Neurology & Pain Mgmt. Assocs., P.C. v. Bunin
| Decision Date | 22 January 2021 |
| Docket Number | CASE NO.: 3:17-CV-00035-JD |
| Parties | NEUROLOGY AND PAIN MANAGEMENT ASSOCIATES, P.C., d/b/a VANGUARD ELDERCARE MEDICAL GROUP, Plaintiff and Counter-Defendant, v. ANTHONY BUNIN and BIO-BEHAVIORAL CARE SOLUTIONS, LLC, Defendants. BIO-BEHAVIORAL CARE SOLUTIONS, LLC, Counter-Plaintiff, v. STEVEN POSAR, Defendant. |
| Court | U.S. District Court — Northern District of Indiana |
While employed by Bio-Behavioral Care Solutions, LLC ("BCS"), Dr. Anthony Bunin became a consultant to BCS's competitor, Neurology and Pain Management Associates ("Vanguard"), and its CEO Dr. Steven Posar. Both companies serve mental health and senior living facilities in Indiana and Michigan, respectively. The relationships soured between the parties, culminating in this lawsuit. Vanguard claims that Dr. Bunin breached their contract and misappropriated its good will. In turn, Dr. Bunin and BCS filed counterclaims against Vanguard, and each party now moves for summary judgment. [DE 97, 98, 100].
Vanguard and BCS are competitor companies that manage and provide general services to various mental health and senior living facilities. Dr. Steven Posar is the principal owner of Vanguard and Robert Clemente is the principal owner of BCS. In January 2013, BCS entered into a Marketing Agreement ("Agreement") with Doctors Behavioral Hospital ("Doctors Hospital") in which BCS agreed to provide marketing and consulting services to Doctors Hospital. [DE 103]. Section Eight of the Marketing Agreement provided Restrictive Covenants where BCS agreed not to compete with Doctors Hospital in Indiana, and, in turn, Doctors Hospital, including any of its affiliates, agreed not to compete with BCS in Michigan.1 As will be addressed later in this opinion, the parties disagree as to whether Vanguard is an affiliate of Doctors Hospital. The Agreement between the parties did not last long as it was terminated on October 20, 2014. [Exhibit D, Clemente Dep. 78:8-12].
In November 2012, Dr. Bunin, an employee of BCS, agreed to assist Dr. Posar and Vanguard by providing consulting services for Vanguard's facilities in Indiana. Dr. Bunin agreed to work as an independent contractor when providing consulting services to Vanguard. During the time he consulted for Vanguard, Dr. Bunin continued to be employed by BCS. In 2014, Dr. Posar started requesting that Dr. Bunin arrange meetings for Vanguard with representatives of healthcare facilities in Michigan that were under contract with BCS. Dr. Bunin refused to arrange these meetings because of his contract with BCS and because he believed Vanguard as Doctor Hospital's affiliate was precluded by the Marketing Agreement from operating in Michigan. On July 9, 2015, Vanguard terminated Dr. Bunin's work as an independent contractor. [DE 99-10].
Vanguard filed this suit against both Dr. Bunin and BCS in 2016. In its complaint, Vanguard maintains that it hired Dr. Bunin as an independent contractor to provide program and business development for Vanguard starting in 2012. [DE 39 at 1]. Vanguard argues that it agreed to a Memorandum of Understanding ("MOU") with Dr. Bunin, and the express intent of the MOU was for Dr. Bunin to work as an independent contractor for Vanguard at designated residential senior facilities and in-patient hospitals. Vanguard claims that while employed by Vanguard, Dr. Bunin "was surreptitiously working for and acting as an executive officer for BCS, one of Vanguard's direct competitors, all the while informing Vanguard and its principal that Bunin's relationship with BCS had terminated." [Id. at 2.] Further, Vanguard alleges that Dr. Bunin solicited customers on behalf of BCS and "usurped important business opportunities from Vanguard to directly compete against Vanguard," which harmed Vanguard's business relationships. [Id.] Vanguard also alleges that BCS was aware of Dr. Bunin's activities and, therefore, is vicariously liable for Dr. Bunin's actions. [DE 39].
In its counterclaim, BCS asserts that Dr. Posar fully participated in negotiating the Marketing Agreement between BCS and Doctors Hospital, including making statements and representations to lead BCS into entering the Agreement but without any intention of complying with the requirements of the Agreement. [DE 85 at 5]. Moreover, BCS argues that it never would have entered into the Agreement unless both Dr. Posar and Vanguard agreed to be bound by Section 8.2 of the Agreement. With the goal of providing services in Michigan, Vanguard asked Dr. Bunin to help arrange meetings with principals of nursing homes and facilities there even while knowing such activity violated Section 8.2 of the Agreement. BCS also alleges that Dr. Posar had access to BCS's confidential information regarding the identities of nursing homes andfacilities under contract with BCS in Michigan and used that information to hire BCS clinicians and used BCS promotional materials in Vanguard's attempt to move into Michigan. [Id. at 8].
On summary judgment, the burden is on the moving party to demonstrate that there "is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). That means that the Court must construe all facts in the light most favorable to the nonmoving party, making every legitimate inference and resolving every doubt in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Summary judgment is not a tool to decide legitimately contested issues, and it may not be granted unless no reasonable jury could decide in favor of the nonmoving party. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The party seeking summary judgment "bears the initial responsibility of informing the district court of the basis for its motion, and identifying" the evidence which "demonstrate[s] the absence of [a] genuine issue of material fact." Id. at 323. Once the moving party meets this burden, the nonmoving party may not rest on allegations or denials in its own pleading but must set out specific facts showing a genuine issue for trial. Fed. R. Civ. P. 56(c)(1); Beard v. Whitley County REMC, 840 F.2d 405, 410 (7th Cir. 1988). The disputed facts must be material, which means that they "might affect the outcome of the suit under the governing law." Brown v. City of Lafayette, No. 4:08-CV-69, 2010 WL 1570805, at *2 (N.D. Ind. Apr. 16, 2010). As a federal court sitting in diversity, the Court will rely on state substantive law. See Lexington Ins. Co. v. Rugg & Knopp, Inc., 165 F.3d 1087, 1090 (7th Cir. 1999). And relevant to many claims addressed in this opinion, "[i]f the nonmoving party fails to establish the existence of an element essential to his case, one on which he would bear the burden of proof at trial, summary judgmentmust be granted to the moving party." Ortiz v. John O. Butler Co., 94 F.3d 1121, 1124 (7th Cir. 1996). Finally, in a case involving cross-motions for summary judgment, that means that each party receives the benefit of all reasonable inferences when considering the opposing party's motion. Tegtmeier v. Midwest Operating Eng'rs Pension Tr. Fund, 390 F.3d 1040, 1045 (7th Cir. 2004).
Dr. Bunin and BCS each moved for summary judgment based on Vanguard's complaint. [DE 97, 98]. Vanguard filed the same response to both motions [DE 105]; therefore, the Court will address their motions in the first section before addressing Vanguard's motion for summary judgment against BCS and Dr. Bunin in the second section. [DE 100].
Regarding the allegations in Vanguard's complaint, there is no question that Dr. Bunin was a consultant for Vanguard for several years and was paid by Vanguard during this time period. The parties disagree as to whether their relationship was based in contract and, if so, whether Dr. Bunin breached the contract. Furthermore, even if Dr. Bunin can show there was no contract between the parties, questions remain as to whether Dr. Bunin defrauded Vanguard, violated a fiduciary duty owed to Vanguard, or whether Dr. Bunin tortuously interfered with Vanguard's business relationships or engaged in unfair competition. For several of these claims, Vanguard also asserts that BCS is vicariously responsible for Dr. Bunin's actions. The Court will now address each of these questions.
First, Vanguard asserts a claim against Dr. Bunin for breach of contract based on a Memorandum of Understanding they agreed upon. [DE 99-7]. Vanguard asserts that the intent ofthe MOU was for Dr. Bunin to work for Vanguard as an independent contractor and that he breached the MOU by secretly working for BCS while he was supposed to be providing services to Vanguard. [DE 39 at 7]. Vanguard also alleges that Dr. Bunin was soliciting its customers and potential customers on behalf of BCS, interfering with Vanguard's business relationships, and committing other acts that were prohibited by the MOU's non-compete clause.
In moving for summary judgment, Dr. Bunin argues that Vanguard cannot assert breach of contract because it cannot show that the MOU constitutes a contract, as it is unsigned and lacks material terms. [DE 99 at 8]. And even if the Court were to find the MOU a valid contract, Dr. Bunin argues it cannot be enforced due to the lack of material terms. Finally, Dr. Bunin argues the MOU is not enforceable as it is an agreement to agree. In response, Vanguard argues that by asserting a counterclaim for breach of contract,2 Dr. Bunin has judicially admitted the existence of a contract. Vanguard also notes that while the MOU is unsigned, Dr. Bunin's conduct establishes his assent to the terms of the MOU. Vanguard argues that the MOU sets forth the essential terms of the parties' agreement with reasonable certainty. Finally, Vanguard asserts that while the MOU references future negotiations and...
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