U.S. Bank National Association v. App International Finance Company
Decision Date | 17 October 2006 |
Docket Number | 8534N.,M-2154. |
Citation | 823 N.Y.S.2d 361,2006 NY Slip Op 07397,33 A.D.3d 430 |
Parties | U.S. BANK NATIONAL ASSOCIATION, Plaintiff, v. APP INTERNATIONAL FINANCE COMPANY et al., Defendants. FINTECH ADVISORY, INC., Respondent, v. U.S. BANK NATIONAL ASSOCIATION, Appellant. |
Court | New York Supreme Court — Appellate Division |
This appeal is one of a series of legal disputes among the instant parties regarding three notes issued and/or guaranteed by the APP defendants (see Gryphon Dom. VI, LLC v APP Intl. Fin. Co., B.V., 18 AD3d 286 [2005] [ ]; Gryphon Dom. VI, LLC v GBR Info. Servs., Inc., 29 AD3d 392 [2006]; U.S. Bank N.A. v APP Intl. Fin. Co., B.V., 29 AD3d 394 [2006]). In the latest appeal (id.), we ruled that indenture trustee U.S. Bank had standing to recover on behalf and for the benefit of all the noteholders, and we affirmed the 2005 judgment granting it recovery of the remaining principal and statutory interest due on the three secured notes.
Plaintiff-in-intervention Fintech Advisory, a 1% stakeholder, moved to intervene, alleging that U.S. Bank's filing of this action breached its fiduciary duties to a subset of the noteholders, itself included. In its intervention complaint Fintech pointed to U.S. Bank's allegedly persistent and unreasonable refusal to participate in the restructuring plan offered by the APP defendants as a basis for enjoining U.S. Bank's prosecution of its claims on the notes. As an affirmative defense, U.S. Bank claimed that Fintech was working at the behest of or in concert with the APP defendants and/or receiving consideration from these defendants or their representatives to bring this action in violation of Judiciary Law § 488.
In response to litigation instigated by the APP defendants to restrain U.S. Bank and others from exercising their rights to recover on the notes both in the U.S. and abroad, U.S. Bank, the Gryphon plaintiffs, and other interested parties (collectively the common interest parties) entered into a "Common Interest and Confidentiality Agreement" so as to protect from disclosure these entities' shared and coordinated litigation strategy against the APP defendants. Fintech moved to compel discovery including disclosure of the purported common interest materials. Insofar as relevant herein, the motion court summarily ruled that the common interest privilege was unavailable to U.S Bank inasmuch as Fintech was itself a noteholder on whose behalf U.S. Bank was required to act as a fiduciary. This was error.
In New York, we recognize that "the public interest is served by shielding certain communications ... from litigation, rather than risk stifling them altogether," and have afforded a conditional, or qualified,...
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