Alkholi v. MacKlowe

20-1961-cv
Alkholi v. Macklowe

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 3rd day of May, two thousand twenty-one.

PRESENT: DENNIS JACOBS,
DENNY CHIN,
Circuit Judges,
J. PAUL OETKEN,
District Judge. *
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DR. HAMZA B. ALKHOLI, AHMED
HALAWANI,
Plaintiffs-Appellants,
-v- 20-1961-cv

HARRY B. MACKLOWE, MACKLOWE
INVESTMENT PROPERTIES, LLC,

Defendants-Appellees.

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* Judge J. Paul Oetken, of the United States District Court for the Southern District of New
York, sitting by designation.
FOR PLAINTIFFS-APPELLANTS: KRISTEN G. NIVEN (Donald N. David,
Katherine E. Giddings, on the brief), Akerman
LLP, New York, New York, and Tallahassee,
Florida.

FOR DEFENDANTS-APPELLEES: DAVID TODD FEUERSTEIN, Feuerstein
Kulick LLP, New York, New York.

Appeal from the United States District Court for the Southern District of

New York (Castel, J.).

UPON DUE CONSIDERATION, IT IS ORDERED, ADJUDGED, AND

DECREED that the judgment of the district court is AFFIRMED.

Plaintiffs-appellants Hamza B. Alkholi and Ahmed Halawani ("plaintiffs")

appeal the district court's dismissal of their claims against defendants-appellants Harry

B. Macklowe ("Macklowe") and Macklowe Investment Properties, LLC ("MIP" and,

together with Macklowe, "defendants"). By memorandum and order entered December

22, 2017 (Batts, J.), the district court dismissed all claims against Macklowe in his

individual capacity and the claim for breach of written contract against MIP. By

opinion entered May 21, 2020, the district court (Castel, J.) granted MIP's motion for

summary judgment as to the remaining claims against it for breach of oral contract,

unjust enrichment, and quantum meruit. Judgment entered on May 21, 2020. We

assume the parties' familiarity with the underlying facts, the procedural history of the

case, and the issues on appeal.

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I. Background

Plaintiffs, both residents of Saudi Arabia, were potential investors in the

acquisition and development of the retail component of 432 Park Avenue, a luxury

residential skyscraper in Manhattan (the "Project"). In 2013, Macklowe, the chairman of

MIP, a real estate investment and development firm based in New York City, proposed

a joint venture between Alkholi and MIP pursuant to which Alkholi would participate

as an investor in the Project and solicit additional investors. Halawani was one such

prospective investor, as was Sheikh Hamad Bin Jassim bin Jaber Al-Thani ("HBJ"), the

former Prime Minister of Qatar and chairman of its sovereign wealth fund, the Qatar

Investment Authority.

In preliminary negotiations, the parties discussed what plaintiffs refer to

as a "Capital Raise Agreement," Appellants' Br. at 5, pursuant to which plaintiffs would

receive 2% of the total raised capital as a fee for securing the necessary capital. The joint

venture did not materialize, however, and the Project went forward with HBJ as the

sole investor without plaintiffs' investment. Following this development, QInvest, the

financial investment firm facilitating HBJ's investment in the Project, paid plaintiffs

$750,000 (representing a 0.5% placement fee for HBJ's $150 million investment in the

Project) and an additional $5 million for the lost opportunity to participate in the

Project. Plaintiffs argue that defendants separately owe plaintiffs the 2% placement fee

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based on their earlier discussions regarding the proposed joint venture, pursuant to

which they helped secure HBJ as an investor.

On January 13, 2017, plaintiffs commenced this suit for breach of written

contract, breach of oral contract, unjust enrichment, and quantum meruit. The district

court ruled as noted above, and this appeal followed.

II. Discussion

We review de novo a district court's grant of a motion to dismiss. Dane v.

UnitedHealthcare Ins. Co., 974 F.3d 183, 188 (2d Cir. 2020). We review de novo a district

court's grant of summary judgment, resolving all ambiguities and drawing all

permissible factual inferences in favor of the party against whom summary judgment is

sought. Booker v. Graham, 974 F.3d 101, 106 (2d Cir. 2020). "Pursuant to Rule 56(a) of the

Federal Rules of Civil Procedure, we will affirm a grant of summary judgment only

where there are no genuine disputes concerning any material facts, and where the

moving party is entitled to judgment as a matter of law." Tiffany & Co. v. Costco

Wholesale Corp, 971 F.3d 74, 83 (2d Cir. 2020). A party cannot defeat a motion for

summary judgment with "conclusory allegations or unsubstantiated speculation."

Fujitsu Ltd. v. Fed. Express Corp., 247 F.3d 423, 428 (2d Cir. 2001) (internal quotation mark

omitted).

We first address the district court's summary judgment decision, which

found that pursuant to the New York Statute of Frauds, N.Y. Gen. Oblig. Law § 5-701

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(McKinney 2002) (the "Statute"), MIP was entitled to summary judgment on the

surviving three claims against it. 1 We conclude that the district court correctly held that

the Statute bars plaintiffs' claims. Accordingly, as discussed further below, we need not

review the district court's decision granting the earlier motion to dismiss.

A. The Motion for Summary Judgment

1. Applicable Law

In New York, certain contracts must be in writing and signed by the party

(or his agent) against whom it is sought to be enforced. See N.Y. Gen. Oblig. Law §

5-701(a) (McKinney 2002) ("Every agreement, promise or undertaking [covered by these

provisions] is void, unless it or some note or memorandum thereof be in writing, and

subscribed by the party to be charged therewith, or by his lawful agent . . . ."). The

memorandum "must contain expressly or by reasonable implication all the material terms

of the agreement." Morris Cohon & Co. v. Russell, 23 N.Y.2d 569, 575 (N.Y. 1969)

(emphasis added). In determining whether the Statute is satisfied, New York law

permits "signed and unsigned writings to be read together, provided that they clearly

refer to the same subject matter or transaction." Crabtree v. Elizabeth Arden Sales Corp.,

305 N.Y. 48, 55 (N.Y. 1953); accord Kelly v. P&G Ventures 1, LLC, 148 A.D.3d 1002, 1003

1 The district court applied New York law, and the parties' briefs on appeal assume that
New York law governs this case. Accordingly, we apply New York law. See Trikona Advisers,
Ltd. v. Chugh, 846 F.3d 22, 31 (2d Cir. 2017) (holding that parties' implied consent to Connecticut
law establishes applicable choice of law).
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(N.Y. App. Div. 2d Dep't 2017). "Parol evidence . . . is immaterial to the threshold issue

whether the documents are sufficient on their face to satisfy the Statute . . . . That issue

must be determined from the documents themselves, as a matter of law." Bazak Int'l

Corp. v. Mast Indus., 73 N.Y.2d 113, 118 (N.Y. 1989).

As relevant here, the Statute applies if the purported agreement "[i]s a

contract to pay compensation for services rendered . . . in negotiating the purchase, sale,

exchange, renting or leasing of any real estate or interest therein, or of a business

opportunity, business, its good will, inventory, fixtures or an interest therein, . . .

including the creating of a partnership interest." N.Y. Gen. Oblig. Law § 5-701(a)(10)

(McKinney 2002). The Statute defines "negotiating" to include "procuring an

introduction to a party to the transaction or assisting in the negotiation or

consummation of the transaction." Id.

2. Application

Plaintiffs raise two issues: they contend that, first, the Statute does not

apply to the circumstances of this case and, second, even if the Statute does apply, its

requirements are met. We are not persuaded.

First, as the district court found, "the Statute comfortably covers the

purported agreement alleged by plaintiffs." J. App'x at 552. The essence of plaintiffs'

claims is that they are entitled to compensation for "procuring an introduction to a

party," or a prospective party, to a real estate transaction. N.Y. Gen. Oblig. Law § 5-

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701(a)(10) (McKinney 2002). They contend that the "Statute of Frauds does not apply"

to a "long-term business relationship with fiduciary obligations to each other as

partners in a Joint Venture." Appellants' Br. at 27 (citing Dura v. Walker, Hart & Co., 27

N.Y.2d 346, 350 (N.Y. 1971)). This argument is unavailing. Not only does this

interpretation cut against the clear text of the Statute, the New York Court of Appeals

has applied the Statute to bar contract claims against a "joint venture[] to acquire and

operate companies in the media business." Snyder v. Bronfman, 13 N.Y.3d 504, 506 (N.Y.

2009). See also Springwell Corp. v. Falcon Drilling Co., Inc., 16 F. Supp. 2d 300, 304

(S.D.N.Y. 1998) ("It is well settled that the Statute of Frauds applies to claims for finder's

fees."). Accordingly, the Statute clearly applies to the circumstances here.

Second, we agree with the district court's conclusion that the purported

agreement does not satisfy the Statute. As the district court held based on a review of

the email exchanges, there was no meeting of the minds on all essential terms as a

matter of law. Macklowe's initial email merely stated "I think a 2% fee will work," J.

App'x at 553; there was no agreement as to who would pay the 2% placement fee, and

there was "no other writing that would permit" the material term of the identity of the

obligor to be read into the email exchange, J. App'x at 557. We also agree with the

district court's detailed analysis of the email exchanges following the November 6

email, including Halawani's characterization of Kimmerman's mid-December emails

regarding the placement fee as a "counteroffer," and noting that "[i]f Halawani believed

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that all material terms had been resolved in the November 6 email exchange between

Alkholi and Macklowe, Halawani would not have responded as he did, and would

have treated Kimmelman's email as a reneging of an agreement, not as a 'counteroffer.'"

Id. at 555.

Based on the factual record and drawing all permissible inferences in

favor of plaintiffs, we hold as a matter of law that the documents relied on by plaintiffs

are insufficient to satisfy the Statute. Accordingly, we conclude that the district court

did not err in granting summary judgment to MIP on plaintiffs' claim for breach of oral

contract.

Finally, we also hold that the district court did not err in granting

summary judgment to MIP on plaintiffs' implied-in-law contract claims for unjust

enrichment 2 and quantum meruit. 3 The Statute clearly applies as a defense to claims for

unjust enrichment and quantum meruit. See N.Y. Gen. Oblig. Law § 5-701(a)(10)

(McKinney 2002) ("This provision shall apply to a contract implied in fact or in law to

2 Under New York law, to plead an unjust enrichment claim, a plaintiff must allege "that
(1) the other party was enriched, (2) at that party's expense, and (3) that it is against equity and
good conscience to permit the other party to retain what is sought to be recovered." Georgia
Malone & Co. v. Rieder, 19 N.Y.3d 511, 516 (N.Y. 2012) (internal quotation marks and citation
omitted).
3 Under New York law, to plead a quantum meruit claim, a plaintiff must allege "(1) the
performance of services in good faith, (2) the acceptance of the services by the person to whom
they are rendered, (3) an expectation of compensation therefor, and (4) the reasonable value of
the services allegedly rendered." Tesser v. Allboro Equip. Co., 302 A.D.2d 589, 590 (N.Y. App. Div.
2d Dep't 2003) (citations omitted).
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pay reasonable compensation."); Snyder, 13 N.Y.3d at 509-10 (upholding dismissal of

unjust enrichment and quantum meruit claims on Statute of Frauds grounds).

B. The Motion to Dismiss

Our affirmance of the district court's summary judgment decision obviates

the need for review of the district court's earlier decision on the motion to dismiss. In

its earlier decision, the district court dismissed all claims against Macklowe in his

individual capacity and the claim for breach of written contract against MIP.

First, "an attempt to pierce the corporate veil does not constitute a cause of

action independent of that against the corporation; rather it is an assertion of facts and

circumstances which will persuade the court to impose the corporate obligation on its

owners." Cortlandt St. Recovery Corp. v. Bonderman, 31 N.Y.3d 30, 47 (N.Y. 2018)

(citations, alterations, and internal quotation marks omitted). As we have held that

there is no "corporate obligation" against MIP here, plaintiffs' claims against Macklowe

in his individual capacity fail as a matter of law.

Second, just as the Statute bars plaintiffs' claims for breach of an oral

contract, it also bars their claims for breach of a written contract. The various emails

and other documents did not establish a meeting of the minds on all the material terms

of the purported contract.

* * *

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 We have considered plaintiffs' remaining arguments and conclude they

are without merit. For the foregoing reasons, we AFFIRM the judgment of the district

court.

FOR THE COURT:
Catherine O'Hagan Wolfe, Clerk

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