Partner Canada Biomedical Int'l, Inc. v. Amgen, Inc.
| Decision Date | 17 July 2018 |
| Docket Number | 17-CV-5919 (VEC) |
| Parties | PARTNER CANADA BIOMEDICAL INTERNATIONAL, INC., Plaintiff, v. AMGEN, INC. Defendant. |
| Court | U.S. District Court — Southern District of New York |
Partner Canada Biomedical International, Inc. ("PCBI") sued Amgen, Inc. ("Amgen") for breach of contract, breach of the duty of good faith and fair dealing, and unjust enrichment. Amgen contracted PCBI to assist Amgen with the sale of one of its manufacturing facilities. PCBI claims that it is entitled to a "success fee" under the contract because PCBI identified a buyer for the facility and, in its view, effected the sale of the facility to that buyer. Amgen moves to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). See Notice of Mot., Dkt. 35. For the following reasons, Amgen's motion to dismiss is GRANTED. PCBI may, however, move for leave to amend its claim for breach of the duty of good faith and fair dealing no later than July 25, 2018.
Amgen, a pharmaceutical company, contracted with PCBI, a consulting firm, to "assist [Amgen] with the identification, qualification, approach, [and] assessment of potential buyers" for the sale of one of Amgen's manufacturing facilities. Am. Compl., Dkt. 29, Ex. A ¶ 1.1(a). Under the contract between Amgen and PCBI (the "Contract"), PCBI first had to compile a list of potential buyers and submit the list to Amgen for its approval. See id. Ex. A at 10. PCBI was then required to contact the potential buyers and present the proposed transaction to them. See id. After ascertaining which parties were interested in the transaction, PCBI was required to submit a final list of interested buyers to Amgen. See id.
Amgen was required to pay PCBI a monthly "service fee." Id. Ex. A ¶ 3.1(a). Additionally, the Contract required Amgen to pay PCBI a "success fee" if "the related transaction" was "completed as a result of the direct or indirect efforts of [PCBI]" and "effected" during the Contract's term or during a 12-month "tail period" following the Contract's termination date.2 Id. Ex A. ¶ 3.1(b). The term of the Contract began on December 16, 2013, and (after an extension) terminated on March 31, 2014. See id. Ex. A ¶ 2.1; id. ¶ 18. The Contract's 12-month "tail period," therefore, terminated on March 31, 2015. See id. ¶ 19.
One of the candidates on PCBI's initial list of potential buyers was AstraZeneca. See id. ¶ 34. After Amgen's approval of the initial list, in January 2014, PCBI approached AstraZeneca and presented the proposed sale in a detailed white paper. See id. ¶ 35.
Shortly after AstraZeneca's internal evaluation of the facility, AstraZeneca told PCBI that it was no longer interested in purchasing the facility. See id. ¶ 38. Accordingly, PCBI removed AstraZeneca from the list of potential buyers. See id. ¶ 39. For the remainder of the Contract's term—approximately two months—PCBI continued identifying and interviewing other prospective buyers but had no further contact with AstraZeneca. See id.
After the Contract's "tail period" began, AstraZeneca apparently reconsidered its decision and contacted Amgen directly. See id. ¶ 40. Over the next few months, and still within the tail period, AstraZeneca and Amgen engaged in direct negotiations for the purchase. See id. ¶¶ 40-41. Within the tail period of the Contract, AstraZeneca and Amgen entered into a preliminary "handshake agreement" for the sale of the facility. See id. ¶ 45. PCBI was not involved in these negotiations or in the handshake agreement. See id. ¶¶ 40-45.
Two months after the Contract's tail period ended, AstraZeneca submitted a "letter of intent" for the purchase of Amgen's facility. See id. ¶ 47. A few months later, in July 2015, AstraZeneca and Amgen entered into a formal Purchase and Sale Agreement. See id. ¶ 48; Handelsman Decl., Dkt. 37, Ex. D. In September 2015, AstraZeneca and Amgen completed the transaction, and AstraZeneca took ownership of the facility. See Am. Compl. ¶ 49.
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In deciding such a motion, "the duty of a court 'is merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof.'" DiFolco v. MSNBC Cable LLC, 622 F.3d 104, 113 (2d Cir. 2010) (quoting Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir. 1998)).
The parties agree that the Contract is governed by New York law. See Am. Compl., Ex. A ¶ 5.5. "Under New York law, the initial interpretation of a contract is a matter of law for the court to decide." Kamfar v. New World Rest. Grp., Inc., 347 F. Supp. 2d 38, 48-49 (S.D.N.Y. 2004); see also RJE Corp. v. Northville Indus. Corp., 329 F.3d 310, 314 (2d Cir. 2003). The court must resolve any ambiguities in the contract in favor of the non-moving party. See Chambers v. Time Warner, Inc., 282 F.3d 147, 153-54 (2d Cir. 2002). Contractual terms are unambiguous if they have "a definite and precise meaning, unattended by danger of misconception . . . and concerning which there is no reasonable basis for a difference of opinion." Met. Life Ins. Co. v. RJR Nabisco, Inc., 906 F.2d 884, 889 (2d Cir. 1990) (internal quotation marks omitted). Contractual "[l]anguage whose meaning is otherwise plain is not ambiguous merely because the parties urge different interpretations." Id. And the fact that one party may "strain[] the contract language beyond its reasonable and ordinary meaning" does not render the contract ambiguous. Aetna Cas. & Surety Co. v. Aniero Concrete Co., Inc., 404 F.3d 566, 598 (2d Cir. 2005).
PCBI claims that Amgen breached the Contract by failing to pay PCBI a success fee. See Am. Compl. ¶ 75. As the Court has discussed, PCBI was entitled to a success fee only if the relevant "transaction" was "completed as a result of the direct or indirect efforts of [PCBI]" and was "effected" during the Contract's term or tail period. Id. Ex. A ¶ 3.1(b). PCBI's claim fails for two reasons: first, the relevant "transaction" was not "effected" during the Contract's term or its tail period and, second, the transaction was not "completed as a result of the direct or indirect efforts" of PCBI.
The Contract requires the relevant "transaction" be "effected" during the term of the Contract or during the tail period. The relevant paragraph in the Contract makes it unambiguously clear that the sale of Amgen's facility had to be fully completed before the end of the tail period. See id. Ex. A ¶ 3.1(b). That paragraph begins by calculating the success fee as a percentage "of the purchase price made to [Amgen] for the sale (or other property interest transfer) of the Facility." Id. Immediately after that phrase, the Contract states that "the related transaction" must be "effected" during the Contract's term or tail period. Id. (emphasis added). The word "transaction," then, clearly refers back to the "sale (or other property interest transfer)" of the facility. Additionally, the plain meaning of the word "effect[]" is "[t]o bring about" or "to make happen." Black's Law Dictionary (10th ed. 2014) (definition of "effect" (vb.)); see also id. (definition of "effect" (n.)) ("Something produced by an agent or cause; a result, outcome, or consequence."). Taking this paragraph of the Contract as a whole, then, PCBI was entitled to the success fee only if Amgen's facility was sold before the end of the tail period.
AstraZeneca and Amgen entered into a "handshake agreement" within the tail period, but they did not sign a letter of intent, sign a purchase agreement, or transfer ownership of the facility until after the tail period concluded. Am. Compl. ¶¶ 45-48. The handshake agreement covered only the most basic terms of the transaction and did not result in the transfer of any legal interest, see id. ¶ 45; thus, the handshake agreement did not "effect" the transaction. And because no other concrete steps were taken towards a sale during the tail period, see id. ¶¶ 46-48, the sale was not "effected" during that time. As a result, under the unambiguous terms of the Contract, PCBI is not entitled to the success fee.3 Cf. Int'l Techs. Mktg., Inc. v. Verint Sys., Ltd., 157 F. Supp. 3d 352, 363 (S.D.N.Y. 2016) ().
PCBI argues that it "effected" the relevant "transaction" during the tail period by contacting and circulating materials to AstraZeneca during this time. See Pl.'s Mem. of Law, Dkt. 42, at 15. In PCBI's view, the parties could not have intended the term "effected" to refer to the final sale of the facility because sales of pharmaceutical manufacturing plants "often take years to negotiate and close" and yet the tail period consisted only of one year. Id. PCBI raises this argument for the first time in its opposition brief, and there are no allegations in the pleadings to support it.4 Because the term "effected" is unambiguous on its face, PCBI cannotcreate an ambiguity through unsubstantiated and untimely assertions. See Lockheed Martin Corp. v. Retail Holdings, N.V., 639 F.3d 63, 69 (2d Cir. 2011) (...
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