Contract analysis

I. INTRODUCTION AND PURPOSE This bench memo is prepared for Samuel Eklund's use at oral argument on April 14, 2025, before the Honorable Richard Torrance, Justice of the Supreme Court, Commercial Division, New York County, on Vantor Holdings Corp.'s Motion to Dismiss filed on February 28, 2025, pursuant to CPLR § 3211(a)(1) (documentary evidence) and CPLR § 3211(a)(7) (failure to state a cause of action). The briefin

II. PROCEDURAL POSTURE The procedural history of this matter is as follows: January 21, 2025: Ironside filed its Verified Complaint (87 paragraphs, seven causes of action), verified by Elliot Brennan, Co-Founder, Managing Partner, and Chief Investment Officer of Ironside. The seven causes of action asserted in the Complaint are: Count I: Fraud (common law) — alleging that Vantor knowingly delivered materially false a

III. SUMMARY OF VANTOR'S FIVE MTD ARGUMENTS For quick reference at argument, Vantor's Motion to Dismiss advances the following five principal arguments, plus a new argument raised for the first time in the reply brief:

1. Fraud Claims Are Duplicative and Fail Particularity Requirements. Vantor contends that the fraud claims (Counts I and II) are duplicative of the breach of contract claim (Count IV) and fail to satisfy the heightened particularity requirements of CPLR § 3016(b).

2. Breach of Fiduciary Duty Fails Because Vantor Is Not a Fiduciary. Vantor argues that it is a contractual service provider, not a fiduciary, and that the FAA does not create or impose fiduciary obligations.

3. The FAA § 9.3 Liability Cap Limits All Damages to $2.98 Million. Vantor asserts that FAA § 9.3 caps its aggregate liability at two times the fees paid in the twelve months preceding termination — calculated as 2 × $1.49 million = $2.98 million — and that this cap applies to all claims, including fraud.

4. Unjust Enrichment Is Precluded by Express Contract. Vantor contends that the unjust enrichment claim (Count VII) cannot be maintained because the FAA is an express contract governing the same subject matter.

5. Economic Loss Doctrine Bars All Tort Claims. Vantor argues that all tort claims (Counts I, II, III, V, and VI) seek purely economic losses arising from a contractual relationship and are therefore barred by the economic loss doctrine.

6. Martin Act Preemption (New — Raised in Reply Brief). Vantor argues for the first time in its April 4, 2025 reply brief that the Martin Act preempts Ironside's common-law fraud claims because the alleged conduct arises in the securities context. Each of these arguments is addressed in detail in Section IV below.

IV. ARGUMENT-BY-ARGUMENT ANALYSIS

IV.A. Argument 1: Fraud Claims Are Duplicative of Contract and Fail CPLR § 3016(b) Particularity

IV.A.1. Vantor's Position Vantor argues that the fraud claims (Counts I and II) are duplicative of the breach of contract claim (Count IV) and should be dismissed on that basis. The crux of Vantor's argument is that the fraud claims merely repackage the breach of contract claim — that is, they allege no more than Vantor's failure to perform its valuation services in accordance with FAA §§ 3.1 and 4.2 — and do not all

IV.A.2. Our Rebuttal Talking Points Vantor's argument mischaracterizes the nature of the fraud claims and ignores the detailed allegations in the Complaint. The following points should be made at argument: The fraud claims are predicated on affirmative misrepresentation and active concealment — not merely on failure to perform contractual duties. The Complaint alleges that Vantor's personnel — specifically Nathan Orr

IV.A.3. Key Authorities The following authorities should be cited in connection with this argument: On the fraud/contract distinction: • Deerfield Communications Corp. v. Chesebrough-Ponds, Inc., 68 N.Y.2d 954, 956 (1986) — The Court of Appeals held that a fraud claim is not duplicative of a breach of contract claim where it is based on a duty independent of the contract, such as the duty not to make knowing misrepre

IV.A.4. Anticipated Court Questions Q: "How does the fraud claim differ in substance from the breach of contract claim? Aren't you just saying Vantor didn't do its job properly?" A: No, Your Honor. The distinction is fundamental. The breach of contract claim alleges that Vantor failed to perform its valuation obligations in accordance with the FAA. The fraud claims allege something categorically different — that Vant

IV.B. Argument 2: Breach of Fiduciary Duty Fails — Vantor Is Not a Fiduciary

IV.B.1. Vantor's Position Vantor argues that the breach of fiduciary duty claim (Count V) should be dismissed because Vantor is an arm's-length contractual service provider and not a fiduciary. Vantor contends that the FAA is a standard commercial services agreement between sophisticated parties, that it does not designate Vantor as a fiduciary, and that no fiduciary relationship arises merely from the provision of f

IV.B.2. Our Rebuttal Talking Points Vantor's argument, while invoking a correct general principle, ignores the specific facts and circumstances of its relationship with Ironside. The following points should be made: The fiduciary duty claim is based on the particular nature of Vantor's role, not merely on the existence of a contractual relationship. Under the FAA, Vantor was not performing a purely ministerial functi

IV.B.3. Key Authorities • EBC I, Inc. v. Pinnacle National Bank, 5 N.Y.3d 11, 19–20 (2005) — The Court of Appeals held that a fiduciary relationship can arise from facts and circumstances demonstrating trust and confidence, even absent a formal fiduciary designation. The relevant inquiry is whether one party reposed trust in another who assumed a superior position in the relationship. • Northeast Gen. Corp. v. Wellin

IV.B.4. Anticipated Court Questions Q: "Isn't Vantor just a service provider? The FAA doesn't use the word 'fiduciary.' Why should I impose fiduciary duties on a fund administrator?" A: Your Honor, the label is not dispositive under New York law. What matters is the substance of the relationship. EBC I makes clear that fiduciary duties can arise from facts and circumstances demonstrating trust and confidence, even wi

IV.C. Argument 3: FAA § 9.3 Liability Cap Limits Damages to $2.98 Million

IV.C.1. Vantor's Position Vantor argues that FAA § 9.3 limits its aggregate liability under the agreement to an amount equal to two times the fees paid to Vantor in the twelve-month period preceding the date of termination. Vantor calculates the applicable fees as $1.49 million (the total fees paid during the period from October 2022 through September 2023), resulting in a liability cap of $2.98 million. Vantor conte

IV.C.2. Our Rebuttal Talking Points Vantor's liability cap argument fails under well-settled New York law. The following points should be made: Contractual limitations on liability are unenforceable where the underlying conduct involves fraud, willful misconduct, or gross negligence. This is a bedrock principle of New York contract law. The Court of Appeals has held, in a line of cases spanning decades, that limitati

IV.C.3. Key Authorities • Kalisch-Jarcho, Inc. v. City of New York, 58 N.Y.2d 377, 384–85 (1983) — The Court of Appeals held that limitation of liability clauses will not be enforced to shield a party from its own gross negligence or willful misconduct. Such clauses are unenforceable as against public policy when applied to intentional wrongdoing. This is the seminal case on the enforceability of limitation of liabil

IV.C.4. Anticipated Court Questions Q: "The parties are sophisticated commercial entities. Why shouldn't I enforce the bargained-for liability cap?" A: Your Honor, New York courts have consistently held that even sophisticated commercial parties cannot contractually insulate themselves from the consequences of fraud. This is not a question of commercial sophistication or freedom of contract — it is a question of publ

IV.D. Argument 4: Unjust Enrichment Is Precluded by Express Contract

IV.D.1. Vantor's Position Vantor argues that the unjust enrichment claim (Count VII) should be dismissed because the FAA is a valid, binding agreement between the parties that governs the same subject matter as the unjust enrichment claim. Vantor relies on the general rule that a quasi-contractual claim for unjust enrichment cannot be maintained where an express contract exists between the parties covering the same s

IV.D.2. Our Rebuttal Talking Points While the general rule stated by Vantor is correct as an abstract proposition, it does not support dismissal of Count VII at the pleading stage under the circumstances of this case. The following points should be made: Unjust enrichment may be pled as an alternative theory of recovery. Under New York's liberal pleading rules, a plaintiff may plead unjust enrichment as an alternativ

IV.D.3. Key Authorities • Corsello v. Ashgrove & Co. New York, Inc., 18 N.Y.3d 777, 790–91 (2012) — The Court of Appeals held that unjust enrichment may not be maintained where there is an express contract governing the same subject matter, but confirmed that the claim may be pled in the alternative where the scope or validity of the contract is in dispute. • IDT Corp. v. Meridian Financial, 12 N.Y.3d 132, 142 (2009)

IV.D.4. Anticipated Court Questions Q: "There's an express contract here — the FAA. Why should I allow a quasi-contract claim?" A: Your Honor, because the parties dispute the scope and enforceability of the FAA — particularly the § 9.3 liability cap. Vantor argues the cap limits all recovery to $2.98 million; we argue it is unenforceable as to the fraud claims. If the contract limits Ironside's recovery on the contra

IV.E. Argument 5: Economic Loss Doctrine Bars All Tort Claims

IV.E.1. Vantor's Position Vantor argues that all of Ironside's tort claims — the fraud claim (Count I), the fraudulent concealment claim (Count II), the negligent misrepresentation claim (Count III), the breach of fiduciary duty claim (Count V), and the aiding and abetting fraud claim (Count VI) — seek purely economic losses arising from a contractual relationship and are therefore barred by the economic loss doctrin

IV.E.2. Our Rebuttal Talking Points Vantor's economic loss doctrine argument fundamentally misapplies the doctrine. The following points should be made: The economic loss doctrine does not bar fraud claims. This is the single most important point. New York's economic loss doctrine bars negligence-based tort claims for purely economic losses where there is no personal injury or property damage. It does not bar claims

IV.E.3. Key Authorities • Adriatic Specialty Insurance v. Aniero Concrete Co., 404 F.3d 566, 584–85 (2d Cir. 2005) (applying New York law) — The Second Circuit held that the economic loss doctrine does not bar fraud claims. The court explained that the doctrine applies only to negligence claims and has no application to claims based on intentional wrongdoing. • Hydro Investors, Inc. v. Trafalgar Power Inc., 227 F.3d

IV.E.4. Anticipated Court Questions Q: "This is a contract dispute between two commercial parties. Why should I allow tort claims that are just another way of saying Vantor didn't perform the contract?" A: Because Vantor didn't merely fail to perform — it lied. The economic loss doctrine prohibits negligence suits for purely economic harm where the parties' relationship is governed by contract. But it does not bar fr

IV.F. New Reply-Brief Argument: Martin Act Preemption

IV.F.1. Vantor's Position (Raised for First Time in Reply Brief) In its reply brief dated April 4, 2025, Vantor argued for the first time that the Martin Act (N.Y. General Business Law Article 23-A) preempts Ironside's common-law fraud claims. Vantor contends that because the alleged conduct — misvaluation of securities positions — arises in the "securities context," Ironside's fraud claims fall within the Martin Act

IV.F.2. Our Rebuttal Talking Points This argument should be rejected on both procedural and substantive grounds. Procedural objection — the argument is waived. The Martin Act preemption argument was raised for the first time in the reply brief and should be deemed waived. Arguments raised for the first time in reply deprive the opposing party of the opportunity to respond and are generally not considered by courts. A

IV.F.3. Key Authorities • Assured Guaranty (UK) Ltd. v. Brightwater Trust Bank Inv. Mgmt. Inc., 18 N.Y.3d 341, 350–53 (2011) — The Court of Appeals held that the Martin Act does not bar private common-law fraud claims. The Court's analysis established that the Attorney General's exclusive enforcement authority under the Martin Act does not preempt traditional common-law remedies. The legislative history and text of t

IV.F.4. Anticipated Court Questions Q: "This argument was raised in the reply. Should I consider it?" A: We respectfully submit that it should not be considered, Your Honor. The Martin Act preemption argument was raised for the first time in the reply brief, denying Ironside any opportunity to brief the issue in opposition. Arguments raised for the first time in reply are routinely disregarded by courts for this very

V. OVERARCHING STRATEGIC NOTES FOR ORAL ARGUMENT

V.1. Theme The overarching theme for oral argument should be the following: This is not a case about a service provider making ordinary valuation errors. This is a case about an eleven-quarter, systematic fraud in which Vantor knowingly delivered fabricated marks to Ironside, concealed internal communications documenting its awareness of the inflation, and caused $287 million in aggregate overvaluation across forty-s

V.2. Key Factual Anchors to Emphasize The following factual points should be woven into argument as appropriate. These are the facts that most powerfully distinguish this case from an ordinary fund administration dispute: • The internal Vantor emails. The internal Vantor emails between Nathan Orris and Deepa Rajaram, obtained via CPLR § 3102(c) subpoena to DataVault Solutions Inc. (a cloud-based document management p