Morpheus Capital Advisors LLC v. UBS AG

Summary

The New York Court of Appeals held that a financial brokerage agreement created an exclusive agency rather than an exclusive right to sell. Because the agreement did not expressly require UBS Real Estate Securities to pay a commission when it independently transferred distressed student loan assets to a Swiss National Bank fund, the transfer did not trigger a success fee. The court reversed the Appellate Division and directed dismissal of the complaint against UBS Real Estate Securities.

Holdings

1. The agreement created an exclusive agency, not an exclusive right to sell. A contract establishes an exclusive right to sell only when it clearly and expressly provides that a commission is due upon a sale by the owner or excludes the owner from independently negotiating a sale.
2. The provision granting Morpheus the exclusive right to solicit counterparties did not impose a corollary duty on UBS to wait before independently transferring the assets.
3. The transfer of the student-loan assets to the stabilization fund did not trigger UBS's obligation to pay Morpheus a success fee.
4. The complaint was properly dismissed because its causes of action were conclusively contradicted by the language of the parties' contract.

Questions Presented

1. Whether the brokerage agreement created an exclusive right to sell, requiring UBS to pay a commission when UBS itself transferred the assets without a buyer procured by Morpheus.
2. Whether the agreement's grant of an exclusive right to solicit counterparties imposed a duty on UBS to wait and give Morpheus an opportunity to solicit a buyer before transferring the assets.
3. Whether the transfer to the Swiss National Bank stabilization fund triggered UBS's contractual obligation to pay a success fee.
4. Whether the complaint was conclusively contradicted by the contract and therefore subject to dismissal under CPLR 3211.

Disposition

reversed