| Nam Tai Elecs., Inc. v UBS PaineWebber Inc. |
| 2007 NY Slip Op 10497 [46 AD3d 486] |
| December 27, 2007 |
| Appellate Division, First Department |
| Nam Tai Electronics, Inc., Appellant, v UBS PaineWebberInc., Also Known as UBS Wealth Management USA, Respondent. |
—[*1] O'Melveny & Myers LLP, New York City (Daniel L. Cantor of counsel), forrespondent.
Order, Supreme Court, New York County (Charles Edward Ramos, J.), entered July 19,2006, which, to the extent appealed from, granted defendant's motion to dismiss the secondthrough fourth causes of action of the amended complaint, and order, same court and Justice,entered February 16, 2007, which, to the extent appealable, denied plaintiff's motion to renewand for leave to file a second amended complaint, unanimously affirmed, with costs. Appealfrom order, same court and Justice, entered October 28, 2005, deemed abandoned, as plaintiffmakes no arguments with respect thereto, without costs.
If defendant were in default for failure to answer timely pursuant to CPLR 3211 (f), it wouldnot be necessary to reach the other issues raised by plaintiff. However, the motion court's excusalof defendant's default, made sua sponte during oral argument, is not an appealable order wherethe transcript was not "so ordered" by the court (see Matter of Grisi v Shainswit, 119AD2d 418, 420, 422 [1986]; Le Glaire v New York Life Ins. Co., 5 AD2d 171, 172[1958]; CPLR 5512 [a]; 2219 [a]). There is no indication that the court would have refused to "soorder" the transcript or sign a written order if plaintiff had so requested (see Le Glaire, 5AD2d at 172; cf. Grisi, 119 AD2d at 420). We note that plaintiff merely served a noticeof default on defendant; it did not actually apply to the court for a default judgment, although ithad time to do so before oral argument (see CPLR 3215 [g] [1]). Furthermore, at oralargument, it did not claim that defendant should be held in default.
Even were we to consider the new gloss that plaintiff places on the second through fourthcauses of action of the first amended complaint (see e.g. Chateau D' If Corp. v City of NewYork, 219 AD2d 205, 209 [1996], lv denied 88 NY2d 811 [1996]; but see Jordan v UBS AG, 11 AD3d283 [2004]), they were properly dismissed. The October 28-31, 1997 exchange of lettersbetween the parties did not form a contract. The British Virgin Islands (BVI) court order alreadyrequired the share certificates to be delivered to defendant. "A promise to perform an existinglegal obligation is not valid [*2]consideration to provide a basisfor a contract" (Goncalves v Regent Intl. Hotels, 58 NY2d 206, 220 [1983]).
The first amended complaint does not state a claim for promissory estoppel becausedefendant's October 31 letter does not contain a "clear and unambiguous promise" (RichbellInfo. Servs. v Jupiter Partners, 309 AD2d 288, 304 [2003]) to sell Tele-Art's sharesimmediately.
There was no fiduciary relationship between plaintiff and defendant (see duPont vPerot, 59 FRD 404, 409 [SD NY 1973], where the court noted "no precedent for theproposition that a fiduciary relationship is created between a creditor [here, plaintiff] and a thirdparty [defendant] merely by reason of a contract between the third party and the creditor's debtor[Tele-Art]"). Even if, arguendo, plaintiff reposed trust and confidence in defendant afterreceiving the latter's October 31, 1997 letter, it soon became suspicious of defendant, asevidenced by plaintiff's letter of November 19. One can hardly say that defendant gainedsuperiority or influence over plaintiff as a result of plaintiff's trust (see Thermal Imaging, Inc.v Sandgrain Sec., Inc., 158 F Supp 2d 335, 343 [SD NY 2001]).
Neither the first amended complaint nor the proposed second amended complaint states aclaim for fraud. An element of fraud is detrimental reliance, which means transaction causationand loss causation (see Water St.Leasehold LLC v Deloitte & Touche LLP, 19 AD3d 183, 185 [2005]). Plaintiff claimsthat without defendant's assurances, it would not have agreed to the designation of defendant asthe broker who would sell Tele-Art's shares. However, the BVI court order makes it clear thatTele-Art, not plaintiff, would choose the broker. That order also required the sharecertificates that were in the possession of the stock transfer agent to be delivered to the brokerchosen by Tele-Art. Therefore, plaintiff cannot establish that defendant's misrepresentationcaused its loss (see Meyercord vCurry, 38 AD3d 315 [2007]; National Union Fire Ins. Co. of Pittsburgh, Pa. vChristopher Assoc., 257 AD2d 1, 9 [1999]).
Plaintiff's claim that defendant should have corrected its mistaken belief that shares werebeing sold in accordance with the BVI court order is unavailing, as plaintiff's November 19 lettershows that plaintiff had no such illusion.
Since the proposed second amended complaint failed to state a claim for fraud, the motioncourt properly denied leave to amend (see e.g. Megaris Furs v Gimbel Bros., 172 AD2d209 [1991]). Concur—Tom, J.P., Friedman, Nardelli and Catterson, JJ.