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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
x
ACI CAPITAL CO., LLC, : Index No.: 09/601888
Plaintiff, Hon. Richard B. Lowe III
~ against — | TAS Part 56
THE TALBOTS, INC.,
Defendant.
REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF THE TALBOTS,
INC.’S MOTION TO DISMISS THE AMENDED COMPLAINT AND OPPOSING
PLAINTIFF’S CROSS-MOTION FOR SUMMARY JUDGMENT
Robert C. Myers
Leo V. Gagion
Kelly A. Librera
Matthew L. DiRisio
DEWEY & LEBOEUF LLP
1301 Avenue of the Americas
New York, New York 10019-6092
Telephone: (212) 259-8000
Facsimile: (212) 259-6333
Attorneys for Defendant The Talbots, Inc.TABLE OF CONTENTS
PAGE
TABLE OF AUTHORITIES oo ceccesssessssessessesessseesuessaveccacennsenveccuseearessesennecseesasecaneceanesaseeenses ii
PRELIMINARY STATEMENT . 1
I. ACIS BREACH OF CONTRACT CLAIM MUST BE DISMISSED AS A
MATTER OF LAW... secsseecssseeseessssssnseassesseessesessserseesssteseersesesseessesssnesseessseessetsasesnuesanarescane 4
Il. ACI’S USE OF PAROL EVIDENCE ON THIS MOTION IS INAPPROPRIATE
AND ITS CROSS-MOTION FOR SUMMARY JUDGMENT IS IMPROPER ..........:00+ 8
A. ACT's Parol Evidence Is Both Legally Inappropriate And Irrelevant............cc08
B. ACT's Cross-Motion For Summary Judgment Is Improper 10
Wi. ACI’S FRAUD CLAIM MUST BE DISMISSED AS A MATTER OF LAW..........0-5 11
CONCLUSION... cscessseescseessesssscssseesuesssressusssusessecssuessaceuneersessaseenarsnseessessaseunsessuseatesseeesaseeeress 15TABLE OF AUTHORITIES
CASES PAGE(S)
311 West 232nd Owners Corp. v. Jennifer Realty,
98 N.Y.2d 144, 746 N.Y.S.2d 131 (2002) ...eccssescssseessseesssnseessnecessseccsseesenseerennnerennevensenents 8
Aronson v, Wiersma,
65 N.Y.2d 592, 493 N.Y.S.2d 1006 (N.Y. 1985) .esscssssesssesesssseesssesssssescesecseeresceneccsneeenae 13
Baron vy. Pfizer,
12 Misc, 3d 1169(A) (N.Y. Sup. Ct. 2006)...sccssesecsserecsssiosssnsossssssessnsssssnsesssesensnennensentanne 15
Cannon v. Douglas Elliman, LLC,
No, 06 Civ. 7092 (NRB), 2007 WL 4358456 (S.D.N.Y. Dec. 10, 2007)...
City of Rochester v. Chiarella,
65 N.Y.2d 92, 479 N_E.2d 810 (1985)...sseccesserecsserecsssesssvesresserssseessssseessneesssnsenssreenssase 10-11
Coliseum Towers Assoc. v. County of Nassau,
2 A.D.3d 562, 769 N.Y.S.2d 293 (2003),
ly, denied 2 N.Y.3d 707, 781 N.Y.S.2d 289 (2004).o.....eeesceeccsecseessctesveeeseeeenessnssnteenneesseees 8
Commercial Credit Corp. v. Third & Lafayette Sts Garage, Inc.,
226 A.D. 235, 234 N.Y.S. 463 (4th Dep’t 1929) ..sesssssssssessssssssssccssssssssssssassenssssssssessesesenesed 6
Coppola v. Applied Electric Corp.,
288 A.d.2d 41 (1st Dep’t 2001).
Don E. Williams Co. v. Commissioner,
429 U.S. 569 (1977).
Four Seasons Hotels Lid. v. Vinnik,
127 A.D.2d 310 (Lst Dep't 1987) .ecesceececcsessseessecssseessessesecseesarecseerseesarecseeesneerstesnnesseres 11
Gladliz, inc. v. Castiron Court Corp.,
177 Misc.2d 392, 677 N.Y.8.2d 662 (N.Y. Sup. Ct. 1998) ...ecssssecsssserssseessssessssetessseeseeeel 5
Inre Plover Motel, Inc.,
No. 94-50567-7, 1996 WL 33401161 (Bankr. W. D. Wis. March 26, 1996)... eee 6
Kessler v. Time Warner Cable,
No. 07-1179, 2008 WL 1883417 (N.Y. Sup. Ct. Apr. 16, 2008)... eessseessseeesneeenned 4
Linea Nuova, S.A. v. Slowchowsky,
62 A.D.3d 473, 877 N.Y¥.S.2d 891 (1st Dep't 2009) ......sesecsesseesssesseecseseseessereneeesecssersene 13
Manas v. VMS Associates, LLC,
53 A.D.3d 451 (1st Dep't 2008) oe ccecsssssesescsseseeveeveesessessessenensserenteensenesseaneseesseanets 13
Palliser v. United States,
136 U.S. 257 (1890) ececcescssseessessessecseeseeeseesnsssessassucenseesearecnecnecsvenseseesueesecaenneeneeaeaseseseted 5,6
Portnoy v. American Tobacco Co.,
1997 WL 92040 (N.Y. Sup. Ct. 1997) ..oe.ceeccssecessseessseesecsssesesessseessesssesesneasccsssceeennesseeets 15Pramco HI LLC v. P’ners Trust Bank,
15 Mise.3d 1142(A) (N.Y. Sup. 2007) .....-sceeseecceesseesesessnesseeeessessessssessuessscesseesseceseeets 12, 13
Rivas v. Amerimed USA, Inc.,
34 A.D.3d 250, 824 N.¥.S.2d 41 (Ist Dep’t 2006) oo... seessseescssseessseecssveecssarenssnsesesnereeses 14
Seiden Associates, Inc. v. ANC Holdings, Inc.,
959 F.2d 425 (2d Cir, 1992)... cseeceecssecsstssssecsessnscssesssnssssessessaseeneessessaseeserssaeecsneesseeenseeenses 8
South Road Associates, LLC v. IBM Corp.,
4N.Y.3d 272, 793 N.Y.S.2d 835 (2005) ...escsesscesssessssesseesensssseessescsseesessassuneesreessennecseetees 9
U.S. Fid. & Gura. Co. v. Annunziata,
67 N.Y.2d 229, 501 N.Y.S.2d 790 (1986) .....ssesecssesecssetsesssvesssecsssessssncensnssenvesseneesssaneensanee! 4
Walker v. Knowles,
No. 602499/2006, 2007 WL 1176519 (N.Y. Sup. Ct. Mar. 16, 2007)... sesssescsesseseres 15
Wilson v. Hochberg,
245 A.D.2d 116, 665 N.Y.8.2d 653 (1st Dep't 1997) oo..ceeseessescceeeseececesneesseeesererseessneenee 6]
WIT Holding Corp. v. Klein,
282 A.D.2d 527, 724 N.Y.S.2d 66 (2d Dep't 2001) ..scscsescsssecsseessereeseessneecesteesesnes 12, 13
Xuchang Rihetai Human Hair Goods Co., Ltd., v. Hanyu Int'l USA Inc.,
No. 00 Civ. 5585 (DLC), 2001 WL 8438 (S.D.N.Y. 2001) oo. eeeeeccsessessseeneesetecneeeseereeee 14
RULES
CPLR 3016(D)...esssesesssesssssesessseeesssesssssesscsseesonsnecssenecsannecnansscssaseensnscenensensarseannesssanesssanessen 3, 14, 15
CPLR 3211 (a)(7) csssesccssssecssescesseesnsseesnsseetsssnsesssnsesssscesssrccesneseessarsenseseesesicancseceeceeceeseesanvecearsesseasese! 4
CPLR 3211 (c).... 10, 11
CPLR 3211(d).... 15
CPLR 3212... cece eesesesteestsenneenee
iiiPRELIMINARY STATEMENT
In its response to Talbots’ motion to dismiss, ACI] concedes that this is a “simple
contract” case. It then attempts to rewrite the plain language of the Reimbursement Agreement
to claim a right to reimbursement of its expenses from Talbots. That it cannot do. Simply stated,
the Reimbursement Agreement, by its express terms, conditioned ACI’s right to receive
reimbursement of its expenses upon, among other things, ACI offering Talbots a “purchase
price payable in cash” for the J. Jill division. However, ACI’s $50 million purchase price offer
was not payable in cash — it was, as ACI admits, payable through a combination of cash, a
contingent note and warrants. Accordingly, on the face of the contract at issue and under well
established law governing the meaning of the term “cash,” ACI failed to fulfill the contractual
conditions for reimbursement under the Reimbursement Agreement. Its claims thus should be
dismissed. Talbots agrees that this is a simple contract case — the consequence of ACI failing to
fulfill an express condition of that contract is dispositive.'
Faced with this reality, ACI cobbles together a series of strawman arguments, each of
which is weaker than the next and each of which ignores the express language of the
Reimbursement Agreement. First, ACI claims that the Reimbursement Agreement did not
expressly state that the purchase price needed to be “all cash,” “only cash,” or “cash at closing.”
ACI is correct - the Reimbursement Agreement expressly stated that the purchase price needed
to be “payable in cash” — not partly in cash, not mostly in cash and not in warrants or in a
contingent promissory note instead of cash — it stated “in cash” and nothing but “in cash.” The
law is clear that “cash” means just that - ready cash. It does not mean a contingent promissory
* While ACI claims that Talbots is on the “brink of bankruptcy” and is attempting to avoid financial obligations,
that is not only irrelevant to Talbots’ motion dismiss but is, at best, fanciful. Talbots is a going concern whose stock
is publicly traded on the New York Stock Exchange. It has just received an influx of $75 million by virtue of its
sale of the J. Jill division. While the retail business has undoubtedly fallen on difficult times, the idea that Talbots is
on the brink of bankruptcy is nonsense.note, it does not mean a warrant and it does not mean a mere opportunity to obtain additional
cash in the future. ACI cites no case law or definition to the contrary, nor could it.
Second, ACI claims that, since the Reimbursement Agreement provided that its bid was
to be subject to “financial terms and conditions,” ACI could offer future promissory notes and
warrants (instead of cash) and still maintain a right to reimbursement. Again, ACI ignores the
plain language of the Reimbursement Agreement. The Reimbursement Agreement expressly
included the phrase “including a purchase price payable in cash” as one of the very financial
terms and conditions that ACI had to meet in order to receive reimbursement of its expenses.
That was the deal ACI struck and it simply did not fulfill its terms.
Third, ACI claims that Talbots’ “interpretation” of the Reimbursement Agreement is
“unreasonable” because ACI would be penalized for adding an additional $25 million in
consideration to its offer where, had ACI limited its offer to only $25 million in cash (without the
additional $25 million consideration), it would have been entitled to reimbursement. That is
frivolous. Under ACI’s interpretation, if it had offered $1 in cash and the remainder in other
consideration, it would be entitled to reimbursement. Yet, that would throw the language
“payable in cash” out the window and allow ACI to rewrite the clear terms of this agreement. In
any event, there is absolutely nothing unreasonable about requiring a bidder to provide an offer
“in cash” if it wished to be reimbursed for its expenses. A cash offer is a premium offer and thus
it would not be surprising that a seller would wish to encourage a cash offer. Moreover, ACI’s
purchase price offer was not $25 million in cash. On its face it was $50 million but it was not
payable in cash. Most important, ACI was free to offer anything it wanted to secure the J. Jill
division. It could have offered $100 million or $200 million in promissory notes. Talbots may
or may not have accepted those offers. But those offers would not have given ACI the right toexpense reimbursement under its contract. That required the purchase price offer to be in cash
and nothing but cash.
Faced with the consequence of these clear terms, ACI then seeks to bring in parol
evidence to create an ambiguity. While inappropriate on this motion since this evidence is found
nowhere in the Amended Compiaint, ACT’s efforts nonetheless fail. ACI’s assertions that (i) a
Talbots banker reportedly told ACI that “warrants might be attractive to Talbots,” and (ii)
Talbots ultimately accepted a deal with a “variable” purchase price are both irrelevant. ACT
confuses its right to offer Talbots whatever it wished to secure the J. Jill division with Talbots’
contractual obligations wnder the Reimbursement Agreement to reimburse ACI’s expenses. It
may well have been that Talbots would have considered warrants as a component of a successful
offer. And it may well be that Talbots ultimately accepted an offer that had a form of
contingency, That, however, does not mean that an offer of warrants or a contingent, non-cash
offer would satisfy ACI’s obligation under the Reimbursement Agreement to secure its expenses.
By the clear terms of the Reimbursement Agreement, it would not.
ACL is no more successful with its fraud claim. Indeed, ACI attempts to add allegations
to its claim found nowhere in the Amended Complaint, establishing that it has failed to plead
fraud with the detail required by CPLR 3016(b). In any event, and under the most liberal reading
of the Amended Complaint, ACI’s fraud claim is nothing more than a rehash of its breach of
contract claim. On its face, the Amended Complaint asserts no misrepresentation extraneous to
exactly what is contained in the Reimbursement Agreement itself, i.¢., the representation that
Talbots, assuming ACI’s compliance with certain conditions, would pay for ACI’s expenses.
Under clear New York law, such allegations do not support an independent fraud claim.In sum, this Court concluded that ACI was not likely to succeed on the merits of its
claims when it denied ACI’s motion for a preliminary injunction. The Court should now dismiss
this action and end what has become an effort to extort money from Talbots notwithstanding
ACT's failure to comply with its own contractual obligations.
I. ACI’S BREACH OF CONTRACT CLAIM MUST BE DISMISSED AS A MATTER
OF LAW
ACI concedes that this Court must enforce the Reimbursement Agreement according to
its terms. (Pls. Br. at 8.) ACI further does not contest that those terms must be given their plain,
ordinary, popular and non-technical meanings. U.S. Fid. & Guar. Co. v. Annunziata, 67 N.Y 2d
229, 232, 501 N.Y.S.2d 790, 791 (1986). It further does not contest that both the
Reimbursement Agreement and ACI’s offer letter are expressly incorporated by reference into
the Amended Complaint and may be considered on this motion to dismiss. Under these simple
rules, there can be no debate — the Reimbursement Agreement expressly required that, in order to
be reimbursed for its expenses, ACI was to submit a good faith offer which was to be “comprised
of a detailed proposal of the financial terms and conditions of [the sale] (including a proposed
purchase price payable in cash)... .” (Am. Compl., Exh. A [emphasis added].) ACI
admittedly did not comply with this express condition and thus its breach of contract claim must
fail on the face of the pleading.
In response, ACI argues that (i) the Reimbursement Agreement did not require ACI’s
purchase price offer to be “all cash,” “only cash,” or “cash at closing”; (ii) because the
Reimbursement Agreement contemplated an offer subject to “financial terms and conditions,”
2 ee
the purchase price term could also be subject to conditions; and (iii) Talbots’ “interpretation” is
? Contrary to ACI’s suggestion, the fact that ACI has incorporated both the Reimbursement Agreement and its offer
letter by reference into the Amended Complaint does not transform this motion into one for sammary judgment nor
does it “demonstrate an intention of charting a summary judgment course.” (See Pls. Br. at 19 n.11.) The law is
clear that documents incorporated by reference into the pleading may be considered on a motion to dismiss under
CPLR 3211(a)(7). (See Opening Br. at 6-7.)unreasonable because it would purportedly penalize ACI for making an additional offer of non-
ees
cash consideration where, under Talbots’ “interpretation,” ACI purportedly would have received
reimbursement if it had limited its offer to only $25 million in cash. None of these arguments
changes the express language of the Reimbursement Agreement, the precise terms of ACI’s offer
and the direct contractual consequences flowing therefrom.
First of all, ACI fails to cite to this Court a single precedent for the proposition that the
phrase “payable in cash” means that one may pay parily in cash and partly in other
consideration and nonetheless satisfy the express contractual language at issue. This agreement
could not be clearer: the purchase price was to be “payable in cash” — not partly in cash, not
mostly in cash and not partly in a contingent promissory note or warrant. The concept that a
contract, which specifies that it is to be “paid in cash” means that one may pay it partly in cash
and partly in other consideration flies in the face of the express terms and their plain, ordinary
meaning.
As set forth in Talbots’ initial submission, the plain, ordinary, well-accepted meaning of
the term “cash,” both in legal dictionaries and case law, is just that — “ready cash” — not a
contingent promissory note or a warrant. (Op. Br. at 8-9.) As no less than the United States
Supreme Court has articulated, cash means “ready money, or money in hand, either in current
coin or other legal tender, or in bank-bills or checks paid and received as money, and does not
include promises to pay money in the future.” Palliser v. United States, 136 U.S. 257, 263
(1890); see also Don E. Williams Co. v. Comm’r, 429 U.S. 569, 577-78 (1977) (a note
promising payment of cash in the future is not cash or its equivalent)?
* ‘The rationale for this rule is apparent: “the note may never be paid, and if it is not paid, the [party] has parted with
nothing more than his promise to pay.” See Don E. Williams, 429 U.S. at 578 (internal quotes omitted).ACI thus assumes that this plain, well-settled definition of cash that courts have adopted
for more than a hundred years is somehow inapplicable here. Yet, to support such a drastic
departure from clear and well-reasoned precedent, ACI does not offer this Court a single case,
let alone any persuasive analysis. ACI’s efforts to distinguish Talbots’ citations provide little
assistance. For example, while ACI argues that Commercial Credit Corp. v. Third & Lafayette
Sts. Garage, Inc., 226 A.D. 235, 234 N.Y.S. 463 (4th Dep't 1929), is inapplicable because the
court there considered the phrase “cash and not its equivalent,” that case explicitly holds that the
transfer of a secured promissory note (i.¢., a note with more backing than the contingent note
ACI proposed here) was not a payment “in cash.” 26 A.D. at 238, 234 N.Y\S, at 467.4
Similarly, Jn re Plover Motel, Inc., No. 94-50567-7, 1996 WL 33401161 (Bankr. W. D.
Wis. March 26, 1996), also cited by Talbots in its opening brief, is even more instructive.
There, the court considered whether a proposed purchase price that contained, in part, a
“nonrecourse $300,000 promissory note from [one party] to [another] with repayment
provisions which contemplate payment only if the Jacquired asset] makes a sufficient profit to
do so,” satisfied a contractual requirement for a proposed purchase price on “cash terms,” /d. at
*2,n.5. After noting that cash means “ready money,” the court concluded that, because part of
the proposed payment was to be made by promissory note, the offer was not a “cash offer.” Jd.
at *4, That is exactly the case here and nothing ACI argues changes that fundamental fact,
ACI’s proposed $50 million purchase price, comprised of $25 million in cash and the
“opportunity” for $25 million more based upon a contingent promissory note and warrants is
* The concept that the phrase “cash and not its equivalent” is substantively distinguishable for the phrase “payable
in cash” is nonsensical. On their face, both mean what they say — payment must be in cash. So too ACI’s effort to
claim that the phrase “except for cash” — the phrase at issue in Palliser — means “cash only” (see Pls. Br. at 12) but
that the phrase “payable in cash” in the Reimbursement Agreement does not mean “cash only” is equally
nonsensical. There is no substantive difference in the phrases “except for cash” and “payable in cash” - both, under
the plain meaning of the term, mean that cash is the required form of payment.not, under any reasonable interpretation, a proposal for a $50 million purchase price in “ready
money,” 7.¢., in cash. Accordingly, and under the clear terms of the Reimbursement Agreement,
ACT had no right to reimbursement of its expenses.
ACTI’s argument that, because its bid for the J. Jill business was expected to be subject to
“terms and conditions,” the purchase price term of that bid could likewise be subject to
conditions, is equally unavailing. Nothing in the Reimbursement Agreement supports this
illogical leap. Instead, a plain reading of the express terms of the contract establishes that a
“purchase price payable in cash” was an explicit “financial term[] and condition[]” that had to be
included in ACI’s offer if AC] were to recover its expenses. (See Am. Compl., Exh. A at 1 (the
“offer (1) shall be comprised of a detailed proposal of the financial terms and conditions of [the
sale] (including a proposed purchase price payable in cash)”).
In short, ACI was free to submit an offer to acquire the J. Jill division on any terms and
conditions it chose, but the consequences were clear: expenses associated with an offer that did
not comply with the explicit terms of the Reimbursement Agreement would not be reimbursed.
Now that those consequences have come to pass, ACI simply wants a do-over and seeks to
recharacterize its half-cash, half-notes-and-warrants offer as “payable in cash” offer partially
payable “on condition.” (Pls. Br. at 12.) The express language of the Reimbursement
Agreement and the case law simply will not support this recharacterization.
Finally, ACI’s desperate claim that the Court should disregard this express language and
its plain meaning because it would purportedly punish ACI for offering more than the $25
million that ACI proposed to pay in cash is just that — desperate. (Pls. Br. at 13.) By that logic,
had ACI offered to purchase the J. Jill division for $1, it would have satisfied the terms of the
Reimbursement Agreement. That would eviscerate the clear and unambiguous phrase “payablein cash” and render it meaningless.’ ACI could have offered anything it chose in its efforts to
acquire the J. Jill division. But to realize the right to reimbursement of its expenses under this
particular contract it had to offer a purchase price “payable in cash.” On its face, it is logical
that a company might wish to encourage cash offers for an asset or division. That does not
mean that other offers are penalized; it simply means they do not qualify for reimbursement.
In sum, the Reimbursement Agreement is clear and unambiguous and ACI’s offer,
incorporated by reference in the Amended Complaint, establishes that ACI did not satisfy an
essential condition of the Reimbursement Agreement. On the face of the Amended Complaint,
ACT's claim of breach must be dismissed.
i. ACI’S USE OF PAROL EVIDENCE ON THIS MOTION IS INAPPROPRIATE AND
ITS CROSS-MOTION FOR SUMMARY JUDGMENT IS IMPROPER
Realizing that the plain language of the Reimbursement Agreement is clear and
unambiguous on its face, ACI attempts to go beyond the allegations in the Amended Complaint
and create an ambiguity in the agreement by referencing select “parol evidence” of Talbots’
purported willingness to accept non-cash or partly non-cash offers for the J. Jill division.
Similarly, ACI then cross-moves for “summary judgment” on its breach of contract claim,
notwithstanding that issue has yet to be joined in this matter. Both paths are improper.°
A. ACI’s Parol Evidence Is Both Legally Inappropriate And Irrelevant
New York law is clear that the issue of whether a contract is ambiguous is an issue of
law. Seiden Associates, Inc. v. ANC Holdings, Inc., 959 F.2d 425, 429 (2d Cir. 1992). A party
> Deing so would also breach the implied covenant of good faith and fair dealing, which exists in every contract,
See, ¢.g., 511 West 232nd Owners Corp. v. Jennifer Realty, 98 N.Y.2d 144, 153, 746 N.Y.S.2d 131, 135 (2002).
® ACI’s assertion that any ambiguities in the Reimbursement Agreement must be construed against Talbots is wrong,
as a matter of law. ACI is a highly sophisticated private equity fund represented by Kaye Scholer, a preeminent (and
eminently capable) corporate law firm. Accordingly, the doctrine of conira proferentem has no application to this
case. See, e.g., Coliseum Towers Assoc. v. County of Nassau, 2 A.D.3d 562, 565, 769 N.Y.S.2d 293, 296-297 (2d
Dep’t 2003), /v. denied, 2 N.Y.3d 707, 781 N.Y.S.2d 289 (2004) (noting that the contra proferentem rule does not
apply when equally sophisticated parties have a hand in drafting the agreement in question).thus may not rely upon parol evidence in an effort to create an ambiguity. South Rd. Assocs.,
LLC v. IBM Corp., 4 N.Y.3d 272, 278, 793 N.Y.S.2d 835, 838 (2005). Yet, that is precisely
what ACI attempts to do here. The Court should thus disregard ACI’s efforts and this so-called
parol evidence. However, were the Court to examine this so-called evidence, it would only
confirm the lack of merit to ACI’s arguments. ACI asserts that parol evidence shows that the
Reimbursement Agreement did not require an all cash purchase price because (i) a Talbots
financial advisor reportedly told ACI that “warrants might be attractive to Talbots,” (ii) ACI
ultimately accepted a deal with a “variable” purchase price, and (iii) instruction letters regarding
the submission of bids for the J. Jill division stated that “[c]onsideration should be in cash and
fully financed.” (Pls. Br. at 14-16.) This so-called parol evidence is easily discarded.
First, the claims that a Talbots financial advisor may have informed ACI that warrants
might be attractive to Talbots and that ACI ultimately accepted a deal with a “variable” purchase
price are irrelevant to whether ACI has a right to reimbursement of expenses under the terms of
the Reimbursement Agreement with Talbots. Again, ACI was free to offer anything it chose to
Talbots in its efforts to acquire the J. Jill division. Had it offered more warrants, Talbots may or
may not have accepted ACI’s offer. But that in no way means that, if unsuccessful in its efforts,
ACI then had a right to reimbursement of its expenses under the Reimbursement Agreement
regardless of the form of consideration in its offer. That issue is controlled by the terms of the
Reimbursement Agreement alone and is, as a matter of law, not affected simply because ACI
was under the impression that ACI might find certain non-cash offers appealing. So too with the
fact that Talbots may have accepted a winning bid that contained a “variable” purchase price.
That has no relevance to the issue of, assuming that bid were unsuccessful, whether a right to
expense reimbursement would exist. That, again, would be determined solely by the terms of thecontract at issue and not the simple fact that Talbots wound up accepting another offer that may
not have merited expense reimbursement.
Similarly, the April 2009 letters — not even referenced in ACI’s Amended Complaint —
change nothing. Indeed, those letters clarify that Talbots was interested only in fully-funded
cash offers (and, by extension, not mixed offers of cash, notes and warrants). For example, the
oa
opening paragraph to each letter states that Talbots’ “principal objectives are to provide for the
sale of [J. Jill] upon terms which realize the highest possible value in cash as well as to
consummate a transaction as expeditiously and with as little conditionality as possible.”
Paragraph 3 expressly provided that the “[clonsideration should be in cash and fully financed.”
id. (emphasis added). On its face, that language appears rather clear — the consideration “should
be in cash.” How that renders the clear terms of the Reimbursement Agreement that the offer
had to be “payable in cash” meaningless is a mystery. Likewise, ACI’s assertion that the term
“fully financed” somehow obviates Talbots’ purchase price argument makes no sense. The entire
phrase clearly states that the consideration “should be in cash.” That could not be clearer. That
the letter also required that the offer be “fully financed” does not in any way limit the fact that
the offer had to be in cash as well. In short, whether the funds for ACI’s offer came from ACI’s
own coffers or from a bank willing to fully finance ACI’s offer for the J. Jill division made no
difference to the fact that in either case, the offer had to be in cash.
B. ACI’s Cross-Motion For Summary Judgment Is Improper
Although ACI seeks to go beyond the Amended Complaint and cross moves for
summary judgment on its breach of contract claim pursuant to both CPLR 3212 and 3211(c),
neither approach is legally proper at this juncture. First, a party may not move for summary
judgment under CPLR 3212 “until after issue is joined,” City of Rochester v. Chiarella, 65N.Y.2d 92, 101, 479 N.E.2d 810, 815 (1985). Because Talbots has not yet answered the
Amended Complaint, ACI’s motion is premature. Second, where a plaintiff files a cross motion
pursuant to 3211(c), until such time as the Court explicitly gives notice to the parties that it
intends to reach ACI’s cross motion, Talbots need not respond to that motion. CPLR 3211(c);
see, e.g., Four Seasons Hotels Ltd. y. Vinnik, 127 A.D.2d 310, 320, 515 N.Y.S.2d 1, 7-8 (Ist
Dep’t 1987). Without such express notice from the Court, the motion under consideration is one
of dismissal, that filed by Talbots, and not one for summary judgment. Jd.’ In short, on the
present motion, it is the Amended Complaint and the documents incorporated therein that are
dispositive.
WI. ACI’S FRAUD CLAIM MUST BE DISMISSED AS A MATTER OF LAW
ACI’s fraudulent inducement claim, premised entirely upon the allegation that Talbots
misrepresented its intent to pay ACI’s expenses in connection with its evaluation of the J. Jill
division (Am, Compl. 495, 37-38), is wholly duplicative of its breach of contract claim and, thus,
fails to state a cause of action. (See Op. Br, at 10-13.) Under New York law, a plaintiff “may
not convert [its] so-called contract action into one for fraud by the mere additional allegation that
the contracting party did not intend to meet [its] contractual obligation.” Wilson v. Hochberg,
245 A.D.2d 116, 117, 665 N.Y.S.2d 653, 654 (Ist Dep’t 1997). ACI now argues that a
fraudulent inducement claim can theoretically coexist with a breach of contract claim where
either (i) the misrepresentations alleged by a plaintiff are collateral and extraneous to the
underlying contract (Pls. Br. at 20) or (ii) a plaintiff sustains “special damages” not recoverable
7 Likewise, until it is directed by the Court to do so, Talbots need not submit a response to Plaintiff's premature
Rule 19-a Statement of “Undisputed” Facts. Of course, should the Court give notice to Talbots that summary
judgment motion practice will commence, Talbots will submit the appropriate papers for the Court’s consideration
outlining additional defenses to the breach of contract claim, including that ACI failed to fulfill other conditions
under the Reimbursement Agreement (e.g. failing to substantially complete its due diligence prior to making its
offer and impermissibly including financing contingencies in its offer).
11in contract damages (id. at 22). These arguments are unavailing. AC] has not proffered any
legal authority and has failed to allege any facts showing that its claim falls within cither of these
categories.*
Initially, in order to survive dismissal, a plaintiff asserting a fraudulent inducement claim
in tandem with a breach of contract claim must allege a “misrepresentation extraneous to that
contained (and made) in the [agreement] itself” Pramco Ill, LLC v. P’ners Trust Bank, 15
Misc.3d 1142(A) at *1, 841 N.Y.S.2d 822 (N.Y. Sup. 2007) (emphasis added). A
misrepresentation that is “nothing more than what was announced [in the contract itself] . . .
cannot be extraneous to the contract and cannot support an independent fraud claim.” /d. This is
precisely the nature of ACI’s claim — the Amended Complaint does not assert any
misrepresentation made by Talbots that is at all different than the representations made in the
Reimbursement Agreement itself.
The Amended Complaint, without setting forth any specific misrepresentation by any
specific Talbot representative, conclusorily alleges that “Talbots made multiple representations
to ACI that it would reimburse ACI for its out-of-pocket expenses, should ACI investigate and
bid on the Business and not be the successful bidder.” (Am. Compl. 37.) By comparison, the
Reimbursement Agreement provided that, subject to the satisfaction of several conditions,
Talbots would pay ACI’s “reasonably incurred and documented third party out-of-pocket fees
and expenses . . . in connection with ACI’s evaluation of [J. Jill]” in the event ACI did not
* In any event, the Amended Complaint fails even to allege that Talbots’ purported misrepresentations induced ACI
to enter the Reimbursement Agreement, as it must under the “collateral misrepresentation” doctrine. See, e.g., WIT
Holding Corp. v. Klein, 282 A.D.2d 527, 528, 724 N.Y.S.2d 66, 68 (2d Dep't 2001). Rather, the Amended
Complaint alleges that Talbots’ promise to reimburse expenses persuaded ACI to participate in the J. Jill bidding
process in the first place (Am, Compl. 5, 36) - a distinction ACI tries to dance around in its opposition brief with
the unfounded assertion that the alleged misrepresentations “were fraudulently made by Talbots with the intention of
getting ACI to enter in the bidding for the Business, and in turn, the Reimbursement Agreement.” (Pls. Br. at 22.)
Yet, by ACI’s own admission, the Reimbursement Agreement was drafted and subsequently entered into at AC/’s
request. (Manasse Aff., §18-19.) The notion that ACI was “fraudulently induced” to enter a contract ACI itself
demanded is simply not credible.
12ultimately prevail in the bidding process. (Am. Compl., Exh. A.) On their face, these
representations are substantially identical; those allegedly preceding the Reimbursement
Agreement are neither extraneous nor collateral to the contract itself, and thus cannot support a
fraud claim independent of a breach of contract claim. Pramco III LLC, 15 Mise.3d 1142(A) t
*1, see also Manas v. VMS Assocs., LLC, 53 A.D.3d 451, 863 N.Y.S.2d 4 (Ist Dep’t 2008)
(dismissing fraudulent inducement claim where plaintiff alleged that defendant never intended to
comply with promises preceding and inducing subsequent employment contract); Linea Nuova,
SA, v. Slowchowsky, 62 A.D.3d 473, 473, 877 N.Y.S.2d 891, 892-93 (Ist Dep’t 2009)
(dismissing fraud claim as duplicative where “alleged misrepresentation of an existing fact was
made in the context of merely assuring plaintiff that [defendant] would comply with its
contractual obligation and no additional duty was allegedly breached”).?
ACT’s next argument, that it suffered “special damages,” fares no better. ACI failed to
plead “special damages” in its Amended Complaint, and its last-ditch effort to save its
duplicative fraud claim by tossing this blanket phrase into its opposition brief “is insufficient to
trigger the application of the special damages exception.” Cannon v. Douglas Elliman, LLC, No.
06 Civ. 7092 (NRB), 2007 WL 4358456, at *9 n. 14 (S.D.N.Y. Dec. 10, 2007); see also Aronson
v, Wiersma, 65 N.Y.2d 592, 595, 493 N.Y.S.2d 1006, 1008 (1985) (itemizing “loss of salary and
benefits” in a subsequent affidavit is insufficient to allege special damages where not pled in
complaint).
In fact, the Amended Complaint seeks the exact same $1.5 million in damages for both
its contract claim and for its fraud claim, see Am. Comp!. WHEREFORE CLAUSE (A), (C),
° The cases cited by ACI are not to the contrary and, in large part, involve cases in which defendants made
misrepresentations that were unmistakably extraneous to the underlying contracts. See, e.g, WIT Holding, 282
A.D.2d at 528-529 (permitting fraud claim in conjunction with breach of stock purchase agreement claim where
defendant misrepresented his position and company’s regulatory compliance).
13(D). This precise structure has been held insufficient to plead special damages in this context.
Xuchang Rihetai Human Hair Goods Co., Ltd, v. Hanyu Int'l USA Inc., No. 00 Civ. 5585
(DLC), 2001 WL 8438, at *2 n. 3 (S.D.N.Y. 2001) (“Plaintiff seeks the same amount of damages
in its breach of contract and fraudulent misrepresentation claims, and its claim for punitive
damages as a result of the allegedly fraudulent misrepresentation are not ‘special damages.””).
Moreover, even if ACI were not foreclosed from asserting a claim for special damages
(which it is), it fails to allege, as it has from the onset of this litigation, any injury “[not]
recoverable under a contract measure of damages” ~ a requirement for invoking the special
damages exception. Coppola v. Applied Elec. Corp., 288 A.D.2d 41, 732 N.Y.S.2d 402 (Ist
Dep’t 2001); see also Rivas v. Amerimed USA, Inc., 34 A.D.3d 250, 250, 824 N.Y.S.2d 41, 41
(1st Dep’t 2006) (same). While ACI now claims, for the first time, that it has incurred special
damages in the form of its “own time and expenses in pursuing the Business” and “lost the
opportunity to pursue other potential deals” (Pls. Br. at 23), these general assertions are
inadequate to allege special damages, which “are not sufficiently pled where damages are not
itemized.” Kessler v. Time Warner Cable, No. 07-1179, 2008 WL 1883417, at *5 (N.Y. Sup. Ct.
Apr. 16, 2008).
Finally, even if ACI had otherwise satisfied these legal infirmities to its fraud claim,
ACI’s fraud allegations are woefully inadequate under CPLR 3016(b). Simply stated, there is
not a single fact alleged in the entire Amended Complaint to support a claim of fraud. ACI
responds to this deficiency by stating that it “has identified two letters that included the
fraudulent misrepresentations.” (Pls. Br. at 24.) Even if this were true, those two letters are not
even referenced in the Amended Complaint. No specific factual representation on the part of any
representative of ACI is alleged in the Amended Complaint at all. CPLR 3016(b) requires that
14the facts supporting a fraud claim be located “within the four corners of the complaint.” Baron
v. Pfizer, 12 Mise. 3d 1169(A), at *4, 820 N.Y.S.2d 841 (N.Y. Sup. Ct. May 2, 2006).
Deficiencies in the complaint cannot be solved by making unsubstantiated factual allegations in a
party’s subsequent briefs. See, e.g., Portnoy v. American Tobacco Co., 1997 WL 92040, at *2
(N.Y. Sup. Ct. Feb. 19, 1997) (“statements in briefs and affirmations not based on personal
knowledge cannot be used to supplement deficiencies in the complaint itself”).'°
CONCLUSION
For the foregoing reasons, Talbots respectfully requests that each and every cause of
action asserted against it be dismissed with prejudice and that ACI’s cross motion for summary
judgment be denied as moot.
Dated: New York, New York
July 29, 2009
DEWEY & LEBOEUF LLP
By: G
Robert C. Myers
Leo V. Gagion
Kelly A. Librera
Matthew L. DiRisio
1301 Avenue of the Americas
New York, New York 10019-6092
212.259.8000
Attorneys for Defendant The Talbots, Inc.
"© ACI’s contention that “because [it] has outstanding discovery pending . . . dismissal is inappropriate” under
CPLR 3211(d) (Pls. Br. at 24) mischaracterizes the law. A plaintiff can invoke CPLR 321 1(d), only where it has
“demonstrated that facts essential to justify opposition to the motion may exist but could not be stated.” Walker v.
Knowles, No. 602499/2006, 2007 WL 1176519, at *3 (N.Y. Sup. Ct. Mar. 16, 2007). Conversely, where, as here, a
plaintiff's purported reasons for requiring additional discovery are wholly speculative and “fail to show that
discovery would lead to or uncover any legally relevant information,” dismissal is entirely proper. Gladliz, Inc. v.
Castiron Court Corp., 177 Misc.2d 392, 398, 677 N.Y.S.2d 662, 667 (N.Y. Sup. Ct. 1998) (dismissing fraud claim
for failure to satisfy pleading standard under CPLR 3016(b).
15
Preview
SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK x ACI CAPITAL CO., LLC, : Index No.: 09/601888 Plaintiff, Hon. Richard B. Lowe III ~ against — | TAS Part 56 THE TALBOTS, INC., Defendant. REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF THE TALBOTS, INC.’S MOTION TO DISMISS THE AMENDED COMPLAINT AND OPPOSING PLAINTIFF’S CROSS-MOTION FOR SUMMARY JUDGMENT Robert C. Myers Leo V. Gagion Kelly A. Librera Matthew L. DiRisio DEWEY & LEBOEUF LLP 1301 Avenue of the Americas New York, New York 10019-6092 Telephone: (212) 259-8000 Facsimile: (212) 259-6333 Attorneys for Defendant The Talbots, Inc.TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES oo ceccesssessssessessesessseesuessaveccacennsenveccuseearessesennecseesasecaneceanesaseeenses ii PRELIMINARY STATEMENT . 1 I. ACIS BREACH OF CONTRACT CLAIM MUST BE DISMISSED AS A MATTER OF LAW... secsseecssseeseessssssnseassesseessesessserseesssteseersesesseessesssnesseessseessetsasesnuesanarescane 4 Il. ACI’S USE OF PAROL EVIDENCE ON THIS MOTION IS INAPPROPRIATE AND ITS CROSS-MOTION FOR SUMMARY JUDGMENT IS IMPROPER ..........:00+ 8 A. ACT's Parol Evidence Is Both Legally Inappropriate And Irrelevant............cc08 B. ACT's Cross-Motion For Summary Judgment Is Improper 10 Wi. ACI’S FRAUD CLAIM MUST BE DISMISSED AS A MATTER OF LAW..........0-5 11 CONCLUSION... cscessseescseessesssscssseesuesssressusssusessecssuessaceuneersessaseenarsnseessessaseunsessuseatesseeesaseeeress 15TABLE OF AUTHORITIES CASES PAGE(S) 311 West 232nd Owners Corp. v. Jennifer Realty, 98 N.Y.2d 144, 746 N.Y.S.2d 131 (2002) ...eccssescssseessseesssnseessnecessseccsseesenseerennnerennevensenents 8 Aronson v, Wiersma, 65 N.Y.2d 592, 493 N.Y.S.2d 1006 (N.Y. 1985) .esscssssesssesesssseesssesssssescesecseeresceneccsneeenae 13 Baron vy. Pfizer, 12 Misc, 3d 1169(A) (N.Y. Sup. Ct. 2006)...sccssesecsserecsssiosssnsossssssessnsssssnsesssesensnennensentanne 15 Cannon v. Douglas Elliman, LLC, No, 06 Civ. 7092 (NRB), 2007 WL 4358456 (S.D.N.Y. Dec. 10, 2007)... City of Rochester v. Chiarella, 65 N.Y.2d 92, 479 N_E.2d 810 (1985)...sseccesserecsserecsssesssvesresserssseessssseessneesssnsenssreenssase 10-11 Coliseum Towers Assoc. v. County of Nassau, 2 A.D.3d 562, 769 N.Y.S.2d 293 (2003), ly, denied 2 N.Y.3d 707, 781 N.Y.S.2d 289 (2004).o.....eeesceeccsecseessctesveeeseeeenessnssnteenneesseees 8 Commercial Credit Corp. v. Third & Lafayette Sts Garage, Inc., 226 A.D. 235, 234 N.Y.S. 463 (4th Dep’t 1929) ..sesssssssssessssssssssccssssssssssssassenssssssssessesesenesed 6 Coppola v. Applied Electric Corp., 288 A.d.2d 41 (1st Dep’t 2001). Don E. Williams Co. v. Commissioner, 429 U.S. 569 (1977). Four Seasons Hotels Lid. v. Vinnik, 127 A.D.2d 310 (Lst Dep't 1987) .ecesceececcsessseessecssseessessesecseesarecseerseesarecseeesneerstesnnesseres 11 Gladliz, inc. v. Castiron Court Corp., 177 Misc.2d 392, 677 N.Y.8.2d 662 (N.Y. Sup. Ct. 1998) ...ecssssecsssserssseessssessssetessseeseeeel 5 Inre Plover Motel, Inc., No. 94-50567-7, 1996 WL 33401161 (Bankr. W. D. Wis. March 26, 1996)... eee 6 Kessler v. Time Warner Cable, No. 07-1179, 2008 WL 1883417 (N.Y. Sup. Ct. Apr. 16, 2008)... eessseessseeesneeenned 4 Linea Nuova, S.A. v. Slowchowsky, 62 A.D.3d 473, 877 N.Y¥.S.2d 891 (1st Dep't 2009) ......sesecsesseesssesseecseseseessereneeesecssersene 13 Manas v. VMS Associates, LLC, 53 A.D.3d 451 (1st Dep't 2008) oe ccecsssssesescsseseeveeveesessessessenensserenteensenesseaneseesseanets 13 Palliser v. United States, 136 U.S. 257 (1890) ececcescssseessessessecseeseeeseesnsssessassucenseesearecnecnecsvenseseesueesecaenneeneeaeaseseseted 5,6 Portnoy v. American Tobacco Co., 1997 WL 92040 (N.Y. Sup. Ct. 1997) ..oe.ceeccssecessseessseesecsssesesessseessesssesesneasccsssceeennesseeets 15Pramco HI LLC v. P’ners Trust Bank, 15 Mise.3d 1142(A) (N.Y. Sup. 2007) .....-sceeseecceesseesesessnesseeeessessessssessuessscesseesseceseeets 12, 13 Rivas v. Amerimed USA, Inc., 34 A.D.3d 250, 824 N.¥.S.2d 41 (Ist Dep’t 2006) oo... seessseescssseessseecssveecssarenssnsesesnereeses 14 Seiden Associates, Inc. v. ANC Holdings, Inc., 959 F.2d 425 (2d Cir, 1992)... cseeceecssecsstssssecsessnscssesssnssssessessaseeneessessaseeserssaeecsneesseeenseeenses 8 South Road Associates, LLC v. IBM Corp., 4N.Y.3d 272, 793 N.Y.S.2d 835 (2005) ...escsesscesssessssesseesensssseessescsseesessassuneesreessennecseetees 9 U.S. Fid. & Gura. Co. v. Annunziata, 67 N.Y.2d 229, 501 N.Y.S.2d 790 (1986) .....ssesecssesecssetsesssvesssecsssessssncensnssenvesseneesssaneensanee! 4 Walker v. Knowles, No. 602499/2006, 2007 WL 1176519 (N.Y. Sup. Ct. Mar. 16, 2007)... sesssescsesseseres 15 Wilson v. Hochberg, 245 A.D.2d 116, 665 N.Y.8.2d 653 (1st Dep't 1997) oo..ceeseessescceeeseececesneesseeesererseessneenee 6] WIT Holding Corp. v. Klein, 282 A.D.2d 527, 724 N.Y.S.2d 66 (2d Dep't 2001) ..scscsescsssecsseessereeseessneecesteesesnes 12, 13 Xuchang Rihetai Human Hair Goods Co., Ltd., v. Hanyu Int'l USA Inc., No. 00 Civ. 5585 (DLC), 2001 WL 8438 (S.D.N.Y. 2001) oo. eeeeeccsessessseeneesetecneeeseereeee 14 RULES CPLR 3016(D)...esssesesssesssssesessseeesssesssssesscsseesonsnecssenecsannecnansscssaseensnscenensensarseannesssanesssanessen 3, 14, 15 CPLR 3211 (a)(7) csssesccssssecssescesseesnsseesnsseetsssnsesssnsesssscesssrccesneseessarsenseseesesicancseceeceeceeseesanvecearsesseasese! 4 CPLR 3211 (c).... 10, 11 CPLR 3211(d).... 15 CPLR 3212... cece eesesesteestsenneenee iiiPRELIMINARY STATEMENT In its response to Talbots’ motion to dismiss, ACI] concedes that this is a “simple contract” case. It then attempts to rewrite the plain language of the Reimbursement Agreement to claim a right to reimbursement of its expenses from Talbots. That it cannot do. Simply stated, the Reimbursement Agreement, by its express terms, conditioned ACI’s right to receive reimbursement of its expenses upon, among other things, ACI offering Talbots a “purchase price payable in cash” for the J. Jill division. However, ACI’s $50 million purchase price offer was not payable in cash — it was, as ACI admits, payable through a combination of cash, a contingent note and warrants. Accordingly, on the face of the contract at issue and under well established law governing the meaning of the term “cash,” ACI failed to fulfill the contractual conditions for reimbursement under the Reimbursement Agreement. Its claims thus should be dismissed. Talbots agrees that this is a simple contract case — the consequence of ACI failing to fulfill an express condition of that contract is dispositive.' Faced with this reality, ACI cobbles together a series of strawman arguments, each of which is weaker than the next and each of which ignores the express language of the Reimbursement Agreement. First, ACI claims that the Reimbursement Agreement did not expressly state that the purchase price needed to be “all cash,” “only cash,” or “cash at closing.” ACI is correct - the Reimbursement Agreement expressly stated that the purchase price needed to be “payable in cash” — not partly in cash, not mostly in cash and not in warrants or in a contingent promissory note instead of cash — it stated “in cash” and nothing but “in cash.” The law is clear that “cash” means just that - ready cash. It does not mean a contingent promissory * While ACI claims that Talbots is on the “brink of bankruptcy” and is attempting to avoid financial obligations, that is not only irrelevant to Talbots’ motion dismiss but is, at best, fanciful. Talbots is a going concern whose stock is publicly traded on the New York Stock Exchange. It has just received an influx of $75 million by virtue of its sale of the J. Jill division. While the retail business has undoubtedly fallen on difficult times, the idea that Talbots is on the brink of bankruptcy is nonsense.note, it does not mean a warrant and it does not mean a mere opportunity to obtain additional cash in the future. ACI cites no case law or definition to the contrary, nor could it. Second, ACI claims that, since the Reimbursement Agreement provided that its bid was to be subject to “financial terms and conditions,” ACI could offer future promissory notes and warrants (instead of cash) and still maintain a right to reimbursement. Again, ACI ignores the plain language of the Reimbursement Agreement. The Reimbursement Agreement expressly included the phrase “including a purchase price payable in cash” as one of the very financial terms and conditions that ACI had to meet in order to receive reimbursement of its expenses. That was the deal ACI struck and it simply did not fulfill its terms. Third, ACI claims that Talbots’ “interpretation” of the Reimbursement Agreement is “unreasonable” because ACI would be penalized for adding an additional $25 million in consideration to its offer where, had ACI limited its offer to only $25 million in cash (without the additional $25 million consideration), it would have been entitled to reimbursement. That is frivolous. Under ACI’s interpretation, if it had offered $1 in cash and the remainder in other consideration, it would be entitled to reimbursement. Yet, that would throw the language “payable in cash” out the window and allow ACI to rewrite the clear terms of this agreement. In any event, there is absolutely nothing unreasonable about requiring a bidder to provide an offer “in cash” if it wished to be reimbursed for its expenses. A cash offer is a premium offer and thus it would not be surprising that a seller would wish to encourage a cash offer. Moreover, ACI’s purchase price offer was not $25 million in cash. On its face it was $50 million but it was not payable in cash. Most important, ACI was free to offer anything it wanted to secure the J. Jill division. It could have offered $100 million or $200 million in promissory notes. Talbots may or may not have accepted those offers. But those offers would not have given ACI the right toexpense reimbursement under its contract. That required the purchase price offer to be in cash and nothing but cash. Faced with the consequence of these clear terms, ACI then seeks to bring in parol evidence to create an ambiguity. While inappropriate on this motion since this evidence is found nowhere in the Amended Compiaint, ACT’s efforts nonetheless fail. ACI’s assertions that (i) a Talbots banker reportedly told ACI that “warrants might be attractive to Talbots,” and (ii) Talbots ultimately accepted a deal with a “variable” purchase price are both irrelevant. ACT confuses its right to offer Talbots whatever it wished to secure the J. Jill division with Talbots’ contractual obligations wnder the Reimbursement Agreement to reimburse ACI’s expenses. It may well have been that Talbots would have considered warrants as a component of a successful offer. And it may well be that Talbots ultimately accepted an offer that had a form of contingency, That, however, does not mean that an offer of warrants or a contingent, non-cash offer would satisfy ACI’s obligation under the Reimbursement Agreement to secure its expenses. By the clear terms of the Reimbursement Agreement, it would not. ACL is no more successful with its fraud claim. Indeed, ACI attempts to add allegations to its claim found nowhere in the Amended Complaint, establishing that it has failed to plead fraud with the detail required by CPLR 3016(b). In any event, and under the most liberal reading of the Amended Complaint, ACI’s fraud claim is nothing more than a rehash of its breach of contract claim. On its face, the Amended Complaint asserts no misrepresentation extraneous to exactly what is contained in the Reimbursement Agreement itself, i.¢., the representation that Talbots, assuming ACI’s compliance with certain conditions, would pay for ACI’s expenses. Under clear New York law, such allegations do not support an independent fraud claim.In sum, this Court concluded that ACI was not likely to succeed on the merits of its claims when it denied ACI’s motion for a preliminary injunction. The Court should now dismiss this action and end what has become an effort to extort money from Talbots notwithstanding ACT's failure to comply with its own contractual obligations. I. ACI’S BREACH OF CONTRACT CLAIM MUST BE DISMISSED AS A MATTER OF LAW ACI concedes that this Court must enforce the Reimbursement Agreement according to its terms. (Pls. Br. at 8.) ACI further does not contest that those terms must be given their plain, ordinary, popular and non-technical meanings. U.S. Fid. & Guar. Co. v. Annunziata, 67 N.Y 2d 229, 232, 501 N.Y.S.2d 790, 791 (1986). It further does not contest that both the Reimbursement Agreement and ACI’s offer letter are expressly incorporated by reference into the Amended Complaint and may be considered on this motion to dismiss. Under these simple rules, there can be no debate — the Reimbursement Agreement expressly required that, in order to be reimbursed for its expenses, ACI was to submit a good faith offer which was to be “comprised of a detailed proposal of the financial terms and conditions of [the sale] (including a proposed purchase price payable in cash)... .” (Am. Compl., Exh. A [emphasis added].) ACI admittedly did not comply with this express condition and thus its breach of contract claim must fail on the face of the pleading. In response, ACI argues that (i) the Reimbursement Agreement did not require ACI’s purchase price offer to be “all cash,” “only cash,” or “cash at closing”; (ii) because the Reimbursement Agreement contemplated an offer subject to “financial terms and conditions,” 2 ee the purchase price term could also be subject to conditions; and (iii) Talbots’ “interpretation” is ? Contrary to ACI’s suggestion, the fact that ACI has incorporated both the Reimbursement Agreement and its offer letter by reference into the Amended Complaint does not transform this motion into one for sammary judgment nor does it “demonstrate an intention of charting a summary judgment course.” (See Pls. Br. at 19 n.11.) The law is clear that documents incorporated by reference into the pleading may be considered on a motion to dismiss under CPLR 3211(a)(7). (See Opening Br. at 6-7.)unreasonable because it would purportedly penalize ACI for making an additional offer of non- ees cash consideration where, under Talbots’ “interpretation,” ACI purportedly would have received reimbursement if it had limited its offer to only $25 million in cash. None of these arguments changes the express language of the Reimbursement Agreement, the precise terms of ACI’s offer and the direct contractual consequences flowing therefrom. First of all, ACI fails to cite to this Court a single precedent for the proposition that the phrase “payable in cash” means that one may pay parily in cash and partly in other consideration and nonetheless satisfy the express contractual language at issue. This agreement could not be clearer: the purchase price was to be “payable in cash” — not partly in cash, not mostly in cash and not partly in a contingent promissory note or warrant. The concept that a contract, which specifies that it is to be “paid in cash” means that one may pay it partly in cash and partly in other consideration flies in the face of the express terms and their plain, ordinary meaning. As set forth in Talbots’ initial submission, the plain, ordinary, well-accepted meaning of the term “cash,” both in legal dictionaries and case law, is just that — “ready cash” — not a contingent promissory note or a warrant. (Op. Br. at 8-9.) As no less than the United States Supreme Court has articulated, cash means “ready money, or money in hand, either in current coin or other legal tender, or in bank-bills or checks paid and received as money, and does not include promises to pay money in the future.” Palliser v. United States, 136 U.S. 257, 263 (1890); see also Don E. Williams Co. v. Comm’r, 429 U.S. 569, 577-78 (1977) (a note promising payment of cash in the future is not cash or its equivalent)? * ‘The rationale for this rule is apparent: “the note may never be paid, and if it is not paid, the [party] has parted with nothing more than his promise to pay.” See Don E. Williams, 429 U.S. at 578 (internal quotes omitted).ACI thus assumes that this plain, well-settled definition of cash that courts have adopted for more than a hundred years is somehow inapplicable here. Yet, to support such a drastic departure from clear and well-reasoned precedent, ACI does not offer this Court a single case, let alone any persuasive analysis. ACI’s efforts to distinguish Talbots’ citations provide little assistance. For example, while ACI argues that Commercial Credit Corp. v. Third & Lafayette Sts. Garage, Inc., 226 A.D. 235, 234 N.Y.S. 463 (4th Dep't 1929), is inapplicable because the court there considered the phrase “cash and not its equivalent,” that case explicitly holds that the transfer of a secured promissory note (i.¢., a note with more backing than the contingent note ACI proposed here) was not a payment “in cash.” 26 A.D. at 238, 234 N.Y\S, at 467.4 Similarly, Jn re Plover Motel, Inc., No. 94-50567-7, 1996 WL 33401161 (Bankr. W. D. Wis. March 26, 1996), also cited by Talbots in its opening brief, is even more instructive. There, the court considered whether a proposed purchase price that contained, in part, a “nonrecourse $300,000 promissory note from [one party] to [another] with repayment provisions which contemplate payment only if the Jacquired asset] makes a sufficient profit to do so,” satisfied a contractual requirement for a proposed purchase price on “cash terms,” /d. at *2,n.5. After noting that cash means “ready money,” the court concluded that, because part of the proposed payment was to be made by promissory note, the offer was not a “cash offer.” Jd. at *4, That is exactly the case here and nothing ACI argues changes that fundamental fact, ACI’s proposed $50 million purchase price, comprised of $25 million in cash and the “opportunity” for $25 million more based upon a contingent promissory note and warrants is * The concept that the phrase “cash and not its equivalent” is substantively distinguishable for the phrase “payable in cash” is nonsensical. On their face, both mean what they say — payment must be in cash. So too ACI’s effort to claim that the phrase “except for cash” — the phrase at issue in Palliser — means “cash only” (see Pls. Br. at 12) but that the phrase “payable in cash” in the Reimbursement Agreement does not mean “cash only” is equally nonsensical. There is no substantive difference in the phrases “except for cash” and “payable in cash” - both, under the plain meaning of the term, mean that cash is the required form of payment.not, under any reasonable interpretation, a proposal for a $50 million purchase price in “ready money,” 7.¢., in cash. Accordingly, and under the clear terms of the Reimbursement Agreement, ACT had no right to reimbursement of its expenses. ACTI’s argument that, because its bid for the J. Jill business was expected to be subject to “terms and conditions,” the purchase price term of that bid could likewise be subject to conditions, is equally unavailing. Nothing in the Reimbursement Agreement supports this illogical leap. Instead, a plain reading of the express terms of the contract establishes that a “purchase price payable in cash” was an explicit “financial term[] and condition[]” that had to be included in ACI’s offer if AC] were to recover its expenses. (See Am. Compl., Exh. A at 1 (the “offer (1) shall be comprised of a detailed proposal of the financial terms and conditions of [the sale] (including a proposed purchase price payable in cash)”). In short, ACI was free to submit an offer to acquire the J. Jill division on any terms and conditions it chose, but the consequences were clear: expenses associated with an offer that did not comply with the explicit terms of the Reimbursement Agreement would not be reimbursed. Now that those consequences have come to pass, ACI simply wants a do-over and seeks to recharacterize its half-cash, half-notes-and-warrants offer as “payable in cash” offer partially payable “on condition.” (Pls. Br. at 12.) The express language of the Reimbursement Agreement and the case law simply will not support this recharacterization. Finally, ACI’s desperate claim that the Court should disregard this express language and its plain meaning because it would purportedly punish ACI for offering more than the $25 million that ACI proposed to pay in cash is just that — desperate. (Pls. Br. at 13.) By that logic, had ACI offered to purchase the J. Jill division for $1, it would have satisfied the terms of the Reimbursement Agreement. That would eviscerate the clear and unambiguous phrase “payablein cash” and render it meaningless.’ ACI could have offered anything it chose in its efforts to acquire the J. Jill division. But to realize the right to reimbursement of its expenses under this particular contract it had to offer a purchase price “payable in cash.” On its face, it is logical that a company might wish to encourage cash offers for an asset or division. That does not mean that other offers are penalized; it simply means they do not qualify for reimbursement. In sum, the Reimbursement Agreement is clear and unambiguous and ACI’s offer, incorporated by reference in the Amended Complaint, establishes that ACI did not satisfy an essential condition of the Reimbursement Agreement. On the face of the Amended Complaint, ACT's claim of breach must be dismissed. i. ACI’S USE OF PAROL EVIDENCE ON THIS MOTION IS INAPPROPRIATE AND ITS CROSS-MOTION FOR SUMMARY JUDGMENT IS IMPROPER Realizing that the plain language of the Reimbursement Agreement is clear and unambiguous on its face, ACI attempts to go beyond the allegations in the Amended Complaint and create an ambiguity in the agreement by referencing select “parol evidence” of Talbots’ purported willingness to accept non-cash or partly non-cash offers for the J. Jill division. Similarly, ACI then cross-moves for “summary judgment” on its breach of contract claim, notwithstanding that issue has yet to be joined in this matter. Both paths are improper.° A. ACI’s Parol Evidence Is Both Legally Inappropriate And Irrelevant New York law is clear that the issue of whether a contract is ambiguous is an issue of law. Seiden Associates, Inc. v. ANC Holdings, Inc., 959 F.2d 425, 429 (2d Cir. 1992). A party > Deing so would also breach the implied covenant of good faith and fair dealing, which exists in every contract, See, ¢.g., 511 West 232nd Owners Corp. v. Jennifer Realty, 98 N.Y.2d 144, 153, 746 N.Y.S.2d 131, 135 (2002). ® ACI’s assertion that any ambiguities in the Reimbursement Agreement must be construed against Talbots is wrong, as a matter of law. ACI is a highly sophisticated private equity fund represented by Kaye Scholer, a preeminent (and eminently capable) corporate law firm. Accordingly, the doctrine of conira proferentem has no application to this case. See, e.g., Coliseum Towers Assoc. v. County of Nassau, 2 A.D.3d 562, 565, 769 N.Y.S.2d 293, 296-297 (2d Dep’t 2003), /v. denied, 2 N.Y.3d 707, 781 N.Y.S.2d 289 (2004) (noting that the contra proferentem rule does not apply when equally sophisticated parties have a hand in drafting the agreement in question).thus may not rely upon parol evidence in an effort to create an ambiguity. South Rd. Assocs., LLC v. IBM Corp., 4 N.Y.3d 272, 278, 793 N.Y.S.2d 835, 838 (2005). Yet, that is precisely what ACI attempts to do here. The Court should thus disregard ACI’s efforts and this so-called parol evidence. However, were the Court to examine this so-called evidence, it would only confirm the lack of merit to ACI’s arguments. ACI asserts that parol evidence shows that the Reimbursement Agreement did not require an all cash purchase price because (i) a Talbots financial advisor reportedly told ACI that “warrants might be attractive to Talbots,” (ii) ACI ultimately accepted a deal with a “variable” purchase price, and (iii) instruction letters regarding the submission of bids for the J. Jill division stated that “[c]onsideration should be in cash and fully financed.” (Pls. Br. at 14-16.) This so-called parol evidence is easily discarded. First, the claims that a Talbots financial advisor may have informed ACI that warrants might be attractive to Talbots and that ACI ultimately accepted a deal with a “variable” purchase price are irrelevant to whether ACI has a right to reimbursement of expenses under the terms of the Reimbursement Agreement with Talbots. Again, ACI was free to offer anything it chose to Talbots in its efforts to acquire the J. Jill division. Had it offered more warrants, Talbots may or may not have accepted ACI’s offer. But that in no way means that, if unsuccessful in its efforts, ACI then had a right to reimbursement of its expenses under the Reimbursement Agreement regardless of the form of consideration in its offer. That issue is controlled by the terms of the Reimbursement Agreement alone and is, as a matter of law, not affected simply because ACI was under the impression that ACI might find certain non-cash offers appealing. So too with the fact that Talbots may have accepted a winning bid that contained a “variable” purchase price. That has no relevance to the issue of, assuming that bid were unsuccessful, whether a right to expense reimbursement would exist. That, again, would be determined solely by the terms of thecontract at issue and not the simple fact that Talbots wound up accepting another offer that may not have merited expense reimbursement. Similarly, the April 2009 letters — not even referenced in ACI’s Amended Complaint — change nothing. Indeed, those letters clarify that Talbots was interested only in fully-funded cash offers (and, by extension, not mixed offers of cash, notes and warrants). For example, the oa opening paragraph to each letter states that Talbots’ “principal objectives are to provide for the sale of [J. Jill] upon terms which realize the highest possible value in cash as well as to consummate a transaction as expeditiously and with as little conditionality as possible.” Paragraph 3 expressly provided that the “[clonsideration should be in cash and fully financed.” id. (emphasis added). On its face, that language appears rather clear — the consideration “should be in cash.” How that renders the clear terms of the Reimbursement Agreement that the offer had to be “payable in cash” meaningless is a mystery. Likewise, ACI’s assertion that the term “fully financed” somehow obviates Talbots’ purchase price argument makes no sense. The entire phrase clearly states that the consideration “should be in cash.” That could not be clearer. That the letter also required that the offer be “fully financed” does not in any way limit the fact that the offer had to be in cash as well. In short, whether the funds for ACI’s offer came from ACI’s own coffers or from a bank willing to fully finance ACI’s offer for the J. Jill division made no difference to the fact that in either case, the offer had to be in cash. B. ACI’s Cross-Motion For Summary Judgment Is Improper Although ACI seeks to go beyond the Amended Complaint and cross moves for summary judgment on its breach of contract claim pursuant to both CPLR 3212 and 3211(c), neither approach is legally proper at this juncture. First, a party may not move for summary judgment under CPLR 3212 “until after issue is joined,” City of Rochester v. Chiarella, 65N.Y.2d 92, 101, 479 N.E.2d 810, 815 (1985). Because Talbots has not yet answered the Amended Complaint, ACI’s motion is premature. Second, where a plaintiff files a cross motion pursuant to 3211(c), until such time as the Court explicitly gives notice to the parties that it intends to reach ACI’s cross motion, Talbots need not respond to that motion. CPLR 3211(c); see, e.g., Four Seasons Hotels Ltd. y. Vinnik, 127 A.D.2d 310, 320, 515 N.Y.S.2d 1, 7-8 (Ist Dep’t 1987). Without such express notice from the Court, the motion under consideration is one of dismissal, that filed by Talbots, and not one for summary judgment. Jd.’ In short, on the present motion, it is the Amended Complaint and the documents incorporated therein that are dispositive. WI. ACI’S FRAUD CLAIM MUST BE DISMISSED AS A MATTER OF LAW ACI’s fraudulent inducement claim, premised entirely upon the allegation that Talbots misrepresented its intent to pay ACI’s expenses in connection with its evaluation of the J. Jill division (Am, Compl. 495, 37-38), is wholly duplicative of its breach of contract claim and, thus, fails to state a cause of action. (See Op. Br, at 10-13.) Under New York law, a plaintiff “may not convert [its] so-called contract action into one for fraud by the mere additional allegation that the contracting party did not intend to meet [its] contractual obligation.” Wilson v. Hochberg, 245 A.D.2d 116, 117, 665 N.Y.S.2d 653, 654 (Ist Dep’t 1997). ACI now argues that a fraudulent inducement claim can theoretically coexist with a breach of contract claim where either (i) the misrepresentations alleged by a plaintiff are collateral and extraneous to the underlying contract (Pls. Br. at 20) or (ii) a plaintiff sustains “special damages” not recoverable 7 Likewise, until it is directed by the Court to do so, Talbots need not submit a response to Plaintiff's premature Rule 19-a Statement of “Undisputed” Facts. Of course, should the Court give notice to Talbots that summary judgment motion practice will commence, Talbots will submit the appropriate papers for the Court’s consideration outlining additional defenses to the breach of contract claim, including that ACI failed to fulfill other conditions under the Reimbursement Agreement (e.g. failing to substantially complete its due diligence prior to making its offer and impermissibly including financing contingencies in its offer). 11in contract damages (id. at 22). These arguments are unavailing. AC] has not proffered any legal authority and has failed to allege any facts showing that its claim falls within cither of these categories.* Initially, in order to survive dismissal, a plaintiff asserting a fraudulent inducement claim in tandem with a breach of contract claim must allege a “misrepresentation extraneous to that contained (and made) in the [agreement] itself” Pramco Ill, LLC v. P’ners Trust Bank, 15 Misc.3d 1142(A) at *1, 841 N.Y.S.2d 822 (N.Y. Sup. 2007) (emphasis added). A misrepresentation that is “nothing more than what was announced [in the contract itself] . . . cannot be extraneous to the contract and cannot support an independent fraud claim.” /d. This is precisely the nature of ACI’s claim — the Amended Complaint does not assert any misrepresentation made by Talbots that is at all different than the representations made in the Reimbursement Agreement itself. The Amended Complaint, without setting forth any specific misrepresentation by any specific Talbot representative, conclusorily alleges that “Talbots made multiple representations to ACI that it would reimburse ACI for its out-of-pocket expenses, should ACI investigate and bid on the Business and not be the successful bidder.” (Am. Compl. 37.) By comparison, the Reimbursement Agreement provided that, subject to the satisfaction of several conditions, Talbots would pay ACI’s “reasonably incurred and documented third party out-of-pocket fees and expenses . . . in connection with ACI’s evaluation of [J. Jill]” in the event ACI did not * In any event, the Amended Complaint fails even to allege that Talbots’ purported misrepresentations induced ACI to enter the Reimbursement Agreement, as it must under the “collateral misrepresentation” doctrine. See, e.g., WIT Holding Corp. v. Klein, 282 A.D.2d 527, 528, 724 N.Y.S.2d 66, 68 (2d Dep't 2001). Rather, the Amended Complaint alleges that Talbots’ promise to reimburse expenses persuaded ACI to participate in the J. Jill bidding process in the first place (Am, Compl. 5, 36) - a distinction ACI tries to dance around in its opposition brief with the unfounded assertion that the alleged misrepresentations “were fraudulently made by Talbots with the intention of getting ACI to enter in the bidding for the Business, and in turn, the Reimbursement Agreement.” (Pls. Br. at 22.) Yet, by ACI’s own admission, the Reimbursement Agreement was drafted and subsequently entered into at AC/’s request. (Manasse Aff., §18-19.) The notion that ACI was “fraudulently induced” to enter a contract ACI itself demanded is simply not credible. 12ultimately prevail in the bidding process. (Am. Compl., Exh. A.) On their face, these representations are substantially identical; those allegedly preceding the Reimbursement Agreement are neither extraneous nor collateral to the contract itself, and thus cannot support a fraud claim independent of a breach of contract claim. Pramco III LLC, 15 Mise.3d 1142(A) t *1, see also Manas v. VMS Assocs., LLC, 53 A.D.3d 451, 863 N.Y.S.2d 4 (Ist Dep’t 2008) (dismissing fraudulent inducement claim where plaintiff alleged that defendant never intended to comply with promises preceding and inducing subsequent employment contract); Linea Nuova, SA, v. Slowchowsky, 62 A.D.3d 473, 473, 877 N.Y.S.2d 891, 892-93 (Ist Dep’t 2009) (dismissing fraud claim as duplicative where “alleged misrepresentation of an existing fact was made in the context of merely assuring plaintiff that [defendant] would comply with its contractual obligation and no additional duty was allegedly breached”).? ACT’s next argument, that it suffered “special damages,” fares no better. ACI failed to plead “special damages” in its Amended Complaint, and its last-ditch effort to save its duplicative fraud claim by tossing this blanket phrase into its opposition brief “is insufficient to trigger the application of the special damages exception.” Cannon v. Douglas Elliman, LLC, No. 06 Civ. 7092 (NRB), 2007 WL 4358456, at *9 n. 14 (S.D.N.Y. Dec. 10, 2007); see also Aronson v, Wiersma, 65 N.Y.2d 592, 595, 493 N.Y.S.2d 1006, 1008 (1985) (itemizing “loss of salary and benefits” in a subsequent affidavit is insufficient to allege special damages where not pled in complaint). In fact, the Amended Complaint seeks the exact same $1.5 million in damages for both its contract claim and for its fraud claim, see Am. Comp!. WHEREFORE CLAUSE (A), (C), ° The cases cited by ACI are not to the contrary and, in large part, involve cases in which defendants made misrepresentations that were unmistakably extraneous to the underlying contracts. See, e.g, WIT Holding, 282 A.D.2d at 528-529 (permitting fraud claim in conjunction with breach of stock purchase agreement claim where defendant misrepresented his position and company’s regulatory compliance). 13(D). This precise structure has been held insufficient to plead special damages in this context. Xuchang Rihetai Human Hair Goods Co., Ltd, v. Hanyu Int'l USA Inc., No. 00 Civ. 5585 (DLC), 2001 WL 8438, at *2 n. 3 (S.D.N.Y. 2001) (“Plaintiff seeks the same amount of damages in its breach of contract and fraudulent misrepresentation claims, and its claim for punitive damages as a result of the allegedly fraudulent misrepresentation are not ‘special damages.””). Moreover, even if ACI were not foreclosed from asserting a claim for special damages (which it is), it fails to allege, as it has from the onset of this litigation, any injury “[not] recoverable under a contract measure of damages” ~ a requirement for invoking the special damages exception. Coppola v. Applied Elec. Corp., 288 A.D.2d 41, 732 N.Y.S.2d 402 (Ist Dep’t 2001); see also Rivas v. Amerimed USA, Inc., 34 A.D.3d 250, 250, 824 N.Y.S.2d 41, 41 (1st Dep’t 2006) (same). While ACI now claims, for the first time, that it has incurred special damages in the form of its “own time and expenses in pursuing the Business” and “lost the opportunity to pursue other potential deals” (Pls. Br. at 23), these general assertions are inadequate to allege special damages, which “are not sufficiently pled where damages are not itemized.” Kessler v. Time Warner Cable, No. 07-1179, 2008 WL 1883417, at *5 (N.Y. Sup. Ct. Apr. 16, 2008). Finally, even if ACI had otherwise satisfied these legal infirmities to its fraud claim, ACI’s fraud allegations are woefully inadequate under CPLR 3016(b). Simply stated, there is not a single fact alleged in the entire Amended Complaint to support a claim of fraud. ACI responds to this deficiency by stating that it “has identified two letters that included the fraudulent misrepresentations.” (Pls. Br. at 24.) Even if this were true, those two letters are not even referenced in the Amended Complaint. No specific factual representation on the part of any representative of ACI is alleged in the Amended Complaint at all. CPLR 3016(b) requires that 14the facts supporting a fraud claim be located “within the four corners of the complaint.” Baron v. Pfizer, 12 Mise. 3d 1169(A), at *4, 820 N.Y.S.2d 841 (N.Y. Sup. Ct. May 2, 2006). Deficiencies in the complaint cannot be solved by making unsubstantiated factual allegations in a party’s subsequent briefs. See, e.g., Portnoy v. American Tobacco Co., 1997 WL 92040, at *2 (N.Y. Sup. Ct. Feb. 19, 1997) (“statements in briefs and affirmations not based on personal knowledge cannot be used to supplement deficiencies in the complaint itself”).'° CONCLUSION For the foregoing reasons, Talbots respectfully requests that each and every cause of action asserted against it be dismissed with prejudice and that ACI’s cross motion for summary judgment be denied as moot. Dated: New York, New York July 29, 2009 DEWEY & LEBOEUF LLP By: G Robert C. Myers Leo V. Gagion Kelly A. Librera Matthew L. DiRisio 1301 Avenue of the Americas New York, New York 10019-6092 212.259.8000 Attorneys for Defendant The Talbots, Inc. "© ACI’s contention that “because [it] has outstanding discovery pending . . . dismissal is inappropriate” under CPLR 3211(d) (Pls. Br. at 24) mischaracterizes the law. A plaintiff can invoke CPLR 321 1(d), only where it has “demonstrated that facts essential to justify opposition to the motion may exist but could not be stated.” Walker v. Knowles, No. 602499/2006, 2007 WL 1176519, at *3 (N.Y. Sup. Ct. Mar. 16, 2007). Conversely, where, as here, a plaintiff's purported reasons for requiring additional discovery are wholly speculative and “fail to show that discovery would lead to or uncover any legally relevant information,” dismissal is entirely proper. Gladliz, Inc. v. Castiron Court Corp., 177 Misc.2d 392, 398, 677 N.Y.S.2d 662, 667 (N.Y. Sup. Ct. 1998) (dismissing fraud claim for failure to satisfy pleading standard under CPLR 3016(b). 15