The opinion of the court was delivered by: Irenas, Senior District Judge
This dispute arises out of a failed corporate acquisition of Defendant, BK International Insurance Brokers, Ltd. ("BK International") by Plaintiff, Commerce Bancorp, Inc. ("Commerce").*fn1 Presently before the Court is BK International's Motion to Dismiss the First Amended Complaint.
For the reasons set forth below, the Motion will be granted in part and denied in part.
Commerce and BK International executed a "Letter of Intent" on June 17, 2005, which laid out the material terms of a transaction whereby Commerce would acquire all of the issued and outstanding capital stock of BK International for $9.35 million worth of Commerce common stock. (Compl.*fn2 Ex. A) The agreement specifically contemplated that the parties would later enter into a "definitive acquisition agreement," or "Definitive Agreement." (Id.) The Letter of Intent further stated:
This letter constitutes an expression of mutual intention and is intended only as a guideline for the drafting of the Definitive Agreement, which will contain the terms set forth herein and additional terms and conditions yet to be discussed and agreed upon. Each of [Commerce] and BK will incur legal, accounting and operating expenses in connection with this letter. Accordingly, Paragraphs 5B (BK's obligations not to negotiate with others), and 8 (governing law) are legally binding upon each party. Other than such paragraphs, this letter is not and does not represent or constitute a legally binding agreement and until the Definitive Agreement is agreed upon, executed and delivered, except for Paragraphs 5B and 8, neither [Commerce] nor [BK] shall have any other rights or obligations arising from the provisions set forth in this letter.
It is the intent of the parties to consummate this transaction by August 31, 2005. If the parties fail to consummate this transaction by that date, either [Commerce] or BK shall have the right to terminate this letter.
By August 31, 2005, the parties had not agreed upon a Definitive Agreement. The First Amended Complaint contains no allegations regarding the status of negotiations with respect to a Definitive Agreement prior to, or on August 31, 2005. Commerce does allege, however, that even after the deadline had passed, BK International's principal owners "continued to affirmatively represent to [Commerce] that BK International intended to close the deal, even requesting that the deal close by either September 15, 2005, or October 1, 2005." (Compl. ¶ 10) Based on these post-August 2005 representations, Commerce made various improvements to BK International's facilities in preparation for the acquisition. Specifically, Commerce asserts that it constructed a new room, installed a three ton air conditioning unit, new wiring, computer systems, and telecommunications circuitry, and entered into contracts with outside vendors who would service the new systems. (Id. ¶ 13)
Then, on September 12, 2005, BK International advised Commerce by telephone that BK International no longer intended to go through with the acquisition. The next day, Commerce received a letter from BK International requesting that all due diligence materials be returned to BK International.
Less than two weeks later, Commerce received correspondence from Shelley Levine, one of BK International's five shareholders, "expressing hope that the deal may be closed in the future," and apologizing for the abrupt halt to the acquisition. (Compl. ¶ 24) David Kimball, another shareholder, also "expressed to [Commerce] a desire to revisit the possibility of consummating the deal in the future," indicating that one particular shareholder, John Betz, was "responsible for the collapse of the deal." (Id. ¶¶ 25-27) Commerce further asserts,
In consideration for [Commerce's] agreement to consider resuming negotiations in the future and exploring the possibility of consummating a deal without John Betz, as well as for a release of potential liability stemming from the circumstances under which the deal was terminated, David Kimball, on behalf of BK International, offered to pay [Commerce] some amount of money. After negotiations between David Kimball and [Commerce], an agreement was reached that BK International would pay $93,500.00*fn3 to [Commerce] in consideration for [Commerce's] promise to consider a future resumption of negotiations, [Commerce's] agreement to explore the possibility of proceeding with the acquisition without John Betz, [Commerce's] release of BK International from any potential liability which may have accrued from the circumstances under which they terminated the deal, and to compensate [Commerce] for the expenses and costs incurred in the construction of the new room and various improvements made to BK International's facilities.
Based on this alleged agreement (the "1% Agreement"), Commerce asserts that it completed an analysis of the feasibility of pursuing the acquisition without John Betz. BK International never paid Commerce. Commerce alleges that when it asked for payment, BK International requested that Commerce wait until May 1, 2006, to be paid. Commerce agreed, but even after May 1, 2006, BK International never paid the $93,500.00, despite Commerce's repeated demands.
Commerce's First Amended Complaint asserts four claims: (1) breach of the 1% Agreement; (2) promissory estoppel based on BK International's post-August 2005 representations and Commerce's improvements to BK International's facilities; (3) negligent and intentional misrepresentation based on the post-August 2005 representations; and (4) unjust enrichment based on Commerce's improvements to BK ...