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Reynolds v. University of Pennsylvania

October 25, 2010

FRANK REYNOLDS
v.
THE UNIVERSITY OF PENNSYLVANIA



The opinion of the court was delivered by: O'neill, J.

MEMORANDUM

Reynolds alleged that Penn breached its contract with him or, alternatively, that Penn had been unjustly enriched. At the conclusion of a six day trial, the jury found that Penn had been unjustly enriched and awarded Reynolds $66,000. Both parties filed post trial motions. Reynolds argues that I erroneously excluded evidence at trial and therefore a new trial is warranted. Penn argues that for several reasons it is entitled to judgment as a matter of law ("JMOL"). The motions are fully briefed and presently ripe for disposition.*fn1 For the following reasons, I will deny Reynolds's motion for a new trial and grant Penn's motion for JMOL.

BACKGROUND

Reynolds was a student in Penn's Executive Masters in Technology Management program. He alleges that Penn promised that upon his completion of the program Reynolds would be entitled to certain benefits. He further alleges that he never received such benefits. As a result, Reynolds filed this lawsuit.

Prior to his enrollment in the EMTM program, Reynolds was a marketing executive at the Xerox Corporation. Trial Tr. 58:1-10, Reynolds Test. (June 15, 2010). At the same time, he also served as President and CEO of Expand the Knowledge, a not-for-profit company that he had co-founded. Id. at 40:15-25. He testified that he logged approximately 110 hours of work per week between the two jobs. Id. at 40:15-16.

Reynolds first learned about the EMTM program from an advertisement in an in-flight magazine he reviewed while traveling. Id. at 40:10-12. At that time, Reynolds held four degrees: a Bachelor of Science degree in Marketing from Rider University; a Master of Science degree in Psychology from Chestnut Hill College; a Master of Science degree in E-Business from Temple University and a Master of Business Administration degree in Health Administration from Saint Joseph's University. See Reynolds's App. for Admission to Graduate Studies, Part I (Pl.'s Ex. 7). He testified that the presence of a Wharton logo initially attracted him to the advertisement. Trial Tr. 41:18-19, Reynolds Test. (June 15, 2010). He believed that he did not need additional education but would benefit from associating himself with what he referred to as "the Wharton brand." Id. at 42:10-19. Upon concluding his travels, he visited the Wharton website to find out more about the EMTM program. Id. at 43:14-23. While there, he claimed to have limited his research to the section of the website setting forth the EMTM program's alumni benefits. Id. at 46:12-19 ("Q. Now was there some particular reason that you focused on or read the alumni benefits? A [by Reynolds]. It was the only thing I was interested in."). That section promised EMTM applicants that, upon graduation from the program, they would be entitled to the full advantages of being Penn Engineering alumni, Wharton alumni and Penn Alumni. Perhaps the most significant benefit is the opportunity to join the alumni network and the most important tools to enable that network are the alumni directories. There are actually 2 alumni directories. The Penn alumni directory is available to all graduates of the University. The only school that provides a distinct alumni network is Wharton, in which you are included as an EMTM graduate. If you have not already done so, register on-line and confirm that your information is up-to-date in both directories. The Wharton directory is part of WAVE (Wharton Alumni Virtual Experience) at http://www.wave.wharton.upenn.edu/. You can search for other EMTMers in this directory by searching for cohort =X. The Penn directory uses the same technology, but they are different databases and contain different data. So be sure to also register and confirm your information for this larger and broader network by visiting www.alumniconnections.com/olc/pub/UPN. While Penn Engineering does not provide a distinct directory, the EMTM office does want to maintain close ties with our alumni. So please be sure to share your most up-to-date contact information with them at EMTM@seas.upenn.edu or 215-898-5241.

In addition to alumni directories, you have access to 2 separate lifelong e-mail addresses, an unchanging e-mail address that you can use throughout your lifetime. Once you have a lifelong e-mail address, you can update the address for incoming mail to be forwarded. The standard address formats are f i r s t n a m e . l a s t n a m e . c l a s s at w h a r t o n . u p e n n . e d u a n d firstname.lastname@alumni.upenn.edu. The "class" used in your Wharton address is Wtyy; WT stands for Wharton Technology, and yy is the year of your graduation. You establish your lifelong e-mails at WAVE and alumniconnections, respectively.

EMTM Website,*fn2 Alumni Benefits (Pl.'s Ex. 5); see also Trial Tr. 49:13-50:1, Reynolds Test. (June 15, 2010) (discussing alumni benefits section of EMTM website).

Reynolds next telephoned Joel Adler, then-associate director of the EMTM program, in an attempt to learn more about the program. Trial Tr. 46:14-16, Reynolds Test. (June 15, 2010). Adler invited Reynolds to attend an informational session directed toward prospective students.

Id. at 52:10-12. At the informational session, Adler gave a PowerPoint*fn3 presentation on the benefits of the EMTM program. Id. at 61:6-8. Although paper copies of the presentation were distributed before Adler spoke, Reynolds testified that he did not receive a copy because they had run out by the time he arrived. Id. at 52:11-16. He also testified that he was unable to see the PowerPoint presentation from where he was sitting because a spinal cord injury prevented him from turning his head in the direction of the presentation. Id. at 61:9-17. Reynolds later received both a paper copy and an electronic copy of the PowerPoint presentation but he testified that he never looked at either version. Id. at 61:20-62:8. Reynolds testified that at the informational session Adler informed the audience that EMTM alumni have "full access to all Wharton resources." Id. at 53:3-4. However, Reynolds stated that he was "shocked" to learn at that session that the degree conferred upon EMTM graduates was a Master of Science in Engineering not a "Wharton degree" as he expected. Id. at 53:4-6.

After the informational session, Reynolds questioned Adler at length about why the degree was issued through the School of Engineering. Id. at 53:12-13. According to Reynolds, Adler explained to him that due to "turf wars" at Penn, "Wharton had to partner with [E]ngineering in order to issue the degree." Id. at 53:17-24. Adler clarified, however, that EMTM graduates receive three documents: (1) a degree issued by the University; (2) "a document signed by both deans of Wharton and Penn Engineering"; and (3) "a Moore Certificate [which represents] the engineering school's contribution to the program." Id. at 54:1-9. Reynolds testified that he expected to receive each of the three documents. Id. at 54:9-12.

Reynolds, who was primarily concerned with benefitting from the Wharton brand, asked Adler how he could represent his status with respect to Wharton. Id. at 54:12-14. Reynolds testified that Adler told him "it depends on who you're talking to . . . you can use it any way you want . . . . if you're with engineers, you can talk about your Master's of Science in Engineering, and if you're with business people, you can talk about your Master's of Technology Management from the Wharton School." Id. at 54:14-19. Reynolds recalled that Adler, who had a Ph.D. in computer science from Wharton, told him "I'm a Wharton alumni [and] you're going to be equal to me." Id. at 55:21-23.

After considering all the information available to him, Reynolds decided to apply for admission to the EMTM program. Id. at 56:13-14. He addressed his application to "EMTM, Graduate Admissions Office, Penn Engineering." Id. at 58:25-59:11. In July 2002, Reynolds was accepted into the program. See Email from Reynolds to Adler (July 25, 2002, 5:50:01 A.M.) (Pl.'s Ex. 9).

He began his EMTM studies in August 2002. Trial Tr. 65:10-11, Reynolds (June 15, 2010). He testified that at first his experience "was good, we were able to use all the Wharton resources, I was a Wharton student, I was proud, I was showing up [] every other week." Id. at 65:20-22. In his first week in the EMTM program, with the help of Wharton's career services department, Reynolds was hired by the Siemens Corporation as the Director of Global Business Development. Id. at 66:1-3. In his new role, Reynolds was "responsible for 132 countries" and reported directly to the CEO, George Nolan. Id. at 66:1-6. By his own account, Reynolds was "the Wharton guy" at Siemens. Id. at 93:7. According to Reynolds, "everybody called [George Nolan] my godfather," id. at 94:24, and he was one of eight people "in the high potential candidate pool to be the next CEO." Id. at 93:1-2. He earned as much as $269,000 at Siemens. Id. at 102:3-5. Reynolds testified that as a result of his new job, he was "absolutely thrilled . . . really on top of the world." Id. at 66:8-9. Indeed, Reynolds acknowledged that "this [was] exactly what I was paying for at Wharton[.]" Id. at 66:7-9.

Despite his newfound professional success, Reynolds claimed that he was immediately dissatisfied with the education he was receiving in the EMTM program. Id. at 66:22-67:3. Eighteen of his twenty-one professors were adjuncts--a category of professors that Reynolds characterized as "hired guns." Id. at 66:16-22. In addition, Reynolds described the EMTM courses as "half courses" which required only eighteen hours of instruction as opposed to the thirty-six to forty-five hours required by "full Wharton courses." Id. at 67:6-9. Nevertheless, Reynolds successfully completed his first year of studies. Id. at 68:21-23.

It was not until the Autumn of 2003, the beginning of Reynolds's second year, that "everything went haywire." Id. at 69:5. By Reynolds's account, students were "outraged" over the fact that Penn had hired a new co-director of the EMTM program, Ziv Katalan, who allegedly intended to "eliminate [the] Wharton brand." Id. at 69:7 - 70:3. Reynolds's first disagreement with the new administration occurred while he was helping a student society organize a seminar series. When he attempted to reserve a room in Jon M. Huntsman Hall, a Wharton School building, he was told that he was not a Wharton student and therefore could not reserve a room in Huntsman Hall. Id. at 73:5-11. Because he had worked on a similar project during his first year in the program and had no trouble reserving a room, id. at 73:5-6, he called the EMTM program to find out why the policy had changed. Id. at 74:21-23. He was told that Katalan had forbidden EMTM students from reserving rooms in Wharton School buildings. Id. at 74:24-25.

The inability to reserve a room in Huntman Hall did not prevent Reynolds from going forward with the speaker series. On September 9, 2003, he invited Robert Cohen, Chief Information Officer of AstraZeneca, to speak at the seminar series. See Letter from Reynolds to Robert Cohen, Chief Information Officer, AstraZeneca (Sep. 9, 2003) (Def.'s Ex. 79). That letter was sent on Wharton letterhead and purported to extend the invitation "[o]n behalf of the Wharton School of Business." Id. Reynolds, along with his EMTM classmate Anurag Harsh, also circulated a flier on Wharton letterhead advertising a presentation given by John C. Carrow, Chief Information Officer of the Unisys Corporation. See Wharton Technology Club Executive Seminar Series Advertisement (Def.'s Ex. 81 at 18). The flier indicated that the presentation was sponsored by Siemens and supported by the Wharton Technology Club.*fn4 See id. Reynolds claimed that he had received permission from the Wharton Corporation to publicize these events as being sponsored by the Wharton School. Trial Tr. 80:12-14, Reynolds Test. (June 15, 2010). Katalan testified, however, that invitations of this sort were never extended by student organizations or individual students. Trial Tr. 31:21-23, Katalan Test. (June 17, 2010). Instead, the Dean of the Wharton School and Vice Dean of the Graduate Division ordinarily invited speakers to Wharton School seminars. Id. at 31:21-23.

As a result of these publications, Katalan became concerned that Reynolds and Harsh were misrepresenting themselves as Wharton students and, worse, were purporting to act on behalf of the Wharton School. Id. at 26:11-23. So Katalan scheduled a meeting at a local Starbucks with Reynolds and Harsh to discuss his concerns. Trial Tr. 22:13-14, Reynolds Test. (June 16, 2010); 57:6-14, Katalan Test. (June 17, 2010). Reynolds testified that Katalan told those in attendance that they were not Wharton students. Trial Tr. 83:6-8, Reynolds Test. (June 15, 2010). Reynolds also asserted that Katalan "basically attacked us . . . smashing a book on our table . . . [spilling] coffee all over us, flipping out on us . . . ." Id. at 82:9-12. Katalan denied discussing in any manner the students' affiliation with the Wharton School and he further denied raising his voice, slamming a book or causing coffee to spill. Trial Tr. 64:22-65:2, Katalan Test. (June 17, 2010).

Following the meeting, Reynolds wrote to Judith Rodin, the President of the University of Pennsylvania, "to seek protection . . . from what has become a witch-hunt against me and conducted by Ziv Katalan Ph.D." See Letter from Reynolds to Rodin (Sep. 29, 2003) (Def.'s Ex. 88). Notably, Reynolds recited several of Katalan's "intolerable actions" but did not include allegations that Katalan slammed a book or spilled coffee. See id. He also did not allege in his letter to Rodin that Katalan told those in attendance that they were not Wharton students.

See id.; but see Trial Tr. 83:6-8, Reynolds Test. (June 15, 2010) (Reynolds testified: "[y]eah, [Katalan] said we were not Wharton students . . . .").

Katalan's actions lead to a "flurr[y] of surveys," presumably by student organizations, asking if EMTM students believed themselves to be Wharton students. Id. at 75:10-13. Katalan's own survey lead to yet another altercation between Reynolds and Penn's administration. Id. at 77:17-25. Reynolds believed that Katalan's survey contained a flaw that prevented the software from recording votes in favor of the answer Reynolds preferred. Id. at 77:21-23. So he voted multiple times. Id. at 78:3-6. This prompted Penn's Office of Student Conduct to initiate disciplinary proceedings against Reynolds for violating the Code of Student Conduct--which Reynolds described at trial as "some kind of stupid code"--by voting multiple times in the survey and by representing himself to be a Wharton student. See Letter from Michelle Goldfarb, Director of the Office of Student Conduct, to Reynolds (Oct. 15, 2003) (Pl.'s Ex. 22); see also Trial Tr. 78:14, 81:23-25, Reynolds Test. (June 15, 2010). Reynolds, apparently unimpressed by Penn's disciplinary efforts, described the proceedings as "petty" and "pathetic." Trial Tr. 78:15, Reynolds (June 15, 2010). From the witness stand at trial, Reynolds reprimanded the Penn administrators in attendance: "I mean, you guys should all be embarrassed." Id. at 82:1.

On November 1, 2003, Penn administration scheduled a town hall meeting. The purpose of the meeting was to clarify the nature of the EMTM program's affiliation with the Wharton School. See Townhall Meeting Tr. at 7-8 (Nov. 1, 2003).*fn5 At that meeting Anjani Jain, Dean of the Wharton School, informed the audience that "you are students in the engineering school . . . . The admissions are done [in] engineering. You go to commencement from Penn Engineering, and the degree you get is an engineering degree." Id. at 8. Jain also stated "I think for all intents and purposes your access to our alumni services is indistinguishable from those who have Wharton degrees." Id. at 15. Lyle Ungar, an EMTM co-director, acknowledged that "[there have] occasionally been mistakes made from within" with respect to the marketing of the program. Id. at 35. He elaborated: "some of them to my horror only mention Wharton, which I think is, you know, unforgivable." Id. However, when asked later whether the EMTM program was "marketed as an exclusively Wharton program to any of you," unidentified audience members responded in the negative. Id. at 40.*fn6

According to Reynolds, the fact that he was considered an engineering student and not a Wharton student was potentially career ending. Trial Tr. 94:14-15, Reynolds Test. (June 15, 2010). He felt that in order to be competitive in his field, he needed to have a degree from a top ten business school.*fn7 Id. at 97:12-14. In Reynolds's opinion, the EMTM degree, which he completed in 2004, did not satisfy this need. So he quit his job at Siemens and enrolled, in September 2005, in the Massachusetts Institute of Technology's executive MBA program.*fn8 Id. at 96:11-25. While his family remained in the Philadelphia area, Reynolds relocated to Massachusetts to complete the year-long program.

II. Procedural History

This case has evolved rather dramatically over the course of its five year life span.

Reynolds commenced this lawsuit on October 18, 2005 by filing a writ of summons in the Philadelphia County Court of Common Pleas. On March 6, 2006, Reynolds filed a verified complaint that alleged eight counts*fn9 against six defendants.*fn10 All eight counts shared a common core of operative facts: essentially, that Penn had made several representations to Reynolds concerning the nature of the EMTM program and some or all of those representations later turned out to be false. At the same time Reynolds filed his lawsuit, his classmate Harsh filed a lawsuit that contained allegations similar to those contained in Reynolds's complaint. See Harsh v. Univ. of Penn., No. 06-1236.*fn11 The cases proceeded along parallel schedules but were never formally consolidated.*fn12

Penn removed the case to this Court on March 22, 2006. (Doc. No. 1). Subject matter jurisdiction was predicated on 28 U.S.C. § 1331 as count 8 of the complaint alleged violations of the federal RICO statute. Penn filed an answer on May 16, 2006 and the case proceeded to discovery.

The discovery process was contentious, requiring frequent judicial intervention. Penn was compelled to file no fewer than ten discovery motions to obtain necessary documents and information from Reynolds and Harsh.*fn13 On October 10, 2006, Penn filed a motion to compel Reynolds and Harsh to produce the original paper and electronic copies of several documents that Reynolds had included in his complaint. See Def.'s Mot. to Compel (Doc. No. 12). In that motion, Penn asserted for the first time its belief that Reynolds had altered some of the evidence to support his case. See id. at 3 ("The University suspects that Harsh and/or Reynolds altered the documents for this case."). That motion was referred to Magistrate Judge Charles B. Smith, who ordered Reynolds to produce the requested information. See Order (Nov. 28, 2006) (Doc. No. 17).

On June 14, 2007, Penn filed another motion to compel Reynolds and Harsh to produce electronic data concerning the PowerPoint presentation and emails that they alleged to have contained misrepresentations by Penn. See Def.'s Mot. to Compel. (June 14, 2007) (Doc. No. 31). In essence, Penn's motion requested access to Reynolds's and Harsh's personal computers and Harsh's email account. See id. at 6.*fn14 On July 12, 2007, I granted Penn's motion. See Order (July 12, 2007) (Doc. No. 33).*fn15

On August 4, 2008, Penn moved for an order excluding the documents that it suspected had been altered by Reynolds and Harsh. See Def.'s Mot. in Limine (Doc. No. 43). During discovery, Penn had concluded that the PowerPoint presentation that Reynolds claimed to have relied upon in 2002 contained a Wharton logo that was not available until 2003. See id. at 8. Additionally, the allegedly altered presentation had purportedly been saved on Reynolds's computer in 2002 with Adobe 6.0 software that did not become available until 2003. See id. at 9. This led Penn to conclude that "the electronic file of [the] fraudulently altered presentation shows signs of date manipulation." See id. at 8-9. Upon inspection of Reynolds's computer, Penn found several versions of an email sent by Adler to Harsh discussing the EMTM program. See id. at 9-10. Those versions were different from the one recovered from Adler's computer.

See id. These inconsistencies led Penn to believe that Reynolds and Harsh had fraudulently altered the evidence to support their case against Penn. See id. Penn hoped that a favorable ruling on the motion would either "form the basis of a dispositive motion because [Reynolds's complaint is] derived from fraud [or] give [Reynolds] the opportunity to consider withdrawing [his] suit[]." Id. at 10-11. On September 15, 2008, I denied the motion, reasoning that "[w]hether plaintiff has fabricated evidence as defendants assert will be a question for the jury." See Order (Doc. No. 46).

On September 15, 2008, Harsh voluntarily withdrew his case with prejudice. I granted costs to Penn which the Clerk of Court calculated to be $12,222.49. See Order, No. 06-1236 (Dec. 17, 2008) (Doc. No. 54). Several days later, Richard J. Heleniak, the attorney who ultimately would represent Reynolds at trial, entered his appearance on behalf of Reynolds.

On November 7, 2008, Penn moved to compel the videotaped deposition of Harsh. See Def.'s Mot. to Compel (Doc. No. 49). I granted that motion. See Order (Nov. 20, 2008) (Doc. No. 51).

Less than two weeks before trial was scheduled to begin,*fn16 Reynolds voluntarily dismissed his RICO claim. Pl.'s Stipulation of Dismissal (Sep. 1, 2009) (Doc. No. 65). On the same day, he filed a motion to remand to the Court of Common Pleas on the grounds that after dismissal of the RICO claim, this Court lacked subject matter jurisdiction. Pl.'s Mot. to Remand (Sep. 1, 2009) (Doc. No. 66). I denied the motion and retained supplemental jurisdiction over the state law claims. See Order (Sep. 8, 2009) (Doc. No. 69). Trial was rescheduled for September 28, 2009.

On September 18, 2009, Reynolds amended his trial exhibit list to include a DVD recording of the November 1, 2003 town hall meeting. See Supplement to Pretrial Mem. (Doc. No. 77). Penn, in response, moved to exclude any reference to the town hall meeting. See Def.'s Mot. in Limine (Sep. 23, 2009) (Doc. No. 81). It argued that the meeting and statements made therein were subsequent remedial measures and therefore inadmissible under Rule 407 of ...


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