Opinion
7067 654058/15
07-05-2018
Luther S. PATE, IV, Plaintiff–Appellant, v. BNY MELLON–ALCENTRA MEZZANINE III, LP, et al., Defendants–Respondents.
Lupkin PLLC, New York (Jonathan D. Lupkin of counsel), for appellant. Reed Smith LLP, New York (Casey D. Laffey of counsel), for respondents.
Lupkin PLLC, New York (Jonathan D. Lupkin of counsel), for appellant.
Reed Smith LLP, New York (Casey D. Laffey of counsel), for respondents.
Renwick, J.P., Richter, Manzanet–Daniels, Tom, Gesmer, JJ.
Order, Supreme Court, New York County (Anil C. Singh, J.), entered March 2, 2017, which granted defendants' motion to dismiss the amended complaint, unanimously affirmed, without costs.
Because the parties' release agreement contains a merger clause, the release agreement supersedes the preceding term sheet, and the breach of contract claim was correctly dismissed. Contrary to plaintiff's assertions, both agreements concern the same subject matter, that is, the default under the loan and the parties' negotiations in an attempt to avoid the impending foreclosure of the assets securing the loan (see Oorah, Inc. v. Covista Communications, Inc., 149 A.D.3d 552, 52 N.Y.S.3d 347 [1st Dept. 2017] ; Xi Mei Jia v. Intelli–Tec Sec. Servs., Inc., 114 A.D.3d 607, 981 N.Y.S.2d 79 [1st Dept. 2014] ; Kindler v. Newsweek, Inc., 277 A.D.2d 159, 160, 717 N.Y.S.2d 56 [1st Dept. 2000] ). LaRosa v. Arbusman, 74 A.D.3d 601, 603, 903 N.Y.S.2d 371 [1st Dept. 2010], on which plaintiff relies, is factually distinguishable.
The fraudulent inducement claim was correctly dismissed because the merger clause in the release is not a general merger clause but by its express terms supersedes "any prior term sheet or correspondence," which is the basis for plaintiff's claims (compare White v. Davidson, 150 A.D.3d 610, 612, 55 N.Y.S.3d 223 [1st Dept. 2017] ; Remediation Capital Funding LLC v. Noto, 147 A.D.3d 469, 471, 46 N.Y.S.3d 606 [1st Dept. 2017] ; Laduzinski v. Alvarez & Marsal Taxand LLC, 132 A.D.3d 164, 169, 16 N.Y.S.3d 229 [1st Dept. 2015] ). Moreover, the release contains a "No Other Representations" clause (see WT Holdings Inc. v. Argonaut Group, Inc., 127 A.D.3d 544, 5 N.Y.S.3d 731 [1st Dept. 2015] ).
For the foregoing reasons, the complaint fails to allege, in support of the fraudulent inducement claim, that plaintiff justifiably relied on defendants' representations that he was entitled to a 10% participation interest in a certain nonparty entity (see ACA Fin. Guar. Corp. v. Goldman, Sachs & Co., 25 N.Y.3d 1043, 10 N.Y.S.3d 486, 32 N.E.3d 921 [2015] ).
In addition, the fraudulent inducement claim is duplicative of the breach of contract claim, since it is predicated on an alleged expression of a future expectation or intent to perform, rather than on a misrepresentation of present fact (see Laduzinski, 132 A.D.3d at 168, 16 N.Y.S.3d 229 ; Man~as v. VMS Assoc., LLC, 53 A.D.3d 451, 453, 863 N.Y.S.2d 4 [1st Dept. 2008] ).
The breach of the implied warranty of authority claim was correctly dismissed because the underlying allegations are conclusory and fail to establish the existence of an agreement concerning the 10% participation interest that would have been enforceable against the defendant entities had it been authorized ( Gracie Sq. Realty Corp. v. Choice Realty Corp., 305 N.Y. 271, 282, 113 N.E.2d 416 [1953] ; Broughton v. Dona, 101 A.D.2d 897, 475 N.Y.S.2d 595 [3d Dept. 1984], appeal dismissed 63 N.Y.2d 769, 481 N.Y.S.2d 1025, 471 N.E.2d 464 [1984] ).