Merchants Cachet Inv. Partners LLC v. Roche

2023 NY Slip Op 03436

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: June 27, 2023
• Docket: Index No. 156663/20 Appeal No. 549-550 Case No. 2022-00226, 2022-00227
• Status: Published

Opinion

Merchants Cachet Inv. Partners LLC v Roche (2023 NY Slip Op 03436)

Merchants Cachet Inv. Partners LLC v Roche

2023 NY Slip Op 03436

Decided on June 27, 2023

Appellate Division, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided and Entered: June 27, 2023
Before: Webber, J.P., Singh, Kennedy, Scarpulla, Pitt-Burke, JJ.

Index No. 156663/20 Appeal No. 549-550 Case No. 2022-00226, 2022-00227

[*1]Merchants Cachet Investor Partners LLC, Plaintiff-Respondent,

v

Robert Roche, Defendant-Appellant.

Lichtenberg PLLC, New York (Barry E. Lichtenberg of counsel), for appellant.

Aidala Bertuna & Kamins, PC, New York (John M. Leventhal of counsel), for respondent.

Judgment, Supreme Court, New York County (Arthur Engoron, J.), entered January 6, 2022, in favor of plaintiff in the amount of $4,507,899.38, and bringing up for review an order entered December 15, 2021, which granted plaintiff's motion for summary judgment on the complaint seeking to enforce a guaranty and denied defendant's cross-motion for summary judgment dismissing the complaint, unanimously affirmed, with costs. Appeal from aforesaid order, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

Supreme Court properly granted plaintiff's motion and denied defendant's cross-motion. Defendant signed the guaranty and the put option provision at issue here. The put option provision was set forth in the second amendment to plaintiff's and nonparty Cachet Hotel Group Limited Cayman L.P. (Cachet)'s equity and warranty subscriptions agreement (ESA). These documents were authorized by Cachet's general partner, Cachet Hotel Group Limited Cayman, G.P. (Cachet GP). Under Paragraphs (iii) through (v) of Cachet GP's directors' resolution, which was approved by Cachet GP's board before the second amendment was executed, defendant, "acting singly," could "execute . . . [t]ransaction [d]ocuments and any amendments thereto," including the put option provision in the second amendment to the ESA, as well as "any and all . . . instruments and other documents whatsoever," including the guaranty. Under Paragraph (v), these documents were deemed "approved" and "ratified." Thus, the directors' resolution granted defendant the authorization to execute the put option provision and guaranty, overcoming any claimed violations of the earlier limited partnership agreement.

Defendant seems to challenge whether the CFO of Cachet had the authorization to execute the second amendment based on the powers granted under the directors' resolution because the CFO was not a Cachet Board member. However, the CFO signed the document on behalf of Cachet, and as the court noted, defendant's arguments that he should not be held liable for a guaranty he clearly signed and absolutely and unconditionally guaranteed based on his lack of understanding of the corporate structure of an organization that he chairs is unpersuasive and not a basis for him to avoid liability.

Defendant's argument that the guaranty is unenforceable for lack of consideration because the claimed consideration, namely the ESA, did not give rise to an underlying obligation by Cachet to pay Merchants money, is belied by the fact that the guaranty defines the ESA as amended by the second amendment, under which Cachet was required to make such payment.

The purported false promise by plaintiff's representative not to exercise the put option, upon which defendant claims he relied in executing the put option provision and guaranty, was a "mere promissory statement" and does not, standing alone support defendant's fraudulent inducement defense (Adams v Clark , 239 NY 403, 410 [1925]; cf. Deerfield [*2]Communications Corp. v Chesebrough-Ponds, Inc. , 68 NY2d 954, 956 [1986]).

We have considered defendant's remaining arguments and find them unavailing.THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: June 27, 2023