15-554-cv(L)
World of Boxing, LLC v. King
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 10th day of December, two thousand fifteen.
PRESENT: AMALYA L. KEARSE,
REENA RAGGI,
RICHARD C. WESLEY,
Circuit Judges.
----------------------------------------------------------------------
WORLD OF BOXING, LLC, VLADIMIR HRUNOV, and
ANDREY RYABINSKIY,
Plaintiffs-Counter-Defendants-
Appellees-Cross-Appellants,
No. 15-554-cv(L);
v. No. 15-725-cv(XAP)
DON KING and DON KING PRODUCTIONS, INC., *
Defendants-Counter-Claimants-
Appellants-Cross-Appellees.
----------------------------------------------------------------------
*
The Clerk of Court is directed to amend the official caption as shown above.
1
APPEARING FOR APPELLANTS- T. BARRY KINGHAM (Andrew B.
CROSS-APPELLEES: Zinman, on the brief), Curtis,
Mallet-Prevost, Colt & Mosle LLP, New
York, New York.
APPEARING FOR APPELLEES- KENT A. YALOWITZ (Matthew David
CROSS-APPELLANTS: Grant, on the brief), Arnold & Porter
LLP, New York, New York.
Appeal from a judgment of the United States District Court for the Southern District
of New York (Shira A. Scheindlin, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment entered on February 13, 2015, is AFFIRMED in part
and REVERSED in part.
Defendants Don King and Don King Productions, Inc. (collectively “King”) appeal
from a summary award of $990,811.19 in damages, as well as pre- and post-judgment
interest, to plaintiffs Vladimir Hrunov and Andrey Ryabinskiy, who do business as World
of Boxing, LLC (collectively “WOB”). Plaintiffs sued for breach of a boxing contract
resulting from King’s boxer Guillermo Jones not being able to compete because he tested
positive for a banned substance. King disputes both the summary determination of
liability and the damage award. WOB cross-appeals the calculation of the damage award.
“We review an award of summary judgment de novo, construing the evidence in the light
most favorable to the nonmoving party and drawing all reasonable inferences in his favor.”
McElwee v. County of Orange, 700 F.3d 635, 640 (2d Cir. 2012). We assume the parties’
2
familiarity with the facts and the record of prior proceedings, which we reference only as
necessary to explain our decision to affirm with respect to liability and affirm in part and
reverse in part with respect to damages.
1. Liability Award
In challenging the liability aspect of the judgment, King argues only that there were
disputed issues of material fact as to (1) who called off the bout, WOB or the World Boxing
Association (“WBA”); and (2) whether WBA’s on-site ruling that the bout could proceed
precluded WOB from calling off the fight. The argument merits little discussion because
the contract at issue specifically required King to produce Jones for the bout on April 25,
2014, and required the fighters to abide by the WBA rules on performance enhancing drugs
as incorporated into the contract. As the district court correctly concluded, there was no
dispute that Jones ingested furosemide, a substance banned by WBA rules. Any disputed
facts surrounding the determinations of WBA officials at the time,1 or who finally called
off the bout, are thus not material to whether King breached the parties’ contract.
1
In urging otherwise, King points to WBA Rule C.42, which states that “[d]uring a
sanctioned contest or its related preliminary matters, a Supervisor is empowered to resolve
unforeseen issues that require an immediate decision. The Supervisor’s decision in these
exceptional cases is irrevocable.” J.A. 169. King fails, however, to demonstrate that the
WBA views as so “unforeseen” or “exceptional” failing a drug test as to come within this
rule. Indeed, the rules on drug testing at C.45, E.24, and Article 13 of Appendix A suggest
otherwise. See J.A. 170, 176, 189–93. In any event, the contract obligated King to
produce a fighter who had abided by WBA drug rules. It provided no exception based on
Rule C.42.
3
Nor did the district court err in denying certain of King’s discovery requests
pertaining to liability, as King failed to demonstrate either below or on appeal how the
requested discovery would shed light on any disputed issue of fact material to contract
liability.
2. Calculation of Damages
WOB acknowledged that its expectation damages for breach of contract would be
highly speculative and, instead, sought reliance damages. Under New York law, “a
plaintiff may recover ‘damages based on his reliance interest, including expenditures made
in preparation for performance or in performance, less any loss that the party in breach can
prove with reasonable certainty the injured party would have suffered had the contract been
performed.’” St. Lawrence Factory Stores v. Ogdensburg Bridge & Port Auth., 13
N.Y.3d 204, 208, 889 N.Y.S.2d 534, 535 (2009) (quoting Restatement (Second) of
Contracts § 349). Following these principles, the district court considered plaintiffs’
roughly $1 million in preparatory costs as well as $800,000 in an escrow account, of which
$250,000 had already been disbursed to King. Although King argued that WOB’s losses
would have exceeded the available recovery, the district court determined that he had not
carried his burden to demonstrate such losses with reasonable certainty. Thus, it
concluded that WOB was entitled to return of the money remaining in the escrow account
plus its preparatory costs, minus any ticket sales that had not been refunded, with the total
4
then subject to pre- and post-judgment interest. See World of Boxing LLC v. King, No.
14-CV-3791 (SAS), 2015 WL 427225, at *5 (S.D.N.Y. Feb. 2, 2015) (“WOB II”).
King does not dispute his burden to show the amount that WOB would have lost had
the contract been performed. Rather, he argues that the district court improperly denied
discovery as to WOB’s claimed sources of revenue, depriving him of the opportunity to
substantiate his argument. Yet nowhere in King’s summary judgment filings or in any
other communication to the district court did he complain that discovery had been
inadequate or frustrated. See Burlington Coat Factory Warehouse Corp. v. Esprit De
Corp., 769 F.2d 919, 925–27 (2d Cir. 1985) (citing Fed. R. Civ. P. 56(f)’s requirements for
form in which such discovery objection to summary judgment must be made). King
offers no reason why we should now overturn on appeal a grant of summary judgment
based upon his belated assertion that he needed discovery to carry his burden of proof.
WOB, in turn, disputes the district court’s construction of the parties’ Escrow
Agreement to preclude its recovery in this action of the $250,000 disbursed to King. The
Escrow Agreement required WOB to place $800,000 into an escrow account with
$250,000 disbursed to King immediately and the remaining $550,000 either disbursed to
King after the bout took place or returned to WOB if the bout did not take place. J.A. 40.
Based on the Agreement’s recognition of the possibility that the bout would not take place
(and its provision for only the $550,000 remainder to be returned to WOB), the district
court concluded that “$250,000 of the $800,000 deposit was intended as an ‘immediately
5
payable,’ non-refundable signing bonus.” WOB II, 2015 WL 427225, at *2 (quoting
Escrow Agreement 4(i)). Yet no provision of the contract so states, or makes the
$250,000 unrecoverable in the case of a breach of contract, or provides for the return of the
remaining $550,000 as the exclusive remedy. See Ohanian v. Avis Rent A Car Sys., Inc.,
779 F.2d 101, 109–10 (2d Cir. 1985) (“[A] liquidated damage clause must be the result of
an express agreement between the parties; courts will not read such a clause into a contract
by implication.” (citing Winkelman v. Winkelman, 208 A.D. 68, 70, 203 N.Y.S. 63, 64 (1st
Dep’t 1924))); cf. Vacold LLC v. Cerami, 545 F.3d 114, 130 (2d Cir. 2008) (“[New York
courts] appear willing, at least in some circumstances, to recognize limitations on available
remedies, but they do so only when the contract ‘contains a clause specifically setting forth
the remedies available to the buyer if the seller is unable to satisfy a stated condition.’”
(quoting 101123 LLC v. Solis Realty LLC, 23 A.D.3d 107, 108, 801 N.Y.S.2d 31, 31–32
(1st Dep’t 2005) (emphasis added by Vacold v. Cerami))). Rather, the Escrow Agreement
is best understood as allocating $250,000 to King in the first instance, with the remainder to
WOB in the event that the bout did not take place, without regard to whether that was
attributable to breach. Because the Agreement does not specify breach remedies, the
parties’ remedies are those afforded by New York law. As the district court observed,
reliance damages under New York law “seek to restore the injured party to the position she
was in before the contract was formed.” WOB II, 2015 WL 427225, at *2 (citing Clifford
R. Gray, Inc. v. LeChase Constr. Servs., 51 A.D.3d 1169, 1170, 857 N.Y.S.2d 347, 349 (3d
6
Dep’t 2008)); accord Farash v. Sykes Datatronics, Inc., 59 N.Y.2d 500, 504–05, 465
N.Y.S.2d 917, 919–920 (1983). WOB is entitled to be returned its expenditures in
reliance on the contract, which include all money placed into the escrow account.2
3. Conclusion
We have considered the parties’ remaining arguments and conclude that they are
without merit. The judgment of the district court is AFFIRMED in part and REVERSED
in part, and the case is REMANDED to the district court to enter judgment in accordance
with this order.
FOR THE COURT:
CATHERINE O’HAGAN WOLFE, Clerk of Court
2
Similarly, because WOB’s remedies are not limited to the return of the remaining escrow
funds, it is entitled to recoup the fees collected by the Escrow Agent (for which fees, in any
event, King is contractually responsible, see J.A. 43).
7