Opinion
2012-12-13
UBS SECURITIES LLC, Plaintiff–Respondent–Appellant, v. RAE SYSTEMS INC., Defendant–Appellant–Respondent.
Kaplan Rice LLP, New York (Justin M. Garbaccio of counsel), for appellant-respondent. *879Miller & Wrubel P.C., New York (Joel M. Miller of counsel), for respondent-appellant.
Kaplan Rice LLP, New York (Justin M. Garbaccio of counsel), for appellant-respondent. *879Miller & Wrubel P.C., New York (Joel M. Miller of counsel), for respondent-appellant.
Order, Supreme Court, New York County (Jeffery K. Oing, J.), entered on or about February 28, 2012 which denied defendant-appellant's motion to dismiss pursuant to CPLR 3211, and granted plaintiff's cross motion for summary judgment insofar as finding that the parties' agreement included a right to indemnification of plaintiff for its attorney's fees, but denied the cross motion insofar as it sought pay of a discretionary bonus, unanimously modified, on the law, to grant the motion to dismiss the complaint, and otherwise affirmed, without costs. The Clerk is directed to enter judgment dismissing the complaint.
Contrary to the finding of the IAS court, the clause at issue, which provides that defendant “may” in its “sole discretion” pay plaintiff a bonus based on an assessment of its performance, was not a conditional promise, but an entirely discretionary clause that imposed no obligation on defendant to pay ( Hunter v. Deutsche Bank AG, N.Y. Branch, 56 A.D.3d 274, 866 N.Y.S.2d 670 [1st Dept. 2008] ). Nor did the “approval” of the bonus by defendant's special committee create some obligation on defendant to make the wholly discretionary payment ( id.; see generally Matter of Cosmopolitan Mut. Cas. Co. of N.Y. v. Monarch Concrete Corp., 6 A.D.2d 163, 166, 176 N.Y.S.2d 122 [1st Dept. 1958],revd. 6 N.Y.2d 383, 388, 189 N.Y.S.2d 893, 160 N.E.2d 643 [1959] ).
While the parties' amended agreement was properly read by the court to include a right to indemnification of plaintiff's attorney's fees in a direct party action ( see Breed, Abbott & Morgan v. Hulko, 74 N.Y.2d 686, 543 N.Y.S.2d 373, 541 N.E.2d 402 [1989] ), because plaintiff had no right to enforce payment of the aforementioned discretionary bonus sought herein, the cause of action for attorney's fees should also have been dismissed.