HotelsAB Green, LLC v. Reignwood Europe Holdings SARL

REPLY MEMORANDUM OF LAW in Support re: 22 MOTION to Dismiss Complaint. . Document

S.D.N.Y.March 1, 2018

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x HOTELSAB GREEN, LLC, Plaintiff, -against- REIGNWOOD EUROPE HOLDINGS SARL, Defendant. : : : : : : : : : : : : Civil Action No. 1:17-cv-08776-JGK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF DEFENDANT REIGNWOOD EUROPE HOLDINGS SARL’S MOTION TO DISMISS DLA PIPER LLP (US) Christopher M. Strongosky Robert C. Santoro 1251 Avenue of the Americas New York, New York 10020-1104 (212) 335-4500 christopher.strongosky@dlapiper.com robert.santoro@dlapiper.com Of Counsel: Matthew Klepper (admitted pro hac vice) Eric Roberts (admitted pro hac vice) 444 West Lake Street, Suite 900 Chicago, Illinois 60606-0089 (312) 368-4000 matthew.klepper@dlapiper.com eric.roberts@dlapiper.com Attorneys for Reignwood Europe Holdings SARL Case 1:17-cv-08776-JGK Document 26 Filed 03/01/18 Page 1 of 15 TABLE OF CONTENTS Page -i- I. INTRODUCTION ............................................................................................................. 1 II. ARGUMENT ..................................................................................................................... 1 A. The alleged damages were not caused by Reignwood Europe’s conduct ............. 1 B. HotelsAB does not (and cannot) allege that it complied with its fundamental representation and warranty under the LOI ...................................... 5 C. The damages sought by HotelsAB are unavailable for the alleged breaches ........ 6 1. A breach of the LOI, an “agreement to agree,” cannot give rise to a claim for a “loss of business.”.................................................................... 7 2. The alleged “loss of business” damages based on a repositioned Property and new membership venture are too speculative ....................... 9 3. HotelsAB cannot recover from Reignwood Europe the $5,000,000 deposit that AB Green retained when it terminated the PSA................... 10 III. CONCLUSION ................................................................................................................ 10 Case 1:17-cv-08776-JGK Document 26 Filed 03/01/18 Page 2 of 15 TABLE OF AUTHORITIES Page(s) Cases Adjustrite Sys., Inc. v. GAB Bus. Servs., Inc., 145 F.3d 543 (2d Cir. 1998) (cited at Opp. 16–17) ...................................................................7 Benihana of Tokyo, LLC v. Benihana Inc., 73 F. Supp. 3d 238 (S.D.N.Y. 2014)..........................................................................................3 Brown v. Cara, 420 F.3d 148 (2d Cir. 2005).......................................................................................................7 FCOF UB Sec. LLC v. MorEquity, Inc., 663 F. Supp. 2d 224 (S.D.N.Y. 2009)........................................................................................7 Fairbrook Leasing, Inc. v. Mesaba Aviation, Inc., 519 F.3d 421 (8th Cir. 2008) .....................................................................................................6 Goodstein Const. Corp. v. City of N.Y., 80 N.Y.2d 366 (1992) ................................................................................................................8 Hirschfeld v. IC Sec., Inc., 521 N.Y.S.2d 436 (1st Dep’t 1987) .........................................................................................10 Ifill v. N.Y. State Ct. Officers Ass’n, 655 F. Supp. 2d 382 (S.D.N.Y. 2009)........................................................................................9 In re InSite Servs. Corp. LLC, 287 B.R. 79 (Bankr. S.D.N.Y. 2002) .........................................................................................5 Mariah Re Ltd. v. Am. Family Mut. Ins. Co., 52 F. Supp. 3d 601 (S.D.N.Y. 2014)..........................................................................................6 Nadeau v. Equity Res. Props. Mgmt. Corp., 251 F. Supp. 3d 637 (S.D.N.Y. 2017)....................................................................................3, 4 NAF Holdings, LLC v. Li & Fung (Trading) Ltd., No. 10-cv-5762, 2016 WL 3098842 (S.D.N.Y. June 1, 2016) ..................................................2 Nat’l Mkt. Share, Inc. v. Sterling Nat’l Bank, 392 F.3d 520 (2d Cir. 2004 ........................................................................................................2 Network Enters., Inc. v. APBA Offshore Prods., Inc., 427 F. Supp. 2d 463 (S.D.N.Y. 2006), aff’d 264 F. App’x 36 (2d Cir. 2008) .......................8, 9 Case 1:17-cv-08776-JGK Document 26 Filed 03/01/18 Page 3 of 15 - 2 - Renaissance Search Partners v. Renaissance Ltd., LLC, No. 12-cv-5638, 2014 WL 12770400 (S.D.N.Y. July 3, 2014) ............................................. 5-6 Robin Bay Assocs., LLC v. Merrill Lynch & Co., No. 07-cv-376, 2008 WL 2275902 (S.D.N.Y. June 3, 2008) ....................................................9 S. Jon Kreedman & Co. v. Meyers Bros. Parking-W. Corp., 58 Cal. App. 3d 173 (Cal. Ct. App. 1976) ...............................................................................10 Spano v. V&J Nat’l Enters., LLC, 264 F. Supp. 3d 440 (W.D.N.Y. 2017) ..................................................................................3, 4 Teachers Ins. & Annuity Ass’n of Am. v. Tribune Co., 670 F. Supp. 491 (S.D.N.Y. 1987) ........................................................................................ 7-8 USAirways Grp., Inc. v. British Airways PLC, 989 F. Supp. 482 (S.D.N.Y. 1997) ............................................................................................2 Worldwide Servs., Ltd. v. Bombardier Aerospace Corp., No. 14-cv-7343, 2015 WL 5671724 (S.D.N.Y. Sept. 22, 2015) ...............................................6 Wright v. Ernst & Young LLP, 152 F. 3d 169 (2d Cir. 1998)......................................................................................................9 Xpedior Creditor Tr. v. Credit Suisse First Boston (USA) Inc., 341 F. Supp. 2d 258 (S.D.N.Y. 2004)........................................................................................2 Case 1:17-cv-08776-JGK Document 26 Filed 03/01/18 Page 4 of 15 I. INTRODUCTION In its motion to dismiss (“Motion” or “Br.,” ECF No. 23), Reignwood Europe1 highlighted five flaws that plagued HotelsAB’s claims: (1) HotelsAB cannot now complain about Reignwood Europe’s failure to sign a JVA where the LOI provided HotelsAB a specific and compulsory arbitration process on that very point, (2) HotelsAB’s fundamental representation and warranty in the parties’ LOI was false, (3) lost profits are not available for the alleged breach of the LOI, (4) the alleged lost profits are too speculative as a matter of law because they supposedly arise from a new venture, and (5) money that HotelsAB spent before signing the LOI cannot be recovered from Reignwood Europe. Reignwood Europe’s Motion is supported by case law from this District dismissing claims—or at least elements of damages— under similar circumstances. HotelsAB’s opposition (“Opposition” ECF No. 24) implies that the Motion requires resolution of disputed facts. Not so; the Motion draws on the LOI’s terms and the Complaint’s allegations and demonstrates where they fall short. HotelsAB’s attempt to smuggle new allegations into its Opposition to bolster and reframe the claim is clear evidence of the Complaint’s defects. Nevertheless, there remain insurmountable obstacles that HotelsAB cannot plead around, as further demonstrated below. The Court should dismiss HotelsAB’s claim with prejudice. II. ARGUMENT A. The alleged damages were not caused by Reignwood Europe’s conduct. The LOI indisputably provided for binding arbitration in the event the parties’ negotiations stalled, through which the parties could be “compelled to execute” a JVA. (Opp. 4.) 1 Terms not defined herein are defined in the Motion. Case 1:17-cv-08776-JGK Document 26 Filed 03/01/18 Page 5 of 15 - 2 - Although HotelsAB argues that it did its part by initiating arbitration (id. at 8), it does not dispute that it failed to follow through with this process, which would have resulted in Reignwood Europe being “compelled to execute” HotelsAB’s proposed JVA. The Motion demonstrates that this failure to complete arbitration negates the causation element of HotelsAB’s claim. (Br. 6–8.) HotelsAB offers four retorts, none of which provide a legal basis for this case to continue in light of its abandonment of the arbitration process. First, HotelsAB contends that the Motion raises a “fact-dependent causation defense.” (Opp. 7 (citing NAF Holdings, LLC v. Li & Fung (Trading) Ltd., No. 10-cv-5762, 2016 WL 3098842, at *6 (S.D.N.Y. June 1, 2016).2) Although HotelsAB attempts to recast causation as a “defense,” the cases are clear that “‘[c]ausation is an essential element’” of the plaintiff’s claim (Br. 6 (quoting Nat’l Mkt. Share, Inc. v. Sterling Nat’l Bank, 392 F.3d 520, 525 (2d Cir. 2004)).) Moreover, nothing in NAF Holdings prohibits the Court from finding, as a matter of law, that HotelsAB did not plausibly establish causation in the Complaint. See 2016 WL 3098842, at *6 (causation absent where there is “no valid line of reasoning and permissible inferences” to support it). Cases like NAF Holdings involve disputed facts related to issues like the parties’ motives and the timing of events. Here, by contrast, HotelsAB admittedly stopped arbitrating before obtaining an order in its favor that would have ended any further negotiation and resulted in a specifically enforceable contract with Reignwood Europe. HotelsAB cannot, as a matter of law, allege facts supporting the causation element of its claim, and the Court should dismiss the Complaint with prejudice. 2 HotelsAB also cites Xpedior Creditor Tr. v. Credit Suisse First Boston (USA) Inc., 341 F. Supp. 2d 258 (S.D.N.Y. 2004) and USAirways Grp., Inc. v. British Airways PLC, 989 F. Supp. 482 (S.D.N.Y. 1997). Both cases address the availability of damages rather than causation. Case 1:17-cv-08776-JGK Document 26 Filed 03/01/18 Page 6 of 15 - 3 - Second, HotelsAB argues that the arbitration provision in the LOI was not mandatory, and that the “right to submit” a disagreement to arbitration did not obligate HotelsAB to arbitrate. (Opp. 8 (citing Benihana of Tokyo, LLC v. Benihana Inc., 73 F. Supp. 3d 238 (S.D.N.Y. 2014)).) HotelsAB misconstrues Benihana. That court’s recognition that a party has a right not to pursue a claim does not preclude such a decision from having consequences. The parties here bargained for a specific process to follow if negotiations reached an impasse. Arbitration is presumptively mandatory under such an agreement. Benihana, 73 F. Supp. 3d at 249–50. HotelsAB undoubtedly thought so,3 because it started the process before abandoning it. (Compl. ¶ 57.) Thus, it is HotelsAB’s failure to obtain an order from the arbitrator that resulted in no specifically enforceable JVA, and nothing in Benihana nor any other case cited by HotelsAB allows it to blame Reignwood Europe for this result. Third, because arbitration was clearly mandatory, HotelsAB also argues that it was excused from arbitrating because, it claims, Reignwood Europe breached the LOI first. (Opp. 9– 10 (citing Nadeau v. Equity Res. Props. Mgmt. Corp., 251 F. Supp. 3d 637, 641 (S.D.N.Y. 2017) and Spano v. V&J Nat’l Enters., LLC, 264 F. Supp. 3d 440, 459 (W.D.N.Y. 2017)).) This is apparently an attempt to claim anticipatory repudiation. HotelsAB overstates the Complaint’s allegations on this point. The closest HotelsAB comes to alleging any “breach” of the arbitration provision by Reignwood Europe is an assertion that Reignwood Europe “briefly feigned cooperation [with arbitration], only to refuse to 3 HotelsAB’s tortured reading of § 16 of the LOI—that arbitration was only mandatory for the respondent after its counterparty commenced arbitration (Opp. 8 n.1)—renders the term “required” in § 16 meaningless. Construing § 16 in this way always gives each party the right to hail the other into court (or arbitration), and nothing would be “required” to be arbitrated. Case 1:17-cv-08776-JGK Document 26 Filed 03/01/18 Page 7 of 15 - 4 - cooperate with the AAA process.” (Compl. ¶ 56.) But Reignwood Europe’s “cooperation” was not required; the arbitration gave HotelsAB a path to an enforceable JVA with or without any “cooperation.” Undoubtedly, a belief that Reignwood Europe was not cooperating (whether or not justified) led HotelsAB to initiate arbitration in the first place. Yet HotelsAB abandoned the arbitration and, with it, the executed JVA and the closing on the Property. With respect to HotelsAB’s authorities on this point, both Nadeau and Spano involved employment contracts rather than an LOI for a multimillion-dollar project between two sophisticated parties, who bargained for an “expedited arbitration procedure” requiring straightforward submissions “to ensure” that the parties “would be compelled” to execute a joint venture (Opp. 4). Moreover, the arbitration proceedings in both Nadeau and Spano were dismissed by the arbitrator as a result of the defendants’ intransigence. Nadeau, 251 F. Supp. 3d at 640; Spano, 264 F. Supp. 3d at 446–47. Unlike in Nadeau and Spano, there is no hint in the Complaint here that the arbitrator refused (or would have refused) to proceed against Reignwood Europe. In other words, Nadeau and Spano are distinguishable because arbitration offered HotelsAB a remedy (an enforceable JVA) that was unavailable in Nadeau and Spano. Fourth, HotelsAB tries to excuse its failure to obtain its contractual remedy by identifying non-arbitrable disputes. (Opp. 10–11.) This is a smokescreen. The definitive JVA was the sine qua non of the transaction. (Compl. ¶¶ 46, 58.) Settling the terms of the definitive JVA had absolute primacy over other disputes because without a JVA there was no joint venture, and without a joint venture there would be no real estate project to require financing or a liquor license. HotelsAB admits as much in its Complaint: “Reignwood’s actions in failing to negotiate the Joint Venture Agreement in good faith, as required by the Letter Agreement, made it impossible to consummate the acquisition.” (Compl. ¶ 58; see also ¶ 46 (execution of JVA was a Case 1:17-cv-08776-JGK Document 26 Filed 03/01/18 Page 8 of 15 - 5 - “key component” of LOI and “[h]aving a definitive joint venture agreement is a requirement for entering into any commercial financing arrangement and thus was critical to enabling the closing to occur”); ¶ 53 (linking finalization of the JVA to the hoped-for closing on the Property).) HotelsAB cannot refashion its own causation allegation via lawyer argument in its Opposition. None of these pleading defects can be cured by amending the Complaint. The Court should dismiss the Complaint with prejudice. B. HotelsAB does not (and cannot) allege that it complied with its fundamental representation and warranty under the LOI. The Motion also establishes that the Complaint should be dismissed because HotelsAB has not and cannot plausibly allege it would have been able to satisfy its most fundamental representation and warranty: that it could manage the Property after acquisition. (Br. 8–9.) HotelsAB concedes that it does not specifically allege its performance of the LOI and does not bother to address whether it even could plead due performance if permitted to amend the complaint. HotelsAB instead argues that it need only plead “due performance” in conclusory terms. (Opp. 12 (citing In re InSite Servs. Corp. LLC, 287 B.R. 79 (Bankr. S.D.N.Y. 2002) and Renaissance Search Partners v. Renaissance Ltd., LLC, No. 12-cv-5638, 2014 WL 12770400 (S.D.N.Y. July 3, 2014)).) This evasive and purely technical response is revealing. Any plaintiff will attempt to allege it complied with the contract. But where the pleadings raise the issue of the plaintiff’s noncompliance, as they do here, conclusory allegations of “due performance” no longer suffice to make a mere assertion of performance plausible. (See Compl. ¶ 65; Br. 8–9 (citing cases dismissing claims).) HotelsAB’s reliance on InSite and Renaissance is misplaced. The plaintiff in InSite attached detailed letters to its complaint containing factual statements about the plaintiff’s performance that could “supply any omission in the complaint” regarding due performance. 287 B.R. at 93 n.4. Renaissance involved a default judgment without Case 1:17-cv-08776-JGK Document 26 Filed 03/01/18 Page 9 of 15 - 6 - any suggestion that the plaintiff had breached. 2014 WL 12770400, at *4. HotelsAB fails to refute the cases cited in the Motion that required factual allegations supporting a plausible conclusion that the plaintiff performed its obligations. This Court, faced with this Complaint, should require the same rather than accept HotelsAB’s conclusory and general allegation of due performance. If HotelsAB cannot allege its performance of this fundamental component of the LOI, its case is doomed and should be dismissed with prejudice. C. The damages sought by HotelsAB are unavailable for the alleged breaches. In its Motion, Reignwood Europe identifies one or more bases for striking each element of damages alleged in the Complaint.4 (See generally Br. 10–18.) HotelsAB responds that any arguments related to damages are “premature.” (Opp. 14 (citing Worldwide Servs., Ltd. v. Bombardier Aerospace Corp., No. 14-cv-7343, 2015 WL 5671724, at *20 (S.D.N.Y. Sept. 22, 2015)).) HotelsAB places too much stock in the cited portion of Worldwide Services, in which the court self-consciously contradicted numerous decisions of the New York courts and instead relied on dictum from a decision of the Eighth Circuit. 2015 WL 5671724, at *20 (citing Fairbrook Leasing, Inc. v. Mesaba Aviation, Inc., 519 F.3d 421, 429 (8th Cir. 2008)). There is, in fact, ample precedent to dismiss or strike damages claims at this stage. (Br. 10, 12 n.6.) 4 HotelsAB suggests that it has several new categories of damages, such as “declaratory relief, management fees, and HotelsAB’s costs and attorneys’ fees.” (Opp. 14 (citations omitted).) Beyond the impropriety of “amending by brief,” the newly alleged monetary damages are subject to the same arguments put forward in the Motion. HotelsAB provides no explanation for how “management fees” could possibly be distinct from lost profits. As to declaratory relief, “there is no basis for declaratory relief where,” as here, “only past acts are involved.” Mariah Re Ltd. v. Am. Family Mut. Ins. Co., 52 F. Supp. 3d 601, 623 (S.D.N.Y. 2014) (quotation omitted). Case 1:17-cv-08776-JGK Document 26 Filed 03/01/18 Page 10 of 15 - 7 - 1. A breach of the LOI, an “agreement to agree,” cannot give rise to a claim for a “loss of business.” As set forth in the Motion, HotelsAB cannot recover lost profits for Reignwood Europe’s alleged breach of the LOI, which was an agreement to “cooperate in good faith to negotiate and . . . execute and deliver a definitive” JVA (LOI § 7). Notwithstanding this plain language of the LOI, HotelsAB argues that the LOI itself contained the final expression of the parties’ joint venture. (Opp. 15–18.) HotelsAB mischaracterizes the LOI. As quoted in the Complaint (¶ 18), § 7 of the LOI required the parties to negotiate and execute the “definitive” JVA, which would include the LOI terms “and such other terms and conditions as are otherwise reasonably necessary.” Both the Complaint and LOI establish that the LOI was not the definitive JVA, which would include further “necessary” terms. HotelsAB also draws a false equivalence between “binding” agreements and “final” agreements—only the latter of which can support a claim for lost profits. The LOI is a binding agreement to negotiate that does not support a claim for lost profits. Although HotelsAB seizes upon language in the LOI stating that it was a “binding expression” of the parties’ agreement and required them to “execute and deliver” the JVA (Opp. 17), the preface to execution was negotiation (LOI § 7). HotelsAB therefore overlooks the distinction between a “fully binding preliminary agreement” and a “binding preliminary commitment,” the latter of which is “binding only to a certain degree” and reflects a “mutual commitment to negotiate together in good faith in an effort to reach final agreement.” Adjustrite Sys., Inc. v. GAB Bus. Servs., Inc., 145 F.3d 543, 548 (2d Cir. 1998) (cited at Opp. 16–17).5 5 Most of the cases cited by HotelsAB decided only whether or not a binding agreement existed. See Brown v. Cara, 420 F.3d 148, 153 (2d Cir. 2005); Adjustrite Sys., 145 F.3d at 547-48; FCOF UB Sec. LLC v. MorEquity, Inc., 663 F. Supp. 2d 224, 228 (S.D.N.Y. 2009); Teachers Ins. & Case 1:17-cv-08776-JGK Document 26 Filed 03/01/18 Page 11 of 15 - 8 - The binding agreement in the LOI expressly involved further good-faith negotiations (in which third parties like the NY liquor authority could propose terms (see Opp. 20)), not a final expression of the joint venture. In fact, the LOI left open a slew of items to be determined before there could be a “definitive JVA.” (Br. 13–14 (e.g., the identity of the “Investor,” details regarding the “private club,” financing, and other matters).6) Additionally, there would have been no reason for the LOI to call for engaging a third-party neutral to intervene in the negotiations had the LOI itself contained the final expression of the parties’ agreement. The LOI, while undoubtedly binding, was only an agreement to agree (i.e., to negotiate and execute the definitive JVA in good faith). Reignwood Europe’s Motion cites unequivocal decisions of both state and federal courts in New York, all following Goodstein Const. Corp. v. City of N.Y., 80 N.Y.2d 366 (1992), and holding that a breach of an agreement to negotiate and agree cannot result in lost profit damages. (Br. 10, 12 n.6.) HotelsAB further disputes that the cases in the Motion accurately reflect the law, citing Network Enters., Inc. v. APBA Offshore Prods., Inc., 427 F. Supp. 2d 463, 487 (S.D.N.Y. 2006), aff’d 264 F. App’x 36 (2d Cir. 2008), as an example of where the court awarded lost profits. Annuity Ass’n of Am. v. Tribune Co., 670 F. Supp. 491, 496 (S.D.N.Y. 1987). That inquiry is distinct from the one here, which is whether such an agreement supports a claim for lost profits. 6 HotelsAB’s dismisses the identity of the “Investor” bound by the LOI as immaterial. (Opp. 19.) But the Complaint belies this argument. For example, HotelsAB alleges that it was a breach of the Investor’s obligation to cooperate in obtaining a liquor license to propose forming a new entity. (Compl. ¶ 30.) By contrast, HotelsAB asserts that it was a breach of the Investor’s promise to be the replacement guarantor not to identify “an acceptable replacement guarantor.” (Id. ¶¶ 36–37.) The Investor’s identity is clearly material to both of these assertions. Case 1:17-cv-08776-JGK Document 26 Filed 03/01/18 Page 12 of 15 - 9 - (Opp. 18 n.6.) Neither of the Network Enterprises decisions ever mentioned “profits,” however. Instead, the district court awarded damages using a fee set by the preliminary agreement (which was a form of renewal agreement) as well as information from historical performance of a similar agreement between the parties. See 427 F. Supp. 2d at 487. Network Enterprises does not diminish the abundant authority that requires dismissal of HotelsAB’s claim for lost profits. 2. The alleged “loss of business” damages based on a repositioned Property and new membership venture are too speculative. Reignwood Europe also demonstrated, in the alternative, that HotelsAB’s claim for lost profits was too speculative as a matter of law because the contemplated business venture was a new one. (Br. 15–17.) HotelsAB implicitly concedes that its Complaint falls short by referencing supposed facts about the New York market and Mr. Balazs’ alleged experience that appear nowhere in the Complaint. (Opp. 15, 22 n.10.) At minimum, the Court should dismiss and require HotelsAB to plead its claim in a proper complaint (rather than in the Opposition). See Wright v. Ernst & Young LLP, 152 F. 3d 169, 178 (2d Cir. 1998) (a party may not “amend its complaint through statements made in motion papers”); Ifill v. N.Y. State Ct. Officers Ass’n, 655 F. Supp. 2d 382, 293 (S.D.N.Y. 2009) (same). Even then, however, HotelsAB’s lost profits claim would be too speculative as a matter of law. The planned joint venture contemplated major modifications to the Property, including a private club concept that would fundamentally change the very nature of the hotel (and not just the club itself, as HotelsAB suggests (Opp. 22 n.8)). Quantifying lost profits in the face of such uncertainty “would require an unreasonable level of speculation.” Robin Bay Assocs., LLC v. Merrill Lynch & Co., No. 07-cv-376, 2008 WL 2275902, at *7 (S.D.N.Y. June 3, 2008). HotelsAB invokes a putative exception to this rule where one party seeks out another “to enter into a business arrangement” based on the latter’s expertise. (Opp. 23.) But the Complaint does Case 1:17-cv-08776-JGK Document 26 Filed 03/01/18 Page 13 of 15 - 10 - not allege that Reignwood Europe sought out HotelsAB; to the contrary, the Complaint (¶¶ 12– 17) and the Opposition (at 3) both admit that HotelsAB sought out Reignwood as a partner.7 3. HotelsAB cannot recover from Reignwood Europe the $5,000,000 deposit that AB Green retained when it terminated the PSA. In the Motion, Reignwood Europe argued that HotelsAB could not recover, as general damages, the money that HotelsAB spent before approaching Reignwood Europe with the LOI. (Br. 17–18.) For the first time in its Opposition, HotelsAB identifies § 6 of the LOI as the basis for its claim—something it did not do in the Complaint or in the pre-motion letter (see ECF No. 19). Section 6 applied only if the parties failed to close on the Property “solely as a result” of Reignwood Europe’s “material default” under the LOI. Even if the Court declined to find that HotelsAB’s failure to obtain an arbitration remedy broke any causal chain between the alleged breaches and damages, there should be little difficulty in determining that HotelsAB is partly to blame. Accordingly, it cannot invoke § 6 of the LOI as a basis for calculating damages. III. CONCLUSION Reignwood Europe respectfully requests that the Court enter an order granting this motion, dismissing or striking those portions of the Complaint set forth in the foregoing sections with prejudice, and granting such additional relief as the Court deems reasonable and just. 7 HotelsAB’ cases do nothing to further its argument. In Hirschfeld v. IC Sec., Inc., “the amount of damages . . . was contractually specified” and the court distinguished this from cases where future lost profits were properly denied because they were “speculative and [could] not be proven with reasonable certainty.” 521 N.Y.S.2d 436, 439 (1st Dep’t 1987). And S. Jon Kreedman & Co. v. Meyers Bros. Parking-W. Corp., 58 Cal. App. 3d 173 (Cal. Ct. App. 1976), was governed by California law, which differs substantially from New York on this issue. Case 1:17-cv-08776-JGK Document 26 Filed 03/01/18 Page 14 of 15 - 11 - DATED: March 1, 2018 New York, New York DLA PIPER LLP (US) By: /s/ Christopher Strongosky Christopher M. Strongosky Robert C. Santoro 1251 Avenue of the Americas New York, New York 10020-1104 (212) 335-4500 christopher.strongosky@dlapiper.com robert.santoro@dlapiper.com Of Counsel: Matthew Klepper (admitted pro hac vice) Eric Roberts (admitted pro hac vice) 444 West Lake Street, Suite 900 Chicago, Illinois 60606-0089 (312) 368-4000 matthew.klepper@dlapiper.com eric.roberts@dlapiper.com Attorneys for: Reignwood Europe Holdings SARL Case 1:17-cv-08776-JGK Document 26 Filed 03/01/18 Page 15 of 15