Parlux Fragrances, LLC v. S. Carter Enters., LLC

Majority - Higgitt, J.

No, a contract provision requiring a party to provide a 'product development plan' or '20 business days written notice' does not constitute an express condition precedent; rather, such provisions represent contractual promises, and questions of fact exist regarding whether a party's non-compliance was a breach and whether the other party waived or elected to affirm performance. The court found that sections 7C and 11E of the license agreement, which required Parlux to provide a product development plan and for Parlux to give 20 business days' written notice for Carter's appearances, respectively, did not contain the clear, unmistakable conditional language (e.g., 'if,' 'unless and until') necessary to establish express conditions precedent. Instead, the use of the word 'shall' indicated a contractual promise. The court further noted that the license agreement's explicit 'conditions' in section 20A did not include these provisions. Thus, triable issues of fact remained as to whether plaintiffs breached these promises and whether defendants, through their conduct, elected to continue the agreement despite the breaches or waived their right to insist on strict performance of these provisions. Yes, a corporate entity (Perfumania Holdings, Inc.) is liable as a guarantor of a license agreement when it is explicitly included in the definition of 'Perfumania' within the agreement, and when multiple contemporaneous transactional documents read together demonstrate this intent. The court held that the license agreement, sublicense agreement, and assignment letter, executed almost simultaneously and relating to the same subject matter, must be read together. Section 2B's definition of 'Perfumania' as 'Perfumania Holdings, Inc. (collectively, 'Perfumania')' was interpreted to include both the parent company and its subsidiary (Parlux) to avoid the absurd result of Parlux guaranteeing its own performance. The court also noted that Perfumania Holdings, Inc. performed obligations under section 20A (issuing stock warrants and signing the assignment letter), further reinforcing its role as a guarantor. This interpretation also satisfied the statute of frauds, as multiple writings, some signed, referred to the same transaction. The court cited `Beal Savings Bank v Sommer` for avoiding absurd readings and `Taylor Diversified Corporate Servs., Inc. v AMBAC Assur. Corp.` for the statute of frauds. No, a party may not offset a potential, unliquidated liability against a liquidated and due claim for unpaid royalties. The court found that defendants were entitled to summary judgment on their counterclaim for unpaid royalties because Parlux admittedly sold licensed products after July 2015 but ceased making royalty payments. The court reiterated the principle that there is no right to set off a possible, unliquidated liability against a liquidated claim that is due and payable, citing `Willett v Lincolnshire Mgt.` and `Boscorale Operating v Nautica Apparel`. No, an individual signatory to only specific sections of a contract is not personally liable for breaches of other sections of the same contract, particularly when there is no basis to pierce the corporate veil. The court granted summary judgment to Shawn Carter, dismissing plaintiffs' breach of contract claim premised on article 7 (flanker fragrance development). Carter personally signed the license agreement only with respect to sections 2C, 2D, and 11E. Plaintiffs failed to provide sufficient evidence to pierce SCE's corporate veil to hold Carter personally liable for obligations beyond those specified sections, as domination without wrongful or inequitable consequences is insufficient, citing `TNS Holdings v MKI Sec. Corp.`. No, a cause of action for breach of the implied covenant of good faith and fair dealing is duplicative of a breach of contract claim when both are premised on the same alleged conduct and intrinsically tied to the same damages. The court dismissed plaintiffs' fifth cause of action, explaining that the implied covenant of good faith and fair dealing is inherent in every contract and primarily serves to ensure neither party destroys or injures the other's right to receive the fruits of the contract. Therefore, a separate cause of action cannot be maintained where it is based on the same conduct that underlies the breach of contract claim. Plaintiffs could, however, still argue defendants acted in derogation of the covenant within their breach of contract claim, especially concerning the exercise of discretion under articles 7 and 11. The court cited `MBIA Ins. Corp. v Merrill Lynch` and `Mill Fin., LLC v Gillett`.