In re RBGSC Investment Corp.
| Decision Date | 15 March 2000 |
| Docket Number | Bankruptcy No. 99-31799DAS. Adversary No. 99-0892. |
| Citation | 245 BR 807 |
| Parties | In re RBGSC INVESTMENT CORP., Debtor. Red Bell Brewing Company and Red Bell Brewery and Pub Company — Headhouse, Inc., Plaintiffs, v. GS Capital, L.P., Bella's Place, Inc., RBGSC Investment Corp., and Nick Sommaripa, Defendants. |
| Court | U.S. Bankruptcy Court — Eastern District of Pennsylvania |
Walter Weir, Jr., Weir & Partners, Philadelphia, PA, for debtors.
Michael T. Farrell, Post & Schell, P.C., Kevin J. Carey, Philadelphia, PA, for Red Bell entities.
Paul B. Maschmeyer, Ciardi, Maschmeyer & Karalis, PC, Philadelphia, PA, for Creditors' Committee.
Kenneth E. Aaron, Buchanan Ingersoll, P.C., Philadelphia, PA, for GS Capital, L.P.
David B. Smith, Philadelphia, PA., for Bella's Place, Inc. and Nick Sommaripa.
George E. Pallas, Cohen, Seglias, Pallas & Greenhall, P.C., Philadelphia, PA, for debtor in Common Pleas Action.
Jeffrey Meyers, Philadelphia, PA, for Marketplace Redwood, L.P.
Joseph A. Dworetsky, Philadelphia, PA, for Headhouse Retail Associates, L.P.
Joseph DiGiuseppe, Philadelphia, PA, for City of Philadelphia.
Frederic Baker, Ass't. U.S. Trustee, Philadelphia, PA, United States Trustee.
The instant decision puts to rest the claims of RED BELL BREWING COMPANY ("RBBC") and RED BELL BREWERY AND PUB COMPANY — HEADHOUSE, INC. ("RBHH;" with RBBC, "the Plaintiffs") remaining against the Defendants, GS CAPITAL, L.P. ("GS"), BELLA'S PLACE, INC. ("BP"), RBGSC INVESTMENT CORP. ("the Debtor"), and NICK SOMMARIPA, after our decisions in In re RBGSC Investment Corp., 240 B.R. 536, 542-44 (Bankr. E.D.Pa.1999) ("RBGSC I"), refusing to remand this proceeding ("the Proceeding") to the state court from which it was removed and, id. at 544-45, staying a preliminary injunction order and a contempt order entered by the state court prior to removal; and in In re RBGSC Investment Corp., 242 B.R. 851 ("RBGSC II"), reconsideration granted in part, 244 B.R. 71 (Bankr.E.D.Pa.2000) ("RBGSC III"), dismissing most of the Plaintiffs' claims. Herein, we proceed to enter a judgment in favor RBBC against BP only in amount of $20,269.11, for unpaid management fees in an agreed amount of $18,913.11, and $1256 due for sales of wearable items, as RBGSC II portended, 242 B.R. at 864, would be the likely result. In so doing, we reject the claims asserted after our dismissal of the defamation claim on February 2, 2000, namely (1) a "restitution" claim for $2,283,630(!) and (2) a claim against GS seeking to render it liable for all claims against the other Defendants on the ground that it tortiously interfered with contracts between the Plaintiffs and, respectively, the Debtor and BP.
We also will grant in part only the motion ("the Motion") of GS to retain the $83,000 deposit posted by it per our order of October 22, 1999, and continued in effect per RBGSC I, 240 B.R. at 545, directing that $20,169.11 of this sum be paid to the Plaintiffs before refunding the balance of $62,830.89 to GS. Finally, we will sustain the Debtor's objections ("the Objections") to the Plaintiffs' claims filed against it in this bankruptcy case.
The factual and procedural history of the Proceeding are recited, through the dates of those decisions, at some length in RBGSC II, 242 B.R. at 855-57; and RBGSC I, 240 B.R. at 539-41, and will not be repeated here. Picking up thereafter, the trial of the claims remaining after our decision in RBGSC II, scheduled in the order accompanying that Opinion for January 26, 2000, 242 B.R. at 865-66, along with the hearings on the Motion and the Objections, was pushed back to January 28, 2000, and February 2, 2000, by a snow storm. As we noted in RBGSC III, 244 B.R. at 72, the Debtor was authorized, by an order of January 6, 2000, to sell its interests in both of its sites to another brew-pub whose offer of $2,850,000 and a closing in 45 days the Plaintiffs were unable to meet. This order apparently rendered moot the Debtor's counterclaim asserted in the Proceeding seeking to enjoin the Plaintiffs from interfering with its liquor license application for the Debtor's site at the Headhouse of the Reading Terminal in Center City, Philadelphia ("the Headhouse Site").
The only new testimony was the recitation by the Plaintiffs' principal, James R. Bell, and its managing director, Robert T. Huttick, of the following components of their "restitution" claim:
Post Hearing Brief Re: Assessment of Remedy Due To Red Bell Brewing Company And Red Bell Brewery and Pub Company — Headhouse ("Opening Brief"), at 3.
The Plaintiffs' general theory supporting their principal claims in the Proceeding is that, since they offered these contributions to the enterprise formed by it and GS to own and operate brew-pubs at the two sites leased by the Debtor, in the Philadelphia International Airport ("the Airport Site") and in the Headhouse, they were entitled to recover these sums on the basis "restitution."1
Their remaining claims in the Proceeding, are asserting against GS and are substantially based on the tort of intentional inference with the business relationships ("the Tort") between the Plaintiffs and, respectively, the Debtor and BP. The Tort claims seek to render GS liable for any liability imposed upon the Debtor and BP on the ground that GS caused the co-defendants, its affiliates, to take the actions which allegedly rendered them liable to the Plaintiffs.
The Defendants' responsive brief makes, inter alia, the following counter-arguments:
1. The Plaintiffs released the Defendants per recitations in the parties' Settlement Agreement of December 10, 1998 ("the SA").
2. The parol evidence rule bars the Plaintiffs' claims based on negotiations prior to execution of the SA and the other operative contracts between the parties, the License and Consulting Agreement of May 20, 1998 ("the LCA"), relating to the Airport Site, and the Management Agreement of December 10, 1998 ("the MA"), relating to the Headhouse Site.
3. The Plaintiffs were unable to prove that the Defendants benefitted from the activities which constituted the components of their restitution claim, recited at pages 809-10 supra, since the Sites were sold for an amount less than GS invested in the enterprise.
4. The Tort claims are barred because GS at all times acted in good faith to protect its interests.
Although the original briefing order contemplated the filing of simultaneous opening and reply briefs one brief by the Plaintiffs and the Defendants, on February 16, 2000, respectively, and March 1, 2000, the Plaintiffs were granted permission during a colloquy at the confirmation hearing on the Debtor's plan on February 23, 2000, which resulted in a confirmation order of that date, to file a reply brief by March 6, 2000. This request was generated by our expression of skepticism, during that colloquy, that relief could be granted to the Plaintiffs on the basis of a restitution theory in light of the absence of evidence of benefit to the Defendants from the Plaintiffs' actions. In their reply brief the Plaintiffs argued that our observations reflected confusion between restitution and unjust enrichment. The plaintiffs therein posited that, while unjust enrichment required a showing of a benefit to the Defendants, "restitution . . . is simply a measure of damage for a breach of contract premised upon the need to return to the plaintiff the value of that which it gave up pursuant to the contract." Reply of Plaintiffs To Joint Post-Trial Memorandum of Defendants Regarding Damages ("Reply Brief"), at 12. Thus, they argued that the showing of a benefit to the Defendants was not a prerequisite for the success of their large restitution claim.
As we indicated in the colloquy of February 23, 2000, we believed that the Plaintiffs' failure to prove that their actions conferred a benefit upon the Defendants by their activities recited at pages 809-10 supra was fatal to their restitution claims. We do not agree with the Plaintiffs that any of the authorities which they cite for the principle that restitution allows the damages for a breach of contract based upon the value of that which the plaintiff "gave up" or contributed to a contracted enterprise without regard to the benefits or lack thereof provided to the defendant, support any such principles, e.g., ATACS Corp. v. Trans World Communications, 155 F.3d 659, 669-71 (3d Cir.1998); Baker v. Cambridge Chase, Inc., 725 A.2d 757, 766 (Pa.Super.1999), appeal denied, 745 A.2d 1216, 1999 WL 796593 (Pa. Oct. 5, 1999); A. CORBIN, CORBIN ON CONTRACTS, § 1112, at 596-97 (1964) ("Corbin"); and RESTATEMENT (SECOND) OF CONTRACTS, § 373 to comment a, at 208-09 (1981) ("the Restatement"),
It is true that the Restatement comment identifies restitution as an "alterative remedy for breach" of a contract. Id. at 204. However, that does not mean that the Restatement supports the notion that what the plaintiff gave up rather than whether the defendant benefitted can be the sole consideration in...
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