JF CORPORATION v. LLC (2007)

Judgment, Supreme Court, New York County (Herman Cahn, J.), entered December 21, 2006, dismissing the amended complaint as against defendants-respondents, unanimously affirmed, with costs.

Plaintiffs allege that, some time in or after April 2000, defendants wrongfully cancelled two line-of-credit agreements that enabled them to engage in trading of commodities and derivatives for the purposes of hedging their citrus-growing operations in Brazil.   They allege that the parties entered into the credit agreements, which contain Illinois choice of law provisions, in May 1998, renewed them in writing for the period May 27, 1999 through May 27, 2000, and orally agreed to extend them for an indefinite period in March 2000.

The Illinois Credit Agreements Act, 815 ILCS 160 et seq., bars any and all claims based on oral agreements to extend credit or to modify an existing credit agreement (see R and B Kapital Development, LLC v. North Shore Community Bank and Trust Co., 358 Ill.App.3d 912, 917, 295 Ill.Dec. 95, 832 N.E.2d 246, 252 [Ill. App. 1st Dist.2005];  First National Bank in Staunton v. McBride Chevrolet, Inc., 267 Ill.App.3d 367, 372, 204 Ill.Dec. 676, 642 N.E.2d 138, 142 [Ill. App. 4th Dist.1994] ).   Thus, the complaint fails to state a cause of action under Illinois law.

Contrary to plaintiffs' contention, this legal argument may be raised for the first time at this juncture (see Sega v. State, 60 N.Y.2d 183, 190 n. 2, 469 N.Y.S.2d 51, 456 N.E.2d 1174 [1983];  Chateau D'If Corp. v. City of New York, 219 A.D.2d 205, 209, 641 N.Y.S.2d 252, lv. denied, 88 N.Y.2d 811, 649 N.Y.S.2d 379, 672 N.E.2d 605 [1996] ).