Saadeh v. Kagan

Background

Rafic Saadeh loaned $130,000 to Irving Kagan in 2017 under a written loan agreement requiring repayment within six months. Irving died on January 12, 2020, without repaying the loan. Before Irving’s death, Saadeh exchanged emails with Irving and Irving’s son Michael about repayment.

Saadeh filed this lawsuit in March 2020. In September 2021, the court entered a default judgment against Irving’s estate for $178,265.02, plus interest. Saadeh then pursued claims against Michael and Joshua Kagan. The pending motions asked for summary judgment, which is a decision without a trial when the evidence shows there is no genuine dispute about an important fact and one side is entitled to judgment under the law.

Magistrate Judge’s Report

Magistrate Judge Sarah Netburn recommended granting Saadeh summary judgment on his promissory-estoppel claim against Michael and denying the remaining summary-judgment motions. She concluded that Michael’s later emails made clear promises that he personally would repay the loan, that Saadeh reasonably relied on those promises, and that Saadeh suffered economic harm when the loan remained unpaid.

The Report recommended denying summary judgment on Saadeh’s breach-of-contract claim against Michael because a factual question remained about whether Michael’s December 2017 email unambiguously agreed to assume his father’s debt. It also recommended denying Joshua’s and Michael’s motions concerning the constructive-fraud claims, and denying Michael’s motion concerning Saadeh’s actual-fraud claim.

Court’s Analysis

Michael objected to the recommendation concerning promissory estoppel. The court reviewed that portion of the Report independently. To prove promissory estoppel, Saadeh had to show a clear and unambiguous promise, reasonable reliance, and harm caused by that reliance.

The court found that Michael’s emails satisfied those requirements. Michael described repayment as “truly my obligation, not my father’s,” requested extensions, provided updates about his ability to repay, and repeatedly stated that he expected to repay the debt. The court also found unrefuted evidence that Saadeh reasonably relied on those assurances, including the parties’ longstanding friendship and Irving’s own assurances that the loan would be repaid. Because the loan remained unpaid and accrued interest, the court found that Saadeh suffered economic injury.

The court rejected Michael’s arguments that he was merely helping his father, that Saadeh continued to view Irving as the borrower, and that Michael had not signed the original loan agreement. The court concluded that those points did not change the effect of Michael’s separate promises to repay the loan.

No party objected to the Report’s recommendation to deny the remaining summary-judgment motions. The court found no clear error in those portions and adopted them.

Disposition

The court adopted the Report in full, granted summary judgment in Saadeh’s favor on the promissory-estoppel claim against Michael, and denied the balance of the summary-judgment motions. The unresolved claims were to proceed toward trial unless the case settled.