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

QUATTRO PARENT LLC, Plaintiff–Respondent, v. RAKIB, Zaki, Defendant–Appellant.


Decided: April 10, 2018

Renwick, J.P., Mazzarelli, Kahn, Gesmer, Kern, JJ. Gregory Zimmer, New York, for appellant. Becker, Glynn, Muffly, Chassin & Hosinski LLP, New York (Jesse T. Conan of counsel), for respondent.

Order, Supreme Court, New York County (Andrea Masley, J.), entered December 7, 2017, which denied defendant's motion to dismiss the complaint pursuant to CPLR 3211(a)(1) and (7), unanimously affirmed, with costs.

Contrary to defendant's contention, the plain terms of the parties' agreement did not conclusively establish a defense that warrants dismissal of the complaint (see Leon v. Martinez, 84 N.Y.2d 83, 87, 614 N.Y.S.2d 972, 638 N.E.2d 511 [1994];  see Mill Fin., LLC v. Gillett, 122 A.D.3d 98, 992 N.Y.S.2d 20 [1st Dept. 2014];  Taussig v. Clipper Group, L.P., 13 A.D.3d 166, 167, 787 N.Y.S.2d 10 [1st Dept. 2004], lv denied 4 N.Y.3d 707, 796 N.Y.S.2d 580, 829 N.E.2d 673 [2005] ).  Upon de novo review of the parties' agreement (see Duane Reade, Inc. v. Cardtronics, LP, 54 A.D.3d 137, 140, 863 N.Y.S.2d 14 [1st Dept. 2008] ), we find that the subject provision which precluded plaintiff from unwinding its business or subsidiaries during an “interim period” was not an “automatic termination” clause, as characterized by defendant.  No such language was used, or even implied, and the provision's stated intent was to implement a separate operating agreement between the parties by imposing limitations upon plaintiff's actions during the period before such operating agreement could become effective.

It is undisputed that defendant never made the $7,500,000 payment required by the terms of the parties' agreement, giving rise to a cognizable claim for breach of contract (see e.g. Awards.com v. Kinko's Inc., 42 A.D.3d 178, 187, 834 N.Y.S.2d 147 [1st Dept. 2007], affd 14 N.Y.3d 791, 899 N.Y.S.2d 123, 925 N.E.2d 926 [2010] ).  Under these circumstances, plaintiff's unwinding of Quattro and a subsidiary one year after defendant's breach does not foreclose plaintiff's breach of contract claim (see Computer Possibilities Unlimited, Inc. v. Mobil Oil Corp., 301 A.D.2d 70, 77, 747 N.Y.S.2d 468 [1st Dept. 2002] [“(b)esides giving the nonrepudiating party an immediate right to sue for damages for total breach, a repudiation discharges the nonrepudiating party's obligations to render performance in the future”];  see also American List Corp. v. U.S. News & World Report, Inc., 75 N.Y.2d 38, 44, 550 N.Y.S.2d 590, 549 N.E.2d 1161 [1989] ).  Accordingly, defendant's pre-answer motion to dismiss the complaint was correctly denied.