Opinion
21-670-cv
03-14-2022
BLUE STONE ENTERTAINMENT LLC, Plaintiff-Appellant, v. AGS CJ CORPORATION, Defendant-Appellee. [*]
FOR PLAINTIFF-APPELLANT: Jeff L. Todd, McAfee & Taft, Oklahoma City, OK FOR DEFENDANT-APPELLEE: Stephen L. Saxl, Greenberg Traurig, LLP, New York, NY
UNPUBLISHED OPINION
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 "SUMMARY ORDER"). 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 14th day of March, two thousand twenty-two.
Appeal from a judgment of the United States District Court for the Southern District of New York (Ronnie Abrams, Judge).
FOR PLAINTIFF-APPELLANT:
Jeff L. Todd, McAfee & Taft, Oklahoma City, OK
FOR DEFENDANT-APPELLEE:
Stephen L. Saxl, Greenberg Traurig, LLP, New York, NY
PRESENT: ROBERT D. SACK, RAYMOND J. LOHIER, JR., WILLIAM J. NARDINI, Circuit Judges.
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the District Court is AFFIRMED.
Blue Stone Entertainment LLC appeals from the March 10, 2021 judgment of the United States District Court for the Southern District of New York (Abrams, L) dismissing its breach of contract and unjust enrichment claims under Federal Rule of Civil Procedure 12(b)(6). Blue Stone alleged that AGS CJ Corporation breached an amended Stock Purchase Agreement ("SPA") to which Blue Stone was a third-party beneficiary and that AGS was unjustly enriched as a result. We assume the parties' familiarity with the underlying facts and the record of prior proceedings, to which we refer only as necessary to explain our decision to affirm.
On June 10, 2013, AGS entered into an SPA to purchase Diamond Game Enterprises, a sweepstakes machines vendor, for $25 million. In January 2014 Blue Stone and Diamond Game entered into an equipment lease agreement (the "Texas Lease") whereby Diamond Game agreed to lease 416 sweepstakes machines and other accessories (which the Texas Lease defined as the "Texas Equipment") to Blue Stone. The Texas Lease contemplated a potential "Texas Event," defined as any one of three particular events that would prevent Diamond Game from performing under the Texas Lease. AGS and Diamond Game then amended the SPA and made Blue Stone a third-party beneficiary to Section 5.3 of the amended SPA, titled "Conveyance of Texas Equipment," which provided in relevant part that "[o]n or prior to the tenth (10th) Business Day following [Diamond Game]'s termination of the Texas Lease upon or following the occurrence of a Texas Event, [AGS] shall cause [Diamond Game] to convey, transfer and assign to [Blue Stone], for $1.00, the Texas Equipment." Joint App'x at 38, 43. The parties do not dispute that Diamond Game did not wait for a Texas Event to occur before it terminated the Texas Lease "purportedly for cause" without ever conveying the Texas Equipment to Blue Stone. Id. at 22.
Blue Stone claimed that AGS, as Diamond Game's then-parent company, "breached the SPA when it failed to convey the Texas Equipment to Blue Stone and/or otherwise comply with its Texas Conveyance Obligations following the occurrence of a Texas Event." Id. at 24. The District Court correctly concluded that this claim is meritless. "In interpreting a contract under New York law, words and phrases . . . should be given their plain meaning." LaSalle Bank Natl Ass'n v. Nomura Asset Cap. Corp., 424 F.3d 195, 206 (2d Cir. 2005) (quotation marks omitted). Under the express terms of Section 5.3 of the amended SPA, AGS was obligated to force Diamond Game to transfer the Texas Equipment to Blue Stone "following [Diamond Game]'s termination of the Texas Lease upon or following the occurrence of a Texas Event." Joint App'x at 38. The agreement's use of the words "upon or following" makes it clear that the Texas Equipment would be conveyed to Blue Stone if Diamond Game terminated the Texas Lease after a Texas Event. A Texas Event, not termination of the lease, was plainly the initial trigger for the obligation to convey the equipment. As the District Court noted, Blue Stone offers no alternative interpretation of the words "upon or following," and Blue Stone acknowledges that a Texas Event did not occur before Diamond Game terminated the Texas Lease. See id. at 11. We therefore agree with the District Court that AGS did not breach Section 5.3 of the amended SPA.
This interpretation of the unambiguous terms of the amended SPA is also consistent with the Texas Lease, which entitled Blue Stone to the Texas Equipment "following the occurrence of ... a Texas Event." Joint App'x 59.
On appeal, Blue Stone argues primarily that AGS anticipatorily breached, and therefore repudiated, the amended SPA. But Blue Stone forfeited that argument by failing to raise it before the District Court, and we need not consider it on appeal. See Doe v. Trump Corp., 6 F.4th 400, 410 (2d Cir. 2021); Allianz Ins. Co. v. Lerner, 416 F.3d 109, 114 (2d Cir. 2005). Blue Stone also argues that we should focus our inquiry on the amended SPA's purpose and broader context as opposed to its plain text. But we reject that argument because "if the contract is capable of only one reasonable interpretation, i.e., is unambiguous, we are required to give effect to the contract as written." K. Bell & Assocs., Inc. v. Lloyd's Underwriters, 97 F.3d 632, 637 (2d Cir. 1996) (quotation marks omitted).
Finally, New York law recognizes unjust enrichment claims only "in the absence of any agreement" on the "particular subject matter." Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of N.T., Inc., 448 F.3d 573, 586-87 (2d Cir. 2006) (quotation marks omitted). We affirm the District Court's dismissal of Blue Stone's unjust enrichment claim because the amended SPA clearly covers the subject matter of that claim.
We have considered Blue Stone's remaining arguments and conclude that they are without merit. For the foregoing reasons, the judgment of the District Court is AFFIRMED.
[*]The Clerk of Court is directed to amend the caption as set forth above.