The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge
MEMORANDUM OPINION AND ORDER OF COURT
Presently before the Court are the following:
* MOTION FOR SUMMARY JUDGMENT filed by ColumbusNewport, LLC, Victor Millar and John F. Lawrence, with brief in support (Document Nos. 70 and 71, respectively);
* OPPOSITION and MEMORANDUM OF LAW IN OPPOSITION filed by Plaintiffs, Excedo Incorporated, Lawrence Caracciolo, and Thorp, Reed & Armstrong LLP (Document Nos. 90 and 91, respectively); and
* BRIEF IN REPLY TO PLAINTIFFS' MEMORANDUM IN OPPOSITION filed by ColumbusNewport, LLC, Victor Millar and John F. Lawrence (Document No. 102).
After careful review of the filings of the parties and the relevant case law, the Motion for Summary Judgment will be denied.
On July 31, 2003, Plaintiffs, Excedo Incorporated ("Excedo"), Lawrence Caracciolo ("Caracciolo"), and Thorp Reed & Armstrong, LLP ("Thorp Reed"), filed a Verified Complaint in this Court in which they alleged claims of fraud, negligent misrepresentation, and promissory estoppel against Defendants ColumbusNewport, LLC ("ColumbusNewport"); Victor Millar ("Millar"), Chief Executive Officer of ColumbusNewport; and John F. Lawrence ("Lawrence"), Chief Financial Officer of ColumbusNewport (collectively referred to as the "ColumbusNewport Defendants"); Blue Ridge Partners Management Consulting, LLC ("Blue Ridge"); and the two principals of Blue Ridge, James Corey ("Corey") and Michael Penney ("Penney"). Specifically, Plaintiffs allege that the ColumbusNewport Defendants induced Plaintiffs to forego alternative investments and commit to the preparation of ColumbusNewport's proposed investment in Excedo by representing that ColumbusNewport had funding for the deal.
The ColumbusNewport Defendants have filed the instant motion for summary judgment, in which they contend that (i) Defendants Millar and Lawrence are entitled to summary judgment because the evidence is insufficient as a matter of law to impose liability upon them as individuals; (ii) none of the Plaintiffs can show reasonable reliance, which is an essential element of all their claims; (iii) Plaintiffs cannot satisfy the elements of fraud or misrepresentation against the ColumbusNewport Defendants; and (iv) Plaintiff Thorp Reed's claim for attorneys fees are invalid as a matter of law. Plaintiffs have filed their response and memorandum brief in opposition to the motion for summary judgment. The matter is ripe for disposition.
The facts relevant to this discussion, and viewed in the light most favorable to Plaintiffs, are as follows. In 2002 and 2003, Plaintiffs Caracciolo and Excedo sought to acquire two subsidiaries of Federated Investors, Inc. ("Federated") (collectively referred to as the "Business Units"), whose operations Caracciolo managed. In or around May 2002, Excedo retained Blue Ridge to assist in its efforts to locate an equity investor to fund the acquisition.
In June 2002, Caracciolo and Penney of Blue Ridge met with Lawrence of ColumbusNewport. At that meeting, Caracciolo explained that Federated had decided to sell the Business Units and that a $12 - $15 million equity investment would be needed to acquire the Business Units and supply working capital. Defendant Lawrence indicated that ColumbusNewport may be interested in the transaction but that, at that time, it did not have funds for such an investment.
In July 2002, Penney informed Caracciolo that ColumbusNewport remained interested in the Excedo opportunity, but had not yet secured its funding.
In September 2002, ColumbusNewport offered a Letter of Intent for the Excedo investment, which was signed by Defendant Lawrence. The Letter of Intent contained a contingency provision stating that its ability to obtain funds was a condition to closing. Caracciolo rejected the Letter of Intent because he would not sign a letter of intent with any investor who lacked the funding to close the ultimate transaction.
In late November and early December 2002, negotiations commenced over a new Letter of Intent. Caracciolo asked ColumbusNewport to remove the funding contingency. On December 2, 2002, Defendant Lawrence faxed a revised Letter of Intent to Excedo that did not contain the funding contingency that had appeared in the September proposal. On December 10, 2002, Excedo and ColumbusNewport executed the Letter of ...