On March 7, 2024, the First Department issued a decision in Citigroup Global Mkts. Inc. v. SCIP Capital Mgt., LLC, 2024 NY Slip Op. 01249, holding that the plaintiff was not entitled to consequential damages because such damages were not contemplated by the parties when the contract was made, explaining:
Citi, however, demonstrated prima facie that Silverfern is not entitled to consequential damages. The Distribution Agreement does not mention consequential damages, nor is there evidence in the record that liability for lost profits was discussed during contract negotiations. Further, section 7(c) of the Distribution Agreement — concerning the parties’ rights and obligations upon complete termination of the agreement — does not provide for such a heavy responsibility on the part of Citi, even though it is not an exclusive remedy. In addition, Silverfern’s claim for consequential damages is out of proportion to any liability contemplated by the contract.
In opposition, Silverfern failed to raise an issue of fact. While the parties to the Distribution Agreement foresaw future clubs, there is no indication that successor clubs or future funds formed the basis for the original equity club. In addition, Silverfern’s damages expert’s estimate of losses from successor clubs and future funds failed to meet the requirement of reasonable certainty, as it rested on a host of speculative assumptions and few known factors.
(Internal quotations and citations omitted).