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Dreiling Millennium Trust Ii v. Reliant Renal Care

June 29, 2011

DREILING MILLENNIUM TRUST II,
PLAINTIFF,
v.
RELIANT RENAL CARE, INC., DEFENDANT.



The opinion of the court was delivered by: Goldberg, J.

MEMORANDUM OPINION

This case involves allegations of intentional interference with contractual relations arising out of the attempted purchase by Defendant, Reliant Renal Care, Inc. ("Reliant"), of several dialysis centers partly owned by Plaintiff, Dreiling Millennium Trust II ("Dreiling"). Dreiling alleges that after negotiations broke down, Reliant used confidential information in an attempt to sever Dreiling's relationship with two physicians (collectively, the "Doctors") who co-own two of the dialysis centers with Dreiling.

Before the Court is Reliant's motion to dismiss. The primary issue raised in this motion is whether an actual breach of contract must be alleged in order to properly plead an intentional interference of contract claim. Because I find that such allegations are required and have not been pleaded by Plaintiff, I will grant Defendant's motion.

I. Background

The relevant facts, viewing the complaint in the light most favorable to the Plaintiff, are as follows:

Dreiling is a Florida trust that owns and operates numerous dialysis facilities that provide care for patients with end-stage renal disease. In two of those facilities, including the Pennsylvania Dialysis Clinic of Reading (PDCR),*fn1 the Doctors are fifty percent partners with Dreiling.

In March of 1987, the Doctors and Dreiling signed a Voting Agreement (the "Agreement"), which was intended to govern the future transfer of both Dreiling's and the Doctors' shares in the PDCR. Included in the Agreement was an Impasse provision, which allowed the parties to declare an impasse in the event that they were unable to agree on the management of the facility. Under the Agreement, declaration of an impasse triggers a Buy-Sell provision, whereby one of the parties names a price, and the other chooses whether, at that price, it wants to be the buyer or seller. If buyer, that party purchases the other party's shares for the named price, and if seller, that party sells its shares at the named price. The declaration of an impasse ends the business relationship between Dreiling and the Doctors. (Compl. ¶¶ 7-9.)

Defendant Reliant is a Delaware corporation that also owns and operates dialysis centers. (Compl. ¶¶ 2-3.) Early in 2009, Reliant entered into negotiations with Dreiling for the purchase of five dialysis centers,*fn2 including the two owned by Dreiling and the Doctors. By June of the same year, the substance of these negotiations had been reduced to five separate Term Sheets, one for each of the centers. The Term Sheets provided for a due diligence period, to take place over the next several months. During this period, Dreiling provided Reliant with confidential information, including a copy of the Agreement between Dreiling and the Doctors. In October 2009, Dreiling alleges that Reliant took the position that the sale could only be completed on "dramatically" different terms than the parties had agreed to in the Term Sheets. Dreiling declined, and both parties' obligations under the Term Sheets ended. (Compl. ¶¶ 12-16, 20.)

Dreiling claims that at this point Reliant, unsatisfied with the failed transaction, concocted a scheme to gain control of some of the centers, particularly PDCR. Because Reliant wanted control -- more than a fifty percent interest -- any sale would have to involve the purchase of some of Dreiling's interest in PDCR. Therefore, Dreiling asserts that Reliant began to correspond directly with the Doctors, encouraging them to declare an impasse under the Agreement, triggering the Buy-Sell provision allowing the Doctors a chance to purchase Dreiling's interest (or, conversely, to be bought out by Dreiling). (Compl. ¶¶ 18, 20-22.)

According to Dreiling, Reliant's work bore fruit. On March 23, 2010, the Doctors sent a letter to Dreiling expressing their desire to complete a sale of the PDCR to Reliant based on Reliant's proposed terms. The Doctors informed Dreiling that, absent renewed discussions with Reliant, they were prepared to declare an impasse under the Agreement. Dreiling responded on March 31, 2010, proposing several alternatives to the declaration of an impasse and the ending of the relationship. Apparently uninterested in the alternatives, the Doctors responded to Dreiling's letter on April 7, 2010 with a counter proposal. (Compl. ¶¶ 23-25.)

Importantly, according to the complaint, despite these varying proposals and counter proposals, Dreiling and the Doctors have "been unable to reach any resolution" regarding this conflict. Nonetheless, Dreiling asserts that Reliant is still actively encouraging the Doctors to declare an impasse. Dreiling also alleges that Reliant's meddling has fostered "discord" with the Doctors and, as a result, the value of both the PDCR and the Reading Dialysis Center has declined. Dreiling complains that if Reliant is allowed to continue in its current course of action, Dreiling may be unable to pursue a sale of the PDCR on the open market. (Compl. ¶¶ 25-26, 32-33.)

II. Standard of Review

When considering a motion to dismiss, the court must assume the veracity of well-pleaded factual allegations, construe them in a light most favorable to the plaintiff, and "then determine whether they plausibly give rise to an entitlement to relief." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009) (reaffirming Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)); Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). The court may only look to the facts alleged in the complaint and its attachments when deciding a motion to dismiss. Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994). "'[B]are-bones' allegations will no longer survive a motion to dismiss: 'threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.' To prevent ...


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