On September 3, 2026, the First Department issued a decision in Jefferies LLC v. Mountain State Energy Holdings LLC, 2026 NY Slip Op. 05232, enforcing an agreement limiting a party’s liability, explaining:
The court should have also granted the motion to dismiss the tortious interference cause of action as against Trilogy. The crux of the tortious interference claim against Trilogy is that Trilogy purportedly influenced Mountain State to reject plaintiff’s proposed purchase from DoubleLine absent a fee, which, plaintiff contends, amounted to a breach of the confidentiality agreement by Mountain State. Based on these allegations, and contrary to the view of Supreme Court, Trilogy, as a nonparty to the confidentiality agreement, is explicitly protected from liability by the confidentiality agreement’s nonrecourse provision because, as pleaded, the tortious interference claim “aris[es] under, in connection with, and is related in some manner to, the agreement and its alleged breach. As a result, given the broad scope of the nonrecourse provision, plaintiff’s tortious interference claim against Trilogy must be dismissed.
In opposition, plaintiff argues for the first time on appeal that the nonrecourse provision of the agreement is unenforceable with respect to the tortious interference claim against Trilogy because the complaint alleges that Trilogy intentionally interfered with plaintiff’s contract with DoubleLine. This argument is unavailing.
As a general rule, New York courts routinely enforce liability-limitation provisions, especially when negotiated by sophisticated parties. Although we have recognized an exception to this general rule in cases where a party’s alleged misconduct smacks of intentional wrongdoing that is fraudulent, malicious or prompted by the sinister intention of one acting in bad faith. The type of intentional wrongdoing that could render a limitation in a contract unenforceable is that which is unrelated to any legitimate economic self-interest. Thus, where the conduct in question was undertaken to advance a legitimate economic self-interest, a party is entitled to rely on the contractual limitation provision, notwithstanding the intentional nature of its actions.
In this case, plaintiff has alleged that Trilogy caused Mountain State to refuse to permit the consummation of plaintiff’s proposed purchase from DoubleLine absent a fee. It supports this contention by asserting that Trilogy directly communicated to plaintiff its ardent reluctance to permit new entities (such as plaintiff’s client) to join Mountain State’s membership. But even accepting these allegations as true and drawing all inferences in plaintiff’s favor, plaintiff alleges no facts suggesting the kind of bad faith conduct, devoid of any legitimate economic purpose, that would render the nonrecourse provision unenforceable. To the contrary, it is plain from the complaint that Trilogy was acting to advance its legitimate economic self-interest, to wit, maintaining control of Mountain State.
Plaintiff’s reliance on Banc of Am. Sec. LLC v Solow Bldg. Co. II, L.L.C. (47 AD3d 239 [1st Dept 2007]) does not compel a different result. Indeed, in Solow, we found that the defendant’s refusal to do something that it was already obligated to do under the lease unless paid an additional $6 million could be determined by a trier of fact to have been motivated by an intention to inflict monetary harm. Here, by contrast, the alleged 15% fee demanded by defendants to obtain their consent for the DoubleLine transaction came in the context of a bona fide dispute over the propriety of the transaction under the confidentiality agreement’s carve out. Accordingly, based on the facts alleged, plaintiff failed to sufficiently plead that its tortious interference claim against Trilogy is not barred by the nonrecourse provision.
(Internal quotations and citations omitted).