On November 12, 2021, Justice Cohen of the New York County Commercial Division issued a decision in Cohen v. Trump Org. LLC, 2021 NY Slip Op. 32281(U), holding that a “no oral modification” clause barred claims based on alleged oral agreements, explaining:
The alleged oral agreements are unenforceable as a matter of law. Under well-settled New York law, where a contract contains a no oral modification clause, that clause will be enforceable. And if the only proof of an alleged agreement to deviate from a written contract is the oral exchanges between the parties, the writing controls.
Here, it is undisputed that the Operating Agreement, upon which Mr. Cohen heavily relies, contains a no oral modification clause. It is also undisputed that the Operating Agreement was in effect at all times relevant to Plaintiffs claims for indemnification. And the only evidence of the oral agreements proffered by Plaintiff is his own testimony about the alleged promises between the parties. As a result, the terms of indemnification written down in the Operating Agreement must control, and Plaintiff may not rely on the alleged oral agreements to deviate from them.
Plaintiff insists that section 11.1 is inapplicable because the alleged oral commitments were not agreements to modify the indemnification clause in the Operating Agreement, but were, rather, stand-alone commitments to take care of Cohen’s expenses. But the distinction Plaintiff draws here is insubstantial. Whether or not the alleged oral agreements were framed as modifications, the legal question is whether they address the same subject matter as the written indemnification provisions, such that their effect would modify the terms set down in the Operating Agreement. And they do. Where article 7.2 of the Operating Agreement provides for indemnification in specified circumstances, the alleged oral agreements purport to expand that duty into a general promise to take care of’ Plaintiff’s legal expenses.
Indeed, Plaintiff concedes that the oral commitments supplemented the written instrument, and his own deposition testimony confirms his view that the alleged oral agreements changed the terms of the written agreement. Viewing the matter realistically, it is quite obvious that plaintiff is merely attempting to change orally the written agreement by altering key terms – here, the scope of Defendant’s duty to indemnify him – in violation of section 11.1. Therefore, because the alleged oral agreements are unenforceable, the Court must look to the Operating Agreement to determine the scope of Defendant’s duty to indemnify Plaintiff.
(Internal quotations and citations omitted).