IMPERIUM BLUE ACQUISITION PARTNERS LLC v. MARATHON ASSET MANAGEMENT (2025)

Order, Supreme Court, New York County (Margaret A. Chan, J.), entered August 29, 2024, which denied defendants’ motion to dismiss the fraud and promissory estoppel causes of action, unanimously reversed, on the law, with costs, and the motion granted.

Plaintiffs did not, as a matter of law, adequately allege the reasonable reliance element required to state causes of action for fraud and promissory estoppel.  The relevant terms of the parties’ term sheet, including those allowing defendants to require all normal and customary due diligence items, including “survey” reports, directly contradicted the alleged prior oral promises defendants made that they would use best efforts to close the financing by a certain date by expediting and streamlining the due diligence process (see Braddock v. Braddock, 60 A.D.3d 84, 91, 871 N.Y.S.2d 68 [1st Dept. 2009];  Sanyo Elec., Inc. v. Pinros & Gar Corp., 174 A.D.2d 452, 453, 571 N.Y.S.2d 237 [1st Dept. 1991]).

Nor could plaintiffs properly state their claims based on allegations of reasonable reliance on the promises or assurances defendants allegedly made after the signing of the term sheet and during the due diligence period, as those alleged promises were made during the exclusivity period when plaintiffs were not entitled to work with other lenders.  Plaintiffs could not have been induced by defendants’ assurances to continue to “tender a performance which [was] required as a part of a preexisting contractual obligation” (Megaris Furs, Inc. v. Gimbel Bros., Inc., 172 A.D.2d 209, 212, 568 N.Y.S.2d 581 [1st Dept. 1991];  see also Iberdrola Energy Projects v. Oaktree Capital Mgt. L.P., 231 A.D.3d 33, 44, 216 N.Y.S.3d 124 [1st Dept. 2024]).

Based on the foregoing, we do not reach the issue of whether plaintiffs satisfied the pleading requirements with respect to the other elements of their claims.