Courts have held that equitable estoppel, as an equitable defense, “ha[s] no place in an action at law for enforcement of a guaranty.” Daiwa Special Asset Corp. v. Desnick, 2002 WL 1997922, at *12 (S.D.N.Y. Aug. 29, 2002) (citations omitted); accord Avamer 57 Fee LLC v. Gorgeous Bride, Inc., 2022 WL 1305986, at *5 (N.Y. Sup. Ct. May 02, 2022) (citation omitted); United States v. Gordon, 78 F.3d 781, 786 (2d Cir. 1996).
Myriad district courts have concluded that a finding of bad faith is required to justify invocation of the unclean hands doctrine. SeeDeere & Co. v. MTD Holdings, Inc., No. 00-CV-5936 (LMM), 2004 WL 1794507, at *2 (S.D.N.Y. Aug. 11, 2004) ("It is undisputed that an unclean hands defense requires a finding of bad faith."); Daiwa Special Asset Corp. v. Desnick , No. 00-CV-3856 (SHS), 2002 WL 1997922, at *12 (S.D.N.Y. Aug. 29, 2002) ("[A]n unclean hands defense requires a finding of bad faith which the Court has declined to do."); Obabueki v. IBM , 145 F. Supp. 2d 371, 401 (S.D.N.Y. 2001) (noting that the "unclean hands defense requires a finding of bad faith."). The doctrine is not lightly invoked.
Defendants plead in conclusory terms that the Secretary's claims are barred by the doctrines of estoppel, laches, and unclean hands; "mere recitation of the legal buzzwords, however, will not suffice." Saratoga Harness Racing, Inc. v. Veneglia, No. 94 Civ. 1400, 1997 WL 135946, at *6 (N.D.N.Y. Mar. 18, 1997) (striking defenses of estoppel and laches); Obabueki, 145 F. Supp. 2d at 401 ("Pleading the words 'unclean hands' without more . . . is not a sufficient statement of such defense."); Daiwa Special Asset Corp. v. Desnick, No. 00 Civ. 3856 (SHS), 2002 WL 1997922, at *12 (S.D.N.Y. Aug. 29, 2002) (striking estoppel, laches, and unclean hands defenses on grounds that "mere pleading of the defense . . . without more is insufficient"). Were the Court to permit Defendants to amend their Answers to include the factual allegations contained in their opposition briefs, Defendants do not allege facts that would support an estoppel, laches, or unclean hands defense.
However, the unique circumstances that existed in Bank of China do not exist in this case. As the court in Daiwa Special Asset Corp. v. Desnick, Civ. 00-3856, 2002 WL 1997922, at *10, 2002 U.S. Dist. LEXIS 16164, at *32 (S.D.N.Y. Aug. 29, 2002) explained, so too does this Court conclude: Assuming arguendo that an implied duty of good faith exists, this Court would still find for HVB.