12-2360-cv
GEA Group AG v. Panda Ethanol, Inc.

                  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 Daniel Patrick Moynihan
United States Courthouse, 500 Pearl Street, in the City of New
York, on the 28th day of December, two thousand twelve.

PRESENT:    ROBERT D. SACK,
            DENNY CHIN,
            RAYMOND J. LOHIER, JR.,
                      Circuit Judges.

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GEA GROUP AG,
                        Plaintiff-Appellant,


                        -v.-                                 12-2360-cv

PANDA ETHANOL, INC.,
                        Defendant-Appellee.

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FOR PLAINTIFF-APPELLANT:              Michael D. Blechman, Michael A.
                                      Lynn, Kaye Scholer LLP, New York,
                                      NY and Steven S. Rosenthal, Kaye
                                      Scholer LLP, Washington, DC.

FOR DEFENDANT-APPELLEE:               Jonathan D. Pressment, Sarah
                                      Jacobson, Haynes and Boone, LLP,
                                      New York, N.Y.

            Appeal from a judgment of the United States District

Court for the Southern District of New York (Stanton, J.).
           UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment of the district court is AFFIRMED.

           Plaintiff-appellant GEA Group AG ("GEA") appeals from a

May 29, 2012 judgment dismissing its breach of contract claim

against Panda Ethanol, Inc. ("PEI").   GEA's complaint alleged

that PEI failed to make capital contributions to its wholly owned

subsidiary, Panda Hereford Ethanol, L.P. ("PHE"), as required by

a Sponsor Support Agreement ("SSA") among PEI, PHE, and a

syndicate of lenders (the "Lenders") who were financing PHE's

project to construct an ethanol plant in Texas.

           Pursuant to the SSA, PEI agreed to contribute

sufficient capital to PHE to enable it to maintain a $1 million

contingency at all times, as required by an amended financing

agreement between PHE and the Lenders (the "Second Amendment").

The SSA expressly stated that it was "a condition precedent to

the effectiveness of the Second Amendment and a material

inducement for the Lenders to agree thereto."   (SSA at 2).    PHE

subsequently went bankrupt, and GEA purchased from PHE's

successor, inter alia, any right of action held by PHE against
PEI relating to the construction project.

           The district court granted PEI's motion to dismiss,

concluding that because PHE obtained no rights against PEI under

the SSA, GEA could not have purchased any right to sue PEI under

the SSA.

           We review de novo the district court's grant of a

motion to dismiss under Rule 12(b)(6), accepting all factual

allegations in the complaint as true, and drawing all reasonable


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inferences in plaintiff's favor.    Forest Park Pictures v.

Universal Television Network, Inc., 683 F.3d 424, 429 (2d Cir.

2012).   "To survive a motion to dismiss, a complaint must contain

sufficient factual matter, accepted as true, to state a claim to

relief that is plausible on its face."    Ashcroft v. Iqbal, 556

U.S. 662, 678 (2009) (citation and internal quotation marks

omitted).    We assume the parties' familiarity with the underlying

facts, the procedural history of the case, and the issues

presented for review.
            Under New York law, which governs the SSA, "[t]he

fundamental, neutral precept of contract interpretation is that

agreements are construed in accord with the parties' intent."

Northwestern Mut. Life Ins. Co. v. Delta Air Lines, Inc. (In re

Delta Air Lines, Inc.), 608 F.3d 139, 146 (2d Cir. 2010) (quoting

Greenfield v. Philles Records, Inc., 98 N.Y.2d 562, 569 (2002))

(internal quotation marks omitted).    "[W]hen parties set down

their agreement in a clear, complete document, their writing

should . . . be enforced according to its terms."    Vt. Teddy Bear
Co. v. 538 Madison Realty Co., 1 N.Y.3d 470, 475 (2004) (quoting

W.W.W. Assocs. v. Giancontieri, 77 N.Y.2d 157, 162 (1990))

(internal quotation marks omitted).    "Such agreements should be

read as a whole to ensure that undue emphasis is not placed upon

particular words and phrases."    Bailey v. Fish & Neave, 8 N.Y.3d

523, 528 (2007) (citations omitted).
            Here, we conclude that the intent of the parties is

discernible from the face of the SSA.    Read as a whole, it is

clear that the SSA was entered into as a promise by PEI to the


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Lenders to ensure that PHE would comply with its obligations

under the Second Amendment.   The SSA expressly stated that its

execution and delivery was a "condition precedent to the

effectiveness of the Second Amendment and a material inducement

for the Lenders to agree thereto."    (SSA at 2).   The SSA also

provided that PEI would "cause [PHE] to comply" with the

requirement set forth in the Second Agreement that PHE maintain a

$1 million contingency.   (SSA § 2.1).   Far from constituting a

promise from PEI to PHE, these provisions, read together,

demonstrate as a matter of law that PEI was promising the Lenders

as a condition precedent to their further financing that it would

cause its subsidiary, PHE, to comply with its contingency

obligations.   Drawing all reasonable inferences in GEA's favor,

it is simply not plausible that the SSA conferred upon PHE the

right to sue its parent company, PEI.    Thus, like the district

court, we conclude that GEA failed to state a contract claim

because PHE could not have conveyed any right to sue PEI under

the SSA.

           We have considered GEA's remaining arguments and find
them to be without merit.   Accordingly, we AFFIRM the judgment of

the district court.

                               FOR THE COURT:
                               Catherine O'Hagan Wolfe, Clerk




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