Silver v. Lenfest Et Al Motion To Dismiss

Thomas A. Decker (No.
12343)
Philip G. Kircher (No. 24625)
Thomas M. O’Rourke (No. 308233)
COZEN O’CONNOR
One Liberty Place
1650 Market Street, Suite 2800
Philadelphia, PA 19103
P: (215) 665-2000
F: (215) 665-2013
tdecker@cozen.com
pkircher@cozen.com
tmorourke@cozen.com
Attorneys for Defendants
UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA
__________________________________________
HARRIS SILVER and ENTITY X, LLC :

:
Plaintiffs, :
:
:
v. :
: CASE NO. 18-CV-20-JP
HAROLD CHASE LENFEST; :
KEVIN MURPHY; MELVIN YELLIN; :
HIGH STREET CAPITAL PARTNERS :
MANAGEMENT, LLC; HIGH STREET :
CAPITAL PARTNERS, LLC; PRIME :
WELLNESS OF PENNSYLVANIA, LLC; and :
HCL MM INVESTMENTS PA, LLC :
:
Defendants. :
__________________________________________
DEFENDANTS’ MOTION TO DISMISS PLAINTIFFS’ COMPLAINT
Pursuant to Federal Rule of Civil Procedure 12(b), Defendants, Harold Chase Lenfest,
Kevin Murphy, Melvin Yellin, High Street Capital Partners Management, LLC, High Street
Capital Partners, LLC, Prime Wellness of Pennsylvania, LLC, and HCL MM Investments PA,
LLC, (collectively, “Defendants”), by and through the undersigned counsel, respectfully move
this Court for an Order dismissing Plaintiffs’ Complaint, with prejudice.
The factual and legal support for this Motion are set forth in the accompanying
Memorandum of Law, which is incorporated by reference as though fully set forth herein.
Defendants request oral argument on this Motion pursuant to Local Rule 7.1(f).
WHEREFORE, for the reasons set forth in the accompanying Memorandum of Law,
Defendants respectfully request that this Court enter an Order granting Defendants’ Motion and
dismissing Plaintiffs’ Complaint, with prejudice.
Respectfully submitted,
COZEN O’CONNOR
By: /s/ Philip G. Kircher

Thomas A. Decker (No. 12343)
COZEN O’CONNOR
One Liberty Place
P: (215) 665-2000
F: (215) 665-2013
tdecker@cozen.com
pkircher@cozen.com
tmorourke@cozen.com
Dated: March 5, 2018
2
__________________________________________

:
Plaintiffs, :
:
:
v. :
:
Defendants. :
__________________________________________
[PROPOSED] ORDER
AND NOW, this ______ day of _________________, 2018, upon consideration of
Defendants’ Motion to Dismiss Plaintiffs’ Complaint (“Motion”), the accompanying
Memorandum of Law, and any response or reply thereto, it is hereby ORDERED that:
1. The Motion is GRANTED; and
2. Plaintiffs’ Complaint is hereby DISMISSED, WITH PREJUDICE.
BY THE COURT:
______________________________
The Honorable John R. Padova
__________________________________________

:
Plaintiffs, :
:
:
v. :
:
Defendants. :
__________________________________________
DEFENDANTS’ MEMORANDUM OF LAW IN SUPPORT

OF THEIR MOTION TO DISMISS PLAINTIFFS’ COMPLAINT

COZEN O’CONNOR
One Liberty Place
P: (215) 665-2000
F: (215) 665-2013
tdecker@cozen.com
pkircher@cozen.com
tmorourke@cozen.com

TABLE OF CONTENTS
INTRODUCTION..........................................................................................................................1
FACTS ALLEGED IN THE COMPLAINT ...............................................................................2
INTEGRAL DOCUMENTS OMITTED FROM THE COMPLAINT ....................................7
PROCEDURAL HISTORY ..........................................................................................................9
LEGAL STANDARDS ................................................................................................................10
ARGUMENT ................................................................................................................................11
A. Plaintiffs Have Not Alleged Any Basis For This Court to Exercise Personal
Jurisdiction Over the New York Defendants. ............................................................12
B. Harold Chase Lenfest and HCL MM Are Not Proper Defendants..........................15
C. Plaintiffs’ Contract Claim Fails as a Matter of Law. ................................................17
1. The Parties Never Entered Into a Contract Providing Mr. Silver with Bonus
Compensation, an Equity Interest or a Salaried Position. ..................................18
2. The March 20, 2017 “Term Sheet” Confirms There is No Contract..................21
3. The March 16, 2017 “Employment Offer” Accepted by Mr. Silver

Confirms He is Not Entitled to a Full Time Position with Prime. ......................22
4. Plaintiffs’ Purported Contract for “Additional Compensation”

Also Lacks the Material and Necessary Details to Be Enforceable. ...................23
D. Plaintiffs’ Promissory Estoppel Claim Fails as a Matter of Law. ............................25
1. Plaintiffs Have Not Identified Any Alleged Promise that Gives

Rise to a Promissory Estoppel Claim . .................................................................26
2. Plaintiffs Fail to Adequately Allege “Detrimental Reliance”. ............................29
E. Plaintiffs’ Quantum Meruit Claims Fail as a Matter of Law. .................................30
1. HSC and HCL MM Were Not “Unjustly Enriched”. ..........................................31
2. Neither Mr. Lenfest, HSC, Nor Prime Were “Unjustly Enriched”. ...................32
ii
F. Plaintiffs’ Fraud Claim Fails as a Matter of Law ......................................................32
1. Plaintiffs’ Claim Lacks the Requisite Particularity

Under Federal Rule of Civil Procedure 9(b)........................................................32
2. Plaintiffs Fail to Adequately Allege Justifiable or

Detrimental Reliance on Any Alleged Misrepresentation. ..................................34
3. Plaintiffs Have Failed to Allege Any Available Damages. ..................................34
4. Plaintiffs Have Not Alleged Any Basis for Punitive Damages............................35
G. Plaintiffs’ “Securities Fraud” Claim Fails as a Matter of Law .................................36
H. Plaintiffs’ “Civil Conspiracy” Claim Fails as a Matter of Law.................................38
1. Plaintiffs Have Not Alleged an Underlying Tort Claim ....................................38
2. Plaintiffs Have Not Alleged an Illicit Agreement ...............................................38
CONCLUSION ............................................................................................................................39
iii
I. INTRODUCTION
In 2016, Defendant High Street Capital Partners, LLC (“HSC”) retained Plaintiff Harris
Silver to help prepare a set of applications for medical marijuana licenses in Pennsylvania. The
applications were submitted on behalf of Defendant Prime Wellness of Pennsylvania, LLC
(“Prime”), which is partially owned by HSC.
For three months, Mr. Silver worked as the collection point for a team of HSC employees
at HSC’s office in New York City. In return for his services, Mr. Silver was paid $180,000 and
received a conditional employment offer, in writing, which Mr. Silver accepted. HSC and Mr.
Harris agreed that he would receive a position with Prime if Prime received two medical
marijuana licenses – a “grow/processor” license and a “dispensary” license. Prime received one.
Mr. Silver now wants more. He contends that he is entitled to additional compensation
for his time, including a “4% equity” ownership interest in Prime, a “bonus,” an “ongoing,
salaried position” as “Chief Marketing Officer” of Prime, and a laundry list of other benefits. He
claims to be entitled to more money and an “ongoing role” with HSC and/or Prime pursuant to a
web of “oral contracts” with unspecified parties. He asserts claims for breach of contract,
promissory estoppel, fraud, “securities fraud,” unjust enrichment and “conspiracy.”
In support of his theory, Mr. Silver offers a jumble of alleged “promises” raised during
ongoing contract negotiations, which he allegedly “tracked” on an ever-evolving “term sheet”
that he created using “Google Docs.” He does not, however, allege that there was a “meeting of
the minds” on contract terms or a sufficiently definite understanding of the items of additional
“compensation” he is seeking. At most, the parties negotiated an “agreement to agree,” which is
not a “contract” and provides no basis for his quasi-contract or fraud claims.
1
Mr. Silver also studiously avoids attaching or describing his Google Docs “term sheet,”
which was executed by the parties on March 20, 2017. This is by design. The “term sheet” –
which allegedly captures the terms of an “agreement” for “equity,” “bonus” payments, and an
“ongoing role” with Prime – is an unenforceable letter of intent that explicitly states that the
parties were still in “negotiations” on all “proposed terms” and had yet to enter into “definitive
and binding agreements relating to the transaction[.]” (Exhibit A.) This document confirms
what is clear on the face of the Complaint – there is no contract. Under Third Circuit authority,
the Court can consider the parties’ “term sheet” in evaluating the Complaint. It can also
consider the parties’ written “Employment Offer,” which Mr. Silver specifically relies upon to
establish his claim for a “salaried position” at Prime, but fails to attach or describe. (Exhibit B.)
Mr. Silver’s Complaint is also deficient in other respects. He is suing individuals and
entities that are either not subject to personal jurisdiction in Pennsylvania or have no connection
to his claims. Indeed, he names four New York residents as defendants, including two
individuals, without offering any factual basis to subject them to personal jurisdiction here. He
also inexplicably names Harold Chase Lenfest as an individual defendant in six of his seven
Counts, without alleging any basis to suggest that Mr. Lenfest was a party to any purported
“contract” or was responsible for any purported “promises” or “representations.”
For these reasons, as more fully explained below, Defendants respectfully request that
this Court dismiss the Complaint, with prejudice.
II. FACTS ALLEGED IN THE COMPLAINT
Defendant HSC is a “New York investment firm” that invests in state-licensed “cannabis
cultivation and dispensing” businesses. (Compl., ¶¶ 2, 44.) Defendants Kevin Murphy and
Melvin Yellin, who reside in New York, are “Managers” and/or “Members” of HSC and
2
Defendant High Street Capital Partners Management, LLC (“HSC Management”), which is a
“Managing Member” of HSC. (Id., ¶¶ 16-17, 20-22.) HSC Management is headquartered in
New York. (Id.)
Plaintiff Harris Silver is a consultant who helps companies apply for cannabis cultivation
and dispensary licenses. (Id., ¶¶ 14, 50-51.) Mr. Silver is the sole owner of Plaintiff Entity X,
LLC. (Id., ¶ 15.) Both Plaintiffs are California citizens. (Id., ¶¶ 14-15.)
In the summer of 2016, Mr. Silver and HSC began “discussing” a potential relationship
on future cannabis applications. (Id., ¶ 60.) The discussions initially involved a potential
“partnership” on future applications throughout the country. (Id., ¶ 61). They, however, never
reached an agreement on any extended relationship. (See id., ¶¶ 60-61, 75-77.)
Instead, HSC and Mr. Silver considered working together on a single set of applications
for medical marijuana licenses in Pennsylvania on behalf of Prime, which is partially owned by
HSC. (Id., ¶ 32, 76, 84.) Prime, however, “essentially did not exist” during contract
negotiations between HSC and Mr. Silver. (Id., 85-86.) The “LLC agreement for Prime” was
not “draft[ed] or execut[ed]” until after all alleged contract negotiations were completed. (Id., ¶¶
127-28.) The other owner of Prime is Defendant HCL MM Investments PA, LLC (“HCL MM”).
HCL MM is at least partially owned by Defendant Harold Chase Lenfest. (Id., ¶¶ 26-29.) HSC
and Mr. Silver entered into preliminary negotiations regarding the Pennsylvania applications in
the winter of 2016. (Id., ¶ 32, 76, 84.)
As a general matter, there are two types of medical marijuana licenses available under
Pennsylvania law: (1) “grower/processor” or cultivation licenses, which permit licensees to grow
and process marijuana for medical use; and (2) “dispensary” licenses, which permit licensees to
distribute medical marijuana to patients and caregivers. 35 P.S. §§ 10231.101, et seq.; 28 Pa.
3
Code § 1141.23. Prime was interested in obtaining both types of licenses. Silver agreed to assist
with the application process.
This case is about the terms of Mr. Silver’s compensation for his work on the
applications. Mr. Silver received $180,000 from HSC and a conditional employment offer to be
Prime’s Chief Marketing Officer in return for his work. (See Compl., ¶¶ 81, 88, 111.) He now
claims, however, to be entitled to “additional” compensation pursuant to “oral agreements”
allegedly reached in December, 2016, and March, 2017. (See Compl., ¶¶ 81, 88, 108-111, 121.)
A. Mr. Silver and HSC Engage in Preliminary Negotiations Regarding

His Assistance on the Pennsylvania Applications________________
In December, 2016, Mr. Silver and Mr. Yellin had “several telephone conversations” to
discuss the potential terms of his compensation. (Compl., ¶ 80.) Plaintiffs allege that:
During those calls, Messrs. Silver and Yellin agreed that, in return for
preparing the Pennsylvania application, Mr. Silver and his wholly-owned
LLC, Plaintiff Entity X, LLC, would receive, among other things, $180,000
upfront , and, if Defendants were awarded a cultivation and processing license,
an additional $150,000 in cash, a 4% non-dilutable equity interest in the
licensee, and a salaried position as the Chief Marketing Officer of the licensee.
(Compl., ¶ 81.)
After these calls, and “[a]t Mr. Yellin’s request, Mr. Silver prepared a term sheet
reflecting the terms to which they orally agreed. Mr. Silver created the document on Google
Docs and shared it with Messrs. Yellin and Murphy.”1 (Id., ¶ 82.) After receiving the Google
Docs “term sheet,” Mr. Yellin told Mr. Silver that the parties would enter into “a written
contract” at a later date, “which [Mr. Yellin] would prepare[.]” (Compl., ¶ 83). Mr. Silver also
recognized that any contract needed to be in writing. (Compl., ¶ 106.) Mr. Silver’s “term sheet”
1
Google Docs is a web-based word processor that allows multiple authors to edit a document in real time.
4
– which allegedly captures the parties’ understanding in December, 2016 – is not described or
attached to the Complaint.
Plaintiffs’ conclusion that the parties’ “orally agreed” to “terms” in December, 2016, is
entitled to no deference at the motion to dismiss stage and is belied by their own allegations.
Plaintiffs’ specifically describe the December, 2016 discussions as “negotiations,” which were
ongoing and continued into 2017. (See Compl., ¶ 87, 108-26.)
B. Mr. Silver and Messrs. Murphy and Yellin Continue to Engage in

Contract Negotiations_____________________________________
In December, 2016, HSC wired Mr. Silver an initial payment of $90,000 to assist on the
Pennsylvania applications. (Compl., ¶ 88). This was the first payment toward his $180,000 in
compensation for the project. In January, 2017, Mr. Silver temporarily moved to New York to
work on the applications. (Id., ¶¶ 95.) Additional contract discussions were tabled. (Id.)
The HSC team and Mr. Silver worked on the applications throughout the first few months
of 2017. (Compl., ¶¶ 96-105). During this time, Mr. Silver sought to finalize the terms of his
compensation in “a formal, signed document.” (Id., ¶ 106.) Messrs. Murphy and Yellin also
recognized that the parties’ still required a “signed contract.” (Id., ¶ 110.)
On March 11, 2017, Silver met with Mr. Murphy to discuss his “relationship with [HSC]
after the Pennsylvania application was completed.” (Id., ¶ 108.) He alleges that they discussed
new contract terms that were never addressed in December, 2016:
At that meeting, Mr. Murphy assured Mr. Silver that (i) Mr. Silver would
remain the point person for [HSC’s] applications in other states, (ii) Mr.
Silver would retain an interest in and leadership role with respect to any
branded products that were launched in other states, (iii) any tax
consequences arising from Mr. Silver’s equity interest not being listed as
founder’s shares on the Pennsylvania applications would be borne by HSC,
Mr. Lenfest and/or Prime Wellness, (iv) the work Mr. Silver created would
be used only in connection with the Defendants’ activities in Pennsylvania,
and would not be used in any other states without Mr. Silver’s consent; (v)
5
Lucho Marcial and his firm would be the Primary Design Architects in the
event Prime Wellness was awarded a license; and (vi) Mr. Silver would be
put on HSC’s health insurance plan.
(Id., ¶ 109.)
Plaintiffs conclude that the parties reached another “oral agreement” as a result of the
meeting on March 11. (Id., ¶ 121.) Once again, this legal conclusion is entitled to no deference
and is belied by their own allegations of continuing contract negotiations.
C. On March 16, 2017, Silver Receives a Conditional Offer of Employment from

Prime for His Work on the Applications_______________________________
On March 16, 2017, Mr. Murphy sent Mr. Silver a conditional offer of employment with
Prime, which Mr. Silver viewed as entirely “consistent” with the parties’ previous negotiations.
(Id., ¶ 111.) The offer – which Mr. Silver explicitly “agree[d] to” – is not described or attached
to the Complaint. Mr. Silver does not disclose the actual terms of the offer he accepted, despite
explicitly relying on it to justify his claim for a “salaried position” with Prime. (Id., ¶¶ 111-13.)
D. On March 18, 2017, Mr. Silver Continued to Update and Revise the
Term Sheet to “Track All of the Changes” to the Proposed Contract
On March 18, 2017, Mr. Silver continued to revise and “update” his “term sheet” based
on the parties’ ongoing negotiations. (Id., ¶ 114.) His stated purpose was to “track all the
changes” in the evolving discussions for Messrs. Murphy and Yellin. (Id.) After March 18, the
parties continued to engage in contract negotiations and revisited the terms that were previously
discussed. (See id., ¶¶ 115-26.) The negotiations continued through March 20, the date the
applications were due. (Id., ¶ 116.)
E. On March 20, 2017, Messrs. Murphy and Silver Sign an Earlier Version of
the Google Docs “Term Sheet” Containing Proposed Future Terms________
On March 20, 2017, Mr. Murphy presented Mr. Silver with a “written contract.” (Id., ¶
117.) “Mr. Murphy stated that the document contained all the provisions the parties had
6
previously agreed to” and asked Mr. Silver to sign it. (Id., ¶¶ 117-18.) Evidently, however, the
parties had no agreement on proposed terms. Mr. Silver alleges that the proposed “written
contract” was “a new document that he had never previously seen.” (Id., ¶ 118.) Mr. Silver
refused to sign it and demanded that Messrs. Murphy and Yellin sign the “March 18” version of
Mr. Silver’s “term sheet.” (Id., ¶¶ 118-20.) Messrs. Murphy and Yellin refused, but suggested
that the parties sign the December, 2016 version of the “term sheet.” (Id., ¶ 121.) Mr. Silver
agreed. (Id., ¶ 122.)
On March 20, 2017, the parties signed the “term sheet” from December, 2016, which
included none of the terms discussed in 2017. (Id., ¶ 126.) Plaintiffs, again, do not attach or
describe the executed “term sheet,” despite identifying it as the only articulation of proposed
contract terms that both parties’ agreed to on March 20, which is last time the parties allegedly
engaged in contract discussions.
F. Prime Is Awarded a Grower/Processor License, and

Silver Demands a Job as Prime’s Chief Marketing Officer
On June 27, 2017, Prime was awarded a grower/processor or cultivation license. (Id., ¶
140.) It was not awarded a dispensary license. After the results came in, Mr. Silver demanded
“his promised role as Chief Marketing Officer of Prime.” (Id., ¶ 140.) After Prime refused his
request based on the clear terms of his conditional Employment Offer, Plaintiffs initiated this
action for more “compensation” under non-existent “contracts.”
III. INTEGRAL DOCUMENTS OMITTED FROM THE COMPLAINT
Two documents integral to Plaintiffs’ claims are not described or attached to the
Complaint: (1) Mr. Silver’s Google Docs “term sheet;” and (2) Mr. Silver’s “Employment Offer”
from Prime. This is by design. Plaintiffs are attempting to hide these documents because they
contradict their entire narrative. As discussed below, under Third Circuit authority, the Court
7
can and should consider both documents in evaluating the Complaint. These documents are
attached as Exhibits A and B, respectively, and are briefly summarized below.
A. Mr. Silver’s Google Docs “Term Sheet”
Mr. Silver alleges that the “term sheet” he maintained on Google Docs captured the terms
of the parties’ “oral agreement” in December, 2016, and their final understanding of contract
discussions on March 20, 2017. The term sheet was executed by the parties on March 20. By its
own terms (which were drafted by Mr. Silver), this document reflects that the parties did not
have an agreement on proposed terms in December, 2016, or March, 2017:
Proposed Agreements Between

Harris Silver / Entity X LLC
And
Kevin Murphy / High Street Capital
[…]
This Term Sheet summarizes the proposed terms with regard to a proposed
Agreement between Harris Silver, and Kevin Murphy (the Parties) and certain other
future related agreements.
The parties acknowledge they must complete negotiations on the points set forth
in this understanding as well as on unspecified points beyond the scope of this
Term Sheet, which negotiations will ultimately determine a Final agreement.
(See Signed Google Document, attached hereto as Exhibit A, at 1 (emphasis added)).
The remainder of the self-described “Term Sheet” lists various categories of terms that the
parties “intend” to “negotiate” in the future, including the “Bonus” and “Equity” terms Plaintiffs
are seeking to enforce. (See Exhibit A). The final page reiterates that the “[t]he parties will enter
into definitive and binding agreements relating to the transaction, together with any ancillary
agreements that are reasonable and customary for transactions of the type contemplated herein.”
(See Exhibit A) (emphasis added.)
8
B. Mr. Silver’s “Employment Offer”
On March 16, 2017, Mr. Murphy sent a signed Employment Offer to Silver as an
“[a]uthorized agent of Prime.” (Compl., ¶ 111). The Employment Offer outlined “the mutually
agreed terms of the employment offer” and clearly and unambiguously states:
This offer of employment is contingent upon our receiving a final and unappealled
permit for medical marijuana grow/processing facility and dispensary from the
Pennsylvania Department of Health by March 12, 2018.
(See Employment Offer, attached hereto as Exhibit B, at 2) (emphasis added). Mr. Silver signed
the conditional Employment Offer on March 17, 2017, thereby expressly “agree[ing] to the
terms of this offer.” (Exhibit B, at 3). The condition precedent for the offer to take effect –
Prime’s receipt of at least two licenses – never occurred.
IV. PROCEDURAL HISTORY
Plaintiffs initiated this action on January 3, 2018. They raise seven meritless claims
against a puzzling assortment of Defendants:
 Count I: “Breach of Contract” against Mr. Lenfest, “High Street Capital” and Prime;
 Count II: “Promissory Estoppel” against Mr. Lenfest, “High Street Capital” and
Prime;
 Count III: “Unjust Enrichment/Quantum Meruit” against Mr. Lenfest, “ High

Street Capital” and Prime;
 Count IV: “Common Law Fraud” against Mr. Lenfest, Mr. Murphy, Mr. Yellin, “High
Street Capital” and Prime;
 Count V: “Securities Fraud” against Mr. Lenfest, Mr. Murphy, Mr. Yellin, “High
Street Capital,” and Prime;
 Count VI: “Civil Conspiracy” against Mr. Lenfest, Mr. Murphy, Mr. Yellin, “High
Street Capital,” and Prime; and
 Count VI I: “Unjust Enrich me nt” against HSC and HCL MM.
9
Because Plaintiffs improperly name Defendants who do not belong in this litigation, and fail to
state a claim for relief, the Court should dismiss Plaintiffs’ Complaint, with prejudice.
V. LEGAL STANDARDS
A. Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(2)
In deciding a motion to dismiss for lack of personal jurisdiction pursuant to Rule
12(b)(2), the court must accept as true all allegations contained in the complaint. Dayhoff, Inc. v.
H.J. Heinz Co., 86 F.3d 1287, 1302 (3d Cir.1996)). “Once a defendant challenges a court’s
exercise of personal jurisdiction over it, the plaintiff bears the burden of establishing personal
jurisdiction.” D’Jamoos ex rel. Estate of Weingeroff v. Pilatus Aircraft Ltd., 566 F.3d 94, 102
(3d Cir.2009). When the court does not hold an evidentiary hearing, plaintiff must establish a
prima facie case of personal jurisdiction to survive dismissal. Miller Yacht Sales. Inc. v. Smith,
384 F.3d 93, 97 (3d Cir. 2004) (citations omitted).
B. Motion to Dismiss Under Federal Rule of Civil Procedure 12(b)(6)
In deciding a motion to dismiss under Rule 12(b)(6), a court must determine whether the
complaint “pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” PA Prison Soc. v. Cortes, 622 F.3d 215, 233 (3d
Cir. 2010); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
The Third Circuit requires a two-step analysis for reviewing a complaint under 12(b)(6).
First, the court must separate the factual and legal elements of a claim, accepting the facts and
disregarding the legal conclusions. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir.
2009). Second, the court must determine whether the well-pled facts sufficiently show that the
plaintiff “has a plausible claim for relief.” 578 F.3d. at 211. A plaintiff must plead fraud with
“particularity” under Rule 9(b). This requirement is “rigorously applied in securities fraud
cases.” In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1417 (3d Cir. 1997).
10
Although a district court may not generally consider matters outside of the pleadings
when deciding a motion to dismiss, the Third Circuit has long recognized an exception for
documents “integral to or explicitly referred to in the complaint.” See, e.g., id.
VI. ARGUMENT
Plaintiffs’ Complaint is deficient in several respects. As an initial matter, Plaintiffs are
suing a collection of individuals and entities that are either not subject to personal jurisdiction in
Pennsylvania or have no connection to their claims. Plaintiffs have named four New York
residents – Mr. Murphy, Mr. Yellin, HSC, and HCS Management (collectively, the “New York
Defendants”) – without offering any basis to subject them to personal jurisdiction here.
Plaintiffs also inexplicably name Mr. Lenfest as a defendant in all but one Count, without
offering any allegation to suggest that he is a party to any purported “contract” or is responsible
for any purported “promise” or “representation” at issue. Plaintiffs also characterize HCL MM
as a “Lenfest Party” and sue it for “unjust enrichment,” despite the fact that it had no alleged role
in any negotiations with Plaintiffs and never requested or received anything from them.
Plaintiffs also fail to state a claim for relief against the Defendants.
First, Plaintiffs’ breach of contract claim fails because they do not identify an
enforceable contract or sufficiently definite contract terms. This conclusion, which is clear on
the face of the Complaint, is confirmed by the parties’ “term sheet,” which the Court may
consider in evaluating Plaintiffs’ allegations.
Second, Plaintiffs’ promissory estoppel claim fails because they do not identify any
“promise” indicating “with ‘reasonable certainty’ the intent of the parties” or allege that Mr.
Silver reasonably or detrimentally relied on any purported “promise.”
11
Third, Plaintiffs’ “quantum meruit/unjust enrichment” claims fail because they seek
“benefit-of-the-bargain” damages, which are unavailable under an unjust enrichment theory, and
have sued parties that never requested, accepted, and/or received any benefit from Plaintiffs.
Fourth, Plaintiffs’ fraud claim fails because their allegations are intentionally vague and
do not even approach the particularity necessary to support a fraud claim. Plaintiffs also fail to
allege that Mr. Silver justifiably relied on any purported representation to his detriment. They
are also seeking contract damages, which are unavailable on a fraud claim.
Fifth, Plaintiffs’ “security fraud” claim fails because they have failed to plead any
“fraud,” and this case does not involve a “contract” for the “purchase or sale” of a “security.”
Sixth, Plaintiffs’ civil conspiracy claim is entirely derivative of their fraud claim, which
fails as a matter of law. Plaintiffs also fail to plead an illicit agreement between the Defendants.2
A. Plaintiffs Have Not Alleged Any Basis For This Court to

Exercise Personal Jurisdiction Over the New York Defendants
Plaintiffs’ claim that this Court “may exercise personal jurisdiction over the [New York
Defendants] because this case arises out of conduct by the [New York Defendants] that occurred
within Pennsylvania and conduct that was specifically directed to Pennsylvania.” (Compl., ¶
25.) This is insufficient to establish a prima facie case of personal jurisdiction.
2
Based on Plaintiffs’ allegations, there is a potential conflict regarding whether New York or
Pennsylvania law applies in this case. A federal court sitting in diversity applies the choice of law rules
of the state in which it sits. Suchomajz v. Hummel Chemical Co., Newark, New Jersey, 524 F.2d 19 (3d
Cir. 1975). Where there is no meaningful difference between the law of Pennsylvania and the foreign
jurisdiction, there is a false conflict, and Pennsylvania law applies. Rose v. Dowd, 265 F. Supp. 3d 525,
530 (E.D. Pa. 2017). Unless otherwise noted, there is no conflict between New York and Pennsylvania
law. Accordingly, Pennsylvania law applies. See Erie Ins. Exch. v. J.M. Pereira & Sons, Inc., 151
A.D.3d 1879, 1881 (N.Y. App. Div.), reargument denied, 153 A.D.3d 1675 (N.Y. App. Div. 2017) (no
“conflict” regarding basic tenets of contract law); Legal Asset Funding, LLC v. Veneski, 2006 WL
2623884, at *4 (M.D. Pa. Sept. 12, 2006) (no “conflict” regarding promissory estoppel, unjust
enrichment, and fraud); ACR Sys., Inc. v. Woori Bank, 232 F. Supp. 3d 471 (S.D.N.Y. 2017) (civil
conspiracy in New York); Goldstein v. Phillip Morris, Inc., 854 A.2d 585, 590 (Pa. Super. Ct. 2004)
(civil conspiracy in Pennsylvania).
12
Personal jurisdiction may be either general or specific. “A defendant is subject to general
jurisdiction when it has continuous and systematic contacts with the forum state.” Gen. Elec.
Co., 270 F.3d 144, 150 (3d Cir. 2001). In contrast, “specific jurisdiction is established when a
non-resident defendant has ‘purposefully directed’ his activities at a resident of the forum and
the injury arises from or is related to those activities.” Id. at 144 (emphasis added).
Plaintiffs essentially concede that the Court may not exercise general jurisdiction over the
New York Defendants. Plaintiffs allege that: (1) HSC and HSC Management are incorporated
under Delaware law, maintain their respective headquarters in New York, and all of the members
of each entity reside in New York, (Compl., ¶¶ 21-23); and (2) Messrs. Yellin and Murphy
permanently reside in New York, and are citizens of that state, not Pennsylvania, (id., ¶¶ 17, 19.)
None of the New York Defendants can be fairly regarded as at home in Pennsylvania.3 See
Daimler AG v. Bauman, 134 S. Ct. 746, 760 (2014). There is no general jurisdiction.
Plaintiffs also attempt, and fail, to establish specific jurisdiction. (Compl., ¶ 25.)
Pennsylvania’s long arm statute permits the exercise of specific jurisdiction over out-of-state
defendants to the fullest extent permitted by the Constitution. 42 PA. CONS. STAT. ANN. §
5322(b). The Third Circuit applies a three-prong test to determine whether specific jurisdiction
may constitutionally extend to an out-of-state defendant: (1) the defendant must have
“purposefully directed [its] activities at the forum,” (2) the dispute must “arise out of or relate to
at least one of those activities,” and (3) the exercise of jurisdiction must comport with “fair play
and substantial justice.” O’Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 317 (3d Cir. 2007)
3
The only non-transitory link to the forum state that Plaintiffs allege is that HSC – not HSC Management
or Messrs. Murphy and Yellin – holds a membership interest in Prime. (Compl., ¶ 22). A foreign
defendant’s ownership of an in-state corporate entity, however, is insufficient to establish general
personal jurisdiction over the out-of-state owner. Campbell v. Fast Retailing USA, Inc., 2015 U.S. Dist.
LEXIS 170986, at *9 (E.D. Pa. 2015).
13
(citations omitted). This inquiry must be applied to each claim and to each defendant
independently. Marten v. Godwin, 499 F.3d 290, 296 (3d Cir. 2007) (citing Remick v. Manfredy,
238 F.3d 248, 255-56 (3d Cir. 2001)).
First, Plaintiffs fail to carry their burden to establish that their contract and promissory
estoppel claims arise out of the New York Defendants’ contacts with Pennsylvania. In
evaluating contacts relevant to establishing specific jurisdiction in contract disputes, courts
consider the totality of the circumstances, including “the location and character of the contract
negotiations, the terms of the contract, and the parties’ actual course of dealing.” Element Fin.
Corp. v. ComQi, Inc., 52 F. Supp. 3d 739, 746 (E.D. Pa. 2014) (citing Remick v. Manfredy, 238
F.3d 248, 256 (3d Cir.2001)). Plaintiffs contend that Messrs. Yellin and Murphy – New York
citizens, living and working in New York – made promises to Mr. Silver, a California resident,
while he was in California, New York, and/or Nevada. (See Compl., ¶¶ 79-82, 95, 108-126).
Plaintiffs’ claims arise out of these purported “promises,” “contracts” and/or “representations.”
Plaintiffs allegedly performed their end of the alleged bargain in New York. (Id., ¶ 95.) The
New York Defendants allegedly failed to perform their end of the bargain in New York. (See
Compl., ¶¶ 117-126, 130-43.) There are no “contacts” to establish jurisdiction.
Similarly, Plaintiffs fail to allege any basis for specific jurisdiction with respect to their
fraud claim. In suits alleging intentional torts, courts apply the “effects test” to determine
whether “minimum contacts” exist between a defendant and the forum, which requires that: (1)
“the defendant must have committed an intentional tort,” (2) “the plaintiff must have felt the
brunt of the harm caused by the tort in the forum,” and (3) “the plaintiff must show that the
defendant knew that the plaintiff would suffer the brunt of the harm caused by the tortious
14
conduct in the forum, and point to specific activity indicating that the defendant expressly aimed
its tortious conduct at the forum.” Walsh, 157 F.Supp.2d at 508.
None of the purported injuries attributable to the New York Defendants were felt in
Pennsylvania. Plaintiffs are California residents. (Compl., ¶¶ 14-15). They fail to allege that
any injury as a result of the New York Defendants’ alleged actions was felt in Pennsylvania.
Nothing in the Complaint indicates that any New York Defendant “knew that the plaintiff would
suffer the brunt of the harm caused by the tortious conduct in [Pennsylvania],” or reflect
“specific activity indicating that the [New York Defendants] expressly aimed . . . [their] tortious
conduct at [Pennsylvania].” Walsh, 157 F.Supp.2d 501, 508 (E.D. Pa. 2001). As a result,
Plaintiffs’ allegations also fail to establish personal jurisdiction as to their fraud claim.
Accordingly, the Court should dismiss Plaintiffs’ claims against the New York
Defendants for lack of personal jurisdiction under Rule 12(b)(3).
B. Harold Chase Lenfest and HCL MM Are Not Proper Defendants
Incredibly, without any basis, Plaintiffs name Mr. Lenfest as an individual defendant on
their claims for breach of contract, promissory estoppel, unjust enrichment, fraud, “securities
fraud” and “conspiracy.” They also, without any basis, sue HCL MM for “unjust enrichment.”
As set forth below, all of these claims fail as a matter of law. But independent of that, Mr.
Lenfest and HCL MM have no business being defendants in this case.
Mr. Lenfest is the alleged owner of HCL MM, which is a partial owner of Prime. It is a
mystery how Mr. Lenfest, in his individual capacity, can be held liable for any of Plaintiffs’
claims. Initially, he cannot be liable for breach of contract. “It is well established under
Pennsylvania law that one cannot be liable for a breach of contract unless one is a party to that
contract.” Electron Energy Corp. v. Short, 597 A.2d 175, 177 (Pa. Super. Ct. 1991), aff’d 533
15
Pa. 66, 618 A.2d 395 (Pa. 1993) (citing Viso v. Werner, 471 Pa. 42, 369 A.2d 1185 (Pa. 1977)).
He is not an alleged party to any alleged contract.
Mr. Lenfest also played no alleged role in the negotiation of any purported contract. The
alleged contracts are based exclusively on the alleged oral representations of Messrs. Murphy
and Yellin. (Compl., ¶¶ 114-126). Plaintiffs assert, without basis, that Messrs. Murphy and
Yellin were, somehow, always acting as “agents” of Mr. Lenfest. (Id.) They offer no allegations
to suggest that Messrs. Murphy or Yellin were employed by Mr. Lenfest or otherwise operating
under his authority. There is nothing to suggest that either of them entered into a contract on Mr.
Lenfest’s behalf or uttered any promises or representations on Mr. Lenfest’s behalf.
Plaintiffs’ bald assertion of an agency relationship fails as a matter of law to establish any
liability on the part of Mr. Lenfest.4 In order for there to be an agency relationship, the principal
must consent that another may act on his or her behalf. Basile v. H & R Block, Inc., 761 A.2d
1115 (Pa. 2000). “An agent cannot simply, by his or her own words, invest himself or herself
with apparent authority; but rather, such authority emanates from the principal’s action and not
the agent’s.” V-Tech Servs., Inc. v. Thomas Milton St., 72 A.3d 270, 279 (Pa. Super. Ct. 2013).
Plaintiffs do not allege that Mr. Lenfest appointed Messrs. Murphy or Yellin as his personal
agents or identify any statement or conduct that could possibly support such a finding. Absent
any such allegations, there is, as a matter of law, no basis to contend that Mr. Lenfest is
personally liable for any of the alleged actions of Messrs. Murphy or Yellin.
Furthermore, Plaintiffs also appear to allege that Mr. Lenfest is individually liable for the
alleged actions of Prime. This theory fails. Mr. Lenfest cannot be subject to liability under this
4
There is no conflict of law on this issue. Under the law of either New York or Pennsylvania, there are
no allegations to suggest that Messrs. Murphy and Yellin were agents of Mr. Lenfest. Meese v. Miller,
436 N.Y.S.2d 496, 499 (N.Y. App. Div. 1981); Basile v. H & R Block, Inc., 761 A.2d 1115 (Pa. 2000).
16
theory unless the facts justify piercing the corporate veil of two separate entities – Prime and
HCL MM. Piercing the corporate veil is an extraordinary deviation from “the general body of
Pennsylvania corporate law [which] holds that the corporate entity should be recognized unless
specific, unusual circumstances require an exception be made.” In re. Simplified Info. Sys., Inc.,
89 B.R. 538, 544 (W.D. Pa. 1988). To survive a motion to dismiss, a party seeking to pierce the
corporate veil must plead facts to support a finding of: undercapitalization, failure to adhere to
corporate formalities, substantial intermingling of corporate and personal affairs, or use of the
corporate form to perpetrate a fraud. Accurso v. Infra-Red Servs., Inc., 23 F. Supp. 3d 494, 510
(E.D. Pa. 2014). Plaintiffs do not offer any such allegations with respect to Prime or HCL MM.
Lastly, by Plaintiffs own allegations, HCL MM had nothing to do with retaining
Plaintiffs or negotiating the supposed terms of their compensation. HCL MM’s sole connection
to this case is a partial ownership interest of Prime, which “did not exist” until Prime’s LLC
agreement was drafted and executed on March 20, 2017, after all alleged negotiations were
complete. (Compl., ¶¶ 85-86, 126-28.) Any purported negotiations, promises, or representations
were not made by, or on behalf of, HCL MM.
Mr. Lenfest and HCL MM are not proper defendants. At a minimum, Counts I, II, III,
IV, V, and VI of Plaintiffs’ Complaint should be dismissed with respect to Mr. Lenfest and
Count VII should be dismissed with respect to HCL MM.5
C. Plaintiffs’ Contract Claim Fails as a Matter of Law
“It is by now hornbook law that ‘the test for enforceability of an agreement is whether
both parties have manifested an intention to be bound by its terms and whether the terms are
5
Below, this Memorandum provides additional justification for dismissal of Mr. Lenfest and HCL MM as
parties to this action in connection an analysis of Plaintiffs’ unjust enrichment and conspiracy claims.
See, infra, Sections VI.E and VI.H.
17
sufficiently definite to be specifically enforced.’” Channel Home Ctrs. v. Grossman, 795 F.2d
291, 298 (3d Cir.1986) (citing Lombardo v. Gasparini Excavating Co., 123 A.2d 663, 666 (Pa.
1956); Linnet v. Hitchcock, 471 A.2d 537, 540 (Pa. Super. Ct. 1984)). Put another way, “there
must be an offer, acceptance, consideration or mutual meeting of the minds.” Jenkins v. County
of Schuykill, 658 A.2d 380, 383 (Pa. Super. Ct. 1995). A contract only arises where “the minds
of the parties . . . meet upon all the terms, as well as the subject-matter, of the contract[.]” Onyx
Oils & Resins v. Moss, 80 A.2d 815, 817 (Pa. 1951).
Plaintiffs ignore these fundamental principles. Instead, they offer a jumble of purported
contract “terms” exchanged during months of ongoing negotiations and “tracked” on an ever-
evolving Google Docs “term sheet” that is not described or attached to the Complaint. It is
impossible to identify the parties to Plaintiffs’ alleged contract(s) or the final terms of the parties’
purported contract(s). One thing, however, is clear on the face of the Complaint – there was no
mutual assent on any of the purported contract terms Plaintiffs seek to enforce in this action.
This undeniable conclusion is confirmed by the Google Docs “term sheet” and “Employment
Offer” that Plaintiffs rely upon, but attempt to shield from the Court’s review.
Furthermore, even if Plaintiffs had adequately alleged the existence of a contract (which
they have not), any purported terms offering Plaintiffs an “equity” interest in Prime or an
“ongoing role” at Prime are not sufficiently definite to be enforced.
1. The Parties Never Entered Into a Contract Providing Mr. Silver with
Bonus Compensation, an Equity Interest or a Salaried Position
To plead a contract claim, Mr. Silver was required to allege “an offer on one side and an
unconditional acceptance on the other.” Parsons Bros. Slate Co. v. Dep’t of Highways, 211 A.2d
423, 424 (Pa. 1965) (quoting Cohn v. Penn Beverage Co., 169 A. 768, 768–69 (Pa. 1934)). “So
long as any condition [was] not acceded to by both parties to the contract, the dealings are mere
18
negotiations and may be terminated at any time by either party while they are pending.” Id.
(emphasis added.) Ongoing negotiations, even if “prolonged,” cannot give rise to an enforceable
contract. See, e.g., Essner v. Shoemaker, 143 A.2d 364, 366 (Pa. 1958).
Mr. Silver was promised, and has received, $180,000 for his work on Prime’s
Pennsylvania applications and a conditional offer of employment from Prime. He now contends
he is entitled to more pursuant to a set of “oral agreements” entered into in December, 2016, and
March 11, 2017. (See Compl., ¶¶ 81-82, 93, 105, 108-110, 114.) He does not identify the parties
to these “contracts” or identify which contract he is seeking to enforce. In the end, it doesn’t
matter – neither “contract” exists.
After purportedly reaching an “oral agreement” with certain unspecified parties in
December, 2016, Mr. Silver created his Google Docs “terms sheet” to capture the “terms to
which [the parties] had orally agreed.” (Compl., ¶¶ 81-82, 93.) By Plaintiffs’ own allegations,
the parties’ discussions in December, 2016, were “negotiations” and the parties continued to
negotiate proposed contract terms on March 11, 2017, including the terms of a conditional
Employment Offer for Silver to become Chief Marketing Officer of Prime. (Id., 87, 108-111.)
As a result, on March 18, 2017, Silver “revised” the “term sheet” he originally created in
December, 2016, to “track all the changes” that were allegedly discussed. (Id., ¶ 114.) The
parties’ negotiations – by the Plaintiff’s own account – extended well past December, 2016, into
March, 2017. Accordingly, they did not mutually agree on all material terms in December,
2016. See Onyx Oils & Resins v. Moss, 80 A.2d 815, 817 (Pa. 1951). There is no December,
2016 “contract” for “contingent compensation.”
The same is true of the purported March 11, 2017 “contract.” During the course of
negotiations, the parties agreed that any contract would be in writing. (See Compl., ¶¶ 83, 106.)
19
On March 20, 2017 – two days after Mr. Silver “revised” his “term sheet” to reflect the terms
discussed on March 11 – Messrs. Yellin and Murphy presented Mr. Silver with a “written
contract.” (Id., ¶¶ 117-119.) He refused to sign it, alleging “that he had never previously seen”
the proposed contract. (Id.) He did not review all of the proposed terms, since he was in “no
position to, review or revise a new document that he had never previously seen.” (Id., ¶ 119.)
Instead, Mr. Silver suggested that the parties sign the “March 18” term sheet. (Id., ¶¶ 117-119.)
Messrs. Yellin and Murphy refused, and Mr. Silver “agreed” to “sign” an earlier version from
December, 2016, which did not include the terms discussed in 2017. (Id., ¶¶ 121-122, 126.)
This back-and-forth confirms that the parties had no “meeting of the minds” when they
resumed negotiations on March 20. They literally and figuratively were on completely different
pages. By Plaintiffs’ own allegations, there was no offer, unconditional acceptance, or mutual
assent in December, 2016, or on March 11, March 18, or at any time in between.
And Plaintiffs do not allege that the parties entered into an oral contract on March 20.
The Complaint includes no allegations of any oral offer, acceptance or mutual assent on March
20. They do not allege that the parties entered into a written contract on March 20. They do not
describe the terms of any purported March 20 contract. And, as set forth above, they do not
attach or describe the “term sheet” that was executed by the parties on March 20. Without any
allegations to reflect the parties’ mutual and unconditional assent on all material terms of
Plaintiffs’ alleged “contracts,” their contract claim fails as a matter of law.
But it’s worse than that. In this action, Plaintiffs are attempting to plead around the
actual facts in hopes of avoiding dismissal. The March 20 “term sheet,” which Mr. Silver
drafted, confirms what is already clear on the face of the Complaint. The parties never entered
into a contract providing Plaintiffs a “bonus,” “equity interest,” or an unconditional employment
20
offer. And the actual terms of the “Employment Offer” that Silver “agree[d] to,” confirms he not
entitled to a “position as the Chief Marketing Officer of [Prime].” (See Compl., ¶ 81.)
2. The March 20, 2017 “Term Sheet” Confirms There is No Contract
Under Third Circuit precedent, the Court may consider Silver’s Google Docs “term
sheet” in evaluating Plaintiffs’ Complaint because it is “integral to or explicitly referred to in the
complaint.” In re Burlington Coat Factory Securities Litig., 114 F.3d 1410, 1426 (3d Cir. 1997);
Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014). “[T]he justification for the integral
documents exception is that it is not unfair to hold a plaintiff accountable for the contents of
documents [he] must have used in framing [his] complaint, nor should a plaintiff be able to
evade accountability for such documents simply by not attaching them to his complaint.”
Schmidt, 770 F.3d at 250 (emphasis added).
The Google Docs term sheet is integral to Plaintiffs’ claims. As alleged by Plaintiffs, it:
(1) reflected Mr. Silver’s understanding of the parties purported “oral agreement” in December,
2016; (2) was shared with Messrs. Murphy and Yellin throughout ongoing discussions to inform
them of Mr. Silver’s understanding of the “agreement;” and (3) represents the only collection of
proposed contract terms that the parties agreed to sign on March 20, the last day of contract
negotiations described in the Complaint. Plaintiffs explicitly refer to the “term sheet” in over 12
paragraphs and rely on it as a basis for their contract claim and derivative promissory estoppel
and fraud claims. (Complaint, ¶¶ 82, 83, 114, 115, 118, 120-26.) But they fail to disclose what
it says. The “integral document exception” is not only applicable – it was built for this situation.
As described above, the Google Docs term sheet is a “Proposed Agreement” that was
drafted by Mr. Silver. (Exhibit A.) It clearly and unambiguously “summarizes the proposed
terms with regard to a proposed Agreement” and states that the “parties acknowledge they must
complete negotiations on the points set forth in this understanding as well as on unspecified
21
points beyond the scope of this Term Sheet, which negotiations will ultimately determine a
Final Agreement.” (Exhibit A) (emphasis added.) The parties could only agree to sign a
document stating that they were in negotiation on all proposed terms and had yet to reach
“definitive and binding agreements relating to the transaction[,]” including the “terms” at
issue. (Id., ¶¶ 13, 14, 16 & p. 4) (emphasis added.)
These are Mr. Silver’s words. This is his description of the parties’ purported
“agreement” as of December, 2016 – when he initially transcribed the proposed “terms” – and on
March 20, 2017, when he signed the “term sheet.” (See Compl., ¶¶ 81-82, 93, 121-122.) Mr.
Silver’s term sheet confirms that the parties had no agreement for the additional compensation
Plaintiffs are seeking. At most, the parties had an agreement to agree, which is “incapable of
enforcement, especially when it is stipulated that the proposed compact shall be mutually
agreeable.” Highland Sewer and Water Authority v. Forrest Hills Mun. Authority, 797 A.2d 385,
390 (Pa. Comm. 2002) (quoting Onyx Oils & Resins, Inc. v. Moss, 80 A.2d 815, 816 (Pa. 1951)).
3. The March 16, 2017 “Employment Offer” Accepted by Mr. Silver

Confirms He is Not Entitled to a Full Time Position with Prime
Prime and Mr. Silver did enter into a “definitive and binding” written agreement
regarding Plaintiffs’ purported “Ongoing Role” with Prime. On March 16, 2017, Mr. Murphy
sent an “Employment Offer” to Mr. Silver on behalf of Prime. (Exhibit B.) On March 17, Silver
executed the “Employment Offer,” confirming that he “accept[ed] the terms of this offer.” (Id.)
Plaintiffs fail to attach or describe this document, which is integral to their claims and explicitly
referenced in their Complaint. (See Compl., ¶¶ 108-112.)
Plaintiffs specifically allege that “[c]onsistent with [Mr. Murphy’s] and Mr. Yellin’s
representations to Mr. Silver, on March 16, 2017, Mr. Murphy sent Mr. Silver a written offer of
employment to be the Chief Marketing Officer of Prime Wellness in the event it was awarded a
22
cannabis license.” (Id., ¶ 111.) Plaintiffs contends that the terms of this offer were “false and
fraudulent” because Messrs. Murphy and Yellin never intended to “abide by them.” (Id., ¶ 113.)
This document serves as a basis for Plaintiffs’ contract claim for an ongoing role with Prime as
well as their derivative fraud and promissory estoppel claims. (See id., ¶¶ 139-143.)
The Court can and should consider the actual terms of the “Employment Offer” accepted
by Mr. Silver. See, e.g., In re Burlington Coat Factory Securities Litig., 114 F.3d at 1426. It
explicitly states that the “offer of employment is contingent upon [Prime’s receipt of] a final and
unappealled permit for a medical marijuana grow/processing facility and dispensary[.]” (Exhibit
B ) (emphasis added). Prime was only “awarded” a grow/processing or “cultivation” license.
(Compl., ¶ 140.) Accordingly, under the clear and unambiguous language of Mr. Silver’s
Employment Offer, he is not entitled to any ongoing position at Prime. Any claim to the
contrary should be dismissed.
4. Plaintiffs’ Purported Contract for “Additional Compensation” Also

Lacks the Material and Necessary Details to Be Enforceable
Even if Plaintiffs adequately alleged that the parties entered into a contract for additional
“contingent compensation,” their claim still fails. For a contract to be enforceable, the nature
and extent of the mutual obligations must be “certain,” and the parties must have agreed on “the
material and necessary details of their bargain.” Krebs v. United Refining Co. of Pennsylvania,
893 A.2d 776, 783 (Pa. Super. Ct. 2006) (citing Peck v. Delaware County Board of Prison
Inspectors, A.2d 185, 191 (Pa. 2002)). When performance under a contract is uncertain, the court
will not write the contract for the parties. Turner v. Hostetler, 518 A.2d 833, 836 (Pa. Super Ct.
1986). Whether the terms are sufficiently definite to be specifically enforced is a question of
law. Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 585 (3d Cir. 2009).
23
A general promise of ownership, without any agreement as to the nature of the
ownership, is too indefinite to enforce. See Shell’s Disposal and Recycling, Inc. v. City of
Lancaster, 504 Fed. Appx. 194, 202 (3d Cir. 2012) (“[T]he Pennsylvania Supreme Court has
held that an agreement was unenforceable when the parties failed to even discuss terms like price
and manner of performance, and when the parties exchanged draft agreements that differed
dramatically on the essential terms.”) (citations omitted); Sloan v. Frascella, 2013 WL 4433366,
at *4 (E.D. Pa. Aug. 16, 2013) (same); see also Caisson Corp. v. Ingersoll–Rand Co., 622 F.2d
672, 678 (3d Cir. 1980) (noting where certain essential elements are missing from a contract,
“the lack of specificity may make enforcement so difficult that the courts will hold there was no
enforceable contract”); Mazzella v. Koken, 739 A.2d 531, 537 (Pa. 1999) (“If, however, there
exist ambiguities and undetermined matters which render a settlement agreement impossible to
understand and enforce[,] such an agreement must be set aside.”).
In Sloan v. Frascella, for example, the plaintiff alleged that the defendants breached an
oral contract in which they agreed to provide her “a $100,000 annual salary and a 5% percent
equity position in . . . a litigation funding business, in exchange for her agreement to set up the
administrative side of the business.” Sloan, 2013 WL 4433366 at *1. The Court rejected the
claim as a matter of law at the conclusion of the plaintiff’s case at trial, concluding that the
parties’ oral agreement was “void of elements which can be reasonably considered essential to an
equity ownership interest,” such as:
[H]ow her 5% would be determined, how the value of the company would be determined,
how the profits would be determined, or how profits would be distributed. Rather, she
stated she was simply promised equity in the company.
Sloan, 2013 WL 4433366, at *2.
In this case, Plaintiffs allege that the parties entered into an “oral contract” providing
them with a “4% non-dilatable equity interest” in Prime, but do not allege that the parties agreed
24
on any of the essential terms necessary to evaluate the parties’ performance obligations or to
fashion an appropriate remedy. See RESTATEMENT (SECOND) OF CONTRACTS § 33(2) (“The
terms of a contract are reasonably certain if they provide a basis for determining the existence of
a breach and for giving an appropriate remedy.”). As in Sloane, the alleged oral contract for
“equity” fails to specify how the 4% equity interest would be determined, how Prime would be
valuated, how profits would be distributed, or how profits would be determined. Without any
alleged agreement on the material and necessary details of an exchange of equity ownership, this
term is unenforceable as a matter of law.
The same analysis applies to Plaintiffs’ purported “ongoing role” at Prime. If the Court
declines to consider Prime’s March 16 Employment Offer in evaluating Plaintiffs’ Complaint,
Plaintiffs’ purported promise of an ongoing, salaried position is unenforceable for lack of any
reasonable certainty. Plaintiffs do not allege any of the necessary details of this alleged bargain,
such as the terms of Mr. Silver’s employment, Mr. Silver’s salary, or any other financial benefits
he would have received as “Chief Marketing Officer” of Prime.
D. Plaintiffs’ Promissory Estoppel Claim Fails as a Matter of Law
To maintain a promissory estoppel action, a plaintiff must allege that: (1) the promisor
made a clear promise that it should have reasonably expected would induce action or forbearance
on the part of the plaintiff; (2) the plaintiff actually took action or refrained from taking action in
reliance on the promise; and (3) injustice can be avoided only by enforcing the promise. V-Tech
Services, Inc. v. Street, 72 A.3d 270 (Pa. Super. Ct. 2013). These factors are strictly enforced to
guard against the “loose application” of promissory estoppel. Peluso v. Kistner, 970 A.2d 530,
533 (Pa. Commw. Ct. 2009). Promissory estoppel is not a mechanism to transform statements
made during contract negotiations into binding obligations. See, e.g., Bennett v. Itochu Intern.,
Inc., 2012 WL 3627404 *21-22 (E.D. Pa. Aug. 23, 2012).

25
Plaintiffs have failed to adequately allege a clear promise upon which they could have
reasonably relied. They also fail to allege “detrimental reliance.”
1. Plaintiffs Have Not Identified Any Alleged Promise

that Gives Rise to a Promissory Estoppel Claim
Promissory estoppel provides an equitable remedy to enforce a “contract-like promise
that would be otherwise unenforceable under contract law principles.” Peluso, 970 A.2d at 533.
“It operates to protect a promisee whose reliance cannot be secured by contract because the
promise on which he relied was unsupported by consideration. As one Court explained, it is ‘an
equitable remedy to be implemented only when there is no contract; it is not designed to protect
parties who do not adequately memorialize their contracts in writing.”’ Massaro Ltd.
Partnership (Park West Two) v. Baker Taylor, Inc., 161 Fed. App’x 185, 188-89 (3d Cir. 2005)
(internal citations omitted). Accordingly, a “broad or vague implied promise” cannot support a
promissory estoppel claim. C&K Petroleum Prods., Inc., 839 F.2d at 192. To be enforceable,
the promise must expressly “indicate with ‘reasonable certainty’ the intent of the parties.”6 And
any reliance on the alleged promise must be reasonable. See, e.g., Burton Imaging Grp. v. Toys
“R” Us, Inc., 502 F.Supp.2d 434, 440 (E.D. Pa. 2007).
In light of these standards, Plaintiffs’ claim fails for several reasons.
First, Plaintiffs fail to identify a clear promise upon which they could have reasonably
relied. They seek to enforce a litany of vague promises that were delivered during ongoing
contract negotiations, which do not (and cannot) reflect the intent of the parties with any
6
Burton Imaging Grp. v. Toys “R” Us, Inc., 502 F. Supp. 2d 434, 439 (E.D. Pa. 2007); see also Channel
Homes Ctrs. v. Grossman, 795 F.2d 291, 299 (3d Cir. 1986) (requiring that agreements to negotiate in
good faith be “sufficiently definite to be enforced”); Berry v. Maguire, 56 A.2d 282, 283 (Pa. Super. Ct.
1948) (“[T]o give rise to an estoppel[,] statements must be clear and reasonably certain in their
intendment.”).
26
certainty. All of these purported promises were allegedly reflected on the Google Docs “term
sheet” prepared by Mr. Silver and shared with Messrs. Murphy and Yellin. See, supra, Section
III. According to the Complaint, this set of “promises” was “updated,” “revised,” and “changed”
over the course of significant negotiations, which were all directed at reaching a final written
agreement. Id. The “term sheet” itself reflects that the “promises” at issue were always
“proposed terms with regard to a proposed Agreement” and were subject to ongoing
“negotiations.” (Exhibit A.) The parties expressly recognized that they had yet to “enter into
definitive and binding agreements[.]” (Id.; see Compl., ¶¶ 81-82, 93, 114, 121-122).
There is nothing reasonably certain about any of the alleged promises Plaintiffs seek to
enforce. Plaintiffs, rather, attempt to transform alleged oral promises made during ongoing
negotiations into binding obligations, which is improper and should be rejected.7 Furthermore,
Plaintiffs’ promissory estoppel claim only exists if there is no enforceable contract. If that is
true, then Plaintiffs performed “the work necessary to submit the applications” on the mistaken
belief that oral promises for “additional compensation” were enforceable, without any definitive
or binding written agreement. (See Compl., ¶ 156.) This mistaken belief is belied by Plaintiffs’
own rendition of the parties’ contract negotiations and the “term sheet” that Mr. Silver prepared
and signed. “[B]usinesses may not rely merely on their own interpretation of the legal
7
See, e.g., Bennett, 2012 WL 3627404 at *20 (holding that it was unreasonable as a matter of law for
plaintiff to rely on alleged oral promises that were delivered during ongoing negotiations, particularly
where the parties entered into a written non-binding letter of intent and term sheets that required a written
final agreement on the subject); MD Net, Inc. v. Pharmacia Corp., 147 Fed. App’x 239, 244 (3d Cir.
2005) (affirming district court’s dismissal of promissory estoppel claim because “[the plaintiff] could not
have reasonably relied on the oral promises made by [the defendants] because their prior agreement
required a writing for a further binding agreement”); Landan v. Wal-Mart Real Estate Bus., 2016 WL
5253329, at *9 (W.D. Pa. Sept. 22, 2016) (“In the context of the ongoing negotiations and the closing that
consistently was not scheduled, the statements of a done deal or that a closing and executed documents
would be forthcoming were at best vague and aspirational; at the very least, they were not definite
promises on which plaintiffs objectively and reasonably could rely.”)
27
significance of a promise.” Burton, 502 F.Supp.2d at 439. “Action induced by the promisee’s
mistaken judgment will not satisfy this element of detrimental reliance because such reliance is
not reasonable.” Id.
Second, the specific promises at issue also lack necessary specificity. As set forth above,
any alleged oral promise of a “4% equity” ownership interest in Prime is not clear or reasonably
certain. (See Compl., ¶ 81.) It lacks all necessary specificity to reflect the intent of the parties
or to be subject to enforcement.8 The same is true of any purported promise of an “ongoing,
salaried position” with Prime. See, supra, Section VI.C.4.
Third, the other purported “promises” identified in the Complaint are similarly
insufficient. Specifically, Plaintiffs seek to enforce a laundry list of other alleged promises on a
host of issues, including: (1) Mr. Silver’s role “as point person” on other cannabis applications in
“other states”; (2) an “interest in and leadership role with respect to any branded products that
were launched in other states;” (3) the architecture firm that would be hired as the “Primary
Design Architects in the event” Prime was “awarded a license.” (Compl., ¶ 109.)
All of these purported “promises” were allegedly delivered on March 11, 2017, months
after Mr. Silver began working on the applications at issue and nine days before they were
submitted. (See Compl., ¶¶ 95, 105, 108-109.) Further, on March 20, 2017 – before submitting
the applications – Mr. Silver agreed to sign a “term sheet,” which included none of these
“promises.” It is impossible to see how Mr. Silver could have reasonably “relied” or actually did
8
See, supra, Section VI.C.4; see, e.g., Ankerstjerne v. Schlumberger, Ltd., 155 Fed. App’x 48, 51 (3d Cir.
2005) (explaining that promise that plaintiffs would be compensated pursuant to the terms of his
compensation plan was “simply too vague and indefinite to constitute a ‘promise’ for purposes of
promissory estoppel” where the defendant did not “specify how much the plaintiff would be paid, by
whom he would be paid, how payment was to be calculated, or when the plaintiff would be paid”)
(internal quotation omitted)).
28
“rely” on any of these alleged promises to his “detriment.” This, in and of itself, is a basis for
dismissal. Further, none of these amorphous promises indicate the intent of the parties with
reasonable certainty.9
Plaintiffs also allege that, at various times, Messrs. Yellin and Murphy assured Mr. Silver
that the parties would ultimately enter into a written agreement concerning the “contingent
consideration” at issue. (See Compl., ¶¶ 81, 107, 153.) “But assurances that a contract will be
executed at some point in the future are not the sort of express promise that can support a
promissory estoppel claim.”10
Plaintiffs’ promissory estoppel claim should be dismissed for these reasons alone.
2. Plaintiffs Fail to Adequately Allege “Detrimental Reliance”
It is well-established that any action taken in reliance on a promise must be “detrimental”
before a plaintiff can prevail on a promissory estoppel claim. Ndubizu v. Drexel Univ., 768 F.
Supp. 2d 796, 797 (E.D. Pa. 2011); see also Stelmack v. Glen Alden Coal Co., 339 Pa. 410, 416,
14 A.2d 127, 130 (1940) (rejecting claim where “no action was taken by plaintiff in reliance
upon the defendant’s promise which resulted in disadvantage to them.”) “The change in the
plaintiff’s position must be substantial, and there is ‘no injustice in being deprived of a gratuitous
9
See, e.g., Ankerstjerne, 155 F. App’x at 51; Burton, 502 F. Supp. 2d at 439 (holding that defendant’s
statement that they were “going to move ahead” with plaintiff as its vendor was “simply insufficient to
qualify as a promise for a claim of detrimental reliance because it does not express the intent of the parties
with reasonable certainty.”); Engstrom v. John Nuveen & Co., 668 F. Supp. 953 (E.D. Pa. 1987) (finding
that employers promise that it would provide plaintiff with “excellent treatment in salaries, bonuses and
promotion” and “make up” for lost stock investments were “not specific enough or made under such
circumstances that a reasonable person could find that [defendant] should have expected the statements to
induce reliance.”).
10
ProgenyHealth, Inc. v. CareSource Man. Grp., Co., 2017 WL 2618879 at *3 (E.D. Pa. June 16, 2017)
(dismissing claim because, even accepting that the parties exchanged numerous emails and had “104
meeting” about entering into a contract, these are “simply assertions of Defendant’s intent to execute a
contract at a later time; Plaintiff has not alleged that Defendants ever made any statement that could
constitute a definite promise”); see also, e.g., Ankerstjerne, 155 Fed. App’x. at 51; Landan v. Wal-Mart
Real Estate Bus., 2016 WL 5253329, at *9 (W.D. Pa. Sept. 22, 2016).
29
benefit.’” Peluso v. Kistner, 970 A.2d 530, 533 (Pa. Commw. Ct. 2009) (quoting Stelmack v.
Glen Alden Coal Co., 339 Pa. 410, 14 A.2d 127, 130 (Pa. 1940)).
Plaintiffs contend that they detrimentally relied on “Defendants promises” when “they
performed the work necessary to prepare the applications.” (Compl., ¶ 156.) But Mr. Silver was
promised and received “$180,000” and a conditional offer to become “Chief Marketing Officer”
of Prime in return for preparing the applications. (See Compl., ¶ 81; Exhibit B.) Any additional
“consideration” that they were allegedly promised was “contingent” on the success of at least
one of the applications. (See Compl., ¶¶ 81, 153.) Plaintiffs do not allege how they substantially
changed their position based on any promise of contingent consideration or allege how they were
disadvantaged by performing “the work necessary to submit the applications.”11
Plaintiffs’ promissory estoppel claim should be dismissed for this reason as well.
E. Plaintiffs’ Quantum Meruit Claims Fail as a Matter of Law
Mr. Silver raises two “quantum meruit” or “unjust enrichment” claims – one against HSC
and HCL MM (Count VII), and another against Mr. Lenfest, HSC and Prime (Count III). (See
Compl., ¶¶ 158-162, 179-182.) “No matter the label attached to it, the elements of a claim for
unjust enrichment or quantum meruit are: “[1] benefits conferred on defendant by plaintiff, [2]
appreciation of such benefits by defendant, and [3] acceptance and retention of such benefits under
such circumstances that it would be inequitable for defendant to retain the benefit without payment
of value.” Goldsmith Assocs., Inc. v. Del Frisco’s Rest. Grp., LLC, 2009 WL 3172752, at *2 (E.D.
Pa. Oct. 1, 2009) (citation and internal quotation marks omitted).
11
Cf. Ndubizu v. Drexel Univ., 768 F. Supp. 2d 796, 798-99, 802 (E.D. Pa. 2011) (dismissing promissory
estoppel claim where plaintiff claimed that he was promised an endowed professorship “after two years as
a Distinguished Research Fellow” and dedicated significant time and effort into his work and refrained
from seeking other employment, because there was nothing to suggest that performing the work in this
matter was to his “detriment.”)
30
Under this theory, a plaintiff may only obtain the reasonable value of the services
performed. Meyer, Darragh, Buckler, Bebenek & Eck, P.L.L.C. v. L. Firm of Malone Middleman,
P.C., 137 A.3d 1247, 1251 n. 6 (Pa. 2016). Benefit-of-the-bargain damages are unavailable. See,
e.g., Meyer, Darragh, Buckler, Bebenek & Eck, P.L.L.C. v. Law Firm of Malone Middleman, P.C.,
137 A.3d 1247, 1251 n.6 (Pa. 2016).
1. HSC and HCL MM Were Not “Unjustly Enriched”
Plaintiffs contend that they “conferred a benefit on [HSC and HCL MM] by causing the
LCC of which they are the sole members, [Prime], to be awarded a cannabis license.” (See
Compl., ¶ 180.) This conclusion is belied by Plaintiffs’ allegations of fact. Plaintiffs helped
prepare applications for cannabis licenses for Prime; it did not grant anyone a “cannabis license.”
Furthermore, Plaintiffs are also not pursuing damages available under an unjust
enrichment theory. Plaintiffs demand a “4% non-dilutable [sic] equity stake in Prime,” which
“properly belongs to Plaintiffs.” (Comp., ¶ 182.) Plaintiffs purported right to “4% equity” could
only be available to Plaintiffs if they were granted the benefit of their alleged bargain. Benefit-
of-the-bargain damages are unavailable for unjust enrichment.
Lastly, at a minimum, Plaintiffs claim against HCL MM should be dismissed. A party is
not “unjustly enriched” when it receives a benefit that it did not request from the plaintiffs,
unless that party somehow “misled” the plaintiff. See Goldsmith Assocs., Inc. v. Del Frisco’s
Rest. Grp., LLC, 2009 WL 3172752, at *4-5 (E.D. Pa. Oct. 1, 2009) (“Where the person
benefitted does not in any way request the benefit or cause the other party to confer the benefit,
the benefitted person should not have to pay for it.”); D.A. Hill v. Clevetrust, 524 Pa. 425, 573
A.2d 1005, 1009-10 (Pa. 1990). Plaintiffs do not (and cannot) allege that HCL MM requested a
cannabis application or license – or any personal services – from Plaintiffs or “misled” them in
31
any way. HCL MM had absolutely nothing to do with retaining Plaintiffs and do not even factor
into Plaintiffs rendition of the alleged negotiations, “promises” or “representations” at issue.
2. Neither Mr. Lenfest, HSC, Nor Prime Were “Unjustly Enriched”
Plaintiffs also lodge an unjust enrichment claim for contract damages against Mr.
Lenfest, HSC, and Prime. (See Compl., ¶¶ 159-162.) Any purported claim for the value of a
“contingent” bonus, equity interest, or salaried position are benefit-of-the-bargain damages that
cannot be awarded for unjust enrichment. Because Plaintiffs have not alleged any “benefit” that
has been “unjustly retained” by any Defendant, their claim fails.
In addition, Plaintiffs inexplicably name Mr. Lenfest as a Defendant. As set forth above,
Mr. Lenfest did not allegedly retain Plaintiffs, contract with Plaintiffs, or promise Plaintiffs
anything. He also never requested any benefit from Plaintiffs or mislead the Plaintiffs. The fact
that he allegedly “knew of the work performed by Plaintiffs” provides no basis for liability.
(Compl., ¶ 161.) There is no conceivable basis to hold him liable for unjust enrichment.
F. Plaintiffs’ Fraud Claim Fails as a Matter of Law
Plaintiffs’ fraud claim fails for several reasons. First, they do allege fraud with
particularity. Second, they do not adequately allege that Mr. Silver justifiably or detrimentally
relied on any purported misrepresentation. Third, Plaintiffs fail to allege any available damages.
1. Plaintiffs’ Claim Lacks the Requisite Particularity

Under Federal Rule of Civil Procedure 9(b)
Fraud must be plead with particularity. See FED. R. CIV. P. 9(b). A plaintiff must support
its allegations of fraud “with all of the essential factual background that would accompany the
first paragraph of any newspaper story—that is, the who, what, when, where and how of the
events at issue.” U.S. ex rel. Moore & Co., P.A. v. Majestic Blue Fisheries, LLC, 812 F.3d 294,
307 (3d Cir. 2016); see also Godfrey v. Upland Borough, 246 F. Supp. 3d 1078, 1088 (E.D. Pa.
32
2017). When multiple defendants are involved, the complaint must specify the allegations of
fraud applying to each defendant. Cinalli v. Kane, 191 F. Supp. 2d 601, 609 (E.D. Pa. 2002).
Plaintiffs fails to satisfy this standard. Their allegations are intentionally vague to avoid
dismissal. Plaintiffs allege that every alleged “promise” made by Messrs. Yellin and/or Murphy
“to pay [Plaintiffs] contingent consideration” was fraudulent because they “had no intention of
ever keeping those promises.” (Compl., ¶ 164.) Yet, they fail to describe or attach: (1) the “term
sheet” that allegedly reflected the parties understanding of these “promises;” or (2) the March 16,
2017 Employment Offer that allegedly “promised” him a job. The contents of these documents
provide the critical context necessary to inject precision into Plaintiffs’ allegations.
For example, Plaintiffs do not identify any representation of fact made by Messrs. Yellin
and/or Murphy in connection with the parties’ negotiations in December, 2016, or on March 20,
2017. (See Compl., ¶¶ 81, 93.) Plaintiffs, rather, rely exclusively on Silver’s understanding of
the “terms to which they had orally agreed,” which were allegedly captured in the “term sheet”
that was ultimately signed by the “parties.” (Compl, ¶ 82, 121, 126) Without a description of
what the “term sheet” actually says, it is impossible to determine whether any Defendant
“promised” Plaintiffs anything in December, 2016, or March, 2017. It is also impossible to tell
which fraudulent “promises” were delivered by, or on behalf of, each of the named Defendants.
As set forth above, it is clear why Plaintiffs’ attempt to evade the contents of Mr. Silver’s
“terms sheet” and “Employment Offer.” But a fraud plaintiff, in particular, cannot evade or
rewrite unfavorable facts that are central to its claim. Rule 9(b)’s particularity requirement
requires heightened specificity in order to smoke out frivolous claims at the onset of litigation.
See In re Burlington Coat Factory Sec. Litiga., 114 F.3d. 1410, 1417 (3d Cir. 1997). Plaintiffs’
evasive pleading lacks particularity and should be dismissed on this basis alone.
33
2. Plaintiffs Fail to Adequately Allege Justifiable or Detrimental
Reliance on Any Alleged Misrepresentation
The elements of fraud include: (1) a representation; (2) which is material; (3) made
falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the
intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation;
and (6) resulting injury that was proximately caused by the reliance. Richards v. Ameriprise
Fin., Inc., 152 A.3d 1027, 1035 (Pa. Super. Ct. 2016). In other words, a plaintiff must show that
he “suffered harm as a result of detrimental reliance on [a defendant’s] fraudulent conduct.”
Debbs v. Chrysler Corp., 810 A.2d 137, 157 (Pa. Super. Ct. 2002).
Plaintiffs’ fraud claim suffers from the same deficiencies as their promissory estoppel
claim. They fail to identify any representation upon which they could have justifiably relied.
Plaintiffs’ theory, rather, rests on alleged promises and representations exchanged during
contract negotiations, which were indefinite and not “binding.” See, supra, Section VI.D.1.
Plaintiffs also fail to adequately allege that they justifiably relied on a representation to their
detriment. See, supra, Section VI.D.2. They performed the work “necessary” to complete the
application, which they were required to do in exchange for the $180,000 and conditional
employment offer they have already received. Id. Plaintiffs’ fraud claim fails for these reasons
as well.
3. Plaintiffs Have Failed to Allege Any Available Damages
Under Pennsylvania law, an alleged fraud victim can only recover the “actual loss and
not the benefit of his bargain.” Motorola, Inc. v. Electronic Laboratory Supply Co., Inc., 1991
WL 12437, *5 (E.D. Pa. Jan. 31, 1991); Delahanty v. First Pennsylvania Bank, N.A., 464 A.2d
1243, 1257 (Pa. Super. Ct. 1983). Damages recoverable for fraud are those “that will put the
34
injured party in a position that he was in before he was injured.” Killian v. McCulloch, 850 F.
Supp. 1239, 1253 (E.D. Pa. 1994).12
Plaintiffs do not seek out-of-pocket losses or identify any out-of-pocket losses. They
seek to be “fully and properly compensated” pursuant to the terms of alleged contracts for
“contingent compensation.” (See Compl., ¶¶ 164-66.) Such benefit-of-the-bargain damages are
unavailable as a matter of law. Plaintiffs have failed to allege any recoverable losses.
4. Plaintiffs Have Not Alleged Any Basis for Punitive Damages
If any thread of Plaintiffs’ fraud claim survives, the Court should strike their demand for
punitive damages. Under Pennsylvania law, punitive damages are only available as punishment
“for conduct that is outrageous, because of the defendant’s evil motive or his reckless
indifference to the rights of others.” Mifflinburg Telegraph, Inc. v. Criswell, 4:14-CV-0612,
2017 WL 4310187, at *34 (M.D. Pa. Sept. 28, 2017) (citing Hutchison v. Luddy, 582 Pa. 114,
870 A.2d 766, 770 (2005)). Punitive damages are not awarded to compensate plaintiffs, but
rather “to heap an additional punishment on a defendant who is found to have acted in a fashion
which is particularly egregious.” Phillips v. Cricket Lighters, 883 A.2d 439, 446 (Pa. 2005).
New York law is even more stringent. Under New York law, “there may be a recovery
of exemplary damages in fraud and deceit actions where the fraud, aimed at the public
generally, is gross and involves high moral culpability.” Walker v. Sheldon, 179 N.E.2d 497, 499
(N.Y. App. 1961) (emphasis added). This is because the purpose of punitive damages is “not to
12
New York courts recognize the same principle. Lama Holding Co. v. Smith Barney Inc., 668 N.E.2d
1370, 1373–74 (N.Y. App. 1996) (“Damages are to be calculated to compensate plaintiffs for what they
lost because of the fraud, not to compensate them for what they might have gained. Under the out-of-pocket
rule, there can be no recovery of profits which would have been realized in the absence of fraud.”) (citations
omitted).
35
remedy private wrongs but to vindicate public rights.” Rocanova v. Equitable Life Assurance
Society, 634 N.E.2d 940, 943 (N.Y. App. 1994).
Plaintiffs do not allege any egregious conduct showing an evil motive or reckless
indifference. They also do not allege or describe any “outrageous” conduct in support of their
claim. (Compl., ¶¶ 163-67.) Plaintiffs’ fraud claim is simply a restatement of its contract claim,
which is based on ongoing negotiations and discussions between business people. There is no
alleged conduct that warrants “punishment” of any Defendant. Because the Complaint fails to
supply any basis for punitive damages under New York or Pennsylvania law, Plaintiffs’ demand
for punitive damages should be stricken.
G. Plaintiffs’ “Securities Fraud” Claim Fails as a Matter of Law
Plaintiffs’ federal securities fraud claim is baseless. As an initial matter, and as set forth
above, Plaintiffs have failed to allege a fraud claim, which is fatal to this claim as well. In
addition, Plaintiffs’ theory does not implicate federal securities law, which concerns (1) the
“purchase or sale” of (2) a “security.” 17 C.F.R. § 2401.10b-5; see also 15 U.S.C. § 78j (2018).
Plaintiffs lack standing to bring any private cause of action under Rule 10b-5 because
they fail to allege that they purchased or sold anything. See Chadbourne & Parke LLP v. Troice,
134 S.Ct. 1058, 1063 (2014) (citing Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 737,
(1975)). Private causes of action for damages under Rule 10b-5 may be brought only by
purchasers or sellers of securities, not prospective buyers. Blue Chip Stamps, 421 U.S. 723, 737,
(1975). In order for a plaintiff to be a “purchaser or seller,” it must have purchased or sold a
security for value. See Teamsters v. Daniel, 439 U.S. 551, 560 (1979) (employer’s provision of
securities to employees does not constitute a purchase or sale because the employees did not
contribute a tangible and definable amount of money or labor in exchange for the securities).
36
While the outer limits of federal securities law have stretched to include certain services-
for-stock options, Plaintiffs’ claim does not fit into the boundaries of securities law. Cf. Wharf
(Holdings) Ltd. v. United Int’l Holdings, Inc., 532 U.S. 588 (2001) (finding a “purchase or sale”
where plaintiffs received no payment for its work, but instead offered its services in exchange for
a stock “option” and agreed that the value of plaintiff’s services would be directly applied as a
credit toward the purchase price of the stock at issue). Plaintiffs contend that they were
promised a contingent “equity” interest. They do not allege that: (1) they purchased a “4%
equity” interest; (2) they purchased an “option” to buy a “4% equity” interest; or (3) they offered
the “value” of their services as payment for an “option” or a “4% equity” interest in Prime.
(Compl., ¶¶ 81, 170). Plaintiffs never allegedly agreed to “pay” anything for its purported “4%
equity” interest and they did not allegedly contribute a definable amount of money or labor in
exchange for the value of a “4% equity” interest. Because there was no “purchase or sale” under
any definition, Plaintiffs’ claim fails.
In addition, the promise of “equity” at issue is not a “security” under federal law. While
an equity interest in an LLC can, in certain circumstances, be considered an “investment
contract” – which is a “security” – the LLC interest at issue does fit this definition.
Initially, as set forth above, the parties had no “contract” for “equity,” which precludes
any finding that the parties entered into an “investment contract.” Furthermore, an “investment
contract” only constitutes a “security” where there is: (1) an investment of money; (2) in a
common enterprise; and (3) with profits to come solely from the efforts of others. SEC v. W.J.
SEC v. W.J. Howey Co., 328 U.S. at 298-99; see also Steinhardt Grp. Inc. v. Citigroup, 126 F.3d
144, 151 (3d Cir. 1997). There was no “investment of money” here. And, under the third factor,
an investment in an LLC is not considered a “security” when the investor will “meaningfully
37
participate[] in the management of the [corporate entity] in which it has invested such that it has
more than minimal control over the investment’s performance.” Steinhardt Grp. Inc., 126 F.3d
at 152.
Plaintiffs contend that they are entitled to a “4% equity” interest in Prime and a
management position as Prime’s “Chief Marketing Officer.” (Compl., ¶¶ 7, 111, 141, 170.)
According to Plaintiffs’ own (baseless) description of the parties’ “contract,” Plaintiffs were
going to assume an active management role at Prime and, therefore, were not simply passive
investors. The alleged “equity” that accompanied their alleged management role, therefore, is
not a “security.” See, e.g., Steinhardt Grp. Inc., 126 F.3d at 152.
Accordingly, Plaintiffs’ securities fraud claim should be dismissed.
H. Plaintiffs’ “Civil Conspiracy” Claim Fails as a Matter of Law
Plaintiffs have no “civil conspiracy” claim because they fail to allege an underlying
intentional tort or an illicit agreement between the Defendants to defraud Plaintiffs.
1. Plaintiffs Have Not Alleged an Underlying Tort Claim
To plead a claim of civil conspiracy, a plaintiff must allege an underlying tort. Sprinturf,
Inc. v. Southwest Recreational Industries, Inc., 281 F. Supp. 2d 784 (E.D. Pa. 2003); Phillips v.
Selig, 959 A.2d 420 (Pa. Super. Ct. 2008). Fraud is the only alleged tort claim here. Because
Plaintiffs failed to allege a fraud claim, their derivative conspiracy claim fails.
2. Plaintiffs Have Not Alleged an Illicit Agreement
A conspiracy only exists if multiple actors enter into a joint agreement. Egli v. Strimel,
251 F. Supp. 3d 827, 840 (E.D. Pa. 2017). Pennsylvania courts have long recognized that:
[a] conspiracy to defraud on the part of two or more persons means a common
purpose supported by a concerted action to defraud, that each has the intent to do
it, and that it is common to each of them, and that each understands that the other
has that purpose.
38
Ballantine v. Cummings, 70 A. 546 (Pa. 1908). Other than vague, conclusory statements, the
Complaint does not allege a joint agreement to commit fraud. Nowhere do Plaintiffs allege that
the parties shared a common purpose supported by a concerted action to defraud Plaintiffs.
Accordingly, this claim fails.
Plaintiffs were also required to allege an “overt act done in pursuance of the common
purpose.” Egli v. Strimel, 251 F. Supp. 3d 827, 840 (E.D. Pa. 2017). The Complaint does not
identify a single overt act by Mr. Lenfest or HSC Management. Accordingly, at the very least,
Plaintiffs’ claim against these Defendants should be dismissed.
For these reasons, Mr. Silver fails to state a civil conspiracy claim.
VII. CONCLUSION
There is no alleged contract, promise, or representation that could support Plaintiffs’
claims for relief, particularly against Defendants who are not subject to jurisdiction in
Pennsylvania or have no connection with the negotiations at issue. For the foregoing reasons,
Defendants respectfully request that this Court dismiss Plaintiffs’ Complaint, with prejudice.
Respectfully submitted,
COZEN O’CONNOR
Dated: March 5, 2018 By: /s/ Philip G. Kircher

COZEN O’CONNOR
One Liberty Place
P: (215) 665-2000
tdecker@cozen.com
pkircher@cozen.com
tmorourke@cozen.com
39
EXHIBIT A
EXHIBIT B
CERTIFICATE OF SERVICE
I hereby certify that on this 5th day of March, 2018, a copy of the foregoing Motion to
Dismiss, Proposed Order and supporting Memorandum of Law have been served using the Court’s
electronic filing system and via email on the following:
Peter J. Kreher
KREHER & TRAPANI LLP
1325 Spruce Street | Philadelphia, PA 19107
pete@krehertrapani.com
By: /s/ Philip G. Kircher

Philip G. Kircher
Dated: March 5, 2018

Silver v. Lenfest Et Al Motion To Dismiss

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Silver v. Lenfest Et Al Motion To Dismiss

Uploaded by

Copyright:

Available Formats

Thomas A. Decker (No.

Attorneys for Defendants

UNITED STATES DISTRICT COURT

HARRIS SILVER and ENTITY X, LLC :

DEFENDANTS’ MOTION TO DISMISS PLAINTIFFS’ COMPLAINT

this Court for an Order dismissing Plaintiffs’ Complaint, with prejudice.

dismissing Plaintiffs’ Complaint, with prejudice.

By: /s/ Philip G. Kircher

Attorneys for Defendants

Dated: March 5, 2018

HARRIS SILVER and ENTITY X, LLC :

AND NOW, this ______ day of _________________, 2018, upon consideration of

Defendants’ Motion to Dismiss Plaintiffs’ Complaint (“Motion”), the accompanying

1. The Motion is GRANTED; and

2. Plaintiffs’ Complaint is hereby DISMISSED, WITH PREJUDICE.

HARRIS SILVER and ENTITY X, LLC :

DEFENDANTS’ MEMORANDUM OF LAW IN SUPPORT

Thomas A. Decker (No. 12343)

Attorneys for Defendants

FACTS ALLEGED IN THE COMPLAINT ...............................................................................2

INTEGRAL DOCUMENTS OMITTED FROM THE COMPLAINT ....................................7

PROCEDURAL HISTORY ..........................................................................................................9

LEGAL STANDARDS ................................................................................................................10

B. Harold Chase Lenfest and HCL MM Are Not Proper Defendants..........................15

C. Plaintiffs’ Contract Claim Fails as a Matter of Law. ................................................17

2. The March 20, 2017 “Term Sheet” Confirms There is No Contract..................21

3. The March 16, 2017 “Employment Offer” Accepted by Mr. Silver

4. Plaintiffs’ Purported Contract for “Additional Compensation”

D. Plaintiffs’ Promissory Estoppel Claim Fails as a Matter of Law. ............................25

1. Plaintiffs Have Not Identified Any Alleged Promise that Gives

2. Plaintiffs Fail to Adequately Allege “Detrimental Reliance”. ............................29

E. Plaintiffs’ Quantum Meruit Claims Fail as a Matter of Law. .................................30

1. HSC and HCL MM Were Not “Unjustly Enriched”. ..........................................31

1. Plaintiffs’ Claim Lacks the Requisite Particularity

2. Plaintiffs Fail to Adequately Allege Justifiable or

3. Plaintiffs Have Failed to Allege Any Available Damages. ..................................34

4. Plaintiffs Have Not Alleged Any Basis for Punitive Damages............................35

G. Plaintiffs’ “Securities Fraud” Claim Fails as a Matter of Law .................................36

H. Plaintiffs’ “Civil Conspiracy” Claim Fails as a Matter of Law.................................38

1. Plaintiffs Have Not Alleged an Underlying Tort Claim ....................................38

2. Plaintiffs Have Not Alleged an Illicit Agreement ...............................................38

applications were submitted on behalf of Defendant Prime Wellness of Pennsylvania, LLC

(“Prime”), which is partially owned by HSC.

promissory estoppel, fraud, “securities fraud,” unjust enrichment and “conspiracy.”

ongoing contract negotiations, which he allegedly “tracked” on an ever-evolving “term sheet”

“compensation” he is seeking. At most, the parties negotiated an “agreement to agree,” which is

“contract” or was responsible for any purported “promises” or “representations.”

this Court dismiss the Complaint, with prejudice.

II. FACTS ALLEGED IN THE COMPLAINT

“Managing Member” of HSC. (Id., ¶¶ 16-17, 20-22.) HSC Management is headquartered in

New York. (Id.)

reached an agreement on any extended relationship. (See id., ¶¶ 60-61, 75-77.)

the winter of 2016. (Id., ¶ 32, 76, 84.)

with the application process.

claims, however, to be entitled to “additional” compensation pursuant to “oral agreements”

A. Mr. Silver and HSC Engage in Preliminary Negotiations Regarding

attached to the Complaint.

ongoing and continued into 2017. (See Compl., ¶ 87, 108-26.)

B. Mr. Silver and Messrs. Murphy and Yellin Continue to Engage in

new contract terms that were never addressed in December, 2016:

and is belied by their own allegations of continuing contract negotiations.

C. On March 16, 2017, Silver Receives a Conditional Offer of Employment from

applications were due. (Id., ¶ 116.)

AND NOW, this day of ___________, 2018, upon consideration of