Santa Escolastica, Inc. v. Pavlovsky
| Decision Date | 18 October 2011 |
| Docket Number | Civil Action No. 09–358–KSF. |
| Citation | 823 F.Supp.2d 649 |
| Parties | SANTA ESCOLASTICA, INC., Plaintiff v. Ignacio PAVLOVSKY, Jr., Defendant. |
| Court | U.S. District Court — Eastern District of Kentucky |
OPINION TEXT STARTS HERE
Harold L. Kirtley, II, James R. Stinetorf, Thomas Dulaney Bullock, Bullock & Coffman LLP, Lexington, KY, for Plaintiff.
W. Craig Robertson, III, Leila O'Carra, Wyatt, Tarrant & Combs LLP, Lexington, KY, for Defendant.
This matter is before the Court on the motion of Defendant, Dr. Ignacio Pavlovsky (“Pavlovsky”), for summary judgment [DE 46] and the cross-motion of Plaintiff Santa Escolastica, Inc. (“SEI”) for partial summary judgment [DE 51]. For the reasons discussed below, both motions will be granted in part and denied in part.
I. BACKGROUND
This case arises from the breakup of a thoroughbred horse investment relationship. The Defendant, Dr. Ignacio Pavlovsky, is a veterinarian who conducts thoroughbred breeding and racing operations in Argentina. Jose DeCamargo is a Brazilian citizen whose Kentucky corporation, SEI, invested with Pavlovsky for twelve years from 1995 to 2007 in thoroughbred horses in Argentina. [DE 46–1, pp. 1–2; DE 51–1, p. 1]. There was no written agreement between the parties regarding their business relationship, and they each conducted separate business transactions involving horses. [DE 53–1, pp. 17–18]. The parties ended most of their relationship on October 30, 2007 through mediation by a mutual friend in Argentina, Juan Garat, who reflected the parties' agreement for Pavlovsky to buy out SEI's interest in certain jointly owned horses in an email referred to as the “Garat Agreement.” [DE 46–1, p. 2; DE 51–1, p. 2]. Under the Garat Agreement, Pavlovsky was to buy out SEI's 50 percent interest in “the horses you have in partnership” for a total of $350,000 to be paid to SEI in four installments. [DE 51–5].
The primary dispute between the parties centers on which horses and what interests in horses were encompassed by the Garat Agreement and whether any additional funds, above and beyond the $350,000, are due to SEI. [DE 50, p. 2]. SEI claims the Garat Agreement is limited to SEI's “50 percent share in a band of broodmares, yearlings, and foals.” [DE 1, ¶¶ 24–25]. SEI also references a list of horses 1 it provided Mr. Garat and argues that no other horses were considered as part of the agreement. [DE 51–1, p. 2]. Mr. Garat's deposition supports this interpretation.
Q. When you spoke with Jose DeCamargo and Ignacio Pavlovsky, were there any other horses discussed other than the horses on the list?
[Garat Depo., DE 51–4, p. 3]. Without the list, however, the Court is not able to determine what limit SEI seeks to impose on the Garat Agreement and how that limit is disputed.
Dr. Pavlovsky, on the other hand, initially claimed that the Garat Agreement terminated the entire relationship between the parties. [DE 28, Answer ¶¶ 12–14; Counterclaim ¶ 3]. The dispute arose when SEI provided a receipt for the second Garat Agreement payment, but DeCamargo wrote limiting language on the receipt regarding the scope of the payment. [DE 53, p. 4]. Pavlovsky claimed SEI was trying to change the terms and refused to make the last two payments under the Garat Agreement, totaling $165,000, because of the dispute between the parties. [DE 28 ¶ 16]. In his summary judgment motion, Pavlovsky narrows his position and states the agreement was that “Pavlovsky would purchase all of SEI's interests in their jointly owned broodmares, yearlings and foals for the sum of $350,000.00, to be paid in four installments.” [DE 46–1, p. 2].
SEI brought this action to recover for breach of the Garat Agreement and for fraud and breach of fiduciary duty for Pavlovsky's alleged failure to disclose correct and accurate accounting information for various horses over the years. [DE 1]. Pavlovsky counterclaimed that SEI breached the Garat Agreement by denying that it resolved all claims between the parties and by asserting a continuing ownership interest in various horses. [DE 28, pp. 11–12]. Pavlovsky also contended that any claims regarding accountings during the business relationship are barred by promissory estoppel in that regular accountings were provided and that he relied on SEI's acceptance of the accountings before he made any payments to SEI. [DE 46–1, pp. 6–8].
II. ANALYSISA. Summary Judgment Standard
Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A genuine issue of material fact exists if there is sufficient evidence favoring the nonmoving party for a reasonable jury to return a verdict in favor of that party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In other words, the determination must be “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Id. at 251–52, 106 S.Ct. 2505. The evidence, all facts, and any inferences that may permissibly be drawn from the facts must be viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
Once the moving party shows that there is an absence of evidence to support the nonmoving party's case, the nonmoving party must present “significant probative evidence” to demonstrate that “there is [more than] some metaphysical doubt as to the material facts.” Moore v. Philip Morris Companies, Inc., 8 F.3d 335, 340 (6th Cir.1993). Conclusory allegations are not enough to allow a nonmoving party to withstand a motion for summary judgment. Id. at 343. “The mere existence of a scintilla of evidence in support of the [nonmoving party's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmoving party].” Anderson, 477 U.S. at 252, 106 S.Ct. 2505. “If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Id. at 249–50, 106 S.Ct. 2505 (citations omitted).
The parties now agree that the Garat Agreement encompasses “all of SEI's interest in the jointly owned broodmares, yearlings and foals.” [DE 53–1, pp. 65, 69; DE 46–2, ¶¶ 11, 14]. Pavlovsky argues he has been ready and willing to make the two final payments, but DeCamargo insisted he still had some ownership interest in horses that were encompassed by the Garat Agreement. [DE 46–1, p. 5]. For example, SEI claims it is entitled to specific installment payments relating to the horses AUK, DANCHA GAUCHA and EL PAIMUN. [Complaint ¶¶ 58–60].2 Dr. Pavlovsky claims these horses [DE 53–2 ¶ 8]. In response to Pavlovsky's motion for summary judgment, SEI admits that the Garat Agreement encompasses a sale of SEI's “interest in the broodmare band, foals and yearlings.” [DE 50, p. 2]. Thus, while the parties agree on the scope of the Garat Agreement, neither party has identified the horses by name or otherwise demonstrated that they agree which horses or interests in horses are included in the phrase “the horses you have in partnership.” 3 Under these circumstances, the Court finds that the Garat Agreement is ambiguous and subject to interpretation through extrinsic evidence. See e.g. A & A Mechanical, Inc. v. Thermal Equipment Sales, Inc., 998 S.W.2d 505 (Ky.Ct.App.1999).
SEI continues to rely on the “list” of horses it provided to Garat and that Garat said he considered, but that list has not been provided as evidence. [DE 50, p. 5]. Moreover, Pavlovsky claims he never saw the list and denies that it was the basis of the agreement. [Pavlovsky affidavit, DE 53–2, ¶ 6]. Accordingly, SEI's motion for summary judgment for breach of contract based on its list of horses will be denied.
SEI claims, additionally, that it and Pavlovsky also jointly owned “stallions, breeding rights, payments due on installment agreements for jointly owned horses that had been sold, foal sharing agreements, commission payments due and interests in racehorses.” Id. SEI points to Pavlovsky's testimony that the parties agreed to treat the stallion shares separately and that they did not speak about horses that had been sold but on which all money had not been collected. [Pavlovsky Depo., DE 50–6 (Ex. F) ]. In his brief, Dr. Pavlovsky admits there “were a few stallions that Pavlovsky and SEI owned with third parties which were not covered by the Garat Agreement.” [DE 46–1, p. 5, n. 2]. He also admitted that their joint ownership interest in two racehorses, Candy Stripes and Twice Regal, were not part of the Garat Agreement. [Pavlovsky Depo., DE 50–9 (Ex. I) ]. The record reflects that the parties' interest in the stallion Orpen was also excluded from the Garat Agreement, as they admit that the second payment to SEI included an additional $15,000 for a partial payment on Orpen. [DE 50, p. 8; Pavlovsky Depo., DE 50–13 (Ex. M) ].
SEI has presented sufficient evidence to raise a genuine issue of material fact regarding which horses or interests in horses were resolved by the Garat Agreement and what interests in horses, if any, remain to be resolved. SEI has also raised a genuine issue of material fact regarding its claim of breach of fiduciary duty with respect to horses or interests in horses that were excluded from the Garat Agreement, but for which SEI has not been...
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