Opinion
11367 Index 150161/17
04-09-2020
PAULICOPTER—CIA., et al., Plaintiffs–Appellants, v. BANK OF AMERICA, N.A., Defendant–Respondent, Bank of America Merrill Lynch Banco Mu´ltiplo S.A., et al., Defendants
Schlam Stone & Dolan LLP, New York (Seth D. Allen of counsel), for appellants. Moore & Van Allen PLLC, New York (James P. McLoughlin, Jr. of counsel), for respondent.
Schlam Stone & Dolan LLP, New York (Seth D. Allen of counsel), for appellants.
Moore & Van Allen PLLC, New York (James P. McLoughlin, Jr. of counsel), for respondent.
Friedman, J.P., Kapnick, Webber, Gonza´lez, JJ.
Order, Supreme Court, New York County (Andrea Masley, J.), entered March 28, 2019, which granted defendant Bank of America, N.A.'s motion to dismiss the complaint as against it, unanimously affirmed, without costs.
Plaintiffs allege that defendant Bank of America breached a structured lease transaction by seizing the aircraft that they acquired pursuant to the transaction. The motion court correctly found that defendant's repossession of the aircraft was justified by at least two separate events of default on plaintiffs' part and thus that defendant was not in breach of the leases or any corresponding duty of good faith.
First, it is undisputed that plaintiffs did not pay the rent due March 30, 2016 until May 4, 2016, and that it never paid the interest and administrative fees that had accrued. Plaintiffs' delay in paying the rent far exceeded the sublease's 10–day grace period, and the documentary evidence submitted by defendant "flatly contradicted" plaintiffs' contention that defendant waived its right to declare an event of default (see Morgenthow & Latham v. Bank of N.Y. Co., 305 A.D.2d 74, 78, 760 N.Y.S.2d 438 [1st Dept 2003] [internal quotation marks omitted], lv denied 100 N.Y.2d 512, 766 N.Y.S.2d 166, 798 N.E.2d 350 [2003] ). Moreover, the "hell or high water" clause establishes that it was plaintiffs that waived their rights to declare a default, not defendant, since hell or high water clauses "require[ ] the lessee to make payments irrespective of any defects in performance" ( Wells Fargo Fin. Leasing, Inc. v. Kokoon, Inc., No, 155239/2013, 2013 N.Y. Slip Op. 30204[U], *17, 2013 WL 391439 [Sup Ct. N.Y. County, Jan. 25, 2013] ).
Second, plaintiffs breached the parties' liquidity covenant. The records submitted to the court by defendant establish that plaintiff Antonio Joao Abdalla Filho, the principal owner of plaintiff Paulicopter, had not been paid on the precato´rio (an obligation of a Brazilian government entity to pay judgments against it) for more than six years because it was the subject of litigation brought by the State of Sa~o Paulo and that the precato´rio was subject to a claim or other encumbrance because it was awaiting the outcome of a suit bought by the State Treasury against the amount deposited. Thus, the precato´rio was neither unencumbered nor liquid.
The breach of the implied covenant of good faith and fair dealing claim was correctly dismissed as duplicative of the breach of contract claim. In any event, the complaint makes no nonconclusory allegations of bad faith on defendant's part.
The tortious interference with contract, conversion, and conspiracy claims were correctly dismissed under New York law. Plaintiffs contend that Brazilian law governs these claims, but they failed to plead or otherwise prove the substance of Brazilian law ( CPLR 3016[e] ; see Bank of N.Y. v. Norilsk Nickel, 14 A.D.3d 140, 148, 789 N.Y.S.2d 95 [1st Dept 2004], lv dismissed 4 N.Y.3d 846, 797 N.Y.S.2d 423, 830 N.E.2d 322 [2005] ). In any event, plaintiffs failed to establish that Brazilian or North Carolina law would save their tort claims.
We have considered plaintiffs' remaining contentions and
find them unavailing.