A duty to read

Vulcan Power Co. v Munson, 2011 NY Slip Op 07917 (1st Dept., 2011)

Defendants-appellants and defendant Munson, their representative, signed the stockholders agreement without reading it. Defendants-appellants, in fact, never requested a copy of the agreement, depending instead on the representations of Munson, who, in turn, depended upon the representations of people whose interests were at odds with his and who he believed to be untrustworthy. As a result, defendants are bound by the terms of the stockholders agreement (see Sorenson v Bridge Capital Corp., 52 AD3d 265, 266 [2008], lv dismissed 12 NY3d 748 [2009]; see also Pimpinello v Swift & Co., 253 NY 159, 162-163 [1930]). Defendants' argument that the holding in Sorenson does not apply to signers of loose signature pages is without merit. A signer's duty to read and understand that which it signed is not "diminished merely because [the signer] was provided with only a signature page" (Hotel 71 Mezz Lender LLC v Falor, 64 AD3d 430, 430 [2009]; see also Friedman v Fife, 262 AD2d 167, 168 [1999]).

Defendants' failure to read the stockholders agreement also precludes its fraud in the execution defense (see First Natl. Bank of Odessa v Fazzari, 10 NY2d 394, 397-398 [1961] [finding a non-English speaker negligent for not asking his wife to read a document of obvious legal import, especially where he had done so in the past]; see also Sorenson, 52 AD3d at 266 ["negligent failure to read [an] agreement [precludes the assertion of] justifiable reliance, an essential element of fraud in the execution"]).

Kolmar Ams., Inc. v Bioversal Inc., 2011 NY Slip Op 07916 (1st Dept., 2011)

Plaintiff's attempt to insert ambiguity into the applicable tax clause contained in the General Terms and Conditions (GTC) of the agreement between the parties which required plaintiff to pay defendant all taxes "paid or incurred by [defendant] directly or indirectly with respect to the product sold," is unpersuasive. "A written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms" (Excel Graphics Tech. v CFG/AGSCB, 1 AD3d 65, 69 [2003], lv dismissed 2 NY3d 794 [2004]). Contrary to plaintiff's argument, the language employed in the contract should not be modified by, or read together with, the "Title and Risk of Loss" provision. Nor should the term "indirectly" be read narrowly as such a reading would render the counterpart term covering taxes paid "directly," meaningless, and run afoul of the "cardinal rule of construction that a court adopt an interpretation that renders no portion of the contract meaningless" (Diamond Castle Partners v IAC/Interactive Corp., 82 AD3d 421, 422 [2011]).

Article 2 of the UCC does not authorize the introduction of parole evidence to vary the plain meaning of the GTC tax clause. Extrinsic evidence does not merely "explain" or "supplement" a contractual term within the meaning of UCC 2-202 when the purported explanation or supplement actually contradicts the unambiguous contractual terms (see UCC 2-202; Intershoe, Inc. v Bankers Trust Co., 77 NY2d 517, 523 [1991]).

The motion court's grant of partial summary judgment while directing that an inquest be held after discovery is completed was a provident exercise of its "wide discretion" (see Robert Stigwood Org. v Devon Co., 44 NY2d 922, 923-24 [1978]). Pursuant to the motion court's order, at the inquest, defendant will bear the burden of proving its damages, i.e., the amount it paid or incurred, directly or indirectly, with respect to Florida fuel taxes in connection with the subject contract.

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