The opinion of the court was delivered by: JOSEPH GREENAWAY, District Judge
[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.] OPINION
This matter comes before the Court on a motion for partial
summary judgment, pursuant to FED. R. CIV. P. 56(c), by
Defendants The Travelers Indemnity Company and The Travelers
Companies (collectively "Travelers" or "Defendants"). This is an
on-going contractual dispute between Plaintiff, Frank Briscoe
Company ("Briscoe" or "Plaintiff") and Travelers. The Court has
issued several Opinions and Orders in this matter including,
Frank Briscoe Co., Inc. v. Travelers Indem. Co.,
899 F.Supp. 1304 (D.N.J. 1995) (hereinafter "Agency Opinion") and Frank
Briscoe Co., Inc. v. Travelers Indem. Co., 65 F.Supp.2d 285
(hereinafter "Summary Judgment Opinion").
Defendants now move for partial summary judgment on Briscoe's
Calculation Claims, seeking to identify and confirm the elements
of the formulate to be used to calculate amounts and estimates of amounts, if any, that would be payable to Frank
Briscoe Company, Inc. ("Briscoe"), pursuant to the Agreement for
Disposition of Collateral entered into by the parties on August
2, 1982 ("ADC"). (Defs.' Memo. of Law in Supp. of Their Renewed
Mot. for Partial Summ. J. on Pl.'s Calculation Claims, at 1
(hereinafter "Defs.' Memo. Partial Summ. J.").) The Calculation
Formulae at issue in the instant motion include: 1) the formula
for determining the Final Contingent Fee ("Final Contingent Fee
Formula") that would be payable to Briscoe at the end of the
Program and 2) the formula for determining whether Briscoe was
eligible to receive advance payments against its Final Contingent
Fee or a credit for such an advance ("Estimation Formula").
For the reasons set forth below, this Court grants Defendants'
motion for partial summary judgment on the Calculation Claims
This matter involves a contract dispute between Briscoe and
Travelers. Briscoe was a renowned construction company. Among its
many major projects were two of the Gateway office buildings in
Newark, New Jersey, and Giants Stadium and Meadowlands Race Track
in East Rutherford, New Jersey. Since the early 1970s, Travelers
provided Briscoe with payment and performance bonds for Briscoe's
construction contracts. Due to severe financial troubles in late
1979, Briscoe became unable to meet its obligations. At the time,
Travelers estimated its potential exposure at approximately $100
million if Briscoe should default on its various construction
projects. To avoid this possibility, Travelers chose to assist
Briscoe through a series of loans totaling approximately $24
million. In exchange for the loan, Travelers obtained a security
interest in all of Briscoe's assets. The parties memorialized
their agreement in the Loan and Security Agreement or "LSA."
The Loan and Security Agreement provided that Briscoe would
make monthly interest payments on the loans. Briscoe eventually
defaulted when it failed to make the scheduled monthly payments.
At the time of default, Briscoe owed Travelers $22 million in
loan principal and $6 million in accrued interest. Travelers, as
a secured creditor, chose to take possession of all of Briscoe's
assets (the collateral for the loans) and to liquidate them.
After a two day trial, Judge Wolin wrote the Agency Opinion. In
that Opinion, he considered a claim by Briscoe that it was
entitled to accumulated interest on all of the funds deposited
with Travelers, pursuant to the ADC. Briscoe,
899 F. Supp. at 1307. Briscoe asserted that it and Travelers were partners in the
ADC and, therefore, Travelers was required to accrue interest for
Briscoe on the Program proceeds. Id. By 1995, Briscoe had
collected and deposited over $84 million with Travelers, and
Briscoe claimed that it was entitled to $400 million in interest
on those gross proceeds. Id.
In order to make a decision on Briscoe's claim, the Court first
sought to determine whether the ADC was a clear, unambiguous, and
enforceable contract. Id. at 1308. The Court examined (1) the
contract itself, (2) the parties' pre-execution conduct and (3)
the parties' post-execution conduct. Id. at 1309. The Court
noted that the negotiation of the ADC took well over a year, and
that both sides were represented by counsel during the
Construing the express language of the ADC, the Court concluded
that "Travelers owns the money deposited under the ADC as a
secured creditor. . . . Any interest earned on the money . . . is
the sole and exclusive property of Travelers." Id. at 1316.
This conclusion did not end the Court's inquiry. Noting that the U.C.C. did not alter the Court's
interpretation of the ADC, the Court next examined the parties'
conduct. Id. at 1317. The Court found that the parties'
pre-execution conduct evidenced that Travelers had rejected
several attempts by Briscoe to include an interest component into
the ADC. Id. at 1323. Further, the Court found that in late
1989, William F. Kelly distributed a Briscoe internal memorandum
in which he proposed several ways to interpret the ADC that would
allow Briscoe to increase its recovery. Id. That memorandum,
coupled with Briscoe's silence with respect to interest until
1989, led the Court to conclude that Briscoe was making "an
after-the-fact attempt . . . to earn more money under the ADC."
Id. The Court found that "the post-execution conduct of the
parties demonstrates that after the Program dragged on far longer
than anyone anticipated, Briscoe began to search for ways to
maximize its share." Id. at 1325.
The Court also analyzed the trial testimony of the parties.
Id. at 1325-32. The Court found the testimony of Briscoe's two
witnesses, Howard Loeffler, former Travelers employee, and
Gabriel Calafati, Briscoe President, not credible. Id. at
1325-30. In contrast, the Court found the testimony of Travelers'
witness, Mark Larner, the ADC's scrivener, "highly convincing."
Id. at 1332. Larner testified, among other things, that the ADC
follows the Uniform Commercial Code and was designed to
articulate Travelers' rights after Briscoe's default under the
Loan and Security Agreement. Id. at 1330. The Court held that
Briscoe could not imply terms into the ADC based on the
unsupported contention that the driving force behind the ADC was
Travelers' fear of third-party claimants. Id. at 1332.
The Court held that Travelers, as the exclusive owner of all
money deposited under the ADC, had no duty to accrue interest on
Briscoe's behalf. Id. at 1334. The Court based its holding on, among other things, the following factual and legal
conclusions: (1) the ADC language and meaning was clear and
unambiguous; (2) the ADC created an agency relationship whereby
Briscoe was Travelers' agent; and (3) Travelers was the owner of
all of the collateral under the ADC. Id. at 1344.
Summary judgment is appropriate under FED. R. CIV. P. 56(c)
when the moving party demonstrates that there is no genuine issue
of material fact and the evidence establishes the moving party's
entitlement to judgment as a matter of law. Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986); Orson, Inc. v. Miramax
Film Corp., 79 F.3d 1358, 1366 (3d Cir. 1996). In making this
determination, the Court must draw all reasonable inferences in
favor of the nonmovant. Hullett v. Towers, Perrin, Forster &
Crosby, Inc., 38 F.3d 107, 111 (3d Cir. 1994); Nat'l State Bank
v. Fed. Reserve Bank of N.Y., 979 F.2d 1579, 1581 (3d Cir.
Once the moving party has satisfied its initial burden, the
party opposing the motion must establish that a genuine issue as
to a material fact exists. Jersey Cent. Power & Light Co. v.
Lacey Township, 772 F.2d 1103, 1109 (3d Cir. 1985). The party
opposing the motion for summary judgment cannot rest on mere
allegations and instead must present actual evidence that creates
a genuine issue as to a material fact for trial. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Siegel Transfer,
Inc. v. Carrier Express, Inc., 54 F.3d 1125, 1130-31 (3d Cir.
1995). "[U]nsupported allegations . . . and pleadings are
insufficient to repel summary judgment." Schoch v. First Fid.
Bancorporation, 912 F.2d 654, 657 (3d Cir. 1990); see also
FED. R. CIV. P. 56(e) (requiring nonmoving party to "set forth
specific facts showing that there is a genuine issue for trial"). If the nonmoving party has failed "to make a showing sufficient
to establish the existence of an element essential to that
party's case, and on which that party will bear the burden of
proof at trial, . . . there can be `no genuine issue of material
fact,' since a complete failure of proof concerning an essential
element of the nonmoving party's case necessarily renders all
other facts immaterial." Katz v. Aetna Cas. & Sur. Co.,
972 F.2d 53, 55 (3d Cir. 1992) (quoting Celotex,
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