T.F.T.F. Capital Corp. v. Marcus Dairy, Inc.

312 F.3d 90, 2002 WL 31399792
CourtCourt of Appeals for the Second Circuit
DecidedOctober 25, 2002
DocketDocket No. 01-7549
StatusPublished
Cited by10 cases

This text of 312 F.3d 90 (T.F.T.F. Capital Corp. v. Marcus Dairy, 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
T.F.T.F. Capital Corp. v. Marcus Dairy, Inc., 312 F.3d 90, 2002 WL 31399792 (2d Cir. 2002).

Opinion

PER CURIAM.

Plaintiff-appellant T.F.T.F. Capital Corporation (“T.F.T.F.” or appellant) appeals from the judgment of the United States District Court for the District of Connecticut (Warren W. Eginton, District Judge), granting summary judgment in favor of defendants-appellees Marcus Dairy, Inc. and Michael Marcus (collectively, appellees). See T.F.T.F. Capital Corp. v. Marcus Dairy, Inc., 33 F.Supp.2d 122 (D.Conn.1998). In this diversity action, appellant’s complaint asserted, among other things, Connecticut state law claims of abuse of process, tortious interference with a business expectancy, and fraudulent misrepresentation. The district court found the fraudulent misrepresentation claim to be time barred, and the abuse of process and tortious interference claims to be barred by the Noerr-Pennington doctrine, which generally immunizes from liability a party’s commencement of a prior court proceeding. Id. at 126. While we disagree with the district court’s reasoning with respect to the abuse of process and tor-tious interference claims, we nevertheless affirm its judgment on the merits.

BACKGROUND

This case stems from the sale of a business, Naugatuck Dairy Ice Cream Company, Inc. (“Naugatuck”), and a lawsuit brought in state court when the deal unraveled. Dominick Barbiero and appellee Marcus Dairy are the former majority shareholders of Naugatuck and appellee Michael Marcus is the president of Marcus Dairy. Appellant T.F.T.F. is a New York holding company. T.F.T.F.’s president, Henry Thomas, was president of Freedom Foods, Inc., the initial purchaser of Nauga-tuck, and became president of Naugatuck after the sale.

In March 1988, Barbiero, Marcus Dairy (represented by Michael Marcus), and Naugatuck entered into a stock and assets purchase agreement with Freedom Foods for the sale of Naugatuck by Bar-biero and Marcus Dairy to Freedom Foods. Pursuant to the agreement, Freedom Foods financed the purchase of Nau-gatuck’s production equipment and inventory by executing two promissory notes in favor of Naugatuck that were assigned to Marcus Dairy. Freedom Foods also agreed to a post-sale inventory price adjustment based on actual value. After the closing, T.F.T.F. purchased the production equipment from Freedom Foods and accepted assignment of the lease agreement for the production equipment.

A lawsuit followed, for reasons disputed by the parties. According to appellees, Freedom Foods defaulted on the notes and failed to deliver, as the parties had agreed, an executed note for the inventory price adjustment. In July 1988, Marcus Dairy sued Freedom Foods in Connecticut state court to collect on these obligations (the “Connecticut action”). As pre-judgment remedies, Marcus Dairy obtained, ex parte, the attachment of Freedom Foods’s accounts receivable and the production equipment. The Connecticut state court granted Marcus Dairy’s motion for a default judgment against Freedom Foods for Freedom Foods’s failure to plead.

Appellant, on the other hand, denies that Freedom Foods was ever in default and asserts that appellee's1 obtained the [93]*93pre-judgment remedies as well as the judgment in the Connecticut action through deceit. In appellant’s view, ap-pellees brought the Connecticut action in retaliation for Naugatuck’s decision to move its business away from Marcus in favor of another supplier. Appellant also asserts that Marcus Dairy, in both its application for the first pre-judgment remedy and in its successful motion for summary judgment, employed deceitful measures to prevent Freedom from responding. By obtaining as a pre-judgment remedy the seizure of Naugatuck’s assets and the temporary closure of the plant, appellant further alleges, appellees destroyed Naugatuck’s business.

In September 1991, appellant commenced this diversity action. As is relevant to this appeal, appellant claimed under Connecticut state law that the Connecticut action constituted an abuse of process and a tortious interference with appellant’s expectations of financial gain from the equipment lease with Nau-gatuck. Appellant further claimed that appellees had made a fraudulent misrepresentation in connection with the sale. In granting appellees’ motion for summary judgment, the district court found the abuse of process and tortious interference with business expectancy claims to be barred by the Noerr-Pennington doctrine, and the fraudulent misrepresentation claim to be time barred. T.F.T.F., 33 F.Supp.2d at 126. This appeal followed.

DISCUSSION

We review the district court’s grant of summary judgment de novo. Tri-State Employment Servs., Inc. v. Mountbatten Sur. Co., 295 F.3d 256, 260 (2d Cir.2002). Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). “A dispute regarding a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Tri-State Employment, 295 F.3d at 260 (citation and internal quotation marks omitted).

On appeal, appellant challenges only the dismissal of its abuse of process and tortious interference with a business expectancy claims under Noerr-Pennington.2 The Noerr-Pennington doctrine generally immunizes from liability a party’s commencement of a prior court proceeding. See Cal. Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508, 510, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972). There exists, however, an exception to the Noerr Pennington doctrine for “sham” litigation. This exception applies where the litigation is (1) “objectively baseless” and (2) intended to cause harm to the defendant “through the use [of] governmental process — as opposed to the outcome of that process .... ” Prof'l Real Estate Investors, Inc. v. Columbia Pictures Indus., 508 U.S. 49, 60-61, 113 S.Ct. 1920, 123 L.Ed.2d 611 (1993) (internal quotations omitted, emphasis in original).

Appellant argues that the judgment rendered in the Connecticut action should not have been immunized from the sham litigation exception simply because a default judgment was rendered in favor of appel-lees. See T.F.T.F., 33 F.Supp.2d at 126. Appellant also contests the district court’s sham litigation finding on the basis that the judgment in the Connecticut action [94]*94was engineered by appellees’ deceit. Finally, both parties have cross-moved for sanctions, claiming misconduct by the other in connection with this appeal.

We think that the district court erred when it found the sham litigation exception to Noerr-Pennington to be inapplicable on the basis of the default judgment rendered in the Connecticut action. It is generally true that a winning lawsuit is “a reasonable effort at petitioning for redress and therefore not a sham.” Prof'l Real Estate, 508 U.S. at 60 n. 5, 113 S.Ct. 1920. However, although it is a winning lawsuit, a default judgment does not ipso facto

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Capital Corp. v. Marcus Dairy, Inc.
312 F.3d 90 (Second Circuit, 2002)

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Bluebook (online)
312 F.3d 90, 2002 WL 31399792, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tftf-capital-corp-v-marcus-dairy-inc-ca2-2002.