Peabody v. Weider Publications, Inc.

260 F. App'x 380
CourtCourt of Appeals for the Second Circuit
DecidedJanuary 16, 2008
DocketNo. 07-0094-cv
StatusPublished
Cited by4 cases

This text of 260 F. App'x 380 (Peabody v. Weider Publications, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Peabody v. Weider Publications, Inc., 260 F. App'x 380 (2d Cir. 2008).

Opinion

SUMMARY ORDER

Plaintiff A. Douglas Peabody appeals from an order of the United States District Court for the Southern District of New York (George B. Daniels, Judge) granting summary judgment in favor of defendants Weider Publications, Inc. (“WPI”), Weider Health and Fitness, Inc., and Weider Health and Fitness, LLC (collectively, “Weider”).1 In addition, Peabody also appeals from the District Court’s denial, without prejudice, of his motion to amend his complaint to assert a fraud claim against Weider. We assume the parties’ familiarity with the underlying facts and procedural history in this case.

[382]*382On appeal, Peabody argues that the District Court erred in granting summary judgment because there are genuine issues of material fact in this case in three respects. First, Peabody contends that the evidence in the record creates a genuine issue of material fact with respect to whether Weider exercised its “call right” contained in the Option Agreement. However, it is undisputed that the relevant language of the Option Agreement is as follows:

WPI may exercise the Call Right by sending written notice (the “Call Notice ”) of such exercise to Peabody after the Call Right Date. The Call Notice will specify the purchase price to be paid per each then outstanding Option Share (the “Stock Call Price ”) or the amount to be paid per each Option Share subject to issuance upon the exercise of the Option (the “Option Call Price ”) and the effective time of the exercise of the Call Right.

On appeal, Peabody argues that the January 28, 2003 letter he received from Weider constituted an exercise of Weider’s call right as prescribed by the Option Agreement.

In granting summary judgment in favor of Weider, the District Court rejected precisely this argument. The District Court concluded that, as a matter of law, the January 28, 2003 letter did not meet the requirements of a Call Notice as specified in the Option Agreement. Having reviewed the contents of this letter on appeal, we agree with the District Court’s conclusion that the letter contains no indication that Weider “was exercising or intended to exercise the Call Right, when such exercise would become effective, or the amount to be paid to [Peabody].” Instead, the letter merely stated that Weider was “prepared” to exercise its Call Right, but only if Peabody signed the attached Option Cancellation Agreement. Peabody does not dispute the fact that he did not sign the Option Cancellation Agreement. Furthermore, Peabody has identified no other evidence in the record to support his argument that Weider exercised its Call Right. Although Peabody characterizes the District Court’s interpretation of both the Option Agreement and the January 28, 2003 letter as a “factual” determination or conclusion, it is settled that the meaning of unambiguous contract terms is a question of law for a court, not a jury, to decide. See Palmieri v. Allstate Ins. Co., 445 F.3d 179, 187 (2d Cir.2006). On appeal, Peabody does not challenge the District Court’s interpretation of the terms of the Option Agreement. Both in opposition to Weider’s motion for summary judgment and on appeal, Peabody has failed to come forward with any evidence that the January 28, 2003 letter or any other communication from Weider fulfilled the requirements of a Call Notice. As a result, no reasonable jury could conclude that Weider exercised its Call Right, and the District Court properly rejected Peabody’s argument in opposition to Weider’s motion.

Peabody also argues that the District Court erred in failing to recognize the existence of genuine issues of material fact with respect to whether the November 2002 sale of the WPI magazine business was a “Tag Sale” within the meaning of the Option Agreement. The parties agree that the November 2002 sale constituted a “Liquidity Event,” as provided by that agreement. According to the Option Agreement, the simultaneous occurrence of both a Tag Sale and a Liquidity Event would require Weider to purchase a certain number of Peabody’s shares at a certain price, as provided by other terms of the agreement. To constitute a Tag Sale, Weider must “sell[ ] Common Stock to a third party ..., and after such sale the [383]*383cumulative total of the shares of Common Stock sold by [Weider and affiliates, including WPI] to such third parties [must] exceed[ ] 10% of the then number of fully diluted shares of Common Stock.... ” Peabody argues that “[t]he record is uncontested that [Weider] sold more than a 10% equity ownership interest in the Weider Publications magazine business to American Media, a third party.”

On this issue, the District Court concluded that no reasonable jury could find that the magazine business sale in question constituted a Tag Sale. Specifically, the District Court quoted the definition of “Common Stock” in the Option Agreement to mean “the common stock, par value $.01 per share, of WPI.” As Peabody did not argue that the magazine sale involved any transfer of WPI shares, the District Court concluded, as a matter of law, that such a sale was not a Tag Sale within the meaning of the agreement.

We concur with this analysis. On appeal, Peabody identifies no evidence indicating any involvement of WPI common stock in the sale of the magazine business or any other Weider-related transaction. Moreover, there is nothing in the Option Agreement that addresses the situation of any change in the “equity ownership interest in the Weider Publications magazine business” specifically. Plaintiff argues that the District Court “elevated form over substance” and should have concluded that a Tag Sale “really occurred” vis-a-vis the magazine business sale. However, there is no reason for us to depart from the clear and unambiguous language of the Option Agreement, which defines a “Tag Sale” as described above.2 See Red Ball Interior Demolition Corp. v. Palmadessa, 173 F.3d 481, 484 (2d Cir.1999) (stating that where the terms of a contract are clear, a court must not “alter or go beyond the express terms of the agreement, or [ ] impose obligations on the parties that are not mandated by the unambiguous terms of the agreement itself”). As a result, the District Court was entirely reasonable in concluding, as a matter of law, that the sale of the magazine business did not constitute a Tag Sale.

Peabody’s third and final argument why the District Court erred in granting summary judgment in favor of Weider is that genuine issues of material fact exist regarding Weider’s alleged breach of the covenant of good faith and fair dealing. However, on this issue, the District Court concluded that the good faith and fair dealing claim was “merely duplicative” of Peabody’s claim for breach of the Option Agreement because both claims relied upon the same factual allegations. Indeed, the complaint alleges precisely the same facts for both claims. As a result, it was [384]*384entirely proper under New York law for the District Court to dismiss the good faith and fair dealing claim as duplicative of the breach of contract claim. See Jacobs Private Equity, LLC v. 450 Park LLC, 22 A.D.3d 347, 347-48, 803 N.Y.S.2d 14 (1st Dep’t 2005), lv. denied, 6 N.Y.3d 703, 811 N.Y.S.2d 336, 844 N.E.2d 791 (2006); Cerberus Int’l, Ltd. v. BancTec, Inc., 16 A.D.3d 126, 127, 791 N.Y.S.2d 28 (1st Dep’t 2005).

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Bluebook (online)
260 F. App'x 380, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peabody-v-weider-publications-inc-ca2-2008.