SCANTIBODIES LABORATORY INC v. CHURCH DWIGHT CO INC (2020)

SUMMARY ORDER

Scantibodies Laboratory Inc. (“SLI”) appeals from the December 18, 2018 judgment of the United States District Court for the Southern District of New York (Koeltl, J.) granting the motion for summary judgment made by Church & Dwight Co., Inc. (“C&D”) to dismiss SLI’s breach of contract claims; denying SLI’s motion on those claims; and denying SLI’s motion for summary judgment on each of C&D’s counterclaims other than C&D’s claim for prima facie tort, which the district court dismissed. Scantibodies Laboratory, Inc. v. Church & Dwight Co., Inc., 2018 WL 4500852 (S.D.N.Y. Sept. 19, 2008). SLI then moved for reconsideration, and that motion was also denied. Scantibodies Laboratory, Inc. v. Church & Dwight Co., Inc., 2018 WL 4500852 (S.D.N.Y. Nov. 7, 2018). We assume the parties’ familiarity with the underlying facts, procedural history, and specification of issues for review.

We review grants of summary judgment de novo, and “apply the same principles as required of the district court.” Zurich Am. Ins. Co. v. ABM Indus. Inc., 397 F.3d 158, 164 (2d Cir. 2005). Thus, “construing the evidence in the light most favorable to the non-moving party, we must determine whether any genuine issues of material fact would bar summary judgment.” Id. (internal quotation marks omitted). “Whether contractual language is ambiguous is a question of law that we review de novo.” Id. “Ambiguity exists when a contract is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business.” Id. (internal quotation marks omitted).

The district court erred in finding the agreements at issue unambiguous. We find that there are questions of material fact as to whether the agreements were requirements contracts. In particular, the obligations of the parties under the meet-or-release provisions are susceptible to being read in more than one way, as are the provisions that allow SLI to reject orders from C&D that deviated more than 10 percent from purchase plan orders. We further find that the parole evidence is not “so one-sided that no reasonable person could decide the contrary.” 3Com Corp. v. Banco do Brasil, S.A., 171 F.3d 739, 746-47 (2d Cir. 1999). Both C&D and SLI offered extrinsic evidence that supported their respective interpretations of the Agreements. For example, certain of C&D’s communications indicate that at times both parties understood the agreements to guarantee SLI exclusivity absent specified conditions, e.g., invocation of the meet-or release provisions.

We also find that the district court erred in granting C&D summary judgment on SLI’s claim for scrapping costs. As the party moving for summary judgment, the burden rested with C&D to demonstrate no questions of material fact existed. See Amaker v. Foley, 274 F.3d 677, 681 (2d Cir. 2001) (where movant fails to show that no questions of material fact exist, “summary judgment must be denied even if no opposing evidentiary matter is presented.”).

Finally, we agree with the district court that C&D’s argument as to whether it properly terminated the Agreements cannot be resolved on a motion for summary judgment. Accordingly, the judgment of the district court hereby is VACATED and REMANDED.