Document: Addy v. Piedmonte, et al., C.A. No. 3571-VCP, Parsons, V.C. (Del. Ch. March 18, 2009)
Plaintiff, a sophisticated investor, was induced by Defendants to contribute funds toward an oil and natural gas extraction project and brought suit when Defendants failed to make good on their contractual promises. First, the Court of Chancery denied full integration of an assortment of documents underlying Plaintiff’s investment, justifying that decision by citing (1) conspicuous inconsistencies that supported the conclusion that the documents were not formally or carefully drafted, and (2) the Defendants’ failure to produce certain Note and Note Purchase Documents, contradicting the conclusion that the documents at issue expressed the final intentions of the parties. The Court next ruled on whether a contract can exculpate a contracting party from a claim based on an intentionally false representation of fact. Though the exculpation clause was worded to free the Defendants from responsibility for any false statements of fact represented, it did not clearly disclaim the Plaintiff’s reliance on those representations. As Plaintiff sufficiently alleged that the Defendants knew that certain statements made were false, the Court allowed Plaintiffs’ fraud claims to proceed. In addition, the Court denied Defendants’ motions to dismiss claims of unjust enrichment, breach of contract and promissory estoppel.