CYPRESS GATES INC v. SOCIETE GENERALE (2024)

Order, Supreme Court, New York County (Andrea Masley, J.), entered February 3, 2023, which, to the extent appealed from as limited by the briefs, granted defendants’ motion to dismiss the first, second, and third causes of action of the complaint, unanimously affirmed, with costs.

Supreme Court correctly dismissed the consumer fraud claim under General Business Law § 349.  The financing transaction involved here was not consumer-oriented but involved a proposed loan of over $18 million in connection with a like-kind exchange of commercial property in compliance with Internal Revenue Code (26 USC) § 1031 (see Singh v. City of New York, 40 N.Y.3d 138, 148, 195 N.Y.S.3d 429, 217 N.E.3d 1 [2023];  New York Univ. v. Continental Ins. Co., 87 N.Y.2d 308, 320, 639 N.Y.S.2d 283, 662 N.E.2d 763 [1995]).  Further, the contemplated transaction was not based in New York (see Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 324–325, 746 N.Y.S.2d 858, 774 N.E.2d 1190 [2002]), but involved California residents exchanging properties in California and Tennessee.

Supreme Court also correctly dismissed the claims for breach of the implied covenant of good faith and fair dealing and promissory estoppel.  The term sheet expressly stated that it was not a commitment, that no “offer, agreement, or commitment to lend” was created, and that the loan would be subject to execution of satisfactory documentation “and other such terms and conditions as [to be] determined solely” by defendants, which negates plaintiffs’ claim (see King Penguin Opportunity Fund III, LLC v. Spectrum Group Mgt. LLC, 187 A.D.3d 688, 690, 135 N.Y.S.3d 363 [1st Dept. 2020];  Amcan Holdings, Inc. v. Canadian Imperial Bank of Commerce, 70 A.D.3d 423, 426–427, 894 N.Y.S.2d 47 [1st Dept. 2010], lv denied 15 N.Y.3d 704, 2010 WL 3397330 [2010]).  Given the language in the term sheet, it was unreasonable for plaintiffs to have relied upon defendants’ alleged promises to proceed with the transaction (see 644 E. 14th Realty LLC v. Mount Sinai Health Sys., Inc., 205 A.D.3d 405, 405, 168 N.Y.S.3d 29 [1st Dept. 2022]).

We have considered plaintiffs’ remaining contentions and find them unavailing.