Iberdrola Energy Projects v. Oaktree Capital Mgt., L.P.

Iberdrola Energy Projects v Oaktree Capital Mgt., L.P. 2026 NY Slip Op 05854 October 8, 2026 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This decision is uncorrected and subject to revision before publication in the Official Reports. Iberdrola Energy Projects, Plaintiff-Appellant, v Oaktree Capital Management, L.P., et al., Defendants-Respondents, Does 1-50, Defendants. Decided and Entered: October 08, 2026 Index No. 652514/21|Appeal No. 7182|Case No. 2025-03514| Before: Manzanet-Daniels, J.P., Kennedy, Friedman, Kapnick, Higgitt, JJ. Steptoe LLP, New York (Robert W. Mockler of counsel), and Steptoe LLP, Los Angeles, CA (Thomas B. Watson of the bar of the State of California, admitted pro hac vice, of counsel), for appellant. King & Spalding LLP, New York (Richard T. Marooney of counsel), and King & Spalding LLP, Washington, DC (Ashely C. Parrish of the bar of the District of Columbia, admitted pro hac vice, of counsel), for respondents. [*1] Judgment, Supreme Court, New York County, entered May 7, 2025, dismissing, with prejudice, plaintiff's second amended complaint, and bringing up for review an order, same court (Jennifer G. Schecter, J.), entered February 26, 2025, which granted defendants' motion to dismiss plaintiff's second amended complaint, with prejudice, unanimously affirmed, with costs. Plaintiff failed to plead the element of detrimental reliance in support of its causes of action for fraud. Plaintiff alleges that defendants' misrepresentations and omissions caused it to incur additional labor, costs and expenses as part of its obligations under the Engineering, Procurement, and Construction contract (EPC). Notably, however, none of the allegations supporting plaintiff's fraud claims rely on any misrepresentations or failures to disclose by defendants that are collateral to the contract (see Iberdrola Energy Projects v Oaktree Capital Mgt. L.P., 231 AD3d 33, 45 [1st Dept 2024]). Thus, plaintiff's fraud claims fail because the conduct into which plaintiff was allegedly induced consisted of pre-existing obligations under the EPC (see Megaris Furs v Gimbel Bros., 172 AD2d 209, 212 [1st Dept 1991]). Plaintiff's renewed challenge to the enforceability of the work-pending-dispute clause is barred by the doctrine of law of the case, as we decided this issue on the prior appeal (see Iberdrola Energy Projects, 231 AD3d at 36-37; Matter of Child A. [Parent M.], 228 AD3d 858, 860 [2d Dept 2024]). To the extent plaintiff contends that its renewed argument is based on newly discovered facts, it is still without merit. Any breach by defendants did not cause the dispute resolution procedures to "fail of their purpose" (cf. Granite Computer Leasing Corp. v Travelers Indem. Co., 894 F2d 547, 552 [2d Cir 1990]), particularly where, as here, plaintiff was able to use those procedures to advance to an arbitration in which it was awarded approximately $230 million. We decline to revisit our prior ruling on the enforceability of the nonrecourse provision. The exculpatory clause in One River Run Acquisition, LLC v Milde (239 AD3d 519, 520-521 [1st Dept 2025]) was narrower than the nonrecourse provision in the EPC. Accordingly, there is no conflict between our prior order in this case and One River Run. THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT. ENTERED: October 8, 2026