Silverberg v. SML Acquisition LLC et al

Filing 33

OPINION AND ORDER: Defendants' motion for summary judgment is GRANTED. The Clerk of the Court is respectfully directed to terminate the pending motion, (Doc. 21), enter judgment for Defendants, and close the case. SO ORDERED. (Signed by Judge Cathy Seibel on 2/27/2017) (lnl)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------------------------------------x
IRWIN SILVERBERG,
Plaintiff,
OPINION AND ORDER

- against -

No. 15-CV-7129 (CS)

SML ACQUISITION LLC, and PROCESS
TECHNOLOGIES AND PACKAGING LLC,
Defendants.
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Appearances:
Jason Wolf
Rutkin & Wolf PLLC
White Plains, New York
Counsel for Plaintiff
Katherine Zalantis
Silverberg Zalantis LLP
Tarrytown, New York
Timothy P. Polishan
Kelley, Polishan & Solfanelli LLC
Old Forge, Pennsylvania
Counsel for Defendants
Seibel, J.

Before the Court is Defendants’ Motion for Summary Judgment. (Doc. 21.) For the
following reasons, Defendants’ Motion is GRANTED.

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I.

BACKGROUND
The following facts, which are based on Defendants’ Rule 56.1 Statement of Material

Facts (“Ds’ 56.1”), (Doc. 25), supporting materials and the record in this case, are undisputed
except where noted.1
A. The 2011 Agreement
Plaintiff Irwin Silverberg is the founder of San-Mar Laboratories (“San-Mar”), an FDAlicensed pharmaceutical company that manufactures over-the-counter products. (Silverberg Aff.
¶ 2.) In 2011, Plaintiff sold San-Mar to an individual who continued the business under the
name SML Acquisition LLC (“SML”). (Id. ¶ 3.) As part of the sale, (id.), Plaintiff entered into
a written consulting agreement with SML on December 2, 2011, (Zalantis Decl. Ex. 4 (“2011
Agreement”)).2 The 2011 Agreement dictates that Plaintiff would be “retain[ed] for . . .
[Plaintiff’s] know-how, experience and services,” and would “perform such duties as may be

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Plaintiff failed to abide by Local Rule 56.1, which requires that a party opposing a motion for summary judgment
“include a correspondingly numbered paragraph responding to each numbered paragraph in the statement of the
moving party, and if necessary, additional paragraphs containing a separate, short and concise statement of
additional material facts as to which it is contended that there exists a genuine issue to be tried,” and failed to abide
by my Individual Practices, which require that a party opposing summary judgment reproduce each entry in the
moving party’s Local Rule 56.1 Statement and set out the opposing party’s response directly beneath it. Plaintiff’s
only factual contentions are contained in an Affidavit, (Affidavit of Irwin Silverberg (“Silverberg Aff.”), (Doc. 28)),
which provides his own narrative of the parties’ relationship that led to this litigation, and the Statement of Facts in
his Memorandum of Law, (Plaintiff’s Memorandum of Law in Opposition to Defendants’ Motion for Summary
Judgment (“P’s Mem.”), (Doc. 29), 2-7), neither of which corresponds to Defendants’ Rule 56.1 Statement in any
respect. Moreover, even where one would expect there to be documents to support his allegations, Plaintiff’s
Affidavit does not cite to evidence in the record. Further, Plaintiff’s brief includes facts purportedly supported by
the Silverberg Affidavit that are not mentioned in that Affidavit. Ordinarily, I would be free to disregard Plaintiff’s
assertions in opposition and consider the facts set forth in Defendants’ Rule 56.1 Statement, if supported by the
evidence cited, as undisputed. See Fed. R. Civ. P. 56(e)(2); Local Rule 56.1(c); Gubitosi v. Kapica, 154 F.3d 30, 31
n.1 (2d Cir. 1998). But I have “broad discretion to determine whether to overlook [Plaintiff’s] failure to comply
with local court rules.” Holtz v. Rockefeller & Co., 258 F.3d 62, 73 (2d Cir. 2001). Accordingly, despite Plaintiff’s
failure to properly adhere to Local Rule 56.1 and my Individual Practice 2(C)(i), I will, where appropriate in the
interest of deciding the matter on the merits, consider material facts disputed if Plaintiff provides evidentiary support
for his position. In the future, however, I expect Plaintiff’s counsel to comply with those provisions. Further, where
facts properly alleged in Defendants’ 56.1 Statement are addressed only in Plaintiff’s brief but are without record
support, Plaintiff’s version will be disregarded. See Wright v. Goldman Sachs & Co., 387 F. Supp. 2d 314, 318
(S.D.N.Y. 2005) (statement of facts in memorandum of law lacking citations to the record disregarded).
“Zalantis Decl.” refers to the Declaration of Katherine Zalantis in Support of Defendants’ Motion for Summary
Judgment. (Doc. 22.)
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determined and imposed from time to time by [SML]’s President or such other person directed
by [SML]’s President” for no more than ten hours per month. (Id. at 1-2.) In exchange for his
services, Plaintiff would receive “annual consulting fees” of $150,000 for four years, payable
each month, and an additional $1,041.67 per month for “accrued expenses [Plaintiff] has
incurred on the Company’s behalf prior to the date hereof.” (Id. at 2.) The 2011 Agreement
included a clause providing that “[a]ny written modifications of this Agreement shall not be
binding until and unless such written modification shall have been approved in writing by
[Plaintiff] and by an authorized officer of [SML].” (Id. at 9.) The contract is governed by New
York law. (Id. at 8.)
SML made monthly payments totaling $176,041.04 to Plaintiff’s consulting company,
Silver RPH Services, LLC (“Silver RPH”),3 through December 2012. (Ds’ 56.1 ¶¶ 21, 25;
Zalantis Decl. Ex. 3, at 42:3-10; id. Exs. 9, 11.) In May 2012, Defendant Process Technologies
and Packaging LLC (“PTP”) and SML entered into an Operating Agreement, pursuant to which
PTP became SML’s managing member with a 100% interest in SML. (Zalantis Decl. Ex. 8.)
From January 2013 through February 2014, PTP paid at least $176,041.71 to Silver RPH
pursuant to the 2011 Agreement. (See Ds’ 56.1 ¶¶ 21, 26.) Defendants contend that the total
paid by PTP in that period is $189,583.38 (Ds’ 56.1 ¶¶ 21, 26), but Plaintiff states that he never
received a payment for March 2013, (Silverberg Aff. ¶ 6). Defendants assert that PTP issued a
wire transfer for $13,541.67 to Silver RPH’s checking account in March 2013, (Ds’ 56.1 ¶ 21),
and a transaction history for Silver RPH’s account produced by Plaintiff, (id.), shows a
corresponding March 2013 deposit, (Zalantis Decl. Ex. 11). In total, Plaintiff received

Plaintiff testified that he and Silver RPH are “one in the same,” (Zalantis Decl. Ex. 3, at 42:11-14), and that
Plaintiff directed that he be paid through his company, (id. at 41:11-23, 42:3-10).
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$365,624.42 (including the disputed March 2013 payment), or $352,082.75 (excluding the
disputed payment) under the 2011 Agreement. (Id. Ex. 9.) Plaintiff provided no consulting
services to either SML or PTP under the 2011 Agreement. (Ds’ 56.1 ¶ 24.) Neither side
provided evidence as to whether Plaintiff was asked to do so.
B. The 2014 Agreement
On February 25, 2014, Defendants sent a letter to Plaintiff’s counsel stating that PTP
would cease making payments under the 2011 Agreement because Plaintiff had failed to provide
any consulting services and because Defendants were being sued by a New York State agency.
(Ds’ 56.1 ¶ 42; Zalantis Decl. Ex. 14, at 5.)4 PTP did not issue payments to Plaintiff for the
months of March, April and May 2014. (Silverberg Aff. ¶ 7.) At some point during those
months, Plaintiff contacted Jay Benson, PTP’s Chief of Staff, to discuss why the payments under
the 2011 Agreement had ceased.5 PTP sent Plaintiff a letter on June 10, 2014, enclosing a
consulting agreement “discussed on Monday 6/9/14,” asking him to “make sure [he] ha[d] a full
understanding of all enclosed in the agreement,” and confirming that he would be coming to
PTP’s facility on June 16, 2014 to sign it. (Ds’ 56.1 ¶ 40; Zalantis Decl. Ex. 13; id. Ex. 3, at
42:15-43:20.) Plaintiff does not contest that he received this letter, but testified that it was an
example of the coercion he felt to enter into a new contract. (Ds’ 56.1 ¶ 41; Zalantis Decl. Ex. 3,
at 43:17-20.)

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Plaintiff testified that he never received this letter, and that PTP stopped issuing checks with no notice. (Zalantis
Decl. Ex. 3, at 27:7-16.) Defendants have produced emails with Plaintiff’s counsel that show Plaintiff’s counsel’s
awareness of the dispute. (Id. Ex. 14.)
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The parties disagree as to the number of communications during this time period. Benson testified that he notified
Plaintiff before discontinuing payments under the 2011 Agreement, (Zalantis Decl. Ex. 10, at 47:21-49:5; id. Ex.
14), and spoke with Plaintiff “dozens” of times from as early as February or March 2014, (id. Ex. 10, at 51:7-10),
while Plaintiff says that he could not reach anyone at PTP, or get an explanation why the payments had stopped,
during March, April and May 2014, (Silverberg Aff. ¶¶ 7, 8).

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On June 16, 2014, Plaintiff signed the new consulting agreement with PTP, dated June
10, 2014, (Zalantis Decl. Ex. 6 (“2014 Agreement”)), and below the words “[i]n response to the
above offer of employment,” made a check mark next to the words “I accept,” (Ds’ 56.1 ¶ 10;
Zalantis Decl. Ex 7, ¶¶ 5-7; id. Ex. 3, at 20:17-22:20). Benson, PTP’s CEO W. M. Godfrey and
PTP Human Resources Manager Mason Byers signed the 2014 Agreement on PTP’s behalf.
(Ds’ 56.1 ¶ 11; 2014 Agreement 2.) The 2014 Agreement provided that in exchange for his
consulting services, Plaintiff would receive an annual salary of $175,000 paid on a monthly
basis, as well as a reimbursement of all “reasonable, necessary, and pre-approved travel,
entertainment and other ancillary business expenses.” (2014 Agreement 1.) Plaintiff also had
the opportunity to earn a “pre-negotiated commission on sales.” (Id.) The contract stipulated
that it would commence June 1, 2014 and would end on June 1, 2015, (id.); if either party elected
not to extend the agreement past June 1, 2015, it had to provide written notice to the other party
by April 1, 2015, and if either party elected to cancel at any time thereafter, sixty days’ written
notice was required, (id. at 1-2). The contract provides that “[t]his agreement supersedes all
prior and/or other agreements, contracts or other communication written or verbal. This
specifically pertains to the prior document entitled ‘Consulting Agreement’ dated 02 November
2011 with SML Acquisitions, LLC.”6 (Id. at 2.)
Plaintiff testified that after he stopped receiving payments under the 2011 Agreement, he
and his wife experienced severe stress and anxiety, (see Silverberg Aff. ¶¶ 9-12; Zalantis Decl.
Ex. 3, at 27:7-16), which were harmful to their preexisting cardiac problems, (Silverberg Aff.
¶ 12). He further testified that he had to drain much of his savings and sell some stock to

Although the 2014 Agreement refers to an agreement dated November 2, 2011 – rather than December 2, 2011, the
date of the 2011 Agreement – the parties agree that this was a typographical error, and that the 2011 Agreement at
issue here was the only 2011 consulting agreement between Plaintiff and SML. (Ds’ 56.1 ¶ 9.)
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account for the lack of income during March through May 2014. (Silverberg Aff. ¶ 12; Zalantis
Decl. Ex. 3, at 27:22-28:2.) Benson had informed Plaintiff that he was considering suing
Plaintiff for breach of contract, (Zalantis Decl. Ex. 10, at 51:17-18), thus presenting Plaintiff
with the choice of signing a new consulting agreement or facing litigation, (id.; Silverberg Aff.
¶ 12). Defendants claim that Benson and Plaintiff exchanged drafts of the agreement, (Ds’ 56.1
¶¶ 45-48), and have provided drafts in which certain provisions regarding monthly payments and
Plaintiff’s travel needs were altered in Plaintiff’s favor, (see id.; Zalantis Decl. Exs. 6, 15).7
Under the 2014 Agreement, Plaintiff “engage[ed] in sales related activity [and]
contact[ed] various individuals with whom he had not previously been in contact for a number of
years in an effort to solicit sales for PTP.” (Ds’ 56.1 ¶ 27; Zalantis Decl. Ex. 3, at 38:1-8, 40:2141:6.) Defendants also fully performed under the second contract, making monthly payments in
the amount of $14,583.33 to Silver RPH, (Silverberg Aff. ¶ 14), plus an additional expense
reimbursement of $1,161.46, (Ds’ 56.1 ¶ 30). Between the two agreements, Defendants paid a
total of $556,369.17 to Plaintiff, or $542,827.50 excluding the contested March 2013 payment.
(See Ds’ 56.1 ¶ 22; Zalantis Decl. Ex. 9.)
On March 24, 2015, according to Defendants, PTP sent Plaintiff a letter stating that “this
letter will serve to terminate the consulting agreement between PTP and Silver RPH Services
LLC effective 6/1/15.” (Benson Aff. ¶ 10; id. Ex. 16.)8 The letter was sent via certified mail to
the address Plaintiff provided PTP, but was returned to sender. (Id. ¶ 10; id. Ex. 17.) PTP then

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Plaintiff posits in his memorandum of law that he never negotiated the terms of the 2014 Agreement, but the only
citation for this proposition is a reference to a paragraph in his Affidavit that does not address the issue. (P’s Mem.
5 (citing Silverberg Aff. ¶ 11).) Plaintiff testified in his deposition that he did not receive more than one offer prior
to signing the 2014 Agreement, (Zalantis Decl. Ex. 3, at 56:7-24), but does not explain why there exist multiple
drafts of the 2014 Agreement. I will assume Plaintiff did not negotiate the 2014 Agreement, but the issue does not
affect the outcome here in any event
8

“Benson Aff.” refers to the Reply Affidavit of Jay Benson. (Doc. 30.)

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emailed the letter to Plaintiff on April 1, 2015, using the email address Plaintiff consistently used
to communicate with PTP. (Id. ¶ 12; id. Exs. 18-20.) Plaintiff denies receiving any written
notification that PTP intended to terminate or not extend the 2014 Agreement. (Silverberg Aff.
¶ 15.) According to Defendants, Plaintiff called Benson later that month, indicating that he was
interested in renewing the agreement, (Benson Aff. ¶ 13), and followed up with an email, (id. Ex.
21), but Defendants were not interested, (id. ¶ 14; Silverberg Aff. ¶ 15). Defendants’ counsel
sent Plaintiff a letter on June 5, 2015 stating that “no contract exists between [Plaintiff] and
PTP,” and requesting that Plaintiff “no longer call or write PTP or its officers, directors or other
employees with repetitive assertions to the contrary.” (Silverberg Aff. ¶ 16; Wolf Decl. Ex. A.)9
C. Procedural History
Plaintiff filed this lawsuit on September 10, 2015, seeking damages for breach of the
2011 Agreement. (Doc. 1.) The Complaint did not refer to or seek recovery under the 2014
Agreement. Defendants filed an answer on November 19, 2015. (Doc. 16.) Discovery was
conducted, and this motion followed.
II.

LEGAL STANDARD
Summary judgment is appropriate when “the movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). “[T]he dispute about a material fact is ‘genuine’ . . . if the evidence is such that
a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). A fact is “material” if it “might affect the outcome of the suit
under the governing law . . . . Factual disputes that are irrelevant or unnecessary will not be

“Wolf Decl.” refers to the Declaration of Jason Wolf, (Doc. 32), which was filed in opposition to Defendants’
motion for summary judgment.
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counted.” Id. On a motion for summary judgment, “[t]he evidence of the non-movant is to be
believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255.
The movant bears the initial burden of demonstrating “the absence of a genuine issue of
material fact,” and, if satisfied, the burden then shifts to the non-movant to “present evidence
sufficient to satisfy every element of the claim.” Holcomb v. Iona Coll., 521 F.3d 130, 137 (2d
Cir. 2008) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986)). “The mere existence
of a scintilla of evidence in support of the [non-movant’s] position will be insufficient; there
must be evidence on which the jury could reasonably find for the [non-movant].” Anderson, 477
U.S. at 252. Moreover, the non-movant “must do more than simply show that there is some
metaphysical doubt as to the material facts,” Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586 (1986), and he “may not rely on conclusory allegations or unsubstantiated
speculation,” Fujitsu Ltd. v. Fed. Express Corp., 247 F.3d 423, 428 (2d Cir. 2001) (internal
quotation marks omitted).
“A party asserting that a fact cannot be or is genuinely disputed must support the
assertion by . . . citing to particular parts of materials in the record, including depositions,
documents, electronically stored information, affidavits or declarations, stipulations (including
those made for purposes of the motion only), admissions, interrogatory answers, or other
materials . . . .” Fed. R. Civ. P. 56(c)(1). Where an affidavit is used to support or oppose the
motion, it “must be made on personal knowledge, set out facts that would be admissible in
evidence, and show that the affiant . . . is competent to testify on the matters stated.” Fed. R.
Civ. P. 56(c)(4); see Major League Baseball Props., Inc. v. Salvino, Inc., 542 F.3d 290, 310 (2d
Cir. 2008). In the event that “a party fails . . . to properly address another party’s assertion of
fact as required by Rule 56(c), the court may,” among other things, “consider the fact undisputed

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for purposes of the motion [or] grant summary judgment if the motion and supporting materials –
including the facts considered undisputed – show that the movant is entitled to it.” Fed. R. Civ.
P. 56(e)(2), (3).
Affidavits in opposition to a motion for summary judgment must be based upon
“concrete particulars, not conclusory allegations.” Bickerstaff v. Vassar Coll., 196 F.3d 435, 451
(2d Cir. 1999) (internal quotation marks omitted). “Statements that are devoid of any specifics,
but replete with conclusions, are insufficient to defeat a properly supported motion for summary
judgment.” Id. at 452; see Major League Baseball Props., 542 F.3d at 310 (“A party opposing
summary judgment does not show the existence of a genuine issue of fact to be tried merely by
making assertions that are conclusory . . . .”).
III.

DISCUSSION
A. Superseding Contract
Plaintiff pleads a claim for breach of contract under the 2011 Agreement. (Doc. 1.) “To

establish a prima facie case for breach of contract, a plaintiff must plead and prove the existence
of a contract, a breach of that contract, and damages resulting from the breach.” Genna v. Sallie
Mae, Inc., No. 11-CV-7371, 2012 WL 1339482, at *5 (S.D.N.Y. Apr. 17, 2012). Defendants
argue Plaintiff fails on the first element because the 2014 Agreement superseded and replaced
the 2011 Agreement. (Ds’ Mem. 3.)10
“Under New York law, a written contract is to be interpreted so as to give effect to the
intention of the parties as expressed in the unequivocal language they have employed.”
Terwilliger v. Terwilliger, 206 F.3d 240, 245 (2d Cir. 2000). “[W]here a question of intention is

“Ds’ Mem.” refers to Defendants’ Memorandum of Law in Support of their Motion for Summary Judgment.
(Doc. 24.)
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determinable by written agreements, the question is one of law, appropriately decided . . . on a
motion for summary judgment.” Mallad Constr. Corp. v. Cty. Fed. Sav. & Loan Ass’n, 298
N.E.2d 96, 100 (N.Y. 1973).
“It is well settled that the parties to an agreement can mutually agree to terminate it by
expressly assenting to its rescission while simultaneously entering into a new agreement dealing
with the same subject matter.” Jones v. Trice, 608 N.Y.S.2d 688, 688 (2d Dep’t 1994); see
Penguin Grp. (USA) Inc. v. Steinbeck, 537 F.3d 193, 200 (2d Cir. 2008) (mutually agreed upon
contract superseded previous contract when agreement specifically so stated). If a contract is
terminated and superseded by another, “the new contract provides all of the parties’ obligations
and remedies for breach.” Penguin Grp., 537 F.3d at 200 (citing Northville Indus. Corp. v. Fort
Neck Oil Terminals Corp., 474 N.Y.S.2d 122, 125 (2d Dep’t 1984), aff’d, 477 N.E.2d 1102
(N.Y. 1985)). Indeed, “where the parties have clearly expressed or manifested their intention
that a subsequent agreement supersede or substitute for an old agreement, the subsequent
agreement extinguishes the old one and the remedy for any breach thereof is to sue on the
superseding agreement.” Northville Indus. Corp., 474 N.Y.S.2d at 125 (internal quotation marks
omitted).
The Second Department’s interpretation of the contracts at issue in Northville Industries
Corp. is informative. There a dispute arose between the parties related to services under a
contract and as a result, they entered into a new agreement. A clause in the second contract
stated that “[t]his Agreement shall be in lieu of and shall supersede any other agreements
existing as to the date hereof between [the parties].” Id. at 124. The plaintiff sought recovery
only under the first contract. Id. After a denial of the defendants’ summary judgment and a trial,
the Appellate Division reversed, holding that the trial court should have granted the defendant’s

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motion for summary judgment because the language in the second contract “clearly and
unequivocally provided that the [second] agreement was to be ‘in lieu of’ and would ‘supersede’
any other agreements . . . between the parties.” Id. at 124-25. Similarly here, following a
dispute between Plaintiff and PTP over the first contract, (see Zalantis Decl. Ex. 14), the parties
entered into the 2014 Agreement, which explicitly states that it “supersedes all prior and/or other
agreements, contracts or other communication written or verbal,” and specifies the 2011
Agreement as superseded.11 (2014 Agreement 2.) The clear and unequivocal language in the
2014 Agreement indicates the parties’ intention to have the 2014 Agreement supersede the 2011
Agreement, thereby extinguishing any remedy under the 2011 Agreement.
Plaintiff makes several arguments in response. First, he contends that the modification
clause in the 2011 Agreement – which states that “[a]ny written modification of this Agreement
shall not be binding until and unless such written modification shall have been approved in
writing by consultant and by an authorized officer of the Company,” (2011 Agreement 9) – bars
the 2014 Agreement from superseding the 2011 Agreement, (P’s Mem. 10-11). Plaintiff focuses
on the latter part of this provision – that a modification may only be approved “by an authorized
officer of the Company” – and contends that because the 2011 Agreement was executed by an
officer of SML, the officers of PTP who signed the 2014 Agreement were not “authorized” to
enter into a modification of the earlier agreement. (Id.) Moreover, Plaintiff contends that there

As noted above, the language in the 2014 Agreement refers to a contract dated “02 November 2011” with SML
Acquisitions, LLC; the 2011 Agreement is dated December 2, 2011. A scrivener’s error may be corrected through
the use of parol evidence to establish mutual mistake. See Restatement (Second) of Contracts § 214(d); see also
Aristocrat Leisure Ltd. v. Deutsche Bank Trust Co. Ams., No. 04-CV-10014, 2005 WL 1950116, at *4 (S.D.N.Y.
Aug. 12, 2005) (“Parol evidence is admissible to correct a mutual mistake.”). The parties agree that the 2011
Agreement is the only 2011 consulting agreement the Plaintiff ever had with SML. (Ds’ 56.1 ¶ 9; Zalantis Decl. Ex.
3, at 7:6-8:11.) It is therefore undisputed that the agreement referenced in the 2014 Agreement is the 2011
Agreement.
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is no indication that PTP was acting “on behalf of SML” when it signed the 2014 Agreement.
(Id. at 11.)
These arguments fail. First, the 2014 Agreement is not a “modification,” but rather a
completely new agreement that supersedes and extinguishes the 2011 Agreement. But even if
the 2014 Agreement were a mere “modification” of the 2011 Agreement, PTP is an “authorized
officer” of SML. Plaintiff argues, without citing authority, that Defendants must show that
signers of the 2014 Agreement were acting “in an official capacity for PTP on behalf of SML.”
(Id.) Even if that is the case, however, the undisputed facts show that PTP was acting “on behalf
of” SML when it signed the 2014 Agreement.
“A parent corporation may become a party to its subsidiary’s contract if the parent’s
conduct manifests an intent to be bound by the contract.” Warnaco Inc. v. VF Corp., 844 F.
Supp. 940, 946 (S.D.N.Y. 1994). A party’s intent may be inferred “if the subsidiary is a dummy
for the parent, or if the subsidiary is controlled by the parent for the parent’s own purposes.”
Horsehead Indus., Inc. v. Metallgesellschaft AG, 657 N.Y.S.2d 632, 633 (1st Dep’t 1997). PTP
became the sole managing member of SML with a 100% membership interest in 2012. (Zalantis
Decl. Ex. 8.) Under the Operating Agreement, PTP had authorization to “exercise all the
powers and privileges granted by . . . law or this operating agreement, together with any powers
incidental thereto, so far as such powers are necessary or convenient to the conduct, promotion
or attainment of the business trade, purposes or activities of [SML].” (Id. § 2(a).) SML was a
wholly-owned, inactive subsidiary of PTP, which possessed full power to act on SML’s behalf,
(Ds’ 56.1 ¶¶ 12-13), thus making PTP a de facto party to the 2011 Agreement, given that SML
had become a “dummy” and was wholly controlled by PTP for its own purposes, see Horsehead
Indus., 657 N.Y.S.2d at 633. Beginning in January 2013, PTP – as managing member of SML –

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assumed the responsibility of paying Plaintiff under the 2011 Agreement, and continued to do so
until early 2014, (Zalantis Decl. Ex. 9; id. Exs. 11-12), manifesting its intent to be bound, see
Warnaco, 844 F. Supp. at 946. PTP then ceased payments under the first contract between
Plaintiff and SML, (id. Ex. 10, at 48:14-49:5; id. Ex. 14), initiated correspondence with
Plaintiff’s counsel and Plaintiff to discuss possible outcomes, (id. Ex. 14), and eventually entered
into the 2014 Agreement with Plaintiff, (see 2014 Agreement). PTP and Plaintiff specifically
referenced the 2011 Agreement as being superseded by the 2014 Agreement, demonstrating that
they understood that PTP was acting in its capacity as managing member of SML when it
entered into the latter agreement.12 Indeed, on these facts it is hard to imagine how SML could
act at all, if not through PTP.
Plaintiff argues that even if the 2014 Agreement superseded the 2011 Agreement, he is
entitled to compensation for March, April and May 2014 – the months between Defendants’
cessation of payments on the 2011 Agreement and the signing of the 2014 Agreement. (P’s
Mem. 11-12.) He argues that the language in the contract does not unambiguously manifest the
parties’ intent that Defendants be released from liability under the 2011 Agreement. (Id.)
Plaintiff refers to no applicable case law in support of his argument, citing only cases analyzing
releases. See Bank of Am. Nat’l Trust & Sav. v. Gillaizeau, 766 F.2d 709, 713 (2d Cir. 1985)
(release from liability for loan); Abramowitz v. N.Y. Univ. Dental Ctr., Coll. of Dentistry, 494
N.Y.S.2d 721, 723 (2d Dep’t 1985) (release from liability for improperly administered dental
procedure). The issue here is different: which contract is controlling, not whether the 2014

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Because I find that PTP had the authority enter into the 2014 Agreement, I need not consider whether the second
contract represented a “unilateral consent” to cancel the first. Plaintiff raised this notion in pre-motion
correspondence, (see Doc. 14), but failed to respond to Defendants’ arguments in their opening brief that it should
be rejected, (see Ds’ Mem. 6-10). Plaintiff has thus apparently abandoned the idea. Even if he had not, I agree with
Defendants that even if PTP lacked authority to enter into the 2014 Agreement, Plaintiff consented to cancellation of
the 2011 Agreement and both parties intended to be bound by the 2014 Agreement. (See id. at 8-10.)

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Agreement constitutes a release. As previously discussed, if one contract is found to supersede
another, all claims for liability must be brought under the latter contract. See Northville Indus.
Corp., 474 N.Y.S.2d at 125. Because the 2014 Agreement supersedes the 2011 Agreement,
Plaintiff cannot seek recovery for March, April and May 2015 under the 2011 Agreement,13 and
I need not consider whether Defendants breached the 2011 Agreement.
B. Economic Duress
Plaintiff further argues that even if the 2014 Agreement did supersede the 2011
Agreement, he is not bound by the 2014 Agreement because he entered into it under economic
duress. “[A] party seeking to avoid a contract because of economic duress shoulders a heavy
burden.” Pallonetti v. Liberty Mut., No. 10-CV-4487, 2011 WL 519407, at *5 (S.D.N.Y. Feb.
11, 2011) (internal quotation marks omitted). “[T]he ability of a party to disown his obligations
under a contract on [the basis of economic duress] is reserved for extreme and extraordinary
cases.” VKK Corp. v. Nat’l Football League, 244 F.3d 114, 123 (2d Cir. 2001). To establish
economic duress under New York law, Plaintiff must show that there was “(1) a threat, (2) which
was unlawfully made, and (3) caused involuntary acceptance of contract terms, (4) because the
circumstances permitted no other alternative.” Kamerman v. Steinberg, 891 F.2d 424, 431 (2d
Cir. 1989) (internal quotation marks omitted); accord Reid v. IBM Corp., No. 95-CV-1755, 1997
WL 357969, at *7 (S.D.N.Y. June 26, 1997). Plaintiff has not met this burden.
Plaintiff alleges that he was threatened that he would not receive continued monthly
payments under the 2011 Agreement unless he signed the 2014 Agreement, and that this threat
was “unlawfully made.” Plaintiff cites to case law holding that a threat is unlawful when a party

Plaintiff posits that because there is no statement of release in the 2014 Agreement, Defendants’ summary
judgment motion should be denied. (P’s Mem. 12.) This argument fails because a superseding contract
extinguishes rights under a superseded contract as a matter of law. See Northville Indus. Corp., 474 N.Y.S.2d at
125.
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threatens to “breach an agreement by withholding performance unless the other party agrees to
some further demand.” (P’s Mem. 13 (citing Trustco Bank N.Y. v. MME Power Enters., Inc.,
636 N.Y.S.2d 831, 832-33 (2d Dep’t 1996)).) “Under New York law, [however,] threats to
enforce a party’s legal rights under a contract – or even that party’s interpretation of its rights –
cannot constitute a wrongful threat sufficient to establish a claim of economic duress.” Cooper
Dev. Co. v. Friedman, No. 92-CV-7572, 1994 WL 62846, at *4 (S.D.N.Y. Feb. 22, 1994)
(emphasis in original), aff’d, 43 F.3d 1458 (2d Cir. 1994). Plaintiff has suggested that he did not
breach the 2011 Agreement,14 but he has not provided evidence suggesting that Defendants acted
in bad faith in believing they could void it.15
In any event, even assuming Defendants had made an improper threat, Plaintiff has failed
to present facts from which a reasonable jury could conclude that he lacked a practical
alternative to signing the 2014 Agreement. Plaintiff could have refused to sign it and instead
pursued his legal remedies under the 2011 Agreement. See Wright v. Eastman Kodak Co., 445
F. Supp. 2d 314, 319 (W.D.N.Y. 2006) (“Every litigant or potential litigant who is considering
whether to accept an offer of settlement has a choice to make: whether to settle the claim for a

Plaintiff implies that he was not in breach of the 2011 Agreement because it was in contemplation of his life’s
work with SML, and the monthly payments were meant to support his retirement, (Silverberg Aff. ¶ 4; Zalantis
Decl. Ex. 3, at 27:1-12), but this information was not memorialized in the contract, (see 2011 Agreement). It is well
settled that “[t]he primary objective in interpreting a contract is to give effect to the intent of the parties ‘as revealed
by the language they chose to use.’” Marmer Bros. Constr., LLC v. Midwest Steel, Inc., No. 99-CV-11681, 2000
WL 1341546, at *4 (S.D.N.Y. Sept. 18, 2000) (quoting Seiden Assocs., Inc. v. ANC Holdings, Inc., 959 F.2d 425,
428 (2d Cir. 1992)). The 2011 Agreement only references Plaintiff’s consulting obligations and SML’s monthly
payments in exchange; nowhere in the agreement does it state that Plaintiff was receiving this money as a sort of
retirement payment. (See 2011 Agreement.)
14

Further, where it is alleged that “the [w]rongful act [is] accomplished through lawful means[,] . . . [a] necessary
element of [this] type of business compulsion . . . is a showing that the victim’s financial straits were caused by the
other party.” Nat’l Am. Corp. v. Fed. Rep. of Nigeria, 448 F. Supp. 622, 644 (S.D.N.Y. 1978), aff’d, 597 F.2d 314
(2d Cir. 1979); see U.S. West Fin. Servs., Inc. v. Tollman, 786 F. Supp. 333, 338-40 (S.D.N.Y. 1992) (quoting Nat’l
Am. Corp., 448 F. Supp. at 644). Plaintiff has shown Defendants deprived him of three months’ pay, but has not
shown why – after a successful career and taking in at least $352,082.75 over the previous two-plus years – three
missed payments caused such severe financial straits.
15

15

known sum, or to pursue litigation, which may offer the potential for a greater recovery, but also
carries the risk of no recovery at all.”) (emphasis in original); see also Neuman v. Pike, 591 F.2d
191, 194 (2d Cir. 1979) (“A threatened breach of contract for which there are adequate legal
remedies does not constitute duress.”); Hellenic Lines Ltd. v. Louis Dreyfus Corp., 372 F.2d 753,
758 (2d Cir. 1967) (no duress where party “merely exercised its business judgment in a difficult
situation”).16
That Plaintiff was “forced to drain much of [his] savings,” (Silverberg Aff. ¶ 12), is
likewise unavailing. Plaintiff has provided no bank statements or further support for this
contention, and it is unclear why a three-month pause in payments would require such steps,
considering that he received a total of $365,624.42 in the prior two years. And Plaintiff nowhere
states that he could not have afforded counsel to bring a lawsuit under the 2011 Agreement. But
assuming that he was forced to deplete his savings and sell stock, his hardship would not rise to
the level of “economic duress” under New York law. “A party raising duress must . . . do more
than merely claim that the other party knew about and used his . . . poor financial condition to
obtain an advantage in contract negotiations.” DuFort v. Aetna Life Ins. Co., 818 F. Supp. 578,
582 (S.D.N.Y. 1993) (quoting Austin Instrument, Inc. v. Loral Corp., 272 N.E.2d 533, 535-36
(N.Y. 1971)). Plaintiff provides no evidence that Defendants knew of his alleged poor financial
condition. To the contrary, it would have been reasonable for Defendants to believe that Plaintiff
was financially sound, given that they had paid him more than $350,000 over the past two-plus
years, after he spent his career building a successful business, and he had had counsel contact

To the extent Plaintiff argues he was under “tremendous stress,” (Zalantis Decl. Ex. 3, at 27:7-16; see Silverberg
Aff. ¶ 12), when he entered into the 2014 Agreement, leaving him with no alternative to signing the contract, such
subjective psychological stress is insufficient to constitute economic duress. See Berman v. Parco, No. 96-CV-375,
1996 WL 465749, at *8 (S.D.N.Y. Aug. 15, 1996) (individual’s subjective, emotional state of mind is irrelevant
because “duress involves an objective component”).
16

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them on his behalf. (See Zalantis Decl. Ex. 14.) “Rather, . . . the plaintiff must show that the
defendant’s actions ‘deprived [him] of [his] free will,’ and that ‘the ordinary remedy of an action
for a breach of contract would not be adequate.’” Id. (alterations in original); see VKK Corp.,
244 F.3d at 123 (“Because an element of economic duress is . . . present when many contracts
are formed or releases given, the ability of a party to disown his obligations under a contract or
release on that basis is reserved for extreme and extraordinary cases. Otherwise, the stronger
party to a contract or release would routinely be at risk of having its rights under the contract or
release challenged long after the instrument became effective.”); Farrell v. Title Assocs., Inc.,
No. 03-CV-4608, 2004 WL 5131862, at *6 (S.D.N.Y. Feb. 20, 2004) (“While the Court is
sympathetic to [plaintiff’s] need to buy groceries and pay rent, that need is legally inadequate to
state a claim of duress.”); In re Marketxt Holdings Corp., 361 B.R. 369, 401 (Bankr. S.D.N.Y.
2007) (where debtor “could have chosen to file for bankruptcy at an earlier point,” plaintiff could
not “demonstrate that [it] had no alternative, at any time, than to accede to [the creditor’s]
demands”).
Finally, and dispositively, “[a] contract entered into under duress is voidable, . . . not
void,” such that “even when a party satisfies all of the elements of duress, he must demonstrate
that he promptly disaffirmed the contract.” Eisenstein v. Kelly Music & Entm’t Corp., No. 97CV-4649, 1998 WL 289734, at *4, 6 (S.D.N.Y. June 4, 1998) (party cannot escape contractual
obligations even if executed contract under duress, where party failed to disaffirm contract once
alleged threat removed); see Durante Bros. & Sons, Inc. v. Flushing Nat’l Bank, 755 F.2d 239,
251 (2d Cir. 1985) (party must “act[] promptly to repudiate the contract” to void a contract on
grounds of duress); Sci. Holding Co. v. Plessey Inc., 510 F.2d 15, 23 (2d Cir. 1974) (“[O]ne who
would repudiate a contract procured by duress must act promptly or will be deemed to have

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elected to affirm it.”); VKK Corp., 244 F.3d at 123-24 (“If the releasing party does not promptly
repudiate the contract . . . he will be deemed to have ratified it.”). The burden of proving
economic duress “necessarily increases proportionately with the delay in initiating suit or
otherwise repudiating the contract in question, since it is well established under New York law
that a party asserting duress must do so promptly.” Int’l Halliwell Mines, Ltd. v. Cont’l Copper
& Steel Indus., Inc., 544 F.2d 105, 108 (2d Cir. 1976).
Apart from the fact that on the undisputed facts the elements of economic duress are not
met here, there are no allegations from which I may infer that Plaintiff promptly attempted to
revoke the 2014 Agreement. See Farrell, 2004 WL 5131862, at *6 (finding no duress where
plaintiff accepted benefits of the release and made no effort to revoke it until filing lawsuit
approximately five months later). To the contrary, Plaintiff accepted the full benefits of the 2014
Agreement – a total payment of $189,583.29 – and did not file the instant lawsuit until
September 2015, nearly fifteen months after he signed the contract and three months after it
lapsed. See Harless v. Research Inst. of Am., 1 F. Supp. 2d 235, 242 (S.D.N.Y. 1998) (“[I]f a
party enters a contract under duress, once the duress is removed the party claiming duress must
choose either to repudiate the contract promptly or to acquiesce to its terms pursuant to the
doctrine of ratification.”).
Having done so, Plaintiff is barred from now voiding it on the grounds of duress. See
Davis v. Eastman Kodak Co., No. 04-CV-6098, 2007 WL 952042, at *6 (W.D.N.Y. Mar. 29,
2007) (“Where a release is voidable . . . the employee’s subsequent decision to keep the
consideration despite the defect operates to ratify the release.”); Farrell, 2004 WL 5131862,
at *6 (finding no duress where plaintiff accepted benefits of the release and made no effort to
revoke until filed lawsuit approximately five months later); Reid, 1997 WL 357969, at *6 (no

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economic duress where plaintiff accepted benefits and failed to tender back consideration
received in return).
Because Plaintiff had alternatives to signing the contract – namely, commencing
litigation against PTP to recover under the 2011 Agreement, something that he did only after
receiving an additional $189,583.29 – and because he did not repudiate, and therefore ratified,
the 2014 Agreement by accepting payments for a year, the 2014 Agreement is not voidable under
an economic duress theory.
C. Breach of the 2014 Agreement
Plaintiff raises the argument for the first time in its opposition papers to Defendants’
motion for summary judgment that Defendants breached the 2014 Agreement by failing to
provide to Plaintiff timely written notice of their intention to terminate the agreement at the end
of the one-year term on June 1, 2015. (P’s Mem. 15-16.) The Complaint, however, makes no
mention of the 2014 Agreement, much less Defendants’ alleged breach thereof. (See generally
Doc. 1.) “A party may not use his or her opposition to a dispositive motion as a means to amend
the complaint.” Shah v. Helen Hayes Hosp., 252 F. App’x 364, 366 (2d Cir. 2007) (citing
Wright v. Ernst & Young LLP, 152 F.3d 169, 178 (2d Cir. 1998)); see Southwick Clothing LLC v.
GFT (USA) Corp., No. 99-CV-10452, 2004 WL 2914093, at *6 (S.D.N.Y. Dec. 15, 2004) (“A
complaint cannot be amended merely by raising new facts and theories in . . . opposition papers .
. . .”); Beckman v. U.S. Postal Serv., 79 F. Supp. 2d 394, 407-08 (S.D.N.Y. 2000) (“Because a
failure to assert a claim until the last minute will inevitably prejudice the defendant, courts in this
District have consistently ruled that ‘it is inappropriate to raise new claims for the first time in
submissions in opposition to summary judgment.’”) (quoting Bonnie & Co. Fashions, Inc. v.
Bankers Trust Co., 170 F.R.D. 111, 119 (S.D.N.Y. 1997)); Caribbean Wholesales & Serv. Corp.

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v. U.S. JVC Corp., 963 F. Supp. 1342, 1359 (S.D.N.Y. 1997) (raising new claim “is
inappropriate at the summary judgment stage, after the close of discovery, without the Court’s
leave, and in a brief in opposition to a dispositive motion”); see also Beckman, 79 F. Supp. 2d at
408 (“‘[L]eave to amend a complaint will generally be denied when the motion to amend is filed
solely in an attempt to prevent the court from granting a motion . . . for summary judgment,
particularly when the new claim could have been raised earlier.’”) (omission in original) (quoting
Berman, 986 F. Supp. at 217). Accordingly, I need not consider Plaintiff’s unpleaded claim that
Defendants breached the 2014 Agreement.
IV.

CONCLUSION
For the foregoing reasons, Defendants’ motion for summary judgment is GRANTED.

The Clerk of the Court is respectfully directed to terminate the pending motion, (Doc. 21), enter
judgment for Defendants, and close the case.
SO ORDERED.
Dated: February 27, 2017
White Plains, New York

________________________________
CATHY SEIBEL, U.S.D.J.

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