                               UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT


                               No. 07-1506


In Re: MARINE ENERGY SYSTEMS CORPORATION,

                 Debtor.

------------------------------------

W.   RYAN  HOVIS,     Trustee     for   Marine    Energy    Systems
Corporation,

                 Plaintiff − Appellant,

           v.

GENERAL DYNAMICS CORPORATION; ELECTRIC BOAT CORPORATION,

                 Defendants – Appellees,

           and

SIEMENS    WESTINGHOUSE         POWER     CORPORATION;       VIACOM,
INCORPORATED,

                 Defendants.



Appeal from the United States District Court for the District of
South Carolina, at Charleston.   Patrick Michael Duffy, District
Judge. (2:06-cv-02483-PMD; BK-97-01929; AP-98-80220)


Argued:   September 25, 2008                 Decided:   November 6, 2008


Before WILLIAMS, Chief Judge, GREGORY, Circuit Judge, and James
C. CACHERIS, Senior United States District Judge for the Eastern
District of Virginia, sitting by designation.
Affirmed by unpublished per curiam opinion.


ARGUED: Thomas Scott Harty, LEVY, ANGSTREICH, FINNEY, BALDANTE,
RUBENSTEIN & COREN, P.C., Philadelphia, Pennsylvania, for
Appellant.   Lawrence Scott Schaner, JENNER & BLOCK, Chicago,
Illinois, for Appellees.   ON BRIEF: Steven E. Angstreich, Paul
N. Bonavita, LEVY, ANGSTREICH, FINNEY, BALDANTE, RUBENSTEIN &
COREN, P.C., Philadelphia, Pennsylvania, for Appellant.  George
B. Cauthen, Jody A. Bedenbaugh, NELSON, MULLINS, RILEY &
SCARBOROUGH, L.L.P., Columbia, South Carolina; Andrew W. Vail,
JENNER & BLOCK, Chicago, Illinois, for Appellees.


Unpublished opinions are not binding precedent in this circuit.




                                2
PER CURIAM:

       W. Ryan Hovis, the bankruptcy trustee for the estate of

Marine Energy Systems Corporation (“MESC”), appeals the district

court’s order affirming the bankruptcy court’s grant of summary

judgment in favor of General Dynamics Corporation and Electric

Boat   Corporation    (collectively         “General      Dynamics”)       on   MESC’s

claims    that    General        Dynamics     used      fraud     and      negligent

misrepresentations to induce it to enter into an agreement to

acquire   the    assets     of    General     Dynamics’      Charleston,        South

Carolina manufacturing facility.              Both the bankruptcy court and

the district court granted summary judgment to General Dynamics,

concluding    that   the    non-reliance       provisions       in   the    parties’

Confidentiality Agreement and Asset Purchase Agreement (“APA”)

barred MESC’s fraud and negligent misrepresentation claims.                        In

his capacity as trustee, Hovis argues (1) that the APA’s non-

reliance provisions are insufficient to bar MESC’s reliance on

General      Dynamics’       allegedly         fraudulent         or       negligent

misrepresentations and (2) that the parole evidence rule and the

APA’s merger clause prohibit consideration of the terms of the

Confidentiality      Agreement     to   bar    MESC’s     fraud      and   negligent

misrepresentation claims.          We disagree and affirm the district

court’s   decision    upholding      the    grant    of    summary     judgment     in

favor of General Dynamics.



                                        3
                                            I.

        In the early 1970s, General Dynamics constructed a facility

in Charleston, South Carolina to manufacture aluminum spherical

cargo    tanks       for    the   transportation      and    storage    of    liquefied

natural gas (“LNG”).               The facility incorporated a proprietary

manufacturing technology that enabled General Dynamics to finish

construction of the LNG tanks at the Charleston facility and

then deliver the tanks to shipyards where they could be loaded

onto ships.          The ability to construct a tank outside of the ship

itself gave General Dynamics a substantial competitive advantage

over other LNG tank builders who had to construct tanks directly

on the ship — a much more difficult, costly, and time-consuming

process.       In 1980, however, General Dynamics suspended its LNG

shipbuilding program and decided to put the Charleston facility

to other uses, including building sections of nuclear submarines

and producing waste treatment tanks, oil rigs, and hydrofoils.

        In    late    1993,       General   Dynamics     decided       to    focus    its

resources on its core defense businesses and retained Goldman

Sachs    to    help        sell   the   assets   of    the   Charleston       facility.

Goldman Sachs prepared a document (“Prospectus”) that described

the business opportunity presented by the Charleston facility.

The Prospectus focused mainly on the possible resumption of the

LNG   tank     manufacturing        business,    but    also    contained      a     short



                                            4
section      describing        the        possible   use   of     the    facility     to

manufacture barge-mounted power plants (“BMPPs”).

       Goldman Sachs required potential investors to execute and

return a confidentiality agreement (“Confidentiality Agreement”)

before receiving a copy of the Prospectus.                      The Confidentiality

Agreement      included        a   non-reliance      provision,        which   read   as

follows:

       We acknowledge that neither you, nor Goldman Sachs or
       its affiliates, nor your other Representatives, nor
       any of your or their respective officers, directors,
       employees, agents or controlling persons within the
       meaning of Rule 12b-2 under the Securities Exchange
       Act of 1934, as amended, makes any express or implied
       representation or warranty as to the accuracy or
       completeness of the information, and we agree that no
       such person will have any liability relating to the
       information or for any errors therein or omissions
       therefrom. We further agree that we are not entitled
       to rely on the accuracy or completeness of the
       information and that we will be entitled to rely
       solely on such representations and warranties as may
       be included in any definitive agreement with respect
       to the Transaction, subject to such limitations and
       restrictions as may be contained therein.

(J.A. at 620.)

       In     early    1994,        New      Charleston    Capital       (“NCC”),     an

investment      firm     based       in    Charleston,     expressed      interest    in

purchasing the assets of the Charleston facility, and entered

into    the     Confidentiality             Agreement.       The       Confidentiality

Agreement was executed on behalf of NCC by William J. Gilliam,

NCC’s       chairman     and       sole     shareholder     and    a    sophisticated

businessman       with     extensive          experience     buying      and    selling

                                              5
companies and making investments.           After Gilliam received the

Prospectus on behalf of NCC, he and other representatives of

MESC,    a   South   Carolina    corporation    created     by    NCC   for   the

purpose      of   receiving     the   purchased     assets,        engaged    in

discussions with Goldman Sachs and General Dynamics.                     Gilliam

was assisted in these negotiations by a well-known law firm, a

major accounting firm, and a prominent investment banking firm,

as well as in-house counsel.          Ultimately, the negotiations led

to the execution of the APA, dated June 10, 1994.

        The APA provided that General Dynamics would sell and NCC

would     purchase    “certain     assets      associated        with   [General

Dynamics’] Charleston, South Carolina facility.”                 (J.A. at 103.)

The assets to be acquired were listed on schedules to the APA.

In consideration for these assets, NCC agreed to pay General

Dynamics $12 million at the closing as well as royalties on

sales of LNG tanks and BMPPs.

        Important to this appeal, Section 3.14 of the APA provided

as follows:

        DISCLAIMER OF WARRANTIES.     EXCEPT FOR THE SPECIFIC
        REPRESENTATIONS, WARRANTIES AND COVENANTS SET FORTH IN
        THIS   AGREEMENT,   THE  PURCHASED   ASSETS  WILL   BE
        TRANSFERRED AT THE CLOSING IN “AS IS” CONDITION AS OF
        THE DATE HEREOF AND ALL OTHER REPRESENTATIONS AND
        WARRANTIES, INCLUDING ANY WARRANTY OF MERCHANTIBILITY
        OR FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY
        EXPRESSLY DISCLAIMED.

(J.A. at 112.)


                                      6
Section 10.10 of the APA further provided:

      Entire Agreement.      This Agreement (including the
      documents referred to herein) constitutes the entire
      agreement among the parties and supersedes any prior
      understandings, agreements or representations by or
      among the parties, written or oral, that may have
      related in any way to the subject matter hereof.

(J.A. at 127.)

      On October 27, 1994, General Dynamics and NCC entered into

an amendment to the APA, in which the parties endeavored to

eliminate any possible uncertainty as to the identity of the

assets that were the subject of the transaction, and the APA

eventually    closed     on   December        22,   1994.         Upon   closing,      NCC

transferred the purchased assets to MESC, whose sole shareholder

and   chairman    was    Gilliam.        (MESC      and     NCC    are    collectively

referred to hereafter as MESC.)

      Subsequently,      in   1997,   MESC      experienced        difficulties        and

filed   a   petition    for   Chapter     11    bankruptcy,         which    was     later

converted    to   a     Chapter   7   bankruptcy          after     MESC’s      plan    of

reorganization     failed.        Hovis       was   appointed       to    act    as    the

Chapter 7 Trustee.

      Prior to the Chapter 7 conversion, on October 15, 1998,

MESC filed an adversary proceeding against General Dynamics in

the Bankruptcy Court for the District of South Carolina.                               The

complaint sought to compel General Dynamics to turn over all

intellectual      property    acquired         under      the     APA    and,   in     the


                                          7
alternative, asked the court to reform the APA based on General

Dynamics’     alleged     fraud,     accident,      or    mistake      in    failing       to

include the intellectual property in the APA.                      After the Chapter

7 conversion, in January 2000, MESC filed an amended complaint,

asserting claims for breach of contract (for failure to turn

over certain unidentified intellectual property), breach of the

implied covenant of good faith, specific performance, fraud, and

constructive      fraud.       On    June   26,    2003,       MESC   filed    a    “Third

Amended Complaint,” adding claims against General Dynamics for

negligence,       negligent    misrepresentation,              detrimental     reliance,

and    conspiracy,       and   substantially        expanding         the    allegations

relating     to    its    pre-existing       breach       of    contract      and    fraud

claims.

       On October 13, 2004, the parties filed cross-motions for

summary judgment.          The bankruptcy court, the Honorable William

Thurmond Bishop presiding, heard oral argument on the motions

and entered an order dated April 22, 2005, denying MESC’s motion

in    its   entirety     and   granting         General    Dynamics’        motion    with

respect to the following claims:                 breach of contract, breach of

the    implied     covenant     of    good       faith,    specific         performance,

constructive       fraud,      negligence,         detrimental         reliance,          and

conspiracy.        The    court,     although     it   expressed       “doubts       as    to

whether MESC c[ould] prevail on its fraud claim,” concluded that

“there [we]re genuine issues of fact that preclude[d] the entry

                                            8
of     summary       judgment”        on      both    the     fraud     and      negligent

misrepresentation            claims    and    denied    General       Dynamics’        motion

with respect to those claims.                  In re Hovis, 325 B.R. 158, 167-68

(Bankr. D.S.C. 2005) (“Hovis I”).

       On September 7, 2005, MESC amended its answers to General

Dynamics’ interrogatories in which MESC identified thirty-seven

alleged       misrepresentations.             General       Dynamics    contended         that

MESC     had        previously        asserted        only      nineteen        of        these

misrepresentations            and     asked     the    court     to    bar      MESC      from

presenting evidence at trial on the other eighteen “new” fraud

allegations.           The    bankruptcy       court    denied       General     Dynamics’

request       and    allowed        General        Dynamics     to     conduct       limited

discovery on these allegations.

       On February 28, 2006, the case was reassigned to Judge John

E. Waites following Judge Bishop’s retirement, and on June 16,

2006,    General       Dynamics       moved    for    summary    judgment       on     MESC’s

“new” fraud allegations.               On July 31, 2006, the bankruptcy court

granted summary judgment in favor of General Dynamics on the

“new” fraud allegations.                   The bankruptcy court concluded that

each of the “new” fraud allegations was individually deficient

in that each failed to state a claim of fraud or negligent

misrepresentation, and that, in any event, “[b]ased upon the

specific, unambiguous language of the Confidentiality Agreement

and     the     APA,     MESC       could      not     reasonably        rely        on    any

                                               9
representation not made to it in the APA.”                            In re Hovis, 362

B.R. 247, 275 (Bankr. D.S.C. 2006) (“Hovis II”); see also id.

(“[T]here was a specific agreement by MESC not to rely and not

to     hold    [General    Dynamics]        liable       for    any     representations

contained in the APA.”).               Thereafter, the parties stipulated

that MESC’s remaining fraud claims were barred by the court’s

decision because the representations at issue in those claims

were    also    not     made    in   the    APA,     and       by   a   Stipulation    of

Dismissal,      General     Dynamics       was    awarded       summary    judgment    on

MESC’s remaining fraud and negligent misrepresentation claims on

August 7, 2006.

       The district court affirmed the bankruptcy court’s entry of

summary judgment in favor of General Dynamics on the fraud and

negligent misrepresentation claims, concluding that “[b]ased on

the     specific,       unambiguous    language          of     the     Confidentiality

Agreement and Sections 3.14 and 10.10 of the APA, MESC could not

reasonably       rely      on    any       representation           outside     of     the

representations in the APA.”                In re Hovis, No. 2:06-2483-PMD,

2007    U.S.    Dist.    LEXIS   47151,      at    *54    (D.S.C.       Apr.   18,   2007)

(“Hovis III”).

       MESC timely appealed, and we have jurisdiction pursuant to

28 U.S.C.A. § 158(d) (West 2006 & Supp. 2008).




                                            10
                                            II.

      “We review de novo a bankruptcy court’s grant of summary

judgment      and   a    district    court’s      affirmance       thereof.”         In   re

Ballard, 65 F.3d 367, 351 (4th Cir. 1995).                           In an adversary

proceeding in bankruptcy, summary judgment is governed by the

standards of Federal Rule of Civil Procedure 56, see Fed. R.

Bankr. P. 7056, and a court should award summary judgment “if

the pleadings, the discovery and disclosure materials on file,

and any affidavits show that there is no genuine issue as to any

material fact and that the movant is entitled to judgment as a

matter of law,” Fed. R. Civ. P. 56(c).

      On appeal, MESC argues that the district court erred in

affirming the bankruptcy court’s grant of summary judgment in

favor    of    General      Dynamics    on        MESC’s    claims       of     fraud     and

negligent misrepresentation.                Specifically, MESC contends that

the     district        court’s     conclusion       that     the        terms     of     the

Confidentiality         Agreement     and    the    APA     bar    MESC’s        claims   is

erroneous because the APA’s terms alone are insufficient to bar

MESC’s reliance on General Dynamics’ alleged misrepresentations

and the Confidentiality Agreement may not be considered because

the APA is an unambiguous, integrated contract.

      Conversely,        General    Dynamics       contends       that    the     terms    of

both the Confidentiality Agreement and the APA independently bar

MESC’s reliance on any representations made outside of the APA

                                            11
and that neither the parol evidence rule nor the APA’s merger

clause precludes the court’s consideration of the terms of the

Confidentiality           Agreement.              Alternatively,            General      Dynamics

contends        that     it    is    entitled          to    summary     judgment      on    MESC’s

claims     of    fraud        and    negligent         misrepresentation          because       each

allegation is flawed as a matter of law.



                                                  A.

      As     a     preliminary            matter,       we    note       that    neither       party

disputes        that     South       Carolina          law    governs       MESC’s     fraud    and

negligent misrepresentation claims.                          See In re Payless Cashways,

203   F.3d       1081,    1084       (8th       Cir.    2000)      (“The     bankruptcy       court

applies      the    choice          of    law    rules       of    the   state    in    which     it

sits.”); Witt v. American Trucking Ass’ns, Inc., 860 F. Supp.

295, 300 (D.S.C. 1994) (noting that “[i]n tort actions, South

Carolina     courts       apply          the    law    of    the    place    where     the     wrong

occurred” and that “[i]n a fraud action . . . the wrong occurs

not where the alleged misrepresentations are made, but where the

plaintiff suffers the loss”).

      Thus, to sustain its claim of fraud, MESC must prove:

      (1) a representation; (2) its falsity; (3) its
      materiality; (4) either knowledge of its falsity or
      reckless disregard of its truth or falsity; (5) intent
      that the representation be acted upon; (6) the
      hearer’s ignorance of its falsity; (7) the hearer’s
      reliance on its truth; (8) the hearer’s right to rely


                                                  12
      thereon; and (9) the hearer’s consequent and proximate
      injury.

Armstrong v. Collins, 621 S.E.2d 368, 375 (S.C. 2005) (citing

Regions Bank v. Schmauch, 582 S.E.2d 432, 444-45 (S.C. Ct. App.

2003)) (emphasis added).

      And, to sustain its negligent misrepresentation claim, MESC

must show:

      (1) the defendant made a false representation to the
      plaintiff, (2) the defendant had a pecuniary interest
      in making the statement, (3) the defendant owed a duty
      of   care  to   see   that   he  communicated truthful
      information to the plaintiff, (4) the defendant
      breached that duty by failing to exercise due care,
      (5)   the   plaintiff    justifiably   relied on   the
      representation, and (6) the plaintiff suffered a
      pecuniary loss as the proximate result of his reliance
      on the representation.

Id. (citing Brown v. Stewart, 557 S.E.2d 676, 680-61 (S.C. Ct.

App. 2001)) (emphasis added).

      Although       both     parties     agree     that      South    Carolina         law

controls the elements necessary to sustain MESC’s claims, the

parties disagree on what law we should apply to determine the

effect    of   the   non-reliance        provisions      in   the     Confidentiality

Agreement and the APA.              The Confidentiality Agreement states

that it “will be governed by and construed in accordance with

the   laws     of   the   State    of    New    York    applicable      to    contracts

between      residents      of   that   State     and   executed      in     and   to   be

performed in that State,” (J.A. at 622), and the APA states that

“[a]ll    questions         concerning    the     construction,        validity         and

                                          13
interpretation of this Agreement . . . will be governed by the

internal law, and not the law of conflicts, of the State of

Delaware,” (J.A. at 128).               Although the bankruptcy court noted

that   “[c]ourts      in    [New     York   and    Delaware]      enforce      the   plain

meaning     of   an    unambiguous          contract,”     it     held     that      “South

Carolina law determines whether MESC had a right to reasonably

rely on the representations made to it.”                    Hovis II, 362 B.R. at

272 n.35.        The district court did not specifically find any

error in the bankruptcy court’s application of South Carolina

law, but concluded that the result would be the same regardless

of which state’s law governed.                    See Hovis III, No. 2:06-2483-

PMD, 2007 U.S. Dist. LEXIS 47151, at *39-*40 (“Thus, assuming

the Bankruptcy Court erred in looking to South Carolina law to

determine    whether       a   court    would      give    effect    to     these    [non-

reliance]    provisions,         such   error      was    harmless        as   the   court

examined New York and Delaware law and determined the result to

be the same regardless of which state’s law governed.”); id. at

*40-*46 (applying New York law to the Confidentiality Agreement

and    concluding     that      “the    Bankruptcy        Court     did    not    err   in

determining MESC did not have the right to rely on the alleged

misrepresentations”); id. at *46-*49 (“[T]he court agrees with

the Bankruptcy Court that Delaware courts would give effect to

the    provisions     [of      the   APA]    and    find    that     MESC      could    not

justifiably rely on MESC’s alleged misrepresentations.”); id. at

                                             14
*49-*54 (applying South Carolina law to both the Confidentiality

Agreement    and     the    APA    and    concluding            that    “MESC     could     not

reasonably       rely      on     any    representations                outside      of     the

representations in the APA”).

       On appeal, MESC, which argued before the district court

that the bankruptcy court incorrectly applied South Carolina law

to determine the effects of the agreements, has “chosen not to

challenge” the application of South Carolina law.                              (Appellant’s

Reply Br. at 6.)            On the other hand, General Dynamics, which

argued    before     the    district      court          that    the    bankruptcy        court

correctly applied only South Carolina law, now argues that New

York   law      should     control      the    effect       of    the     Confidentiality

Agreement and that Delaware law should control the effect of the

APA.     We need not resolve this choice of law issue because we,

like the courts below, conclude that the result is the same

regardless of whether South Carolina law controls the effects of

the non-reliance provisions of the APA and the Confidentiality

Agreement,      or   whether      Delaware         and   New     York    law    control    the

effects    of    the     non-reliance         provisions         of     the    APA   and    the

Confidentiality Agreement, respectively.




                                              15
                                         B.

     We    first    analyze     MESC’s      arguments   assuming      that    South

Carolina     law    governs     the    effects     of   the    Confidentiality

Agreement and the APA.

     In Redwend Ltd. P’ship v. Edwards, 581 S.E.2d 496 (S.C. Ct.

App. 2003), the South Carolina Court of Appeals concluded that a

merger    clause    which   provided     that    “[e]ach    party    agrees       that

representations, promises, agreements or understandings, written

or oral, not contained herein shall be of no force or effect,”

id. at 501, was not a non-reliance clause because it “neither

include[d]    the   words     ‘rely’   or     ‘reliance,’   nor     d[id]    it    set

forth any statement that the parties did not, or could not, rely

on the representations of the other party,” id. at 502.

     And, in Slack v. James, 614 S.E.2d 636 (S.C. 2005), the

South Carolina Supreme Court concluded that the following merger

and disclaimer provisions did not afford any protection to the

sellers against the buyers’ allegations of fraud and negligent

misrepresentation:

     21. ENTIRE    AGREEMENT.    This   written  instrument
     expresses the entire agreement, and all promises,
     covenants, and warranties between the Buyer and
     Seller.    It can only be changed by a subsequent
     written instrument (Addendum) signed by both parties.
     Both Buyer and Seller hereby acknowledge that they
     have not received or relied upon any statements or
     representations by either Broker or their agents which
     are not expressly stipulated herein.



                                         16
Id. at 637.             The court concluded that “[a]lthough the [last]

sentence in [Paragraph 21] . . . use[d] the words ‘relied upon,’

this    sentence        [wa]s     not    a    non-reliance            clause,”    because     the

sentence was not set apart and it was “contained in a paragraph

entitled,      ‘ENTIRE          AGREEMENT,’         which       indicates   that       it    [was]

merely    an       extension       of    the       merger       clause.”         Id.    at   640.

Moreover, the court noted that even if the last sentence of

Paragraph      21       could    be    considered         a     non-reliance      clause,     the

buyers        could       still        assert           their     claims     of        negligent

misrepresentation           and       fraud    because         “[a]    general    non-reliance

clause   .     .    .    does    not     prevent         one    from    proceeding      on    tort

theories of negligent misrepresentation and fraud” because to

hold otherwise “would leave swindlers free to extinguish their

victims’ remedies simply by sticking in a bit of boilerplate.”

Id. at 641 (internal quotation marks omitted).

       MESC    contends          that,      under       Slack    and    Redwend,       the   non-

reliance language of the APA alone, specifically the language

contained in Sections 3.14 and 10.10, is insufficient to bar its

claims of fraud and negligent misrepresentation.                                  We need not

determine the effectiveness of the APA’s non-reliance provisions

under    South        Carolina        law     to    resolve       the    issue     before     us,

however, because we conclude that the non-reliance language in




                                                   17
the Confidentiality Agreement alone is sufficient to bar MESC’s

claims. 1

     Paragraph   5   of   the   Confidentiality   Agreement   certainly

qualifies as a non-reliance clause under both Slack and Redwend.

First, it specifically uses the word “rely.”        Second, it states

that MESC is “not entitled to rely” on the information in the

Prospectus and that MESC would only be entitled to rely on the

representations made in the APA.        Third, it is more specific

than either of the clauses in Slack or Redwend.

     Moreover, “[i]t is undisputed that this was an ordinary

commercial transaction between sophisticated parties.”        Hovis I,

     1
       MESC argues that the parole evidence rule and the APA’s
merger clause prevent us from considering the terms of the
Confidentiality Agreement in determining whether MESC’s claims
may go forward.    But, in South Carolina, “[n]either the parol
evidence rule nor a merger clause in a contract prevents one
from proceeding on tort theories of negligent misrepresentation
and fraud.”   Slack v. James, 614 S.E.2d 636, 640 (S.C. 2005);
see also Gilliland v. Elmwood Props., 391 S.E.2d 577, 581 (S.C.
1990) (“The parol evidence rule has been held inapplicable to
tort causes of action (including negligent misrepresentation)
since the rule is one of substantive contract law. . . .We . . .
hold that neither the parol evidence rule nor the merger or
integration clause in the parties’ contract prevents Elmwood
from proceeding on its negligent misrepresentation theory.”).
Just as the parol evidence rule and the merger clause do not bar
MESC’s tort claims based on representations made before the APA
was signed, the parol evidence rule and the merger clause
likewise do not prevent the court from considering the terms of
the Confidentiality Agreement in determining whether MESC had a
right to rely on the alleged misrepresentations or whether
MESC’s reliance was justified—determinations that are made on
the totality of the circumstances. Florentine Corp. v. Peda I,
Inc., 339 S.E.2d 112, 114 (S.C. 1985); Redwend Ltd. P’ship v.
Edwards, 581 S.E.2d 496, 504 (S.C. Ct. App. 2003).


                                   18
325 B.R. at 167.            MESC was represented by a large, well-known

law firm and assisted by investment bankers, a major accounting

firm,      and    in-house      counsel,     and    Gilliam,       who    executed        the

Confidentiality         Agreement      on    behalf     of   MESC,       was    a   highly

experienced investment banker.                   Id.    And, unlike the typical

case in which the aggrieved party seeks to avoid a non-reliance

clause in a contract entered into after the misrepresentations

have been made, MESC signed the Confidentiality Agreement as a

condition        of   receipt    of   the   Prospectus       and   thus    was      put    on

notice that it could not rely on any future representations not

contained in the parties’ final agreement.

       As such, we conclude that, applying South Carolina law,

summary judgment in favor of General Dynamics is appropriate on

MESC’s      fraud     and    negligent      misrepresentation           claims      because

MESC, a sophisticated entity, could not justifiably rely, and in

fact       did    not    have     a    right       to   rely,      on     any       alleged

misrepresentations not in the APA when it expressly agreed in

the Confidentiality Agreement that it would not rely on those

statements. 2         See Florentine Corp. v. Peda I, Inc., 339 S.E.2d


       2
       Having concluded that MESC could not reasonably rely on
any representation not made in the APA under the terms of the
Confidentiality Agreement, we do not address whether each
allegation   of   fraud  and   negligent misrepresentation   is
individually flawed as a matter of law. We note, however, that,
in addition to asserting that General Dynamics’ alleged
misrepresentations induced it to enter into the APA, MESC also
(Continued)
                                            19
112, 114 (S.C. 1985) (noting that in cases involving allegations

of fraud, “[t]he right to rely must be determined in light of

the [Plaintiff]’s duty to use reasonable prudence and diligence

under     the     circumstances”         and      that   “[w]here       there       is   no

confidential          or    fiduciary    relationship        and   an   arm’s       length

transaction between mature, educated people is involved, there

is   no   right       to    rely”);    Ama   Mgmt.   Corp.    v.   Strasburger,          420

S.E.2d 868, 874 (S.C. Ct. App. 1992) (noting that in an action

in   tort       for        negligent    misrepresentation,         “[t]here         is    no

liability       where         information      is    furnished      with        a    clear

understanding that the defendant assumes no liability for its

accuracy”).

                                             C.

      In the alternative, we conclude that, even assuming that

Delaware law determines the effect of the APA and that New York




alleges that, in Paragraph 2.1 of the APA, General Dynamics
misrepresented what assets it would deliver under the agreement.
Like MESC’s other contentions, this argument is without merit.
The bankruptcy court rejected this argument, noting that it had
already granted summary judgment to General Dynamics on MESC’s
breach of contract claim.     In re Hovis, 362 B.R. 247, 270
(Bankr. D.S.C. 2006) (“Hovis II”).    We find no error with the
bankruptcy court’s conclusion that MESC may not now “make an end
run around that ruling by repackaging a breach of contract claim
as a claim for misrepresentation.” Id.; see Vann v. Nationwide
Ins. Co., 185 S.E.2d 363, 364 (S.C. 1971) (noting that “a mere
violation of a contract will not support an allegation of
fraud”).


                                             20
law governs the effect of the Confidentiality Agreement, summary

judgment in favor of General Dynamics is still appropriate.

       As    discussed         above,       MESC     contends      that       the    non-reliance

language of the APA alone is insufficient to bar its claims.

MESC correctly notes that the Delaware Supreme Court has stated

that    “a    merger         clause    does     not       preclude      a    claim       based   upon

fraudulent misrepresentations.”                      Norton v. Poplos, 443 A.2d 1, 6

(Del.    1982).          But     more       recent       Delaware       decisions        have    read

Norton        as      “turn[ing]              importantly           on        the        relatively

unsophisticated          nature        of     the    parties      involved          in   the     case,

[and] the fact that they were entering a simple real estate

contract      and     did      not     bargain           over    the    specific         disclaimer

language.”          Kronenberg v. Katz, 872 A.2d 568, 590 (Del. Ch.

2004).       These more recent decisions have “consistently held that

sophisticated parties to negotiated commercial contracts may not

reasonably rely on information that they contractually agreed

did    not    form       a    part     of     the        basis    for       their    decision      to

contract.”         H-M Wexford LLC v. Encorp, Inc., 832 A.2d 129, 142

n.18    (Del.      Ch.       2003);     see    also       Great    Lakes       Chem.      Corp.    v.

Pharmacia Corp., 788 A.2d 544, 556 (Del. Ch. 2001) (“To allow

Great Lakes to assert, under the rubric of fraud, claims that

are     explicitly            precluded        by        contract,       would       defeat       the

reasonable         commercial         expectations          of   the     contracting        parties

and eviscerate the utility of written contractual agreements.

                                                    21
For   those   reasons,    I   conclude      that   in   these   circumstances,

Delaware law permits explicit contract disclaimers to bar Great

Lakes’ fraud claims.”).        And, in Kronenberg, the Chancery Court

concluded:

      [F]or a contract to bar a fraud in the inducement
      claim, the contract must contain language that, when
      read together, can be said to add up to a clear anti-
      reliance   clause    by   which    the    plaintiff   has
      contractually promised that it did not rely upon
      statements outside the contract’s four corners in
      deciding to sign the contract.        The presence of a
      standard integration clause alone, which does not
      contain explicit anti-reliance representations and
      which   is  not   accompanied   by    other   contractual
      provisions   demonstrating   with    clarity   that   the
      plaintiff had agreed that it was not relying on facts
      outside the contract, will not suffice to bar fraud
      claims.

872 A.2d at 593.

      In this case, MESC (represented by a team of commercially

experienced     businessmen)    and   General      Dynamics     negotiated   the

terms of the APA over a period of months.                 Section 10.10, the

merger clause, specifically states that the APA “supersedes any

prior understandings, agreements or representations by or among

the parties, written or oral, that may have related in any way

to the subject matter hereof,” (J.A. at 127) (emphasis added),

and   Section    3.14    provides     that,    “except    for    the   specific

representations . . . set forth in the agreement, the purchased

assets will be transferred at the closing in ‘as is’ condition .

. . and all other representations . . . are . . . expressly


                                       22
disclaimed.”           (J.A.     at   112.)         We   think     that,     “when     read

together,” these provisions “can be said to add up to a clear

anti-reliance clause by which the plaintiff has contractually

promised    that      it   did    not      rely   upon      statements     outside      the

contract’s      four    corners       in    deciding     to    sign    the    contract.”

Kronenberg,     872     A.2d     at   593.        And,   given     the   sophisticated

nature of the parties to the APA, we agree with the district

court    that   Delaware       courts       would    find     that    MESC    could    not

justifiably rely on, and in fact had no right to rely on, any

representations not contained in the APA itself.                             Thus, if we

apply Delaware law to determine the effect of the APA’s non-

reliance provisions, we conclude that summary judgment in favor

of General Dynamics is appropriate on MESC’s fraud and negligent

misrepresentation claims based solely on Sections 3.14 and 10.10

of the APA, and we have no need to consider the effect of the

terms of the Confidentiality Agreement under New York law.

        Moreover, even assuming that, under Delaware law, the APA’s

non-reliance provisions are ineffective to bar MESC’s claims,

MESC’s claims would still be barred because Paragraph 5 of the

Confidentiality Agreement is a valid non-reliance clause under

New York law.          It is well-settled in New York that “[u]nlike a

general     merger      clause,       a    specific      written      disclaimer      will

vitiate    an    allegation       that      one     party     reasonably      relied    on

alleged misrepresentations of the other party in executing a

                                             23
contract,”   CFJ    Assocs.     of   N.Y.,    Inc.   v.    Hanson   Indus.,   711

N.Y.S.2d 232, 235 (N.Y. App. Div. 2000), and we find this rule

particularly       applicable        where    as     here     a     commercially

sophisticated party agrees, prior to entering negotiations, that

it will not rely on any representations except those made in the

final agreement. 3



                                       III.

     For the foregoing reasons, we affirm the grant of summary

judgment   to   General   Dynamics       on   MESC’s      fraud   and   negligent

misrepresentation claims.

                                                                         AFFIRMED




     3
      We note that New York law also provides that “even where
the parties have executed a specific disclaimer of reliance on a
seller’s representations, a purchaser may not be precluded from
claiming reliance on any oral misrepresentations if the facts
allegedly misrepresented are peculiarly within the seller’s
knowledge.”   Comi v. Breslin & Breslin, 683 N.Y.S.2d 345, 349
(N.Y. App. Div. 1999).    This rule is inapplicable here because
MESC agreed that it would not rely on any representations made
by General Dynamics, including those involving facts peculiarly
within General Dynamics’ knowledge, unless the representations
were included in the final agreement, the APA.      None of the
alleged misrepresentations are included in the APA.


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