(3) (Am. Law Inst. 1958)).
10
App. 9311
Reply at 13 (quoting App. 104).
12
App. 93 (emphasis added).
13
Cf. App. 102 (excluding “the estate and the Debtor” from “the Parties”).
5
Spinner further urges us, in the alternative, to examine if there is an issue of fact as
to whether the parties intended BMS to benefit from the Settlement Order. Since we
conclude that the language of the release is unambiguous, no inquiry into the subjective
intent of the parties is required.14 The Settlement Order released any claim that might
have revested in Fusari, and thus Spinner, as assignee, is also barred by its terms.15
III.
For these reasons, we will affirm the order of the District Court.
14
See Karl’s Sales & Serv., Inc. v. Gimbel Bros., Inc., 592 A.2d 647, 650 (N.J. Super. Ct.
App. Div. 1991) (“[W]here the terms of a contract are clear and unambiguous there is no
room for interpretation or construction and the courts must enforce those terms as
written.”); cf. Schor v. FMS Fin. Corp., 814 A.2d 1108, 1112 (N.J. Super Ct. App. Div.
2002).
15
See CardioNet, Inc. v. Cigna Health Corp., 751 F.3d 165, 178 (3d Cir. 2014) (“It is a
basic principle of assignment law that an assignee’s rights derive from the assignor.”).
6