| Havell Capital Enhanced Mun. Income Fund, L.P. v Citibank,N.A. |
| 2011 NY Slip Op 04101 [84 AD3d 588] |
| May 17, 2011 |
| Appellate Division, First Department |
| Havell Capital Enhanced Municipal Income Fund, L.P.,Appellant, v Citibank, N.A., Respondent. |
—[*1] Freshfields Bruckhaus Deringer US LLP, New York (Marshall H. Fishman of counsel), forrespondent.
Order, Supreme Court, New York County (Charles E. Ramos, J.), entered December 14,2010, which granted defendant's motion for summary judgment dismissing the amendedcomplaint, unanimously affirmed, with costs.
Plaintiff had purchased positions in municipal bonds on margin, and secured its debt todefendant with cash and the bonds pursuant to an International Swaps and DerivativesAssociation agreement and related agreements. When plaintiff defaulted under the governingagreements, rather than invoke its remedies upon default, defendant offered to purchaseplaintiff's bond collateral. Although plaintiff's principal complained that defendant's bid purchaseprices were too low, she signed the letter "settlement agreement" that defendant proffered, whichindicated the prices and the resulting shortfall in payment of the margin loan debt as a result ofthe declined value of the bond collateral.
Under the circumstances, the letter agreement barred plaintiff's claim for breach ofobligations in the earlier agreements to act in a commercially reasonable manner and to obtainthe highest obtainable prices under prevailing market conditions in liquidating plaintiff'sinterests. The reservation of rights in the letter agreement relied on by plaintiff did not reserve itsright to challenge defendant's bond purchase prices, since such interpretation would have negatedthe main purpose of the letter agreement and rendered it meaningless (see Beal Sav. Bank v Sommer, 8 NY3d318, 324 [2007]).
The claim for breach of the implied covenant of good faith, which arose from the same factsand sought identical damages, was duplicative of the contract claim (see Amcan Holdings, Inc. v CanadianImperial Bank of Commerce, 70 AD3d 423, 426 [2010], lv denied 15 NY3d 704[2010]). Moreover, the duty of good faith cannot imply obligations inconsistent with the expressterms of the letter agreement (see Murphy v American Home Prods. Corp., 58 NY2d 293,304 [1983]).
Similarly, the fraud claim, which arose from the same facts, sought identical damages anddid not allege a breach of any duty collateral to or independent of the parties' agreements, wasredundant of the contract claim (seeFinancial Structures Ltd. v UBS AG, 77 AD3d 417, 419[*2][2010]).
The fraudulent inducement claim was deficient for lack of justifiable reliance, since plaintiff,a sophisticated and experienced hedge fund dealing in municipal bonds, had access to therelevant market information, and, moreover, its principal was admittedly aware that defendant'sbids were too low, yet she chose to execute the letter agreement (see e.g. Vanderbilt Group, LLC vDormitory Auth. of State of N.Y., 51 AD3d 506, 507 [2008]).
Absent a confidential or fiduciary relationship, defendant was not under a duty to disclose(see Board of Mgrs. of the Chelsea 19Condominium v Chelsea 19 Assoc., 73 AD3d 581, 582 [2010]) that it was holdingsimilar bonds in its own account and was seeking a purchaser for them at the time it wasnegotiating the liquidation of plaintiff's bond positions. Contrary to plaintiff's contention, theinstant facts do not fall within the "special facts" doctrine (see Swersky v Dreyer &Traub, 219 AD2d 321, 327-328 [1996]).
Furthermore, although defendant's motion for summary judgment was brought simultaneouswith service of its answer to the amended complaint, plaintiff's claimed need for discoveryreflected an ineffectual "mere hope" insufficient to forestall summary judgment since theevidence that might otherwise have been obtained would not have been relevant (see Kent v 534 E. 11th St., 80 AD3d106, 114-115 [2010]). Concur—Mazzarelli, J.P., Sweeny, Acosta, Renwick andDeGrasse, JJ.