Judge Davis Dismisses Promissory Estoppel Claim but Allows Plaintiff to Re-Plead Its Lender Liability Claims

April 11, 2017

Publication

In NVent, LLC v. Hortonworks, Inc., C.A. No. N16C-05-148-EMD-CCLD, Judge Davis granted in part and denied in part the defendant’s motion to dismiss and granted the plaintiff leave to amend its complaint. The plaintiff, NVent LLC (“NVent”), initiated a breach of contract action against the defendant, Hortonworks Inc. (“Hortonworks”), based upon two agreements: a vendor services agreement and a term loan agreement. NVent asserted claims for declaratory judgment, promissory estoppel, misrepresentation, and lender liability.

The defendant’s motion to dismiss asserted that the plaintiff could not assert a promissory estoppel claim because of binding integration clauses in the agreements. In response, the plaintiff argued that the Court could use parol evidence because the defendant’s oral promise was not expressed in the agreements. Applying California law, the Court contrasted the instant case with the more typical situation involving a neutral lender, such as a bank. Here, because the parties enjoyed a symbiotic relationship, the Court held that the plaintiff could maintain its promissory estoppel claim.

With respect to the plaintiff’s misrepresentation and lender liability claims, the Court held that the plaintiff did not sufficiently clarify under which theory it was pursuing each claim. Judge Davis granted the plaintiff leave to amend its complaint to clarify which misrepresentation theory it was pursuing, plead its claim with particularity, and explain why the Court would have jurisdiction over the new claims. Additionally, the Court granted the plaintiff leave to amend its lender liability claim to clarify whether it would pursue a fraud or negligence theory.

Analysis: This case highlights two important features of the CCLD. First, the CCLD typically is asked to address claims arising under the laws of different states. Second, unlike the Delaware Court of Chancery, the CCLD has no Rule 15(aaa), which precludes amendment of a complaint after briefing of Rule 12(b)(6) motions. In this case, application of Rule 15(aaa) could have precluded the plaintiff from amending the complaint, but because the case was filed in Superior Court, Judge Davis allowed the plaintiff to amend its pleading.