Morpheus Capital Advisors LLC v. UBS AG

Pigott, J.

(dissenting). The language used in this agreement could reasonably be interpreted to indicate that the parties intended Morpheus to have an exclusive right to sell the student loan assets during the relevant contract period. For this reason, I dissent.

The majority holds as a matter of law that the agreement in dispute gave Morpheus only a “standard exclusive agency,” not an “exclusive right to sell” certain student loan assets (see majority op at 531). In holding so, the majority sets forth a rule that has not yet been uniformly applied in cases involving investment banking contracts; that an “affirmative and unequivocal *538statement” must be made to establish an exclusive right to sell the assets (id. at 535). Rather, this rule was established in Appellate Division cases involving brokerage real estate agreements.

Reading this agreement most favorably to Morpheus, which we must on this CPLR 3211 motion, questions of fact exist as to whether the parties intended Morpheus to have an exclusive right to sell. The agreement gave Morpheus the “exclusive right to solicit counterparties for any potential Transaction involving the Student Loan Assets during the term of this Agreement.” The agreement also provided that Morpheus “shall receive a Success Fee payable upon the closing of’ any transaction involving the sale, transfer, or transfer of risk of first loss of the student loan assets.

Further, the parties negotiated a contractual provision that relieves UBS Real Estate Securities (UBSRE) of the obligation to pay Morpheus if it or its affiliates completed a certain type of deal with two particular entities, Morgan Stanley or NBF International. This limited exception of UBSRE’s obligation to pay Morpheus for a transaction that it and/or its affiliates initiated would be unnecessary if UBSRE could dispose of the student loan assets without liability to Morpheus in a self-directed transaction. Another provision permits UBSRE to jointly market the assets with Morpheus “taking the lead.” This provision, like the Morgan Stanley/NBF International carve out, also would be unnecessary if UBSRE had, as it claims, an unfettered right to sell the student loan assets without obligation to Morpheus on the theory that Morpheus only had an exclusive agency right.

Judges Graffeo, Read and Rivera concur with Chief Judge Lippman; Judge Pigott dissents in an opinion; Judges Smith and Abdus-Salaam taking no part.

Order reversed, with costs, motion of defendant UBS Real Estate Securities to dismiss the complaint as against it granted, and certified question answered in the negative.