«Greenberg Freeman LLP, New York (Michael A. Freeman of counsel), for appellant. Zeichner Ellman & Krause LLP, New York (Jantra Van Roy of counsel), ...»
SUPREME COURT, APPELLATE DIVISION
APRIL 26, 2011
THE COURT ANNOUNCES THE FOLLOWING DECISIONS:
CORRECTED ORDER - APRIL 27, 2011
Gonzalez, P.J., Mazzarelli, Sweeny, Richter, Manzanet-Daniels, JJ.
3959 Jade Realty LLC, Index 603679/07
-againstCitigroup Commercial Mortgage Trust 2005-EMG, et al., Defendants-Respondents, Capmark Finance, Inc., Defendant.
Greenberg Freeman LLP, New York (Michael A. Freeman of counsel), for appellant.
Zeichner Ellman & Krause LLP, New York (Jantra Van Roy of counsel), for respondent.
Order, Supreme Court, New York County (Michael D. Stallman, J.), entered December 16, 2009, which, to the extent appealed from, granted defendants-respondents' motion for summary judgment dismissing the complaint and denied plaintiff's cross motion for summary judgment on its first cause of action for breach of contract, unanimously reversed, on the law, without costs, the motion denied,· the complaint reinstated, and the cross motion granted.
In 2003, plaintiff and defendants' predecessor in interest Emigrant Securities Corp. negotiated a refinancing of an outstanding commercial loan. The note provided that, during its 10-year term, plaintiff would pay, as a condition of prepaying the loan prior to maturity, a "Yield Maintenance" amount which varied as the loan matured. During the first six years, this amount would be calculated "by taking the positive difference (if any) between the Note Rate minus the current yield, on the actual date of default under the loan. of u.S. Treasury Securities" (emphasis added). The note does not define "default." This note was subsequently sold to defendant Citigroup and securitized with other loans.
In 2007, plaintiff sought to prepay the loan and took the position that, since it had not defaulted on the loan, no yield maintenance was due. Defendant Capmark Finance refused to permit plaintiff to prepay the loan and insisted that plaintiff pay yield maintenance which it computed at $146,104.56. Plaintiff paid this amount under protest and with reservation of rights and demanded a refund from Capmark. When Capmark refused to refund the amount paid by plaintiff, this action ensued, alleging causes of action for breach of contract and for tortious interference with contract. After discovery was conducted, defendants moved for summary judgment dismissing the complaint and plaintiff moved for summary judgment on its cause of action for breach of contract.
The court granted defendants' motions and denied plaintiff's cross motion, finding it "absurd and illogical H to accept plaintiff's argument that no yield maintenance amount is due during the first six years of the term, but that such amounts would be due in the later years. The court added the words "prepayment or H before the term "default H in the note to encompass the situation created by plaintiff's prepayment of the loan.
and thereby make a new contract for the parties under the guise of interpreting the writing H (Reiss v Financial Performance Corp., 97 NY2d 195, 199  [internal quotation marks and citations omitted]). Although "courts may as a matter of interpretation carry out the intention of a contract by.
supplying words to make the meaning of the contract more clear H (Matter of Wallace v 600 Partners Co., 86 NY2d 543, 547 ), "such an approach is appropriate only in those limited instances where some absurdity has been identified or the contract would otherwise be unenforceable" (id. at 547-548). The fact that contractual terms are "novel or unconventional" does not bring them or the contract in question to the level of absurdity (id.
at 548). This rule has even greater force where, as here, "the instrument was negotiated between sophisticated, counseled business people negotiating at arm's length" (id. at 548; see also Flag Wharf, Inc. v Merrill Lynch Capital Corp., 40 AD3d 506, 507 ). Moreover, "[a]n omission or mistake in a contract does not constitute an ambiguity [and]. the question of whether an ambiguity exists must be ascertained from the face of an agreement without regard to extrinsic evidence" (Reiss v Financial Performance Corp. at 199, quoting Schmidt v Magnetic Head Corp., 97 AD2d 151, 157 ).
Under the particular facts of this case, the motion court erred in rejecting plaintiff's interpretation of the subject note. In an effort to carry out the terms of the contract the court added terms to the note, when application of the literal language of the note results neither in absurdity nor in an
note could possibly lead to the prepayment premium being lower in the early years rather than the later years of the prepayment period, that is the way that Emigrant's counsel drafted the note.
Nor does plaintiff's interpretation of the note make it unenforceable or "render a contractual provision meaningless or
NY2d 582, 589 [1996). While it is true that plaintiff's interpretation is very technical and is apparently not what the defendant's predecessor intended, it is not a court's function to imply a term to save defendant from the consequences of an agreement that it drafted, especially here where defendant admittedly used an old form without fully correcting it (see Reiss at 199, 201).
Plaintiff's second cause of action for tortious interference with contract was dismissed on the sole basis that plaintiff had failed to establish a breach of contract. However, since plaintiff has established a breach of contract, we reinstate the tortious interference claim.
Dewey & Leboeuf, New York (John M. Nonna of counsel), for Wesley Wang, appellant.
Nixon Peabody LLP, New York (Frank H. Penski of counsel), for Phoenix Partners Group LLC, Phoenix Partners Group LP, Nicholas Stephan, Marcos Brodsky and Patrick Nihan, appellants.
Olshan Grundman Frome Rosenzweig & Wolosky LLP, New York (Jeffrey A. Udell and Lori M. Marks-Esterman of counsel), for IDX Capital LLC, James Cawley, Helen Cawley, James Cawley, Sr., Ron Neal, Bhanu Patel and Starlight Investments, LTD., respondents.
Graubard Miller, New York (Lawrence D. Bernfeld of counsel), for Brady Halper, respondent.
Order, Supreme Court, New York County (Richard B. Lowe III, J.), entered June 8, 2010, which, insofar as appealed from as limited by the briefs, denied defendant Wesley Wang’s motion for summary judgment dismissing the “earn-out” portion of plaintiffs’ alleged damages, and denied the motion of defendants Phoenix Partners Group LLC, Phoenix Partners Group LP, Nicholas Stephan, Marcos Brodsky, and Patrick Nihan for summary judgment dismissing the second verified amended complaint as against them, modified, on the law, to dismiss the claim for earn-out damages and to dismiss the complaint as against the Phoenix Partners companies, Stephan and Brodsky, and otherwise affirmed, without costs.
Plaintiffs failed to establish with reasonable certainty that IDX Capital LLC, an eight-month-old, money-losing, start-up, is entitled to damages based on the provision in its proposed agreement with a prospective acquirer calling for earn-out payments by the acquirer based on IDX hitting certain revenue targets. Absent evidence discussing the projections or specific strategies that likely would have resulted in IDX meeting the targets, such as an expert affidavit or an affidavit from a financial officer, plaintiffs’ claim for earn-out damages is speculative and accordingly cannot be maintained (see Kenford Co.
v County of Erie, 67 NY2d 257, 261 ; American Preferred Prescription v Health Mgt., 252 AD2d 414, 419 ).
Clearly, issue finding, not issue resolution, is a court’s proper function on a motion for summary judgment, resolving, in the process, all inferences in favor of the plaintiff (see Cruz v American Export Lines, 67 NY2d 1, 13 , cert denied 476 US 1170 ). However, only the existence of a bona fide issue raised by evidentiary facts, not one based on conclusory or speculative allegations, will suffice to defeat a motion for summary judgment (see Rotuba Extruders v Ceppos, 46 NY2d 223, 231 ). Where competent evidence is presented by a defendant in support of a motion for summary judgment, the burden shifts to plaintiff to produce proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action (Miller v City of New York, 253 AD2d 394, 395-396 ).
We find plaintiffs’ claim that Stephan and Brodsky participated in Wang’s admitted campaign to interfere with the prospective acquisition to be speculative and based on unwarranted inferential leaps. With respect to Stephan, the text-message chain that plaintiffs rely on, even when read in a light most favorable to their complaint, does not indicate that Stephan knew of, let alone participated in, defendant Wang’s campaign to derail the deal between IDX and Knight Capital Group.
At the time of the text messages in question, Wang had not commenced his activities and gave no indication to Stephan of what he had planned. If anything, the inference to be drawn from the exchange supports Stephan’s claim that he was not involved in the planning or execution of Wang’s plans to break up the deal between IDX and Knight.
We draw a similar conclusion with respect to Brodsky. There is nothing to indicate that Brodsky provided, at Wang’s request, a link to a web site, http://www.pervscan.com, which shortly thereafter found its way into one of the e-mails Wang sent to Knight, with the intent to further Wang’s campaign to interfere with the transaction. There is no evidence that Wang told Brodsky why he wanted the link or what, if anything, he intended to do with it. Indeed, Brodsky sent this link to other Phoenix employees. Further, other electronic messages relied on by plaintiff indicate that while Brodsky was aware that Wang wanted to interfere with the deal in some manner, he found Wang’s fixation on the deal absurd, even comical. In fact, the electronic messages read in their entirety support Brodsky’s position that he told Wang not to involve Phoenix in any schemes with respect to IDX.
Nor do we agree with the dissent that the message sent from Brodsky’s account to Knight CEO Thomas Joyce that “bad things happen when good people do nothing,” raises a genuine issue of fact. Brodsky claims no knowledge of this e-mail, and given the fact that other defendants have been accused of “hacking” into IDX computer systems, this submission is equivocal at best. When read in the context of all the evidence submitted by defendants, it simply does not rise to the level of a genuine, triable issue of fact sufficient to defeat defendants’ motion.
Although plaintiff Cawley alleges that Stephan and Brodsky had animosity toward him, and that both wanted to see the deal fail, this allegation is clearly insufficient to draw an inference that Stephan, Brodsky, Wang, Niham and others took “common action for a common purpose by common agreement or understanding... from which common responsibility derives” (Goldstein v Siegel, 19 AD2d 489, 493 ; see Anesthesia Assoc. of Mount Kisco, LLP v Northern Westchester Hosp. Ctr., 59 AD3d 473, 479 ).
Accordingly, we dismiss the tortious interference and aiding and abetting causes of action as against Stephan and Brodsky (see Home Town Muffler v Cole Muffler, 202 AD2d 764 ). However, we sustain such claims against Nihan based on evidence tending to show that while still employed by IDX, he gave Wang information about the proposed acquisition and revealed other confidential information about IDX. This evidence is sufficient to raise an issue of fact as to whether Nihan conspired with Wang to derail the acquisition.
Concerning the claims against the Phoenix Partners companies, the record, viewed in a light most favorable to plaintiffs, demonstrates that Wang was a rogue employee whose tortious acts to derail the acquisition were outside the scope of his employment with Phoenix and not committed in furtherance of Phoenix’s business. Accordingly, the Phoenix Partners companies cannot be held vicariously liable for such acts (see Bowman v State of New York, 10 AD3d 315, 316 ; Nicollette T. v Hospital for Joint Diseases/Orthopaedic Inst., 198 AD2d 54, 55 ).
The cause of action for injunctive relief against Stephan is dismissed. Given the lack of evidence that Stephan participated in the campaign against IDX or otherwise engaged in or threatened to engage in any disparagement of plaintiff Cawley in violation of a prior settlement agreement, there is no support for plaintiffs’ claim that Stephan is likely to continue to disparage IDX and Cawley absent injunctive relief.
We have considered the parties’ other contentions and find them unavailing.
All concur except Acosta and Abdus-Salaam, JJ. who dissent in part in a memorandum by
Abdus-Salaam, J. as follows:
ABDUS-SALAAM, J. (dissenting in part) I would affirm the motion court’s denial of summary judgment to the Phoenix Partners companies, Stephan, and Brodsky.