MaxEn Capital Advisors, Ltd. v. Pure Lithium Corporation
- Gregory Woods
- 1:24-cv-02231
- U.S. District Court · Southern District of New York
- 22
In MaxEn Capital Advisors v. Pure Lithium, Judge Woods denied Pure Lithium’s motion to dismiss because MaxEn plausibly pleaded a contract amendment.
MaxEn Capital Advisors, Ltd.’s claims against Pure Lithium Corporation were allowed to proceed, while Pure Lithium’s motion to dismiss was denied.
What happened
MaxEn Capital Advisors, Ltd. sued Pure Lithium Corporation for allegedly failing to pay a success fee after an investor not listed in their agreement invested in Pure Lithium. MaxEn said the parties had expanded the investor list through their communications and conduct.
The court said the brief email exchange itself did not amend the agreement because it did not clearly show an intent to change the contract. But MaxEn plausibly alleged that the parties’ later conduct— including Pure Lithium’s request that MaxEn solicit the investor and MaxEn’s work to do so—created an unwritten amendment. The court also allowed MaxEn’s alternative claims for an implied contract, quantum meruit, and unjust enrichment to continue.
Judge Woods denied Pure Lithium’s motion to dismiss. The ruling allowed the claims to proceed; it did not finally decide whether MaxEn is entitled to a success fee.
The detailed version
- MaxEn Capital Advisors, Ltd. v. Pure Lithium Corporation · No. 1:24-cv-02231
- Gregory Woods
- Oct. 17, 2024
Background
MaxEn, a financial advisory firm, entered into an engagement agreement with Pure Lithium to help raise capital from specifically listed target investors. The agreement provided for a success fee on qualifying investments and stated that amendments or waivers had to be in writing and signed by both parties. The agreement was governed by New York law.
Robert Friedland was not on the target-investor list. In November 2021, Pure Lithium’s chief executive asked MaxEn’s general counsel to send Friedland an investor presentation. The general counsel replied, “Agreed.” MaxEn then contacted Friedland, sent him the presentation, followed up with him, and arranged a visit to Pure Lithium. Friedland later invested $5.9 million through Ivanhoe Capital Corporation in April 2022 and made another $5.9 million investment in March 2023. Pure Lithium did not pay MaxEn a success fee.
MaxEn asserted claims for breach of the engagement agreement, breach of an implied contract, quantum meruit, and unjust enrichment. The latter claims were pleaded as alternatives in case the engagement agreement did not cover MaxEn’s work concerning Friedland. Pure Lithium moved to dismiss all claims.
Court’s analysis
The court held that the engagement agreement plainly limited MaxEn’s success-fee entitlement to investments by listed target investors. Because Friedland was not listed, MaxEn could recover under the express agreement only if the list had been effectively amended.
The court concluded that the two-email exchange did not itself amend the agreement. Neither email mentioned the engagement agreement or an intent to modify it. The response “Agreed” could reasonably have referred to sending the presentation or to the chief executive’s question about how to proceed, but it did not clearly accept an offer to amend the contract.
The court nevertheless held that MaxEn plausibly alleged an amendment based on the parties’ course of conduct. Under New York law, a contract may in limited circumstances be modified through conduct, including partial performance that is unequivocally connected to the alleged modification or conduct that supports estoppel. The complaint alleged that Pure Lithium requested MaxEn’s help in soliciting Friedland and that MaxEn performed substantial work toward that investment. At the motion-to-dismiss stage, those allegations supported an inference that the parties agreed to add Friedland to the target-investor list despite the written-modifications clause.
The court also allowed the alternative claims to proceed. Because there was a substantial dispute over whether the engagement agreement had been amended to cover Friedland, the quantum-meruit and unjust-enrichment claims were not duplicative at this stage. The implied-contract claim also survived because the court could not yet determine that an express agreement covered the same services.
Disposition
The court denied Pure Lithium’s motion to dismiss. The order did not determine whether the alleged amendment ultimately existed, whether Pure Lithium breached an agreement, or whether MaxEn is entitled to a success fee. It allowed MaxEn’s claims to proceed beyond the pleading stage.
Read the full 22-page opinion on CourtListener, the free public archive maintained by the Free Law Project.