C S BIO CO., et al. v. COMERICA BANK

Background

Comerica Bank moved for summary judgment. Summary judgment is a decision entered without a trial when the record shows no genuine dispute requiring a factfinder to decide the issue. Comerica argued that CS Bio Co. and CCS Management, LLC, collectively referred to in the order as “CS,” lacked evidence that they suffered damages caused by Comerica’s alleged misrepresentations.

The court referred to its earlier order allowing some claims to proceed. Those claims were based on alleged assurances that, on November 20 and November 23, 2020, CS could and should pay its contractor’s October invoice for $738,000 without jeopardizing loan funding, and that the payment would be reimbursed through loan proceeds. Another alleged assurance, made on November 24, 2020, concerned waiver of the FCCR covenant. The court said these alleged misrepresentations could support CS’s fraud claim and a related claim based on concealment or failure to disclose.

The court also discussed its earlier denial of CS’s request to file a third amended complaint. That denial did not prevent CS from presenting evidence and arguments about Intarcia’s financial condition and the FCCR issue. The court clarified that CS could pursue a claim that Comerica falsely promised that Intarcia’s financial condition would not prevent final loan approval, to the extent that claim was not already expressly stated in the second amended complaint.

Damages and Causation Issues

Comerica’s motion expressly addressed the alleged November 20, 23, and 24 assurances, but its reply indicated that its causation and damages arguments were intended to apply to all viable misrepresentation claims. The court therefore focused on whether CS had a triable issue of fact—that is, evidence from which a factfinder could reasonably determine—that it suffered damages resulting from the alleged misrepresentations, false promises, failures to disclose, or concealments.

CS’s opposition largely described damages by comparing what it says would have happened if the loan had been approved with what happened after the loan was not approved. Its stated theories included delayed construction, lost leasing opportunities, and higher interest rates.

The court stated that this appeared to be the wrong measure for the alleged fraud. It explained that the case was not a breach-of-contract action seeking enforcement of a promise to fund the loan or damages based on the loan’s failure to close. Instead, the relevant question was what damages CS could show resulted from reasonable reliance on the alleged misrepresentations. The court further stated that CS had offered little evidence supporting or quantifying reliance-based damages, or showing a triable issue of fact on those damages.

Order

The court did not grant or deny Comerica’s summary-judgment motion in this order. Under Rule 56(f) of the Federal Rules of Civil Procedure, the court notified CS that summary judgment might be entered against it on the causation and damages grounds discussed in the order, even if those grounds were not fully presented in Comerica’s motion.

The court continued the hearing that had been set for December 4, 2025, and requested further briefing. It allowed CS one week from the order’s date to file a supplemental brief of no more than 18 pages. Comerica could file a supplemental reply of no more than 18 pages within one week after CS’s filing. The order states that the continued hearing would occur on January 8, 2025.