Marshall Investments Corp. v. Harrah's Operating Co.

Appellate Division of the Supreme Court of New York

Marshall Investments Corp. v. Harrah's Operating Co.

82 A.D.3d 515, 918 N.Y.2d 451

Appellate Division of the Supreme Court of the State of New York·Decided March 15, 2011·Published

Opinion

The subject pledge agreement did not constitute a management contract which required the approval of the National Indian Gaming Commission (25 CFR 502.15; cf. Machal, Inc. v Jena Band of Choctaw Indians, 387 F Supp 2d 659, 666-667 [2005]). However, because it changes the Tribe’s obligations, requiring them to make payments into escrow, and alters their liabilities, giving the right to sue and a veto over certain modifications of a separate management agreement to plaintiffs, the pledge agreement is a modification or assignment of rights under .the management agreement. As such, it is void because it was never approved by the commission (25 CFR 533.7). Since the underlying contract is void, plaintiffs cannot recover for tortious interference with that contract (see Lama Holding Co. v Smith Barney, 88 NY2d 413, 424 [1996]). Concur — Tom, J.E, Mazzarelli, Renwick, Freedman, Manzanet-Daniels, JJ.

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The subject pledge agreement did not constitute a management contract which required the approval of the National Indian Gaming Commission (25 CFR 502.15; cf. Machal, Inc. v Jena Band of Choctaw Indians, 387 F Supp 2d 659, 666-667 [2005]). However, because it changes the Tribe’s obligations, requiring them to make payments into escrow, and alters their liabilities, giving the right to sue and a veto over certain modifications of a separate management agreement to plaintiffs, the pledge agreement is a modification or assignment of rights under .the management agreement. As such, it is void because it was never approved by the commission (25 CFR 533.7). Since the underlying contract is void, plaintiffs cannot recover for tortious interference with that contract (see Lama Holding Co. v Smith Barney, 88 NY2d 413, 424 [1996]). Concur — Tom, J.E, Mazzarelli, Renwick, Freedman, Manzanet-Daniels, JJ.

Marshall Investments Corp. v. Harrah's Operating Co., 82 A.D.3d 515, 918 N.Y.2d 451 (N.Y. Ct. App. 2011).

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Opinion

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