Summary Judgment Motion Denied When Movant Failed to Show as a Matter of Law that Nonmovants' Performance Under Contract Was Possible

On December 22, 2022, Justice Robert R. Reed of the New York County Commercial Division issued a decision in J.P. Morgan Ventures Energy Corp. v. Miami Wind I LLC, 2022 NYLJ LEXIS 2667, denying the plaintiff's motion for summary judgment in a contract suit on the ground that, while the defendants had the burden of proving their force-majeure defense, the plaintiff failed to show as a matter of law that defendants' performance was "possible," explaining:

It is ultimately the Sellers' burden to demonstrate force majeure (see Phillips Puerto Rico Core, Inc. v. Tradax Petroleum, Ltd., 782 F2d 314, 319 [2d Cir 1985]). But, on the Buyer's motion for summary judgment, the Buyer has the initial burden of eliminating questions of fact and its motion must be supported by an affidavit showing "that there is no defense to the cause of action or that the...defense has no merit" (CPLR 3212 [b]; see also Belgium v. Mateo Prods., Inc., 138 AD3d 479, 480 [1st Dept 2016]). Here, this burden includes demonstrating, as a matter of law, that scheduling and delivering the energy at the delivery points on the terms required by the hedge agreements during the period of February 13 through 19, 2021 was, in fact, possible.

Goldstein's affidavit establishes that purchasing the supply needed to satisfy the Sellers' obligations under the hedge agreements was financially unfeasible for the [*21] Sellers and that their decision not to fulfill their obligations rested on financial considerations. However, Goldstein's affidavit does not establish, in and of itself, that it was possible under the circumstance for the Sellers to schedule and deliver energy in accordance with their obligations a question put in issue by the pleadings (see generally Pierrelouis v. Kuten, 207 AD3d 485, 487 [2d Dept 2022 ["CPLR 3212 (b) requires the proponent of a motion for summary judgment to demonstrate the absence of genuine issues of material fact on every relevant issue raised by the pleadings, including any affirmative defenses"][quotation marks and citation omitted]; Aimatop Rest. v. Liberty Mut. Fire Ins. Co., 74 AD2d 516, 516 [1st Dept 1980][CPLR 3212 (b) "requires movant to demonstrate the absence of genuine issues of material fact on every relevant issue raised by the pleadings, including any affirmative defenses"]).

Force-majeure clauses are narrowly interpreted. But on a motion for summary judgment brought by the party resisting the force-majeure clause, the burden falls on the moving party to show that there are no triable issues of fact and that it is entitled to judgment as a matter of law--which the plaintiff here failed to do. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning force-majeure clauses or summary judgment motions.