Marshall Investments Corporation, et al., Plaintiffs-Appellants, v. Harrah's Operating Company, Inc., etc., et al., Defendants-Respondents. (2011)

Meyer, Suozzi, English & Klein, P.C., Garden City (Kevin Schlosser of counsel), for Harrah's Operating Company, Inc., respondent.

Dechert LLP, New York (Neil A. Steiner of counsel), for Ivan Kaufman and Walter Horn, respondents.

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Order, Supreme Court, New York County (Richard B. Lowe III, J.), entered August 3, 2009, which, inter alia, granted defendants' motion for summary judgment dismissing plaintiffs' first cause of action for tortious interference with contract, unanimously affirmed, with costs.

The subject pledge agreement did not constitute a management contract which required the approval of the National Indian Gaming Commission (25 CFR 502.15;  cf.  Machal, Inc. v Jena Band of Choctaw Indians, 387 F Supp 2d 659, 666-667 [2005] ).   However, because it changes the Tribe's obligations, requiring them to make payments into escrow, and alters their liabilities, giving the right to sue and a veto over certain modifications of a separate management agreement to plaintiffs, the pledge agreement is a modification or assignment of rights under the management agreement.   As such, it is void because it was never approved by the commission (25 CFR 533.7).   Since the underlying contract is void, plaintiffs cannot recover for tortious interference with that contract (see Lama Holding Co. v. Smith Barney, 88 N.Y.2d 413, 424 [1996] ).

THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

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CLERK