Opinion
CV 13-04611 RSWL (JCGx)
2013-09-25
Blue Diamond Renewables, LLC, Plaintiff, v. GE Energy Fin. Servs.; Southern California Edison Co., Magic Johnson Enters. Inc., and Does 1 to 10. Defendants.
ORDER RE: DEFENDANT GE
ENERGY FIN. SERVS.
MOTION TO DISMISS
PLAINTIFF'S COMPLAINT
[8]
Currently before the Court is a Motion to Dismiss Plaintiff Blue Diamond Renewables, LLC's ("Plaintiff") Complaint filed by Defendant GE Energy Financial Services ("Defendant") [8]. The Court, having reviewed all papers submitted pertaining to this Motion, NOW FINDS AND RULES AS FOLLOWS: The Court GRANTS in part and DENIES in part Defendant's Motion.
I. BACKGROUND
Plaintiff is a minority-owned Texas company engaged in the development of renewable energy generation and transmission projects. Compl. ¶ 7. Defendant is a New York corporation in the business of development and financing of energy projects. Id. at ¶ 8. In the spring of 2011, Plaintiff submitted a response to Southern California Edison Company's ("SCE") request for a proposal for renewable power sources. Id. at ¶ 20. Although SCE did not accept Plaintiff's proposal, SCE invited Plaintiff to participate in bilateral negotiations for a Power Purchase Agreement ("PPA"). Id. At some point in 2011 and 2012, Plaintiff worked with Defendant on the development of renewable energy projects in the Western United States, including projects for delivery of electricity to SCE. Id. at ¶ 19. During January 2012, Plaintiff, with Defendant's support, began negotiating with SCE regarding a renewable energy proposal. Id. at ¶ 23. Throughout the first half of 2012, Plaintiff expended money on travel and project development to develop and negotiate a renewable PPA with SCE, with funding through investors from both Plaintiff and Defendant. Id. at ¶ 24.
On April 24, 2012, Defendant provided Plaintiff with a "step-by-step set of charts showing the progression of the renewable energy transaction from then through the commercial operation, and included covenants that Plaintiff maintain 100% ownership by minority-owned-business-qualifying individuals, as part of the process of entering into a Letter of Intent for the project." Id. at ¶ 25. The project would be a renewable energy project called the "Blue Diamond Solar Facility" ("Project"). On April 12, 2012, Defendant requested that Plaintiff sign a non-disclosure agreement before preparing a letter of intent, which both Parties signed. Id. at ¶ 27-28. On April 23, 2012, the Parties executed a letter of intent (the "LOI") relating to a renewable energy project with SCE. Id. at ¶ 29. The LOI called for the creation of a jointly-owned company ("ProjectCo") to develop, own, and operate the Project. Id. at ¶ 30. ProjectCo would be jointly owned by Plaintiff (51%) and Defendant (49%) with Plaintiff maintaining majority-ownership and managing-member status in order to maintain ProjectCo's status as a minority-owned business. Id. The LOI also indicated that the LOI would be governed by and construed in accordance with the laws of the State of New York.
The LOI contemplated that ProjectCo would enter into a PPA with SCE for a term of 20 years or longer. Id. at ¶ 31. Pursuant to the LOI, Plaintiff (1) agreed to negotiate exclusively with Defendant and keep confidential the business plans and terms of the LOI, (2) agreed to terminate any pending discussions regarding any alternative proposal regarding the Project, and (3) agreed to a unilateral 180-day exclusivity period, during which Plaintiff would terminate any pending discussions or negotiations regarding any alternative proposals for the SCE renewable energy project. Id. at ¶ 33-35.
At some point after the LOI was signed, Defendant and SCE allegedly told Plaintiff that it was fulfilling the terms of the LOI in a manner which Defendant and SCE considered satisfactory. Id. at ¶ 78. Morever, Defendant and SCE allegedly told Plaintiff that progress on the development of the Project would remain secure if Plaintiff continued to negotiate in good faith with Defendant and SCE. Id. However, contrary to those initial statements, Defendant and SCE allegedly later professed to have considered Plaintiff's ability to perform at that time to be unsatisfactory. Id. at ¶ 79.
In mid-June 2012, SCE contacted Plaintiff to inform it that SCE would like to include Magic Johnson Enterprises, Inc. ("MJE") in the Project. Id. at ¶ 39. Plaintiff then met with representatives of SCE and MJE regarding the Project and the PPA. Id. at ¶ 40. During that meeting, the SCE representative allegedly stated that he wanted "the deal" completed by the end of August 2012, and MJE and SCE demanded that Plaintiff alter its agreement with Defendant to include a change in ownership of ProjectCo to provide a 10% ownership stake to MJE. Id. at ¶ 41-42. Plaintiff resisted the attempts to force MJE into the Project and to reduce Plaintiff's ownership interest in ProjectCo. Id. at ¶ 43. After the meeting, SCE's representative contacted Defendant's representatives and allegedly made statements of fact concerning Plaintiff that were false with the intent of scuttling the ProjectCo deal. Id. at ¶ 47. On July 24, 2012, Defendant terminated the LOI, stating that the Project was "taking too long to close." Id. at ¶ 48.
Plaintiff alleges that Defendant made certain promises and obligations regarding ProjectCo and that Defendant unilaterally and prematurely ended the LOI and the ability of Plaintiff to complete negotiations with SCE for a PPA for the Project. Id. at ¶ 50. Furthermore, Plaintiff alleges that Defendant's termination of the LOI prior to the expiration of the exclusivity period and timeline set forth therein unfairly interfered with Plaintiff's right to receive the benefits of the contract. Id. at ¶ 63. Additionally, Plaintiff alleges that Plaintiff acted in justifiable reliance on Defendant's alleged statements that Plaintiff's progress regarding the Project was "satisfactory," even though Defendant later professed to have considered Plaintiff's ability to perform "unsatisfactory." Id. at ¶ 79. Accordingly, based on the LOI and the alleged cancellation of the LOI, Plaintiff alleges three claims for relief against Defendant: (1) promissory estoppel, (2) breach of the implied covenant of good faith and fair dealing, and (3) negligent misrepresentation [1].
II. LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(6) allows a party to move for dismissal of one or more claims if the pleading fails to state a claim upon which relief can be granted. Dismissal can be based on a lack of cognizable legal theory or lack of sufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). However, a party is not required to state the legal basis for its claim, only the facts underlying it. McCalden v. Cal. Library Ass'n, 955 F.2d 1214, 1223 (9th Cir. 1990), cert. denied, 112 S. Ct. 2306 (1992). In a Rule 12(b)(6) motion to dismiss, a court must presume all factual allegations of the complaint to be true and draw all reasonable inferences in favor of the non-moving party. Klarfeld v. United States, 944 F.2d 583, 585 (9th Cir. 1991).
The question presented by a motion to dismiss is not whether the plaintiff will prevail in the action, but whether the plaintiff is entitled to offer evidence in support of its claim. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 583 (2007). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of a cause of action's elements will not do." Id. at 555 (internal citation omitted). Although specific facts are not necessary if the complaint gives the defendant fair notice of the claim and the grounds upon which the claim rests, a complaint must nevertheless "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted).
If dismissed, a court must then decide whether to grant leave to amend. The Ninth Circuit has repeatedly held that a district court should grant leave to amend even if no request to amend the pleadings was made, unless the court determines that the pleading could not possibly be cured by the allegation of other facts. Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000). The court has discretion to deny leave to amend where deficiencies cannot be cured. Keniston v. Roberts, 717 F.2d 1295, 1300 (9th Cir. 1983).
III. ANALYSIS
A. Defendant's Request for Judicial Notice
As a preliminary matter, the Court addresses Defendant's request that the Court take judicial notice of the letter of intent ("LOI") dated April 23, 2012 between Plaintiff and Defendant. See Def's Req. For Judicial Notice ("RJN").
It is well established that a court ruling on a Rule 12(b)(6) motion to dismiss may not consider any material outside the complaint without converting the motion to dismiss into a motion for summary judgment. Lee v. City of L.A., 250 F.3d 668, 689 (9th Cir. 2001). However, there are two exceptions to the rule. Id. First, a court may consider "material which is properly submitted as part of the complaint." Id. If the documents are not physically attached to the complaint, they may be considered if their "authenticity . . . is not contested" and "the plaintiff's complaint necessarily relies" on them. Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998) superseded by statute on other grounds as recognized in Lacey v. Maricopa Cnty., 693 F.3d 896 (9th Cir. 2012). Second, under Federal Rule of Evidence 201, a court may take judicial notice of "matters of public record." Lee, 250 F.3d at 689. Under Rule 201, a trial court must take judicial notice of facts "if requested by a party and supplied with the necessary information." Fed. R. Evid. 201(d). A fact is appropriate for judicial notice only if it is not subject to reasonable dispute in that it is (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. Fed. R. Evid. 201(b).
Here, although the LOI was not physically attached to the Complaint, the Complaint necessarily relies on said letter. Compl. ¶¶ 29-35, 44-45. Moreover, Plaintiff explicitly indicates that it does not contest the authenticity of the letter. Opp'n 4:25-26. Because the authenticity of the LOI is not contested and Plaintiff's Complaint necessarily relies on the LOI, the Court GRANTS Defendant's Request for Judicial Notice. B. Defendant's Motion to Dismiss
1. Choice-of-law provision
First, this Court considers what law to apply to the present Motion. Ordinarily, California substantive law would apply because this is a diversity action. See Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938). However there is a choice-of-law provision contained in the LOI that expressly states that "[t]his letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law." RJN, Ex. A., p. 4.
In determining the enforceability of contractual choice-of-law provisions, California courts apply principles set forth in Restatement § 187(2), which reflects a strong policy favoring enforcement of such provisions. Nedlloyd Lines B.V. v. Superior Court, 3 Cal. 4th 459, 465 (1992). Specifically, Restatement § 187(2) states that the law of the state chosen by the parties governs their contractual rights, unless either:
(a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the
parties' choice, orId. (quoting Restatement (Second) of Conflict of Laws § 187 (1971)).
(b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of a particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice-of-law by the parties.
In Nedlloyd, the court recognized that the substantial relationship requirement is met if one of the parties is domiciled in the chosen state. Id. (citing Rest. § 187, subd. (2)(a) com. f). Here, because Defendant is incorporated in New York, Defendant is domiciled in New York. See Cream of Wheat Co. v. Grand Forks County, N.D., 253 U.S. 325, 328 (1920). Accordingly, the first required determination is met.
As to the second required determination, Plaintiff does not explain how applying New York law is contrary to a fundamental policy of California. While there is no bright-line definition of a "fundamental policy," a fundamental policy may be "embodied in a statute which makes one or more kinds of contracts illegal or which is designed to protect a person against the oppressive use of superior bargaining power." In re DirecTV Early Cancellation Litigation, 738 F. Supp. 2d 1062, 1087 (C.D. Cal. 2010) (citing Restatement § 187 cmt. g).
Here, applying New York law to Plaintiff's promissory estoppel claim would not violate a fundamental policy of California. See PAE Government Services, Inc. v. MPRE, Inc., 514 F.3d 856, 860 (9th Cir. 2007). In PAE Government Services, a subcontractor asserted a promissory estoppel claim against a contractor. Id. Pursuant to a choice-of-law clause, both parties had agreed that Virginia law applied to the "Teaming Agreement" at issue in the case. Id. Although Virginia law did not recognize promissory estoppel as a cause of action, the court in PAE Government Services held that there was no reason not to enforce the agreement's choice-of-law clause because enforcing the clause would not violate a fundamental public policy of California. Id. Here, the Parties agreed that New York law, which does recognize a claim for promissory estoppel, would govern the agreement. If the court in PAE Government Services held that enforcing the clause under Virginia law (which did not recognize a claim for promissory estoppel), would not violate a fundamental public policy of California, then applying New York law (which does recognize a claim for promissory estoppel) would similarly not violate a fundamental policy of California. As such, the Court finds that applying New York law would not violate a fundamental policy of California.
Moreover, applying New York law to Plaintiff's breach of implied covenant of good faith and fair dealing claim would not violate a fundamental policy of California. See Nedlloyd, 3 Cal. 4th. at 468 (holding that there was no fundamental policy of California requiring the application of California law based on the implied covenant of good faith and fair dealing because the covenant is not a government regulatory policy designed to restrict freedom of contract, but an implied promise inserted in an agreement to carry out the presumed intentions of contracting parties). When a court enforces the implied covenant, it is acting to protect "the interest in having promises performed" rather to protect some general duty to society. Foley v. Interactive Data Corp., 47 Cal. 3d 654, 689-90 (1988). Here, because Plaintiff has identified no fundamental policy of California at issue in its contractual dispute with Defendant, the Court hereby finds that applying New York law to Plaintiff's implied covenant of good faith and fair dealing claim would not violate a fundamental policy of California. See Nedlloyd, 3 Cal. 4th at 468.
Additionally, applying New York law to Plaintiff's negligent misrepresentation claim would not be in conflict with any fundamental policy. In Cardonet, Inc. v. IBM Corp., the court recognized that the Ninth Circuit concluded that application of New York law to fraud claims did not violate California public policy. No. C-06-06637 RMW, 2007 WL 518909 at *4 (N.D. Cal. Feb. 14, 2007) (citing Gen. Signal Corp. v. MCI Telecomm. Corp., 66 F.3d 1500, 1506 (9th Cir. 1995)). The court in Cardonet reasoned that to the extent application of New York law to fraud claims does not conflict with fundamental California policy, neither would the application of New York law to the less culpable negligent conduct applicable to negligent misrepresentation claims. Id. Accordingly, applying New York law to Plaintiff's negligent misrepresentation claim would not violate a fundamental policy of California.
Because Plaintiff has identified no fundamental policy of California at issue in its dispute with Defendant, and because case law suggests that none exists as to each of Plaintiff's claims, the second exception to § 187 does not apply. See Nedlloyd, 3 Cal. 4th at 748. Therefore, the Court finds that New York law governs Plaintiff's claims against Defendant.
2. Plaintiff's Claim for Promissory Estoppel
To state a claim for promissory estoppel under New York law, a plaintiff must allege facts establishing: (1) a promise that is sufficiently clear and unambiguous, (2) reasonable reliance on the promise by a party, and (3) injury caused by the reliance. Soldiers', 911 N.Y.S. 2d at 783.
A claim for promissory estoppel fails where it is contradicted by the agreement in issue which expressly states that neither party has any legal obligation to the other until both have executed and delivered an agreement. See Frutico S.A. de C.V. v. Bankers Trust Co., 833 F. Supp. 288, 299 (S.D.N.Y. 1993); Prestige Foods, Inc. v. Whale Securities Co., L.P., 663 N.Y.S.2d 14, 15 (1997). Here, Plaintiff's Complaint states that Defendant made promises that (1) Defendant would create ProjectCo with Plaintiff for the development of the Blue Diamond Solar Project and (2) Defendant would do so according to an established timeline, thereby permitting Plaintiff to secure a PPA for the Blue Diamond Solar Project. Compl. ¶ 50. However, given the language of the LOI, such promises are not sufficiently clear and unambiguous. Like Frutico S.A., in which the court held that no clear and unambiguous promise was made where negotiations made it clear that any promise or agreement was conditioned upon execution and delivery of a written contract, here, the LOI makes it clear that the LOI: (1) was provided for discussion purposes only, (2) was not a commitment to transact on the part of either party, and (3) that any such commitment would be based upon corporate approval, satisfactory due diligence, satisfactory documentation, and satisfaction of relevant conditions precedent by both Parties. Id. Furthermore, the LOI states that "further agreement by the Parties on material terms will be required for this transaction to proceed." RJN, Ex. A., p. 1. Based on the clear language of the LOI expressly stating that neither party had any legal obligation to the other pending further agreement, documentation, and corporate approval, the Court GRANTS Defendant's Motion to Dismiss Plaintiff's claim for promissory estoppel.
Turning to Plaintiff's request for leave to amend, Plaintiff maintains that it has omitted the detail of numerous discussions, communications, meetings, emails and the like which comprise the subject matter of this Case. Opp'n 18:10-13. Although liberally granted, leave to amend is not automatic and should be denied where "the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency." See Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986). Here, the basis of Plaintiff's promissory estoppel claim rests with the LOI, which Plaintiff argues memorialized a promise that Defendant would create ProjectCo with Plaintiff for the development of the Blue Diamond Solar Project according to an established timeline, thereby permitting Plaintiff to secure a PPA for the Blue Diamond Solar Project. However, regardless of any communication Plaintiff ultimately alleges occurred, the clear language of the LOI disclaiming any promise to contract belies any reasonable reliance on those communications. Accordingly, because it is impossible for Plaintiff to provide evidence of communications or discussions showing a clear and unambiguous promise to contract, Court GRANTS Defendant's Motion to Dismiss Plaintiff's claim without leave to amend.
3. Plaintiff's Claim for Breach of the Implied Covenant of Good Faith and Fair Dealing
Under New York law, all contracts imply a covenant of good faith and fair dealing in the course of performance. M/A-Com Sec. Corp. v. Galesi, 904 F.2d 134, 136 (2d Cir. 1990); 511 West 232nd Owners Corp. v. Jennifer Realty Co., 746 N.Y.S. 2d 131, 135 (2002). Under the implied covenant, "neither party to a contract shall do anything which has the effect of destroying or injuring the right of the other party to receive the fruits of the contract." Thyroff v. Nationwide Mut. Ins. Co., 460 F.3d 400, 407 (2d Cir. 2006). The covenant "only applies where an implied promise is so interwoven into the contract as to be necessary for effectuation of the purposes of the contract." Id. The implied covenant "does not extend so far as to undermine a party's general right to act on its own interests in a way that may incidentally lessen the other party's anticipated fruits from the contract." Thyroff, 460 F.3d at 408 (quoting Galesi, 904 F.2d at 136). Moreover, the implied covenant may "only impose an obligation consistent with other mutually agreed upon terms in the contract. It does not add to the contract a substantive provision not included by the parties." Broder v. Cablevision Sys. Corp., 418 F.3d 187, 198-99 (2d Cir. 2005) (internal quotation marks and citations omitted).
Here, the action taken by Defendant that purportedly violated the implied covenant of good faith and fair dealing was terminating the LOI before the exclusivity period was over. Compl. ¶ 63; Mot. 12:23-24. However, the LOI specifically indicated that it contained a summary of terms and conditions, which were provided for discussion purposes only. RJN, Ex. A. Furthermore, the LOI indicated that it was not a commitment to transact on the part of either Plaintiff or Defendant, and that any such commitment would be based upon satisfaction of further conditions, i.e. corporate approval and documentation. Id. Because an implied covenant can only impose an obligation consistent with other mutually agreed terms of the contract, an implied covenant not to terminate the LOI before the exclusivity period could not be consistent with the LOI given express language indicating that the LOI was not a commitment to transact. Broder, 418 F.3d at 198-99. Accordingly, because Plaintiff has failed to provide sufficient facts to support a claim for breach of implied covenant of good faith and fair dealing, the Court GRANTS Defendant's Motion to Dismiss Plaintiff's claim for breach of the implied duty of good faith and fair dealing.
Moreover, as to Plaintiff's request for leave to amend, the Court finds that the allegation of other facts consistent with the challenged pleading can not possibly cure the deficiency. Schreiber, 806 F.2d at 1401. As discussed above, an implied covenant can only impose an obligation consistent with other mutually agreed terms of the contract. Further, an implied covenant not to terminate the LOI before the exclusivity period could not be consistent with the LOI given express language indicating that the LOI was not a commitment to transact. In order words, there are no possible facts that Plaintiff can allege showing that Defendant breached its implied duty of good faith by terminating the agreement prior to the expiration of the exclusivity period, because such an duty is inconsistent with the language in the LOI indicating that there was no binding commitment to transact. Thus, it is impossible for Plaintiff to allege any facts showing that the implied covenant applies in this situation. Accordingly, because Plaintiff cannot provide the Court with facts to cure the deficiency, the Court GRANTS Defendant's Motion to Dismiss Plaintiff's claim for breach of the implied duty of good faith and fair dealing without leave to amend.
4. Plaintiff's Claim for Negligent Misrepresentation
There is a split among the district courts within the Ninth Circuit as to whether Rule 9(b) applies to claims for negligent misrepresentation. Compare Petersen v. Allstate Indem. Co., 281 F.R.D. 413, 416 (C.D. Cal. 2012), with Glen Holly, F. Supp. 2d at 1097-98 and U.S. Concord, 757 F. Supp. 1053. The court in Peterson noted that among the cases that have applied Rule 9(b) to negligent misrepresentation claims, those cases cited no authority to support that application. Furthermore, the court in Petersen cited to the express language of Rule 9(b), which expressly limits its application to fraud or mistake. Id. at 417. In In re Dau Systems, Inc., the court noted that a plaintiff's 1933 Securities Act Section 11 claim may be subject to Rule 9(b)'s particularity mandate if his complaint "sounds in fraud," that is, if the plaintiff alleges a unified course of fraudulent conduct and relies entirely on that course of conduct as the basis of a claim. 411 F.3d 1006, 1027 (9th Cir. 2005). However, the Ninth Circuit in Dau Systems held that in a case where fraud is not an essential element of a claim, only allegations of fraudulent conduct must satisfy Rule 9(b). Id. Dau Systems further elaborated that those fraud allegations would be stripped from the claim, and allegations of innocent or negligent misrepresentation would survive. Id. at 1028, (citing Lone Star Ladies Inv. Club v. Schlotzky's Inc., 238 F.3d 363, 368 (5th Cir. 2001)).
Here, Plaintiff does not allege facts that support a unified course of fraudulent conduct. Rather, Plaintiff alleges facts showing that Defendant acted negligently. Specifically, Plaintiff alleges that Defendant initially told Plaintiff that Plaintiff was fulfilling the terms of the LOI in a satisfactory manner and that progress on the development of the Blue Diamond Solar Project would remain secure if Plaintiff continued to negotiate in good faith with Defendant. Plaintiff alleges that contrary to those representations, Defendant later professed Plaintiff's ability to perform at that time to be unsatisfactory. Compl. ¶¶ 78-79. Plaintiff does not allege that Defendant engaged in fraudulent conduct or that Defendant made an intentionally false statement; rather, Plaintiff alleges that Defendant made such statements without any reasonable ground for believing the statements to be true. Compl. ¶ 79. Because fraud is not an essential element of Plaintiff's claim and Plaintiff's claim does not "sound in fraud," the Court finds that Plaintiff's claim of negligent misrepresentation should be analyzed under the more liberal Rule 8 pleading standard.
The party asserting a claim of negligent misrepresentation under New York law must prove (1) the existence of a special or privity-type relationship imposing a duty on the defendant to impart correct information to the plaintiff, (2) that the information was incorrect, and (3) reasonable reliance on the information. J.A.O. Acquisition Corp. v. Stavitsky, 8 N.Y. 3d 144, 148 (2007). Whether the nature of the relationship between the parties is such that the injured party's reliance on a negligent misrepresentation is justified generally raises an issue of fact. Kimmel v. Schaefer, 89 N.Y. 2d 257 (1996). A party can be imposed with liability for negligent misrepresentation if that party possesses unique or specialized expertise or is in a special position of confidence and trust with the injured party such that reliance on the negligent misrepresentation is justified. Id. at 263.
Here, Plaintiff alleges in its Complaint that pursuant to the LOI, Plaintiff agreed to negotiate exclusively with Defendant, to keep confidential the business plans and terms of the LOI, and to terminate any pending discussions regarding any alternative proposal regarding ProjectCo. Compl. ¶. 32. Presuming such allegations to be true, the Court can infer that Defendant was in a special position of confidence and trust with Plaintiff given that the LOI required discussions to be kept in confidence. Moreover, Plaintiff has alleged that Defendant made misleading statements to Plaintiff; i.e., that Plaintiff was fulfilling the terms of the LOI in a manner which Defendant considered satisfactory, and that progress on the development of the Blue Diamond Solar Project would remain secure if Plaintiff continued to negotiate in good faith with Defendant. Compl. ¶ 78. Plaintiff has alleged that Defendant later professed to have considered Plaintiff's ability to perform at that time to be unsatisfactory. Id. at ¶ 79. Assuming such allegations to be true, Plaintiff has alleged sufficient facts to support that Defendant made untrue representations when it initially informed Plaintiff that it was proceeding in a satisfactory manner. Finally, Plaintiff has alleged sufficient facts to support that it had reasonably believed it was performing under the LOI to the satisfaction of Defendant and was acting in justifiable reliance on Defendant's representations by continuing to negotiate under the LOI. Id. at ¶ 81. Because Plaintiff has asserted sufficient facts to support a claim for negligent misrepresentation, the Court DENIES Defendant's Motion to Dismiss Plaintiff's claim for negligent misrepresentation.
IV. CONCLUSION
Based on the foregoing, the Court GRANTS in part and DENIES in part Defendant's Motion to Dismiss as follows: • The Court GRANTS Defendant's Motion to Dismiss Plaintiff's promissory estoppel claim without leave to amend. • The Court GRANTS Defendant's Motion to Dismiss Plaintiff's breach of implied covenant of good faith and fair dealing claim without leave to amend. • The Court DENIES Defendant's Motion to Dismiss Plaintiff's negligent misrepresentation claim.
Additionally, the Court GRANTS Defendant's Request for Judicial Notice.
IT IS SO ORDERED.
_________________
HONORABLE RONALD S.W. LEW
Senior, U.S. District Judge