SALVITTI v. LASCELLES

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

ALFRED SALVITTI, et al., : CIVIL ACTION

: NO. 19-00696

Plaintiffs, :

:

v. :

:

SCOTT LASCELLES, et al., :

:

Defendants. :

M E M O R A N D U M

EDUARDO C. ROBRENO, J. APRIL 19, 2023

I. INTRODUCTION

Plaintiffs Alfred Salvitti, Nico Salvitti, and John-David

Potynsky, brought a twelve-count complaint, as amended, against

Defendants Scott Lascelles and Dana DiSabatino, for damages

arising out of a purported business relationship that

disintegrated over time. Defendants raised counterclaims for

tortious interference with business relationships, among other

claims. Presently before the Court is Defendants’ Renewed Motion

for Summary Judgment (ECF No. 139), Plaintiffs’ Responses

thereto, including a motion for leave to amend their expert

report (ECF Nos. 143, 160), and a number of reply briefs.

Because Plaintiffs have failed to establish how they will

prove unjust enrichment and resulting damages in a manner that

complies with the law of the case, and do not state how amending

their export report would bridge the gap in their theory of

damages, Plaintiffs’ Motions will be denied and Defendants’

Motions will be granted.

II. BACKGROUND

Plaintiffs Alfred Salvitti and Nico Salvitti (collectively

“the Salvittis”) patented and designed a knife and partnered

with Plaintiff John-David Potynsky (collectively “Plaintiffs”)

to produce the knife under the name “Colonel Blades.” At the end

of 2013, Plaintiffs reached out to Defendant Lascelles to assist

with the marketing and sales of Colonel Blades. In March 2014

the parties verbally agreed that a limited liability company

should be formed to help manage the production of Colonel

Blades. On March 28, 2014, Lascelles registered The Colonel, LLC

(the “LLC”) with the Pennsylvania Department of State and listed

himself as the sole member. Lascelles then managed the day-to-

day operations of Colonel Blades, including marketing, managing

internet sales, working with manufacturers, and distributing the

product. Defendant Lascelles also enlisted his spouse, Defendant

DiSabatino (collectively “Defendants”), to assist with

developing a business plan.

This case began as a patent infringement and corporate

mismanagement case.1 Compl., ECF No. 1. The gist of Plaintiffs’

1 Plaintiffs originally included a patent infringement claim but

stipulated to dismissal of this claim on November 5, 2019. Stip.

& Order, ECF No. 63. The Court later clarified that

claim was that they agreed to form an LLC to sell knives with

Defendants and contributed their intellectual property, industry

connections, and initial capital, as part of this agreement, but

then were cut out of the business as soon as it became

profitable in 2017. After not receiving profit distributions for

some time, as purportedly agreed, Plaintiffs sent Defendants a

cease-and-desist letter, revoking Defendants’ limited license to

use Plaintiffs’ patents. Two weeks later, when Plaintiffs

observed that Defendants were continuing to offer the patented

knives for sale, Plaintiffs sued Defendants in this Court.

This case, filed in 2019, has been plagued by numerous

delays. These delays primarily arose during discovery. A special

master was appointed to facilitate Plaintiffs’ review of certain

documents. Following over two years of discovery, the parties

filed motions for summary judgment in July of 2021.

Plaintiffs will not be permitted to litigate their

patent claims at trial, but Plaintiffs will be permitted

to provide relevant background information, such as

testimony that they were involved in the design of knives

eventually sold by the business, and that patents

depicting a fixed-blade knife were issued to the

Salvittis. But as a result of the Court’s order on the

Patent Motion precluding Plaintiffs from litigating

patent claims they dismissed with prejudice, Plaintiffs

cannot offer any evidence or argument to the effect that

any knife sold by the business actually was covered by

the Salvittis’ patents or that the sale of any knife

infringed those patents.

Order, ECF No. 130.

Defendants sought summary judgment with respect to

Plaintiffs’ claims for breach of contract (Count II), breach of

fiduciary duty (Count III), unjust enrichment (Count IV),

conversion (Count V), conspiracy (Count VI), aiding and abetting

(Count VII), and money had and received (Count VIII). Defendants

also sought summary judgment with respect to Plaintiffs’ claims

for injunctive relief based on the breach of contract and breach

of fiduciary duty claims (Counts IX, X, XI, XII). Plaintiffs

filed a motion for summary judgment as well.

On January 6, 2022, the Court granted Defendants’ motion

for summary judgment in part and denied Plaintiffs’ motion. On

June 1, 2022, the Court granted Defendants’ motion to exclude

Plaintiffs’ expert, Michael Rountree, C.P.A. on the grounds that

his report was not sufficiently reliable. See Salvitti v.

Lascelles, No. 19-696, 2022 WL 1766934 (E.D. Pa. June 1, 2022).

That same day, Defendants voluntarily dismissed their

counterclaims for breach of contract, unjust enrichment, and

conversion. See Order, ECF No. 127. At this point, what remains

outstanding are Plaintiffs’ claim for unjust enrichment against

Defendant Lascelles, and Defendants’ counterclaim for tortious

interference with contractual relations.

Broadly, Plaintiffs argue that Defendants were unjustly

enriched because of their “failure to pay an agreed-upon two-

thirds share of business profits.” Pls.’ Updated Pretrial Mem.

at 1, ECF No. 137. Plaintiffs describe the benefits conferred

upon Defendants in general terms as: “(i) allow[ing] defendant

Lascelles to use plaintiffs’ patents (ii) . . . Mr. Potynsky’s

law enforcement and military contacts as a primary customer base

and (iii) assist[ing] in day-to-day functions as needed [with

the assumption that] defendant Lascelles would manage

operations.” Id. at 1-2. Plaintiffs point to Defendants’ books

and records as evidence to approximate Defendants’ total sales,

from which Plaintiffs seek to recover a share for their

contributions to the business. Id. at 2. Plaintiffs purport to

testify about their contributions to the business--such as the

value of the patents, their efforts to promote the business, and

their relationships with Defendants. Id. at 3-5.

Defendants, on the other hand, argue that they were not

unjustly enriched by any of Plaintiffs’ alleged contributions to

the business; rather, Defendants themselves, as well as other

non-parties to this case, were the moving force underlying the

business’s success leading up to the filing of this lawsuit.

Defs.’ Pretrial Mem. at 2, 6-8, ECF No. 138.

III. LEGAL STANDARD

The Court shall grant summary judgment on a party’s claim

“if the movant shows 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).2 Thus, “[o]nly disputes over

facts that might affect the outcome of the suit under the

governing law will properly preclude the entry of summary

judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

(1986). In other words, “there is no issue for trial unless

there is sufficient evidence favoring the nonmoving party for a

jury to return a verdict for that party.” Id. at 249; accord

SodexoMAGIC, LLC v. Drexel Univ., 24 F.4th 183, 203-04 (3d Cir.

2022). “Still, in assessing the genuineness of a potential

factual dispute, inferences from the underlying facts should be

drawn in favor of the nonmoving party.” SodexoMAGIC, LLC, 24

F.4th at 204.

Summary judgment is also warranted where a party fails to

present admissible evidence that supports an element of the

claim at issue. Ware v. Rodale Press, Inc., 322 F.3d 218, 226

(3d Cir. 2003); see also Cabrera v. Ross Stores of Pa., LP, 646

F. App’x 209, 211-12 (3d Cir. 2016) (upholding the district

2 When a defendant files a motion in limine that, if granted,

essentially becomes a motion for summary judgment, the Court

must take care to afford a plaintiff “the procedural protections

of notice which the federal rules require before judgment on the

merits may be granted.” Bradley v. Pittsburgh Bd. of Educ., 913

F.2d 1064, 1070 (3d Cir. 1990) (quoting Brobst v. Columbus

Servs. Int’l, 761 F.2d 148, 154 (3d Cir. 1985)). If a plaintiff

is given notice that the Court may rule on the merits in

addition to considering a defendant’s motion in limine, then the

Court may consider the underlying motion and is thus “not

precluded from considering whether the complaint stated a claim,

an issue which remains open up to trial on the merits.” Id.

court’s exclusion of an expert report and subsequent grant of

summary judgment for a defendant where the plaintiff failed to

previously disclose the expert witness and the expert was

necessary to support the element of causation); accord

SodexoMAGIC, LLC, 24 F.4th at 204 (quoting Celotex Corp. v.

Catrett, 477 U.S. 317, 322 (1986)).

IV. DISCUSSION3

Despite extended discovery and motion practice, following

the dismissal of most of their claims and the exclusion of their

expert witness, a forensic accountant, Plaintiffs have yet to

identify the kind or type, much less the extent of the benefit

3 These issues must be viewed through the prism of the law of the

case, as it relates to the various decisions reached by the

Court in this already lengthy litigation. “The law of the case

doctrine directs courts to refrain from re-deciding issues that

were resolved earlier in the litigation . . . . [and] directs [a

court’s] exercise of discretion.” Pub. Interest Rsch. Grp. of

N.J., Inc. v. Magnesium Elektron, Inc., 123 F.3d 111, 116 (3d

Cir. 1997). Although the doctrine “does not preclude all

reconsideration of an issue, nor prevent a trial court from

reconsidering the relevance or admissibility of evidence as a

law suit proceeds or a trial unfolds,” Martin v. Port Auth.

Transit of Allegheny Cnty., 115 F. App’x 556, 560 (3d Cir.

2004), a court may reconsider an issue decided earlier in the

litigation under certain “extraordinary circumstances,”

including where “(1) new evidence is available; (2) a

supervening new law has been announced; or (3) the earlier

decision was clearly erroneous and would create manifest

injustice,” Pub. Interest Rsch. Grp, 123 F.3d at 116-17. The

doctrine only applies to “issues that were ‘expressly’ or

‘necessarily resolved’ by prior decisions in the same case.”

Home Depot USA, Inc. v. Lafarge N. Am., Inc., 59 F.4th 55, 61

(3d Cir. 2023) (citing PDX N., Inc. v. Comm’r N.J. Dep’t of Lab.

& Workforce Dev., 978 F.3d 871, 881 n.10 (3d Cir. 2020)).

conferred upon Defendants on or after February 19, 2015, the

beginning point of the statute of limitations.4 As a result,

summary judgment in favor of Defendants as to Plaintiffs’ unjust

enrichment claim is warranted.

“Unjust enrichment is an equitable remedy, defined as ‘the

retention of a benefit conferred by another, without offering

compensation, in circumstances where compensation is reasonably

expected, and for which the beneficiary must make restitution.’”

Commonwealth v. Golden Gate Nat’l Senior Care LLC, 194 A.3d

1010, 1034 (Pa. 2018) (quoting Roethlein v. Portnoff Law

Assocs., Ltd., 81 A.3d 816, 825 n.8 (Pa. 2013)). For Plaintiffs

to prove unjust enrichment, they must show that “1) [they]

conferred benefits on the defendant, 2) the defendant

appreciated such benefits, and 3) the benefits were accepted and

retained under such circumstances that it would be inequitable

for the defendant to retain the benefit without the payment of

value.” Berardi v. USAA Gen. Indem. Co., 606 F. Supp. 3d 158,

163 (E.D. Pa. 2022) (citing Mitchell v. Moore, 729 A.2d 1200,

1203 (Pa. Super. 1999)). A benefit that is conferred upon a

defendant is not unjustly retained where a plaintiff confers

such benefit in the hope of obtaining a future benefit in

4 As the Court noted in ruling on Defendants’ earlier motions in

limine, the statute of limitations for unjust enrichment in

Pennsylvania is four years. See Order, ECF No. 127.

return. Burton Imaging Grp. v. Toys “R” Us, Inc., 502 F. Supp.

2d 434, 440 (E.D. Pa. 2007) (“A benefit conferred is not

unjustly retained if a party confers the benefit with the hope

of obtaining a contract.”).

A claim of unjust enrichment “based on a theory of quasi-

contract may be pled as an alternative to a breach of contract

claim.” Whitaker v. Herr Foods, Inc., 198 F. Supp. 3d 476, 493

(E.D. Pa. 2016) (Robreno, J.). By contrast, where a claim of

unjust enrichment is based on unlawful or improper conduct such

as fraud or self-dealing, the claim is deemed to be derivative

of the underlying tort.5 Id. As this Court stated in Whitaker,

“[i]f Plaintiff intends to assert an unjust enrichment claim

based on the same unlawful or improper conduct that supports his

tort claims, Plaintiff’s claim would fail because the Court has

dismissed Plaintiff’s tort claims.” Id. at 494.

5 See also Steamfitters Loc. Union No. 420 Welfare Fund v. Philip

Morris, Inc., 171 F.3d 912, 936-37 (3d Cir. 1999) (“In the tort

setting, an unjust enrichment claim is essentially another way

of stating a traditional tort claim (i.e., if defendant is

permitted to keep the benefit of his tortious conduct, he will

be unjustly enriched). . . . We can find no justification for

permitting plaintiffs to proceed on their unjust enrichment

claim once we have determined that the District Court properly

dismissed the traditional tort claims . . . .”); Allegheny Gen.

Hosp. v. Philip Morris, Inc., 228 F.3d 429, 447-48 (3d Cir.

2000) (approving the District Court’s dismissal of restitution

and unjust enrichment claims based in tort theory after the

underlying traditional tort claims against the defendants had

been dismissed).

Given that the Court has already dismissed Plaintiffs’

breach of fiduciary duty claims against Defendants, Plaintiffs

will not be permitted to relitigate the alleged underlying torts

under the guise of unjust enrichment. See Salvitti v. Lascelles,

578 F. Supp. 3d 712, 718-24 (E.D. Pa. 2022).

A. Plaintiffs’ Current Theory of Unjust Enrichment Is Flawed

The Court first notes that Plaintiffs’ theory of unjust

enrichment has no basis in existing Pennsylvania law. To the

extent that Plaintiffs’ claim for unjust enrichment turns on

some form of business tort committed by Defendants, the Court

has already dismissed such claims. Plaintiffs cannot argue as a

basis for their claim that Defendants’ withholding of the LLC’s

profits or use of such profits for improper purposes was some

form of corporate malfeasance. See Steamfitters Loc. Union No.

420 Welfare Fund, 171 F.3d at 936-37 (stating that an unjust

enrichment claim based on a tort theory is derivative of the

underlying tort claim). Insofar as Plaintiffs present a quasi-

contractual claim for unjust enrichment, Plaintiffs point to no

case to support their theory that they can recover two-thirds of

Defendants’ profit--the amount Plaintiffs would have received if

there was an enforceable agreement among Plaintiffs and

Defendants--without a specific showing that Defendants were

actually enriched to the tune of two thirds of their profits.

“Where unjust enrichment is found, the law implies a

contract, which requires the defendant to pay the plaintiff the

value of the benefit conferred.” Mitchell, 729 A.2d at 1203

(citing Schenk v. K.E. David, Ltd., 666 A.2d 327 (Pa. Super.

1995)). The law implies a contract because a claim of unjust

enrichment will not lie where there is an enforceable contract.

See, e.g., Wilson v. Parker, 227 A.3d 343, 353 (Pa. Super. Ct.

2020). The appropriate remedy for unjust enrichment thus

requires the defendant to pay the value of the benefit

conferred. E.g., Styer v. Hugo, 619 A.2d 347, 350 (Pa. Super.

1993); Fleming Steel Co. v. Jacobs Eng’g Grp., Inc., 373 F.

Supp. 3d 567, 604 (W.D. Pa. 2019); cf. In re James, 463 B.R.

719, 727 (M.D. Pa. Bankr. 2011) (citing D.A. Hill Co. v.

Clevetrust Realty Invs., 573 A.2d 1005 (Pa. 1990)) (describing

the measure of damages--that is, the value of the benefit

conferred--in the construction context as the “value added” to

the property). The benefit conferred is frequently, but not

always, assessed in terms of the reasonable value of services

rendered. Am. & Foreign Ins. Co. v. Jerry’s Sport Ctr., Inc., 2

A.3d 526, 531 n.8 (Pa. 2010).6

6 Pennsylvania courts have sometimes distinguished between

quantum meruit and unjust enrichment. See, e.g., Artisan

Builders, Inc. v. Jang, 271 A.3d 889, 892-94 (Pa. Super. 2022)

(explaining that quantum meruit is a separate form of action to

recover the reasonable value of services rendered, but that a

plaintiff may recover the reasonable value of services rendered

Generally, a plaintiff “has the burden of proving damages

to a reasonable degree of certainty.” Temple Univ. Hosp., Inc.

v. Healthcare Mgmt. Alts., Inc., 832 A.2d 501, 510 (Pa. Super.

2003); ATACS Corp. v. Trans World Commc’ns, Inc., 155 F.3d 659,

669 (3d Cir. 1998) (stating that damages must be established

with “reasonable certainty,” which, “[a]t a minimum . . .

embraces a rough calculation that is not ‘too speculative, vague

or contingent’ upon some unknown factor” (quoting Spang & Co. v.

U.S. Steel Corp., 545 A.2d 861, 866 (Pa. 1988))).

Because a claim for unjust enrichment can only be

maintained in the absence of an enforceable contract, a

plaintiff cannot simply point to their expectation damages under

an unenforceable contract as evidence of the benefit conferred

and wrongfully retained. See Calgon Carbon Corp. v. ADA-ES,

Inc., No. 08-1355, 2010 WL 2985947, at *1 (W.D. Pa. July 27,

2010) (“In Pennsylvania, the amount of damages for an unjust

enrichment claim cannot be based on a contractual provision. . .

[T]he accepted measure of damages in an unjust enrichment claim

is the gain to the defendant, not the loss to the plaintiff.”);

in an action for unjust enrichment where the value of the

services is shown to be equal to the benefit conferred). Any

distinction between quantum meruit and unjust enrichment as a

cause of action, and any distinction between the measure of

damages for unjust enrichment, in terms of the value of services

rendered and the measure of benefit conferred are not relevant

here, as Plaintiffs have not attempted to quantify the claimed

damages by reference to either such measure.

Phoenix Canada Oil Co. v. Texaco, Inc., 842 F.2d 1466, 1473 (3d

Cir. 1988) (“The defendants’ net gains are irrelevant in an

unjust enrichment analysis. ‘Profits, no matter how large, do

not constitute unjust enrichment unless they equitably belong to

another person.’ (quoting Harris v. Sentry Title Co., 715 F.2d

941, 950 (5th Cir. 1983))).7

Plaintiffs “sue[d] defendants for unjust enrichment arising

out of defendants’ failure to pay an agreed-upon two-thirds

share of business profits.” Pls.’ Pretrial Mem. 1, ECF No. 137.

As the Court has previously ruled, there was no enforceable

agreement among the parties, Plaintiffs were not members of an

LLC with Defendants, and thus Defendants owed Plaintiffs no

fiduciary duties. See Salvitti, 578 F. Supp. 3d at 719-20, 722-

23. Despite the Court’s rulings on Plaintiffs’ other claims,

7 See also Aquatrol Corp. v. Altoona City Auth., No. 03-252J,

2006 WL 2540797, at *12 (W.D. Pa. Aug. 31, 2006) (“The law of

Pennsylvania is very clear with regard to the ability of a

subcontractor to recover from a property owner on an unjust

enrichment theory. If any benefit was conferred upon the

[defendant] as a result of [the plaintiff’s] work, the amount of

that benefit must be measured by the value of that benefit to

the owner and not by the amount of the contract price.”); cf.

Fidelity Fund, Inc. v. Di Santo, 500 A.2d 431, 438 (Pa. Super.

1985) (distinguishing, in a breach of contract case, between a

party’s expectation and reliance interests, which seek to

enforce a contract, and a party’s restitution interest, which

seeks to prevent unjust enrichment); Chester Upland Sch. Dist.

v. Rossi, 275 A.3d 1117, 1128-29 (Pa. Commw. Ct. 2022)

(dismissing a class action petition for unjust enrichment by

means of a county’s overcharging for court fees where plaintiffs

failed to allege “amounts that were charged or amounts that were

paid, when or by whom”).

Plaintiffs do not currently, nor have they previously, stated

their claim for unjust enrichment in terms of the specific

benefits that were conferred upon Defendants. Instead,

Plaintiffs continue to point to an unenforceable agreement as

evidence that (1) Defendants wrongfully retained some benefit

and (2) the benefit is equal to two thirds of Defendants’

profits.8 Plaintiffs state that Defendant Lascelles’s tax return

indicates that he was conferred a benefit, see ECF No. 160 at 6,

but fail to attribute any of that benefit to the individual

Plaintiffs or otherwise explain how Plaintiffs were responsible

for any of the profits that Defendant Lascelles reported.

Plaintiffs claim that they can show the value of some of

the benefit conferred upon Defendants by examining Defendant

Lascelles’s tax return and Defendants’ reconstructed books and

records. However, Plaintiffs have yet to identify and explain in

8 Most recently, Plaintiffs argue that “the key background/

foundational fact that the parties indisputably entered into a

profit-sharing agreement remains relevant/admissible, not to

prove or enforce a contractual obligation but, instead, as

background revealing why plaintiffs conferred the benefit on

defendants that plaintiffs did, defendants’ appreciation thereof

and the parties’ assignment of value to that benefit under the

unique facts and circumstances of this case.” Pls.’ Sur-Opp’n to

Defs.’ Mot. at 3, ECF No. 160-2. And, in lieu of pointing to the

value of the benefits conferred, Plaintiffs merely claim that

“it suffices to say that defendants have received a substantial

benefit from the use of plaintiffs’ originating and ongoing

efforts and that under the circumstances, i[t] would be unjust

for defendants not to pay 2/3 of the profits, as promised.”

Pls.’ Opp’n to Mot. to Strike Jury Demand at 2, ECF No. 152.

what manner they will connect any of Plaintiffs’ efforts and

contributions to the business, to the entries made in

Defendants’ tax returns and books and records to prove the value

of the benefit conferred that was improperly retained by

Defendants.9 Rather, Plaintiffs continue to assert that they are

owed two thirds of Defendants’ profits without pointing to

specific benefits conferred upon Defendants.

Plaintiffs’ theory that they are entitled to two thirds of

the profits simply represents a roundabout way of enforcing

their expectations under the unenforceable contract. Under these

circumstances, Plaintiffs cannot use the doctrine of unjust

enrichment to attempt to enforce the agreement. See Adams

Outdoor Advert., LP v. Menegatos, No. 1119 EDA 2012, 2013 WL

11256844, at *4 (Pa. Super. July 25, 2013); Gutteridge v. J3

Energy Grp., Inc., 165 A.3d 908, 918 (Pa. Super. 2017) (allowing

Plaintiffs to recover their expectation interest only where

Plaintiffs “presented credible evidence that the benefits that

[Defendants] secured unjustly were equal to the amount of money

[Plaintiffs] would have received” for their services); Phoenix

Canada Oil Co., 842 F.2d at 1473; Calgon Carbon Corp, 2010 WL

2985947, at *1; Aquatrol Corp., 2006 WL 2540797, at *12.

9 Defendants note that, to date, Plaintiffs have not produced a

computation of damages pursuant to Federal Rule of Civil

Procedure 26(a)(1)(A)(iii). See Defs.’ Reply at 9, ECF No. 145.

B. The Record Does Not Contain Legally Sufficient Evidence to

Support a Properly Stated Claim for Unjust Enrichment

Plaintiffs have also failed to point to sufficient

amissible evidence to support an alternate theory for damages

under their one remaining claim for unjust enrichment.

An unjust enrichment plaintiff must describe the benefit

conferred with some specificity; the factfinder needs a

sufficient evidentiary basis from which to calculate the value

of the benefit conferred. “[U]njust enrichment claims cannot be

based on ‘speculative’ or ‘intangible’ benefits.” Morlok v. City

of Philadelphia, No. 20-2973, 2022 WL 252185, at *5 (3d Cir.

Jan. 26, 2022); Carruthers v. Messner Enters. Northgate, LLC,

No. CI-09-07812, 2013 WL 10872127, at *11 (Pa. Ct. Com. Pl. Nov.

19, 2013) (denying plaintiffs’ motion for a new trial on the

issue of unjust enrichment where “the exact amount of

[Plaintiffs’] funds that went to [Defendants], and benefitted

[them] as a result, [could not] be proven with sufficient

certainty to be the basis for an award”).10 In Morlok, for

instance, the Third Circuit found that Plaintiffs failed to

establish that they conferred a compensable benefit on Defendant

10 Cf. Combustion Sys. Servs., Inc. v. Schuylkill Energy Res.,

Inc., No. 92-4228, 1994 WL 229762 at *4-5 (E.D. Pa. May 27,

1994), aff’d 52 F.3d 314 (Table) (striking a plaintiff’s claim

for quantum meruit for work performed outside the scope of a

contract where the plaintiff failed to demonstrate that it could

produce an evidentiary basis for its damages claim, despite

having multiple opportunities to do so).

because they presented no evidence that Defendant benefitted,

and any alleged reputational benefit was not quantified by

Plaintiffs. 2022 WL 252185, at *5.

Similarly, in USA Machinery Corp. v. CSC, Ltd., the Third

Circuit affirmed the district court’s granting of defendant’s

motion for judgment as a matter of law at the close of

plaintiff’s case, finding that plaintiff failed to adduce proof

of damages to support its unjust enrichment claim. 184 F.3d 257,

259 (3d Cir. 1999). There, plaintiff and defendant negotiated a

brokerage agreement in which plaintiff would buy equipment from

defendant and sell it to a third party, in exchange for some

fee. However, because “there was no evidence that a finder’s fee

was negotiated,” there was no evidence that would support a

“custom in the industry with respect to appropriate finder’s

fees,” and there was no “evidence that would support a

calculation of an appropriate finder’s fee, or an estimate of

[plaintiff’s] services on an hourly basis[,]” it would thus be

improper for “a factfinder . . . to engage in bald conjecture as

to the value of [plaintiff’s] services.” Id. at 266.

Moreover, as plaintiff failed to introduce evidence of “an

approximation of the price at which [the seller] was willing to

sell and the price at which [the buyer] was willing to buy . . .

there [was] no way for a factfinder to determine what, if any,

‘spread’ would result from the transactions.” Id. Evidence of

plaintiff’s expectations regarding how much it would make from

the transaction, or plaintiff’s revenues from similar, other

transactions, were not admissible to support plaintiff’s claim

for unjust enrichment.11 Id.

Plaintiffs claim that it is undisputed that they made some

contribution to the success of the business. See, e.g., Defs.’

Statement of Undisputed Facts ¶¶ 9-13, ECF No. 78-1 (attributing

the business idea to Plaintiffs); Id. ¶¶ 14-30 (describing the

initial stages of the working relationship between Plaintiffs

and Defendants).12 Pressed by the Court during oral argument on

the motions, and in Plaintiffs’ most recent filings, see ECF No.

139 at 5 n.2, Plaintiffs’ counsel described these benefits

11 Fleming Steel, on the other hand, illustrates the proper way

for a plaintiff to prove their entitlement to damages for unjust

enrichment. 373 F. Supp. 3d 567 (W.D. Pa. 2019). The plaintiff

in Fleming Steel brought a claim for unjust enrichment as an

alternative to breach of contract for the defendant’s failure to

pay the plaintiff for engineering, design, and manufacturing

work on certain hangar doors. The defendant sought summary

judgment on the grounds that the plaintiff “failed to adduce

evidence quantifying the ‘reasonable value’ of its services” and

even if the plaintiff did have such evidence, “establishing the

‘reasonable value’ of its services requires expert testimony,

which [plaintiff] d[id] not have.” Id. at 604. The district

court found that the plaintiff pointed to sufficient evidence on

the record of the reasonable value of its services, on the basis

of its time sheets and the testimony of an employee regarding

his particularized knowledge and contributions. Id. at 608.

12 As the Court previously noted at the summary judgment stage,

Plaintiffs did not file a statement of undisputed facts or

contest those facts set forth in Defendants’ statement of

undisputed facts. Accordingly, the Court adopts these facts as

true. See Salvitti, 578 F. Supp. 3d at 715 n.1.

conferred upon Defendants by reference to (1) the patents; (2)

the wholesale connections and other sales relationships brought

by Mr. Potynsky; and (3) the labor provided by all Plaintiffs to

the business. These general exhortations, however, are

inadequate to show the extent, if any, of the benefit conferred

upon Defendants.

Plaintiffs must do more than generally show that Defendants

may have benefitted in order to prove that they are entitled to

collect on a claim for unjust enrichment. Specifically,

Plaintiffs have not produced any estimates of the value of the

patents, the time each Plaintiff spent assisting the business,

or the value of Mr. Potynsky’s connections, within the statute

of limitations.13 Therefore, a reasonable jury could not

calculate how much Plaintiffs should receive, if anything, as

just compensation for the benefits conferred upon Defendants.

E.g., Mitchell, 729 A.2d at 1203 (“Where unjust enrichment is

13 As previously noted, Plaintiffs have not produced any

estimates of the reasonable value of their services nor the

value of the benefit conferred upon Defendants; thus, any

distinction between quantum meruit and unjust enrichment is not

relevant here. Moreover, Courts applying Pennsylvania law have

allowed plaintiffs to recover for unjust enrichment by either

such showing. Compare Fleming Steel, 373 F. Supp. 3d, at 608

(allowing a plaintiff to proceed with a claim for unjust

enrichment on the basis, in part, of record evidence

demonstrating the reasonable value of the plaintiff’s services)

with D.A. Hill Co., 573 A.2d at 1009 (requiring, at least in the

construction context, a plaintiff to demonstrate the value of

the benefit conferred, such as by an appraisal, rather than by

the value of invoices for construction services).

found, the law implies a contract, which requires the defendant

to pay the plaintiff the value of the benefit conferred.”

(emphasis added)).

To the extent that Plaintiffs “seek ‘a money judgment in an

amount equal to that gained by [defendants] in using

[plaintiffs’ patent, labor and marking/sales efforts to’ create

a valuable product/business,” Plaintiffs have failed to point to

any computation of such a money judgment which can be supported

by competent evidence: the jury would simply be left to

speculate as to the value of such services.14 Pls.’ Opp’n to Mot.

to Strike Jury Demand at 3, ECF No. 152 (quoting Dastgheib v.

Genentech, Inc., 457 F. Supp. 2d 536, 544 (E.D. Pa. 2006)

(Robreno, J.)). This is so because, as previously explained, a

party can only recover the equivalent of their expectation

damages under an unjust enrichment theory where they can prove

that the defendant was unjustly enriched to that degree.

Gutteridge, 165 A.3d at 918.

Given that Plaintiffs have not pointed to sufficient

evidence which identifies, qualifies, or quantifies the value of

benefit conferred upon Defendants, they have not offered

“evidence from which damages may be calculated to a ‘reasonable

14 The Court notes that, after more than four years of

contentious litigation, this filing appears to be the first time

that Plaintiffs stated that they seek a money judgment on this

enumerated basis, rather than a share of Defendants’ profits.

certainty,’” Ware, 322 F.3d at 225-26, summary judgment will be

granted in Defendants’ favor. See Morlok, 2022 WL 252185, at *5

(granting summary judgment in favor of defendant on plaintiff’s

unjust enrichment claim where plaintiff failed to show defendant

was conferred a “compensable benefit”); USA Mach. Corp., 184

F.3d at 265 (stating that proof of unjust enrichment requires

“evidence from which one might be able to quantify the benefit

that [plaintiff] claims to have bestowed upon [defendant]”);

Sciore v. Centric Bank, No. 20-6035, 2022 WL 17833266, at *12

(E.D. Pa. Dec. 21, 2022) (granting summary judgment for

defendant on plaintiff’s claim of unjust enrichment where

plaintiff alleged that he had benefitted defendant by recruiting

certain employees which led to defendant’s profits, but failed

to point to “any evidence that recruiting [another employee]

generated any ‘actual profits’ for [defendant]”); see also

Combs-Harris v. Carvana, LLC, No. 22-4845, 2023 WL 2772125, at

*1 (E.D. Pa. Apr. 4, 2023) (noting that a court can only remedy

a legally sufficient harm).

C. Amending the Expert Report Would Be Futile, or Prejudicial

Plaintiffs urge the Court to grant leave to amend their

expert report. In determining whether to modify the discovery

process to allow Plaintiffs’ submission of additional evidence

in support of their theory of recovery, the Court is guided by

the Pennypack factors. See ZF Meritor, LLC v. Eaton Corp., 696

F.3d 254, 298 (3d Cir. 2012). Pennypack instructs a court to

account for “(1) the prejudice or surprise in fact of the party

against whom the excluded [evidence] would have [been

presented], (2) the ability of that party to cure the prejudice,

(3) the extent to [modifying discovery] would disrupt the

orderly and efficient trial of the case or of other cases in the

court, and (4) bad faith or willfulness in failing to comply

with the court’s order.15 Meyers v. Pennypack Woods Home

Ownership Ass’n, 559 F.2d 894, 904-05 (3d Cir. 1977), overruled

on other grounds by Goodman v. Lukens Steel Co., 777 F.2d 113

(3d Cir. 1985). “The importance of the [excluded] evidence is

often the most significant factor.” ZF Meritor, LLC, 696 F.3d at

298. Evidence that “is insufficient to support a provable

damages theory” is not considered important. AVM Techs., LLC v.

Intel Corp., No. 10-610, 2013 WL 8422202, at *2 (D. Del. Mar.

29, 2013).

Where a party fails to “present[] any evidence or theories”

as to a claim before a late stage in litigation, such as the

summary judgment stage, the opposing party is prejudiced and so

exclusion of such evidence may be warranted under Pennypack.

15 A lack of diligence is not bad faith under Pennypack. In re

Paoli R.R. Yard PCB Litig., 35 F.3d 717, 793 (3d Cir. 1994).

However, that a party has waited an unjustifiable amount of time

before requesting leave to amend an expert report can support a

finding of bad faith. Tran v. Baik, 406 F. App’x 661, 664 (3d

Cir. 2011).

Astrazeneca AB v. Mut. Pharm. Co., Inc., 278 F. Supp. 2d 491,

506-07 (E.D. Pa. 2003). Moreover, where the curative act by the

party seeking to present new evidence or theories would require

“re-open[ing] depositions and attempt[ing] to secure fact

discovery (and expert opinions)” at a late stage in litigation,

fairness weighs in favor of excluding the new evidence or

theory. Id. at 507.

Plaintiffs request leave to amend their expert report to

address the deficiencies in meeting their burden of proof on the

value of their unjust enrichment claim. Plaintiffs argue that

under the Pennypack factors, Defendant would not suffer

prejudice, amendment of the report would not disrupt the orderly

and efficient trial of the case, that they did not act in bad

faith, and that the proffered expert evidence at issue is

important.

Plaintiffs’ arguments are not persuasive. First, Plaintiffs

do not demonstrate how any additional evidence they seek leave

to obtain is relevant to the issues remaining in the case, given

that the additional evidence is apparently offered in support of

a theory which has already been dismissed by the Court. See AVM

Techs., LLC., 2013 WL 8422202, at *2.16 There was no contract to

16 In his initial report, Mr. Rountree primarily offered

accounting opinions about best practices in accounting and

fiduciary duties of managers of close corporations. But, the

Court has already dismissed all of the fiduciary duty-related

be breached, nor any fiduciary duties owed. Second, Defendants

would be prejudiced, as allowing Plaintiffs to essentially

reopen expert discovery would likely require Defendants to, in

turn, amend their own expert reports, take additional discovery,

and prepare a renewed Daubert motion.

Finally, if amendment of the expert report were to result

in an itemization of the benefits conferred on Defendants, which

Plaintiffs have not previously advanced, including in the Rule

26(a)(1)(A)(iii) disclosures, Defendants’ legal position will be

prejudiced in that, after years of litigation, they would be

faced with a new method of calculating damages.17

claims against Defendants. Thus, Mr. Rountree’s opinion

concerning the intent of the parties would not be a good fit

under Daubert, and would likely not even be relevant under

Federal Rule of Evidence 401.

As noted above, Plaintiffs cannot now revisit the

underlying tort claims of corporate mismanagement to maintain a

claim for unjust enrichment, as the Court has already dismissed

all but Plaintiffs’ unjust enrichment claim and Plaintiffs have

not demonstrated that “extraordinary circumstances” exist to

warrant reconsideration of these issues. See Pub. Interest Rsch.

Grp., 123 F.3d at 116-17.

17 See, e.g., Elf Atochem N. Am., Inc. v. United States, 161

F.R.D. 300, 301 (E.D. Pa. 1995) (“[I]f [an] amendment

substantially changes the theory on which the case has been

proceeding and is proposed late enough so that the opponent

would be required to engage in significant new preparation, the

court may deem it prejudicial. Likewise, if the proposed change

clearly is frivolous or advances a claim or defense that is

legally insufficient on its face, the court may deny leave to

amend.”).

V. CONCLUSION

For the foregoing reasons, Defendants’ Motion for Leave to

File a Motion in Limine is granted. The Resulting Motion for

Summary Judgment is also granted. Plaintiffs’ Cross-Motion for

Leave to Amend is denied. An appropriate Order follows.