Opinion
3139.
Decided March 16, 2004.
Order, Supreme Court, New York County (Herman Cahn, J.), entered September 18, 2003, which granted defendants' motion for summary judgment insofar as to dismiss the causes of action for breach of an oral agreement, fraud, negligent misrepresentation, breach of fiduciary duty, negligent valuation of collateral, and unjust enrichment, and denied plaintiffs' cross motion for summary judgment on their causes of action for breach of written agreements, breach of fiduciary duty and negligent valuation, unanimously affirmed, with costs.
Gregory E. Galterio, for Plaintiffs-Appellants-Respondents.
James A. Moss, for Defendants-Respondents-Appellants.
Before: Tom, J.P., Andrias, Saxe, Sullivan, JJ.
While the issue, whether revised Uniform Commercial Code § 8-113 rendered the statute of frauds inapplicable to the alleged oral agreement to extend financing for the purchase of securities for a particular period, was not raised before the motion court, it presents a question of law that may be raised for the first time at this juncture ( see Chateau D'If Corp. v. City of New York, 219 A.D.2d 205, 209-210). We conclude that the statutory revision, which was intended to bring the law into step with the prevailing mechanics of discrete securities transfers, was not intended to apply to the claimed financing agreement at issue here ( see Uniform Laws Annotated, Vol. 2C, Uniform Commercial Code Revised Article 8, Notes on Scope, 2003 Pocket Part, at 80-81).
The alleged oral agreement was barred by the statute of frauds (General Obligations Law § 5-701). There was absolutely no possibility that it could be performed within a year ( see Cron v. Hargro Fabrics, Inc., 91 N.Y.2d 362, 366); plaintiffs' assertion that there was an option to cancel in exchange for payment of a penalty is, inter alia, unsupported by the record. The documents relied upon by plaintiffs could not be cobbled together as a writing sufficient to satisfy the statute, since material terms were missing ( see Kobre v. Instrument Sys., Inc., 54 A.D.2d 625, 626, affd 43 N.Y.2d 862; see also Adiel v. Lincoln Plaza Assocs., 254 A.D.2d 5). Nor could the agreement be salvaged by the claimed part performance ( see Steven Pevner, Inc. v. Ensler, 309 A.D.2d 722), which, in any event, was not unequivocally referable to the claimed agreement ( see Anostario v. Vicinanzo, 59 N.Y.2d 662, 664). In view of the foregoing, it is unnecessary to address the other arguments regarding the enforceability of the alleged oral agreement.
The tort claims were properly dismissed as duplicative of the contract claims ( see Richbell Info. Servs., Inc. v. 529 Jupiter Partners, L.P., 309 A.D.2d 288, 305; River Glen Assocs, Ltd. v. Merrill Lynch Credit Corp., 295 A.D.2d 274, 275; Shilkoff, Inc. v. 885 Third Ave. Corp., 299 A.D.2d 253). In addition, the fiduciary breach and negligent misrepresentation causes of action were not viable in the absence of a fiduciary or confidential relationship between the parties ( see Sidamonidze v. Kay, 304 A.D.2d 415); the relationship here, involving non-discretionary securities accounts, was, as expressly provided in the governing documents, at arm's length ( see Fesseha v. TD Waterhouse Inv. Servs., Inc., 305 A.D.2d 268). In light of our determination that the tort claims were properly dismissed for these several reasons, we do not address defendants' other arguments.
The cause of action seeking to recover, on the theory of unjust enrichment, the profits that defendants made upon reselling plaintiffs' securities was barred by the limitation of damages provision in the Terms and Conditions for Confirmation, as well as by the existence of a valid contract ( see Golub Assocs, Inc. v. Lincolnshire Mgt., Inc., 1 A.D.3d 237), albeit one whose terms were in dispute.
Although defendants had the discretion to call in their margin loan to plaintiffs at any time reasonably necessary for their protection, this discretion was not unfettered since it remained subject to the implied duty of good faith ( see Richbell Information Services, Inc., 309 A.D.2d at 302-303). Our review of the record discloses that the motion court properly found issues of fact as to defendants' good faith and the reasonableness of their conduct. This is especially so with respect to defendants' margin call.
We have considered the parties' other contentions for affirmative relief and find them unavailing.
THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.