Court Opinion

ID: 5945014
Source: CourtListenerOpinion
Date Created: 2022-01-13 05:58:58.990823+00
Date Added: 2024-06-11T08:47:24.707748
License: Public Domain

Wallach, J.,
dissents in part in a memorandum as follows: I agree with the majority that the IAS court correctly dismissed the second cause of action for tortious interference with contract. A party is, after all, privileged to interfere with performance of a contract in order to protect a right equal or superior to the plaintiff’s, inasmuch as such a showing would overcome the element of malice which is necessary to such a claim (Felsen v Sol Cafe Mfg. Corp., 24 NY2d 682). "Such a cause of action requires the existence of a valid contract *594between the plaintiff and a third party, the defendant’s knowledge of that contract, and its intentional interference with the performance of that contract by the third party without justification” (S & S Hotel Ventures Ltd. Partnership v 777 S. H. Corp., 108 AD2d 351, 354 [emphasis added]).
By the same token, plaintiff’s third cause of action for unjust enrichment requires a showing that “the enrichment be unjust” (McGrath v Hilding, 41 NY2d 625, 629). If Chase Manhattan Bank was justified in interfering with the financial relationship between plaintiff and Drexel Burnham Lambert to the extent of the Chase credit, it stands to reason that Chase was not unjustly enriched by that act. Where a first creditor is simply more diligent than a second in collecting from a debtor who is separately obligated to both, the first is not unjustly enriched at the expense of the second. The diligent creditor (here Chase) has received no “benefit” by reason of the inaction of the passive creditor (here plaintiff) save strictly by the former’s own exertions. Nor is plaintiff to be "restored” to its never-left original position — an essential element of the unjust enrichment recovery which plaintiff is seeking. Thus the remedy of restitution, the essence of which is unjust enrichment, will not lie (see, Restatement of Restitution § 1).
Furthermore, we cannot ignore the fact that Drexel’s debtor status is now the subject of bankruptcy proceedings. The gist of plaintiff’s claim is that Chase collected its debt by enforcing a security interest (an assignment of accounts receivable) beyond its entitlement under that instrument; it therefore received a preferential payment as a mere general, rather than a secured, creditor. Or, to put it another way, plaintiff contends that Chase’s security interest was insufficiently perfected. Litigation of that claim is solely a matter for the bankruptcy trustee, and determination thereof is exclusively within the jurisdiction of the Drexel bankruptcy court (see, Reldan Trading Corp. v ABC Films, 21 Misc 2d 579). Resort to the New York courts in an effort to establish priority of claims against the debtor would thus improperly interfere with the function of the bankruptcy court (Frommer v Frommer, 104 AD2d 726).
Accordingly, I would affirm the dismissal of both the second and third causes of action.