Opinion
12381 Index No. 655701/18 Case No. 2019-03353
11-17-2020
CAMBRIDGE INVESTMENTS LLC, Plaintiff–Appellant, v. PROPHECY ASSET MANAGEMENT, LP, Defendant–Respondent.
Franzino & Scher, LLC, New York (Frank J. Franzino Jr. of counsel), for appellant. Morgan, Lewis & Bockius LLP, New York (Jason D. Frank of counsel), for respondent.
Franzino & Scher, LLC, New York (Frank J. Franzino Jr. of counsel), for appellant.
Morgan, Lewis & Bockius LLP, New York (Jason D. Frank of counsel), for respondent.
Friedman, J.P., Renwick, Webber, González, JJ.
Order, Supreme Court, New York County (Andrea Masley, J.), entered on or about July 16, 2019, which granted defendant's motion to dismiss the complaint with prejudice pursuant to CPLR 3211(a)(1) and (7), unanimously affirmed, with costs.
On appeal, plaintiff does not attempt to defend the first cause of action (breach of contract) as pled in its complaint; instead, it makes arguments about different purported breaches (one in the fall of 2017 and another on February 5, 2018). Plaintiff did not claim the latter was a breach until its opposition to defendant's motion; however, it "may not amend [its] complaint ... via statements in a memorandum of law" ( Rosenberg v. Home Box Office, Inc., 2006 N.Y. Slip Op. 30358[U], *20, 2006 WL 5436822 [Sup. Ct., N.Y. County], affd 33 A.D.3d 550, 822 N.Y.S.2d 921 [1st Dept. 2006], lv denied 8 N.Y.3d 804, 830 N.Y.S.2d 700, 862 N.E.2d 792 [2007] ). As for the former, plaintiff did not claim it was a breach until its appellate brief; hence, its claim is unpreserved (see e.g. Morera v. New York City Tr. Auth., 182 A.D.3d 509, 510, 123 N.Y.S.3d 117 [1st Dept. 2020] ).
Plaintiff's second cause of action (breach of the implied covenant of good faith and fair dealing) depends on its conversations and understandings with defendant. However, the parties' contract contains a merger/integration/no-oral-modification clause. Courts enforce such clauses (see e.g. Jarecki v. Shung Moo Louie, 95 N.Y.2d 665, 669, 722 N.Y.S.2d 784, 745 N.E.2d 1006 [2001] ; Daiichi Seihan USA v. Infinity USA, 214 A.D.2d 487, 488, 625 N.Y.S.2d 527 [1st Dept. 1995] ). Furthermore, the contract does not say plaintiff has the right to make defendant invest at any particular rate; on the contrary, it says that allocations and account exposure may be reduced at defendant's sole discretion and that an increase in allocation requires both parties' agreement. Defendant cannot breach the covenant of good faith and fair dealing if the contract gives it sole and complete discretion (see Transit Funding Assoc., LLC v. Capital One Equip. Fin. Corp., 149 A.D.3d 23, 29, 48 N.Y.S.3d 110 [1st Dept. 2017] ).