author: KEARSE, Circuit Judge:

text:
    In re IONOSPHERE CLUBS, INC., Eastern Air Lines, Inc., and Bar Harbor Airways, Inc., doing business as Eastern Express, Debtors. EASTERN AIR LINES, INC., Plaintiff-Appellant, v. The INSURANCE COMPANY OF the STATE OF PENNSYLVANIA, Defendant-Appellee.
    No. 956, Docket 95-5038.
    United States Court of Appeals, Second Circuit.
    Argued Feb. 20, 1996.
    Decided June 5, 1996.

      Thomas J. Jones, Tallahassee, Florida (Susan L. Turner, Holland & Knight, Tallahassee, Florida, Daniel J. King, Michael E. Norton, King & Spalding, New York City, on the brief), for Plaintiff-Appellant.
    Laurence J. Kaiser, New York City (Fisher, Fischer & Berger, New York City, on the brief), for Defendant-Appellee.
    Gregory B. Stites, Kansas City, Missouri, filed a brief, for amicus curiae National Association of Insurance Commissioners in support of Appellant.
    Dennis Silverman, Tallahassee, Florida, filed a brief, for amicus curiae Florida Department of Insurance in support of Appellant.
    Before: NEWMAN, Chief Judge, KEARSE, Circuit Judge, and WEXLER, District Judge.

       Honorable Leonard D. Wexler, of the United States District Court for the Eastern District of New York, sitting by designation.

   KEARSE, Circuit Judge:

Plaintiff Eastern Air Lines, Inc. (“Eastern”), appeals from a final judgment of the United States District Court for the Southern District of New York, John E. Sprizzo, Judge, affirming an order of the bankruptcy court that dismissed Eastern’s complaint against defendant The Insurance Company of the State of Pennsylvania (“ISOP”) for the immediate refund of a premium overpayment under the terms of an insurance contract and of an additional amount of premium that allegedly exceeded the rate permitted by the State of Florida. The district court affirmed the bankruptcy court’s grant of summary judgment in favor of ISOP dismissing the complaint on the grounds that the insurance contract (a) was enforceable and (b) did not require ISOP to refund Eastern’s premium overpayment prior to January 31, 1994. On appeal, Eastern contends that it was entitled to judgment in its favor principally on the ground that the challenged premium term of the contract was invalid because ISOP failed to obtain Eastern’s consent to that term as required by Florida law and failed to file the contract with the pertinent Florida regulatory agency. For the reasons that follow, we disagree and affirm the judgment of the district court.

I. BACKGROUND

The present controversy centers on workers’ compensation insurance needed by Eastern in order to comply with various state laws and with provisions of its labor contracts. The relevant events are not in dispute.

A. The Negotiations and the Insurance Contract

In January 1989, Eastern’s insurance broker solicited from a number of insurance companies proposals for a nationwide worker’s compensation insurance policy to become effective upon the expiration of Eastern’s existing policy some three weeks thence. At that time it was common knowledge that Eastern was facing mounting labor and financial difficulties, and no insurance carrier was willing to issue to Eastern a “guaranteed cost” plan under which premium payments would be established chiefly on a prospective basis without regard to actual losses incurred. Instead, each carrier proposed a loss-sensitive plan, under which the premium would be calculated largely retrospectively by reference to Eastern’s actual loss claims.

ISOP proposed a loss-sensitive plan calling for Eastern to pay at the beginning of the coverage period a premium deposit, in cash and by letter of credit, totaling approximately $23 million, which approximated Eastern’s anticipated covered losses (including associated expenses). If it turned out that actual covered losses were significantly below the amount deposited, Eastern would be entitled to a partial refund. If, instead, it turned out that such losses significantly exceeded the initial deposit, Eastern would be required to pay additional premium; however, regardless of actual loss experience, the proposed plan set a ceiling, expected to be approximately $28 million, on Eastern’s premium (the “maximum premium”). The maximum premium was to be computed retrospectively essentially by multiplying Eastern’s actual payroll by two factors: (a) ISOP’s “filed rates,” and (b) a “maximum premium factor” of 1.6. Filed rates are, basically, multipliers that states require an insurer to file with state regulatory agencies; the insurer then multiplies the applicable filed rates by the insured’s payroll to yield a figure known as “standard audited premium.” Thus, ISOP’s proposed policy provided in essence that the formula for calculating Eastern’s maximum premium would be {Eastern’s actual payroll} x {ISOP’s filed rates} x 1.6; i.e., the maximum premium would be 160% of ISOP’s “standard audited premium.”

Eastern was amenable to ISOP’s proposal, except that it could not obtain a sufficiently large letter of credit to make an immediate deposit of $23 million. Following negotiations, ISOP agreed to accommodate Eastern’s financial condition by lowering the initial deposit amount, spreading deposit payments over a 10-month period, and forgoing any requirement that Eastern post collateral. In return for these concessions, Eastern agreed that if it were eventually entitled to a refund, ISOP would not be required to refund the paid-in premium, at least up to the amount of the maximum premium, prior to January 31, 1994.

Accordingly, Eastern and ISOP entered into a contract entitled “THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA WORKERS COMPENSATION DIVIDEND PLAN RATING AGREEMENT” (the “Plan” or “ISOP-Eastem Plan”), under which ISOP agreed to provide Eastern with nationwide workers’ compensation coverage for the period February 1, 1989, to February 1, 1990. With respect to Eastern’s premium deposit, the Plan provided that the “Expected Total Premium” was “$21,000,000” (Plan Addendum No. 1, at 1), of which $3,500,000 was to be paid by Eastern on February 1, 1989, with the remaining $17,500,000 paid in 10 equal monthly installments beginning on March 1, 1989. The Plan stated that the “Maximum Premium Factor” was “1.60.” (Plan at 1.)

With respect to the retrospective calculations of loss and the final premium amount payable by Eastern, the Plan provided, in pertinent part, as follows:

4. PREMIUM ADJUSTMENT PROCEDURES
After the initial twelve (12) months, losses will be examined quarterly. Ultimate loss levels will be estimated using the Table of Loss Development Factors indicated below. Final Premium and Dividend (if any) will be calculated and recorded. If at anytime, [sic ] the Final Premium indicated by these calculations exceeds the Paid-in Premium, the additional premium will be immediately billed, subject to Maximum Premium Limitations. All billings will be due and payable within thirty (30) days.
5. PLAN TERM
The term of this plan is five (5) years. At the expiration of the term, the reported incurred losses will be adjusted to ultimate level using the appropriate Loss Development Factor, and will be considered final.
6. PLAN TERMINATION
Upon receipt of the January 31, 1994 Loss Report, the calculation of final premium and dividend (if any) will be made according to the formula contained in this plan. Any additional premium, subject to maximum premium limitation, will be immediately due and payable. Any dividend or return of paid-in premium will be immediately credited and the account will be closed.

(Plan Addendum No. 1, at 1-2.)

B. The Florida Statute

The largest portion of the risk covered under the Plan was in Florida, as the covered Florida residents outnumbered the covered residents of all other states combined. Florida has an elaborate insurance regulatory scheme, see generally Fla.Stat.Ann. § 627.011, et. seq., designed chiefly “to protect policyholders and the public against the adverse effects of excessive, inadequate, or unfairly discriminatory insurance rates,” id. § 627.031(2). To this end, each insurance company doing business in Florida and providing workers’ compensation coverage for residents of Florida is required to, inter alia, file with the Florida Department of Insurance (“FDOI” or the “Department”) every rating plan — i.e., the methodology by which the premium for an insurance policy is calculated — and every rating plan modification that the insurer proposes to use. See id. § 627.091(1). Such plans and plan modifications do not become effective as filed rates unless and until FDOI approves. See id. § 627.101(1).

Once approved, the filed rates must be adhered to by the insurer unless there is compliance with Fla.Stat.Ann. § 627.171. See id. § 627.211. At the times pertinent to this litigation, § 627.171 provided that a rate in excess of the otherwise applicable filed rate could be used with the “written consent of the insured filed with the insurer.” Id. § 627.171 (effective prior to October 1,1989). FDOI has taken the position that in order to comply with § 627.171, an insurer was required to have the insured sign a separate document that mentioned the statute and stated that the insured understood that he was agreeing to pay rates higher than those theretofore filed. (Deposition of James D. Watford, actuary in FDOI’s Division of Insurer Services, Bureau of Property and Casualty Forms and Rates, March 12, 1993, at 42-43.)

The Florida statute provides that if a term of an insurance policy violates one of these statutory provisions, the policy is not void but rather must be construed to conform with the statute. . See Fla.Stat.Ann. § 627.418. The ISOP-Eastem Plan was not filed with FDOI, and Eastern did not sign a separate form indicating its consent to a premium of 160% of the standard audited premium.

C. The Present Litigation

1. Proceedings in the Bankruptcy Court

Some five weeks after the Plan became effective, Eastern suffered a major labor strike and, on March 9, 1989, voluntarily petitioned in the Southern District of New York for relief under Chapter 11 of the Bankruptcy Code, 11 U.S.C. § 101 et seq. (the “Code”). Eastern had made its initial payment of $3,500,000 as required by the Plan but had failed to make the $1,750,000 payment due on March 1.

Under the automatic-stay provisions of the Code, see 11 U.S.C. § 362(a), ISOP was prohibited from seeking judicial relief from its obligation to provide the agreed insurance coverage to Eastern on account of Eastern’s nonpayment of premium. On April 10, 1989, ISOP moved in the bankruptcy court for relief from the automatic stay, asking the court either (a) to permit ISOP to cancel the Plan, or (b) to order Eastern, as debtor-in-possession, to make the March 1 and April 1 installment payments and either assume or reject the Plan in accordance with 11 U.S.C. § 365. Thereafter, ISOP and Eastern negotiated a revised payment schedule, pursuant to which, instead of 10 monthly payments of $1,750,000 each, Eastern would be allowed to make 18 monthly payments of $972,222.22 each.

In all other respects, the Plan was to remain unchanged. According to Eastern senior executive James McGuinness, who participated in the renegotiation, Eastern made no effort to renegotiate the maximum premium formula; nor was there any discussion of altering the time at which Eastern, if it overpaid, would be entitled to receive its refund. (Deposition of James McGuinness, February 1, 1993 (“McGuinness Dep.”) at 8-9.)

The parties’ revised agreement was approved by the bankruptcy court in a consent order dated November 8,1989 (“Consent Order” or “Order”), which provided in pertinent part as follows:

[I]t appearing that since March 9, 1989, the date on which Eastern filed a voluntary petition under chapter 11 of the Bankruptcy Code, ISOP has provided Eastern with the insurance coverage required by the terms of the [Plan], including, without limitation, defending and indemnifying Eastern for and against workmen[’s] compensation ... claims; and it further appearing that, as of November 1, 1989, Eastern was obligated to make premium payments under the [Plan] in the aggregate amount of $15,750,000; and Eastern and ISOP having agreed to a payment schedule with respect to past and future premium payments under the [Plan] which provides for the monthly premium payment of $972,222 for the period from March 1, 1989 up to and including August 1, 1990, together with interest accrued on all' outstanding past due premium payments at the rate of nine percent (9%) per annum; and the Court having determined that the revised payment schedule is in the best interest of Eastern, its estate, creditors and equity holders; and good and sufficient cause appearing therefor; it is hereby
ORDERED that the Motions, as they relate to the assumption of the [Plan] be and they hereby are, granted; and it is further
ORDERED that, except as modified herein, the [Plan] be, and ... hereby [is], assumed pursuant to section 365(a) of the Bankruptcy Code____

(Consent Order at 2-3.) The Order directed Eastern to make a payment of $8,749,998 (ie., the total payments due for March 1, 1989, through November 1, 1989, under the revised agreement), plus interest, within three business days of the entry of the Order; and it ordered Eastern to pay ISOP $972,222 on December 1, 1989, and on the first of each month thereafter through August 1, 1990. The court stated that “such payments shall constitute adequate assurance of Eastern’s future performance under the [Plan]....” Id. at 3.

In March 1991, after the coverage period under the Plan had expired and Eastern had made premium payments totaling $21 million in compliance with the revised payment schedule, ISOP audited Eastern’s payroll. Due predominantly to the labor strike, which had dramatically reduced Eastern’s work force and consequently its payroll, the maximum premium Eastern was obligated to pay {ie., 160% of standard audited premium based on filed rates and payroll) was less than $12 million. Thus, Eastern’s premium deposit exceeded the maximum premium by some $9 million. Moreover, the claims against Eastern did not decline in proportion to its payroll decline. The covered claims exceeded $18 million and hence exceeded Eastern’s maximum premium by more than $6 million.

In March 1992, after Eastern’s bankruptcy trustee (“Trustee”), who had been appointed in April 1990, received ISOP’s audit results, he demanded that ISOP' immediately refund the amount by which the premium Eastern had paid exceeded the maximum premium (the “contractual premium overpayment”). In response, ISOP, relying principally on Paragraphs 5 and 6 of Plan Addendum No. 1, quoted in Part I.A above, stated that it would refund the $9 million contractual premium overpayment, but not until 1994.

In September 1992, the Trustee filed an adversary proceeding in bankruptcy court to recover the contractual premium overpayment and to challenge the formula by which Eastern’s maximum premium was set in the Plan. The Trustee contended principally that the Plan was a rating plan governed by the Florida statute; that ISOP was therefore required to file- the Plan with FDOI; that under Florida law ISOP was prohibited, unless Eastern consented in a separate consent form, from charging a maximum premium based on any rate higher than ISOP’s previously filed rates; that Eastern had not so consented; and that the Plan’s provision for a maximum premium of 160% of the standard audited premium based on filed rates was therefore invalid. The Trustee thus sought to hold ISOP to a maximum premium calculated without the 1.6 multiplier provided for in the Plan, and to recover a total of some $13 million. He also argued that under the provisions of Paragraph 4 of Plan Addendum No. 1, ISOP was required to refund to Eastern the contractual premium overpayment immediately.

ISOP moved for summary judgment. It argued, inter alia, (a) that the Plan was not subject to the Florida requirements of filing and written consent because it was not a rating plan but was exclusively a dividend plan, (b) that even under Florida law, Eastern’s negotiation of and agreement to the written contract specifying the 1.6 multiplier constituted the necessary written consent to a premium higher than ISOP’s previously filed rates, and (c) that in any event, no provision of the Florida statute or the contract required the return of Eastern’s overpayment prior to January 31,1994.

In an oral decision issued on June 15,1993, the bankruptcy court granted ISOP’s motion, ruling that although Florida law was controlling, the Plan was not a rating plan and hence did not fall within the scope of the Florida provisions that prohibited such plans and/or required filings with FDOI. The court found that in agreeing to the Plan, the parties had clearly and unambiguously agreed that Eastern’s premium would be calculated by applying a 1.6 multiplier to ISOP’s standard audited premium and that the refund of any contractual premium overpayment would not be due before January 31, 1994.

2. The District Court’s Decision

Eastern appealed the bankruptcy court’s ruling to the district court, pursuing its contentions that, under the Florida statute, ISOP was not permitted to charge Eastern a maximum premium based on a rate higher than filed rates and was required to return any premium overpayment immediately. The district court, in an opinion dated March 27, 1995, and reported sub nom. Shugrue v. Insurance Co. of Pennsylvania, 180 B.R. 53 (S.D.N.Y. 1995) (“District Court Opinion”), affirmed the dismissal of Eastern’s claims, though on grounds different from those adopted by the bankruptcy court. The district court found that New York law, which did not impose requirements similar to those of the Florida statute, was applicable; but, assuming arguendo that Florida law applied and that the Plan was a rating plan within the scope of the Florida statute, the district court concluded that Eastern had adequately consented to the Plan’s provision for a maximum premium of 160% of ISOP’s standard audited premium. The court further concluded that, even if there had not been full compliance with the Florida statute’s procedural formalities, Eastern was nonetheless equitably estopped from attempting to pay a premium based on a rate below that to which it had agreed both originally and in the context of the bankruptcy proceeding. The court reasoned in pertinent part as follows:

An argument is made here by [ISOP] that ... a[] provision of Florida law .-.. allows a contract to be filed which contains a rate other than that specified in the filed rate, where there is consent of the parties. ... However, [Eastern] argues that for that provision to apply, some written consent other than that which is embodied in the contract itself is required.
[ISOP] responds to that argument by contending that there can be no rational basis for not finding consent here because consent is established not only by the contract itself but also by the circumstance that [Eastern] again independently consented, when, after the bankruptcy petition was filed, the trustee had the opportunity to disaffirm the contract but instead sought the authority of the Bankruptcy Court here in New York, on the record, to ratify the provisions of the contract at issue.
I find [ISOP’s] argument more persuasive on that issue. Even if I were to assume arguendo that some consent other than the contract would be required, I think under the facts presented here it is clear that there is not only written consent to the rate in the contract itself, but also that an additional consent was made in open court. For both of those reasons I cannot reach the conclusion that the failure to file a separate consent document with both the insured and the regulating agencies affords a basis to provide the relief appellant sought in its motion for summary judgment.
Moreover, I think that well-settled principles of estoppel dictate that where a party seeks the benefits of a contract, it cannot disaffirm its burdens. Warren v. Hudson Pulp & Paper Corp., 477 F.2d 229, 236 (2d Cir.1973); Fineberg v. E.B. Kline, 542 So.2d 1002, 1004 (Fla.Dist.Ct.App.3d Dist.1988)....
The Court finds, therefore, that there was adequate consent to a rate other than the filed rate, and that therefore failure to file the rate as set forth in the contract with the rating agencies did not violate Florida law. In any event, principles of estoppel foreclose the issue of consent being raised as a basis to challenge a contract the trustee has chosen to affirm.

District Court Opinion, 180 B.R. at 55-56.

Finding the Plan’s language “unambiguous,” the district court also rejected Eastern’s contention that ISOP was required to refund the contractual premium overpayment immediately after learning the results of the 1991 audit, stating that

the unambiguous language of the contract supports [ISOP’s] view that there was no requirement to pay back premiums prior to ... January 31, 1994. I think the language relied upon by [Eastern] does not support [its] interpretation.... The Court finds no merit to [Eastern’s] argument that somehow the premiums were required to be paid back sooner based upon provision 4 of the contract as opposed to provision 6 of the contract, which the Court finds to be clearly applicable.

Id. at 57 (footnotes omitted).

II. DISCUSSION

On appeal to this Court, Eastern pursues its contentions that ISOP’s failure to file the Plan with FDOI and to obtain Eastern’s consent to the higher rate in a separate consent document violated Florida law, that in light of those violations the Plan must be treated as if the premium payable by Eastern were no greater than ISOP’s standard audited premium based on its previously filed rates, and that the overpayment of premium was required to be refunded immediately. FDOI, as amicus curiae, has filed a brief in which it, inter alia, endorses Eastern’s contentions that Florida law required ISOP to file the Plan and seek approval of the Department. FDOI also states that it likely would not have approved the Plan had it been properly submitted, that the provision for a 1.6 multiplier should thus be deemed a nullity, and that ISOP was required to return Eastern’s overpayment as soon as it became aware that Eastern had overpaid.

We find in these contentions no ground for reversal. In light of the facts that Eastern, in its bankruptcy proceeding, persuaded ISOP to renegotiate the Plan, with modifications only of Eastern’s payment schedule and without challenge to the Plan’s maximum premium formula, and persuaded the bankruptcy court to permit Eastern to assume the Plan as renegotiated, we conclude that even if the Florida statute should ordinarily be interpreted as urged by Eastern and FDOI, the district court correctly affirmed the dismissal of Eastern’s claims.

A. The Bankruptcy Code and Equitable Principles

A bankruptcy debtor, or its trustee, is allowed, with the permission of the bankruptcy court, to assume an executory contract, ie., a contract “on which performance remains due to some extent on both sides,” National Labor Relations Board v. Bildisco & Bildisco, 465 U.S. 513, 522 n. 6, 104 S.Ct. 1188, 1194 n. 6, 79 L.Ed.2d 482 (1984) (internal quotation marks omitted), and thereby prevent the other contracting party from terminating the contract. See 11 U.S.C. § 365 (rights and powers of trustee); id. § 1107(a) (giving substantially identical rights and powers to debtor-in-possession). If the debtor is in default on the contract, it will not be allowed to assume the contract unless, at the time of the assumption it, inter alia, (a) cures, or provides adequate assurance that it will promptly cure, the default, and (b) provides adequate assurance of its future performance of its obligations under the contract. See id. § 365(b). Congress’s intent in imposing these conditions on the ability of the debtor to assume the contract was “to insure that the contracting parties receive the full benefit of their bargain if they are forced to continue performance.” In re Superior Toy & Manufacturing Co., 78 F.3d 1169, 1174 (7th Cir.1996) (“ ‘If the trustee is to assume a contract or lease, the court will have to insure that the trustee’s performance under the contract or lease gives the other contracting party the full benefit of his bargain.’ ” (quoting S.Rep. No. 989, 95th Cong., 2d Sess. 59 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5845; H.R.Rep. No. 595, 95th Cong., 2d Sess. 348 (1978), reprinted in 1978 U.S.C.C.A.N. 5963, 6304-05.)).

The bankruptcy court is essentially a court of equity. See, e.g., National Labor Relations Board v. Bildisco & Bildisco, 465 U.S. at 527, 104 S.Ct. at 1196-97; Bank of Marin v. England, 385 U.S. 99, 103, 87 S.Ct. 274, 277, 17 L.Ed.2d 197 (1966). Its “proceedings [are] inherently proceedings in equity,” Local Loan Co. v. Hunt, 292 U.S. 234, 240, 54 S.Ct. 695, 697, 78 L.Ed. 1230 (1934), and it “applies the principles and rules of equity jurisprudence,” Pepper v. Litton, 308 U.S. 295, 304, 60 S.Ct. 238, 244, 84 L.Ed. 281 (1939), including principles of estoppel, see generally, e.g., Momentum Manufacturing Corp. v. Employee Creditors Committee, 25 F.3d 1132, 1136 (2d Cir.1994) (debtor that had represented that employees would receive severance payments, and thereby obtained needed votes from the employees in favor of reorganization plan, was estopped from amending plan to eliminate severance); In re Garfinkle, 672 F.2d 1340, 1346-48 (11th Cir.1982) (purchasers estopped from seeking recovery of deposit made pursuant to court-approved contract). The existence of a complex statutory scheme governing the underlying contracts does not necessarily impede the court’s exercise of its equitable powers. See, e.g., Momentum Manufacturing Corp. v. Employee Creditors Committee, 25 F.3d at 1137 (bankruptcy court’s power to find an equitable estoppel not preempted by ERISA).

Equitable estoppel is grounded on notions of fair dealing and good conscience and is designed to aid the law in the administration of justice where injustice would otherwise result. See, e.g., Readco, Inc. v. Marine Midland Bank, 81 F.3d 295, 301 (2d Cir.1996); Marine Transportation Services Sea-Barge Group, Inc. v. Python High Performance Marine Corp., 16 F.3d 1133, 1138 (11th Cir.1994). The doctrine is “imposed by law in the interest of fairness to prevent the enforcement of rights which would work fraud or injustice upon the person against whom enforcement is sought and who, in justifiable reliance upon the opposing party’s words or conduct, has been misled into acting upon the belief that such enforcement would not be sought.” Readco, Inc. v. Marine Midland Bank, 81 F.3d at 301.

One species of equitable estoppel is promissory estoppel, which may be applied where there has been a clear and unambiguous promise, reasonable and foreseeable reliance on the promise, and an unconscionable injury as a result of the reliance. See, e.g., id.; Merex A.G. v. Fairchild Weston Systems, Inc., 29 F.3d 821, 824 (2d Cir.1994), cert. denied, — U.S. -, 115 S.Ct. 737, 130 L.Ed.2d 639 (1995); Arcadian Phosphates, Inc. v. Arcadian Corp., 884 F.2d 69, 73 (2d Cir.1989); Pinnacle Port Community Association v. Orenstein, 872 F.2d 1536, 1543 (11th Cir.1989); W.R. Grace & Co. v. Geodata Services, Inc., 547 So.2d 919, 924 (Fla.1989); Mount Sinai Hospital of Greater Miami, Inc. v. Jordan, 290 So.2d 484, 486 (Fla.1974). “Based on equitable principles, once a party accepts the proceeds and benefits of a contract, that party is estopped from renouncing the burdens the contract places upon him.” Fineberg v. Kline, 542 So.2d 1002, 1004 (Fla.Dist.Ct.App.3d Dist.1988), rev. denied, 553 So.2d 1165 (Fla.1989). Indeed, where breach of the promise causes unconscionable injury, the principle of promissory estoppel allows enforcement of the promise even in the absence of an enforceable contract. See Crown Life Insurance Company v. McBride, 517 So.2d 660, 662 (Fla.1987); D & N Boening, Inc. v. Kirsch Beverages, Inc., 99 A.D.2d 522, 524, 471 N.Y.S.2d 299, 302 (2d Dep’t), aff'd, 63 N.Y.2d 449, 483 N.Y.S.2d 164, 472 N.E.2d 992 (1984).

Where a debtor has been permitted by the bankruptcy court to assume a contract pursuant to § 365, equitable estoppel principles may be applied by the court to deny the debtor permission to escape its obligation to perform the contract it assumed. For example, in In re Superior Toy & Manufacturing Co., 78 F.3d 1169, the debtor (“Superior Toy”) held an exclusive license from the defendant (“Playtex”) to distribute a line of trademarked toys throughout North America; as debtor-in-possession, Superior Toy successfully petitioned the bankruptcy court pursuant to § 365 for permission to assume the licensing agreement. For the next two years, Superior Toy enjoyed the exclusive rights conferred by the license. Thereafter, a trustee appointed for Superior Toy commenced an action under 11 U.S.C. § 547, claiming that prebankruptcy payments made to Playtex pursuant to the license constituted a preference and should be returned to Superior Toy. The bankruptcy, district, and appellate courts rejected the trustee’s contention that a bankruptcy debtor can assume a contract, enjoy its benefits, and then compel return of the payments the debtor made pursuant to the contract. The court of appeals ruled that under the Code “[a]n assumption order divests the trustee of subsequent claims to monies paid under the contract whether they were paid prepetition or postpetition,” 78 F.3d at 1174, and further reasoned that

[t]he trustee’s predecessor assumed the license agreement with court approval. Playtex honored the contract, and allowed Superior Toy to retain an exclusive license. The bankruptcy estate benefitted from the contract for almost two years. The trustee cannot now come forward and argue that the contract is not executory and that the payments to Playtex should be returned. To hold otherwise, without some allegation of improper conduct by the parties, would be unfairly prejudicial to Playtex.

Id. See also Seidle v. GATX Leasing Corp., 778 F.2d 659 (11th Cir.1985) (after parties entered into a court-approved stipulation pursuant to 11 U.S.C. § 1110, which permits debtor-in-possession to retain possession of equipment by curing defaults and making the required payments, trustee is precluded as a matter of law from bringing a preference suit under § 547 to recapture prepetition contract payments); Lewis Industries v. Barham Construction Inc., 878 F.2d 1230, 1231 (9th Cir.1989) (where bankruptcy court has entered an order granting debtor’s petition to assume a contract, debtor is estopped from later claiming a breach of which it knew but which it failed to raise at the assumption hearing); In re J.F. Hink & Son, 815 F.2d 1314, 1318 (9th Cir.1987) (where lessor represented to the debtor and the court that he consented to the terms of a lease, and thus “induced reliance by the other principal parties and by the court itself,” lessor was es-topped to “deny that he accepted all the terms”). In sum, the bankruptcy court “will act to assure that fraud will not prevail, that substance will not give way to form, that technical considerations will not prevent substantial justice from being done.” Samuel v. Baitcher, 781 F.2d 1529, 1533 (11th Cir.1986) (internal quotation marks omitted). “The notion that a party in bankruptcy can be permitted to thwart a bankruptcy order which has been conceived and fostered through its participation has been vigorously rejected.” In re J.F. Hink & Son , 815 F.2d at 1318.

B. The Present Case

These principles of estoppel were plainly applicable in the present case and were properly applied by the district court. There can be no question that the Plan was of benefit to Eastern. As McGuinness testified, during the negotiation of the revised payment schedule “there was a whole question of affirmation or rejection of the contract with respect to workers compensation, in order to continue operating in the various states. It was something that we were required to have, and also, for various contractual purposes under our labor agreements.” (McGuinness Dep. at 6.)

In renegotiating the premium payment schedule, Eastern made no effort whatever to alter the formula for computing the maximum premium; according to McGuinness, that question was not even discussed. In seeking the bankruptcy court’s approval for its assumption of the renegotiated Plan, which modified only the premium payment schedule, Eastern made no claim whatever that the Plan violated Florida law, or that the 1.6 multiplier was invalid, or that Eastern had not consented to the 1.6 multiplier. Eastern has not claimed that it was unaware of the fact that the Plan called for a maximum premium that exceeded ISOP’s previously filed rates. Nor would a claim of ignorance be plausible, for the formula stated in the Plan expressly called for those rates to be multiplied by “1.60.”

Nor is there any question that allowing Eastern to alter the premium formula to which it agreed would cause ISOP substantial prejudice. Even without the adjustment Eastern seeks, ISOP suffered a loss of some $6 million as a result of the facts that (a) Eastern’s decline in payroll resulted in a maximum premium of $12 million, ie., less than half the $28 million anticipated, and (b) the claims to be paid by ISOP, which (with associated expenses) were originally expected to total some $23 million, did not decline proportionately and totaled more than $18 million. If Eastern were to succeed in having its maximum premium calculated without the 1.6 multiplier to which it agreed, ISOP’s losses would be increased by some $4 million.

Further, during the period of the renegotiation and submission of the revised agreement to the bankruptcy court for approval of its assumption by Eastern, Eastern was well aware of the patterns that would lead ISOP to suffer losses as a result of the contract. First, as McGuinness testified, “In March of 1989, the company went into bankruptcy. We experienced, as you can imagine, dramatic changes in our work force” (McGuinness Dep. at 5-6); as of March 9, “the magic date, our world changed radically. Our work force dropped tremendously, and the premiums that we were paying, obviously, related to a much larger work force” (id. at 7). Since Eastern’s payroll was a key factor in the formula, that dramatic decline meant that Eastern’s maximum premium would likewise decline dramatically. Second, Eastern was aware that workers’ compensation claims would not decline correspondingly. McGuinness testified that, “It appeared that there had been a large number of cases filed immediately prior to the strike. Those persons, who contemplated going out on strike, and possibly being out on the street for some lengthy period, had filed an inordinate number of cases.” (Id. at 10.) Thus, when Eastern renegotiated the payment schedule, it was aware that its payroll, and hence its maximum premium, was substantially lowered and that the number of claims would be disproportionately high.

In sum, Eastern apparently could not meet the premium payment schedule originally called for by the Plan; yet it needed workers’ compensation coverage in order to continue to operate. Promising to perform its obligations under the Plan with only the payment schedule altered, and remaining silent as to the contentions advanced in this litigation that it had not adequately given its consent to the 1.6 multiplier provided by the Plan, that that multiplier was unenforceable, and hence that its maximum premium should be less than the amount called for by the Plan, Eastern persuaded ISOP to agree to a relaxed premium payment schedule and to continue to provide insurance coverage. It similarly persuaded the bankruptcy court to approve Eastern’s assumption of the renegotiated Plan pursuant to § 365, under which the bankruptcy court could not allow Eastern to assume the Plan unless the court were adequately assured that Eastern itself would perform under the renegotiated Plan. If Eastern wished to eliminate the 1.6 multiplying factor to which it had agreed, which could only increase ISOP’s already predictable substantial losses, it was incumbent upon Eastern to make that disclosure to ISOP during the renegotiations and to the bankruptcy court before obtaining that court’s approval for Eastern’s assumption of the renegotiated Plan as written, without the elimination of that factor. We conclude that the district court properly held that Eastern, by reason of its conduct in renegotiating with ISOP and in securing judicial approval of the renegotiated agreement, was estopped from opposing enforcement of the agreement as renegotiated and as judicially approved.

We also agree with the district court, substantially for the reasons stated in its opinion, that under the terms of the Plan ISOP was not required to refund the contractual premium overpayment to Eastern prior to January 31,1994.

CONCLUSION

We have considered all of Eastern’s contentions on this appeal and have found in them no basis for reversal. The judgment of the district court is affirmed.


source: Caselaw Access Project

author: KEARSE, Circuit Judge.

license: Public Domain

text:
    Robert J. RULE, Plaintiff-Appellant, v. BRINE, INC., also known as W.H. Brine Company, and William H. Brine, Jr., Defendants-Appellees.
    No. 1289, Docket 95-7986.
    United States Court of Appeals, Second Circuit.
    Argued Feb. 21, 1996.
    Decided June 5, 1996.

      Rodney A. Brown, New York City (Eileen Fox, Brown & Fox, New York City, on the brief), for Plaintiff-Appellant.
    Andrew M. Calamari, New York City (Elyse D. Echtman, Donovan Leisure Newton & Irvine, New York City, on the brief), for Defendants-Appellees.
    Before NEWMAN, Chief Judge, KEARSE, Circuit Judge, and WEXLER, District Judge.

       Honorable Leonard D. Wexler, of the United States District Court for the Eastern District of New York, sitting by designation.

   KEARSE, Circuit Judge.

Plaintiff Robert J. Rule appeals from a judgment of the United States District Court for the Eastern District of New York, Manuel L. Real, Judge , dismissing his amended complaint seeking damages principally for breach of contract or unjust enrichment in connection with his designs of equipment for use in the sport of lacrosse. The district court granted summary judgment dismissing the amended complaint on the ground that Rxde’s claims depended on the existence of an agreement by defendant Brine, Inc. to pay Rule “reasonable royalties” and that Rule’s testimony in deposition and at an evidentiary hearing was insufficient as a matter of law to support an inference that there was such an agreement. On appeal, Rule contends principally that summary judgment was inappropriate because there were genuine issues of material fact to be tried. For the reasons that follow, we vacate the judgment and remand for trial.

I. BACKGROUND

Rule began playing lacrosse in high school in 1964, was an All-American in college, and was the starting goaltender on a team that represented the United States and won the world championship in 1974. Since 1973, he has been a high-school lacrosse coach. In the mid-1970s, based on his experiences as a goaltender and his knowledge of the rules applicable to the specifications for lacrosse sticks, Rule began developing a novel design for a goaltender stick.

At all pertinent times, Brine, Inc. or its predecessor W.H. Brine Company (collectively “Brine” or the “Company”) was engaged in the manufacture and sale of sporting goods, including lacrosse-related products. Defendant William H. (“Bill”) Brine, Jr., and his brother Peter Brine (collectively “the Brines”) were officers of Brine and ran the Company. In 1976, the Brines got one of Rule’s former teammates to introduce them to Rule.

Rule discussed with the Brines his design for the new goaltender stick, showed them a small clay model, and explained the reasoning behind the new design. William Brine opined that Rule’s design was patentable. Rule and the Company entered into a relationship lasting more than a decade, during which Rule developed goaltender sticks and other lacrosse-related products on which Brine obtained seven patents naming Rule as the inventor. Pursuant to negotiations described in greater detail in Part I.B. below, Rule assigned his rights in these inventions to Brine, which manufactured and sold the products and paid Rule various sums, to wit, $200/month from 1975 to 1977, $400/month from 1977 to 1979, and $675/month from 1979 to 1990.

Toward the end of this period the relationship deteriorated, and in 1990 Brine stopped making payments to Rule. Brine continued, however, to manufacture and sell the patented products that had been developed by Rule. In 1991, Rule commenced the present action. As amended, the complaint alleged principally that Rule had assigned his rights in the inventions covered by the seven patents to Brine in exchange for Brine’s agreement to pay him reasonable royalty fees and that Brine had breached the agreements, and been unjustly enriched, by failing to pay Rule reasonable royalties. The amended complaint also alleged that defendants had committed patent fraud by obtaining a patent naming William Brine as the sole inventor of a product invented by Rule.

A. The Proceedings Leading to the Summary Judgment Motion

After several years of discovery, the case was scheduled to be tried in June 1995. In April 1995, Brine sought the court’s permission to move for summary judgment dismissing all of Rule’s claims. Judge John Gleeson, to whom the case was then assigned, noted that he had asked the parties in January 1995 whether anything remained to be done before trial, and that although Brine had mentioned the possibility of a motion for partial summary judgment, it made no such motion. Judge Gleeson denied Brine permission to make a summary judgment motion in April because it had unduly delayed and the trial date was too near.

In May 1995, noting Rule’s estimate that 30 days would be needed to try the entire case, Brine moved to bifurcate the trial, arguing that trying only liability issues first would serve the interests of judicial economy and would prevent potential prejudice to Brine. In an Order and Trial Notice dated June 21, 1995 (“June 21 Order”), Judge Friedman, to whom the case had been reassigned, granted the motion. He ordered that

[i]n the first phase of the trial, the jury will determine whether defendants “breached a contract with plaintiff to pay royalties for defendants’ use of plaintiffs patented devices.” .... If the jury decides this issue in plaintiffs favor, the same jury will determine in the second phase of the trial the amount of damages, if any, to which plaintiff is entitled.

June 21 Order at 1. No provision was made for the trial of any other issue or claim. Judge Friedman scheduled trial of the above contract liability issue to commence on or before August 7,1995, before Judge Real. On July 25,1995, the parties were informed that the liability trial would commence on Thursday, August 3.

On August 3, the parties arrived in court ready to proceed with the limited trial but learned that two other cases were scheduled for trial before Judge Real that day. Judge Real stated that, instead of trying Rule’s case, he would entertain a motion by defendants for summary judgment, returnable on Monday, August 7. Over Rule’s objection to, inter alia, the lack of time to prepare to oppose such a motion, the court stated that, since Rule was ready for trial, the court would conduct an evidentiary hearing on the summary judgment motion, at which Rule could present live testimony. On Friday, Brine served on Rule extensive motion papers requesting summary judgment dismissing the amended complaint in its entirety.

B. The Evidence Supporting Rule’s Contract Claim

The summary judgment hearing, which Brine’s attorney described at the oral argument of this appeal as “in effect ... the trial of the contract claim in the case,” began on August 7, with Rule as the principal witness. Rule described, inter alia, his lacrosse background and his meetings with the Brines. In the first meeting in 1976, after examining Rule’s model for the new goaltender stick and stating that it was patentable and that Brine would like to market it, William Brine stated that

to pay you a royalty it’s very hard to track the sticks on a month-to-month basis, very hard to do that, we’ll pay a royalty for the month.
I [Rule] said, you are the businessman, you be fair with me.
He [William Brine] said, we’ll pay you a fair royalty, we’ll keep track of it and you’ll get a fair royalty amount or reasonable or equitable, whatever word was used then to describe the royalty amount that I would receive.

(Summary Judgment Hearing Transcript (“Tr.”) 15 (emphases added).)

In the fall of 1976, after Rule had devised lacrosse-oriented protective body pads, he again met with the Brines, who asked him to sign agreements assigning to Brine all his right, title, and interest in his inventions. Noting that those agreements provided that, in exchange, he was to be paid “One Dollar ($1.00) and other good and valuable consideration, the receipt of which is hereby acknowledged,” Rule balked, saying,

it looks like I could sign this over for one dollar and you would make a lot of money, I would get nothing.
Bill Brine said, we promised you a fair royalty, you will get a fair royalty amount on this.

(Tr. 20 (emphasis added).) Rule testified, “I would not have signed the document unless I was absolutely sure that I was going to get a fair royalty amount.” (Id.)

Rule also testified that the Brines assured him thereafter that the monthly sums Brine was sending him were the fair royalties he had been promised. For example, in connection with the $675/month paid from 1979 to 1990, he testified:

Since we agreed to reasonable and just royalty, I assumed that was the royalties that I was supposed to get for the stuff that I patented and assigned to the Brines to use.
... I came back a year or two later, I said, how are sales on the items. And I believe Peter said the sales are okay, you are getting what you deserve, you are getting what is fair. I assumed he was talking about the fair and — royalties that we agreed upon.

(Tr. 48 (emphasis added).)

Brine’s attorney pointed out to the court that defendants’ summary judgment motion relied on Rule’s testimony at his deposition. He argued that Rule’s “deposition testimony clearly is to the effect there was no agreement other than the agreement to pay Mr. Rule[ ] specified fixed sums of money offered for 15 years,” and that Rule’s hearing testimony could not create a triable issue of fact merely by conflicting with his- deposition testimony. (Tr. 70.) He cross-examined Rule, in part, as follows:

Q. In your words, [Brine said] we will pay you $200 a month as a fair royalty?
A. They would pay me a fair royalty amount and that would start out at $200 a month.
Q. And you said all right?
A. Yes.
Q. They never asked — offered you any sum of money, dollar amount beyond $200 a month at that initial meeting, is that correct?
A. They said they would pay me a fair royalty.
Q. I would like to read from your deposition, if I may.
“QUESTION: To the extent you can recall in paraphrasing the conversations what you said to them and what they said to you, I would appreciate that. To the extent you can recall the exact words I would also like ... you to indicate that.
“ANSWER: ....
“____ [William Brine said] it’s very difficult to keep track of inventory and we’d like to pay you something instead of paying you a royalty of let’s say something per stick, we’d rather pay you a royalty on a monthly basis. It’s easier for us because it’s very hard for us to keep track of the sticks. That’s essentially, I’m paraphrasing the gist of the conversation.
“QUESTION: What did you say in response to what they said to you?
“ANSWER: As I recall, again I have to paraphrase, I said something to the effect like, you are the business people.
And I said something to the effect, I trust you to be fair with me, equitable with me, it’s your business.
And they said, yes, we think it’s equitable.
“QUESTION: To pay royalty per month?
“ANSWER: Instead of royalty per stick.”
Q. Mr. Rule, it’s correct they never used the words “reasonable royalties” with you, is this correct?
A. In sum they used a word similar to that. I’m not a tape recorder that I recall the exact words of a conversation that took place 16 years ago, but I certainly remember there was a word “fair,” there was a word “equitable,” a word in there that indicated to me that I would get a fair royalty, whatever that may be.
Q. Yes or no, they did not use the word “reasonable”?
A. Sir, they used a word similar to it. Might be reasonable.
Q. I would like to read from your deposition transcript____
Q. “QUESTION': Since the beginning of the first complaint, have you ever had any doubts that they used the words ‘reasonable royalty’ when they had a discussion with you?
“ANSWER: They used the word quote, ‘royalties.’ I wouldn’t say ‘reasonable.’”
Q. Did they tell you they were giving you a percentage of sales?
A. No.
Q. You assumed that?
A. I assumed it from our agreement.
Q. They never agreed to give you a percentage of sales?
A. They agreed to give me a reasonable royalty.

(Tr. 78-75, 82 (emphases added).)

On redirect examination, Rule clarified that his understanding was that he was to receive fair royalties based not on Brine’s total sales but on its sales of his products. (Tr. 115.) His attorney also introduced other parts of Rule’s deposition:

“ANSWER: The contract was made on the first meeting that I met with the two Brine brothers in Needham, Massachusetts, in which Bill Brine said to me that because they could not keep track of the inventory exactly, that they would pay me reasonable royalties for anything that I or that they produced. The contract would [sic] then reaffirmed. I believe it was November of 1976.
“QUESTION: Excúseme?
“ANSWER: I said it was reaffirmed on [sic] November 1976, it was in that time period, I can’t speak of the exact time, but in that time frame where I was given two patent applications to fill out, and I believe it was for the goalie stick and the arm pads and two assignment documents to fill out. When I signed the documents, I was with Bill and Peter Brine and myself. I believe at that time it was the three of us.
“I then voiced concern about the one dollar that — it said good and valuable consideration. I believe that’s the phrase there. And then I said something about a dollar and I was concerned — I believe it was Bill Brine that said, no, we are going to give you what we said in the first meeting, which was reasonable royalties.
“It was then confirmed then, the contract that — we had a meeting of minds, whatever, the conversation I had with Peter Brine, the conversation I had a year or two years ago____
“I said, Peter, I said, we had an agreement you were going to pay me royalties.
“And he said, what did you think, you want me to pay you forever?
“I said, no, but as long as you produce items of mine, I expect something reasonable for it. You said reasonable royalties. You were right there when your brother said it.
“He said, yes, but we decided to pay, you know, more money. We wanted a fresh start. ”

(Tr. 121-23 (emphases added).)

Rule was also questioned at some length by the court and testified as follows:

THE COURT: Mr. Rule, what express royalty did the defendants tell you that they would pay you? What express royalty?
THE WITNESS: They said that they would pay me a fair royalty, your Honor.
THE COURT: A fair royalty?
THE WITNESS: Yes, sir.
THE COURT: And when you got the $200 a month, what did they say about the $200 a month?
THE WITNESS: That represented a royalty for the goalie stick, but it was partial compensation.
THE COURT: They said it was partial compensation?
THE WITNESS: They said that they would be able to figure out later on what a royalty would be for it, or words to that effect.
THE COURT: Who said that to you and when?
THE WITNESS: I believe it was Bill Brine at the second meeting.
THE COURT: Did any of the defendants ever tell you that they would pay you a royalty on each item that was sold?
THE WITNESS: Not each item but as part of the sales, I believe.
THE COURT:.... What did they say to you about a percentage of the sales of the individual items?
THE WITNESS: They said I would be paid a fair royalty.
THE COURT: Did they say anything about a percentage of the sales of the items which you brought to them? Did any of the defendants ever say that to you, we’ll give you a percentage — a fair percentage, a reasonable percentage, any percentage of the sale of the items that we seh?
THE WITNESS: Not in those exact words, your Honor.
THE COURT: The $200 figure, didn’t they tell you that was a fair royalty?
THE WITNESS: Yes, at that time they did, yes.
THE COURT: Where and when if they did, did any of the defendants tell you that they would set up a royalty account for you in addition to the payments of 200, 400 and 675?
THE WITNESS: They did not say that.
THE COURT: Or that they would keep a record of sales upon which to pay royalties?
THE WITNESS: They didn’t say—
THE COURT: Did they say that to you?
THE WITNESS: The sales figures they would have, your Honor.
THE COURT: No, no. Did they ever say to you, in addition to the $200 per month, $400 per month, 675 [sic] per month, we’ll keep a record of sales for the royalties in addition to that?
THE WITNESS: They did not say that to me, your Honor.

(Tr. 127-31 (emphases added).)

The evidence presented at the summary judgment hearing also included the testimony of Peter Brine, who stated that the Brines “did not agree to pay royalties” to Rule; that “[r]oyalties were never even discussed”; and that none of the payments made to Rule were considered by the Brines to be royalties. (Tr. 137.) He conceded, however, that Brine’s corporate records described the payments to Rule for some 10 years as “royalty” payments. (Tr. 138.)

C. The District Court’s Decision

The summary judgment hearing, having begun on August 7, ended at 4:00 p.m. on August 8. At 1:00 p.m. on August 8, the court gave Rule’s counsel a deadline of noon August 9 for the submission of a memorandum of law opposing summary judgment. At the conclusion of the hearing on August 8, the court stated that in its view there were no disputed material issues of fact to be tried.

On August 10, the district court ruled from the bench that summary judgment would be granted:

I believe that... either from the deposition of the plaintiff or the court testimony of the plaintiff, there are no disputed facts with reference to the formation of the contract and that the contract was an oral contract to provide services for compensation, whatever it might be called, whether it be called wages or compensation or royalties, to provide the services which Mr. Rule was to provide, including ... the design of the lacrosse goalie stick and for those services he was to be paid two hundred dollars a month. As time went on and his services and ideas increased, it was increased to four hundred dollars a month to be the total compensation that he was to receive and then to six hundred and seventy-five dollars a month, which was the compensation that he received.
Unfortunately, Mr. Rule[] had more thoughts about what he was doing than he was expressing, either to the Brines or Brine was expressing to him and he got it all mixed up unfortunately. That was it and compensation, which was agreed upon on each occasion was something that he said he would be satisfied to take for the services that he was rendering and obviously he knew because he expressed that not only in deposition but in court there was no promises [sic ] of anything beyond compensation that had been discussed and accepted.

(Tr. 204-06 (emphases added).) The court instructed Brine’s attorney to prepare findings of fact as to which there was no controversy and submit a proposed order.

The order proposed by Brine and signed by the court (“August 28, 1995 Order”) included the following findings of fact:

5..... [Brine’s] monthly payments covered all services plaintiff performed for the Company, including his lacrosse product ideas____
6. ... [T]he only “royalties” ever expressly discussed by the parties were the fixed monthly payments____
7. ... [T]he word “reasonable” was never used by the Brines, or anyone else on behalf of the Company, in any conversation about Rule’s compensation____ [I]f [the words “fair and equitable royalty”] were used, they were used only to describe the fixed monthly payments____ [T]here is no evidence of any agreement to pay the plaintiff a “royalty” in addition to the fixed monthly compensation he received.

August 28, 1995 Order at 4-5. The court found that Rule’s subjective understanding that he would be paid “reasonable royalties” was an unexpressed, secret intention that, under New York law, did not become part of the parties’ contract:

The undisputed evidence of the parties’ objective intent leaves no question that the parties’ agreement was for fixed monthly compensation and nothing more.

Id. at 7.

On the premise that “all of the claims in the amended complaint depend on proof that an agreement for ‘reasonable royalties’ existed,” id. at 1, the court dismissed the action. Judgment was entered accordingly, and this appeal followed.

II. DISCUSSION

On appeal, Rule contends principally that summary judgment was inappropriate because there were genuine issues of fact to be tried. He also challenges, inter alia, the bifurcation order and the summary judgment procedures adopted by the district court. We find merit in part of Rule’s challenge to the bifurcation order and we agree that summary judgment was inappropriate.

In light of our conclusion that the matter must be remanded for trial, we need not address all of Rule’s challenges to the procedures followed in the district court. We are constrained to note, however, that Fed.R.Civ.P. 56(c) provides that a summary judgment motion “shall be served at least 10 days before the time fixed for the hearing,” and that, while the district court may have discretion to shorten that period, it should not do so unless good cause is shown and the party opposing summary judgment will not thereby be unduly prejudiced. The record in the present case does not show good cause either for hearing defendants’ summary judgment motion on two days’ notice or for giving Rule less than 24 hours after the close of that expedited hearing in which to submit a memorandum of law and marshal the evidence adduced at the hearing.

A. Contract and Quantum Meruit Principles

Several general principles of contract law provide the substantive framework for our discussion. Under New York law, which the parties do not dispute is controlling in this diversity case, the question of whether or not a binding contract exists “is not dependent on the subjective intent” of either party. Brown Bros. Electrical Contractors, Inc. v. Beam Construction Corp., 41 N.Y.2d 397, 399, 393 N.Y.S.2d 350, 351, 361 N.E.2d 999 (1977). Instead, “[w]hat matters are the parties’ expressed intentions, the words and deeds which constitute objective signs in a given set of circumstances.” R.G. Group, Inc. v. Horn & Hardart Co., 751 F.2d 69, 74 (2d Cir.1984). The analysis must not put “disproportionate emphasis ... on any single act, phrase or other expression, but, instead, [should consider] the totality of all of these, given the attendant circumstances, the situation of the parties, and the objectives they were striving to attain.” Brown Bros. Electrical Contractors, Inc. v. Beam Construction Corp., 41 N.Y.2d at 399-400, 393 N.Y.S.2d at 352, 361 N.E.2d 999.

In general, under New York law no enforceable contract comes into being when the parties leave a material term for future negotiations, creating “a mere agreement to agree.” Joseph Martin, Jr., Delicatessen, Inc. v. Schumacher, 52 N.Y.2d 105, 109, 436 N.Y.S.2d 247, 249, 417 N.E.2d 541 (1981). However, an enforceable contract may be created if the parties agree that a contract term, such as price, is to be set by reference to prevailing industry standards. See, e.g., Cobble Hill Nursing Home, Inc. v. Henry & Warren Corp., 74 N.Y.2d 475, 483, 548 N.Y.S.2d 920, 923, 548 N.E.2d 203 (1989) (parties can agree that price will be set according to “commercial practice or trade usage”), cert. denied, 498 U.S. 816, 111 S.Ct. 58, 112 L.Ed.2d 33 (1990). Further, in an appropriate case, a provision for the later fixing of a “reasonable” price may be sufficiently definite, in light of industry standards, to make the contract enforceable. See, e.g., Catlin v. Manilow, 170 A.D.2d 357, 357, 566 N.Y.S.2d 59, 59-60 (1st Dep’t 1991); cf. Joseph Martin, Jr., Delicatessen, Inc. v. Schumacher, 52 N.Y.2d at 111, 436 N.Y.S.2d at 250, 417 N.E.2d 541. In addition, even an agreement whose price term is to be set by reference to a valuation “ ‘[to be] jointly agreed upon,’ ” Chase National Bank of the City of New York v. Manufacturers Trust Co., 265 A.D. 406, 407, 39 N.Y.S.2d 370, 372 (1st Dep’t 1943) (quoting contract), which might otherwise be unenforceable, may become enforceable after a valuation has been stated, the contract has been partly performed in that respect, and there remains no uncertainty about what the parties meant, see id. at 410, 39 N.Y.S.2d at 374.

If the plaintiff fails to prove a valid contract, the court may nonetheless allow recovery in quantum meruit “to assure a just and equitable result,” Bradkin v. Leverton, 26 N.Y.2d 192, 196, 309 N.Y.S.2d 192, 195, 257 N.E.2d 643 (1970), where “the defendant received a benefit from the plaintiff’s services under circumstances which, in justice, preclude him from denying an obligation to pay for them,” id. at 197, 309 N.Y.S.2d at 196, 257 N.E.2d 643. Such a recovery for unjust enrichment is permissible “when and because the acts of the parties or others have placed in the possession of one person money, or its equivalent, under such circumstances that in equity and good conscience he ought not to retain it, and which ex aequo et bono belongs to another.” Miller v. Schloss, 218 N.Y. 400, 407, 113 N.E. 337, 339 (1916).

Where the complaint asserts claims on theories of both contract and quantum meruit and there is a genuine dispute as to the existence of a contract, the plaintiff need not make a pretrial election between these theories; he is entitled to have the case submitted to the jury on both theories. See, e.g., Joseph Sternberg, Inc. v. Walber 36th Street Associates, 187 A.D.2d 225, 228, 594 N.Y.S.2d 144, 146 (1st Dep’t 1993).

B. Summary Judgment Principles

The general principles governing consideration of a motion for summary judgment are well established. A party who moves for summary judgment has the burden of showing that no genuine issue of material fact exists and that the undisputed facts entitle it to judgment as a matter of law. See, e.g., Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). In order to defeat a properly supported summary judgment motion, the opposing party must come forward with affidavits, depositions, or other sworn evidence as permitted by Fed.R.Civ.P. 56, setting forth specific facts showing that there exists a genuine issue of material fact. Although a party does not show a triable issue of fact merely by submitting an affidavit that disputes his own prior sworn testimony, see, e.g., Trans-Orient Marine Corp. v. Star Trading & Marine, Inc., 925 F.2d 566, 572 (2d Cir.1991), a material issue of fact may be revealed by his subsequent sworn testimony that amplifies or explains, but does not merely contradict, his prior testimony, see, e.g., Villante v. Department of Corrections, 786 F.2d 516, 522 (2d Cir.1986), especially where the party was not previously asked sufficiently precise questions to elicit the amplification or explanation.

In ruling on a motion for summary judgment, the district court is required to draw all factual inferences in favor of, and take all factual assertions in the light most favorable to, the party opposing summary judgment. See, e.g., Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513-14, 91 L.Ed.2d 202 (1986); Rodriguez v. City of New York, 72 F.3d 1051, 1061 (2d Cir.1995). The function of the district court in considering the motion for summary judgment is not to resolve disputed issues of fact but only to determine whether there is a genuine issue to be tried. See, e.g., Anderson v. Liberty Lobby, Inc., 477 U.S. at 255, 106 S.Ct. at 2513-14; Eastman Machine Co. v. United States, 841 F.2d 469, 473 (2d Cir.1988). Assessments of credibility and choices between conflicting versions of the events are matters for the jury, not for the court on summary judgment. See, e.g., Fed R. Civ. P. 56(e) 1963 Advisory Committee Note; Anderson v. Liberty Lobby, Inc., 477 U.S. at 255, 106 S.Ct. at 2513-14; United States v. Rem, 38 F.3d 634, 644 (2d Cir.1994); 6 Moore’s Federal Practice ¶ 56.02[10], at 56-45 (2d ed.1986). Any weighing of the evidence is the prerogative of the finder of fact, not an exercise for the court on summary judgment. See, e.g., Frito-Lay, Inc. v. Morton Foods, Inc., 316 F.2d 298, 301 (10th Cir.1963).

C. The Record in the Present Case

The record in the present case persuades us that summary judgment was inappropriate for two reasons. First, the record,'taken in the light most favorable to Rule, would support a finding that Brine did in fact agree to pay Rule reasonable royalties. Second, if the jury is not persuaded that there was an enforceable contract for reasonable royalties, it may be persuaded that there also was no agreement limiting Rule’s entitlement to the monthly amounts sent by Brine, that Brine paid Rule less than a fair amount, and that Brine therefore has been unjustly enriched.

1. The Evidence of a Contract for Reasonable Royalties

Brine argues that summary judgment was appropriate because Rule’s testimony showed that there was an agreement for Brine to pay Rule “only” the “fixed monthly” payments that Brine made over the years (Defendants’ brief on appeal at 1), and that “the only evidence supporting plaintiffs claim for additional ‘reasonable royalties’ was his testimony that he subjectively understood the word ‘royalty’ to require the payment of something more than fixed monthly compensation — a subjective understanding which he admitted he never conveyed to the defendants” (id. at 2). These contentions, which were accepted by the district court (see, e.g., Tr. 206 (“Unfortunately, Mr. Rule[] had more thoughts about what he was doing than he was expressing ... to the Brines or Brine was expressing to him____”)), simply do not take the record in the light most favorable to Rule, for Rule repeatedly testified, both in deposition and at the summary judgment hearing, that William Brine told him that Brine would pay him fair or equitable royalties.

For example, Rule testified at the summary judgment hearing that at his first meeting with the Brines, William Brine, when suggesting monthly payments,

said, we’ll pay you ajfair royalty, we’ll keep track of it and you’ll get a fair royalty amount or reasonable or equitable, whatever word was used then to describe the royalty amount that I would receive.

(Tr. 15 (emphases added).) Describing that meeting in his deposition, Rule similarly had testified that

“Bill Brine said to me that because they could not keep track of the inventory exactly, that they would pay me reasonable royalties for anything that I or that they produced.”

(Tr. 121 (emphases added).)

At the hearing, Rule testified that in a subsequent meeting with the Brines, when he expressed concern over the patent-assignment agreements’ provision that he was to be paid “a dollar plus good and valuable consideration,”

Bill Brine said, we promised you a fair royalty, you will get a fair royalty amount on this.

(Tr. 20 (emphasis added).) This paralleled his deposition description of Brine’s response to that concern:

“Bill Brine ... said, ... we are going to give you what we said in the first meeting, which was reasonable royalties.”

(Tr. 122 (emphasis added).)

When asked in his deposition whether the precise phrase “reasonable royalty” had been used, Rule responded that the word “royalties” had been used, but that he “wouldn’t say ‘reasonable.’” Defendants rely heavily on the nonuse of the exact word “reasonable” (see, e.g., Tr. 74 (“Q. Mr. Rule, it’s correct they never used the words ‘reasonable royalties’ with you, is this correct?”); Tr. 75 (“Q. Yes or no, they did not use the word ‘reasonable’?”)). However, Rule pointed out in his deposition that more than a decade had passed since the conversations at issue, that he could not remember the exact words spoken, and that he was paraphrasing. At the hearing, Rule testified that if William Brine did not use the precise word “reasonable,” he used

a word similar to that. I’m not a tape recorder that I recall the exact words of a conversation that took place 16 years ago, but I certainly remember there was á word “fair,” there was a word “equitable,” a word in there that indicated to me that I would get a fair royalty, whatever that may be.

(Tr. 74 (emphases added).) A rational jury could well infer that Brine had promised fair and equitable royalties and that this meant, and was reasonably understood by Rule to mean, reasonable royalties.

The district court’s findings that “the only ‘royalties’ ever expressly discussed by the parties were the fixed monthly payments,” and that “there [wa]s no evidence of any agreement to pay the plaintiff a ‘royalty’ in addition to the fixed monthly compensation he received,” either overlooked or discredited Rule’s testimony, inter alia, that William Brine said that Brine “would be able to figure out later on what a royalty would be,” and “we’ll pay you a fair royalty, we’ll keep track of it and you’ll get a fair royalty amount.” A jury crediting that testimony could well find that William Brine’s statement that Brine would “keep track of it” and pay Rule “a fair royalty amount” meant, and was reasonably understood by Rule to mean, that the uniform monthly sums would constitute an advance on royalties rather than his entire royalty entitlement. Though Rule also answered negatively the court’s questions as to whether defendants told him that they would “set up a royalty account” for him or “keep a record of sales for the royalties,” the jury could conclude that negative responses to those precisely focused questions are not irreconcilably inconsistent with Brine’s having made a statement that it would “keep track” sufficiently to “figure out later” what would be a “fair royalty” and pay Rule accordingly.

Further, though the court inferred that the parties agreed that Rule would be entitled to receive only the fixed monthly sums that Brine actually sent him, a rational jury could infer that Brine’s repeated assurances that the monthly sums it sent Rule were fair (see, e.g., Tr. 130 (“THE COURT: The $200 figure, didn’t they tell you that was a fair royalty? THE WITNESS: Yes, at that time they did, yes.”); Tr. 48 (as to the $675 figure, “Peter said the sales are okay, you are getting what you deserve, you are getting what is fair”)) constituted acknowledgement by Brine that, under the parties’ agreement, the payment of fair royalties was required. The jury could also infer that Rule’s innocent assumptions that Brine’s representations were truthful did not constitute a modification of the contract.

Finally, we note that the district court also found that Brine owed Rule nothing for the period after 1990 because the agreement between Rule and Brine was terminable at will. We cannot uphold this ruling for two reasons. First, it assumes that there was an agreement other than the patent-assignment agreement, a proposition that the jury is free to reject. Second, it depends on the view that Rule’s status was that of a Brine employee, for while an employment contract that lacks an express duration creates a relationship that is terminable at will, see Sabetay v. Sterling Drug, Inc., 69 N.Y.2d 329, 333, 514 N.Y.S.2d 209, 211, 506 N.E.2d 919 (1987), that principle is not generally applicable outside the realm of employment. In other contexts, “[i]n the absence of an express term fixing the duration of a contract, the courts may inquire into the intent of the parties and supply the missing term if a duration may be fairly and reasonably fixed by the surrounding circumstances and the parties’ intent,” Haines v. City of New York, 41 N.Y.2d 769, 772, 396 N.Y.S.2d 155, 157, 364 N.E.2d 820 (1977). In the patent context, for example, if a contract for royalties does not expressly define the period during which royalty payments are required, the implied period may last for the life of the patent. See Sproull v. Pratt & Whitney Co., 108 F. 963, 964-65 (2d Cir.1901); cf. 6 Ernest B. Lipscomb III, Walker on Patents § 20:45 (3d ed. 1987) (“Apart from any express provision in the license agreement, if the licensee exercises the rights granted him under the license, he is hable during continuance of the license for the stipulated royalty.”). The jury could easily infer that Rule was not Brine’s employee, from, inter alia, the evidence (a) that he was a full-time employee of the New York schools at which he coached lacrosse; (b) that Brine never furnished Rule with Form W-2’s, which the law requires an employer to give to its employees and which Brine did furnish to its employees; and (c) that Brine’s records described its payments to Rule not as salary but as royalties. The jury could well infer that Rule, who had had no contact with Brine or the Brines prior to Ms first invention, did not assign Ms patent rights to Brine with the understanding that Brine could stop paying him whenever it wished.

In sum, in light of the passages of Rule’s testimony quoted above, the court’s inference that the parties agreed that Rule would be entitled to receive oMy the fixed monthly payments that Brine made is hardly the oMy inference that is permissible. To be sure, there was also evidence — perhaps as much or more — to support that inference. But the decisions as to how to weigh the evidence, what testimony to believe, and wMch of competing inferences to draw are to be made by the jury after trial. The jury, of course, is free to view the evidence in the light least favorable to Rule. The court, on Brine’s summary judgment motion, was not. Taking the evidence in the light most favorable to Rule, the jury could permissibly find that the parties agreed that, m exchange for Rule’s assignments to Brine, Brine would pay Rule reasonable royalties and that there was no agreement that the monthly sums that Brine sent constituted the fair and equitable amounts that Brine had promised to pay.

2. The Unjust Enrichment Claim

Further, defendants’ apparent view that, if there was no agreement that Brine would pay Rule reasonable royalties, the parties must have agreed that Brine would be obligated to make oMy the fixed monthly payments is specious. The jury would be free to infer that there simply was no meeting of the minds on either proposition. Just as Rule’s belief that he would be paid “reasonable” royalties could not result in the contract he contends existed if that belief was an unexpressed secret intention, neither could an intention on the part of Brine to pay Rule no more than the monthly sums result m the contract that defendants contend existed if Brine’s intention was not commumcated to Rule.

In short, the evidence as to the statements Brine made to Rule and as to the parties’ conduct over the years would permit the jury to reach any of at least three conclusions: (1) that the parties agreed that Brine would pay Rule reasonable royalties and that the fixed monthly- sums were advances, with reasonable totals to be calculated at some later time; or (2) that the parties agreed that Brine would pay Rule only the fixed sums per month actually paid; or (3) that there was no meeting of the parties’ minds as to the meaMng of “One dollar ($1.00) and other good and valuable consideration,” with Rule believing that the fair-and-equitable-royalties interpretation of that term as expressed to him by Brine meant reasonable royalties on which he was to receive advance payments, and with Brine believing that that term meant only the fixed sums eventually paid.

If the jury reaches the third conclusion, it should then consider Rule’s claim for recovery on a quantum meruit basis, and assess Ms contention that by manufacturing and selling products that use his inventions and refusing to pay him more than the monthly sums — or indeed to pay him any sums after 1990 — Brine has been unjustly enriched. The district court’s bifurcation order apparently ignored this possibility. That order required that Rule’s contention that there was a contract for reasonable royalties be tried first and stated that, if the jury found in Ms favor on that issue, there would be a trial on damages. The order did not provide either for exploration of the quantum meruit claim at the first trial or for a later trial on that claim in the event that the jury found there was no contract. On remand, whether or not there is any other bifurcation, at least Rule’s claims of breach of contract and unjust enrichment should be tried together.

CONCLUSION

We have considered all of defendants’ arguments in support of summary judgment and have found them to be without merit. The judgment is vacated, and the matter is remanded for further proceedings not inconsistent with this opiMon.

Costs to plaintiff.

       Honorable Manuel L. Real, of the United States District Court for the Central District of California, sitting by designation.

       Honorable Bernard A. Friedman, of the United States District Court for the Eastern District of Michigan, sitting by designation.