OPINION & ORDER In 2015, Mohegan Lake Motors, LLC (“Mohegan”), owned by Barry Rost (individually “Rost”) and his brother, William Rost (together with Barry Rost, “the Rosts”) entered into a contract with Celebrity Auto of Mohegan Lake, LLC (“Celebrity”), a company formed by Thomas Maoli (“Maoli”) to buy Mohegan’s car dealership. After months of due diligence, which Celebrity extended twice, Celebrity sent a notice of termination. Mohegan filed this diversity action asserting, inter alia, contract and fraud claims against Celebrity and Maoli (collectively, “the Buyer” or “the Purchaser”).1 The Buyer asserts counterclaims against Mohegan and third-party claims against the Rosts (together with Mohegan “the Seller”) for breach of contract and contractual indemnification. (ECF No. 80.) Before the Court are the Buyer’s motion for summary judgment (ECF No. 105) and the Seller’s cross-motion for summary judgment (ECF No. 112). For the following reasons, the Court DENIES the Buyer’s motion as to the Seller’s alter ego liability, fraudulent inducement, and breach of contract claims and GRANTS the Seller’s cross-motion, dismissing the Buyer’s breach of contract claim. BACKGROUND The facts in this section are drawn from the Buyer’s Statement of Undisputed Facts in Support of its Motion for Summary Judgment (“SUMF” (ECF No. 107)), the Seller’s Response to the SUMF (“RSUMF” (ECF No. 108)), the Seller’s Statement of Undisputed Facts in Support of its Cross-Motion for Summary Judgment (“CSUMF” (ECF No. 114)), the Buyer’s Response to the CSUMF (“CRSUMF” (ECF No. 119)), the Declaration of Marc Gross in Support of the Buyer’s Motion for Summary Judgment (“Gross Supporting Decl.” (ECF No. 121)), the Declaration of Jarod Taylor in Opposition to the Motion for Summary Judgment (“Taylor Opp’n Decl.” (ECF No. 110)), the Declaration of Barry Rost in Opposition to the Motion for Summary Judgment (“Rost Decl.” (ECF No. 111)), the Declaration of Thomas Maoli in Opposition to the Seller’s Cross-Motion for Summary Judgment (“Maoli Decl.” (ECF No. 117)), Jarod Taylor’s Declaration in Support of the Seller’s Cross-Motion for Summary Judgment (“Taylor Supp. Decl.” (ECF No. 115)), and corresponding exhibits. Facts are undisputed except where indicated. I. Factual Background A. Undisputed Facts Regarding the Transaction Rost owns the Mohegan Audi dealership (“the Dealership”) and some of the real estate upon which the Dealership operates with his brother, William Rost. Maoli owns and operates a number of car dealerships under various entities including Celebrity Motorcar (“Maoli Dep. Tr.” at 106 (ECF Nos. 110-1, 115-3)), Lexus of Route 10, Maserati of Morris County, BMW of Springfield NJ, and NMK SAAB (see ECF No. 110-28 email signature block for Maoli indicating that he is “Dealer Principal” of the aforementioned entities). In or about 2014, Rost decided to sell the Dealership, engaged a broker — Tony Assalone (“the Broker”) — to market the Dealership and find a suitable buyer, and authorized Audi to find buyers. (“Rost Dep. Tr.” at 59, 72, 74, 78 (ECF Nos. 110-2, 121-1); see SUMF 1; RSUMF 1.) At the time, Rost had health issues and did not have the funds to improve the Dealership to meet Audi’s requirements. (Rost Dep. Tr. at 59-60.) The Broker brought the deal to Maoli, with whom he had a prior professional relationship. (“Assalone Dep. Tr.” at 94-96 (ECF Nos. 110-3 and 121-14); see also Rost Dep. Tr. at 82-83, 89). Around June 2015, Rost and Maoli began discussing the potential sale of the Dealership. On June 16, 2015, in connection with the potential transaction, Maoli formed Celebrity of Mohegan Lake (“Celebrity”), a New Jersey limited liability corporation (“LLC”), of which he was the sole member. (“Formation Cert.” (ECF No. 110-20, 121-2); see SUMF 2; RSUMF 2.) Celebrity was assigned an employer identification number by the Internal Revenue Service (“IRS Letter” (ECF No. 121-3), but Celebrity never had any employees (Maoli Dep. Tr. at 109). Celebrity has an undated operating agreement signed by Maoli indicating that Celebrity is an LLC, that Maoli is the sole member with a 100 percent ownership interest. (ECF No. 110-21.) On June 19, 2015, Celebrity and Mohegan executed a non-binding letter of intent (“LOI”). (“LOI” (ECF Nos. 110-11, 121-5); see SUMF 4; RSUMF 4.) As early as July 2015, Maoli was in conversations with Audi regarding the financing of upgrades that would be required at the Dealership. (Maoli Dep. Tr. at 134-35; “July 9, 2015 email from Maoli to Rick Fuller” (ECF No. 110-27).) On August 19, 2015, an Order was entered in Maoli’s divorce proceeding enjoining him from acquiring or selling any further business, or real or personal property during the pendency of the divorce action unless agreed to by the parties with court approval (the “Injunction”). (“Injunction” (ECF Nos. 110-17, 121-8); see SUMF 11; RSUMF 11.) On or about October 16, 2015, Mohegan and Celebrity entered into a written asset purchase agreement (“APA”), pursuant to which Celebrity agreed to purchase certain enumerated assets of the Dealership. (“APA” (ECF Nos. 115-1, 121-6); see SUMF 6; RSUMF 6; CSUMF 1; RCSUMF 1.) Though the agreement was signed on or about October 16, 2015, the parties agreed to postdate it to November 10, 2015, the date by which Maoli expected his divorce to be concluded. (SUMF 9; RSUMF 9.) In an email to his attorney dated October 16, 2015, Rost explains What we have is a postdated agreement signed by [Maoli], because he is in the midst of a divorce and he expects it to be concluded before Nov. 10…which is the date he signed the agreement for.2 Next he says he is sending an Escrow Check to Bob Bass for the deposit of $500,000 which I assume is also postdated. Obviously, not where I want to be…not what I expected. However, I still believe he is a real buyer…. Now for the major hurdle and I don’t know if we should wait to see if we have a bona fide deal or act on it now. [Maoli] says he cannot provide a personal guaranty for the $2.5 mil that I am carrying as a result of his divorce and that he can’t show the liability. This is totally a dealbreaker, unless you get together with Bob Bass and can get me a guaranty from Lexus Rt. 10, that is the entity of Lexus Rt 10 that segregates the $2.5 mil so that it is not encumbered…that’s the jailhouse lawyer in me. I really don’t want or need anyother [sic] surprises.3 I don’t whether [sic] you should act on it now…though I think we should and what course to take. Tom “assures” [the Broker], that he will come up with a guaranty that will put any fears I have to rest…. (“APA Email” ECF Nos. 110-7, 121-7.) B. Disputed Facts Regarding Disclosures Maoli testified that prior to signing the LOI and the APA, he disclosed to the Seller that in order to consummate the transaction Maoli would either need his divorce to be concluded or he would need to get approval from the divorce court. (Maoli Dep. Tr. at 65-67, 83-84, 142, 175.) He further testified that Section “4.2(e) is in the contract” because he disclosed the pending divorce to the Seller. (Maoli Dep. Tr. at 171.) Maoli explained that Section 4.2(e) is “a condition of my obligation to close,” (Maoli Dep. Tr. at 171) which “basically says that [the injunction] needs to be lifted” in order for the transaction to go through (Maoli Dep. Tr. at 174). Rost testified that prior to signing the APA he knew that Maoli was “in the midst of a divorce,” which he initially learned from the Broker (Rost Dep. Tr. at 159), and that he knew Maoli “expects [the divorce] to be concluded before Nov. 10…which is the date he signed the agreement for,” (APA Email); Rost Dep. Tr. at 219; see SUMF 8; RSUMF 8.) Rost insists that Maoli never informed him that Maoli, and consequently Celebrity, was enjoined from entering into the sale prior to the conclusion of divorce proceedings without court approval. (Rost Dep. Tr. at 220-21; Rost Decl. 2 (“At no time did Thomas Maoli ever tell me that there was an injunction issued by any court that prohibited or in any way restricted Maoli’s ability to enter into a contract for the purchase of any business or any assets.”).) Rost did not make inquiries regarding Maoli’s ability to consummate the transaction prior to entering into the APA. (Rost Dep. Tr. at 330; Rost Decl. 4 (“I did not review the records of New Jersey’s family courts before entering into the APA because it did not occur to me that a family court judge would have issued an injunction against Maoli personally that would prevent or impede this transaction.”). Rost further testified that he did not learn about the divorce court’s injunction until after the transaction was terminated (Rost Dep. Tr. at 309; Rost Decl. 5 (“I first learned of the existence of this injunction from my litigation counsel after Maoli terminated the APA. I do not know how he obtained the injunction”).) The Broker also testified that while he was aware of Maoli’s ongoing divorce, Maoli never told him that he was enjoined from closing on a car dealership without court approval during the pendency of the divorce. (Assalone Dep. Tr. at 287-88.) The Area General Manager at Audi who was involved in the transaction also testified that he was aware that Maoli’s divorce was making it hard for Maoli to do business but was unaware that any injunction existed. (“Fuller Dep. Tr.” at 79, 200 (ECF No. 110-14).) Rost avers that he “would not have entered into the LOI or the APA had [he] been told about [the] injunction [against Maoli].” (Rost Decl. 6.) C. Undisputed Facts Regarding the Escrow Check Pursuant to the APA, the Buyer was to place a $500,000 deposit in escrow within 3 days of the effective date. (APA at 12.) The escrow agent is identified as Bass Sox Mercer, Attention: Stuart Rosenthal. (APA at 3.) On November 10, 2015, Maoli made out a check in the amount of $500,000 to Bass Sox Mercer Attorney Trust Account, which notes in the memo line “Purchase of Mohegan Lake Motors.” (“Escrow Check” (ECF No. 110-12).) Maoli testified that it appears this check was made out from his personal account. (Maoli Dep. Tr. at 176-177.) Rost attests: “I believed that the escrow payment had been deposited with the escrow agent, Stuart Rosenthal of Bass Sox Mercer, because Maoli provided me a copy of a check that was made out to escrow.” (Rost Decl. 8.) On November 23, 2015, Gary Gabriele, who worked for Maoli and was listed as the authorized agent of Celebrity, emailed Elaine Keifrider, the executive assistant at Lexus of Route 10, stating with reference to the escrow check “I don’t believe I wrote this check out, nor is it showing as cashed in the bank (or monies put in to cover it). Is this a legitimate check? My records are not in balance. If it has to be covered, let me know from where to pull the monies.” Keifrider responded “[Maoli] had me do the check but the check was never sent.” (ECF No. 110-15.) In May 2016, Buyer’s counsel emailed Celebrity’s termination notice to Seller’s counsel and the Escrow Agent, copying Maoli. (“Emails Re Return of Depost” (ECF No. 110-16).) Seller’s counsel responded to all but Maoli stating “I received an email from [the Escrow Agent] that the deposit was never paid to him. Where is the deposit?” On May 7, 2016, [the Escrow Agent] responded to the group stating “Just to be clear, please be advised that I am unequivocally stating and representing to you that I have never received any funds as an escrow agent or otherwise with regard to this matter.” (Id. (emphasis in original).) D. Undisputed Facts Regarding the Due Diligence Period On or about December 3, 2015, Maoli opened a bank account for Celebrity at Valley National Bank. (“Valley National Bank Account” (ECF No. 110-13).) On December 4, 2015, the Broker alerted Maoli by email to [email protected] that Mohegan’s financial statements appeared to be missing $300,000 in profit. (ECF No. 110-28.) Maoli copied Gabriele and Keifrider, both of whom had email addresses at lexusofroute10.com, on his acknowledgement of receipt email. (Id.) By email dated February 4, 2015, Rost explained to the Broker: the “year end statement…. includes a $300,000 charge up for LIFO adjustment (good faith estimate). But…I deferred $325,000 of Audi incentives for last quarter (NOT STANDARDS) and $67k from third quarter.” (“Feb. 4, 2016 Email from Rost to Assalone” (ECF No. 110-29); see also Rost Dep. Tr. at 224-25.) On January 5, 2016, Celebrity requested a 60-day extension of the due diligence period through March 8, 2016. (“January Extension Letter” (ECF Nos. 117-1, 121-9).) This letter does not provide any reason for the extension and merely states that if the Seller does not agree to the extension, the Buyer will terminate the Agreement and be entitled to refund of its deposit. (Id.) On January 5, 2016, Mohegan agreed to extend the Due Diligence period for 60 days. (Id.; see SUMF 16; RSUMF 16.) By email the following day, Rost wrote to his attorney: “I spoke to Tom Maoli yesterday and as the drop dead date of the original contract was January 7, 2016, he wanted an extension…to which I agreed…. he said…that the full package was submitted to Audi on Friday of last week and I believe that Audi is entitled to take up to 60 days for approval….” (“Email from Rost to Counsel re January Extension” (ECF No. 110-5.)) Rost consentend to the extension requested by returning a signed version of the extension letter. (January Extension Letter.) One of Maoli’s staff — possibly the Director of New Franchise Development for Lexus of Route 10 and Maserati of Morris County — emailed Maoli on February 3, 2016 relating a message from Audi Financial regarding the opening of the Hawthorne Point Audi. (ECF No. 110-26.) Rost testified that the Hawthorne Point location is about 20 miles from the Dealership, opened in approximately October 2017, is the closest competitor of the Dealership, and that while the existence of Hawthorne has enhanced Mohegan’s reputation because Mohegan is more proficient in sales and service, Hawthorne’s existence has decreased Mohegan’s profits because Mohegan has to lower its prices to match those at Hawthorne. (Rost Dep. Tr. at 50-53.) By email dated February 23, 2016, the Area General Manager at Audi emailed Maoli to schedule a meeting for Maoli with Audi Executives in Virginia on March 21, 2016, stating “I need a firm commitment for you on this as we will not be able to cancel on them again” and also noting that Audi still needed certain documents from Celebrity. (“Emails re Audi Meeting” (ECF No. 110-19).) Maoli responded that March 21, 2016 was not possible since he would be on a pre-planned family vacation out of state at that time. (Id.) On March 4, 2016, Celebrity requested another 60-day extension of the Due Diligence Period through May 7, 2016. (“March Extension Letter” (ECF Nos. 117-2, 121-9).) As with the first extension letter, this letter does not provide any reason for the extension and merely states that if the Seller does not agree to the extension, the Buyer will terminate the Agreement and be entitled to refund of its deposit. (Id.) Maoli testified that in March or April 2016 he verbally asked for an extension of due diligence because his divorce was not final. (Maoli Dep. Tr. at 279-80.) When Seller’s counsel emailed Maoli (at his Route 10 Lexus email address) and his attorney to ask why they needed the extension if the application to Audi is complete, Maoli stated that they did not have Audi approval yet and “[w]e do not have our arms around [t]he building issues.” (“Email Re Reason for Extension” (ECF No. 110-6).) Seller consented to the extension by signing the extension letter. (March Extension Letter). Rost avers that he “would not have agreed to any extension of the closing under the APA had [he] been told of the injunction.” (Rost Decl 7.) E. Undisputed Facts Regarding the Dissolution of the Transaction and Discovery of Buyer’s Failure to Make Deposit Rost testified that he did not become aware that Maoli’s “personal issues” were delaying closing until Audi informed him of this fact. (Rost Dep. Tr. at 219.) On April 10, 2016, Rost emailed his attorney and the Broker stating, in relevant part: [Maoli] has informed [the Broker] that he is experiencing a problem with Audi Financial in approving his package as he claims they have changed the terms of his financing to reflect a “necessary change in the pro-forma” as a result of the inclusion of a new Audi dealer in Hawthorne. Because of this change, he decided to cancel his face to face with Audi management (which they want before granting approval) until they gave him the original agreed upon terms. If this is truly the case, it is going to once again delay any possible closing. Additionally the buyer has real and significant personal issues that is causing him distractions, which has and will continue to further delay any closing. I have been most reasonable in accommodating his situations, but I have exhausted my patience and need closure. Along the way (last month), he informed me that he does not want the VW franchise at all even at no cost, but he does WANT to assume the VW building at the time he takes on Audi. I understand that view. This brings me to my points. A — I want certainty and to that end, I propose that the $500,000 deposit immediately become non-refundable and transfer to me as a condition for continuing to wait. It would of course be a credit at closing. I would like that without any contingencies in recognition for the extended wait I have endured and the compromises in rent, real estate price, termination of VW etc. I would give him for that consideration, up to six months additional to close the deal. However, I do believe that he still wants to proceed, but he is even more distracted than usual…. (“Apr. 10, 2016 Email between Rost and Counsel re Further Delays” (ECF No. 110-31).) On April 20, 2016, Rost emailed the Broker stating in relevant part: I just want to clarify some points that I would like you [sic] consider regarding Tom. I trust he will not cancel Monday night, but as the lottery says (hey you never know.) Under any scenario, I am going to insist on the $500 K deposit be made a hard deposit and he can take up to 6 months to close. I am very concerned that his inaction with Audi is going to result in the package being kicked back to him for a potential restart. He is also risking burning bridges and ruining his good auspices with Audi by not communicating. I think that if he is looking for my assistance, and therefore looking to leverage me and Audi, perhaps my lawsuit and the $672,000 plus $57,000 that they took illegally (imho) from me can be a vehicle to broker an accommodation for Tom and Audi. Just a thought. I checked the last extension…it runs through May 7, not the 2nd as I had thought. If Tom is serious about continuing to honor the contract, he is going to have to communicate that to Audi ASAP. In the absence of these basic tenets, I don’t see any useful purpose in getting together, but I am certainly not looking to close the door or blow up the deal, but I really have been overly accommodating to all his needs and issues, and I’m really really not of the mindset to “rework” this deal after ten months…. (“Apr. 20, 2016 Email from Rost to Broker” (ECF No. 110-30); see Rost Dep. Tr. at 277-78 (stating that in April 2016 he demanded that the deposit become nonrefundable).) The Broker forwarded Rost’s email to Maoli. (Id.) Maoli refused to have the “deposit to go hard.” (Maoli Dep. Tr. at 279; Maoli Decl. 14.) By letter dated April 27, 2016, Audi informed the Buyer and Seller that it was withholding its consent to the proposed sale of the Dealership, citing Maoli’s failure to provide various requested and required documents and information necessary to demonstrate that the Buyer satisfies Audi’s new dealer requirements. (“Audi Witholding Letter” (ECF No. 110-18.) By letter dated May 3, 2016, Celebrity served written notice terminating the APA invoking Section 8.1(h). (“Termination Letter” (ECF Nos. 110-9, 117-6, 121-12).) Maoli avers that Celebrity terminated the APA because during the due diligence period, Celebrity learned, among other things, that the financial statements provided by Mohegan did not reflect Mohegan’s true financial status. (Maoli Decl. 5.) For example, Mohegan’s “adjusted” 2015 year-end financial statement, provided to Celebrity in March 2016 showed a decrease in Mohegan’s 2015 “Net Profit” of $253,755 (or 30 percent), from the “Net Profit” of $849,549.00 recorded in Mohegan’s January 2016 financial statement. (Maoli Decl.
6-7 (citing Exhibit C (“Net Profit” line 84 on page 2) and Exhibit D (“Net Profit” line 84 on page 2).) In addition, Mohegan’s adjusted year-end 2015 financial statement also recorded as “Standard Bonus — Revenue” of $600,857.00 but Rost acknowledged that this nearly $600,000 is not “income” but money that Mohegan believed Audi owed to it and which was the subject of a lawsuit by Mohegan against Audi. (Maoli Decl.
