United States District Court, E.D. Pennsylvania
MEMORANDUM RE: DEFENDANT'S MOTION TO
Stichting Katholieke Universiteit moves under Fed.R.Civ.P.
12(b)(6) to dismiss Plaintiff International Strategic Cancer
Alliance, LLC's complaint for failure to state a claim.
Defendant contends that Plaintiff's breach of contract,
unjust enrichment, promissory estoppel, and fraud by
concealment claims are barred by the statute of limitations
and that Plaintiff has inadequately pled the existence of an
Factual and Procedural Background
to the Complaint, Plaintiff refers its clients to physicians
for care and treatment. Plaintiff also provides assistance to
other health care providers to obtain state-of-the-art cancer
diagnosis and treatment procedures. (ECF 1,
“Compl.” ¶ 5). In or about 2006, Dr. Orn
Adalsteinsson, Chief Executive Officer of Plaintiff, became
aware of a diagnostic procedure using a novel contrast agent,
ferumoxtran-10 (brand name, “Combidex”) owned and
developed by AMAG Pharma (“AMAG”). (Id.
¶ 6). In 2006, Plaintiff began directing patients to
Defendant for MRI scans using Combidex. (Id. ¶
Barentsz, Head of the Department of Radiology at Defendant,
met in Pennsylvania with representatives of Plaintiff to
develop a strategy to acquire and keep Combidex available for
the treatment of referred cancer patients. (Id.
¶ 11). Defendant also expressed a desire to partner with
Plaintiff so that both would have access to Combidex.
(Id. ¶ 12). Thereafter, Plaintiff initiated
meetings with AMAG to convince them to license Combidex to
meeting between Plaintiff, Defendant, and AMAG on or about
April 22, 2010, AMAG agreed to continue discussions with both
Plaintiff and Defendant regarding licensing Combidex to
Defendant. (Id. ¶ 13). Plaintiff and Defendant
developed a Letter of Intent which after intensive
negotiations conducted by Dr. Adalsteinsson, resulted in a
Service Agreement between AMAG and Defendant dated May 19,
2011. (Id. ¶ 14). The Service Agreement allowed
Defendant, for a period of one year, to produce Combidex for
use in clinical trials and to determine if the product could
be produced according to its specification. (Id.
¶ 14). Dr. Adalsteinsson undertook efforts to recruit
Dr. Lewis, the inventor of Combidex, to participate in the
Service Agreement. Plaintiff even drafted Dr. Lewis's
consulting contract with Defendant at Plaintiff's own
expense. (Id. ¶ 15). In late 2011 and 2012,
Plaintiff, jointly with Defendant, conducted further
negotiations with AMAG for a limited territorial license of
Combidex. (Id. ¶ 16).
AMAG had no further interest in producing or licensing
Combidex to third parties (id. ¶ 17), Plaintiff
convinced AMAG to sell all of its Combidex-related assets to
Defendant on favorable terms (id. ¶ 18). As
part of these discussions, Defendant assured Plaintiff that
it would be allowed to: (1) take the lead in seeking FDA
approval of Combidex, and (2) set up a patient treatment
center in North America making use of Combidex. (Id.
¶ 19). Dr. Adalsteinsson had numerous meetings with Dr.
Barentsz to discuss the best plan for obtaining FDA approval
and Plaintiff's role in that process. (Id.)
Specifically, Dr. Barentsz assured Dr. Adalsteinsson that
Plaintiff would receive rights to acquire and use the
Combidex nanoparticle in North America as well as the ability
to use Combidex for clinical trials to obtain FDA approval.
Id. Dr. Adalsteinsson pursued fundraising efforts to
assist Defendant in funding its purchase of rights to
Combidex. (Id.) The parties prepared term sheets in
December 2012, followed by an Asset Purchase Agreement
between AMAG and Defendant, which closed on or about February
19, 2013. (Id.)
took physical possession of approximately half of AMAG's
documents and records relating to Combidex, including those
pertaining to FDA approval. (Id. ¶ 20). As
agreed, Plaintiff maintains these materials to this day in a
storage facility at its own expense. (Id.) In 2014,
Defendant resumed manufacturing Combidex, after acquiring the
rights to do so. (Id. ¶ 21). Later, in November
2014, at the request of Defendant, Dr. Adalsteinsson attended
a meeting wherein he participated in mapping out a strategy
for FDA approval of Combidex in the United States.
(Id. ¶ 22).
2015, Defendant informed Plaintiff that it was
commercializing Combidex through its new for-profit holding
company, SPL Medical B.V. ("SPL"), to which,
“on information and belief, Defendant transferred the
Combidex technology assets.” (Id. ¶ 24).
Defendant further informed Plaintiff that it was
collaborating with a different U.S. partner to bring Combidex
to the U.S. market and that it would not involve Plaintiff at
all. (Id.) Defendant provided Plaintiff no
compensation or value for the benefits Plaintiff conferred on
Defendant. (Id. ¶ 25).
filed its Complaint on May 3, 2017. (ECF 1). Defendant filed
its Motion to Dismiss on July 17, 2017. (ECF 8). Plaintiff
filed its Response to the Motion on August 18, 2017. (ECF
13). Defendant filed its Reply in Support of its Motion on
August 30, 2017. (ECF 14).
Complaint raises four claims:
• Count I: Breach of Oral Contract;
• Count II: Unjust Enrichment (Quantum Meruit);
• Count III: Promissory Estoppel; and
• Count IV: Fraud by Concealment.
Breach of Contract and Promissory Estoppel (Counts I and
Complaint alleges that Defendant refused to provide the
promised consideration in exchange for all the services
Plaintiff performed. Defendant contends in its Motion to
Dismiss that Plaintiff has failed to adequately plead: 1) a
manifestation of an intent to be bound by the terms of the
agreement; and (2) sufficiently definite terms of the alleged
contract. As a result, Defendant asserts, the complaint fails
to set forth “sufficient factual matter”
establishing the existence of an oral contract. (See
ECF 8). Plaintiff responds that the intent to be bound is
implicit in the parties' conduct, that Plaintiff's
services constitute consideration, and that the surrounding
circumstances further bolster its claims. (See ECF
13). In its Reply, Defendant highlights that, because the
basic terms of a contract-- compensation, consideration,
duration, and the like--are essential to pleading and missing
here, the Complaint must be dismissed. (See ECF 14).
Unjust Enrichment (Count II)
Complaint alleges Plaintiff conferred benefits upon Defendant
and Defendant's retention of those benefits without
compensating Plaintiff would amount to unjust enrichment.
Defendant argues that Plaintiff has not pleaded sufficient
facts to demonstrate that it would be inequitable for
Defendant to retain the alleged value of the benefits (if
any) contributed by Plaintiff. Plaintiff responds that it has
sufficiently pled the elements for unjust enrichment found in
Kontonotas,  which is sufficient on Rule 12(b)(6)
review. Defendant replies that the district court opinion
giving rise to Kontonotas based its holding on
specific allegations of compensation set forth in that
complaint and that, as a result, Kontonatas is
inapplicable to this case.
Fraud by Concealment (Count IV)
Complaint also includes a claim for fraud by concealment,
alleging that Defendant Plaintiff intentionally concealed its
intentions to form a for-profit company, commercialize
Combidex, and cut Plaintiff out of its dealings involving
Combidex. Plaintiff claims Defendant had a duty to speak
because the parties were engaged in a joint effort, there was
a relationship of trust and confidence, and Defendant was a
larger and more sophisticated entity that exhibited
domination and influence over Plaintiff. In the Motion to
Dismiss, Defendant contends this claim is inadequately pled
in the Complaint because: (1) Plaintiff does not allege any
particular facts about the purported misleading statements
made by Defendant (when, where and by whom); and (2) there is
no duty to speak in an “arms-length” business
relationship. Plaintiff responds that the heightened pleading
standard for fraud claims is applied more flexibly to claims
of fraudulent concealment, where, by definition, “key
factual information remains within the defendant's
control as in this case and therefore the complaint is
properly pled.” In its Reply, Defendant argues that
Plaintiff's position--i.e., that information disparities
in business negotiations create confidential
relationships--is contrary to law.
also contends that Plaintiff's fraudulent concealment
claim is barred by the “gist of the action”
doctrine. Plaintiff responds that Defendant's actions
give rise to Plaintiff's separate action for fraud apart
from its other claims.
Statute of Limitations
Defendant argues that the claims are barred by the statute of
limitations. Plaintiff responds that its claims are timely
because the statute of limitations began to run when
Plaintiff knew or should have known that Defendant breached
the contract/promises, in 2015. Defendant replies that the
Complaint lacks “precision or some measure of
substantiation” to survive the limitations bar.
Legal Standard for Motion to Dismiss for Failure to State a
considering a motion to dismiss under Rule 12(b)(6),
“we accept all factual allegations as true [and]
construe the complaint in the light most favorable to the
plaintiff.” Warren Gen. Hosp. v. Amgen, Inc.,
643 F.3d 77, 84 (3d Cir. 2011) (internal quotation marks and
citations omitted). “To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim for relief that is plausible on
its fact.'” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570, (2007)).
Statute of Limitations
Pennsylvania,  the statute of limitations for breach of
contract claims is four years. Steiner v. Markel,
968 A.2d 1253, 1255, n.5 (Pa. 2009) (citing 42 Pa.C.S. §
5525). The equitable claims also have a four year limitations
period while fraud has a two year limitations period. See
Crouse v. Cyclops Indus., A.2d 606, 610 (Pa. 2000); 42
Pa.C.S. § 5524.
statute of limitations begins to run when the cause of action
accrues, which, under Pennsylvania law, occurs when the
contract is breached. Colonial Assurance Co. v. The
Mercantile & General Reinsurance Co., 297 F.Supp.2d
764, 769-70 (E.D. Pa. 2003). However, “[u]nder
Pennsylvania's discovery rule, the statute of limitations
will not begin to run until the plaintiff reasonably knows or
reasonably should know: (1) that he has been injured, and (2)
that his injury has been caused by another party's
conduct.” In re Mushroom Transp. Co. Inc., 382
F.3d 325, 338 (3d Cir. 2004)
alleges that its agreement with Defendant was that Defendant
would perform its part of the contract once Plaintiff had
assisted it in acquiring Combidex. Thus, the alleged injury
or breach of contract occurred at the time that Defendant
acquired Combidex and acted in a manner contrary to
Plaintiff's expectations; which Plaintiff alleges is in
2015. Having filed the Complaint on May 3, 2017, Plaintiff
alleged sufficient facts to warrant the Court denying any
Motion to Dismiss as to the statute of limitations issue on
all counts, except for the fraud count. Because the statute
of limitations for fraud is two years, and the Court ...