On December 11, 2018, the First Department issued a decision in Securitized Asset Funding 2011-2, Ltd. v. Canadian Imperial Bank of Commerce, 2018 NY Slip Op. 08444, holding that questions of fact precluded summary judgment on a claim for mutual mistake, explaining:
[W]e affirm the denial of Cerberus’s motion, because CIBC’s defenses and counterclaims raise triable issues of fact. For example, the second counterclaim seeks to reform the A Note and B Certificate based on mutual mistake. Although the counterclaim does not show in no uncertain terms exactly what was really agreed upon between the parties, the affirmations that CIBC submitted in opposition to Cerberus’s motion show that — according to CIBC — the parties agreed that the Relevant Notional Amount for the Altius IV synthetic assets would be reduced by payments of Synthetic Principal. Viewed in the light most favorable to CIBC (the nonmovant), the evidence shows that, for more than four years, between June 2010 and October 2014, the parties reduced the Relevant Notional Amount of the Altius IV synthetic assets by CIBC’s payments of Synthetic Principal. A factfinder could reasonably conclude that a sophisticated financial entity such as Cerberus, which was reviewing monthly reports about the reduction of the Relevant Notional Amount, had some internal controls to ensure that the substantial amounts it received were consistent with the terms of the underlying contracts.
(Internal quotations and citations omitted).
The doctrines of mutual and unilateral mistake are a way to have a court throw a contract out because there was no meeting of the minds by the parties. Contact Schlam Stone & Dolan partner John Lundin at email@example.com if you or a client face a situation where you are unsure how to enforce rights you believe you have under a contract.
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