Neurology and Pain Management Associates P.C. v. Bunin

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

SOUTH BEND DIVISION

NEUROLOGY AND PAIN MANAGEMENT )

ASSOCIATES, P.C., d/b/a VANGUARD )

ELDERCARE MEDICAL GROUP, )

)

Plaintiff and Counter-Defendant, )

)

v. ) CASE NO.: 3:17-CV-00035-JD

)

ANTHONY BUNIN and BIO-BEHAVIORAL )

CARE SOLUTIONS, LLC, )

)

Defendants. )

BIO-BEHAVIORAL CARE SOLUTIONS, LLC, )

)

Counter-Plaintiff, )

)

v. )

)

STEVEN POSAR, )

)

Defendant. )

OPINION AND ORDER

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].

I. FACTUAL BACKGROUND

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].

1 Section 8.2 states, “Hospital or any affiliate of Physicians Hospital System shall not enter into any agreement, oral

or written, directly or indirectly, with any Facility within the Michigan Service Area under an active on-site mental

health service contract with BCS to provide remote or on-site clinical services at the Facility which is the same or

similar to the mental health services generally rendered by BCS or its affiliates.”

2

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 and

3

facilities 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].

II. STANDARD OF REVIEW

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 judgment

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must 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).

III. DISCUSSION

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].

A. Dr. Bunin’s and BCS’s Motions for Summary Judgment

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.

1. Count I: Breach of Contract Claim Asserted against Dr. Bunin

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 of

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the 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 another agreement, the parties

clearly express an intent to be bound by the MOU until such time that another agreement is

reached, if at all. In response, Dr. Bunin argues that his counterclaim for breach of contract is not

a judicial admission: it “is simply an alternative, that if the court determined that a valid contract

existed, that Vanguard breached it first by failing to pay [him] for work performed.” [DE 110 at

2]. Moreover, Dr. Bunin goes on to state that he “fully expects that if the Court finds no contract

2 In his counterclaim, Dr. Bunin asserts that he and Vanguard entered into an agreement in which he agreed to

provide consulting services to Vanguard in exchange for payment. Dr. Bunin claims that he has satisfied all his

obligations under the agreement, but Vanguard has failed to pay him as agreed, which constitutes a breach of the

parties’ agreement. [DE 10 at 8].

6

exists between Vanguard and [him], that [his] counterclaim will be disposed of as well on

summary judgment.” [Id.].

The Court first addresses whether Dr. Bunin’s counterclaim for breach of contract results

in a judicial admission that a contract existed with Vanguard. [DE 105 at 8]. Vanguard argues

that, since Dr. Bunin has judicially admitted the existence of a contract, his motion for summary

judgment on Vanguard’s claim for breach of contract should be denied. In Dr. Bunin’s Answer

and Counterclaim, he denies the allegations contained in Count I (Breach of Contract) [DE 10 at

3-4] while later asserting the counterclaim for breach of contract [DE 10 at 8]. “Judicial

admissions are formal concessions in the pleadings, or stipulations by a party or its counsel, that

are binding upon the party making them.” Keller v. United States, 58 F.3d 1194, 1199 n.8 (7th

Cir. 1995). It is well-recognized under Federal Rule of Civil Procedure 8(d)(2) that parties may

plead in the alternative regardless of consistency. Fed. R. Civ. P. 8. “When this is done, an

admission in one alternative in the pleadings in the case does not nullify a denial in another

alternative as a matter of pleading.” 6 Handbook of Fed. Evid. § 801:26 (9th ed.); see also, Cont'l

Ins. Co. of N.Y. v. Sherman, 439 F.2d 1294, 1298 (5th Cir. 1971), Douglas Equip., Inc. v. Mack

Trucks, Inc., 471 F.2d 222, 224 (7th Cir. 1972). Indiana courts have also found that, where an

admission is countered by other pleadings (as is the case here), the “ambiguity need not be

construed against the pleader.” Butler v. Forker, 221 N.E.2d 570, 575 (Ind. Ct. App. 1966).

Regardless, the Court finds Dr. Bunin’s counterclaim to be a pleading in the alternative and not a

judicial admission of the existence of a contract.

Next, the Court will address whether the MOU may be considered a valid contract. The

existence of a contract is established by evidence of an offer, acceptance, consideration, and a

manifestation of mutual assent. Ind. Dep't. of Corr. v. Swanson Servs. Corp., 820 N.E.2d 733,

7

737 (Ind. Ct. App. 2005). “To bring a contract into existence, an offer must be extended and the

offeree must accept it, the communication of acceptance being crucial. Thus, a meeting of the

minds between the contracting parties is essential to the formation of a contract.” Id. And, in

order to be enforceable, a contract must be reasonably definite and certain in its material terms so

that the intention of the parties may be ascertained. Berkel & Co. Contractors v. Palm & Assocs.,

Inc., 814 N.E.2d 649, 655 (Ind. Ct. App. 2004). Notably, Indiana courts have routinely made

clear that “the validity of a contract is not dependent upon the signature of the parties.” Ind. BMV

v. Ash, Inc., 895 N.E.2d 359, 366 (Ind. Ct. App. 2008); State v. Daily Express, Inc., 465 N.E.2d

764, 767 (Ind. Ct. App. 1984). Nonetheless, when an agreement is not signed, Indiana law

requires “some form of assent to the terms.” Nationwide Ins. Co. v. Heck, 873 N.E.2d 190, 196

(Ind. Ct. App. 2007). “Assent may be expressed by acts which manifest acceptance.” Id.; see

also, Pohl v. United Airlines, Inc., 110 F. Supp. 2d 829, 836 (S.D. Ind. 1999) (“As long as there

is evidence to show that a meeting of the minds has occurred, a signed document is not the sine

qua non to the creation of a binding contract.”), aff'd, 213 F.3d 336 (7th Cir. 2000).

First, recognizing that only essential terms need to be included to render a contract

enforceable, the Court turns to the contract to analyze which terms are present and which are

missing. Wolvos v. Meyer, 668 N.E.2d 671, 676 (Ind. 1996). In the MOU, the parties are clearly

identified: Anthony E. Bunin and Steven Posar. Second, the subject matter of the MOU is clearly

set forth: Dr. Bunin will provide program and business development to existing Vanguard

facilities in the service area. Third, the MOU explains the roles and expectations of each party in

their collaboration in Subsections 2D and 2E. But, as noted by Dr. Bunin, the MOU also lacks

many terms including: the date the MOU was entered, the place of business where Dr. Bunin was

to work, the amount of fees to be paid to Dr. Bunin, and the equity share that Steven Posar

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agreed to pay Dr. Bunin. And, “the existence or nonexistence of a contract turns on whether

material terms are missing.” Mays v. Trump Indiana, Inc., 255 F.3d 351, 358 (7th Cir. 2001).

The MOU also notably lacks signatures by either party though the Court recognizes that Indiana

courts have routinely made clear that “the validity of a contract is not dependent upon the

signature of the parties.” Ind. BMV v. Ash, Inc., 895 N.E.2d 359, 366 (Ind. Ct. App. 2008).

The Court concludes that the material terms of the MOU are not reasonably definite and

certain so that the intention of the parties may be ascertained. The MOU lacks the payment

structure agreed upon by the doctors, it lacks an effective date providing the Court with no

relevant time period on which to determine the parties’ relevant actions, and it lacks the facilities

where performance of the contract was to occur. The Court recognizes there to be some form of a

consulting relationship between Vanguard and Dr. Bunin but there is no evidence regarding the

terms of that relationship. As the Court noted in its previous order [DE 63], Vanguard could have

provided evidence that the MOU was signed at some point, that there were other documents or

memorializations of the agreement in existence, or that Dr. Bunin accepted the agreement

through his conduct. Id. at 6. But Vanguard has failed to supply any evidence that the MOU was

an enforceable contract. Dr. Bunin testified in his deposition that “I never had a document that

was signed with them, but Steve [Posar] was paying some consultation fees to me” to help

Vanguard’s facilities in Indiana. [Exhibit E, Bunin Dep. 26:7-22]. Dr. Posar testified that he does

not possess a written contract signed by him and Dr. Bunin. He argues that there was a signed

contract with the material term blanks filled in but that he cannot find it and thus cannot produce

it. [Exhibit B, Posar Dep. 28:11 to 29:20].

Vanguard and Dr. Posar also fail to provide evidence of Dr. Bunin’s assent to the terms

of a contract or evidence of the parties discussing the terms or timeframe of a contract. Vanguard

9

argues that Dr. Bunin’s testimony in his deposition established his assent to the terms of the

MOU although, notably, Vanguard failed to provide any citation to which parts of the deposition

supported its argument. [DE 105 at 9]. In his deposition, Vanguard’s attorney asks Dr. Bunin a

series of questions about what kind of services he performed for Vanguard and Dr. Bunin

answers in the affirmative. [Exhibit E, Bunin Dep. 33-36]. During this exchange, Vanguard’s

attorney does not cite to the MOU as the source from which he is reading the described services

though many are included in the section describing Dr. Bunin’s duties under the MOU. [DE 99-7

at 2-3]. Later in his deposition when specifically discussing the MOU, Dr. Bunin testifies to the

following:

“There’s many things in there that – that were at a granular level that I never

discussed with Steve. We had discussed more general aspects that he had brought

up in terms of, oh, 10, 15 percent equity stake. We’ll work out some monthly fee.

. . . But it was very general terms and not to the granular level that is presented in

that document, which is what surprised me. And there was blanks everywhere.

Never filled in.”

[Exhibit E, Bunin Dep. 106-107]. Dr. Bunin does not deny that he had a consultative

relationship with Vanguard as an independent contractor but asserts that the MOU does not

reflect the agreement he made with Dr. Posar.

Courts cannot make contracts for parties, nor are they “at liberty to supply omitted terms

while professing to construe a contract.” Zukerman v. Montgomery, 945 N.E.2d 813, 822 (Ind.

Ct. App. 2011) (citing Mead Johnson v. Oppenheimer, 458 N.E.2d 668, 670 (Ind. App. Ct.

1984)). “[W]here any essential term is omitted from a contract, or is left obscure or undefined, so

as to leave the intention of the parties uncertain as to any substantial term of the contract, the

contract may not be specifically enforced.” Poore v. Indianapolis Pub. Sch., 155 N.E.3d 643,

655 (Ind. Ct. App. 2020) (quoting Conwell v. Gray Loon Outdoor Mkg. Grp., Inc., 906 N.E.2d

805, 813 (Ind. 2009)). There are too many material terms missing in the MOU for the Court to

10

find it enforceable and notably Vanguard is not properly identified in it. Dr. Bunin freely admits

that he had an independent contractor relationship with Vanguard and Dr. Posar, but he also

testified that he had never seen the MOU before the start of this lawsuit. Furthermore, the Court

does not find that Dr. Bunin assented to the terms of the MOU simply by completing services the

parties agreed to as part of the independent contracting role created for him. And Vanguard has

failed to supply any evidence demonstrating the contrary. Moreover, the Court notes that there

are also a couple of other inconsistencies within the MOU itself. It refers to “Vanguard

Services,” which Dr. Posar explained in his deposition is not an entity he is aware of as his entity

is known as “Vanguard Eldercare.” [Exhibit B, Posar Dep. 27:1-10]. The MOU also calls for Dr.

Bunin to “collaborate in the Indiana market at [Steven Posar’s] existing facilities,” but as this

dispute has demonstrated, Dr. Posar wanted Dr. Bunin to work in Michigan and not just Indiana.

[DE 99-7].

It is clear that Dr. Bunin had some kind of an agreement as an independent contractor

with Vanguard, but the MOU supplied by Vanguard is insufficient to form the basis of an

enforceable contract on which this Court can find a breach of contract claim. Therefore, the

Court grants Dr. Bunin summary judgment on the breach of contract claim. Moreover, since Dr.

Bunin’s counterclaim against Vanguard is premised on the existence of a written contract, Dr.

Bunin’s counterclaim will also be dismissed.

2. Count II: Constructive Fraud Claim Asserted against Dr. Bunin and BCS

Next, in its complaint, Vanguard alleged that, as an independent contractor and as part of

his obligations under the MOU,3 Dr. Bunin owed a duty of good faith and fair dealing to

3 Vanguard refers to the MOU as the “Agreement” throughout its complaint. [DE 39]. For the purposes of this

opinion, the Court recognizes the MOU as the alleged agreement between Dr. Bunin and Vanguard and recognizes

the Marketing Agreement (“Agreement”) as the agreement between BCS and Doctors Hospital.

11

Vanguard in all aspects regarding their arrangement. But in its response brief, Vanguard argued

that the requisite duty to support a claim for constructive fraud was supplied by the fiduciary

duty Dr. Bunin owed Vanguard. [DE 105 at 17]. Vanguard also argued that, since Dr. Bunin

worked on behalf of BCS for its benefit, BCS is responsible for his actions as it is vicariously

liable under the theory of respondeat superior for Dr. Bunin’s actions. [DE 105 at 18].

Under Indiana law, a showing of constructive fraud requires “the existence of a duty by

virtue of a special relationship between the parties; deceptive and material representations or

omissions made in violation of that duty; and reliance on the deceptive statements or omissions

resulting in injury to the complaining party and an unconscionable advantage to the defrauding

party.” Mudd v. Ford Motor Co., 178 F. App’x 545, 547 (7th Cir. 2006) (citing Doe v. Howe

Military Sch., 227 F.3d 981, 991 (7th Cir. 2000)). Normally the “special relationship” is a

fiduciary or confidential one between the parties. Doe, 227 F.3d at 991. Vanguard initially based

this claim on the MOU it allegedly had with Dr. Bunin. But an arms-length, contractual

relationship is not enough to give rise to a claim of constructive fraud. See Morgan Asset

Holding Corp. v. CoBank, ACB, 736 N.E.2d 1268, 1273 (Ind. 2000); Comfax Corp. v. North Am.

Van Lines, 587 N.E.2d 118, 126 (Ind. Ct. App. 1992) (“pure contractual relations between parties

entering into an arm's length transaction may not form the basis for constructive fraud”); see also

Orem v. Ivy Tech State College, 711 N.E.2d 864, 869 (Ind. Ct. App. 1999) (“There must always

be a violation of some duty owing to plaintiff, and generally such duty must arise by operation of

law and not by mere agreement of the parties.”). Next, Vanguard argued that the duty element

required for its constructive fraud claim was supplied by Dr. Bunin’s fiduciary duty to Vanguard,

but as will be more fully explained in Count III (Breach of Fiduciary Duty), this Court finds that

Dr. Bunin owed no fiduciary duty to Vanguard.

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Thus, Vanguard’s argument for a special relationship between the parties must rely on

Dr. Bunin owing Vanguard a duty of good faith and fair dealing as it originally alleged in its

complaint. Indiana courts recognize that a fiduciary relationship is not the only basis for a claim

of constructive fraud; rather, a relationship that invokes a duty of good faith and fair dealing is

also sufficient to satisfy the first prong of the constructive fraud test. Wells v. Stone City Bank,

691 N.E.2d 1246, 1251 (Ind. Ct. App. 1998). But, “Indiana law does not impose a generalized

duty of good faith and fair dealing on every contract; the recognition of an implied covenant is

generally limited to employment contracts and insurance contracts.” Old Nat. Bank v. Kelly, 31

N.E.3d 522, 531 (Ind. Ct. App. 2015). Here, the Court finds there to be no employment contract

and Vanguard makes no other argument as to how a duty of good faith and fair dealing might be

applied to its relationship with Dr. Bunin. Notably, in its argument regarding whether a fiduciary

relationship exists between the parties, Vanguard submits that the conduct of the parties over a

period of years established a relationship that was characterized by trust and confidence. While

that may have been true, Indiana law does not extend the duty of good faith and fair dealing to

such a relationship and Vanguard has failed to supply any other evidence demonstrating that a

special relationship, a required element of its constructive fraud claim, existed between it and Dr.

Bunin. Therefore, the Court grants Dr. Bunin summary judgment on the constructive fraud

claim.

As for the claim asserted against BCS, the Court cannot find there to be any genuine

issue of material fact as to its involvement with Dr. Bunin. Vanguard responded to BCS’s motion

for summary judgment on this claim that its constructive fraud claim was based entirely on Dr.

Bunin’s relationship with Vanguard. [DE 105 at 18]. Vanguard then argues that since Dr. Bunin

was still employed by BCS while doing contract work for it, that BCS is vicariously liable under

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the theory of respondeat superior. [Id.]. Notably though, Mr. Clemente, the CEO of BCS,

testified that he was unaware that Dr. Bunin was working for Vanguard during the relevant time

period. [Exhibit D, Clemente Dep. 19:5-25]. Nor has Vanguard supplied any evidence to any

kind of involvement by BCS while Dr. Bunin worked with Vanguard. Its claim that BCS’s

liability falls under the doctrine of respondeat superior fails primarily because Dr. Bunin is not

liable, but also because Vanguard has not supplied any evidence that Dr. Bunin’s actions were

committed within the course and scope of his employment with BCS. “An employee’s act is not

within the scope of employment when it occurs within an independent course of conduct not

intended by the employee to serve any purpose of the employer.” Barnett v. Clark, 889 N.E.2d

281, 284 (Ind. 2008) (quoting Restatement (Third) of Agency, § 7.07(1) (2006)).

Here, Dr. Bunin freely admitted that he had an independent contractor relationship with

Vanguard. [Exhibit E, Bunin Dep. 26:7-22]. Moreover, as noted earlier, Mr. Clemente was

unaware that Dr. Bunin was working for Vanguard prior to the commencement of this lawsuit.

[Exhibit D, Clemente Dep. 19:5-12]. Finally, Vanguard has failed to supply any evidence that

Dr. Bunin was working within the scope of his employment with BCS or that he was being

directed by BCS to the detriment of Vanguard. “While the record ‘and all reasonable inferences

drawn from it [are to be viewed] in the light most favorable to the party opposing the motion,’

Bisciglia v. Kenosha Unified Sch. Dist. No. 1, 45 F.3d 223, 226 (7th Cir. 1995), the nonmovant

must show more than ‘some metaphysical doubt’ regarding the facts.” Technic Eng'g, Ltd. v.

Basic Envirotech, Inc., 53 F. Supp. 2d 1007, 1010 (N.D. Ill. 1999). Vanguard has failed to

support its claim of vicarious liability for constructive fraud against BCS and therefore the Court

grants BCS’s motion for summary judgment as to that claim.

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3. Count III: Breach of Fiduciary Duty Claim Asserted against Dr. Bunin

Vanguard argues that, as an independent contractor and as part of his obligations under

the MOU, Dr. Bunin owed it a fiduciary duty to deal fairly, honestly, and openly in all aspects of

their cooperative agreement. [DE 39 at 10]. In the complaint, Vanguard alleges that Dr. Bunin

breached his fiduciary duty by engaging in the same or substantially the same services on behalf

of BCS that he was supposedly providing for Vanguard. Vanguard also alleges that Dr. Bunin

breached this duty by being employed by one of its competitors, serving as an executive officer

at the same competitor while receiving compensation from Vanguard, and for attempting to

solicit business with Vanguard’s customers, clients, and contacts on behalf of BCS. Finally,

Vanguard asserts that Dr. Bunin further breached his duty by providing Dr. Posar false reports of

his activities on behalf of Vanguard.

“[A] claim for breach of fiduciary duty requires proof of three elements: (1) the existence

of a fiduciary relationship; (2) a breach of that duty owed by the fiduciary to the beneficiary; and

(3) harm to the beneficiary.” Rapkin Grp., Inc. v. Cardinal Ventures, Inc., 29 N.E.3d 752, 757

(Ind. Ct. App. 2015) (internal citation omitted); Aaron MacGregor & Assocs., LLC v. Zhejiang

Jinfei Kaida Wheels Co., 328 F. Supp. 3d 906, 927 (N.D. Ind. 2018). Indiana courts have not

found a fiduciary duty to be based on employment or contractual agreements, “[b]ut . . . under

Indiana law, a breach of contract and breach of fiduciary duty are two different claims; a

contractual relationship does not preclude a fiduciary one.” Zimmer Inc. v. Beamalloy

Reconstructive Med. Prod., LLC, 2017 WL 3315135, at *5 (N.D. Ind. Aug. 2, 2017) (citing

Town of Goodland v. Kessler Tank Co., 2014 WL 1319509, at *1–2 (N.D. Ind. April 1, 2014)

(“the existence of a fiduciary relationship depends upon the facts of each case, not on the label or

classification”)); see also, Demming v. Underwood, 943 N.E.2d 878, 888 (Ind. Ct. App. 2012).

15

Indiana courts have also found that a fiduciary duty can arise out of a confidential relation

between parties under special circumstances. Town of Goodland, 2014 WL 1319509, at *1–2

(“The only relevant exception [to the general rule that a contractual relationship does not give

rise to a fiduciary relationship] is when special circumstances establish a ‘confidential

relationship’ between the parties.”) (citing Wilson v. Lincoln Fed. Sav. Bank, 790 N.E.2d 1042,

1046–47 (Ind. Ct. App. 2003)). Three elements are required to establish this confidential

relationship between parties:

“First, the claimant must establish that there was ‘an unequal relationship between

two parties, with one party in a position of dependence, weakness or lack of

knowledge.’ Id. (citing Kreighbaum v. First National Bank & Tr., 776 N.E.2d

413, 419 (Ind. Ct. App. 2002)). Second, the weaker party must have put its trust

and confidence in the stronger party. Id. Third, ‘the stronger party [must have]

wrongfully abused the weaker party’s trust and confidence by improperly

influencing the weaker party to gain an advantage.’ Id. (citing Kreighbaum, 776

N.E.2d at 419). In order to prove improper influence to gain an advantage, the

plaintiff ‘has to plead facts showing [the tortfeaser] took advantage of [the

claimant’s] trust.’ Id. (citing Kreighbaum, 776 N.E.2d at 419).”

Zimmer Inc., 2017 WL 3315135, at *5.

But here, there is simply not enough to establish a fiduciary relationship between

Vanguard and Dr. Bunin. Dr. Bunin’s fiduciary duty cannot be based on a contract and the facts

do not establish a confidential relationship based on an unequal relationship between the parties.

Vanguard does not allege that Dr. Bunin was the more dominant party or that he had more

influence between the two. Neither Vanguard, nor Dr. Posar can argue that they are the more

inexperienced party when compared to Dr. Bunin since the facts establish that BCS and

Vanguard were competitors. And Vanguard fails to demonstrate how Dr. Bunin was superior to

it or exercised influence over it. Paulson v. Centier Bank, 704 N.E.2d 482, 490 (Ind. Ct. App.

1998). While Vanguard certainly had to trust that Dr. Bunin was doing what he said he was

doing, trust is simply not enough to establish a fiduciary duty. Town of Goodland v. Kessler Tank

16

Co., 2014 WL 1319509, at *3 (N.D. Ind. Apr. 1, 2014). “[W]e trust most people with whom we

do business.” Pommier v. Peoples Bank Marycrest, 967 F.2d 1115, 1117 (7th Cir. 1992). To state

a claim for breach of fiduciary duty, the dominant party must have used his dominance to

somehow improperly influence the weak party to obtain an advantage. See Kruse v. Nat’l Bank

of Indianapolis, 815 N.E.2d 137, 148 (Ind. Ct. App. 2004). And notably, Dr. Posar testified that

he was aware Dr. Bunin was working for BCS for the entire time up until an executive for BCS,

Dr. Gunabalan, was arrested. [Exhibit B, Posar Dep. 75:9-12]. Thus, at the very most, Vanguard

has alleged bad faith behavior on Dr. Bunin’s part for not being forthright about resigning from

BCS, but neither his alleged behavior nor their relationship gives rise to a fiduciary duty. See

Zimmer Inc., 2017 WL 3315135, at *6 (N.D. Ind. Aug. 2, 2017). Since Vanguard has failed to

provide evidence demonstrating the existence of a fiduciary duty Dr. Bunin owed it, Dr. Bunin is

entitled to summary judgment as a matter of law on the claim for breach of fiduciary duty.

4. Count IV: Fraud Claim Asserted against Dr. Bunin

Vanguard is also asserting a claim of actual fraud against Dr. Bunin for knowingly, or

with reckless disregard for the truth, making false statements of material fact. Vanguard alleges

that Dr. Bunin made these false statements with the intent to deceive Vanguard so that he would

continue to be compensated while intentionally harming and devaluing Vanguard. Vanguard

argues that it was justified in relying on Dr. Bunin’s statements and did so to its detriment while

Dr. Bunin diverted business away to BCS, attempted to solicit business from Vanguard’s

customers, and acted as an executive officer for BCS while receiving compensation from

Vanguard. Therefore, as a result of his fraudulent conduct, Vanguard alleges that Dr. Bunin has

been unjustly enriched through compensation from Vanguard for services that were not rendered

and, at the same time, increasing the value of BCS and harming Vanguard.

17

In Indiana, the elements of actual fraud are: 1) a material misrepresentation of past or

existing fact by the party to be charged that “2) was false; 3) was made with knowledge or in

reckless ignorance of the falsity; 4) was relied upon by the complaining party; and 5)

proximately caused the complaining party injury.” Schwartz v. Oberweis, 826 F. Supp. 280, 288

(N.D. Ind. 1993). For actual fraud to apply, “the complaining party must have had the right to

rely upon those misrepresentations.” Pugh's IGA, Inc. v. Super Food Servs., Inc., 531 N.E.2d

1194, 1198 (Ind. Ct. App. 1988).

Dr. Bunin argues that both Vanguard and Dr. Posar knew he was still employed by BCS,

that Vanguard admitted there was no evidence that he and BCS engaged in a conspiracy, and that

Vanguard cannot prove it suffered an injury. [DE 99 at 19]. In his deposition, Dr. Posar testified

that he was aware Dr. Bunin was working for BCS for the entire time up until an executive for

BCS, Dr. Gunabalan, was arrested. [Exhibit B, Posar Dep. 75:9-12]. Following the arrest, Dr.

Posar stated that both he and Cameron Gilbert met with Dr. Bunin about not wanting Vanguard

to be associated with an organization (BCS) that had one of its executives under federal arrest.

Dr. Posar testified that they communicated with Dr. Bunin that Vanguard could not have a

relationship with him if he was still associated with BCS and that “[y]ou have to either go with

BCS or go with us, but you can’t really do both at this point.” [Id. at 76:6-8]. Following this

conversation, Dr. Posar testified that Dr. Bunin prepared a resignation letter and certified to Dr.

Posar that he had mailed the letter and that his relationship with BCS was terminating within 60

days. [Id. at 76:13-17]. Finally, Dr. Posar testified that “at that point going forward, it was our

belief and it was Mr. Bunin’s representation to us that he no longer had a relationship with

BCS.” [Id. at 76:19-21]. In Dr. Bunin’s deposition, he explains the series of events slightly

differently. Dr. Bunin testified that, “[n]o, I did not at any point tell him I was no longer

18

employed by BCS.” [Exhibit E, Bunin Dep. 59:21-22]. He further explained that following Dr.

Gunabalan’s arrest, Dr. Posar encouraged him to resign from BCS to protect himself and so he

prepared the resignation letter at Dr. Posar’s direction, but never submitted the letter. Id. at 60:1-

23. Dr. Bunin testified that when asked if he sent the letter, he told Dr. Posar that he was

consulting with counsel and that he had still not decided what to do. [Id. at 63:16-19].

“[A]ctual fraud may not be based on representations regarding future conduct, or on

broken promises, unfulfilled predictions, or statements of existing intent which are not

executed.” Comfax v. N. Am. Van Lines, 587 N.E.2d 118, 125 (Ind. App. Ct. 1992). The

representation at issue here is whether Dr. Bunin allowed Vanguard to believe that he had

resigned from BCS when he had not. Dr. Bunin asserts that he promised to look into resigning

from BCS and to speak to his attorney about it but testified that he never stated that he fully

resigned from BCS. On the other hand, Dr. Posar asserts that Vanguard had several

conversations with Dr. Bunin about his employment with BCS and that Dr. Bunin represented

that he was no longer employed there. The parties did not provide any evidence on this issue

aside from the depositions. Thus, there may have been a period of time in which Vanguard

assumed Dr. Bunin was no longer working for BCS because Dr. Bunin led them to believe he

had resigned, but in reality, he had not. The claim cannot be based on Dr. Bunin’s promise to

resign, it must be based on an existing fact—that he had resigned and was no longer employed

by BCS. See Siegel v. Williams, 818 N.E.2d 510, 515 (Ind. Ct. App. 2004). During this period of

time then, Dr. Bunin may have been working for Vanguard and being paid by Vanguard when, in

reality, he was really working for BCS and not helping Vanguard grow its business. Here, the

Court finds significant issues of material fact remain on this point, at least for the period of time

following the creation of Dr. Bunin’s resignation letter and the termination of his independent

19

contract by Vanguard. Therefore, the Court denies Dr. Bunin’s motion for summary judgment as

to this claim.

5. Count V: Tortious Interference Claim Asserted against Dr. Bunin and BCS

In its response brief, Vanguard argues that Dr. Bunin intentionally interfered with

Vanguard’s relationships with facilities in Michigan by telling Vanguard that he was pursuing

those business opportunities and promoting Vanguard when he was only marketing BCS in

Michigan. [DE 105 at 21]. Vanguard claims that the evidence demonstrates that it suffered

damages as a result of delayed entry and loss of new business in the Michigan market. [Id. at 22].

Vanguard argues that Dr. Bunin lied, verbally and in writing, about services he was performing

on behalf of Vanguard. [Id. at 23]. Finally, Vanguard asserted that BCS is vicariously liable for

Dr. Bunin’s actions. And as a result of their actions, Vanguard asserts that the defendants have

tortiously and without privilege interfered in Vanguard’s business and prospective business.4

Dr. Bunin argues that Vanguard failed to establish the required element of damages for

its tortious interference claim. [DE 99 at 21]. The Court agrees that Vanguard failed to

demonstrate any harm. To establish tortious interference with a business relationship a party

must show: “(1) the existence of a valid relationship; (2) the defendant’s knowledge of the

existence of the relationship; (3) the defendant’s intentional interference with that relationship;

(4) the absence of justification; and (5) damages resulting from defendant’s wrongful

interference with the relationship.” McCollough v. Noblesville Sch., 63 N.E.3d 334, 344 (Ind. Ct.

App. 2016). Moreover, “[i]n the State of Indiana, an element necessary to prove this cause of

4 The Court notes that neither Dr. Bunin, nor BCS raised a statute of limitations argument for these claims

and thereby has waived this affirmative defense. See Neterer v. Slabaugh, 548 N.E.2d 832, 834 (Ind. Ct. App. 1990).

20

action is that a defendant acted illegally in achieving his end.” Watson Rural Water Co. v.

Indiana Cities Water Corp., 540 N.E.2d 131, 139 (Ind. Ct. App. 1989).

Here, Vanguard has failed to supply any evidence that damages resulted from Dr.

Bunin’s interference. Vanguard alleges that Dr. Bunin interfered with its current and prospective

customers, but Dr. Posar testified in his deposition that he was not alleging that Dr. Bunin drove

away any current customers. [Exhibit B, Posar Dep. 164:23-25 to 165:1-2]. Moreover, the only

evidence Dr. Posar provided of Dr. Bunin’s interference with Vanguard’s prospective business

customers in Michigan was the conversations he had with staff members at a potential customer

facility and his conversation with one of the facility’s employees, Jamie Garcia. [Exhibit B,

Posar Dep. 165:21-25 and 166:1]. Dr. Posar stated that Jamie Garcia informed him that Dr.

Bunin was soliciting her company’s business on behalf of BCS while he was working for

Vanguard. [Exhibit B, Posar Dep. 159:6-9]. Notably, Vanguard did not file any affidavit or

declaration on behalf of Ms. Garcia stating these same facts. Dr. Posar also testified that Dr.

Bunin blocked Vanguard in Michigan by representing BCS to certain facilities instead of

Vanguard. [Id. at 169:17-25]. Moreover, Vanguard references a list of Michigan facilities that

Dr. Bunin promised to get under contract for Vanguard, but fails to supply this list or references

what facilities they lost as a result of Dr. Bunin’s interference. [DE 105 at 21]. There is

insufficient evidence demonstrating that, as a result of Dr. Bunin’s interference, Vanguard lost

prospective customers in Michigan or anywhere else. Vanguard has also not supplied any

evidence of how much those potential new customers were worth to it. Certainly, if Dr. Bunin

had been successful at interfering with any of Vanguard’s business relationships, it could show

how many potential facilities were lost to BCS or current facilities that switched from Vanguard

to BCS. Once Vanguard had determined how many facilities were lost, it could estimate how

21

much each facility was worth in income. But it has failed to provide any evidence of such loss or

damages.

Here, the nonmoving party, Vanguard, bears the burden of demonstrating that a genuine

issue of material fact exists as to this claim. See Matsushita Elec. Indus. Co. v. Zenith Radio

Corp., 475 U.S. 574, 586–87 (1986); Oliver v. Oshkosh Truck Corp., 96 F.3d 992, 997 (7th Cir.

1996). It is not the duty of this Court “to scour the record in search of evidence to defeat a

motion for summary judgment; rather, the nonmoving party bears the responsibility of

identifying applicable evidence.” See Bombard v. Fort Wayne Newspapers, Inc., 92 F.3d 560,

562 (7th Cir. 1996). Vanguard has not supplied evidence to establish damages resulting from its

allegations that Dr. Bunin wrongfully interfered with any of its current or potential clients or

customers in the Michigan market. Therefore, the Court grants Dr. Bunin’s motion for summary

judgment on this claim.

In this same claim, Vanguard also asserts that BCS is vicariously liable for Bunin’s

actions because Dr. Bunin’s actions were completed in the course and scope of his employment.

Dr. Posar testified that he believed Dr. Bunin “was acting as an agent at that time essentially

committing industrial espionage . . . on behalf of BCS.” [Exhibit B, Posar Dep. 82:5-7]. But

since Vanguard cannot prevail against Dr. Bunin, it follows that it cannot prevail against BCS.

As noted several times in this opinion, Mr. Clemente, CEO of BCS, testified in his deposition

that he was surprised to discover Dr. Bunin was working for Vanguard and that he learned about

it from the lawsuit. [Exhibit D, Clemente Dep. 19:5-12]. Again, Vanguard has failed to supply

sufficient evidence demonstrating tortious interference on the part of BCS. The claims asserted

against Dr. Bunin failed and thus Vanguard’s argument of respondeat superior fail. Moreover, as

BCS argues, Vanguard has failed to show a valid relationship with any prospective customers in

22

Michigan and has admitted that it did not have any current customers that it lost as a result of Dr.

Bunin’s activities. Moreover, viewing the evidence in the light most favorable to Vanguard, there

is no evidence that any contract between Vanguard and Dr. Bunin even existed or was broken, or

that BCS induced the breaking of such a contract. Therefore, the Court grants BCS’s motion for

summary judgment as to both claims for tortious interference.

6. Count VI: Unfair Competition Claim Asserted against Dr. Bunin and BCS

Vanguard’s argument in response to the motions for summary judgment on its unfair

competition claim is short. Vanguard argues that the evidence demonstrates that Dr. Bunin lied

about the work he was performing for Vanguard. It argues that “[i]nstead of promoting Vanguard

in Indiana and Michigan, Dr. Bunin accepted compensation from Vanguard in exchange for

essentially nothing and utilized his time continuing to promote BCS to the detriment of

Vanguard.” [DE 105 at 24]. Finally, again, Vanguard asserts that since Dr. Bunin’s conduct was

within the course and scope of his employment with BCS that BCS is vicariously liable.

Under Indiana law, unfair competition is not a single course of conduct, but a general

category of conduct which “is open-ended, and nameless forms of unfair competition may be

recognized at any time for the protection of commercial values.” Felsher v. Univ. of Evansville,

755 N.E.2d 589, 599 (Ind. 2001). “The question to be determined in every case is . . . whether

defendant, as a matter of fact, is by his conduct passing off his goods as plaintiff’s goods, or his

business as plaintiff’s business.” Inst. for Int'l Educ. of Students v. Qian Chen, 380 F. Supp. 3d

801, 810 (S.D. Ind. 2019) (quoting Hartzler v. Goshen Churn & Ladder Co., 104 N.E. 34, 37

(Ind. App. Ct. 1914)). In its response brief, Vanguard quotes the court in Felsher when

describing unfair competition as “the attempt to create confusion concerning the unfair

competitor’s goods.” 755 N.E.2d at 598. [DE 105 at 23]. Vanguard then reiterates that Dr. Bunin

23

lied about the work he was performing for it and lied about his continued employment with BCS,

while accepting money from Vanguard and continuing to promote BCS to Vanguard’s detriment.

Thus, it appears that Vanguard is arguing that Dr. Bunin committed the tort of “passing off,”

which “is a species of unfair competition that emerged in the nineteenth century as a type of

fraud.” Keaton & Keaton v. Keaton, 842 N.E.2d 816, 818 (Ind. 2006). “Under this doctrine,

liability is imposed for the intentional misrepresentation of goods or services as those of

another.” Id.

Notably, the only evidence the Court could find on this subject involves Jamie Garcia. In

his termination letter to Dr. Bunin (which was not supplied by Vanguard), Dr. Posar accuses him

of lying about a meeting he set up with Ms. Garcia for Vanguard—essentially that Dr. Bunin

stated that the meeting was scheduled with Ms. Garcia as a representative of her facility, and it

was not. [DE 99-10]. And as noted earlier in this opinion, Dr. Posar testified in his deposition

that Ms. Garcia informed him that Dr. Bunin was soliciting her company’s business on behalf of

BCS while he was working for Vanguard. [Exhibit B, Posar Dep. 159:6-9]. Interestingly, later in

his deposition, Dr. Posar states that Ms. Garcia worked at a facility that was under contract with

BCS. [Id. at 171:8-24]. Finally, Dr. Posar testified that Dr. Bunin never solicited any business

away from Vanguard on behalf of BCS in Indiana. [Id. at 169:2-5]. The issue of unfair

competition then is focused on what Dr. Bunin did or did not do in Michigan. While the Court

notes that there is not a lot of evidence of unfair business competition—that is whether a

defendant, as a matter of fact, is by his conduct passing off his goods as the plaintiff’s goods, or

his business as the plaintiff’s business—there at least remains a genuine issue of material fact as

to whether Dr. Bunin lied about or misrepresented the work he was doing for Vanguard in

24

Michigan. Therefore, the Court denies Dr. Bunin’s motion for summary judgment as to the claim

of unfair business competition.

However, Vanguard has failed to show Dr. Bunin taking any of these actions within the

course and scope of his employment with BCS and thereby fails to show how BCS is vicariously

liable. Dr. Bunin testified in his deposition that he was hired to promote Vanguard in Indiana and

that he performed services on behalf of Vanguard in Indiana. [Exhibit E, Bunin Dep. 34:4-7].

Vanguard failed to supply evidence of BCS’s involvement other than also being a current

employer of Dr. Bunin. Therefore, the Court grants Dr. Bunin and BCS’s motions for summary

judgment on this claim.

B. Vanguard’s Motion for Summary Judgment

The Court will now address Vanguard’s motion for summary judgment asserted against

BCS’s amended complaint and counterclaim. A central issue in the relationship between BCS

and Vanguard is whether the Marketing Agreement between BCS and Doctors Hospital also

applies to Vanguard. [DE 104-3]. Vanguard’s motion for summary judgment is based on BCS’s

first amended complaint against Dr. Posar, individually, and its counterclaims against Vanguard

filed in October of 2019. [DE 85]. At the outset, the Court would note that there is a genuine

issue of material fact as to whether Dr. Posar may be held individually liable for any of the

claims asserted by BCS. At this point in time, insofar as any claims survive against Vanguard,

the same claims survive against Dr. Posar. The Court will now address Vanguard’s motion for

summary judgment. [DE 100].

1. Count I: Breach of Contract

In its amended counterclaim against Vanguard, BCS asserts that Vanguard, as an affiliate

of Doctors Hospital—a point that Vanguard disputes—was bound by the Marketing Agreement

25

between Doctors Hospital and BCS yet breached that agreement by attempting to expand its

business into Michigan. BCS submits that in 2012 Dr. Posar, as principal of Vanguard, was

“heavily involved in the negotiation of the Marketing Agreement eventually entered into

between Doctors Hospital and BCS.” [DE 85 at 9]. Since Dr. Posar was involved in the

negotiation of the Agreement, BCS argues that he was aware of the restriction in Section 8.2 of

each party to their respective services areas—Indiana and Michigan. The restriction in the

Agreement precluded Doctors Hospital, or any of its affiliates, from providing services to any

facility in the Michigan Service Area that had an active contract with BCS. Id. The issue thus

really turns on whether Vanguard is, or was at the time of signing, an affiliate of Doctors

Hospital or if it is in privity with Doctors Hospital since Dr. Posar admitted to attempting to

expand into Michigan.5

Here, there are significant issues of material fact as to whether Vanguard was an affiliate

of or in privity with a party to the Marketing Agreement. “The term privity describes the

relationship between persons who are parties to an action and those who are not parties to an

action but whose interests in the action are such that they may nevertheless be bound by the

judgment in that action.” Weinreb v. Fannie Mae, 993 N.E.2d 223, 230 (Ind. Ct. App. 2013).

BCS has supplied enough evidence of Vanguard’s interest to the action such that it might be

bound by the contract. There is also conflicting evidence as to whether Vanguard was considered

an affiliate of Doctors Hospital in the contract itself or as generally understood under the

meaning of the word.6 BCS has supplied sufficient evidence demonstrating there to be

5 Dr. Posar testified in his deposition that there “was a change in circumstances” which led him to attempt to expand

Vanguard’s business into southwestern Michigan. [Exhibit B, Posar Dep. 168-170].

6 While neither party raised the issue of the parol evidence rule, which prohibits courts from considering extrinsic

evidence for the purpose of varying or adding to the terms of the contract (including parties), courts may consider

parol evidence if it is being used to show fraud, intentional misrepresentation, or mistake. See Krieg v. Hieber, 802

26

significant disputed issues of material fact remaining on these points. BCS supplied an article in

which Dr. Posar is interviewed regarding Doctors Hospital. [DE 104-6]. In the article, Vanguard

is described as an affiliate with Doctors Hospital and it states that Dr. Posar is the president of

medical staff at Doctors Hospital. BCS also supplied an email between Dr. Posar, Dr. Bunin, and

Cameron Gilbert which included a copy of a Letter of Intent as to a draft Development

Agreement between Doctors Hospital and BCS, which BCS states includes predecessor language

to Section 8.2 of the final Agreement. [DE 104-5]. The draft Development Agreement lists

Vanguard Eldercare as an affiliate of Doctors Hospital. [Id. at 2]. An email from Dr. Bunin to Dr.

Posar references the draft agreement and asks him to sign off on the Letter of Intent so that a full

contract between the organizations could be completed. [Id. at 7]. Finally, another exhibit

demonstrates an email Dr. Posar received from his attorney, Michael McNally, which states the

following: “In the copy I reviewed, the agreement restricts the Hospital, Vanguarg [sic], and

their respective affiliates from providing . . . services at any ‘Facility’ in Michigan.” [DE 104-9].

The Court also notes that the numerous depositions in this case tend to show that Dr. Posar was,

at the very least, aware of and involved in the negotiations surrounding the creation of the

Marketing Agreement. Thus, there remains a genuine issue of material fact as to whether

Vanguard was bound by the terms of the Marketing Agreement. Therefore, the Court denies

Vanguard’s motion for summary judgment on this claim.

2. Count II: Unjust Enrichment/Quantum Meruit

BCS asserts that from 2012-2014 it provided services under the Marketing Agreement,

which led it to refer many patients to Doctors Hospital and which made it unable to compete in

Indiana. As a result of these referrals, BCS claims that Vanguard and Dr. Posar benefitted

N.E.2d 938, 944 (Ind. Ct. App. 2004). The Court will consider parol evidence in this matter as BCS has

demonstrated that it will be used to show fraud or intentional misrepresentation.

27

financially as an affiliate of Doctors Hospital. [DE 85 at 11]. Using BCS’s confidential

information, Vanguard and Dr. Posar hired BCS clinicians, attempted to recruit BCS facilities,

and used its promotional materials in advertising, all of which unjustly enriched Dr. Posar and

Vanguard. BCS asserts that it is entitled to receive the substantial financial benefit that Vanguard

and Dr. Posar received from services provided to facilities in Michigan in violation of the

Marketing Agreement.

“Also referred to as quantum meruit or quasi-contract, unjust enrichment requires a party

who has been unjustly enriched at another’s expense to make restitution to the aggrieved party.”

Reed v. Reid, 980 N.E.2d 277, 296 (Ind. 2012). “To recover under an unjust enrichment claim, a

plaintiff must generally show that he rendered a benefit to the defendant at the defendant's

express or implied request, that the plaintiff expected payment from the defendant, and that

allowing the defendant to retain the benefit without restitution would be unjust.” Id. But notably,

“[w]hen the rights of parties are controlled by an express contract, recovery cannot be based on a

theory implied in law such as unjust enrichment.” Zoeller v. E. Chi. Second Century, Inc., 904

N.E.2d 213, 221 (Ind. 2009).

Here, the Court finds that BCS failed to provide evidence demonstrating that it expected

payment from Vanguard for its referrals in any form. Moreover, the benefit that BCS asserts it

rendered to Vanguard is the non-compete section in the Agreement, but that agreement is

directly addressed in its breach of contract claim. If the Court were ultimately to find that the

Marketing Agreement does not apply to Vanguard, then Vanguard’s solicitation of BCS’s

facilities in Michigan would still not qualify as unjust enrichment, even if Vanguard improperly

used confidential business information. Moreover, BCS has not supplied any evidence

demonstrating it expected payment in any other form from Vanguard within or outside of the

28

Agreement. Therefore, the Court grants Vanguard’s motion for summary judgment as to this

claim.

3. Counts III-V: Tortious Interference

Vanguard asserts that BCS’s three counts based on tortious interference must be

dismissed because they are time-barred under Indiana law. In Indiana, a tortious interference

claim has a two-year statute of limitations. Ind. Code § 34–11–2–4. The statute of limitations

begins to run when a cause of action accrues, which is when an injury causes damage, or some

ascertainable damage has occurred. Graves v. Kovacs, 990 N.E.2d 972, 978 (Ind. Ct. App. 2013).

“[T]ortious interference with contract claim accrues when the contract is breached” and

“[s]imilarly, a tortious interference with prospective advantage accrues when the prospective

advantage is interfered with.” C & E Corp. v. Ramco Indus., Inc., 717 N.E.2d 642, 644 (Ind. Ct.

App. 1999). And “the general purpose of statutes of limitations is to encourage the prompt

presentation of claims and to spare the courts from litigation of stale claims.” Mercantile Nat'l

Bank of Hammond v. Underwood, 906 N.E.2d 881, 887 (Ind. Ct. App. 2009). Thus, these claims

accrued when BCS became aware of the interference or damage that was caused by the

interference.

In an effort to save these claims, BCS first argues that its counterclaims relate back to the

filing of Vanguard’s complaint in state court on September 26, 2016. Here, BCS’s counterclaims

against Vanguard do arise out of the same agreements and business relationships as Vanguard’s

complaint and therefore may be considered compulsory counterclaims. See Bond v. Gen. Motors,

LLC, 2016 WL 3548956, at *2 (N.D. Ind. June 30, 2016) (citing Ind. Trial Rule 13(A)). But

reading Indiana courts’ application of statutes of limitations to affirmative counterclaims, it does

29

not appear that BCS’s “relating back” argument has any legs.7 Indiana courts have previously

addressed the accrual date of counterclaims and strictly apply the statute of limitations, which

results in the counterclaims accruing on the same date as the plaintiff’s claim—the date of the

incident or injury. See Crivaro v. Rader, 469 N.E.2d 1184, 1187 (Ind. Ct. App. 1984). “In

Crivaro, another panel of this Court adopted the former approach, declining the invitation to

adopt a ‘tolling’ rule that would essentially grant the counterclaimant additional time for

asserting a counterclaim.” Delacruz v. Wittig, 42 N.E.3d 557, 561 (Ind. Ct. App. 2015). Thus,

BCS’s counterclaims do not relate back to Vanguard’s complaint and the statute of limitations

was not tolled following the filing of the complaint. The two-year limitation under § 34–11–2–4

still applies to BCS’s counterclaims even if they are compulsory. BCS did not file its original

counterclaim until February 15, 2019. As the Court will explain in depth below, the date of

interference or damage for each of these claims occurred at the very latest in 2016. Thus, even

assuming the latest possible date of interference, BCS is still precluded by the two-year statute of

limitations from asserting these claims.

In response BCS argues that the doctrine of continuing wrong applies to its

counterclaims, which tolls the statute of limitations. The doctrine of continuing wrong applies

when a course of conduct combines to produce an injury that “was of a continuous nature.”

Garneau v. Bush, 838 N.E.2d 1134, 1143 (Ind. Ct. App. 2005). The statute of limitations is tolled

until the end of a continuing wrongful act. Gumwood HP Shopping Partners, L.P. v. Simon Prop.

Grp., Inc., 36 N.E.3d 2, 4 (Ind. Ct. App. 2015). “This does not mean, however, that the plaintiff

may sit idly by if he discovers facts that alert him that he has a cause of action.” Parks v.

7 The Court recognizes BCS’s counterclaims to be affirmative as they could have been maintained independent of

Vanguard’s action, which is in contrast to defensive counterclaims that focus on recoupment or recovery. See

Delacruz v. Wittig, 42 N.E.3d 557, 560 (Ind. Ct. App. 2015).

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Madison County, 783 N.E.2d 711, 719 (Ind. Ct. App. 2002). But, “[d]rawing the line between

something that amounts to a ‘fresh act’ each day and something that is merely a lingering effect

of an earlier, distinct, violation is not always easy.” Pitts v. City of Kankakee, 267 F.3d 592, 595

(7th Cir. 2001). Thus, for BCS’s tortious interference claims, it “must demonstrate that the

alleged injury-producing conduct was of a continuous nature.” Garneau v. Bush, 838 N.E.2d

1134, 1143 (Ind. Ct. App. 2005). But for the reasons discussed below, the Court finds that BCS’s

claims each fail on this front as well.

i. Count III: Tortious Interference with Contractual Relationship between

BCS and Michigan Facilities

BCS claims that both Vanguard and Dr. Posar solicited health care facilities in the

Michigan service area that were under contract with BCS. BCS argues that while Mr. Clemente

sent a cease and desist letter to Vanguard on June 7, 2016, which could serve as the earliest point

in time at which it became aware of the tortious interference, Vanguard and Dr. Posar continued

to violate the Marketing Agreement by soliciting facilities in Michigan well into 2019. In his

deposition, Mr. Clemente testified that while the Marketing Agreement between BCS and

Doctors Hospital was terminated on October 20, 2014, the obligation to stay in their respective

geographic territories continued. [Exhibit D, Clemente Dep. 78:8-12]. Mr. Clemente also stated

that he learned of Dr. Posar’s tortious interference with BCS’s contractual relationship with the

Michigan facilities in April or May of 2016. [Id. at 138:11-18]. Finally, in June 2016, Mr.

Clemente sent a cease and desist letter to Vanguard, Doctors Hospital, Dr. Posar, and Cameron

Gilbert. [DE 104-16]. The letter states that BCS learned that Dr. Posar was actively pursuing

BCS contracted facilities in Michigan and provided four examples of facilities where this was

occurring. [Id. at 4].

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Here, the Court agrees with Vanguard that BCS’s claim for tortious interference with its

facilities in Michigan is time-barred. Even assuming Vanguard continued to interfere with BCS’s

contracts in Michigan after the Marketing Agreement was terminated in 2014 or even after the

cease and desist letter was sent in 2016, BCS did not file its counterclaim against Vanguard until

2019. The Court cannot find that Vanguard’s alleged conduct is of such a continuous nature to

toll the statute of limitations three years after BCS demanded the behavior stop. “The doctrine of

continuing wrong will not prevent the statute of limitations from beginning to run when the

plaintiff learns of facts which should lead to the discovery of his cause of action even if his

relationship with the tortfeasor continues beyond that point.” Parks v. Madison Cty., 783 N.E.2d

711, 719 (Ind. Ct. App. 2002) (quotation omitted). Additionally, BCS has failed to demonstrate

why the geographic limitations on competition would continue after the Agreement was

terminated. Therefore, the Court grants Vanguard’s motion for summary judgment on BCS’s

claim of tortious interference with its contractual relationship with the facilities in Michigan.

ii. Count IV: Tortious Interference with a Contractual Relationship between

BCS and Doctors Hospital

BCS also claims that Vanguard tortiously interfered with its contractual relations with

Doctors Hospital under the Marketing Agreement. BCS alleges that Dr. Posar had access to

BCS’s confidential information under the Marketing Agreement in management meetings to

review referrals to Doctors Hospital [DE 85 at 14] and used this information to hire and recruit

BCS clinicians and create promotional material in its advertising. Id. at 15. As a result of this

activity, Dr. Posar and Vanguard violated the stated obligations as an affiliate under the

Marketing Agreement to their financial benefit. In response, Vanguard and Dr. Posar again assert

that this claim is time-barred. The Court agrees. BCS has supplied no evidence of Vanguard or

Dr. Posar interfering with the Marketing Agreement terms beyond the cease and desist letter,

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which was sent after the Marketing Agreement was terminated in 2014. Even taking the date of

the cease and desist letter in 2016, BCS did not file its counterclaim against Vanguard and Dr.

Posar until 2019, which is beyond the statute of limitations. Therefore, the Court grants

Vanguard’s motion for summary judgment on this claim.

iii. Count V: Tortious Interference with a Business Relationship between BCS

and Dr. Bunin

Finally, BCS alleges that Vanguard and Dr. Posar tortiously interfered with its business

relationship with Dr. Bunin and Dr. Dennis Padla. BCS describes both doctors as being key

employees of BCS whose duties were to assist BCS in fulfilling its obligations under the

Marketing Agreement. [DE 85 at 15]. Both doctors also had established relationships with

principals of the nursing homes and care facilities in Michigan. BCS asserts that Vanguard and

Dr. Posar were aware of the doctors’ importance to BCS and hired them to help with their

activities in Indiana. [Id. at 16]. After hiring Dr. Bunin as an independent contractor, Vanguard

and Dr. Posar instructed him to start setting up meetings with nursing homes and care facilities in

Michigan so that they could solicit business from them. BCS also alleges that Vanguard and Dr.

Posar used Dr. Padla’s reputation and expertise to induce nursing homes and care facilities in

Michigan to terminate their contracts with BCS and switch to Vanguard. Vanguard and Dr. Posar

encouraged Dr. Bunin to violate his employment obligations to BCS, to resign from BCS, and to

interfere with BCS’s business relationships in Michigan.

Vanguard again asserts that BCS is barred by the statute of limitations from asserting this

claim. The Court again agrees. BCS’s own exhibit demonstrates that Vanguard and Dr. Posar

terminated the relationship it had with Dr. Bunin on July 9, 2015. [DE 85-4]. Moreover, Mr.

Clemente testified in his deposition that he learned that Dr. Bunin was employed by Vanguard

when the termination letter was sent in 2015. [Exhibit D, Clemente Dep. 156:6-20]. Even

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applying the doctrine of continuing wrong, BCS cannot allege that Vanguard continued to

interfere with BCS’s relationship with Dr. Bunin after terminating its arrangement with him in

2015. BCS learned of Vanguard’s interference with Dr. Padla even earlier as Mr. Clemente

testified that Vanguard and Dr. Posar tried to reduce Dr. Padla’s involvement with BCS in 2013.

[Exhibit D, Clemente Dep. 157:19-23]. Therefore, BCS is again prohibited by the statute of

limitations from asserting this claim and the Court grants Vanguard’s motion for summary

judgment on this claim.

4. Count VI: Fraud in the Inducement

In support of its claim for fraud in the inducement, BCS argues that Dr. Cameron Gilbert,

on behalf of Doctors Hospital, and Dr. Posar, individually and on behalf of Vanguard, promised

BCS that they would not compete for BCS facilities in Michigan. BCS would not have entered

into the Marketing Agreement without these assurances from Doctors Hospital and Vanguard.

[DE 85 at 18-19]. Despite these promises, Dr. Posar and Vanguard intentionally solicited

healthcare facilities in Michigan that were under active contract with BCS, which constitutes

fraud in the inducement of the Marketing Agreement. [Id. at 20]. BCS asserts that Vanguard and

Dr. Posar knew that such activities and solicitation breached the promises and assurances made

to Mr. Clemente and BCS. As a result of the breach, BCS suffered substantial damage in lost

business and profits.

“Fraudulent inducement occurs when a party is induced through fraudulent

misrepresentation to enter into a contract.” Tru-Cal, Inc. v. Conrad Kacsik Instrument Sys., Inc.,

905 N.E.2d 40, 45 n.6 (Ind. Ct. App. 2009). The required elements of fraudulent inducement are

no different from the elements of actual fraud: “(1) a material misrepresentation of past or

existing facts; (2) made with knowledge or reckless ignorance of falsity; (3) which caused the

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claimant to rely upon the misrepresentation to the claimant’s detriment.” Massey v. Conseco

Servs., L.L.C., 879 N.E.2d 605, 611 (Ind. Ct. App.), aff'd on reh'g, 886 N.E.2d 581 (Ind. Ct. App.

2008) (quoting Siegel v. Williams, 818 N.E.2d 510, 515 (Ind. Ct. App. 2004)). Notably, “[a]

knowing misstatement of facts that causes a signing of a writing is fraud.” Guar. Trust Life Ins.

Co. v. Palsce, 641 N.E.2d 1266, 1269 (Ind. Ct. App. 1994).

Vanguard argues that BCS’s claim for fraud is predicated upon Dr. Posar and/or

Vanguard’s statements of future conduct—that they would not solicit any facility in Michigan.

[DE 101]. Vanguard and Dr. Posar assert that BCS does not allege they made a statement of past

or existing fact. The Court disagrees. BCS has supplied enough evidence indicating that it and its

employees believed that the Marketing Agreement applied to Vanguard as well as Doctors

Hospital. The fraudulent statement that BCS is relying upon is that Vanguard stated that the

Marketing Agreement and all of its provisions applied equally to it, which is what led BCS to

sign the contract. Mr. Clemente testified in his deposition that Dr. Posar promised him that he

was bound by the Agreement and that he was agreeing to the terms of the Agreement—that he

and Vanguard were obligated to not pursue BCS facilities in Michigan. [Exhibit D, Clemente

Dep. 61:8-25]. Mr. Clemente went on to say that he was aware that, as a result of the Agreement

applying to Vanguard, Dr. Posar and Vanguard would have access to BCS’s information about

their facilities under contract and that he would not have entered into the Agreement unless

Vanguard agreed to not go after the facilities in Michigan. [Id. at 64:7-24]. Finally, as noted

earlier, BCS alleges that some of the nursing homes under contract with it were approached by

Dr. Posar and Vanguard in violation of the assurances made to BCS. [DE 104-17]. At least one

of these facilities terminated its contract with BCS in 2015.

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Thus, unlike as Vanguard argues, BCS’s claim for fraudulent inducement is not premised

upon future conduct, but the existing fact of whether the Marketing Agreement applied to

Vanguard as well as Doctors Hospital. Vanguard also argues that since BCS is claiming the

Marketing Agreement is a valid and binding written contract, it cannot proceed on its unjust

enrichment claim due to Indiana law prohibiting unjust enrichment where a written contract

controls. But parties may plead in the alternative and thus the Court will allow this claim to

proceed at this time. See Payday Today, Inc. v. Defreeuw, 903 N.E.2d 1057, 1060 (Ind. Ct. App.

2009) (“Indiana Trial Rule 8(E)(2) allows a party to plead alternative and even inconsistent

theories of recovery.”). Moreover, the Court notes that the Agreement’s integration clause does

not prohibit the Court from considering parol evidence when it is being offered “to show that

fraud, intentional misrepresentation, or mistake entered into the formation of a contract.” Am.'s

Directories Inc., Inc. v. Stellhorn One Hour Photo, Inc., 833 N.E.2d 1059, 1066 (Ind. Ct. App.

2005) (citing Krieg v. Hieber, 802 N.E.2d 938, 944 (Ind. Ct. App. 2004)). Therefore, Vanguard’s

motion for summary judgment as to this claim is denied.

5. Count VII: Promissory Estoppel

Finally, BCS argues that it was assured by Dr. Posar that neither he nor Vanguard would

solicit any facility in Michigan with an active contract with BCS. Dr. Cameron Gilbert, Doctors

Hospital, Dr. Posar, and Vanguard promised to cooperate with BCS and assist each other with

their respective businesses. In reliance upon these promises made by Vanguard and Dr. Posar,

BCS entered into the Marketing Agreement effective January 24, 2013. [DE 85 at 22]. BCS

alleges that Vanguard and Dr. Posar should have reasonably expected it to have relied upon these

promises and assurances in entering into the Marketing Agreement. Despite the promises made,

BCS asserts that Dr. Posar and Vanguard intentionally solicited BCS healthcare facilities in

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Michigan. As a result of Dr. Posar and Vanguard breaching these promises, BCS claims it has

suffered substantial damage in lost business and profits.

When asserting a promissory estoppel claim, a party must establish five elements: “(1) a

promise by the promissor (2) made with the expectation that the promisee will rely thereon (3)

which induces reasonable reliance by the promisee (4) of a definite and substantial nature and (5)

injustice can be avoided only by enforcement of the promise.” Biddle v. BAA Indianapolis, LLC,

860 N.E.2d 570, 581 (Ind. 2007). “Promissory estoppel permits recovery where no contract in

fact exists.” Hinkel v. Sataria Distrib. & Packaging, Inc., 920 N.E.2d 766, 771 (Ind. Ct. App.

2010). “When applicable, which [is] to say when the promise is definite enough to induce a

reasonable person to rely . . . the doctrine makes the promise enforceable.” All-Tech Telecom,

Inc. v. Amway Corp., 174 F.3d 862, 868 (7th Cir. 1999).

Similar to the Unjust Enrichment claim, Vanguard claims that BCS’s claim for

promissory estoppel must fail because of the written Marketing Agreement. [DE 101]. Vanguard

is arguing that a claim for promissory estoppel may not be asserted where a valid contract exists.

BCS cites to cases noting that parties may plead in the alternative—to plead breach of contract

or, if the court finds no contract was formed, then to plead for quasi-contractual relief in the form

of promissory estoppel. [DE 104 at 24-25]. See Costello v. Bd. of Trus. of Flavius J. Witham

Mem'l Hosp., 2019 WL 6252258, at *6 (S.D. Ind. Nov. 22, 2019); Cromeens, Holloman, Sibert,

Inc. v. AB Volvo, 349 F.3d 376, 397 (7th Cir. 2003). “Indeed, it is precisely under such

circumstances, where a promise is made but which is not enforceable as a ‘contract,’ that the

doctrine of promissory estoppel is recognized.” First Nat. Bank of Logansport v. Logan Mfg.

Co., 577 N.E.2d 949, 955 (Ind. 1991). Thus, the fact that the Court is allowing BCS’s claim for

breach of contract to proceed does not automatically negate its claim for promissory estoppel.

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And, the Court finds there remains a genuine issue of material fact as to whether Vanguard

induced reasonable reliance on the part of BCS due to its promises to be bound by the terms of

the Marketing Agreement. Therefore, Vanguard’s motion for summary judgment is denied as to

this claim.

IV. CONCLUSION

Based on the foregoing, Dr. Bunin’s and BCS’s Motions for Summary Judgment are

GRANTED IN PART AND DENIED IN PART.

1. The Court GRANTS Dr. Bunin’s Motion for Summary Judgment on Count I

(Breach of Contract) and notes that Dr. Bunin’s counterclaim for breach of

contract is now dismissed. These counts are DISMISSED WITH PREJUDICE.

2. The Court GRANTS Dr. Bunin’s Motion for Summary Judgment on Count II

(Constructive Fraud), Count III (Breach of Fiduciary Duty), and Count V

(Tortious Interference). These counts are DISMISSED WITH PREJUDICE.

3. The Court DENIES Dr. Bunin’s Motion for Summary Judgment on Count IV

(Fraud) and Count VI (Unfair Competition).

4. The Court GRANTS BCS’s Motion for Summary Judgment on Count II, Count

V, the tortious interference with a contractual relationship claim, and Count VI.

These counts are DISMISSED WITH PREJUDICE.

Vanguard’s motion for summary judgment is also GRANTED IN PART AND

DENIED IN PART.

1. The Court DENIES Vanguard’s Motion for Summary Judgment on Count I

(Breach of Contract), Count VI (Fraud in the Inducement), and Count VII

(Promissory Estoppel).

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2. The Court GRANTS Vanguard’s Motion for Summary Judgment on Count II

(Unjust Enrichment), Count III (Tortious Interference with a Contractual

Relationship), Count IV (Tortious Interference with a Contractual Relationship),

and Count V (Tortious Interference with a Business Relationship). These counts

are DISMISSED WITH PREJUDICE.

SO ORDERED.

ENTERED: January 22, 2021

/s/ JON E. DEGUILIO

Chief Judge

United States District Court

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