Marvel Entertainment LLC v. Stephen Kimble

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MARVEL ENTERTAINMENT LLC,
Plaintiff - Appellee,
v.
STEPHEN KIMBLE,
Defendant - Appellant.
No. 12-15315
D.C. No. 4:10-cv-00792-DCB
MEMORANDUM*
Appeal from the United States District Court
for the District of Arizona
David C. Bury, District Judge, Presiding
Argued and Submitted December 5, 2012
Submission vacated December 14, 2012
Resubmitted May 29, 2013
San Francisco, California
Before: O’SCANNLAIN, THOMAS and CALLAHAN, Circuit Judges.
FILED
JUL 16 2013
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.

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Appellant Stephen Kimble appeals the district court’s order granting
Appellee Marvel Entertainment, LLC’s (“Marvel”) motion for summary judgment
on his counterclaim for breach of an alleged verbal agreement. The district court
found that Kimble’s claim was barred by a subsequent Settlement Agreement,
which was unambiguous under New York law. It accordingly did not address
Marvel’s arguments that the claim was also barred by the doctrine of res judicata
and the applicable statute of limitations. We have jurisdiction pursuant to 28
U.S.C. § 1291. Because we find that the Settlement Agreement is ambiguous
under New York law and that we cannot affirm the district court’s decision on
either of the other grounds, we vacate the district court’s decision and remand for
further proceedings.
I
Marvel bears the burden of proving that the Settlement Agreement
discharged its obligations under the verbal agreement because its argument is
essentially an accord and satisfaction affirmative defense. See City of Amsterdam
v. Daniel Goldreyer, Ltd., 882 F. Supp. 1273, 1279-80 (E.D.N.Y. 1995). Under
New York law, we determine whether an agreement is ambiguous “by looking
within the four corners of the document, not to outside sources.” Riverside S.
Planning Corp. v. CRP/Extell Riverside, L.P., 920 N.E.2d 359, 404 (N.Y. 2009).
2

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“An ambiguity exists where the terms of the contract could suggest more than one
meaning when viewed objectively by a reasonably intelligent person who has
examined the context of the entire integrated agreement . . . .” Law Debenture
Trust Co. of N.Y. v. Maverick Tube Corp., 595 F.3d 458, 466 (2d Cir. 2010)
(internal quotation marks omitted).
The Settlement Agreement included an integration clause stating that “[t]his
Agreement contains the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous arrangements
or understandings with respect thereto.” It also, however, included a release clause
that explicitly excepted Marvel’s obligations under the Settlement Agreement and
its “obligations under the alleged verbal agreement.” Thus, on its face, the
Settlement Agreement is ambiguous. Contrary to Marvel’s contention, Marvel’s
act of agreeing to the Settlement Agreement did not discharge its obligations under
the verbal agreement if the Settlement Agreement, by its own terms, preserved
those very obligations.
Accordingly, we vacate and remand to the district court to allow the parties
an opportunity to introduce extrinsic evidence. If “the extrinsic evidence is so one-
sided that no reasonable factfinder could decide contrary to one party’s
interpretation,” the district court may grant summary judgment to that party. SCS
3

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Commc’ns, Inc. v. Herrick Co., Inc., 360 F.3d 329, 342 (2d Cir. 2004) (internal
quotation marks and citation omitted). If, however, that is not the case, the dispute
raises a question of fact that must be resolved by a jury.
II
Marvel also contends that we should affirm the district court’s decision
because Kimble’s claim is barred by res judicata. A settlement agreement,
however, “can limit the scope of the preclusive effect of a dismissal with prejudice
by its terms.” California v. Randtron, 284 F.3d 969, 975 (9th Cir. 2002) (quoting
U.S. ex rel. Barajas v. Northrop Corp., 147 F.3d 905, 911 (9th Cir. 1998)).
Accordingly, if the Settlement Agreement explicitly preserved Kimble’s claims
under the verbal agreement, res judicata would not apply, and we cannot affirm the
district court’s decision on this basis.
III
Marvel further argues that we should affirm the district court’s decision
because Kimble’s claim is barred by the statute of limitations. Under New York
law, in contract cases involving a claim for the payment of a sum of money, the
statute of limitations is “triggered when the party that was owed money had the
right to demand payment.” Hahn Auto. Warehouse, Inc. v. Am. Zurich Ins. Co.,
967 N.E.2d 1187, 1191 (N.Y. 2012); see also Sirico v. F.G.G. Prods., Inc., 896
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N.Y.S.2d 61, 66 (App. Div. 2010) (indicating that a contractual right to recurring
royalty payments accrues each time the obligation to pay is breached). On the
present record, it is not clear when Kimble would have had a right to demand
payment under the verbal agreement. Accordingly, it is also unclear whether his
claim is barred by the statute of limitations, and we cannot affirm the district
court’s decision on that basis either.
VACATED and REMANDED.
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