United States District Court, D. Connecticut
BRUCE KIRBY, INC. et al., Plaintiffs,
LASERPERFORMANCE (EUROPE) LIMITED et al., Defendants.
ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR
PARTIAL SUMMARY JUDGMENT
Jeffrey Alker Meyer, United States District Judge.
Global Sailing Ltd. has moved for partial summary judgment on
the narrow question of whether defendants LaserPerformance
(Europe) Ltd. and Quarter Moon, Inc. breached licensing
agreements in the 2010s that their predecessors established
in the 1980s. I agree with Global Sailing that defendants
breached some aspects of those agreements, but I do not agree
that the evidence supports summary judgment on each alleged
breach that Global Sailing claims. So I will grant in part
and deny in part Global Sailing's motion for summary
motion is the latest stage of a long-running dispute between
the parties. Because I discuss this case's history at
Bruce Kirby, Inc. v. LaserPerformance (Europe) Ltd.,
2018 WL 3614117, at *1-*3 (D. Conn. 2018), and Bruce
Kirby, Inc. v. LaserPerformance (Europe) Ltd., 2016 WL
4275576, at *1-*2 (D. Conn. 2016), I will address here only
the facts pertinent to Global Sailing's motion, largely
as laid out in the parties' Local Rule 56(a) statements.
1969, Bruce Kirby designed the 13' 10½”
Laser sailboat, a high-performance racing vessel.
See Doc. #470-2 at 1 (¶ 1); Kirby,
2016 WL 4275576, at *1. Kirby does business through his
Connecticut-based company, Bruce Kirby, Inc, and I refer to
them together as the “Kirby Plaintiffs.”
See Doc. #470-2 at 1-2 (¶ 2).
regulate Laser production, the Kirby Plaintiffs entered into
a “Head Agreement” with various organizations
that governed sailing. See Kirby, 2016 WL 4725576,
at *1; Doc. #472 at 1 (¶ 1); see also Doc.
#470-2 at 2-3 (¶ 6). The Head Agreement required any
party to that agreement to obtain written permission from all
other parties to the agreement before assigning any rights
under the agreement. Doc. #472 at 1 (¶ 1). To actually
produce Lasers, the Kirby Plaintiffs also entered into
“Builder Agreements” with individual sailboat
manufacturers. See Kirby, 2016 WL 4725576, at *1;
see also Doc. #470-2 at 2-3 (¶ 6).
case is about two of those Builder Agreements. The Kirby
Plaintiffs entered into the first agreement with Brook Shaw
Motor Services in 1983. Doc. #470-2 at 3 (¶ 7). They
entered into the second agreement with PY Small Boats, Inc.
in 1989. Ibid. (¶ 9). United Kingdom-based
defendant LaserPerformance has succeeded Brook Shaw's
rights and obligations under the 1983 Agreement, and Rhode
Island-based defendant Quarter Moon has done the same for PY
under the 1989 Agreement. Id. at 2, 4 (¶¶
4-5, 11-12). Ontario law governs the 1983 Agreement, and
Connecticut law governs the 1989 Agreement. See Id.
at 3-4 (¶¶ 8, 10).
Builder Agreements had several common obligations. They
required the builder licensees to pay royalties for the right
to manufacture and market Lasers, to pay interest on overdue
royalty payments, to maintain sales records of Lasers, and to
make those records available for inspection. Id. at
6 (¶ 17). Both agreements provided that a failure to pay
royalties on time would be a condition of default.
Id. at 7 (¶ 20). Both agreements provided that
the defaulting party could receive written notice of the
defaulting event at the Kirby Plaintiffs' option.
Id. at 8 (¶ 23). And both agreements required that
the Kirby Plaintiffs could only assign their rights in the
Laser design to an assignee who would enter into an agreement
with the builder licensees with identical terms and
conditions to the preexisting Builder Agreements. Doc. #472
at 1 (¶ 2).
agreements also had several notable distinctions. Each
agreement had a different “no contest” clause
preventing a licensee from challenging various intellectual
property rights the Kirby Plaintiffs held. The 1989 Agreement
provided that a builder defaults if “the Licensee
contests in any manner whatsoever the right and interest of
[the Kirby Plaintiffs] in and to the Licensed Design.”
Doc. #470-2 at 9 (¶ 28). The 1983 Agreement, by
contrast, provided that a builder defaults if it
“contests in any manner whatsoever the validity of [the
Kirby Plaintiffs'] exclusive and complete
Copyright.” Id. at 10 (¶ 31). The 1983
Agreement stated that “Copyright” referred to
“copyright and industrial design rights in” the
Laser. See Doc. #228-11 at 4 (¶ 2.1).
from the “no contest” clauses, the 1983 Agreement
also sought to protect the Kirby Plaintiffs' intellectual
property by requiring that, after a termination of the
agreement, a builder licensee must stop manufacturing Lasers
and stop using the production tooling, moulds, and plugs
associated with manufacturing Lasers. Doc. #470-2 at 12
(¶ 38). The 1983 Agreement also provided that, in the
event the agreement was terminated, the licensee would
“attempt in good faith to negotiate a sale to [the
licensor], or to negotiate a sale to another [Laser licensee]
all plugs, moulds, and tooling” owned by the licensee
and related to manufacturing Lasers. Doc. #228-11 at 18
(¶ 10.8); see also Doc. #470-2 at 11-12 (¶
2008, the Kirby Plaintiffs entered into a “Sale
Agreement” with New Zealand-based Global Sailing. Doc.
#470-2 at 4 (¶ 13). That agreement “was a valid
contract that transferred all of [the Kirby Plaintiffs']
rights to G[lobal Sailing], including [the Kirby
P]laintiffs' rights under the terms of the Head and
Builder Agreements.” Kirby, 2016 WL 4275576,
at *4. In January 2009, Global Sailing sent a letter to the
builder licensees indicating that the Laser rights had been
transferred from the Kirby Plaintiffs to Global Sailing,
providing an updated address for royalty payments, and
stating that matters would continue to be “business as
usual” and that “[a]ll extant agreements with
Kirby, Inc., including rights and obligations, have been
assigned to Global Sailing.” Doc. #470-2 at 5 (¶
the sale, defendants continued selling Lasers. Id.
at 7 (¶ 21). Uncontroverted evidence submitted by Global
Sailing indicates that LaserPerformance sold Lasers at least
until 2015, but does not distinguish when during 2015 those
sales took place. See Doc. #414-6 at 20-44. Further
uncontroverted sales records appear to show Laser sales in
2017 and 2018, and those records list an entity named
“Quartermoon” at the top, alongside named
“LP Topco, ” “SINA, ” “Full
Moon Holdings Ltd., ” and “LaserPerformance
NA.” See Id. at 45-48. Those records do not
distinguish which entity sold which Lasers. Ibid.
Defendants assert, without citing evidence, that they no
longer sell Lasers. Doc. #470-2 at 7 (¶ 21).
parties agree, however, that defendants stopped paying
royalties, Doc. #470-2 at 7 (¶ 22), and that defendants
received notice of a claim that they owed royalties,
id. at 8 (¶ 24).Global Sailing therefore argues
that defendants' failure to pay royalties provides one
basis for summary judgment that defendants have breached the
parties have also argued over the Builder Agreements'
intellectual property provisions. Global Sailing and
LaserPerformance agree that the 1983 Agreement has been
terminated, id. at 11 (¶ 36), and that
LaserPerformance has not participated in negotiations to sell
back plugs, moulds, and tooling used for making Lasers.
See Doc. #414-11 at 4-5 (¶¶ 53-55). Still,
LaserPerformance denies that it has breached any obligations
under the 1983 Agreement. Doc. #470-2 at 11-12 (¶ 37).
LaserPerformance admits that it contests Kirby's rights
in the Laser design, id. at 10-11 (¶ 33), but
argues that it has not disputed any copyright in the
design. Id. at 10 (¶ 32). Quarter Moon, for its
part, maintains that there are no design rights in the Kirby
sailboat. Id. at 11 (¶ 34).
parties' dispute landed on the federal docket in March
2013, when the Kirby Plaintiffs sued LaserPerformance,
Quarter Moon, and several other defendants on numerous
contract and trademark claims. See Doc. #1. Soon
thereafter, Global Sailing entered the case as a defendant to
LaserPerformance and Quarter Moon's counterclaims.
See Doc. #40 at 20 (¶ 5). In 2015, Global
Sailing argued (and submitted a sworn declaration
maintaining) that because the Kirby Plaintiffs had not
satisfied the Head Agreement and Builder Agreements'
contractual condition that the Kirby Plaintiffs obtain
consent from their counterparties before assigning their
rights, it had no part in this case. See Doc. #222-1
at 3 (¶ 6); Doc. #472 at 2 (¶ 3). But I rejected
this argument in August 2016, when I determined that the 2008
Sale Agreement had validly transferred the Kirby
Plaintiffs' rights to Global Sailing. Kirby,
2016 WL 4275576, at *4.
May 2017 did Global Sailing move to assert contract claims
against defendants. See Doc. #298. I denied this
motion because Global Sailing had not diligently sought leave
to amend, and because giving Global Sailing leave to do so
would prejudice defendants. Doc. #312 at 1-3. Global Sailing
then filed a new case to assert its contract claims against
defendants, see Global Sailing Ltd. v. Rastegar,
17cv1178 (D. Conn. 2017), and I consolidated that case with
this one, see Doc. #321. I then dismissed and granted
summary judgment on many of the non-contract claims in July
2018. See Bruce Kirby, Inc. v. LaserPerformance (Europe)
Ltd., 2018 WL 3614117 (D. Conn. 2018); Bruce Kirby,
Inc. v. LaserPerformance (Europe) Ltd., 2018 WL 3614116
(D. Conn. 2018). In the wake of those decisions, Global
Sailing has now moved for summary judgment as to whether
LaserPerformance and Quarter Moon have breached their
respective Builder Agreements. See Doc. #434 at 4. I
agree with Global Sailing in part, and so will grant in part
and deny in part its motion for summary judgment.
principles governing the Court's review of a motion for
summary judgment are well established. Summary judgment may
be granted only if “the movant shows that there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a). The Court must view the facts in the light most
favorable to the party who opposes the motion for summary
judgment and then decide if those facts would be enough-if
eventually proved at trial-to allow a reasonable jury to
decide the case in favor of the opposing party. My role at
summary judgment is not to judge the credibility of witnesses
or to resolve close contested issues but solely to decide if
there are enough facts that remain in dispute to warrant a
trial. See generally Tolan v. Cotton, 572 U.S. 650,
656-57 (2014) (per curiam); Benzemann v.
Houslanger & Assocs., PLLC, 924 F.3d 73, 78 (2d Cir.
Sailing has moved for summary judgment on the narrow question
of whether each defendant breached its respective Builder
Agreement. It has not moved for summary judgment on damages,
and it views the precise extent of how any breach occurred as
a question to be resolved in addressing damages. See
Doc. #434 at 5 (“Each of these breaches . . . provide
an independent basis for entry of summary judgment on the
issue of liability. Put simply, GSL need only show one breach
to prevail; here, it can show several.”).
parties agree that substantially similar law governs a breach
of contract claim in Connecticut and Ontario. See
Doc. #434 at 7; Doc. #470 at 4-11 (not challenging Global
Sailing's claim that Connecticut and Ontario breach of
contract claims are similar and noting that Connecticut and
Ontario material breach standards resemble each other). I
also agree. In Connecticut, a breach of contract claim
requires that the parties form an agreement, the plaintiff
performs as agreed, the defendant does not, and that
nonperformance hurts the plaintiff. See Meyers v.
Livingston, Alder, Pulda, Meiklejohn and Kelly, P.C.,
311 Conn. 282, 291 (2014). “Under Ontario law, the
elements of a claim for breach of contract are ‘the
particulars of the alleged contract including its terms, the
nature of the alleged breach, causation and damages that are
alleged to have flowed from the breach.'” PPC
Broadband, Inc. v. Transformix Engineering Inc., 2015 WL
339564, at *6 (N.D.N.Y. 2015) (quoting McCarthy Corp. PLC
v. KPMG LLP,  O.J. 1492, 2006 CanLII 11919, at
¶ 42 (Can. Ont. S.C.J.)).
and Quarter Moon have focused their opposition to summary
judgment on two main lines of defense. First, they argue that
Global Sailing brought suit too late under both Connecticut
and Ontario law. Second, they argue that, regardless of
timing, the Builder Agreements do not bind them. I address
each objection in turn.
begin by arguing that Ontario and Connecticut's
respective statutes of limitations for contract claims
restrict Global Sailing's claims against LaserPerformance
and Quarter Moon. See Doc. #470 at 1 n.1. Global
Sailing objects on the ground that any failure of defendants
to pay royalties is a continuing violation under both
Connecticut and Ontario law, and so should reset the date
from which the statutory clock runs to that of the most
recent breach. See Doc. #471 at 10. I am unpersuaded
by Global Sailing's argument.
begin with, Connecticut law has traditionally applied the
continuing course of conduct doctrine to torts, and the
Connecticut Supreme Court has not applied the doctrine to
claims based on breach of contract. See St. Bernard Sch.
of Montville v. Bank of Am., 312 Conn. 811, 834 n.11
(2014) (noting that “[a]lthough our Appellate Court has
questioned the extent to which this doctrine applies outside
of claims sounding in tort, we have no occasion to consider
that question in the present case”). And in AT
Engine Controls Ltd. v. Goodrich Pump & Engine Control
Systems, Inc., 2014 WL 7270160 (D. Conn. 2014),
aff'd, 637 Fed.Appx. 645 (2d Cir. 2016), I noted
that even in the tort context, Connecticut courts require
“a ‘special relationship' between the parties
or . . . later wrongful acts.” Id. at *14-*15