C S Bio Co. v. Comerica Bank

Background

The plaintiffs moved for leave to seek reconsideration of an earlier order that dismissed part of their second amended complaint. They also sought leave to file a third amended complaint. The proposed complaint would have restored previously dismissed allegations and added allegations based on information the plaintiffs said they learned during discovery.

The second amended complaint asserted four fraud-related claims. The first alleged intentional misrepresentation based on two groups of statements: statements made on September 2 and 4, 2020, and statements made between November 20 and 24, 2020. The second claim alleged negligent misrepresentation based on the same statements. The third claim, labeled “False Promise,” concerned the late-November statements. The fourth claim alleged fraud by concealment.

The earlier dismissal order concluded that the September statements did not support the plaintiffs’ claims. The statement that a loan would be approved once a term sheet was issued did not override the term sheet’s stated conditions, which made clear that final approval depended on those conditions being satisfied. The earlier order also found that the plaintiffs had not alleged facts showing that the other September statements were false. The late-November statements were promises about future events and could support a promissory-fraud theory only if properly pleaded; the court had found that the third claim adequately pleaded that theory. The negligent-misrepresentation claim failed as to both groups of statements, and the concealment claim failed as to the September statements but survived as to the alleged false promises. The opinion describes the first and third claims as duplicative to the extent they relied on the late-November statements.

Request for reconsideration

The plaintiffs argued that internal bank documents showed the loan had received “approval” within the bank when the term sheet was issued, and that the approval was later withdrawn. The court found that the documents showed only that the loan had received an approval needed to proceed to the term-sheet stage, not final approval and funding. The court also relied on deposition testimony identified by the plaintiffs, which confirmed that issuing a term sheet was only a preliminary step.

The court held that the bank’s use of “approved” or “approval” in internal documents did not override the term sheet’s clear language. It further concluded that the documents tended to show that the alleged September statements about existing facts were true. The plaintiffs also cited an earlier loan-approval letter involving a property acquisition. The court found that letter irrelevant because it did not contain the clear disclaimers included in the term sheet at issue here.

The court therefore denied the plaintiffs’ motion for leave to seek reconsideration. The opinion also states in the reconsideration discussion that the motion for leave to amend was denied in connection with the proposed reassertion of the September allegations.

Request to amend

The plaintiffs acknowledged that restoring the September allegations depended on obtaining reconsideration. Separately, they sought to add allegations about the role of the Intarcia bankruptcy in the bank’s decision and the bank’s view of the FCCR issue.

The court denied leave to amend. Although amendments are generally allowed freely, the court found that the existing complaint already gave the plaintiffs a basis to present their arguments and discovery evidence concerning Intarcia and the FCCR issue at trial or in response to a summary-judgment motion. The proposed amendments would add clarity and factual detail, but they did not state new claims and were not necessary for the plaintiffs to proceed.

Other motions and disposition

The court denied both the motion for leave to seek reconsideration and the motion for leave to amend. The court also granted the motions to seal at Docket Nos. 79 and 84 to the extent provided in the parties’ stipulation, and denied them otherwise. It denied the sealing motion at Docket No. 90 because the plaintiffs stated that they did not object to filing the materials in the public record.