| Churchill Fin. Cayman, Ltd. v BNP Paribas |
| 2012 NY Slip Op 03775 [95 AD3d 614] |
| May 15, 2012 |
| Appellate Division, First Department |
| Churchill Financial Cayman, Ltd., Appellant, v BNPParibas, Respondent. |
—[*1] Davis & Gilbert LLP, New York (David S. Greenberg of counsel), for respondent.
Order, Supreme Court, New York County (Charles Edward Ramos, J.), entered December 2,2010, which granted defendant's motion to dismiss the amended complaint's first cause of action,unanimously affirmed, with costs.
The motion court correctly held that defendant had no duty to speak regarding the classaction. "[A]bsent a fiduciary duty or some other independent duty owed by [defendant allegedaider and abettor] to the plaintiff[ ]," there is no duty to disclose, and, thus, defendant's silencedoes not constitute the requisite "substantial assistance" to sustain a claim for aiding and abettingfraud (see Stanfield Offshore LeveragedAssets, Ltd. v Metropolitan Life Ins. Co., 64 AD3d 472, 476 [2009], lv denied13 NY3d 709 [2009]; see also King v Schonberg & Co., 233 AD2d 242, 243 [1996]).Contrary to plaintiff's contention, the documentary evidence proffered by defendant demonstratedthat defendant was silent in response to plaintiff's question regarding outstanding legal matters,and thus had no duty to address the class action.
In any event, even assuming defendant had a duty to address the class action, plaintiff couldnot have justifiably relied on defendant's silence. The existence and particulars of that lawsuitwere matters of public record which plaintiff could have discovered using ordinary diligence(see National Union Fire Ins. Co. of Pittsburgh, Pa. v Red Apple Group, 273 AD2d 140,141 [2000]). Moreover, the principle that parties, who are not in a fiduciary or confidentialrelationship, and deal with each other at arm's length, cannot justifiably rely on the other side'sfailure to disclose matters of public record and/or matters discoverable by using ordinarydiligence, assumes added significance, where, as here, plaintiff is a sophisticated commercialentity (see HSH Nordbank AG v UBS AG, 95 AD3d 185, 195 [2012]; Alpha GmbH& Co. Schiffsbesitz KG v BIP Indus. Co., 25 AD3d 344, 345 [2006], lvdismissed 7 NY3d 741 [2006]; seealso Ventur Group, LLC v Finnerty, 68 AD3d 638, 639 [2009]).
Furthermore, plaintiff was specifically advised in the Confidential Information Memorandumof certain unspecified litigation. Thus, a sophisticated lender, such as plaintiff, had a duty tofollow-up and make its own independent analysis regarding the "materiality" of that litigation.Under the circumstances, plaintiff's failure to perform any independent analysis of whether aspecifically disclosed risk factor (i.e., litigation) could have a material adverse effect [*2]on the borrower's financial condition defeats its assertion ofjustifiable reliance (see HSH Nordbank AG, 95 AD3d 185, 207; Ventur Group, LLC, 68 AD3d at 639).
Moreover, plaintiff could not justifiably rely on defendant's lack of specific response to itsgeneral question regarding "any outstanding legal, tax, related matters," as meaning thatpreviously disclosed, but unspecified, litigations were not material. Here again, plaintiff had aduty to conduct, at a minimum, a basic independent investigation and assessment of theborrower's litigation risk and exposure, and not to blindly rely on the inference it allegedly drewfrom defendant's silence (seePermasteelisa, S.p.A. v Lincolnshire Mgt., Inc., 16 AD3d 352 [2005]).
We have reviewed plaintiff's remaining contentions, and find them unavailing.Concur—Tom, J.P., Andrias, Renwick, DeGrasse and Abdus-Salaam, JJ.