arrow left
arrow right
  • Trojan Maritime Inc. v. Tpg Sixth Street Partners, Llc, F/K/A Tpg Special Situations Partners, Llc Commercial - Contract document preview
  • Trojan Maritime Inc. v. Tpg Sixth Street Partners, Llc, F/K/A Tpg Special Situations Partners, Llc Commercial - Contract document preview
  • Trojan Maritime Inc. v. Tpg Sixth Street Partners, Llc, F/K/A Tpg Special Situations Partners, Llc Commercial - Contract document preview
  • Trojan Maritime Inc. v. Tpg Sixth Street Partners, Llc, F/K/A Tpg Special Situations Partners, Llc Commercial - Contract document preview
						
                                

Preview

FILED: NEW YORK COUNTY CLERK 03/30/2018 03:35 PM INDEX NO. 655978/2016 NYSCEF DOC. NO. 130 RECEIVED NYSCEF: 03/30/2018 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK TROJAN MARITIME, INC., INDEX NO. 655978/2016 Plaintiff, -against- Justice Melissa A. Crane odon Seq. No. 005 TPG SIXTH STREET PARTNERS, LLC, f/k/a TPG SPECIAL SITUATIONS PARTNERS, LLC, Defendant. MEMORANDUM OF LAW IN REPLY TO PLAINTIFF'S OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT CKR LAW LLP 1330 Avenue of the Americas 14th Floor New York, New York 10019 Tel. (212) 259-7300 Attorneys for Defendant Of counsel: Rosanne E. Felicello Zofia Rubens 1 of 13 FILED: NEW YORK COUNTY CLERK 03/30/2018 03:35 PM INDEX NO. 655978/2016 NYSCEF DOC. NO. 130 RECEIVED NYSCEF: 03/30/2018 TABLE OF CONTENTS TABLE OF ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 2 AUTHORITIES........................................................................................................ PRELIMINARY STATEMENT 1 .................................................................................................. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 2 ARGUMENT................................................................................................................................. POINT I.PLAINTIFF HAS FAILED TO ESTABLISH THAT THE CONTRACT IS AMBIGUOUS 2 ................................................................................................................................ POINT II.PLAINTIFF IGNORES THE PLAIN WORDS OF THE AGREEMENT.................... 2 PARTIES' POINT III.PLAINTIFF IGNORES THE CONDUCT................................................. 5 POINT IV. THE TESTIMONY OF THIRD PARTY MICHAEL KIRK IS IRRELEVANT.......... 6 POINT V. AN ANALYSIS OF THE EVIDENCE PRODUCED BY DEFENDANT SHOWS THAT TSSP EXPENDED MORE THAN $225,000 ON DUE DILIGENCE EXPENSES........... 7 CONCLUSION ............................................................................................................................. 9 . 1 2 of 13 FILED: NEW YORK COUNTY CLERK 03/30/2018 03:35 PM INDEX NO. 655978/2016 NYSCEF DOC. NO. 130 RECEIVED NYSCEF: 03/30/2018 TABLE OF AUTHORITIES Cases (1st Ashwood Capital, Inc. v. OTG Mgmt., Inc., 99 A.D.3d 1, 948 N.Y.S.2d 292 Dep't 2012) ...... 7 Banco Espirito Santo, S.A. v. Concessionaria Do Rodoanel Oeste S.A., 100 A.D.3d 100, 951 (1st N.Y.S.2d .Y.S.2d ~ ~ ~ 19 (1 QL ~ Dep't L Cr 2012) .................................................................................................. 7, 8 Gee v. Zee Ying Wng, 49 Misc. 3d 1215(A), 29 N.Y.S.3d 847 (N.Y. Sup. 2015) 4 ........................... Greenfield v.Philles Records, Inc., 98 N.Y.2d 562, 780 N.E.2d 166 (2002).................................. 7 Nat'l Union Fire Ins. Co. of Pittsburgh, Pennsylvania v. TransCanada Energy USA, Inc., 52 Misc. 3d 455, 28 N.Y.S.3d 800 (N.Y. Sup. Ct. 2016)............................................................. ............................................................. 2, 7 Oppenheimer & Co. v. Oppenheim, Appel, Dixon & Co., 86 N.Y.2d 685, 660 N.E.2d 415 (1995)4 (1st Perella Weinberg Partners LLC v.Kramer, 153 A.D.3d 443, 58 N.Y.S.3d 384 Dep't 2017)... 2 Schron v. Grunstein, 32 Misc. 3d 231, 917 N.Y.S.2d 820 (N.Y. Sup. Ct. 4 2011)............................. Zuckerman v. City of New York, 49 N.Y.2d 557 (1980)........................................................ ........................................................ 5, 6, 10 .. 11 3 of 13 FILED: NEW YORK COUNTY CLERK 03/30/2018 03:35 PM INDEX NO. 655978/2016 NYSCEF DOC. NO. 130 RECEIVED NYSCEF: 03/30/2018 Defendant TPG Sixth Street Partners, LLC, f/lda TPG Special Situations Partners, LLC ("TSSP" "Defendant" or "Defendant"), by and through itsundersigned attorneys, hereby respectfully submits ("Trojan" "Plaintiff' this memorandum of law in reply to Plaintiff Trojan Maritime, Inc.'s or "Plaintiff") opposition to Defendant's motion for summary judgment. PRELIMINARY STATEMENT To decide this motion, the Court must answer two questions: 1. Has Plaintiff raised an issue of material fact as to whether TSSP breached the contract by failing to return the funds advanced for due diligence? Plaintiff contends that the $150,000 transferred for due diligence expenses was subject to being returned to Plaintiff ifa third party (RBS) did not sign a settlement agreement. The plain language of the agreement does not contemplate a refund. Plaintiff proffers the testimony of a third party in an attempt to create a fact issue as to the interpretation of the agreement. But absent a finding of ambiguity, which must be determined without consideration of parol evidence, courts may not look outside the contract to interpret the meaning of the contract terms. Because the agreement is not ambiguous and does not create a condition precedent, there is no material issue of fact and the Court should find that TSSP did not breach the contract. 2. Has Plaintiff raised an issue of material fact as to whether Plaintiff owes itfor due diligence expenses? The parties agreed to cap Plaintiff's due diligence expenses at $225,000. TSSP has provided evidence that TSSP spent more than $225,000 on due diligence expenses. Trojan disputes the validity of the charges, but does not offer any evidence to support itsdispute. Notias Aff. at ¶ 26. Thus, Plaintiff owes TSSP the difference between the amount advanced and the agreed cap and is entitled to summary judgment on thisissue. I 4 of 13 FILED: NEW YORK COUNTY CLERK 03/30/2018 03:35 PM INDEX NO. 655978/2016 NYSCEF DOC. NO. 130 RECEIVED NYSCEF: 03/30/2018 ARGUMENT POINT I. PLAINTIFF HAS FAILED TO ESTABLISH THAT THE CONTRACT IS AMBIGUOUS "To be found ambiguous, a contract must be susceptible of more than one commercially interpretation." reasonable Perella Weinberg Partners LLC v.Kramer, 153 A.D.3d 443, 446, 58 (1" N.Y.S.3d 384, 388 Dep't 2017). "[P]rovisions in a contract are not ambiguous merely differently." because the parties interpret them Nat'l Union Fire Ins. Co. of Pittsburgh, Pennsylvania v. TransCanada 52 Misc. 3d — 28 N.Y.S.3d 806 Energy USA, Inc., 455, 461-62, 800, (N.Y. Sup. Ct. 2016) (citing Mount Vernon Fire Ins. Co. v. Creative Hous. Ltd., 88 N.Y.2d 347, 352, 668 N.E.2d 404, 406 (1996)). Plaintiff failed to show how the Term Sheet provision at issue is susceptible of more than one commercially reasonable interpretation. Precedent." The Term Sheet sets out certain "Conditions This listdoes not include the condition that RBS sign a settlement agreement. But satisfactory conclusion of due diligence is one of the conditions precedent (see Affidavit of Samuel Ditter Submitted in Support of Defendant's Motion for Summary Judgment ("Ditter Aff."), Exhibit E, at p. 6, (xi)). Thus, Plaintiff's interpretation that would hold Plaintiff not responsible for the due diligence expenses unless the deal closes does not comport with the plain words of the agreement and is not commercially reasonable. POINT II. PLAINTIFF IGNORES THE PLAIN WORDS OF THE AGREEMENT parties' Plaintiff misstates the terms of the agreement. The agreement does not state "if expenses" the Settlement Agreement was not executed, Trojan would not be responsible for these as Plaintiff blithely asserts in itsAmended Complaint. See Affirmation of Rosanne Felicello Submitted in Support of Defendant's Motion for Summary Judgment (the "Felicello Aff."), 5 of 13 FILED: NEW YORK COUNTY CLERK 03/30/2018 03:35 PM INDEX NO. 655978/2016 NYSCEF DOC. NO. 130 RECEIVED NYSCEF: 03/30/2018 Exhibit B, at ¶ 23. The Term Sheet states that Trojan will not be responsible for the due diligence "until" expenses RBS signs the settlement agreement. Trojan provides no legal support for its interpretation. Expenses" Plaintiff's reliance on the second paragraph under "Transaction is misplaced. The Term Sheet states: To avoid any doubt, the Charterer [Plaintiff] and Charter Guarantors shall not be responsible for any expenses whatsoever, including but not limited to the Arranger's and TSSP's expenses incurred in progressing the Transaction, the costs and fees of legal, tax, technical and other professional advisers until a final Settlement Agreement is agreed and signed with RBS. Any costs, expenses incurred during RBS' the period waiting for agreement and the signed Settlement Agreement, shall be solely for each party's own expense. (Ditter Aff., Exhibit E, at p.7.) While this paragraph purports to disclaim responsibility for expenses incurred "until a signed" final Settlement Agreement is agreed and and maintains that any expenses incurred while waiting for the signed Settlement Agreement "shall be solely for each party's own expense," this language does not impose on TSSP the duty to maintain in escrow funds that are "unless" advanced for expenses. It does not say that a Settlement Agreement is signed no funds (" until" may be expended. Rather, itis clearly a statement of timing ("until"). Plaintiff waived itsright to wait for the Settlement Agreement to be signed when ittransferred funds to TSSP prior to receiving the signed Settlement Agreement. Thus, Plaintiff cannot look to this paragraph of the Term Sheet to provide itwith relief. This language does not include words of condition. "To make a provision in a contract a condition precedent, itmust appear from the contract itself that the parties intended the provision ..." so to operate Schron v. Grunstein, 32 Misc. 3d 231, 239, 917 N.Y.S.2d 820, 827 (N.Y. Sup. Ct. 6 of 13 FILED: NEW YORK COUNTY CLERK 03/30/2018 03:35 PM INDEX NO. 655978/2016 NYSCEF DOC. NO. 130 RECEIVED NYSCEF: 03/30/2018 condition" "if," 2011). The Term Sheet does not include "unmistakable language of such as "unless until," void." and and/or "null and Oppenheimer & Co. v. Oppenheim, Appel, Dixon & Co., 86 N.Y.2d 685, 691, 660 N.E.2d 415, 418 (1995); Gee v. Zee Ying Wng, 49 Misc. 3d 1215(A), 29 N.Y.S.3d 847, *6 (N.Y. Sup. 2015) (internal citations omitted). It similarly does not use that," that," to," "conditional language, such as "on the condition "provided "subject or "in the that." event Gee, 29 N.Y.S.3d at *6. See, Gee v.Zee Ying Wng, 49 Misc. 3d 1215(A), 29 N.Y.S.3d 847 (N.Y. Sup. 2015) (Where defendant argued that the condition precedent was never met because she was never advised to consummate the transaction pursuant to the language of the agreement that provided that "[t]he parties shall use their best efforts to consummate the transactions parties' contemplated herein as soon as advised by both CPAs.", the court found said language to be "simply a timing mechanism to determine the date of transfer of the properties in accordance with the agreed-upon terms, rather than a condition precedent to performance.") The court in Gee also emphasized that conduct of the parties did not support treating the subject language as a condition precedent as the parties began performance and, as shown by their e-mails, only the issue of the timing of the transfer remained to be established. Id. at *7. Similarly, here the Term Sheet ("until" language at issue ("until") describes the timing of the deposit payment and does not create a condition precedent for the payment. If the parties meant to create a condition precedent, they "unless" would have included the word that would signal that they payment might never be made. requests" "insiste[d]" Trojan contends that it made "repeated and that "it would not be responsible for the due diligence expenses unless and until a final settlement agreement was signed." signed. Plaintiffs Mem. Of Law at p. 17. But this contention ignores the timeline of events. While Trojan may not have wanted to transfer the funds until after the RBS signed the settlement agreement, at some point Trojan decided to advance the funds even before RBS signed the 7 of 13 FILED: NEW YORK COUNTY CLERK 03/30/2018 03:35 PM INDEX NO. 655978/2016 NYSCEF DOC. NO. 130 RECEIVED NYSCEF: 03/30/2018 settlement agreement. Trojan does not provide any evidence-not one email or even a party affidavit-that itreached a new agreement with TSSP (or even that Trojan demanded) at the time that ittransferred the funds that the $150,000 should be returned to Trojan if RBS did not sign the settlement agreement. See Zuckerman v. City of New York, 49 N.Y.2d 557, 562 (1980) (finding that party opposing summary judgment "must produce evidentiary proof in admissible form . . . unsubstantiated allegations are insufficient.") Rather the fact is, as Trojan concedes, that Trojan transferred the funds because TSSP was likely to walk away from the deal if Trojan did not begin to fund the due diligence. Felicello Aff., Exhibit B, at ¶ 20. Given that TSSP was unwilling to proceed with the Transaction unless Trojan agreed to advance the $150,000, it isunreasonable for Trojan to expect that the $150,000 would be returned if the deal did not close. The interpretation advanced by Trojan ex post facto does not make commercial sense and the only viable interpretation of the agreement is the one proffered by TSSP. Thus, there is no ambiguity and no issue of fact.TSSP did not breach the contract. POINT III. PARTIES' PLAINTIFF IGNORES THE CONDUCT parties' As discussed in TSSP's opening brief, to the extent the agreement imposed a condition precedent, Trojan waived that condition by sending the funds before the RBS settlement agreement was signed and by approving expenditure of those funds by TSSP on due diligence expenses. Plaintiff argues that there was no waiver because it insisted that its responsibility for funding the due diligence expenses not arise until RBS signed the settlement agreement. This argument misses the point entirely. TSSP's contention is that the waiver occurred after the agreement was signed. Plaintiff does not address this argument. Nor does Plaintiff offer any explanation for why Plaintiff would be given the opportunity to approve, and would approve, the expenditure of funds that Plaintiff would expect itwould not 8 of 13 FILED: NEW YORK COUNTY CLERK 03/30/2018 03:35 PM INDEX NO. 655978/2016 NYSCEF DOC. NO. 130 RECEIVED NYSCEF: 03/30/2018 be liable to pay for if the deal failed to close. In addition, Plaintiff fails to explain why Plaintiff would be concerned at capping its exposure at $225,000 if itdid not intend to be liable for the due diligence funds at all absent the executed settlement agreement with RBS. The only logical explanation is that Plaintiff developed this theory of contract interpretation after the Transaction fell through. Plaintiff's conduct should not be countenanced. As shown in the emails attached to Ditter Aff. as exhibits F and G, TSSP relied on Plaintiff to provide its share of the due diligence expenses. Plaintiff encouraged TSSP's reliance by sending the funds for these expenses. Plaintiff has provided no evidence, in an email or affidavit, that Trojan told TSSP not to expend the funds advanced on due diligence expenses until and unless the settlement agreement was signed. See Zuckerman, 49 N.Y.2d, at p. 562. POINT IV. THE TESTIMONY OF THIRD PARTY MICHAEL KIRK IS IRRELEVANT Plaintiff fails to explain why the court should look to the testimony of Michael Kirk as parties' evidence of the parties intent. Plaintiff does not claim that Mr. Kirk was serving as the agent of Plaintiff or Defendant. In fact, Mr. Kirk and his related company, RMK Maritime LLP, was a third party. "The best evidence of what the parties to an agreement intended is the language of the entities." agreement itself, especially where ... the parties ... were sophisticated Nat'l Union Fire Ins. Co. of Pittsburgh, Pennsylvania v. TransCanada Energy USA, Inc.,,5252Misc. 3d.455, 455, 461, 28 N.Y.S.3d 800, 806 (N.Y. Sup. Ct. 2016) (citing Broad Street, LLC v. Gulf Ins. Co., 37 A.D.3d 126, 130, 832 N.Y.S.2d 1 (1st Dept. 2006) (citations omitted)). "[I]n order to determine the contracting parties' parties' intent, a court looks to the objective meaning of contractual language, not to the it." individual subjective understanding of Ashwood Capital, Inc. v. OTG Mgmt., Inc., 99 A.D.3d (1" parties' 1, 6, 948 N.Y.S.2d 292, 296 Dep't 2012). "[E]xtrinsic evidence of the intent may be 9 of 13 FILED: NEW YORK COUNTY CLERK 03/30/2018 03:35 PM INDEX NO. 655978/2016 NYSCEF DOC. NO. 130 RECEIVED NYSCEF: 03/30/2018 ambiguous." considered only ifthe agreement is Banco Espirito Santo, S.A. v. Concessionaria Do (1st Rodoanel Oeste S.A., 100 A.D.3d 100, 106, 951 N.Y.S.2d 19, 24 Dep't 2012). Whether a decide." contract is ambiguous "is an issue of law for the courts to Greenfield v. Philles Records, Inc., 98 N.Y.2d 562, 569, 780 N.E.2d 166 (2002). The Term Sheet is not ambiguous. A contract is unambiguous if "on its face [it] is meaning."" reasonably susceptible of only one Banco Espirito Santo, S.A., 100 A.D.3d, at 106 (quoting Greenfield, 98 NY2d at 570). Here the agreement, when read together, is only susceptible to the interpretation that the money was to be sent to be used for due diligence and that the parties expected the transfer of funds to happen after RBS signed the settlement agreement. Plaintiff concedes that ittransferred the funds and that the funds were used for due diligence. Plaintiff's Counterstatement of Material Facts in Opposition to Defendant's Motion for Summary Judgment, at ¶ 8, Felicello Aff., Exhibit B, at ¶ 23. Therefore, extrinsic evidence, in this case a third-party's testimony, is not admissible and the court should not consider evidence parties' of the supposed intent offered by Mr. Kirk. Mr. Kirk's testimony is not helpful for the additional reason that he has not been shown to be able to provide any evidence of TSSP's intent. Itis telling that Plaintiff has not offered itsown testimony and has not sought the deposition of TSSP. It is likely because the Term Sheet, together with the emails exchanged between the parties' parties and the conduct make clear that the parties intended that the $150,000 sent by Trojan be used for the due diligence expenses. The evidence also shows that the full $150,000 was used for the intended expenses. POINT V. AN ANALYSIS OF THE EVIDENCE PRODUCED BY DEFENDANT SHOWS THAT TSSP EXPENDED MORE THAN $225,000 ON DUE DILIGENCE EXPENSES Defendant incurred the following due diligence expenses up to September 2015 in 10 of 13 FILED: NEW YORK COUNTY CLERK 03/30/2018 03:35 PM INDEX NO. 655978/2016 NYSCEF DOC. NO. 130 RECEIVED NYSCEF: 03/30/2018 connection with the transaction with Plaintiff 1: Invoice Date Issuer Services Period Services Amount and Number 11.17.2015 BankServe August 2015 Report on insurance £850.00 Insurance documentations relating to the B5FEE2015- Services Ltd. vessels. APO612 27.11.2015 Idwal Marine September 2015 Inspections of the vessels, audit $38,955.00 Services Ltd of Trojan, dry docking IMS01629 specification and plan reviews, technical advisory. 10.30.2015 Kelly Hart & September 2015 Preparation of confidentiality $154.00 444899-20959 Hanman W agreements. 09.08.2015 KPMG LLP from Professional tax services, $9,110.00 01.01.2015 to research, consultation and 800811341 08.15.2015 discussions on Project Trojan 08.20.2015 Maritime 1st instalment of Dry Bulk £16,500.00 Strategies Market (Supramax)- 75% Study 5375 International of total Limited 08.31.2015 Maritime 2nd instalment of Dry Bulk £5,500.00 Strategies Market (Supramax)- Study 5384 International remaining 25% of total Limited 09.092015 The Risk from Due diligence investigation of $12,000.00 Advisory Group 07.31.2015 to Nicholas Notias. SIN003464 09.09.2015 10.09.2015 Roosevelt BPO/CMA Orders $760.00 Management Value Reconciliation RMC0046840 Company LLC Realquest Data Reports £94,546.892 11.19.2015 Watson, Farley from Review of documents such as & ams 01.30.205 to tem sheet, lease agreement, 1097498B LLP 10.13.2015 bareboat charter, guarantee note; draft memo on guarantees, on risks of being a lessor vs lender, equitable subordination; review of issues relating to withdrawal of vessels under bareboat charter, relieffrom forfeiture; emails, discussions regarding bareboat charter structure. TOTAL: $60,979.00 1 H The listedexpenses are evidenced by invoicesannexed as Exhibit to the Affidavitof Daniel Louis Wanek Submitted in Support of Defendant's Motion forSummary Judgment, dated November 14, 2017. See also,Affidavit of Daniel Louis Wanek Submitted in Support of Defendant's Motion forSummary Judgment, dated March 30,2018, correcting the November 14,2017 Affidavit. 2 The totalamount on the 11.19.2015 Watson, Farley 4 Williams LLP invoice is£100,725.85. Defendant is not including the amount of £6,178.96 for charges incurred inOctober, 2015. 11 of 13 FILED: NEW YORK COUNTY CLERK 03/30/2018 03:35 PM INDEX NO. 655978/2016 NYSCEF DOC. NO. 130 RECEIVED NYSCEF: 03/30/2018 £117,396.89 Plaintiff fails to provide any evidence disputing these charges. Instead, Plaintiff merely argues that some of the charges do not appear to be related to the Transaction. Even omitting charges on the April 30, 2015 invoice from Watson, Farley & Williams LLP in the amount of GBP 23,862.50 as well as the charges for January 2015 (GBP 120.00), TSSP has provided evidence that itexpended more than $225,000 on due diligence relating to the Transaction. Plaintiff is required allegations." to do more on a motion for summary judgment than merely raise "unsubstantiated See Zuckerman, 49 N.Y.2d, at p. 562. Plaintiff also says that it is not responsible for payments made to Watson, Farley & Williams LLP because it did not approve the invoices. But the Term Sheet does not provide Plaintiff with approval rights. Thus, TSSP has provided evidence to support that it expended these funds for due diligence. Plaintiff has failed to provide evidence in admissible form to counter TSSP's evidence. Thus, the Court should rule that TSSP is entitled to be paid by Trojan the amount of $75,000.00. CONCLUSION For allthe foregoing reasons, the Court should enter an Order granting Defendant's motion for summary judgment, and granting such other and further relief as the Court deems just and proper. Dated: New York, New York Respectfully submitted, March 30, 2018 CKR LAW LLP By: /s/ Rosanne E. Felicello Rosanne E. Felicello Zofia Rubens 1330 Avenue of the Americas 12 of 13 FILED: NEW YORK COUNTY CLERK 03/30/2018 03:35 PM INDEX NO. 655978/2016 NYSCEF DOC. NO. 130 RECEIVED NYSCEF: 03/30/2018 14th Floor New York, New York 10019 Tel. (212) 259-7300 rfelicello@ckrlaw.com zrubens@ckrlaw.com Attorneys for Defendant/Counter-Plaintiff I 13 of 13