On October 30, 2024, Justice Chan of the New York County Commercial Division issued a decision in Aptos, LLC v. Forman Mills Inc., 2024 NY Slip Op. 33896(U), upholding a claim for anticipatory repudiation, explaining:
An anticipatory repudiation occurs when, before the time for performance has arisen, a party to a contract declares its intention not to fulfill a contractual duty. Put differently, a party repudiates a contract when it voluntarily disables itself from complying with its contractual obligations. If a party repudiates its contractual duty before performance is due, the non·repudiating party is then entitled to claim damages for breach of the contract.
To sufficiently plead a claim for anticipatory breach, a plaintiff must allege that the repudiating party made a definite and final communication of the intention to forego performance. Such a communication can be either ‘a statement by the obligor to the obligee indicating that the obligor will commit a breach that would of itself give the obligee a claim for damages for total breach or a voluntary affirmative act which renders the obligor unable or apparently unable to perform without such a breach. Regardless of its form, the communication must be positive and unequivocal.
Here, the crux of Aptos’s anticipatory repudiation claim is that Forman Mills essentially took the position that it would not pay Aptos for the remaining three years of the Amended Term under the MSA. As alleged, Aptos reached this conclusion because Forman Mills’s principal, Dushey, allegedly asserted that Forman Mills had moved on to another retail system, such that, in his mind, the relationship between Aptos and Forman Mills had terminated. These allegations, accepted as true and with every favorable inference afforded to Aptos, sufficiently establish Forman Mill’s intent to forgo future performance under the MSA despite Aptos’s willingness to continue providing services thereunder.
That Dushey stated that the parties’ relationship had terminated in his mind does not alter this conclusion. Importantly, Dushey’s statement was not stated in a vacuum. Rather, Dushey allegedly communicated this position after Shopper World’s acquisition of Forman Mills in June 2023, which was presumably the reason why, as Dushey noted, Forman Mills had transitioned to a new retail system. Furthermore, his representations came only after Forman Mills had stopped paying Aptos’ s invoices. Thus, upon consideration of this alleged context, Dushey’s purported January 2024 statement to Aptos, at minimum, supports a pleading·stage inference that he was communicating Forman Mills’s definite and final repudiation of the MSA.
As the Complaint otherwise asserts that Aptos had remained willing and able to provide services to Forman Mills throughout the remainder of the MSA’s Amended Term, Aptos has plausibly alleged a claim for anticipatory breach of the MSA. Forman Mills’s motion to dismiss Count I of the Complaint is denied.
(Internal quotations and citations omitted).