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United States Court of Appeals, Second Circuit.

AMERICAN RAILCAR INDUSTRIES, INC., Plaintiff-Counter-Defendant-Appellant-Cross-Appellee, v. GYANSYS, INC., Defendant-Counter-Claimant-Appellee-Cross-Appellant.

18-160(L), 18-164 (XAP)

Decided: March 29, 2019

Present: ROSEMARY S. POOLER, DENNY CHIN, Circuit Judges. ERIC N. VITALIANO,1 District Judge. Appearing for Appellant: Edward J. Naughton, Brown Rudnick LLP (Rebecca M. Lecaroz, on the brief), Boston, MA. Appearing for Appellee: Brian J. Paul, Faegre Baker Daniels LLP (Mark A. Voigtmann, Shawna Eikenberry, Maureen Moss Buscher, on the brief), Indianapolis, IN.


American Railcar Industries, Inc. (“ARI”) appeals from the December 20, 2017, judgment of the United States District Court for the Southern District of New York (Rakoff, J.) contending that it was due additional damages in the amount of $14,866,257. GyanSys, Inc. cross-appeals from that same judgment, challenging both the district court’s (1) award of damages to ARI; and (2) dismissal of its claims against ARI for breach of contract. We assume the parties’ familiarity with the underlying facts, procedural history, and specification of issues for review.

We affirm, primarily for the reasons set forth in the district court’s thorough and well-reasoned opinion. The district court correctly concluded that the additional damages sought were consequential, not general, damages, and that ARI failed to make the record necessary to support any additional award.

Contrary to GyanSys’s arguments, the district court did not definitively conclude that ARI wrongly terminated the contract. While the district court found that ARI wrongfully terminated for delay, it declined to reach ARI’s alternate argument that it was still entitled to terminate for convenience. The district court correctly found that ultimately, the non-waiver provisions of the agreement between the parties permitted ARI to recoup damages. See Luitpold Pharm., Inc. v. Ed. Geistlich Söhne A.G. Für Chemische Industrie, 784 F.3d 78, 97 (2d Cir. 2015). Finally, we agree with the district court that GyanSys cannot recover in quantum meruit because it did not demonstrate that the work for which it was not paid yielded a benefit to ARI. Mid–Hudson Catskill Rural Migrant Ministry, Inc. v. Fine Host Corp. 418 F.3d 168, 175 (2d Cir. 2005).

We have considered the remainder of the arguments raised by both parties and find them to be without merit. Accordingly, the judgment of the district court hereby is AFFIRMED. Each side to bear its own costs.

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