United States District Court, E.D. Pennsylvania
E.K. PRATTER United States District Judge
Burris seeks equitable relief and damages for an array of
claims arising out of Main Line Health System's
(“Main Line” or “MLH”) alleged abuse
of a purported legal relationship with Mr. Burris and Main
Line's alleged misuse of materials obtained during the
course of that relationship in connection with the purchase
of real property from Saint Charles Borromeo Roman Catholic
Seminary (“St. Charles” or “the
Seminary”). Mr. Burris also alleges, inter
alia, that St. Charles aided and abetted Main Line's
breach of fiduciary duty and is liable for civil conspiracy.
Line and St. Charles each moved for summary judgment shortly
after the Complaint was filed, seeking to dismiss all of Mr.
Burris's claims against them. Because the Court concludes
that the evidence in the record raises some genuine issues of
material fact, summary judgment will be denied.
and Procedural History
Burris is the Chairman and Chief Executive Officer of various
business entities involved in the development and operation
of post-acute care facilities in the tri-state area, and
beginning in 2013, he sought to expand his network by
acquiring a 40-acre parcel of land(the “Parcel”)
located in Lower Marion Township, Pennsylvania and owned by
St. Charles Seminary. Lankenau Hospital, which is is owned
and operated by defendant Main Line, is located across the
street from the Parcel. Burris Aff. ¶ 10. After reading
an article published by the Philadelphia Inquirer
reporting that the Archdiocese of Philadelphia was
considering selling the Parcel, Mr. Burris contacted
officials at St. Charles about acquiring it in order to open
and operate a post-acute care facility. Burris Aff. ¶ 5.
Seminary engaged a broker-Holliday Fenoglio Fowler, L.P.
(“HFF”)-to list the Parcel and manage the bidding
process. Summary Judgment Record (“S.J.R.”), at
1-4. Jeffrey Julien, the Managing Director at HFF, served as
the point person for the Seminary. Mr. Burris submitted a
first-round bid for the Parcel in December 2013 and a
second-round bid in January 2014. S.J.R. 3-9; S.J.R.
17-18. After he submitted his second-round bid,
Mr. Burris engaged professionals to, among other things,
draft “Renderings and Plans” and ensure his
planned facility would comply with Township requirements.
Burris Aff. ¶¶ 8-9. The Renderings and Plans
describe possible improvements to the Parcel if Mr.
Burris's bid was successful. S.J.R. 23-36; Burris Aff.
Burris and Main Line Discuss Involvement
April 2014, members of St. Charles's Board of Directors
encouraged Mr. Burris to meet with John “Jack”
Lynch III, Main Line's President, due to Main Line's
neighboring Lankenau Hospital. S.J.R. 38. At this
recommendation, Mr. Burris contacted Mr. Lynch and the two
began discussing possibilities for the Parcel. S.J.R. 11;
Burris Aff. ¶ 12. In May 2014, Mr. Burris invited Mr.
Lynch, Jo Ann Magnatta (Main Line's Senior Vice President
of Facilities Design and Construction), Donna Phillips
(President of Bryn Mawr Rehabilitation Hospital), and other
Main Line executives on a tour of a post-acute care facility
he owns in Moorestown, New Jersey. Burris Aff. ¶ 15.
to Mr. Burris, Main Line executives were “blown
away” by his New Jersey facility, and after the tour,
Mr. Lynch told Mr. Burris “I want in, ” meaning,
in Mr. Burris' estimation, that he wanted Main Line to
join Mr. Burris in a partnership, joint venture, or as a
co-developer of Burris's proposed facility. Burris Aff.
¶¶ 16-17. Mr. Burris emailed Mr. Julien at HFF, the
Seminary's broker, following the tour and reported that
“[t]he goal of the meeting was to solicit the support
of Lankenau Hospital for our pursuit at St. Charles. Mr.
Lynch advised after the tour and subsequent meeting that he
would not simply endorse our project, he wants to be a part
of it, and wants you to know that.” S.J.R. 849.
Line took steps to explore developing the Parcel with Mr.
Burris. Ms. Magnatta attended calls and meetings with Mr.
Burris a few weeks after the tour, and Mr. Burris began
disclosing information about and plans for the Parcel,
including the Renderings and Plans he had commissioned.
Burris Aff. ¶¶ 18-19; S.J.R. 13. In mid-June 2014,
Mr. Lynch emailed Bishop Timothy Senior, Rector of the St.
Charles Seminary, to show his support for and involvement in
Mr. Burris's bid. He explained that while Main Line and
Mr. Burris “ha[d] not reached formal agreement”
yet, they were “in the process of developing a
relationship that would include [Main Line's]
participation in the operation of the facilities.”
S.J.R. 11. On June 27, 2014, Lydia Hammer, Main Line's
Senior Vice President of Marketing and Business Development
drafted and circulated a memorandum called “Options for
MLH Burris Partnership at St. Charles Seminary, ” which
outlined possible arrangements for a Burris-Main Line
relationship. S.J.R. 42- 44. Throughout June and July 2014,
Main Line executives attended meetings with Mr. Burris about
the development, including one with a Lower Merion Township
official to discuss various issues, including rezoning.
S.J.R. 12; Burris Aff. ¶¶ 22-23.
Burris and Mr. Lynch went back-and-forth about
the proposed relationship between the parties and the manner
in which responsibilities would be divided. Some
communications indicate a co-ownership partnership, while
others contemplate a management arrangement. On August 9,
2014, Mr. Burris sent Mr. Lynch an email attaching details
for a planned facility at the Seminary called “MLH at
Wynnewood, ” and alerting him that “[w]ithin the
next week or so, [he would] put forth a proposal . . . for
[Main Line's] operations to run the campus we are
proposing in the context of a joint venture between the
parties.” S.J.R. 53-54. Mr. Burris sent a Letter of
Intent (“LOI”) outlining a joint venture to Main
Line on August 22, 2014. S.J.R. 55-58.
continued throughout September and October 2014. Several
emails among Main Line personnel during this time period show
that Main Line was considering the ownership and management
proposals provided by Mr. Burris and that its position was
not set in stone. For example, an email from Lydia Hammer to
Donna Phillips stated that Main Line was reluctant to pursue
50/50 ownership of the entire project, but remained open to
partial ownership or management “joint venture”
arrangements. S.J.R. 59. Main Line executives exchanged a
draft response to Burris, stating that they were “not
interested in Joint Venturing on the MOB, Assisted Living and
the Alzheimers unit[, ] [and were] [i]nterested only in doing
a joint venture on the SNF [skilled nursing facility] and
managing the outpatient therapy and contracting [MLH]
therapists for the SNF.” S.J.R. 71. In Main Line's
following communication with Mr. Burris, it affirmed its
continued desire to discuss a joint venture, but clarified
that its interest was limited to the skilled nursing
facility. S.J.R. 118.
both Mr. Burris and Mr. Lynch were in communication with the
Seminary, either directly or through HFF, about the Parcel.
On September 18, 2014, Mr. Lynch wrote that he had “a
good conversation with Bishop Senior” and that
“they [were] very pleased to hear that [Main Line]
[was] involved in the Burris proposal.” S.J.R. 74. On
that same date, Mr. Burris wrote to Mr. Julien to report that
he “h[ad] been actively working on the partnership with
Main Line Health.” Id. Mr. Burris continued to
communicate with Mr. Julien at HFF and develop the project
by, for example, instructing his architects to incorporate
medical office space for Main Line and engaging in due
diligence such as obtaining traffic analysis for the proposed
project and speaking with Lower Merion officials.
end of September, Donna Phillips from Main Line and Ken
Keegan from the Burris Post-Acute Network executed a
Non-Disclosure Agreement (“NDA”) enabling each
party to “share certain proprietary information”
in discussions “regarding possible
collaboration.” S.J.R. 65. The NDA states that
“[t]he Receiving Party agrees to use the Confidential
Information solely in connection with the current or
contemplated business relationship between the parties and
not for any purpose other than as authorized by this
Agreement.” S.J.R. 66. Of particular relevance here,
the NDA contained a section stating that it did not
constitute an outside legal obligation:
The parties agree that neither party will be under any legal
obligation of any kind whatsoever with respect to a
Transaction by virtue of this Agreement, except for the
matters specifically agreed to herein. The parties further
acknowledge and agree that they each reserve the right, in
their sole and absolute discretion, to reject any and all
proposals and to terminate discussions and negotiations with
respect to a Transaction at any time. This agreement does not
create a joint venture or partnership between the parties. .
S.J.R. 67. Two other provisions are relevant here. First, the
NDA contained an integration clause: “This agreement
constitutes the entire understanding between the parties and
supersedes any and all prior or contemporaneous
understandings and agreements, whether oral or written,
between the parties, with respect to the subject matter
hereof.” S.J.R. 67. Second, the NDA provides that
“[t]he receipt of Confidential Information pursuant to
this Agreement will not prevent or in any way limit either
party from: (i) developing, making or marketing products or
services that are or may be competitive with the products or
services of the other; or (ii) providing products or services
to others who compete with the other.” S.J.R. 68. In
light of this agreement, Mr. Burris disclosed plans for the
Parcel and confidential information about his business
operations to Main Line. S.J.R 69-70.
Submitting the Buyer Qualification Questionnaire to St.
October 2014, HFF requested that Burris and the other two
final candidates who placed bids on the Parcel submit a
Buyer Qualification Questionnaire (“BQQ”). S.J.R.
82; S.J.R. 102-05. Mr. Burris, Mr. Lynch, and others such as
Thomas Comitta Associates (town planners/landscape architects
brought on by Mr. Burris) were involved in preparing the BQQ.
S.J.R. 119-22. Before the BQQ was submitted, Mr. Lynch
presented the opportunity to Main Line's Board of
Directors, explaining that “MLH is interested in
developing the [Seminary's] lower campus. . . . Burris
Construction has offered to build a 124-bed skilled nursing
facility and is interested in a 50/50 partnership with
MLH.” S.J.R. 138. On October 28, 2014, Mr. Burris
circulated the final draft of the BQQ to Mr. Lynch and
others. S.J.R. 140.
Burris team submitted the BQQ to HFF on October 29, 2014 in
advance of the final bid meeting scheduled that day. S.J.R.
159-76. The BQQ acknowledged that Burris was
“negotiating the finer points of a partnership with
Main Line.” S.J.R. 172. However, it included the
Addendum that had been circulated to Main Line explaining
that Burris was acting “in partnership with Main Line
Health” in order “to retain the existing seminary
building, including the chapel, and redevelop it . . .”
S.J.R. 175. Mr. Burris asserts that the business entities
that would acquire the Parcel itself had not yet been
created. Burris Aff. ¶ 40; S.J.R. 160. Mr. Burris and
Mr. Lynch made a presentation to Bishop Senior and the St.
Charles Seminary Board during which they each discussed
proposed plans for the Parcel. Mr. Burris alleges in his
affidavit that Mr. Lynch personally spoke during the joint
presentation and voiced his approval of a partnership of some
sort between the two entities. See Burris Aff.
Post-BQQ Negotiations Between Burris and Main Line
between personnel associated with Mr. Burris and Main Line on
the structure of the alleged joint venture continued after
the presentation to the Seminary Board. Emails between
members of Burris's team and Main Line executives in
early November show that the parties were hammering out
detains of a “St. Charles JV.” See
S.J.R. 178. Ms. Magnatta at Main Line reported that she
thought Mr. Burris and Mr. Breslin were “concerned that
there is nothing in writing that solidifies what Burris keeps
telling us he is willing to do. We are right beside him in
everything and yet have nothing to indicate that we in fact
will have the first option to reside on the site with him,
etc. if he does get the approval to occupy/build.”
Schmotzer sought additional confidential financial and
operations details from Mr. Breslin and Mr. Burris following
the presentation to the Board, which they provided. S.J.R.
243-50. Using information Mr. Burris's team shared, Mr.
Schmotzer prepared a thorough comparison of various financial
metrics between Main Line's own operations and the St.
Charles proposal. See e.g., S.J.R. 266-306.
Burris, Mr. Breslin, and various Main Line executives
attended a “Strategy Council” meeting on November
18, 2014. Burris Aff. ¶ 46. Mr. Burris alleges that Main
Line sought assurance during this meeting and others that it
would be the exclusive partner/co-venturer with respect to
the Parcel if Mr. Burris won the bid. Burris Aff. ¶
47-48. Mr. Burris allegedly assured Main Line personnel that
he had long considered Main Line a partner and co-venturer.
Id. Notes from the meeting, while not necessarily
detailing a final arrangement, show that indeed, the
“finer points” of their relationship was the
focus of discussion. S.J.R. 192-97. A “Financial Follow
Up Meeting” was held on December 1, 2014, where the
parties reviewed the financial metrics Mr. Burris shared.
S.J.R. 251-65. Throughout December 2014 and January 2015,
Main Line requested additional proprietary information about
Mr. Burris's operations, which was disclosed. S.J.R.
331-43; 412-13; 414-443.
end of January 2015, Main Line sent a revised Letter of
Intent to Burris Construction Company stating, in relevant
Based on our review we have concluded that Main Line is not
interested in a SNF [skilled nursing facility] joint venture
with Burris Construction Company (“Burris”). . .
. Main Line would like to propose a full management contract
arrangement for a Burris-developed Skilled Nursing Facility
(“Facility”) to be located on the St. Charles
S.J.R. 447. The January 2015 Letter of Intent outlined an 8%
management fee for Main Line, Burris's involvement in
managing the Facility, and a non-compete provision “to
ensure that Burris does not develop, own, operate, manage, or
lease to any business on the St. Charles Seminary property
site that would be in direct competition with any Main Line
entity.” S.J.R. 448. According to Mr. Burris, on a
phone call the following day, Mr. Lynch expressed that he was
still viewing the arrangement as a partnership or co-venture.
Burris Aff. ¶¶ 53-54. Burris contends that as of
February 10, 2015, Burris had an agreement with Main Line
that it would be partners/co-venturers on the construction of
the skilled nursing facility, “Main Line Health at
Wynnewood.” Burris Aff. ¶ 55.
HFF & St. Charles Negotiate with Burris
Following the Seminary Board presentation, communications
between Steve Dolan, the Chief Financial Officer at St.
Charles, Bishop Senior, and Mr. Julien at HFF show that the
Seminary was favoring the Burris bid and nearing a final
decision. S.J.R. 350-57; 370. On December 2, 2014, Mr. Julien
explained that he had spoken with Mr. Burris, and upon
receipt of a final Letter of Intent from Mr. Burris, there
would be a final meeting with Mr. Burris and Mr. Lynch and
preparation of a ground lease. S.J.R. 353. Mr. Burris
reported to Mr. Lynch at Main Line that during the December
2nd conversation, “Julien said the deal is ours.”
S.J.R. 379. Mr. Burris submitted the final Letter of Intent
on December 27, 2014, and it stated, among other things, that
discussions with Main Line have continued and that an
arrangement would be finalized by the end of January. S.J.R.
Charles did not respond quickly to Mr. Burris's proposal.
When, on March 16, 2015, Mr. Burris asked Mr. Lynch whether
he had any insight into developments, Mr. Lynch replied,
“nothing.” S.J.R. 470. This response, as it turns
out, occurred while Mr. Lynch and other Main Line executives
were communicating directly with St. Charles about the
Burris's bid on the Parcel. Around the same time, Mr.
Dolan at St. Charles told Mr. Julien at HFF that the Burris
deal “is still going to take place and hopefully in the
near future.” S.J.R. 472. Mr. Burris was anxious to
hear about the proposal he sent in December, and throughout
March and April 2015, he continued to provide HFF and St.
Charles details about the project and his proposed
“mezzanine” financing for it. See, e.g.,
S.J.R. 375-76; 473; 471-98.
Seminary clarified its position on financing the project in
May. On May 12, 2015, counsel for St. Charles sent Mr. Burris
a letter stating that St. Charles had decided that it would
only accept a buyer with an institutional common equity
capability of purchasing the Parcel, as opposed to mezzanine
financing, as well as other new requirements in information
requests. S.J.R. 676. After receiving the letter, Mr. Burris
sought to clarify the financing terms he had secured and
stated that Main Line would be operating the Post-Acute
Center as an extension of their Lenkenau brand. S.J.R. 677.
He also requested a meeting with Mr. Dolan at St. Charles.
S.J.R. 678. Lydia Hammer, Senior Vice President of Marketing
and Business Development at Main Line, upon learning that Mr.
Burris sought a meeting with Mr. Dolan-while Main Line itself
was communicating with the Seminary-commented to other Main
Line executives “[l]et's sit back and watch this
light of St. Charles's concerns about financing, Mr.
Burris submitted two new Letters of Intent-on June 23,
2015 and July 17, 2015. S.J.R. 680-85. The
July 17th LOI ...