Summary
affirming dismissal pursuant to CPLR 3211 and where parties' agreement provided that certain profit calculations "shall be binding and final absent manifest error"
Summary of this case from Curacao Oil N.V. v. Trafigura Pte. Ltd.Opinion
1418
June 17, 2003.
Order, Supreme Court, New York County (Charles Ramos, J.), entered July 2, 2002, which granted defendant's motion to dismiss the complaint pursuant to CPLR 3211(a)(1) and (7), unanimously affirmed, without costs.
Marc A. Susswein, for plaintiff-appellant.
David W. Haller, for defendant-respondent.
Before: Mazzarelli, J.P., Ellerin, Williams, Lerner, Gonzalez, JJ.
Plaintiff's breach of contract claim alleging defendant's unjustified reduction of the arbitrage vehicle's profitability, and resulting elimination of a large part of plaintiff's expected profit from the transaction, was properly dismissed in view of the provisions in the parties' agreements that defendant's arbitrage profit calculations "shall be binding and final absent manifest error" (see Matter of Hermance v. Board of Supervisors, 71 N.Y. 481, 486) and that defendant would not be liable to plaintiff absent willful misconduct, bad faith or gross negligence. The motion court also properly dismissed plaintiff's causes of action alleging loss of profitability caused by defendant's hedging the collateral with treasury securities instead of interest-rate swaps, on the ground that the parties' fully integrated agreements did not impose any duty on defendant to hedge the collateral with interest-rate swaps. Moreover, even if plaintiff could establish a tort claim independent of defendant's alleged contractual hedging obligations, based upon accepted banking industry hedging practices, plaintiff's allegations fail to show the necessary reckless disregard of its rights (see Hartford Ins. Co. v. Holmes Protection Group, 250 A.D.2d 526, 527). The motion court correctly found that disclosure would not avail plaintiff.
THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.