14-2920-cv
Intercept Pharmaceuticals v. Howard

                                      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 28th day of August, two thousand fifteen.

PRESENT:

          JOSÉ A. CABRANES,
          ROSEMARY S. POOLER,
          DENNY CHIN,
                       Circuit Judges.


INTERCEPT PHARMACEUTICALS, INC.,

                    Plaintiff-Counter-Defendant-Appellee,

                    v.                                                    No. 14-2920-cv

CHRIS HOWARD,

                    Defendant-Counter-Claimant-Appellant.


FOR APPELLANT:                                              STUART M. GORDON, Mark A. Beckman,
                                                            Mercedes Colwin, James K. Holder, Gordon
                                                            & Rees LLP, New York, NY.

FOR APPELLEE:                                               ROBERT D. CULTICE, Michael J. Bayer, Wilmer
                                                            Cutler Pickering Hale and Dorr LLP, Boston,
                                                            MA; and Catherine M.A. Carrol, Wilmer
                                                            Cutler Pickering Hale and Dorr LLP,
                                                            Washington, D.C.
       Appeal from an August 6, 2014 judgment of the United States District Court for the
Southern District of New York (Alvin K. Hellerstein, Judge).

     UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the August 6, 2014 judgment of the District Court is AFFIRMED.

         Defendant Chris Howard appeals from a judgment entered in the District Court granting a
motion for judgment on the pleadings by plaintiff Intercept Pharmaceuticals, Inc. (“Intercept”).
Howard claims that he exercised his options for shares of Intercept’s stock by mailing in a check on
December 26, 2007. Intercept claims that it never received the check and therefore Howard has
failed to plead facts sufficient to state a claim for breach of contract. In holding that Howard’s
contract claim is barred by New York’s six-year statute of limitations for breach of contract actions,
the District Court did not address whether Howard had adequately pleaded a claim for breach of
contract.

        On appeal, Howard’s principal arguments are that (1) the District Court erred in its
application of New York’s statute of limitations, and (2) he adequately pleaded a plausible claim for
breach of contract. We assume the parties’ familiarity with the underlying facts and the procedural
history of the case.

                                            DISCUSSION

         We review de novo a district court’s decision to grant judgment on the pleadings. Karedes v.
Ackerley Group, Inc., 423 F.3d 107, 113 (2d Cir. 2005). “The standard for addressing a Rule 12(c)
motion for judgment on the pleadings is the same as that for a Rule 12(b)(6) motion to dismiss for
failure to state a claim.” Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir. 2006). On a motion to
dismiss a complaint under Rule 12(b)(6), a court assesses whether the complaint “contain[s]
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) (internal quotation marks omitted).

         The elements of a breach of contract claim in New York are: (1) the existence of a contract,
(2) performance by the party seeking recovery, (3) non-performance by the other party, and (4)
damages attributable to the breach. Marks v. New York Univ., 61 F. Supp. 2d 81, 88 (S.D.N.Y. 1999). In
an options contract, the party “attempting to validly exercise [the] option . . . must strictly adhere to
the terms and conditions of the option agreement.” Tomhannock, LLC v. Roustabout Resources LLC,
115 A.D.3d 1074, 1076 (N.Y. App. Div. 2014) (internal quotation marks omitted). Finally, to
withstand a motion to dismiss, the party seeking recovery must allege the essential terms of the
parties’ purported contract “in nonconclusory language.” Sud v. Sud, 211 A.D.2d 423, 424 (N.Y. App.
Div. 1995).




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         In the instant case, the agreements between Howard and Intercept explicitly provide that in
order for Howard to exercise his options, he had to ensure that Intercept received payment in full by
December 31, 2007. App. at 51 (“[I]f you timely sign and return this letter agreement, subject to
approval by the Company’s Board of Directors, you will have until 5:00 p.m. (New York City time)
on December 31, 2007 to exercise the vested portion of your options to purchase shares of the
Company’s common stock.”); id. at 18 (“Each election to exercise this option shall be in writing in
the form of notice attached hereto as Exhibit A, signed by the Participant, and received by the
Company at its principal office, accompanied by this agreement, and payment in full in the manner
provided in the Plan.”) (emphasis added). Despite this unambiguous requirement, Howard never
alleges that Intercept received his check by the deadline. Rather, Howard alleges that he mailed the
check and speculates that “[p]erhaps” it was “lost, misplaced or mishandled.” Id. at 58. Indeed, he
alleges that he “has no information” regarding whether his purported payment was received. Id. at
61. At best, Howard alleges (inconsistently) that the check was received sometime after the
December 31, 2007 deadline. Id. at 69 (“Howard was never informed . . . that Intercept had either
received the $54,000.00 check late or not at all . . . .”); id. at 70 (quoting email from Intercept
arguably acknowledging receipt after expiration period). Accordingly, taking Howard’s allegations to
be true, he has failed to plead sufficient facts establishing that he effectively exercised his stock
options in compliance with the terms of the governing agreements.

                                         CONCLUSION

       We have considered Howard’s remaining arguments and find them without merit.
Accordingly, we AFFIRM the August 6, 2014 judgment of the District Court.


                                              FOR THE COURT,
                                              Catherine O’Hagan Wolfe, Clerk of Court




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