Questions of Fact Regarding an Alleged Mutual Mistake Preclude Summary Judgment

On September 30, 2021, the First Department issued a decision in Empery Asset Master, Ltd. v. AIT Therapeutics, Inc., 2021 NY Slip Op. 05163, holding that questions of fact regarding an alleged mutual mistake precluded summary judgment, explaining:

Defendant contends that the reformation claim should be dismissed because there is no evidence that plaintiffs — as opposed to nonparty Deerfield Special Situations Fund, LP, the lead investor for the relevant capital raise by defendant — reached an agreement with defendant that was not reflected in the warrant and because plaintiffs were negligent. These arguments are unavailing.

Under the circumstances of this case, the evidence reveals issues of fact as to whether there was mutual mistake and/or a scrivener’s error. We cannot conclude, as a matter of law, that a reasonable person reviewing a 20-page warrant and a 42-plus-page Securities Purchase and Registration Rights Agreement would have realized that the word “sentence” (in “immediately preceding sentence”) should have been “sentences.”

(Internal citation omitted).

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