Opinion
Nos. 2003 2004 Index No. 656893/19 Case Nos. 2023-03449 2023-04530
09-05-2024
GCA Advisors, LLC, Plaintiff-Respondent, v. Intersections, Inc., Defendant-Appellant.
Wilmer Cutler Pickering Hale and Dorr LLP, New York (Ericka Aiken of the bar of the District of Columbia and State of Maryland, admitted pro hac vice, of counsel), for appellant. The Liddle Law Firm PLLC, New York (Jeffrey L. Liddle and Edger M. Rivera of counsel), for respondent.
Wilmer Cutler Pickering Hale and Dorr LLP, New York (Ericka Aiken of the bar of the District of Columbia and State of Maryland, admitted pro hac vice, of counsel), for appellant.
The Liddle Law Firm PLLC, New York (Jeffrey L. Liddle and Edger M. Rivera of counsel), for respondent.
Before: Webber, J.P., Moulton, Kennedy, Rodriguez, JJ.
Judgment, Supreme Court, New York County (Andrea Masley, J.), entered August 10, 2023, in favor of plaintiff in the total amount of $1,929,405.31, unanimously affirmed, without costs. Appeal from order, same court and Justice, entered June 16, 2023, which denied defendant's motion for summary judgment and granted plaintiff's motion for summary judgment, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.
Contrary to defendant's contention, the agreement's tail provision did not require plaintiff to perform any services with respect to the ultimately completed transaction in order to be entitled to a transaction fee. Unambiguous terms of an agreement between sophisticated parties must be enforced pursuant to their plain meaning (see Condor Capital Corp. v CALS Inv., LLC, 179 A.D.3d 592, 592 [1st Dept 2020], citing Ellington v EMI Music, Inc., 24 N.Y.3d 239, 245 [2014]; see also George Backer Mgt. Corp. v Acme Quilting Co., 46 N.Y.2d 211, 217-218 [1978]; Murray Hill Mews Owners Corp. v Rio Rest. Assoc. L.P., 92 A.D.3d 453, 454 [1st Dept 2012]).
Tail provisions in investment banking contracts are common and are generally enforceable (see e.g. Moelis & Co. LLC v Ocwen Fin. Corp., 203 A.D.3d 469, 471-472 [1st Dept 2022]; StormHarbour Sec. LP v IIG Trade Opportunities Fund N.V., 145 A.D.3d 497 [1st Dept 2016]). The broker cases cited by defendant are inapposite, as they turn on whether the broker was the "procuring cause" of the transaction, which is not a requirement under the tail provision here (see e.g. Saunders Ventures, Inc. v Catcove Group, Inc., 151 A.D.3d 991, 994 [2d Dept 2017]). As is the decision in Peter J. Solomon Co., L.P. v Oneida Ltd. (2010 WL 234827, *3, 2010 U.S. Dist LEXIS 6500, *8 [SD NY Jan. 22, 2010, No. 09 Civ. 2229 (DC)]), upon which defendant relies, since there the plaintiff attempted to collect a second fee under a distinguishable tail provision after an initial fee had already been paid for the contemplated, completed restructuring transaction.
It is not commercially unreasonable to enforce the agreement, including the tail provision, by the plain terms of the governing language (see ERC 16W Ltd. Partnership v Xanadu Mezz Holdings LLC, 95 A.D.3d 498, 502-504 [1st Dept 2012]; see also Condor Capital Corp., 179 A.D.3d 592 ["enforcing the definition as written does not 'produce a result that is absurd, commercially unreasonable or contrary to the reasonable expectations of the parties'"], quoting Matter of Lipper Holdings v Trident Holdings, 1 A.D.3d 170, 171 [1st Dept 2003]).