SEMPRA ENERGY TRADING CORP v. BP

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Supreme Court, Appellate Division, First Department, New York.

SEMPRA ENERGY TRADING CORP., Plaintiff-Appellant, v. BP PRODUCTS NORTH AMERICA, INC., Defendant-Respondent, BP North America Petroleum, Defendant.

Decided: June 17, 2008

LIPPMAN, P.J., ANDRIAS, SWEENY, RENWICK, JJ. Golenbock Eiseman Assor Bell & Peskoe LLP, New York (Jeffrey T. Golenbock of counsel), for appellant. Sidley Austin LLP, Chicago, IL (Thomas K. Cauley, Jr., of the Bar of the State of Illinois, admitted pro hac vice, of counsel), for respondent.

Order, Supreme Court, New York County (Richard B. Lowe III, J.), entered July 20, 2007, which granted defendants' motion pursuant to CPLR 3211(a)(1) and (7) to dismiss the complaint, unanimously affirmed, with costs.

 Plaintiff commenced this action for breach of contract alleging that defendants delivered fuel oil that failed to comply with the terms of the parties' agreement.   Pursuant to the contract, defendants promised to deliver plaintiff fuel oil with an API gravity of 11.3, and the parties agreed that the quality and quantity of the fuel would be determined and certified prior to discharge by a mutually acceptable inspector, and that the pre-discharge report was binding on the parties except in the event of fraud or manifest error.   The record shows that pre-discharge testing of the delivered oil established that the API gravity was in compliance with the parties' agreement.   However, post-discharge testing conducted at plaintiff's request revealed the API gravity to be below the specified minimum.

 The complaint was properly dismissed, where plaintiff's breach of contract claim was refuted by the documentary evidence, namely the pre-discharge inspection report showing that the delivered fuel oil was in compliance with contract specifications (see Leon v. Martinez, 84 N.Y.2d 83, 88, 614 N.Y.S.2d 972, 638 N.E.2d 511 [1994];  150 Broadway N.Y. Assoc., L.P. v. Bodner, 14 A.D.3d 1, 5, 784 N.Y.S.2d 63 [2004] ).   Plaintiff's allegations of manifest error on the face of the official pre-discharge inspection report were properly rejected (see Matter of Hermance v. Ulster County, 71 N.Y. 481, 486 [1877];  see also Structured Credit Partners v. PaineWebber Inc., 306 A.D.2d 132, 760 N.Y.S.2d 316 [2003] ).   Plaintiff relied on the post-discharge report, which was not material under the parties' agreement, to allege the possibility of manifest error in the official binding pre-discharge report.   Furthermore, plaintiff did not plead its claim for fraud with any specificity and merely suggested fraud on the part of defendants when loading the fuel (see CPLR 3016[b];  New York Univ. v. Continental Ins. Co., 87 N.Y.2d 308, 318-319, 639 N.Y.S.2d 283, 662 N.E.2d 763 [1995] ).