Motion Sequences 008, 009 and 010 are consolidated for disposition.

I. Motions Before the Court

Plaintiffs HYMF, Inc. (HYMF) and Barclays Bank PLC (Barclays, together with HYMF, plaintiffs) move for summary judgment on the first seven causes of action in the complaint, each of which alleges a breach of contract against defendant Highland Capital Management, L.P. (Highland) and one of the defendant hedge funds (collectively, Funds).^[FN1] CPLR 3212 (Mot Seq 008). The court has been advised that an automatic bankruptcy stay is in place with respect to RE 2002. Therefore, the court makes no disposition of plaintiffs' motion insofar as it seeks summary judgment on the seventh cause of action as against RE 2002.

Defendant Highland moves for summary judgment dismissing the complaint as against it. CPLR 3212 (Mot Seq 009). Defendants Credit Strategies, Credit Opportunities, Crusader, CDO [*2]LP, CDO Ltd, and RE 2002 (collectively, Movant Funds), move for summary judgment against plaintiffs on the ground that they cannot prove damages. CPLR 3212 (Mot Seq 010). However, RE 2002's motion is stayed.

II. Background

Highland is a hedge fund manager. It is undisputed that Highland manages, controls and makes all investment decisions for the defendant Funds. None of the Funds has employees. HYMF is a wholly-owned subsidiary of Barclays.

This action arose out of two derivative transactions that plaintiffs hedged by investing in the Funds. On July 28, 2006, Barclays entered into a "prepaid forward" (PPF) contract with Highland Multi Strategy Onshore Master SubFund L.L.C. (SubFund). On February 28, 2007, Barclays entered into an "accreting strike option" contract (ASO, collectively with the PPF, Derivative Transactions)^[FN2] with the Subfund.^[FN3] Plaintiffs also entered into tri-party agreements with the Funds and Highland (Fund Contracts).^[FN4] Barclays hedged its exposure to the Derivative Transactions by investing in CDO Ltd directly and through its subsidiary HYMF in the other Funds.

The Fund Contracts prohibit the Funds from suspending or withholding plaintiffs' redemptions at any time. Schmit Aff, Exs 16-19, 21-26, §7; Exs 20 & 27, §8; Ex 28 §9. Plaintiffs claim that in October 2008, they gave proper notice of early termination of the Derivative Transactions and properly requested redemption of their total investments in the Funds, whereupon the Funds and Highland breached the Fund Contracts by refusing to redeem plaintiffs' investments for their net asset value (NAV). Additionally, plaintiffs allege that Highland breached its fiduciary duty to plaintiffs and breached the covenant of good faith and fair dealing implied in the Fund Contracts, by instructing the Funds not to redeem plaintiffs' investments.

The first eight causes of action in the complaint are for breach of the Fund Contracts, each one asserted against Highland and one of the Funds. The ninth and tenth causes of action are against Highland only and assert claims, respectively, for breach of fiduciary duty and an accounting by Highland for profits it made allegedly in breach of its fiduciary duty.

III. Plaintiffs' Motion for Partial Summary Judgment

Plaintiffs motion for summary judgment on the third cause of action is denied because [*3]they did not submit the Missing Fund Contract of Credit Opportunities relating to the PPF. Plaintiffs' motion on the seventh cause of action against RE 2002 is stayed. The balance of plaintiffs' motion for summary judgment is denied due to a question of fact as to whether defendants advised plaintiffs to send their redemptions requests to Funds' third-party administrators, rather than to Highland's Noel Road address in Texas. The court rules that plaintiffs properly terminated the Derivative Transactions and that, if the address plaintiffs used to request their redemptions was designated in writing by defendants, plaintiffs will be entitled to redemption at the NAV on the applicable NAV Determination Date (except with respect to Credit Opportunities and its Missing Fund Contract).

In connection with plaintiffs' partial summary judgment motion, defendants challenged: 1) the adequacy of plaintiffs' notices of termination, 2) whether there were grounds for early termination of the ASO, 3) the facial sufficiency of the redemption notices, 4) plaintiffs' contention that NAV is the correct measure of the amount payable for redemption upon proper notice, 5) plaintiffs' claim that they were damaged by the Movant Funds' refusal to redeem, and 6) Highland's liability for breach of the Fund Contracts, breach of the covenant of good faith and fair dealing, and breach of fiduciary duty.

A. Notice of Termination

1. Termination of the PPF

The PPF, §8, provided that it could be terminated early by Barclays:

In the event that an Event of Default or a Termination Event occurs in respect of Party B [SubFund] (as provided in the Agreement) or an Additional Termination Event (as provided in Annex 1) occurs (in which case Party B shall be the sole Affected Party). Party A [Barclays] has the right to terminate this Transaction in whole (a "Party A Early Termination") by giving Party B 3 calendar days written notice for the Transaction to be terminated on the next available Dealing Date, which may be deemed to be an Early Termination Date (a "Party A Early Termination Dealing Date").

On October 7, 2008, Barclays hand-delivered a written notice to the SubFund (PPF Notice) that it was terminating the PPF, "effective today," due to an Event of Default under §5(a)(iii) of the Master Agreement. Schmit Aff, Ex 31. The PPF Notice stated that all capitalized terms not otherwise defined therein would have the meanings assigned in the Agreement. The PPF Notice stated that Barclays:

hereby designates October 7, 2008 as the Early Termination Date in respect of all outstanding Transactions.

Defendants concede plaintiffs' asserted ground for early termination of the PPF, which was that the value of the Account held as Collateral for Barclays had fallen below the Credit Support Amount of $53,158,854 (all capitalized terms as defined in the PPF and the other [*4]documents comprising the Agreement).^[FN5] Defendants do not dispute that on October 7, 2008, the amount in the Account was less than the Credit Support Amount and that this constituted an Event of Default under the PPF.

Defendants' position is that the PPF Notice was ineffective because October 7, 2008 was not the next available Dealing Date or a valid Early Termination Date and did not constitute three days written notice. Plaintiffs correctly argue that where there is an erroneous termination date in a contractual notice of termination, the termination is effective as of the first proper termination date. G. B. Kent & Sons, Ltd. v Helena Rubinstein, Inc., 47 NY2d 561 (1979); American Food & Vending Corp. v IBM, 245 AD2d 1089 (4th Dept 1997); Ellman v Chatwal, 209 AD2d 287 (1st Dept 1994). The parties agree that November 1, 2008 was the next available Dealing Date after October 7, 2008. Thus, although the PPF Notice erroneously stated that termination was effective October 7, 2008, it was effective as of November 1, 2008, which was more than three days hence.

2. Termination of the ASO

The ASO, §8, provided that it could be terminated early by Barclays:

[I]n the event of the occurrence of an Event of Default or Termination Event with respect to which the Buyer [SubFund] is the Defaulting Party or is an affected Party (as provided in the Agreement), or an Additional Termination Event (as detailed in Annex 1), the Seller [Barclays] has the right to terminate this Transaction in whole by giving the Buyer five Business Days' prior written notice for the Transaction to be terminated on the next following available Redemption Dealing Date which shall constitute the Early Termination Dealing Date.

On October 17, 2008, Barclays hand-delivered notice to the SubFund that it was terminating the ASO (ASO Notice). The ASO Notice stated that Barclays:

hereby designates October 24, 2008 as the Early Termination Date in respect [sic] the Transaction.

in the reasonable determination of the Seller [Barclays], such event has had, or can reasonably be expected to have, a material effect on this Transaction or on the Seller (including without limitation, an adverse change to Seller's hedging risk profile or ability to effectively hedge its liability under the Transaction).

Defendants make the same argument that the ASO Notice was ineffective, i.e., that the designation of the wrong Early Termination Date was fatal, which the court rejects based upon the erroneous date rule precedents cited in part II(A)(1) above. The parties agree that November 1, 2008 was the next available Redemption Dealing Date after October 17, 2008. Therefore, the ASO Notice of termination was effective as of November 1, 2008.

B. Alleged Redemption Facial Defects

1. PPF Redemption Requests

The evidence establishes that requests to redeem plaintiffs' total investments in the PPF were received on October 14, 2008, except for the Select Equity and Equity Focus Funds requests, which were received on October 17 and 20, 2008, respectively. Schmit Aff, Exs 40 & 13 (EBT Andrei Dorenbaum of Highland).

Section 4 of most of the Fund Contracts for the PPF are substantially the same and contain the following redemption clause:

The Fund hereby agrees with HYMF that HYMF has the right to redeem ... on the first day of the month (a "Redemption Date") ... all of HYMF's Interests in connection with the termination of the transaction to be described in the Term Sheet upon 30 calendar days' prior notice, in each case effective at the NAV per Share on the NAV Determination Date (with such NAV per Share on such NAV Determination Date to be published pursuant to paragraph 3(a) above on the NAV Announcement Date associated with such NAV Determination Date) immediately prior to such Redemption Date. The Fund agrees to deposit in an account designated by HYMF not more than 5 Business Days after the NAV Announcement Date associated with such NAV Determination Date the redemption proceeds in connection with such redemption.

Schmit Aff, as Exs 16-20, §4.^[FN7] Thirty calendar days from October 14 was November 13, and thirty calendar days from October 17 was November 17. However, a Redemption Date had to be the first of a month, and the earliest one was December 1, 2008. Highland's Controller testified that if a redemption was received with insufficient notice, it would be processed for the next available redemption date. Schmit Aff, Ex 7, Halpin EBT, p 23-24. The corresponding NAV [*6]Determination Date was November 30, 2008, the end of the preceding month.

The Select Equity PPF redemption clause is slightly different and requires only one business days' notice of redemption:

the Fund hereby agrees with HYMF that HYMF has the right to redeem on any Business Day (a "Redemption Date") (with no minimum size of redemption) ... all of HYMF's Interests in connection with the termination of the transaction described in the Term Sheet upon one (1) calendar days' prior notice, in each case effective at the HYMF NAV on the NAV Determination Date (with such NAV per Share on such NAV Determination Date to be published pursuant to paragraph 3(a) above on the NAV Announcement Date associated with such NAV Determination Date) immediately prior to such Redemption Date.

Section 3(a) of most of the PPF Fund Contracts provides that:

The Fund and the Manager [Highland] agree in good faith to provide, or shall cause the fund administrator (the "Fund Administrator") to provide HYMF^[FN8] with the following information: (a) a statement of the (I) the net asset value per share (the "NAV per Share") as of the last day of each month (the "NAV Determination Date"), expected to be published on or before the 20th Business day of the following month (the "NAV Announcement Date") ....

Section 3(a) of Select Equity's Fund Contract is slightly different:

The Fund and the Manager agree to provide HYMF with the following information: (a) a statement of the Fund's net asset value and the net asset value of HYMF's Interests (the "HYMF NAV") as of the end of the each Business Day (the "NAV Determination Date"), expected to be published on or before the next Business Day of the following month (the "NAV Publication Date"), ... such HYMF NAV to be provided to HYMF no later than next Business Day after such NAV Publication Date (the date the HYMF NAV is provided to Barclays is the "NAV Announcement Date") ....

Thus, the NAV Determination Date for the PPF full redemptions was November 30, 2008, except for Select Equity's, which was October 20, 2008.

2. ASO Redemption Requests

The evidence establishes that requests to redeem plaintiffs' total investments in the ASO were received on October 17, 2008. Schmit Aff, Exs 40 & 13 (EBT Andrei Dorenbaum of Highland). [*7]

Section 4 of most of the Fund Contracts for the ASO contain the following redemption clause:

The Fund hereby agrees with HYMF that HYMF has the right to redeem ... on the first day of any month (a "Redemption Date") (with no minimum size of redemption) ... all of HYMF's Interests in connection with the termination of the Transaction (as defined in the Confirmation) upon four (4) Business Days' prior notice in each case effective at the HYMF NAV on the NAV Determination Date (with such HYMF NAV on such NAV Determination Date to be provided to HYMF pursuant to paragraph 3(a) above on the NAV Announcement Date associated with such NAV Determination Date) immediately prior to such Redemption Date. The Fund agrees to deposit in an account designated by HYMF not more than 5 Business Days after the NAV Announcement Date associated with such NAV Determination Date the redemption proceeds in connection with such redemption.

The Select Equity ASO investment by HYMF contained a slightly different redemption clause, with a shorter notice period, and with five Business Days to deposit the redemption proceeds:

the Fund hereby agrees with HYMF that HYMF has the right to redeem on any Business Day (a "Redemption Date) (with no restriction on minimum size of redemption) ... all of HYMF's Interests upon one (1) calendar days' prior notice ... in connection with the termination of the Transaction (as defined in the Confirmation) ... effective at the HYMF NAV on the NAV Determination Date (with such HYMF NAV on such NAV Determination Date to be provided to HYMF pursuant to paragraph 3(a) above on the NAV Announcement Date associated with such NAV Determination Date) immediately prior to such Redemption Date.

Other than the Select Equity Fund Contact, §3(a) of the ASO Fund Contracts provides:

The Fund and the Manager agree to provide HYMF with the following information: (a) a statement of the Fund's net asset value and the net asset value of HYMF's Interests (the "HYMF NAV") as of the last day of each month (the "NAV Determination Date"), expected to be published on or before the twentieth (20th) Business Day of the following month (the "NAV Publication Date"), ... such HYMF NAV to be provided to HYMF no later than two (2) Business Days after such NAV Publication Date (the date the HYMF NAV is provided to Barclays is the "NAV Announcement Date") ....

Other than the Select Equity investment, the first available Redemption Date was [*8]November 1, 2008. The corresponding NAV Determination Date was October 31, 2008, the end of the prior month. The first available Redemption Date for the Select Equity ASO investment was Monday, October 20, 2008 (because October 17 was a Friday), and the NAV Determination Date was October 17, 2008.

3. Notices

All of the Fund Contracts provide that:

A notice or communication will only be effective if it is in writing and if it is sent, faxed or hand delivered to the address of each party as set forth below or to such other address as a party notifies to the other parties in writing from time to time:

It is undisputed that the redemptions at issue here were not delivered to Noel Road. All of the full redemption requests were sent to the Funds' administrators in Boston, Delaware or Bermuda. Schmit Aff, Exs 38 & 39. Plaintiffs point to evidence that in 2007, Fund administrators in Boston processed two redemptions HYMF requested from Funds in the ASO Reference Portfolio. The 2007 redemptions that were honored were sent to the Crusader and CDO^[FN9] administrators in Boston on the same form used for the redemptions that plaintiffs seek to enforce in this action. Id. Schmit Aff, Exs 42 and 43. Highland's controller, Christopher Halpin, testified that "redemptions come in from investors usually by a notice to the administrator." Schmit Aff, Ex 7, p. 22. He also said that if a redemption request had insufficient notice, it would be within enough time for the next available redemption. Id., p23. He identified the redemption requests that were honored in 2007. Id., pp 88-91; Schmit Aff, Exs 42 & 43. Patrick Boyce, Highland's Chief Financial Officer (CFO) testified that redemptions went to the third-party fund administrators. Reply Affirmation of Joseph B Schmit, dated March 10, 2011 (Schmit Reply), Ex 71, p 211. The form CDO LP Subscription Agreement contained a form for submitting redemptions to the administrator in Boston. However, plaintiffs submitted an unsigned copy of the Subscription Agreement for the first time in reply. Schmit Reply, Ex 74. Therefore, the Subscription Agreement is not evidence that can be used in support of plaintiffs' summary judgment motion. Zuckerman v City of New York, 49 NY2d 557 (1980)(summary judgment must be supported by proof in evidentiary form); Schirmer v Athena-Liberty Lofts, LP, 48 AD3d 223 (1st Dept 2008)(error to consider evidence offered for first time in reply); Migdol v City of New York, 291 AD2d 201 (1st Dept 2002)(reply papers cannot be used to correct deficiency in moving papers).

4. Discussion of Facial Validity of the Redemptions

Defendants make the following arguments regarding the facial insufficiency of the redemption request notices: 1) the PPF and ASO had to be terminated prior to the time that redemption requests were submitted; 2) there was insufficient prior notice given; and 3) the notices were sent to the wrong addresses. Plaintiffs disagree and also argue that notices of redemption are not governed by the notice provision in the Fund Contracts. [*9]

The court holds that the notice provision does apply to redemptions. The Fund Contracts clearly provide for redemptions based upon prior "notice."

The court does not agree that the PPF and ASO had to be terminated prior to the date that Barclays or HYMF sent a redemption request. The Fund Contracts all say that there must be a number of days "prior notice" of a redemption "in connection with" the termination of the transaction. The plain meaning is that prior notice of a redemption request is required, not that prior termination of the transaction is required.

The court rejects the argument that there was insufficient prior notice. Highland's Controller admitted that if there were insufficient notice, the next available Redemption Date would be used.

With respect to the addresses to which the redemption notices were required to be sent, there is a question of fact. Defendants' witnesses testified that redemptions were handled by the third-party Fund administrators. There is some evidence, albeit insufficient to support summary judgment in plaintiffs' favor, that Highland supplied a form with a subscription agreement which was similar to the ones used by plaintiffs, which were pre-printed with the address of the Fund administrators. There also is evidence that prior redemptions using the same form were processed through administrators. Supplying a pre-printed form with an address could satisfy the written notice requirement, but there is not enough evidence here to rule as a matter of law that plaintiffs received written notice to send the redemptions to the Fund administrators instead of to Noel Road.

C. Redemption Valuation

Defendants argue that plaintiffs were entitled to receive only what their interests could have been sold for on the NAV Determination Date, not the amount of NAV determined by Highland. Plaintiffs argue that their interests in the Funds should have been redeemed at the NAV on the NAV Determination Date, a figure determined by Highland in accordance with generally accepted accounting principles. Schmit Aff, Ex 7, EBT Halpin, p 24 -25.

A court should not adopt a construction that renders a contractual provision meaningless. General Electric Co. v Hatzel and Buehler, Inc., 19 AD2d 40 (1st Dept 1963), aff'd 14 NY2d 639(1964); Peripheral Equipment, Inc. v Farrington Mfg. Co., 29 AD2d 11 (1st Dept 1967)(court must give effect to all parts of the contract). The court, therefore, rejects defendants' interpretation of the Fund Contracts because it renders meaningless the operative clause regarding valuation of plaintiffs' redemption rights.

The Fund Contracts unambiguously provide that upon proper notice plaintiffs were entitled to redeem their interests "effective at the NAV" [or the HYMF NAV] on the "NAV [or HYMF NAV] Determination Date." The next sentence provides that the Fund agrees to deposit the "redemption proceeds" in an account designated by plaintiffs. The operative language regarding valuation is the first sentence. The second sentence governs the account in which to deposit the money. Defendants focus exclusively on the second sentence in urging the court to interpret the Fund Contracts to mean that defendants did not have to honor a redemption request during the 2008 financial crisis, when defendants could not sell plaintiffs' interests for more than a fire sale price. Defendants' interpretation reads the language "effective at the NAV on the NAV Determination Date" out of the Fund Contracts and is rejected. No extrinsic or expert evidence is needed to reach this conclusion because the Fund Contracts are unambiguous on this point. [*10]West, Weir & Bartel, Inc. v Mary Carter Paint Co., 25 NY2d 535, 540 (1969) ("The construction of a plain and unambiguous contract is for the court to pass on, and ... circumstances extrinsic to the agreement will not be considered when the intention of the parties can be gathered from the instrument itself.").

IV. Highland's Motion for Summary Judgment

Highland's motion for summary judgment is denied as to the breach of contract causes of action, and granted as to the claims for breach of fiduciary duty and an accounting (ninth and tenth causes of action), which are dismissed.

Highland moves to dismiss the entire complaint against it. Highland argues that it is not liable for breach of the Fund Contracts because only the Funds had an obligation to redeem plaintiffs' investments, and no contractual language makes Highland liable for redemptions. Defendants further claim that they had no fiduciary duty to plaintiffs, sophisticated investors in an arms-length transaction. Finally, defendants urge that plaintiffs cannot rely on breach of the covenant of good faith and fair dealing to raise an issue of fact because they did not plead it. Plaintiffs oppose Highland's motion on the grounds that: 1) only Highland could redeem plaintiffs' interests because the Funds had no employees, and were owned and controlled by Highland; 2) Highland breached the covenant of good faith and fair dealing implied in the Fund Contracts by taking affirmative steps to prevent the redemptions; and 3) Highland had a fiduciary duty arising out of their promise to safeguard plaintiffs' investments and because an investment manager has fiduciary duties to investors.

1. Breach of Contract & the Covenant of Good Faith & Fair Dealing

Highland's motion to dismiss the breach of contract claims against it is denied. The covenant of good faith and fair dealing in the course of performance is implied in every contract. 511 West 232nd Owners Corp. v Jennifer Realty, 98 NY2d 144, 135 (2002). The implied covenant is a pledge that neither party will do anything which destroys or injures the right of the other party to receive the benefits of the contract. Id. The duty of good faith and fair dealing does not imply obligations inconsistent with the contractual obligations, but it encompasses any promises that a reasonable person in the position of the promisee would be justified in understanding were included. Id., 135-136.

Here, the fruit of plaintiffs' bargain clearly included redemptions upon proper notice, and a reasonable person would have been justified in understanding that it included a promise that Highland would not thwart plaintiffs' right to redeem. The Fund Contracts, to which Highland is a party, state explicitly that the Funds will not suspend or withhold redemptions. Schmit Aff, Exs 16-19, 21-26, §7; Exs 20 & 27, §8; Ex 28 §9. However, in November 2008, Highland instructed the Select Equity and Equity Focus Fund administrators to take no action on plaintiffs' redemption requests until further notice. Opposition Aff of Joseph B. Schmit, dated February 7, 2011, Exs 50 & 51. It is undisputed that Highland owned and controlled the Funds. While there is no explicit promise that Highland will not interfere with the Funds' redemptions, the covenant of good faith and fair dealing is implied. Plaintiffs suspect that Highland instructed the other Fund administrators to suspend redemptions from the other Funds, due to some of the items on defendants' privilege log that is the subject of plaintiffs' separate pending motion to compel disclosure (Motion Seq 007). Highland clearly is not entitled to summary judgment in its favor in light of evidence that it acted to obstruct plaintiffs' contractual rights. Summary judgment [*11]with respect the contract claims against the Funds other than Select Equity and Equity Focus is premature because there may be evidence that is exclusively in the control of defendants in the documents that they have withheld on the ground of privilege. CPLR 3212(f)(court may deny summary judgment if facts essential to opposition may exist but cannot then be stated).

The court rejects defendants' argument that breach of the covenant of good faith and fair dealing was not pled. Plaintiffs' claims for breach of contract encompass the covenant, and Highland knew, as evident from the course of discovery, that plaintiffs claimed that Highland owed a duty to effectuate, rather than interfere with, redemptions. This is not a newly-minted theory with which Highland was surprised after the close of disclosure.

B. Breach of Fiduciary Duty

Highland moves to dismiss the breach of fiduciary duty and accounting claims on the grounds that: 1) the Fund Contracts were arms-length transactions between sophisticated parties and there was no relationship of higher trust; 2) the Select Equity subscription agreement proves that HYMF was not relying on Highland; 3) the breach of fiduciary duty duplicates the breach of contract claims because it is based upon the same alleged misconduct, i.e., failure to redeem, and seeks no damages not recoverable for breach of contract; 4) the Funds, not Highland, withheld plaintiffs' money; and 5) an investment advisor owes a duty of loyalty only to the fund it advises, not the fund investors.

Plaintiffs allege that Highland had a fiduciary duty because: 1) Highland's fiduciary duty to the Funds does not negate its fiduciary duty to plaintiffs; 2) in entering into the Fund Contracts plaintiffs' relied on Highland's assurances that plaintiffs would have preferential redemption rights and their investments would be safeguarded; 3) the Derivative Transactions benefitted Highland's partners; 4) Highland's CFO testified that Highland had a fiduciary duty to the Funds' investors; 5) conduct that breaches a contract can also breach a fiduciary duty if it breaches an obligation outside the contract; 6) Highland breached its fiduciary duty by demanding that plaintiffs grant concessions in exchange for processing the redemptions.

A fiduciary duty is a relationship of higher trust that arises out of an obligation to act for or give advice to another upon matters within the scope of the relation. EBCI, Inc. v Goldman Sachs, 5 NY3d 11, 31 (2005). Such a relationship is fact specific and is grounded in a higher level of trust than normally is present in the marketplace in an arms-length business transaction. Id.; RNK Capital LLC v Natsource, 76 AD3d 840 (1st Dept 2010). Where the parties have entered into a contract, courts look to the agreement to find the nexus of the parties relationship and should not ordinarily transport the parties to the realm of higher duty. ECBI, supra. The same conduct that constitutes a breach of contract may constitute a breach of fiduciary duty, where there is a relationship that arises from the contract, but is independent of the contract itself. Mandelblatt v Devon Stores, 132 AD2d 162 (1st Dept 1987). "A cause of action for breach of fiduciary duty which is merely duplicative of a breach of contract claim cannot stand." William Kaufman Org., Ltd. v Graham & James LLP, 269 AD2d 171, 173 (1st Dept 2000); Fesseha v TD Waterhouse Investor Servs., 305 AD2d 268, 269 (1st Dept 2003)(breach of fiduciary duty claim properly dismissed as duplicative of breach of contract); RNK Capital LLC, supra.

Plaintiffs' breach of fiduciary duty claim is dismissed because it rests on the failure to redeem investments and duplicates the breach of contract claim. The factual basis of the claim is based on Highland's failure to redeem and demands for financial concessions, not investment [*12]advice. Plaintiffs' Memorandum in Opposition to Highland's Motion, p 23. The court has already ruled that Highland had a duty of good faith and fair dealing arising from the Fund Contracts, which included a promise not to interfere with the Funds' redemptions of plaintiffs' investments. Plaintiffs concede that if they recover on their breach of contract claims, they will be fully compensated for their alleged damages and their claims for breach of fiduciary duty and accounting will be moot. Memorandum in Support of Plaintiffs' Motion for Summary Judgment (Doc 89), p 11, fn 6. Nor do plaintiffs allege that Highland concealed facts that it should have disclosed, or misrepresented facts. All of the New York cases cited by plaintiffs for the proposition that a party may be liable for both breach of fiduciary duty and breach of contract are based upon concealment of material facts about an investment, reliance on investment advice, misrepresentation of facts, or tortious behavior. None of that is present here. Highland's alleged financial concessions demand is conduct outside the contractual redemption rights, but in order for it to be actionable as a breach of fiduciary duty, the fiduciary relationship would have to exist in the first place. There is no evidence to support that.^[FN10] The assurance that Highland would safeguard plaintiffs' investments is no more than a rephrasing of the charge that Highland did not redeem plaintiffs' investments. In sum, the ninth and tenth causes of action are dismissed because the breach of fiduciary duty claim is identical to the claim for breach of the implied covenant of good faith and fair dealing, both of which are grounded on the failure to redeem.

V. Movant Funds' Motion for Summary Judgment

The Movant Funds' motion is denied, except for the portion of the motion by RE 2002, which is stayed. The Movant Funds' is based upon the theory that when the redemption requests were made, the Movant Funds could only have redeemed plaintiffs' interests for "pennies on the dollar". The Movant Funds' theory is boot-strapped on defendants' argument that plaintiffs were entitled to "redemption proceeds" available in the marketplace, instead of the NAV on the NAV Determination Date, an argument that the court has rejected.

Moreover, damages in an action for breach of contract are intended to restore the injured party to the position he would have had if the contract had been fully performed. Brushton-Moira Cent. School Dist. v Fred H. Thomas Associates, P.C., 91 NY2d 256, 262 (1998).Here, defendants' performance, assuming proper notice of redemption, would have resulted in plaintiffs' receipt of redemptions at the rate specified in the Fund Contracts, i.e. the NAV on the NAV Determination Date. A defendant's ability to raise money to pay what is owed is not the measure of damages.

V. Sealing

The parties submitted documents, affidavits and memoranda of law under seal and redacted portions of their e-filed submissions. However, they did not request such sealing prior to moving and advanced no arguments to support sealing the records of these motions. Sealing requires a court to make a determination that there is good cause for sealing that overrides the public's interest in open judicial proceedings. 22 NYCRR 216; Applehead Pictures LLC v [*13]Perelman, 80 AD3d 181, 191-192 (1st Dept 2010)(presumption of benefit of public access to court proceedings takes precedence, and sealing court papers is permitted only to serve compelling objectives, such as need for secrecy that outweighs public's right to access). The parties have made no such showing and, in fact, have not addressed sealing. Thus, the court cannot find good cause for sealing on the present record.

The remaining contentions of the parties have been considered and are found to be without merit or unnecessary to the decision. Accordingly, it is

ORDEREDthat the motion by plaintiffs HYMF, Inc., and Barclays Bank PLC,

for summary judgment on the first through seventh causes of action against Highland Capital Management, L.P., Highland Select Equity Fund, L.P., Highland Credit Strategies Fund, L.P., Highland Credit Opportunities CDO, L.P., Highland Crusader Fund, L.P., Highland CDO Opportunity Fund, L.P., Highland Equity Focus Fund, L.P., and Highland Capital Real Estate Fund 2002-A, L.P., is stayed as to Highland Capital Real Estate Fund 2002-A, L.P., and the balance of the motion is denied; and it is further

ORDERED that the motion by Highland Capital Management, Inc., to dismiss the complaint as against it is denied as to the first through eighth causes of action for breach of contract, and granted as to the ninth and tenth causes of action for, respectively, breach of fiduciary duty and an accounting, which are dismissed; and it is further

ORDERED that the motion by defendants Highland Credit Strategies Fund, L.P., Highland Credit Opportunities CDO, L.P., Highland Crusader Fund, L.P., Highland CDO Opportunity Fund, L.P., Highland CDO Opportunity Fund, Ltd., and Highland Capital Real Estate Fund 2002-A, L.P., to dismiss the complaint insofar as it is asserted against them is stayed as to Highland Capital Real Estate Fund 2002-A, L.P., and the balance of the motion is denied; and it is further

ORDERED that within twenty days of the date that this decision and order is entered in the New York State Court Electronic Filing System, the parties shall e-file full copies of all papers submitted in connection with this motion that have not been e-filed and unredacted copies of papers e-filed with redactions, unless they move by order to show cause within said twenty-day period to seal said papers; and it is further

ORDERED that the parties are to appear in Part 54, on April 17, 2012, for a pre-trial conference.

Dated: March 23, 2012ENTER:

_____________________________________

J.S.C