—Ordеr, Supreme Court, New York County (Charles Ramos, J.), entered February 21, 1997, which, inter alia, granted plaintiffs’ cross motion for summary judgment on the issue of liability as to the first cause of action and denied dеfendants’ motion to dismiss that cause of action, denied plaintiffs’ cross motion to dismiss the second and fourth counterclaims and granted, in part, plaintiffs’ cross motion to dismiss the third counterclaim, unanimously modified, on the law, to the extent of denying plaintiffs’ cross motion for summary judgment on the issué of liability as to the first cause of action and granting defendants’ motiоn for summary judgment as to that cause of action, and granting plaintiffs’ cross motion to dismiss the second, third and fourth counterclaims and, except as so modified, affirmed, without costs.
McMahan, Brafman, Morgan & Co. (MBM) is a partnership in which Saul Bass and other defendants had purchased a limited partnership interest during the period from 1980 to 1982. D. Bruce McMahan is the general partner оf MBM. In 1992, defendants (and others) commenced a Federal court action against MBM and its general partner, McMahan. In the Federal action, defendants alleged that they were defrauded in connection with their original purchases of limited partnership interests in MBM. They further alleged that they were defrauded into entering into contracts to sell their limited partnership interests to McMahan in anticipation of an Internal Revenue Service audit of MBM’s 1980 tax returns. The audits were to be conducted pursuant to the Tax Rеform Act of 1984, which created potentially significant tax liabilities on persons owning limited partnership interests. In connection with the transfer of their interests to McMahan, each defendant, as seller, executed a Contract of Sale and Security agreement (the contracts) with MBM, as partner, and with McMahan, as purchaser.
The Federаl action was dismissed on the ground that the claims advanced by defendants herein were barred by the as
Defendants assert four counterclaims against plaintiffs in which they seek, respectively: (1) damages for breach of contract for failure to pay the entire purchasе price due under the contracts; (2) damages for breach of contract for failure to establish the special trust account or to fund it sufficiently to ensure paymеnt of the entire purchase price due on the contracts; (3) judgment declaring the nonrecourse provisions of the contracts unenforceable together with damages for breach of contract — based upon McMahan’s fraudulent misrepresentation, bad faith and breach of fiduciary duty — by causing MBM to incur substantial and excessive lеgal fees and other expenses in defense of Internal Revenue Service claims and by wrongfully impairing defendants’ security interests (as evidenced by certain annexed lеtters from McMahan to the defendants which described operating losses and expenses); and (4) damages for willful and malicious breach of contract for failure to perform their obligations under the contracts.
The assignment and release clauses contained in the contracts constitute releases, not implied covenants nоt to sue, because they relate to claims extant at the time the parties entered into the contracts. A release is a provision that intends a present abandonment of a known right or claim. By contrast, a covenant not to sue also applies to future claims and constitutes an agreement to exercise forbearance from asserting any claim which either exists or which may accrue (Wilder v Pennsylvania R. R. Co.,
Defendants assert four counterclaims, each of which alleges that defendants have not beеn paid the full price specified in
With respect to the first counterclaim, we agree with Supreme Court that defendants have a viable claim for breach of contract by reason of plaintiffs’ failure to pay the entire purchase price due under the contracts. Any recоvery, however, is limited to the assets pledged as security for the payment of plaintiffs’ obligations pursuant to the nonrecourse provisions of the contracts.
The remаinder of the counterclaims simply elaborate on the breach of contract action. The second counterclaim is predicated on plaintiffs’ failure tо fund a trust account to ensure payment of the purchase price. Like the first counterclaim, it alleges breach of contract and seeks recovery of the purchase price. By identifying the mechanism by which the failure to ensure compensation arose, it provides additional factual detail. Nevertheless, it merely restates the breach of contract claim.
The third counterclaim variously alleges breach of the duty of good faith, misrepresentation and breach of fiduciary duty, without any attempt to distinguish or separately state the claims (CPLR 3014). We agree with Supreme Court that the allegation of a breach of the duty of good faith is duplicative of the cause of action for breach of contract since, where appropriate, the courts will imply the obligation of good faith and fair dealing between parties to a contract (see, Murphy v American Home Prods. Corp.,
Defendants have not pursued their allegation of breаch of fiduciary duty asserted in the third counterclaim, presumably because termination of their status as limited partners ends their fiduciary relationship with the partnership (see, Matter of Silverberg [Schwartz],
The fourth cause of action, alleging willful and malicious failure to perform contractual obligations, states no cognizable cause of action (Metropolitan Life Ins. Co. v Noble Lowndes Intl.,