FOR THE COURT: Catherine O'Hagan Wolfe, Clerk
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 3rd day of September, two thousand twenty. Present: ROSEMARY S. POOLER, PETER W. HALL, DENNY CHIN, Circuit Judges. Appearing for Plaintiff-Appellant: Gary E. Roth, Javerbaum Wurgaft Hicks Kahn Wikstrom & Sinins, P.C., Springfield, N.J. Appearing for Defendant-Appellee: Cara O'Sullivan, Kaufman Borgeest & Ryan LLP, New York, N.Y. Appeal from the United States District Court for the Southern District of New York (Abrams, J.).
ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of said district court be and it hereby is AFFIRMED.
Plaintiff-Appellant Byron K. Woodard appeals from the July 22, 2019 opinion and order of the United States District Court for the Southern District of New York (Abrams, J.) granting Reliance's 12(b)(6) motion to dismiss Woodard's claim for breach of the implied covenant of good faith and fair dealing. We assume the parties' familiarity with the underlying facts, the procedural history of the case, and the issues on appeal.
Woodard's employment with John Guest USA was governed by an executive agreement that guaranteed a $500,000 bonus if John Guest USA was acquired by another entity and Woodard was fired without cause within seven days after the acquisition's closing. In June 2018, Reliance closed on its acquisition of John Guest USA and fired Woodard without cause twenty-nine days later. Woodard alleges that Reliance breached the implied covenant of good faith and fair dealing because it had already decided to fire him before the expiration of the seven-day timeframe but ultimately delayed Woodard's termination in order to avoid paying the bonus.
The grant of a motion to dismiss is subject to de novo review. Allaire Corp. v. Okumus, 433 F.3d 248, 249-50 (2d Cir. 2006). "Implicit in every contract" under New York law "is a covenant of good faith and fair dealing." See Spinelli v. Nat'l Football League, 903 F.3d 185, 205 (2d Cir. 2018). The implied covenant precludes one of the contracting parties from taking any action that will destroy the rights of the other party to receive the benefit of the bargain. Id. However, the covenant "only impose[s] an obligation consistent with other mutually agreed upon terms in the contract. It does not add [] to the contract a substantive provision not included by the parties." Broder v. Cablevision Sys. Corp., 418 F.3d 187, 198-99 (2d Cir. 2005) (internal quotation marks and citations omitted).
We agree with the district court that Woodard has failed to assert a colorable claim. The provision at issue concerns the timing of Woodard's termination in the event of an acquisition, not the timing of the decision to terminate him. Woodard, a sophisticated business executive, bargained for special financial protection for the seven-day window following an acquisition. But under Woodard's theory, Reliance might be liable even if it waited years, rather than days or weeks, to fire him. Allowing Woodard's implied covenant claim to go forward would undo the contract's terms and create an independent contractual right that was never negotiated by the parties.
Furthermore, the implied covenant "does not extend so far as to undermine a party's general right to act on its own interests in a way that may incidentally lessen the other party's anticipated fruits from the contract." M/A-COM Sec. Corp. v. Galesi, 904 F.2d 134, 136 (2d Cir. 1990) (internal quotation marks and citation omitted). Thus, even assuming that Reliance purposefully waited to avoid having to pay Woodard the bonus, that conduct alone does not constitute a breach of the implied covenant in these circumstances.
We have considered the remainder of Woodard's arguments and find them to be without merit. Accordingly, the judgment of the district court hereby is AFFIRMED.
FOR THE COURT:
Catherine O'Hagan Wolfe, Clerk