Big Bite Real Estate v. Ilera Holdings

• Court: Superior Court of Pennsylvania
• Decided: April 8, 2026
• Docket: 2906 EDA 2024
• Status: Unpublished
• Author: Bowes

Opinion

J-A27011-25

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37

BIG BITE REAL ESTATE, LLC, BOTH : IN THE SUPERIOR COURT OF INDIVIDUALLY AND DERIVATIVELY ON : PENNSYLVANIA BEHALF OF ILERA HOLDINGS, LLC, : AND SHANNON HEXTER : : v. : : ILERA HOLDINGS, LLC, GREG : ROCHLIN, ZOLTAN KEREKES, : TORSTEN GEERS, OSAGIE IMASOGIE, : LISA GRAY, ILERA HOLDINGS II, : ILERA HEALTHCARE, LLC, AND IHC : REAL ESTATE : : : APPEAL OF: ILERA HOLDINGS, LLC, : GREG ROCHLIN, ZOLTAN KEREKES, : TORSTEN GEERS, OSAGIE IMASOGIE, : No. 2906 EDA 2024 LISA GRAY, AND ILERA HOLDINGS II :

Appeal from the Judgment Entered October 31, 2024 In the Court of Common Pleas of Philadelphia County Civil Division at No(s): 201000441

BEFORE: BOWES, J., MURRAY, J., and BECK, J.

MEMORANDUM BY BOWES, J.: FILED APRIL 8, 2026

Ilera Holdings, LLC, Greg Rochlin, Zoltan Kerekes, Torsten Geers,

Osagie Imasogie, Lisa Gray, and Ilera Holdings II, LLC (collectively

“Defendants”), appeal from the judgment entered against them and in favor

of Big Bite Real Estate, LLC, both individually and derivatively on behalf of

Ilera Holdings, LLC, and Shannon Hexter (collectively “Plaintiffs”). 1 We vacate

____________________________________________

1 All the business entities involved in this case are limited liability companies

(“LLCs”). J-A27011-25

the judgment and the verdict, reverse the order granting Plaintiffs’ request for

fees and costs, and remand with instructions.

This case presents a complex web of similarly-named companies, owned

and controlled by varying combinations of the above-named individuals along

with non-parties, involved in the cultivation and sale of medical marijuana. 2

Frustratingly, neither the litigants nor the trial court consistently reference the

distinct parties and entities with precision, leaving this Court with oftentimes

confusing and unclear arguments and findings. We offer the following

statement of the case, gleaned to the best of our ability from the certified

record and from Plaintiffs’ proposed findings of fact and conclusions of law,

which the trial court adopted in rendering its verdict, insofar as those findings

are supported by the evidence.

We begin our narrative in 2015, when Hexter formed Chesapeake Health

Sciences (“CHS”) to pursue medical marijuana licenses in Maryland. While

Hexter had an MBA, her education and experience was in science. She thus

hired a consultant to create CHS’s financial models, deeming herself

unqualified to do such valuations. However, Hexter undertook the task of

learning about and completing the arduous process of applying for a cannabis

license. Hexter searched for someone to run the company and found Rochlin,

2We shall refer to the individuals among the appellants, namely Rochlin, Kerekes, Geers, Imasogie, and Gray, as the “Individual Defendants.”

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an experienced business executive. Rochlin bought into CHS and became its

CEO.

Meanwhile, Gray, Imasogie, Kerekes, and Geers were considering the

pursuit of cannabis licenses in Pennsylvania. Gray was a certified public

accountant and certified valuation analyst. Imasogie, Kerekes, and Geers

were attorneys with knowledge of the pharmaceutical industry or corporate

governance. All four had extensive experience in private equity.

In the summer of 2016, the parties began discussions about combining

their efforts to pursue licenses in both states. In October 2016, these talks

culminated in the formation of Ilera Holdings (“Ilera I”), a Pennsylvania LLC,

with Hexter and Rochlin contributing their interest in CHS to the capitalization.

The parties created Ilera Healthcare, LLC (“Healthcare”) as the operating

company to apply for the Pennsylvania licenses. When CHS failed to acquire

a Maryland cultivation license, the Ilera I operating agreement was amended

to reflect that Rochlin contributed $150,000 in cash, the same as the other

members aside from Hexter. Hexter, who lacked liquidity due to her

acquisition of real estate in Fulton County, instead was credited for leasing

that property to Ilera I with a right to purchase at a $102,273 discount. The

property was held by Big Bite Real Estate, LLC (“Big Bite”), of which Hexter

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was the sole member. Ilera I’s lease of Big Bite’s property was assigned to

Healthcare for its use should it be awarded a Pennsylvania cultivation license. 3

As of March 7, 2017, the Individual Defendants each held 17.6% of the

company’s common units and Big Bite held the remaining 12%. See Trial

Exhibit # 22 at Scheule I. Article VI of the operating agreement, detailing the

management of Ilera I, provided that it was to be governed by a board of five

managers, initially the five Individual Defendants. Id. at §§ 6.1, 6.3. General

provisions in Article XIV of the operating agreement included the stipulation

that Ilera I’s assets were wholly owned by the company, with no member

having any ownership in them or any portion thereof. Id. at § 14.2. The

agreement was governed by Pennsylvania law, with each party waiving the

right to a jury trial in connection with it. Id. at § 14.8. Should an action be

brought to enforce or interpret the agreement, to protect rights granted by it,

or to cover damages for its breach, a party prevailing in whole or in part would

be entitled to costs and reasonable attorney fees. Id. at § 14.16. Significant

to this appeal, § 6.8 of the operating agreement stipulated that no member

3 The Individual Defendants also expected Hexter as “the lead expert on the

application preparations,” to save Ilera I the expense of hiring a consultant. See Trial Exhibit # 26 at 2. However, since Hexter became so exhausted from completing a prior application that she “seriously almost died,” she did not make that contribution and Ilera I hired a third party to perform that work “for significant cost[.]” Id. at 1, 3.

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had any fiduciary duty to the company or other members regarding other

investment opportunities.4 Id. at § 6.8(a).

In June 2017, Healthcare was awarded Pennsylvania cultivation and

dispensary licenses, allowing for a vertically-integrated operation. Rochlin

served as Healthcare’s CEO, Gray was its CFO, and the COO was non-member

Oludare Odumosu. Healthcare entered into an agreement with Playa

Financial, LLC (“Playa”), operated by Rochlin’s friend Myles Norin, for a $10

million line of credit (“LOC”), with interest on drawdowns payable quarterly.

In exchange, Playa was granted 15% equity in Healthcare, with Ilera I

retaining the other 85%. Healthcare constructed a cultivation facility on the

land leased to Ilera I by Big Bite, with operations beginning in January 2018.

In the meantime, Healthcare COO Odumosu introduced the Individual

Defendants to Dr. Chandra Macias, a major force in the cannabis industry.

The Individual Defendants and Norin discussed developing a relationship with

her to pursue opportunities in other states. They partnered with her group to

seek licenses in Ohio and Connecticut, utilizing Healthcare’s resources to cover

some expenses although Healthcare was not a participant.

In May 2018, Gray reflected that, given the use of “Healthcare’s cash

flow to fund other opportunities,” they did “need to” include the other Ilera I

4 Healthcare’s operating agreement was identical to that of Ilera I as to the

sections detailed above, excepting that Schedule I of the Healthcare document provided that Ilera I was the sole member. See Trial Exhibit # 18.

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investors “in the overall strategy.” Trial Exhibit # 83 at 1. Gray suggested to

Rochlin that they communicate with Hexter “to see if she would take a lower

position to have broader opportunity,” which in turn “would maximize our

flexibility in terms of funding allocation to projects/working capital and simplify

our structure.” Id. However, they elected not to have that discussion with

Hexter at that time because they had nothing to offer in exchange for her

equity reduction in Ilera I. See N.T. Trial, 7/9/24, at 99-100.

The Individual Defendants took steps toward their expansion strategy

that summer. In July 2018, they increased Healthcare’s LOC from Playa to

$20 million, with $5 million earmarked for expansion. The next month, they

used $20,000 from the LOC to apply for New Jersey licensure to be granted

to Ilera Holistic Healthcare (“IHH”), listing Hexter as an equity holder in IHH

in order to support it with Healthcare’s operations. 5 Id. at 216-17.

The agenda for Healthcare’s September 26, 2018 board meeting

included the pursuit of licenses in New Jersey, Ohio, Connecticut, Maryland,

and the District of Columbia, with pro forma capitalization tables reflecting the

participation of Ilera I and Hexter in each. They instead decided to deem Ilera

I and Healthcare as Pennsylvania-specific entities, and separately “determine

5 IHH’s New Jersey application was ultimately unsuccessful.

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the appropriate investor group” for other opportunities that came to them. 6

Id. at 60.

Accordingly, the following day Gray sent Rochlin updated capitalization

tables showing Ilera Holdings II, LLC (“Ilera II”) to be formed with the

Individual Defendants each owning 16.17% and the rest held in varying

percentages by Healthcare COO Odumosu and companies controlled by Playa

owner Norin and his associate. See Trial Exhibit # 98 at 8. Pro formas for

potential entities created to operate in the other jurisdictions proposed

splitting ownership of each between Ilera II and Dr. Macias’s group. Id. at 9-

12. Gray suggested that, if they accepted any of the new licenses, they should

then form Ilera II; reimburse Healthcare for the expenses it covered for New

Jersey, Connecticut, and Ohio; split Healthcare’s LOC between it and the other

state’s operating company; and establish a services agreement whereby

Healthcare would charge the other entities for the management services it

provided. Id. at 1.

In late October 2018, Dr. Macias approached Rochlin with a new, time-

sensitive opportunity to acquire an existing license in Louisiana. Specifically,

Advanced Biomedics (“AB”) had a contract with Southern University

6 As later testimony revealed, Kerekes and Geer deemed Hexter to be an undesirable partner for future ventures since she had neither capital nor business acumen to offer, and she did not contribute as expected by completing the company’s license applications. See N.T. Trial, 7/11/24, at 107-10, 133.

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(“Southern”), which held one of only two licenses for marijuana cultivation

and processing in the state. Southern was prepared to terminate the

arrangement with AB, which had yet to begin cultivation, because it was

behind in payments. See N.T. Trial, 7/9/24, at 76-80. Dr. Macias proposed

teaming up to acquire a controlling interest in AB and its valuable contract

with Southern.

The Individual Defendants promptly met with Norin to discuss the

proposal and opted to move forward with it. Given the time constraints, they

utilized an existing entity to submit a November 1, 2018 letter of commitment

to buy AB, namely IHH, the company of which Hexter was a member and that

had unsuccessfully sought New Jersey licensure. The following day, Gray

emailed Rochlin a list of actions necessary for the AB acquisition, such as

formally establishing Ilera II, setting up a management company and its

service agreements with Healthcare and AB, and having Healthcare borrow

funds on its LOC to be given to Ilera II “as a loan to be paid back our [sic] of

an equity raise.” Trial Exhibit # 113.

On November 6, 2018, Gray made a written request to Playa for a $2.35

million drawdown from Healthcare’s LOC, which Playa approved and added to

Healthcare’s debt. The next day, Ilera II was founded and its operating

agreement executed, with the Individual Defendants making no capital

contributions for their equal 16.7% interests therein. The AB transaction

closed on November 9, 2018. On November 14, 2018, the Individual

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Defendants sent Southern a letter clarifying that AB was being acquired by

Ilera II, rather than IHH as indicated on the letter of commitment, and

subsequently reimbursed Healthcare by paying back the LOC.

This was all undertaken without informing Hexter of the Louisiana

opportunity or offering her the chance to participate therein. Rather, after the

transactions were completed, Rochlin set up a meeting with Hexter at the

office of David Sellman, Esquire, on December 8, 2018. Not disclosing how

the Individual Defendants learned about AB or paid to acquire it, Rochlin

offered Hexter the chance to buy a 4% stake on Ilera II by reducing Big Bite’s

equity in Ilera I from 12% to 4%. Hexter maintained that she already held

an interest in the entities involved in the Louisiana acquisition by virtue of her

membership in Ilera I, but Rochlin was adamant that she was not entitled to

any portion of Ilera II unless she agreed to the proposed equity swap. If she

wished to make the swap, Hexter had to decide before year’s end. See N.T.

Trial, 7/8/24, at 35.

While Hexter contemplated the offer, Healthcare held its December 2018

board meeting, which included a discussion of numbers and a timeline for an

expansion to begin in January 2019. See Trial Exhibit # 130. The following

week, Gray circulated materials to attract investment in IHH. The investor

presentation highlighted Healthcare’s Pennsylvania facilities. See Trial Exhibit

# 138 at 19-20, 23-25. Supporting documents stated a $232 million valuation

of Healthcare as a result of the expansion. See Trial Exhibit # 140 at 2.

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This material was not provided to Hexter, who was unaware of the plans

to expand Healthcare’s Pennsylvania operations. Instead, at Hexter’s request,

Gray prepared a spreadsheet depicting “the expectations on value and impact

of the share shift” in the event that Hexter decided to move forward with the

proposal Rochlin made at Attorney Sellman’s office (“the share transfer

analysis”). See Trial Exhibit # 146. Although Gray emailed this to Hexter on

December 20, 2018, which was the day after sending the IHH investor

documents showing Healthcare being worth $232 million, Gray provided

Hexter a Healthcare net value of only $59 million. Id. On the other hand,

she represented the worth of Ilera II’s Louisiana and District of Columbia

operations at $300 million and $64 million, respectively. Id. Thus, Gray’s

calculations indicated that Hexter stood to increase the overall value of her

investment by 57% if Big Bite accepted the equity swap.

Relying upon Gray’s valuations in the share transfer analysis, Hexter

agreed to the proposal despite her belief that she should not have had to give

up anything to own a piece of Ilera II. Between December 31, 2018, and

January 18, 2019, the parties executed multiple documents in connection with

the equity swap. First, there was a Redemption Agreement, governed by

Delaware law, by which Big Bite reduced its interest in Ilera I from 12% to

4%. See Trial Exhibit # 191. In conjunction with this, the Ilera I’s operating

agreement, which was governed by Pennsylvania law, was amended to reflect

the changes effectuated by the Redemption Agreement. See Trial Exhibit

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# 193. Correspondingly, a subscription and joinder agreement gave Big Bite

a 4% interest in Ilera II, and its operating agreement, governed by Delaware

law, was amended to, inter alia, reflect Big Bite’s joinder. See Trial Exhibits

# 194 and # 195.

Additionally, Hexter, through Attorney Sellman, secured a side letter

agreement which guaranteed Big Bite that its proportionate interest in Ilera I

and Ilera II would not change moving forward, and that it would have the

same proportionate interest in any new Ilera-related projects involving three

or more members of those companies. See Trial Exhibit # 200 at 4. Pursuant

to the side agreement, Hexter was subsequently invited to participate in other

companies in Georgia, Maryland, and Louisiana. See N.T. Trial, 7/8/24, at

118.

In April 2019, Rochlin received an offer from TerrAscend Corp.

(“TerrAscend”) to purchase Healthcare. Rochlin rejected that offer and several

others, deeming them insufficient to account for Healthcare’s future revenues,

before ultimately reaching an agreement with TerrAscend on August 1, 2019.

All told, TerrAscend paid $225 million for Healthcare, $200 million of which

was cash. As a result of the equity swap, Big Bite realized a fraction of what

it would have received from the sale of Healthcare, while each of the Individual

Defendants pocketed millions more.

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Plaintiffs initiated the instant action in October 2020, raising claims by

Big Bite, both individually and derivatively on behalf of Ilera I, and by Hexter.

Specifically, the operative complaint stated the following counts:

(I) Big Bite, derivatively on behalf of Ilera I vs. the Individual Defendants - breach of fiduciary duty;

(II) Big Bite vs. the Individual Defendants - breach of the covenant of good faith and fair dealing;

(III) Big Bite vs. the Individual Defendants - fraud;

(IV) Big Bite vs. Ilera I, Healthcare, and another Ilera-related entity not mentioned above - declaratory judgment;

(V) Big Bite vs. the Individual Defendants and Ilera II - civil conspiracy;

(VI) Big Bite vs. the Individual Defendants - unjust enrichment;

(VII) Big Bite vs. the Individual Defendants and Ilera I - accounting;

(VIII) Hexter vs. Rochlin - conversion;

(IX) Big Bite vs. Ilera II - tortious interference with contract; and

(X) Big Bite vs. the Individual Defendants - constructive trust.

See First Amended Complaint, 11/9/20, at 21-29.

For one reason or another, counts II, IV, VII, VIII, and IX were

dismissed before the case was tried in July 2024. As such, the trial involved

no claim by Hexter on her own behalf. Rather, the court was tasked with

deciding Ilera I’s claim, brought derivatively by Big Bite, for breach of fiduciary

duty, as well as Big Bite’s individual claims for fraud, civil conspiracy, unjust

enrichment, and constructive trust.

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Specifically, the derivative claim brought on behalf of Ilera I asserted

that the Individual Defendants breached their fiduciary duty “to refrain from

competing with Ilera I in the conduct of Ilera I’s activities and affairs.” Id. at

¶ 115. The complaint continued: “By transferring the acquisition of [AB], as

well as other valuable intellectual property and assets belonging to Ilera I, to

Ilera II (which had only been formed five days before the [AB] acquisition was

announced), the Individual Defendants took assets and an opportunity that

belonged to Ilera I and began to compete against Ilera I.” Id. at ¶ 118. As

a result of this alleged breach, “Ilera I [was] damaged in an amount to be

determined at trial, but in no event less than $2.15 million.” Id. at ¶ 121.

Turning to Big Bite’s direct claims, its fraud count was founded upon the

statements made to induce it to agree to the equity swap, and asserted as

damages “the fraudulent reduction of its membership interest in Ilera I from

12% to approximately 4%, and its corresponding loss of the additional 8% of

profits Big Bite would have been entitled to from the TerrAscend Deal but for

the fraud.” Id. at ¶ 136. The conspiracy claim stated that the Individual

Defendants “combined and agreed to act for the common purpose of

intentionally excluding Big Bite from the enterprise of Ilera I[.]” Id. at ¶ 146.

As a result, Big Bite purportedly “suffered damages including the lost profits

stemming from the sale of Healthcare to TerrAscend.” Id. at ¶ 147. Big Bite’s

unjust enrichment count asserted that “[a] benefit was conferred on the

Individual Defendants as a product of their illicit actions to exclude Big Bite

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from business opportunities rightfully belonging to Ilera I and inducing Big

Bite into decreasing its equity.” Id. at ¶ 150. It claimed that it would be

unjust to allow them to retain “(i) ownership of 8% interest in Ilera I that

rightfully belongs to Big Bite, and (ii) at least $ 18 million in profit from the

TerrAscend Deal that would have gone to Big Bite had it not been fraudulently

induced into diluting its equity.” Id. at ¶ 151. Thus, at bottom, Big Bite’s

individual claims all sought to recover the amount that went to the Individual

Defendants instead of Big Bite by virtue of the Redemption Agreement when

Healthcare was sold to TerrAscend.

Bit Bite attempted to establish the factual underpinnings of these causes

of action at trial through the testimony of Hexter, the Individual Defendants,

and Norin, along with scores of exhibits, including deposition testimony from

Attorney Sellman. The court also heard opinion testimony from Lincoln

Eckhardt, Plaintiffs’ expert in valuation and economic damages. In Eckhardt’s

learned estimation, Gray had grossly undervalued Healthcare and overvalued

AB in providing Hexter the share transfer analysis that prompted her to agree

to the equity swap.

Specifically, with the planned expansion of Healthcare, Mr. Eckhardt

assigned it a net value of $179.3 million as opposed to Gray’s $59 million.

See N.T. Trial, 7/10/24, at 55. On the other hand, he deemed Gray’s

assessment of AB with a value of $300 million to have “made no sense” at the

time it was rendered, because at the beginning of 2019, Louisiana had “a very

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restrictive, very narrow market.” Id. at 64. Although Louisiana law changed

significantly between the time of the swap and trial, in Mr. Eckhardt’s opinion,

there was “no way that management could understand the future regulatory

changes that were going to fundamentally restructure the marketplace,” and

made “no assessment of the true market in Louisiana” as it was when Gray

provided the valuation to Hexter. Id. at 97. In his view, the value of AB at

the time of the swap was only $33.6 million. Id. at 63. Acknowledging that

the subsequent change in the marketplace yielded a 2022 AB valuation of

$288 million, close to the $300 million Gray had offered Hexter in 2019, Mr.

Eckhardt quipped: “I guess sometimes it’s better to be lucky than good.” Id.

at 98.

Mr. Eckhardt’s testimony as to his damage calculations was rife with

instances of conflating Big Bite, Hexter, and Ilera I. He first explained his

calculations as to Big Bite’s fraud claim as having the goal “to put the plaintiff

back in the position she would have been in just prior to the transaction,”

such that he “valued each of the companies that were contained within the

transaction and then determined plaintiff’s effective ownership interest in each

of those companies.”7 N.T. Trial, 7/10/24, at 55 (emphasis added). All told,

7 Plaintiffs’ proposed findings and conclusions stated an altered version of this

testimony as follows: “To calculate the damages based on the Individual Defendants’ fraud in the inducement, Mr. Eckhardt used the Individual Defendants’ own DCF analysis to ‘put the [Plaintiffs] back in the position [they] would have been in just prior to the transaction [i.e., the Equity Swap].’” (Footnote Continued Next Page)

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Mr. Eckhardt opined that Big Bite’s interest in Ilera I entities went from a value

of $20.2 million to roughly $8 million as a result of the swap. Id. at 61-63.

Meanwhile, its 4% acquisition of Ilera II was, at the time, only worth $1.1

million. Thus, Big Bite lost $11,062,949, or more than 54%, by agreeing to

the swap, rather than gaining 57% as Gray indicated in the share transfer

analysis.

Mr. Eckhardt also testified about the fiduciary duty damages. Although

this claim was brought on behalf of Ilera I, he again used “she” in speaking of

the plaintiff whose losses he calculated. See, e.g., id. at 72. Explaining his

understanding of the claim, Mr. Eckhardt stated:

[T]he assets of Ilera II really flowed from Ilera I and, therefore, the plaintiff should have been brought along into Ilera II, so this analysis looks like if her pro rata interest in Ilera I, which is 12[%], was applied to Ilera II, she would have a 12[%] in both entities.

Id. at 72.

While the fraud damages were ascertained as of the time of the equity

swap in December 2018, the valuations pertinent to his fiduciary duty opinion

were assessed as of December 2021, when he wrote his report. Id. at 71.

Now embracing, inter alia, a $288.3 million value for AB and a $200.8 million

value for Healthcare, Mr. Eckhardt concluded as follows: “If plaintiffs had the

Plaintiffs’ Proposed Findings, 8/22/24, at ¶ 172 (alterations in original). The trial court repeats this modification of Mr. Eckhardt’s actual testimony in its Rule 1925(a) opinion. See Trial Court Opinion, at 18. Yet, as noted, the one claim brought by Hexter directly was dismissed prior to trial.

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12[%] ownership interest in Ilera I and Ilera II, they would have value today

of approximately $49 million, what they actually received was about $14.5

million, so the damage to the plaintiff under this analysis is $24.5 million.” 8

Id. at 80-81.

On cross-examination, Mr. Eckhardt made it plain that he did not view

Ilera I as being a plaintiff advancing the fiduciary duty claim and stated no

opinion as to Ilera I’s damages:

Q So Count 1 is a derivative claim on behalf of Ilera I, correct?

A That’s what it says.

Q And you did not calculate any damages regarding the derivative claim of Ilera [I], correct?

A Not in this chart. I calculated damage to the plaintiff.

Q Not only not in this chart, nowhere in your report, correct?

A No.

Q The answer to my question is, yes, you did not calculate those damages to Ilera [I], correct?

A That’s correct.

Id. at 85. On re-direct, counsel tried to elicit a number from Mr. Eckhardt

that the trial court could use to calculate Ilera I’s damages, but the court

sustained Defendants’ objection to that opinion being beyond the scope of his

report. Id. at 111-12.

8 More precisely, Mr. Eckhardt calculated the fiduciary duty loss to be $24,515,407. See Plaintiffs’ Proposed Findings, 8/22/24, at ¶ 197.

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After the trial concluded, the parties filed proposed findings of fact and

conclusions of law. The court subsequently rendered its verdict by entering

the following order:

AND NOW, this 6th day of September, 2024, upon consideration of all evidence presented at trial, along with the findings of facts and conclusions of law submitted by all parties, it is hereby ORDERED and DECREED as follows:

1. Judgement [sic] is entered in favor of Plaintiffs and against all Defendants in the amount of $24,515,407 together with prejudgment interest, plus attorneys’ fees and costs.

2. Plaintiffs’ claim for punitive damages is DENIED.

3. The [c]ourt fully adopts the finding of facts and conclusions of law submitted by Plaintiffs.[9]

Order, 9/6/24 (emphases omitted). The court further directed Plaintiffs to file

a fee petition, indicating that a hearing thereupon would be scheduled if

necessary. Id.

Defendants filed a timely post-trial motion seeking relief based upon,

inter alia, the issues they present in this appeal. The trial court summarily

denied Defendants’ motion without a hearing on October 1, 2024.

9 Plaintiffs’ complaint contained a count for constructive trust, and their proposed findings mentioned it as a potential remedy for the breach of fiduciary duty claim, suggesting that the court “order that the Individual Defendants place . . . Hexter’s [twelve] percent interest in all of the assets improperly diverted into Ilera [II] into a constructive trust.” Plaintiffs’ Proposed Findings, 8/22/24, at 53 n.19. The court explained in its Pa.R.A.P. 1925(a) opinion that, by declining to order constructive trust in its verdict order, it effectively denied that claim sub silentio. See Trial Court Opinion, 3/4/25, at 12-13. Hence, we perceive the court’s order to have resolved all outstanding claims.

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Meanwhile, Plaintiffs filed their motion for fees, citing § 14.16 of Ilera I’s

amended operating agreement as the legal basis for their entitlement to

reasonable attorney fees and costs. They attached an attorney declaration of

the reasonableness of the rates and the propriety of the work, along with

hundreds of pages of invoices reflecting the names of the attorneys or

paralegals who provided services, the amount of time spent on each task, and

the corresponding amount billed. However, the descriptions for the services

were wholly redacted such that it was impossible to ascertain the basis for any

given charge. Overall, Plaintiffs asked for $1,965,787.40. Apparently

deeming a hearing unnecessary, the court by order of October 28, 2024,

granted Plaintiffs’ motion, awarding the full amount of requested fees and

costs to be paid by the Individual Defendants. Based upon that award, the

verdict, and pre-judgment interest, judgment was entered in favor of

“Plaintiffs” and against the Individual Defendants, jointly and severally, in the

amount of $32,242,314.04.

This timely appeal followed.10 The trial court ordered Defendants to file

a Pa.R.A.P. 1925(b) statement of errors complained of on appeal. They timely

10 More precisely, this appeal was initiated prematurely on October 29, 2024,

when Defendants filed a notice purporting to appeal from the denial of their post-trial motion. They also filed subsequent appeals from the order granting Plaintiffs’ fee petition and from the judgment. This Court deemed the instant appeal to have been perfected by, and timely filed from, the subsequent entry of judgment and amended the caption accordingly. See Pa.R.A.P. 905(a)(5) (“A notice of appeal filed after the announcement of a determination but (Footnote Continued Next Page)

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filed a twelve-page statement reiterating the issues presented in their post-

trial motion, and the trial court authored a Rule 1925(a) opinion, suggesting

therein that most of Defendants’ issues were waived because their statement

was vague and not concise. See Trial Court Opinion, 4/4/25, at 24-27.

Defendants present the following questions for our resolution:

1. Where the trial court’s bench verdict did not address all of the claims at trial, was ambiguous about the parties entitled to relief, and failed to identify the claims on which Defendants were liable or the Defendants who were liable, did Defendants waive their liability arguments by stating non-redundant, non- frivolous issues in their Rule 1925(b) statement?

2. Are the Individual Defendants liable for breach of fiduciary duty where (a) [§] 6.8 of Ilera I’s limited liability company agreement permits “[e]ach Member [to] engage in whatever activities such Member may choose, without having or incurring any obligation to offer any interest in such activities to the Company or to the other Members”; and (b) Plaintiffs introduced no evidence of the damages suffered by Ilera I, despite asserting a derivative claim on behalf of the company?

3. Are the Individual Defendants liable for fraud based on estimated projections of future performance, which are not actionable as a matter of law, where reliance on those projections is barred by the parol evidence rule and Plaintiffs did not justifiably rely on alleged omissions regarding a corporate opportunity?

4. Are the Individual Defendants liable for unjust enrichment and civil conspiracy where liability depends on unsupportable fraud and fiduciary-duty findings, the parties’ contracts necessarily bar extra-contractual claims, and agents of a single entity cannot conspire as a matter of law?

before the entry of an appealable order shall be treated as filed after such entry and on the day thereof.”). We dismissed the other two appeals as duplicative of the appeal sub judice.

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5. Did Plaintiffs establish entitlement to attorneys’ fees and costs by submitting wholly redacted attorney invoices and failing to distinguish between fees and costs incurred for successful and unsuccessful claims?

Defendants’ brief at 5-6.

We begin with our standard of review:

Our appellate role in cases arising from non-jury trial verdicts is to determine whether the findings of the trial court are supported by competent evidence and whether the trial court committed error in any application of the law. The findings of the trial court must be given the same weight and effect on appeal as the verdict of a jury. We consider evidence in a light most favorable to the verdict winner. We will reverse the trial court only if its findings of fact are not supported by competent evidence in the record or if its findings are premised on an error of law. However, where the issue concerns a question of law, our scope of review is plenary. The trial court’s conclusions of law on appeal originating from a non-jury trial are not binding on an appellate court because it is the appellate court’s duty to determine if the trial court correctly applied the law to the facts of the case.

Spolar v. Spolar Family Tr., 326 A.3d 995, 1001–02 (Pa.Super. 2024)

(cleaned up).

Interpretation of a contract, such as an LLC operating agreement, is a

question of law subject to de novo, plenary review. See Vinculum, Inc. v.

Goli Techs., LLC, 310 A.3d 231, 242 (Pa. 2024) (providing contract

interpretation standard of review); Toth v. Toth, 324 A.3d 469, 486

(Pa.Super. 2024) (indicating an LLC operating agreement is a contract

between members). The following legal tenets pertain to these questions:

[I]f the contractual terms are clear and unambiguous on their face, then such terms are deemed to be the best reflection of the intent of the parties. If, however, the contractual terms are ambiguous, then resort to extrinsic evidence to ascertain their

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meaning is proper. A contract’s terms are considered ambiguous if they are subject to more than one reasonable interpretation when applied to a particular set of facts.

Further, our review is guided by certain principles, or canons, of contract interpretation. First, the entire contract should be read as a whole to give effect to its true purpose. Second, a contract must be interpreted to give effect to all of its provisions. Thus, our Court will not interpret one provision of a contract in a manner which results in another portion being annulled. Third, a word used by the parties in one sense is to be interpreted as employed in the same sense throughout the writing in the absence of countervailing reasons, such as thwarting the intent of the agreement. And, finally, a party’s performance under the terms of a contract is evidence of the meaning of those terms.

Toth, 324 A.3d at 486 (cleaned up).

We next review some basic principles concerning the nature and

governance of LLCs. First and foremost, we observe that, although it is not

apparent from the history of this case detailed above, it is axiomatic that an

LLC “is an entity distinct from its member or members.” 15 Pa.C.S. § 8818(a).

As such, Big Bite and its sole member Hexter are not one in the same, and

they should not be referenced interchangeably. Likewise, Healthcare and Ilera

I were distinct legal entities both when Healthcare was a wholly-owned

subsidiary of Ilera I and after Playa became a member with a 15% ownership

interest in exchange for providing the Healthcare LOC. Furthermore, as noted

above, pursuant to § 14.2 of the operating agreements of both Ilera I and

Healthcare, the assets of each entity belonged to that company alone, with no

member having any ownership interest in any portion thereof.

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This Court has observed that “[LLCs] are creatures of statute,” such that

“their members are subject to only those duties that are authorized by

statute.” Retina Associates of Greater Philadelphia, Ltd. v.

Retinovitreous Associates, Ltd., 176 A.3d 263, 271 (Pa.Super. 2017).

Among those duties are the standards of conduct for managers of manager-

managed LLCs described in the Pennsylvania Uniform Limited Liability

Company Act of 2016 (“the Act”).11 By statutory default, managers in such

LLCs have a fiduciary duty of loyalty which includes the following

responsibilities:

(1) to account to the company and to hold as trustee for it any property, profit or benefit derived by the manager:

(i) in the conduct or winding up of the company’s activities and affairs;

(ii) from a use by the manager of the company’s property; or

(iii) from the appropriation of a company opportunity;

(2) to refrain from dealing with the company in the conduct or winding up of the company’s activities and affairs as or on behalf of a person having an interest adverse to the company; and

(3) to refrain from competing with the company in the conduct of the company’s activities and affairs until completion of the winding up of the company.

15 Pa.C.S. § 8849.2(b).

11 Both Ilera I and Healthcare were manager-managed Pennsylvania LLCs.

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Thus, relevant to this case, a manager’s duty of loyalty implicates

respecting both that company property is for company use and that company

opportunities belong to the company. The comment to § 8849.2(b)(1)(iii)

notes that the term “company opportunity” is not defined in the Act, but

references “ample case law” discussing an “interest or reasonable expectancy

test” and a “line of business test.”12 15 Pa.C.S. § 8849.2, Committee

Comment—2016. Our Supreme Court broadly defined the company

opportunity aspect of the duty of loyalty thusly in the context of corporations:

[T]here is demanded of the officer or director of a corporation that he furnish to it his undivided loyalty; if there is presented to him a business opportunity which is within the scope of its own activities and of present or potential advantage to it, the law will not permit him to seize the opportunity for himself; if he does so, the corporation may elect to claim all of the benefits of the transaction. Nor is it material that his dealings may not have caused a loss or been harmful to the corporation; the test of his liability is whether he has unjustly gained enrichment.

Lutherland, Inc. v. Dahlen, 53 A.2d 143, 147 (Pa. 1947).

Unlike managers, “a member does not have any duty to a manager-

managed [LLC] or to any other member of the company solely by reason of

being or acting as a member,” except to “discharge the duties and obligations

under this title or under the operating agreement and exercise any rights

12 The comment also observes that “[i]n most, if not all, situations, usurping

a company opportunity also breaches the duty not to compete.” 15 Pa.C.S. § 8849.2, Committee Comment—2016. However, Plaintiffs do not argue that the Individual Defendants improperly competed with Ilera I in violation of their § 8849.2(b)(3) duty.

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consistent with the contractual obligation of good faith and fair dealing.” 13 15

Pa.C.S. § 8849.1(d), (i). Hence, neither Hexter nor Big Bite had a duty of

loyalty to Ilera I.14

The statutory provisions do not provide the final word on the duties of

managers and members. For while LLCs owe their legal existence to the Act,

an LLC “is as much a creature of contract as of statute.” 15 Pa.C.S. § 8815,

Committee Comment—2016. In addition to establishing the details about the

organization and operation of the company, an LLC’s operating agreement

may vary some provisions of the Act concerning the fiduciary duties of

members and managers. Pertinent to this case, an LLC’s operating agreement

may, if not manifestly unreasonable, “identify specific types or categories of

activities that do not violate the duty of loyalty.” 15 Pa.C.S. § 8815(d)(3)(iii).

The comment to § 8815 indicates that, “[u]nder [subparagraph (d)(3)(iii)],

an operating agreement might provide that . . . the manager may pursue

opportunities that otherwise would be company opportunities. Such

arrangements are commonplace and permissible.” 15 Pa.C.S. § 8815,

Committee Comment--2016.

13 For LLCs that are member-managed instead of manager-managed, all members have a duty of loyalty. See 15 Pa.C.S. § 8849.1(b)(1)(ii)-(iii), (b)(3).

14 Hexter thus legitimately participated in applying for licenses in Arkansas,

California, Missouri, and Ohio without offering those opportunities to Ilera I, Healthcare, or the Individual Defendants. See N.T. Trial, 7/8/24, at 70-72.

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When a member of an LLC wishes to enforce her rights and interests in

the company, she may bring a direct action against managers or other

members if she is able to “plead and prove an actual or threatened injury that

is not solely the result of an injury suffered or threatened to be suffered by

the [LLC].” 15 Pa.C.S. § 8881(b). Otherwise, the member must pursue a

derivative action to enforce the LLC’s rights in accordance with 15 Pa.C.S.

§ 8882. As we have said in the context of corporations:

It is axiomatic that a corporation has a cause of action against its officers and directors for breach of a fiduciary duty. It is also axiomatic that a shareholder may assert a derivative action on behalf of the corporation where the shareholder has demanded that the corporation assert the right underlying the action and the corporation has refused. . . . [I]n a derivative action, the corporation is a required party.

Fitzpatrick v. Shay, 461 A.2d 243, 246 (Pa.Super. 1983). Moreover, any

benefits of a derivative action “belong to the [LLC] and not to the plaintiff”

who filed on behalf of the company. See 15 Pa.C.S. § 8885(a)(1).

Mindful of these principles, we turn to Defendants’ appellate

arguments. They first assail the trial court’s suggestion that they waived the

bulk of the issues raised in their Rule 1925(b) statement. Rule 1925 provides

that a statement “shall concisely identify each error that the appellant intends

to assert with sufficient detail to identify the issue to be raised for the judge.”

Pa.R.A.P. 1925(b)(4)(i). While the statement should not be redundant or

provide lengthy explanations, raising a large number of errors will not ipso

facto result in waiver so long as they are not frivolous and are as concise as

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practicable. See Pa.R.A.P. 1925(b)(4)(iv). Conversely, filing a general

statement will not result in waiver where “the appellant in a civil case cannot

readily discern the basis for the judge’s decision[.]” See Pa.R.A.P.

1925(b)(4)(vi).

As noted above, the trial court here found that the majority of

Defendants’ claims of error were “not concisely stated and [we]re vague in

nature.” Trial Court Opinion, 3/4/25, at 24. Defendants counter this by

maintaining that “[t]he trial court’s decision to adopt wholesale Plaintiffs’

ambiguous proposed findings and conclusions, with no further explanation,”

along with its confusing verdict order that failed to specify to whom and

against whom damages were awarded required their lengthy filing in order to

preserve their claims. See Defendants’ brief at 32 (cleaned up).

Following our review of the certified record, we agree with Defendants

that their Rule 1925(b) statement was appropriate given the significant

ambiguity created by the trial court’s decision to enter a general verdict in

favor of “Plaintiffs” and against “all Defendants,” and the claims at issue in the

trial. Even after studying the findings incorporated by reference in the court’s

order, it is unclear to this Court who is supposed to pay what to whom and

why.

Here, the fiduciary duty count of the complaint was not brought by Ilera

I member Big Bite directly to enforce its rights regarding the duty of loyalty

the Individual Defendants owed to Ilera I. Indeed, since the harm Big Bite

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alleged resulted solely from the Individual Defendants’ decision to usurp an

opportunity that it believed belonged to Ilera I, it appears that a direct claim

by Big Bite would have been foreclosed by § 8881(b). 15 Instead, the claim

that the Individual Defendants breached their fiduciary duties was brought by

Ilera I member Big Bite on behalf of Ilera I to recover the value of the

opportunity that the Individual Defendants diverted away from Ilera I. Big

Bite additionally raised claims of fraudulent inducement, unjust enrichment,

and conspiracy in its own right against the Individual Defendants.

The trial court’s verdict order does not accurately reflect this state of

affairs. The caption of the order lists the following as plaintiffs: “Big Bite Real

Estate, LLC, both individually and derivatively on behalf of Ilera Holdings, LLC,

and Shannon Hexter.” Order, 9/6/24 (capitalization altered). The captioned

defendants are “Ilera Holdings, LLC, et al.” Id. (capitalization altered).

Meanwhile, the caption to Plaintiffs’ proposed findings identifies as

15 It is worth noting that the facts regarding the fiduciary duty claim largely

appear to implicate the Individual Defendants’ management of Healthcare, not of Ilera I. All the evidence proffered by Plaintiffs discussed hereinabove points to the opportunity being brought to Healthcare through Healthcare’s COO Odumosu, who was not a member of Ilera I. It was discussed by the Individual Defendants at Healthcare board meetings and through Healthcare company emails. At the time of AB’s acquisition, through Healthcare resources, Healthcare was no longer a wholly-owned subsidiary of Ilera I. As such, pursuant to Healthcare’s operating agreement discussed above, all the Healthcare assets belonged solely to Healthcare and not in any part to its members, i.e., Ilera I and Playa. Nonetheless, since Defendants do not invoke this Healthcare-Ilera I distinction as a basis for relief, we do not sua sponte consider whether it impacts the propriety of the cause of action or the verdict.

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defendants: “Ilera Holdings, LLC, Greg Rochlin, Zoltan Kerekes, Torsten

Geers, Osagie Imasogie, Lisa Gray, Ilera Holdings II, LLC, Ilera Healthcare

LLC, and IHC Real Estate LP.” Plaintiffs’ Proposed Findings, 8/22/24, at cover

page (capitalization altered). Yet, as of the time of trial, Hexter had no viable

claims against any defendant, and no plaintiff had any remaining claims

against any Ilera entity.

The Defendants raised these complaints in their post-trial motions, but

the court declined to clarify its verdict, instead issuing a blanket denial order.

In their praecipe to enter judgment on the verdict, Plaintiffs limited

“Defendants” to the Individual Defendants. However, the judgment amount

was still in favor of all Plaintiffs despite there being both derivative and direct

claims raised by Big Bite, and Hexter having prevailed on no direct claim.

In its Rule 1925(a) opinion, the trial court described Defendants’ request

to clarify the verdict by assigning the derivative claim award to Ilera I as

“bizarre” and “concerning.” Trial Court Opinion, 4/4/25, at 11. It first claimed

that Ilera I was not a party to the case. Id. Then the court insisted that, with

the caption to the complaint indicating that the plaintiffs were Big Bite both

on behalf of Ilera I and itself, as well as Hexter, Big Bite and Hexter were

entitled to recover on the fiduciary duty count because Big Bite and Hexter

are the ones who were ultimately harmed, and awarding damages to Ilera I

would involve the Individual Defendants largely paying themselves. Id. at

11-12.

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The trial court is legally incorrect. Big Bite and Hexter’s alleged loss as

a result of the Individual Defendants’ decision to divert the Louisiana

opportunity to Ilera II was not direct, but was sustained solely by virtue of the

fact that they would not reap the benefits of it through Ilera I. That is why

Big Bite alleged the claim derivatively on Ilera I’s behalf in accordance with

§ 8882 of the Act rather than directly pursuant to § 8881(a). As such, Ilera I

was not only a party to the litigation, but an indispensable party. See

Fitzpatrick, 461 A.2d at 246. Further, as we just recounted, the Act

mandates that any benefits of a derivative action “belong to the limited

liability company and not to the plaintiff” who filed on behalf of the

company. See 15 Pa.C.S. § 8885(a)(1) (emphasis added). Thus, whatever

portion of the court’s general damages finding was related to the fiduciary

duty count should have been specifically awarded to Ilera I. Damages for the

other claims should have been awarded to Big Bite. Hexter should not have

been awarded anything directly.

Stated plainly, the trial court’s method of rendering its verdict created

an ambiguous mess that it refused to correct when Defendants raised these

issues in their post-trial motions. Under these circumstances, no waiver

results from the length of Defendants’ Rule 1925(b) statement. See, e.g.,

Maya v. Johnson & Johnson, 97 A.3d 1203, 1211 n.4 (Pa.Super. 2014)

(declining trial court’s invitation to find waiver due to the statement containing

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twenty-three paragraphs with numerous sub-issues given the complexity of

the case, the voluminous evidence, and the absence of any sign of bad faith).

Having resolved that matter, we turn to Defendants’ substantive issues,

beginning with their challenge to the finding of liability for breach of fiduciary

duty. To prevail on this derivative claim, Big Bite was required to prove that:

(1) the Individual Defendants were in a fiduciary relationship with Ilera I; (2)

they negligently or intentionally failed to act in good faith to fulfill their

fiduciary obligations; and (3) Ilera I suffered an injury caused by their breach

of fiduciary duty. See Snyder v. Crusader Servicing Corp., 231 A.3d 20,

31 (Pa.Super. 2020). “No damages may be awarded where the evidence is

insufficient for the finder of fact to determine what, if any amount, of damages

the plaintiff[, i.e., the company,] suffered.” Id. at 32. In the context of

usurpation of a company opportunity, the measure of damages is the profits

that the company lost through being deprived of the opportunity. See CST,

Inc. v. Mark, 520 A.2d 469, 472 (Pa.Super. 1987); Hill v. Hill, 420 A.2d

1078, 1083 (Pa.Super. 1980).

Defendants first assert that the court erred in finding liability against the

Individual Defendants on the fiduciary duty claim and awarding damages to

any plaintiff because: (1) they had no duty to treat the chance to acquire AB

as an Ilera I company opportunity in light of § 6.8 of the operating agreement;

and (2) Plaintiffs failed to prove any amount of damages to Ilera I resulting

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from the Individual Defendants’ use of company assets to acquire AB for Ilera

II. See Defendants’ brief at 33, 37.

The trial court declined to address this issue in its Rule 1925(a) opinion,

having deemed it waived. Since the trial court rendered its verdict by adopting

Plaintiffs’ proposed findings, we look to them to explain the propriety of the

ruling. Plaintiffs maintain that § 6.8, by its terms, applies only to members

and not to managers, whereas elsewhere the agreement references both

members and managers. See Plaintiffs’ brief at 35 (citing § 7.1).

Plaintiffs contend that, in any event, the chance to join with Dr. Macias

and her group in acquiring AB “was not some generic ‘investment

opportunity’” permissible under § 6.8. Id. at 36. Indeed, they claim that it

“was not an ‘investment opportunity’ at all since [the Individual Defendants]

did not invest their own money to acquire it.” Id. at 37. Rather, they assert

that it was a “quintessential corporate opportunity in that it was (i) brought

to the company by a Healthcare executive, (ii) acquired with company assets

(i.e., Healthcare’s Amended LOC), (iii) in the same business as Healthcare,

and (iv) to be operated by Healthcare’s existing management.” 16 Id. at 37

n.12. Hence, their use of company resources for their own benefit, which the

Individual Defendants conceded was not authorized by § 6.8, violated the

16 This characterization causes us to again ponder how the Individual Defendants’ obligations to Ilera I instead of to Healthcare are implicated here.

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corporate opportunity doctrine that forbids officers and directors from using

their position to obtain a personal benefit. 17 Id. at 34, 37.

Plaintiffs assert that Defendants’ “claim that Hexter and Ilera I did not

suffer any harm is both a red herring and wrong.” Id. at 37. Quoting Hill,

420 A.2d at 1081, Plaintiff maintains that “whether Hexter and Ilera I ‘suffered

harm’ is not ‘material’ because ‘the test of [the fiduciary’s] liability is whether

he has unjustly gained enrichment.’” Plaintiffs’ brief at 37 (edits in original).

“Thus, even if the company suffers no harm, there may be liability for breach

of fiduciary duty.” Id.

Defendants assail this reasoning on several fronts. First, they maintain

that Big Bite failed to prove that the Individual Defendants’ choice to pursue

AB separately from Ilera I breached any duty owed to the company. They

argue that the plain language of § 6.8 clearly and unambiguously disclaims

any fiduciary duty regarding investment opportunities for all members, not

just members who are not also managers. See Defendants’ brief at 34. They

insist that the trial court’s interpretation renders the provision meaningless,

17 To the extent that Plaintiffs advance their argument by citing a 2015 unpublished memorandum decision of this Court, they squarely violated § 65.37 of our internal operating procedures, reference to which is boldly emblazoned atop the cited decision. That provision states, with exceptions plainly not relevant here: “An unpublished memorandum decision filed prior to May 2, 2019, shall not be relied upon or cited by a Court or a party in any other action or proceeding[.]” 210 Pa. Code § 65.37(B) (emphasis added). Thus, we will not consider that decision in conducting our review, and the trial court erred insofar as it did so by adopting Plaintiff’s conclusions of law as its own.

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since non-member managers have no fiduciary duty to refrain from usurping

company opportunities. Id.

Second, the Individual Defendants contend that Big Bite failed to prove

the damages element of the derivative claim. Concerning the taking of Ilera

I’s opportunity to acquire a share of AB, Defendants highlight that Plaintiffs

offered evidence only proved the value Big Bite would have held in December

2021 if it were a 12% member of Ilera II, not how much profit Ilera I lost by

not acquiring AB. Id. at 38-40. As for the Individual Defendants’ use of IHH

to submit a letter of commitment and the loan from Healthcare’s LOC to

consummate the transaction, Defendants likewise point to the absence of any

evidence of harm. They assert that the use of IHH as a “placeholder” did not

injure Plaintiffs in any way. Id. at 36. Since it is undisputed that the

Individual Defendants repaid the loan in full, they avow that the use of

Healthcare’s LOC resulted in no financial loss to Ilera I. Id.

We agree with Defendants on both counts. First, the operating

agreement of Ilera I disclaimed the fiduciary duty of loyalty as follows:

No Member shall have any fiduciary obligations with respect to the Company or to the other Members insofar as making other investment opportunities available to the Company or to the other Members. Each Member may, notwithstanding the existence of this Agreement, engage in whatever activities such Member may choose, without having or incurring any obligation to offer any interest in such activities to the Company or to the other Members, subject to the provisions of any non-competition, non-solicitation, non-disclosure agreements or other written agreements between such Person and the Company or its Subsidiaries. Neither this Agreement nor any activities undertaken pursuant hereto shall prevent any Member from engaging in such activities.

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Trial Exhibit # 22 at § 6.8(a).

Plaintiffs’ argument that “no member” does not actually mean “no

member,” but only “no member who is not also a manager,” is contrary to the

unambiguous language of the agreement. “Member” is defined by the

Agreement as “each of the members named on Schedule I attached hereto

and any person admitted to the Company as a Substituted Member or

Additional Members, but only so long as such Person is shown on the

Company’s books and records as the owner of one or more Units.” Id. at 10.

Schedule I lists each of the Individual Defendants and Big Bite. Id. at

Schedule I. As such, no person or entity listed in Schedule I was constrained

by a fiduciary obligation to offer opportunities to Ilera I or other Ilera I

members. Further, since Ilera I is a manager-managed LLC, non-manager

members had no statutory duty of loyalty in need of disclaiming. 18 See 15

Pa.C.S. § 8849.1(i).

18 Plaintiffs correctly observe that this Court held in Retina Associates that

non-manager members have fiduciary duties in some contexts. See Plaintiffs’ brief at 36 (citing Retina Associates, 176 A.3d at 278). However, as we recently observed, “Retina Associates was decided under the Pennsylvania Limited Liability Company Law of 1994 (“PLLCL”), which did not expressly delineate the fiduciary obligations of members and managers.” TCS Black Label Realty, LLC v. Serhant Pennsylvania, LLC, ___A.3d ___, 2026 WL 251144, at *12 (Pa.Super. 2026) (concluding non-manager member’s conduct of competing with the company was allowable under the Act). The member duty discussed in Retina Associates was not the duty of loyalty at issue herein, but the duty to act in good faith, which the current LLC statute expressly imposes upon non-manager members. See 15 Pa.C.S. § 8849.1(d) (Footnote Continued Next Page)

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Plaintiff’s contention that reference to members and managers

elsewhere in the agreement means that mention of only one excludes the

other would yield absurd results. For example, the provision cited by Plaintiff

states, inter alia:

[T]he debts, obligations[,] and liabilities of the Company, whether arising in contract, tort[,] or otherwise, shall be solely the debts, obligations[,] and liabilities of the Company and no Member or Manager shall be obligated personally for any such the debts, obligations[,] or liability solely by being a Member or acting as a Manager of the Company. Except as otherwise provided in this Agreement, a Member’s liability (in its capacity as such) for Company liabilities and Losses shall be limited to the Company’s assets; provided that a Member shall be required to return to the Company any Distribution made to it in clear and manifest accounting or similar error.

Id. at § 7.1. Meanwhile, § 7.3 provides: “No Member shall have the right to

seek or obtain partition by court decree or operation of law of any Company

property, or the right to own or use particular or individual assets of the

Company.” Id. at § 7.3.

Under Plaintiffs’ proffered interpretation, these provisions mean that Big

Bite is the only member with a duty to return an erroneous distribution, since

manager-members are not expressly included in that portion of § 7.1.

Likewise, § 7.3 would deny only Big Bite, but not the manager-members, the

(“A member shall discharge the duties and obligations under this title or under the operating agreement and exercise any rights consistent with the contractual obligation of good faith and fair dealing.”).

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right to own and use Ilera I assets. These are not tenable constructions. 19

Consequently, we conclude that Plaintiffs failed to establish that the Individual

Defendants’ choice to pursue the acquisition of AB without first offering it to

Ilera I was contrary to a fiduciary duty they owed to the company.

We further agree with Defendants that, even if a breach of the duty of

loyalty was implicated by the usurpation of the Louisiana opportunity, Plaintiffs

also failed to prove the damages element of the claim. As mentioned supra,

the measure of damages for usurpation of a company opportunity is the profits

that the company lost through being deprived of the opportunity. See CST,

520 A.2d at 472; Hill, 420 A.2d at 1083. Thus, the trial court was unable to

award damages for the claim unless Big Bite established what amount of profit

Ilera I lost by having opportunities diverted to Ilera II. See Snyder, 231

A.3d at 32 (“No damages may be awarded where the evidence is insufficient

for the finder of fact to determine what, if any amount, of damages the

plaintiff[, i.e., the company,] suffered.”).

As we detailed in recounting his trial testimony, in opining as to the

fiduciary duty damages, Mr. Eckhardt offered only his estimation of the value

of Big Bite’s share of the value of the companies usurped by Ilera II. He did

not testify to the amount of profits those assets generated and were realized

19 A reasonable explanation for the separate inclusion of “Managers” in § 7.1

is to extend the relief from personal responsibility for company liabilities to any manager who is not also a member, in the event that Ilera I selected a non-member to its board.

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by Individual Defendants instead of Ilera I. See N.T. Trial, 7/10/24, at 71-

85. Consequently, the fiduciary duty count concerning the diversion of AB in

violation of the § 8849.2(b)(1)(iii) (“appropriation of a company opportunity”)

duty of loyalty also fails for want of proof of damages.

Turning to the duty of loyalty codified at § 8849.2(b)(1)(ii) (“use by the

manager of the company’s property”), the trial evidence unquestionably

established that the Individual Defendants breached it through using Ilera I

or Healthcare resources in the initial acquisition of AB. However, Plaintiffs did

not prove damages resulting from this breach. The evidence was undisputed

that the Individual Defendants accounted for the use of the LOC and fully

repaid the draw-down. Plaintiffs did not show if or how much interest was

incurred by Ilera I from the transaction, or that it was unable to meet other

obligations or to pursue other opportunities due to the brief increase in

Healthcare’s liabilities.

Plaintiffs correctly assert that that there may be liability for breach of a

fiduciary duty even in the absence of harm to the company. See Plaintiffs’

brief at 37 (citing Hill, 420 A.2d at 1081). However, that does not mean Big

Bite was relieved of its obligation to prove the damages element of the

derivative claim. A brief consideration of Hill is instructive.

In that case, two breaches of duties owed by the fiduciary to Hill Co.

were at issue: (1) corporate fund misuse by a fiduciary loaning Hill Co. funds

to his other enterprises at a lower rate than was charged to businesses in

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which he held no stake; and (2) diversion of corporate opportunities from Hill

Co. to a new company he formed to contract for the same types of jobs that

had formerly been done by Hill Co. Regarding the fund misuse, we observed

that it mattered not whether Hill Co. was harmed or suffered a loss; the

company was entitled to be paid the amount that the fiduciary personally

benefited from the low-rate loans. See Hill, 420 A.2d at 1081. For the

usurpation of Hill Co. opportunities, the court looked to the profits realized by

the company to which the jobs were diverted. Id. at 1083.

Hence, contrary to Plaintiffs’ suggestion, the Hill Court did not recognize

a right for a company to recover money where there was neither a loss to the

company nor a profit to the fiduciary. Instead, Hill stands for the proposition

that, in the absence of a loss to Ilera I from the use of the resources of

Healthcare and IHH, Plaintiffs could have proven the damages element of their

corporate-asset-misuse fiduciary duty claim by showing what benefit the

Individual Defendants reaped by using Ilera I property instead of non-

company resources. The certified record reflects no such evidence.

As such, Plaintiffs failed to prove the necessary elements of either aspect

of Ilera I’s breach of fiduciary duty claim. The trial court erred in concluding

otherwise. Therefore, the court’s unallocated damages award is unsustainable

to the extent it was premised upon this claim.

We next consider whether the court’s finding the Individual Defendants

liable for fraud is properly founded in law and facts supported by the record.

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To establish a fraud claim, a plaintiff must prove the following elements by

clear and convincing evidence:

(1) a representation; (2) which is material to the transaction at hand; (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) the resulting injury was proximately caused by the reliance.

Kostryckyj v. Pentron Lab. Techs., LLC, 52 A.3d 333, 338 (Pa.Super.

2012) (cleaned up). “[F]raud consists in anything calculated to deceive,

whether by single act or combination, or by suppression of truth, or a

suggestion of what is false, whether it be direct falsehood or by innuendo, by

speech or silence, word or mouth, of look or gesture.” Id. (cleaned up).

Where induced by fraud to enter into an agreement, “the victim of fraud in

the inducement has two options: (1) rescind the contract, or (2) affirm the

contract and sue for damages.” Eigen v. Textron Lycoming Reciprocating

Engine Div., 874 A.2d 1179, 1184 (Pa.Super. 2005).

Here, the trial court found that Plaintiffs proved by clear and convincing

evidence that the Individual Defendants fraudulently induced Hexter to agree

to the equity swap. In particular, they “grossly and recklessly understated

the value of Healthcare’s Pennsylvania operations by (i) excluding the planned

Phase 2 Expansion, and (ii) double-counting Healthcare’s debt under the

Amended LOC (including the $2.35 million used to acquire [AB]) to artificially

reduce Healthcare’s purported value.” Plaintiffs’ Proposed Findings, 8/22/24,

at ¶ 216. At the same time they informed Hexter that Healthcare was worth

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$59 million, they were telling potential investors that it had a value of $232

million. Id. at ¶ 224. Meanwhile, the Individual Defendants “grossly inflated

the supposed future value of Louisiana by assuming that [AB] would generate

revenues that were more than four times the size of the entire projected

Louisiana cannabis market as of December 2018.” Id. at ¶ 221 (cleaned up).

They deliberately presented these mismatched values to Hexter with the

intent to deceive her into believing that it was an apples-to-apples comparison

such that the giving up two thirds of Big Bite’s equity in Ilera I in favor of a

4% stake in Ilera II would increase the overall value of her investment. 20 Id.

at ¶ 224.

The Individual Defendants, being managers of Healthcare and Ilera I,

had more information about the performance and outlook of Healthcare than

Hexter, such that Hexter reasonably and justifiably relied on their

representations in deciding to have Big Bite accept the proposed equity swap.

Id. at ¶¶ 231-233. As a result of that reliance, Big Bite suffered damages in

the amount of $11,062,949, which Mr. Eckhardt calculated as the difference

in value, at the time of the fraud, between what Big Bite surrendered and what

it received. Id. at ¶¶ 188, 234.

20 While the representations were communicated to Hexter by Gray and Rochlin, all the Individual Defendants acted in concert in inducing Hexter to dilute Big Bite’s interest in Ilera I. See Plaintiffs’ Proposed Findings, 8/22/24, at 44 n.17.

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Defendants’ assault on these findings is multifaceted. Specifically, they

assert: (1) estimated projections of future performance are not actionable as

a matter of law; (2) Plaintiffs did not justifiably rely on alleged omissions

regarding a corporate opportunity; and (3) reliance on the share transfer

analysis is barred by the parol evidence rule.

Defendants’ first prong of attack focuses upon the nature of the

statements inducing the equity swap. They observe that “a cause of action

for fraud must allege a misrepresentation of a past or present material fact.”

Defendants’ brief at 41 (citing, inter alia, Krause v. Great Lakes Holdings,

Inc., 563 A.2d 1182, 1187 (Pa.Super. 1989)). Contrarily, “representations of

something that may happen in the future do not, at least as a general rule,

constitute fraud.” Id. (quoting Boyd v. Rockwood Area Sch. Dist., 907

A.2d 1157, 1170 (Pa.Cmwlth. 2006)). Citing our Supreme Court’s decision in

Huddleston v. Infertility Center of America, Inc., 700 A.2d 453

(Pa.Super. 1997), as well as several decisions of non-precedential value to

this Court, Defendants maintain that earnings forecasts and other statements

concerning possible future events are not actionable as fraud. See

Defendants’ brief at 41-42.

In Huddleston, the plaintiff contracted with ICA to be a surrogate

mother. According to Huddleston, she was induced to participate because

“ICA represented its program to be the ‘premier’ surrogacy program in the

country, and that it was designed and implemented to ensure the safety of its

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client-participants.” Id. at 461. ICA also purportedly told her “that her

surrogacy situation would be handled as an adoption.” Id. The man whose

son Huddleston ultimately bore through contracting with ICA took physical

custody of him from the hospital the day after the birth. That man abused

the child, causing severe head and brain injuries that resulted in the baby’s

death the following month. Huddleston filed wrongful death and survival

claims, including one for fraud that the trial court dismissed. Our Supreme

Court affirmed, stating:

The trial court concluded, and we agree, that these representations are not sufficient to support an intent to induce by misrepresentation. ICA’s representations regarding the quality of the program amounted to mere “puffing,” rather than fraud. And its promise to treat the surrogacy undertaking as an adoption is merely an unfulfilled promise to do something in the future, which does not constitute fraud.

Id. at 461 (citations omitted).

Defendants maintain that the representations in the share transfer

analysis are likewise unavailing because they are “almost entirely forward-

looking estimated projections and potential future values[,] . . . not

statements of present or past fact that could support Plaintiffs’ fraud claim.”

Defendants’ brief at 42. We disagree.

Big Bite’s fraud claim is not premised upon the failure of the Individual

Defendants’ future projections to bear out. It is founded upon proof that they

intentionally led Hexter to believe that the share transfer analysis was “an

‘apples to apples’ comparison of value,” when, as they acknowledged at trial,

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it instead compared a highly speculative projection of AB’s potential value of

$300 million against an artificially-low indication of Healthcare’s present value

at $59 million. See Plaintiffs’ brief at 43.21 Had they given Hexter the same

projection for Healthcare’s future worth at $232 million that they

simultaneously shared with investors, thus offering the apples-to-apples

comparison Hexter thought she was receiving, she would have seen that Big

Bite’s giving up 8% of Ilera I to get 4% of Ilera II was a bad deal. The trial

court did not err in concluding that the share transfer analysis contained

actionable misrepresentations intended to deceive Big Bite.

Defendants’ remaining arguments concerning the fraud verdict both

involve the reliance element of the claim. First, they observe that Hexter had

access to Ilera I’s financial information and the opportunity to review the

proposal with counsel, such that she could have verified the accuracy of the

Healthcare valuation rather than rely on the share transfer analysis. See

Defendants’ brief at 45-46. Second, they aver that the integration clause

contained in the Redemption Agreement negates any justifiable reliance upon

representations not included in that writing, for “a party cannot be said to

have justifiably relied on prior representations that he has superseded and

21 We again rely upon Plaintiffs to explain and defend the trial court’s holdings

because Defendants’ challenges to the fraud verdict, as with the fiduciary duty findings, were rejected without explanation at the post-trial motions stage and are among those the trial court declined to address in its Rule 1925(a) opinion.

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disclaimed through a fully integrated written contract[.]” Toy v. Metro. Life

Ins. Co., 928 A.2d 186, 207 (Pa. 2007) (cited in Defendants’ brief at 48-49).

Neither of these arguments persuades us either. Regarding Hexter’s

reliance upon Gray’s representations, as Plaintiffs aptly note, while a person

may not justifiably rely upon a statement that is obviously or known to be

false, “the recipient of an allegedly fraudulent misrepresentation is under no

duty to investigate its falsity” in order to justifiably rely upon it. See Plaintiffs’

brief at 44 (quoting Egan v. USI Mid-Atl., Inc., 92 A.3d 1, 16 (Pa.Super.

2014)) (cleaned up). “Furthermore, where the means of obtaining the

information in question were not equal, the representations of the person

believed to possess superior information may be relied upon.” Patel v.

Kandola Real Estate, LP, 271 A.3d 421, 427 (Pa.Super. 2021) (cleaned up).

Here, Hexter, who was not a manager of Healthcare or Ilera I and, by

the Individual Defendants’ estimation was not a competent businessperson,

was provided valuations by her business partner, who, as the CFO of

Healthcare had the most intimate knowledge of the business’s finances and

expertise in valuation. Further, Hexter was given mere weeks to elect to make

the equity swap, virtually guaranteeing that she would rely upon Gray’s share

transfer analysis. Under these circumstances, we cannot rule that the trial

court erred in holding that Hexter justifiably relied upon the representations

of value offered by the Individual Defendants without attempting to

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independently verify them in the eleven days she had to decide whether to

accept their offer.

Nor are we convinced that the trial court erred in refusing to find Big

Bite’s fraud claim barred by the parol evidence rule. Our High Court has stated

that rule and its application in this context as follows:

Once a writing is determined to be the parties’ entire contract, the parol evidence rule applies and evidence of any previous oral or written negotiations or agreements involving the same subject matter as the contract is almost always inadmissible to explain or vary the terms of the contract. One exception to this general rule is that parol evidence may be introduced to vary a writing meant to be the parties’ entire contract where a party avers that a term was omitted from the contract because of fraud, accident, or mistake.

Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425, 436-37 (Pa.

2004) (cleaned up). In other words, under Pennsylvania law, when the

parties’ complete agreement is reduced to writing, parol evidence may be

offered to establish fraud in the execution, but not to prove fraud in the

inducement. See Rudy v. Lesniak, 343 A.3d 1261, 1268 (Pa.Super. 2025).

Pennsylvania law for assessing whether a writing constitutes the parties’

whole agreement is summarized thusly:

To determine whether or not a writing is the parties’ entire contract, the writing must be looked at and if it appears to be a contract complete within itself, couched in such terms as import a complete legal obligation without any uncertainty as to the object or extent of the parties’ engagement, it is conclusively presumed that the writing represents the whole engagement of the parties. An integration clause which states that a writing is meant to represent the parties’ entire agreement is also a clear sign that the writing is meant to be just that and thereby expresses all of

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the parties’ negotiations, conversations, and agreements made prior to its execution.

Yocca, 854 A.2d at 436 (cleaned up).

The impact and scope of an integration clause is different under

Delaware law. As one court elucidated:

Where the plaintiff alleges the defendant lied in contract negotiations, but the contract says the plaintiff did not rely on the defendant’s extracontractual statements, Delaware law recognizes a tension between excusing the defendant’s pre- contract lie, and excusing the plaintiff’s lie that it was not relying on any extracontractual statements. Delaware law has resolved this tension by requiring specific and unambiguous anti-reliance language to preclude a fraudulent inducement claim based on the defendant’s pre-contract statements, as the plaintiff cannot plead justifiable reliance on extracontractual statements when it promised not to rely on them. An integration provision without anti-reliance language does not do the same.

But an integration clause functions to preclude a fraud claim where the extracontractual misrepresentation directly conflicts with an express term in the contract. That result follows from the parol evidence rule: evidence of a prior contradictory agreement cannot be considered to modify the terms of the integrated contract. A contract with an integration clause supersedes the terms of any prior agreement covering the same subject matter. When a prior agreement and a subsequent agreement cover the same subject matter and the subsequent agreement contains an integration clause, the prior agreement ‘needs to be memorialized in the subsequent agreement’ to survive.

An integration provision alone precludes consideration of a pre- contract understanding based on extracontractual statements that conflict with the terms of the integrated contract. So the plaintiff cannot plead justifiable reliance on those conflicting and superseded pre-contract extracontractual statements. While an integration provision alone does not preclude reliance on misrepresentations outside the four corners of an agreement, it precludes reliance on precontractual understandings of facts that are found within the four corners of that agreement.

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Park7 Student Hous., LLC v. PR III/Park7 SH Holdings, LLC, 340 A.3d

614, 618–19 (Del. Ch. 2025) (cleaned up).

Here, Big Bite alleged that Hexter was fraudulently induced into

agreeing to the equity swap. As Defendants indicated in their proposed

findings and reiterate on appeal, “[u]ltimately, four agreements comprised the

equity swap,” namely: (1) the Redemption Agreement, governed by Delaware

law, by which Big Bite relinquished two-thirds of its shares in Ilera I; (2) the

amendment to Ilera I’s operating agreement, subject to Pennsylvania law; (3)

the subscription and joinder agreement through which Big Bite was issued

membership in Ilera II; and (4) the amended operating agreement for Ilera

II, governed by Delaware law. See Defendants’ brief at 18-19; see also

Defendants’ Proposed Findings, 8/22/24, at ¶ 97.

Defendants advocate for application of the parol evidence rule based

upon the integration clause found in one of those four writings, namely the

Redemption Agreement. That document indicates that the parties agree to its

various terms “in consideration of the promises and mutual agreements set

forth herein, and for other good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged[.]” Trial Exhibit # 191 at 2.

Among the miscellaneous provisions of that contract is the following:

This Agreement and the other instruments referenced herein contain the entire understanding of the parties hereto with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, none of the parties hereto makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may

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be waived other than by an instrument in writing signed by the party to be charged with enforcement and no provision of this agreement may be amended other than by an instrument in writing signed by all of the parties.

Id. at ¶ 6(c). The only “other instruments” mentioned in the Redemption

Agreement appear to be the Ilera I operating agreement, referenced for

definitions for capitalized terms, and unspecified “all such other agreements,

certificates, instruments[,] and documents as the other party may reasonably

request in order to carry out the intent and accomplish the purposes of this

Agreement and the consummation of the transactions contemplated thereby.”

Id. at ¶ 6(e).

The trial court held that, construing the Redemption Agreement

pursuant to Delaware law, the integration clause did not act to bar parol

evidence of fraud in the inducement, since it is merely boilerplate and the

Redemption Agreement does not include representations that contradict those

that fraudulently induced Hexter to agree to the equity swap on behalf of Big

Bite. See Plaintiffs’ Proposed Findings, 8/22/24, at ¶¶ 280-285.

Defendants counter that the Redemption Agreement’s choice-of-law

provision does not apply to Big Bite’s fraud claim, which is governed by

Pennsylvania law. See Defendants’ brief at 50-51 (citing trial court decisions

from federal courts and Philadelphia County). They maintain that

Pennsylvania’s jurisprudence bars Plaintiffs from establishing that they

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justifiably relied on any representations not included in the Redemption

Agreement agreement. Id. at 49-50.22

We conclude that Defendants do not prevail under either jurisdiction’s

law. If we deem this a matter of construing the Redemption Agreement to

discern the meaning of the integration clause, Delaware law applies to render

only representations found within the four corners of the writing to have been

superseded by its execution. Since the deceitful misrepresentations that

underlie Big Bite’s fraud claim are not addressed or contradicted by the

Redemption Agreement, the integration clause does not preclude the claim.

See Park7 Student Hous., 340 A.3d at 618–19.

If we view this as a matter of Pennsylvania law concerning parol

evidence, the claim that the equity swap was fraudulently induced is barred

only if the Redemption Agreement represents the complete memorialization

of the parties’ contract. It does not. Defendants readily acknowledge that

the full agreement was spread over four separate writings, two of which

separately included integration clauses. The Redemption Agreement further

vaguely indicates that it is founded upon “other good and valuable

consideration” not set forth in the writing. See Trial Exhibit # 191 at 2. The

evidence pertinent to the fraud allegations speaks to this other consideration

22 In making this argument, Defendants also are guilty of citing an uncitable

unpublished memorandum decision filed before May 2, 2019, in violation of 210 Pa. Code § 65.37(B). We have not considered it in rendering our decision.

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supporting Big Bite’s otherwise-uncompensated voluntary forfeiture of the

bulk of its interest in Ilera I. Thus, Defendants have failed to meet the

threshold showing for invoking the parol evidence rule, i.e., establishing that

the Redemption Agreement is “the parties’ entire contract[.]” Yocca, 854

A.2d at 436-37 (cleaned up).

For these reasons, we affirm the trial court’s finding that the Individual

Defendants are liable to Big Bite for fraud. For the reasons noted earlier,

awarding damages on this claim to another Plaintiff was improper, as the claim

was alleged and proven on behalf of Big Bite, the entity that sustained the

loss.23 Further, as rendered, it is unclear how much of the amount awarded

by the trial court pertained to this claim. Upon remand, the court shall issue

a new verdict order specifying the amount to which Big Bite is entitled from

the Individual Defendants for their fraud.

Defendants next argue that the trial court erred in finding them liable

for unjust enrichment and civil conspiracy. They first complain that, unlike its

discussions of the fiduciary duty and fraud counts, the trial court’s adopted

findings and conclusions do not delineate the elements and damages related

to these causes of action, but rather merely mentioned these claims in

connection with the others. See Defendants’ brief at 54-55. They further

23 We acknowledge that Hexter is the only member of Big Bite. However, the funds recouped from the loss belong to Big Bite in the first instance, to be held or distributed to Hexter or creditors of Big Bite in accordance with Big Bite’s LLC operating agreement.

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insist unjust enrichment was not a viable claim since Plaintiffs’ relationship

with Defendants was governed by contract. Additionally, the Individual

Defendants contend that the conspiracy claim fails because “agents of a single

entity cannot conspire among themselves.” 24 Id. at 56.

Defendants are correct that the trial evidence did not prove the cause

of action of unjust enrichment. As our Supreme Court has explained: “Unjust

enrichment is the retention of a benefit conferred by another, without offering

compensation, in circumstances where compensation is reasonably expected,

and for which the beneficiary must make restitution. An action based on

unjust enrichment is an action which sounds in quasi-contract or contract

implied in law.” Roethlein v. Portnoff Law Associates, Ltd., 81 A.3d 816,

825 n.8 (Pa. 2013) (citations omitted). Stated differently, “[u]njust

enrichment describes recovery for the value of the benefit retained when there

is no contractual relationship, but when, on the grounds of fairness and

justice, the law compels performance of a legal and moral duty to pay.”

Spolar, 326 A.3d at 1003 (cleaned up) (affirming unjust enrichment award

requiring a landowner to pay her daughter the amount by which the parcel of

land was increased in value as a result of the daughter constructing a house

on the property under the mistaken belief that she owned it).

24 Defendants also argued that the conspiracy claim could not survive the failure of the fiduciary duty and fraud claims. See Defendants’ brief at 55. Our upholding of the fraud finding negates this argument.

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The elements of a cause of action for unjust enrichment are: “benefits

conferred on defendant by plaintiff, appreciation of such benefits by

defendant, and acceptance and retention of such benefits under such

circumstances that it would be inequitable for defendant to retain the benefit

without payment of value.” Vacula v. Chapman, 230 A.3d 431, 437

(Pa.Super. 2020) (cleaned up). “The doctrine does not apply simply because

the defendant may have benefited as a result of the actions of the plaintiff.”

Mark Hershey Farms, Inc. v. Robinson, 171 A.3d 810, 817 (Pa.Super.

2017) (cleaned up). Moreover, “[a] cause of action for unjust enrichment

arises only when a transaction is not subject to a written or express contract.”

Heldring v. Lundy Beldecos & Milby, P.C., 151 A.3d 634, 645 (Pa.Super.

2016) (cleaned up).

In its Rule 1925(a) opinion, the trial court merely points to its findings

that Defendants enriched themselves by breaching their fiduciary duties,

which it deemed to be “a fundamental element” of that claim. See Trial Court

Opinion, 3/4/25, at 10. For their part, Plaintiffs likewise cite unjust enrichment

as a measure of fiduciary duty damages rather than fleshing out the elements

of the independent cause of action, and assert that the Individual Defendants

were unjustly enriched by the breach and their scheme to defraud Hexter.

See Plaintiffs’ brief at 52-53.

From our review of the certified record, we discern no specific evidence

or findings as to the elements of an unjust enrichment claim. There is no

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indication of any benefit conferred upon the Individual Defendants that was

not the subject of one of the parties’ express contracts. We have ruled that

there was no unjust enrichment proven from a breach of fiduciary duty, and

Big Bite will receive the restitution of what the Individual Defendants obtained

through their fraud in connection with that count. No separate award

sounding in quasi-contract is warranted by the facts before us. Thus, to the

extent that the trial court’s verdict found in favor of any plaintiff on Count VI

of the operative complaint, we reverse that ruling.

Turning to the civil conspiracy count, the trial court rejected Defendants’

criticism by indicating that their “conspiratorial actions lie at the heart of this

entire litigation, and form the basis for fraud and breach of fiduciary duty.”

Trial Court Opinion, 3/4/25, at 10. Specific to the fraud claim, the court

pointed to the Individual Defendants’ decision to convince Hexter that

Healthcare was worth less than it was. Id. at 10 n.13. As with the separately-

pled claim of unjust enrichment, it does not appear that the court imposed

liability for the conspiracy distinct from the other implicated claims. Rather,

as indicated in its adopted findings, the court utilized the conspiracy as the

basis for imputing to all Individual Defendants the fraudulent

misrepresentations made by Rochlin and Gray to further their conspiracy. See

Plaintiffs’ Proposed Findings, 8/22/24, at 44 n.17.

The trial court’s application of the law in this manner was correct:

Although a cause of action, a civil conspiracy is not a “tort” unto itself. Essentially, it is a theory of vicarious liability that renders

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each participant in the wrongful act responsible as a joint tortfeasor for all damages ensuing from the wrong, irrespective of whether the co-conspirator was a direct actor and regardless of the degree of his or her activity. The acts of any one co- conspirator are deemed the acts of all, so anyone who merely agrees to the plan or design may be held liable for the acts of the others.

Bert Co. v. Turk, 257 A.3d 93, 115 (Pa.Super. 2021), appeal granted on

other issues and aff’d, 298 A.3d 44 (Pa. 2023).

Defendants accurately assert that, under Pennsylvania law, one cannot

pursue a conspiracy claim against an entity based upon an agreement among

its agents to take actions on behalf of the organization. See, e.g., Grose v.

Procter & Gamble Paper Products, 866 A.2d 437, 441 (Pa.Super. 2005)

(observing that company/employer and its supervisors could not conspire to

create intolerable working conditions for employee); Rutherfoord v.

Presbyterian-Univ. Hosp., 612 A.2d 500, 508 (Pa.Super. 1992) (holding

hospital and its agents could not conspire to demote and discharge an

employee). Yet, in the case sub judice, Big Bite did not allege that the

Individual Defendants agreed among themselves to have any company they

managed harm Big Bite. Rather, they, as individuals, tricked Hexter into

relinquishing part of Big Bite’s interest in Ilera I. This was not a company

action to benefit or otherwise impact the company, but individual investors

seeking to increase their own personal wealth. We find no fault with the trial

court’s application of civil conspiracy in this case to render the Individual

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Defendants jointly and severally liable for the fraudulent misrepresentations

of their co-conspirators.

Defendant’s last claim of error attacks the trial court’s award of attorney

fees to Plaintiffs. Based upon our disposition, we deem this issue moot. It is

well-settled that, “[u]nder the American Rule, applicable in Pennsylvania, a

litigant cannot recover counsel fees from an adverse party unless there is

express statutory authorization, a clear agreement of the parties, or some

other established exception.” Trizechahn Gateway LLC v. Titus, 976 A.2d

474, 482–83 (Pa. 2009). The only basis asserted by Plaintiffs to recover their

fees and costs was § 14.16 of Ilera I’s operating agreement, which states:

If any action, suit[,] or proceeding is brought to enforce or interpret the terms of this agreement or to protect the rights obtained hereunder, or to recover damages for breach of this Agreement, then, if successful in whole or in part in such action, the prevailing party or parties in such action, suit[,] or proceeding shall be entitled to recover from the non-prevailing party or parties hereto any and all of the costs of suit and reasonable attorneys’ fees incurred by the prevailing party or parties in connection therewith, including attorneys’ fees on appeal, costs and disbursements, in addition to such other relief to which any such prevailing party or parties may be entitled.

Trial Court Exhibit # 22 at ¶ 11.16.

Our rulings above leave Big Bite as the sole prevailing plaintiff, and only

as to fraud and civil conspiracy, not as to any claim to enforce or interpret the

terms of the operating agreement, to protect any of Big Bite’s rights obtained

thereunder, or to recover damages for breach of that agreement. In other

words, our reversal of the court’s verdict in favor of Plaintiffs on the breach of

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fiduciary duty claim has destroyed the foundation for granting Plaintiffs’ fee

petition. In the absence of any other basis to shift the fees, the American rule

applies, and we must reverse the trial court’s grant of Plaintiffs’ fee petition.

In sum, the judgment and the verdict in this case are unsound in that

they were entered in favor of parties not entitled to recover, in an amount

apparently based in part upon a finding we have reversed, and include fees

and costs to which no plaintiff is entitled. We therefore vacate the judgment

and the verdict, and reverse the order granting Plaintiffs’ fee petition. We

affirm the finding that the Individual Defendants are liable to Big Bite for fraud

and conspiracy, but otherwise reverse the findings in favor of Plaintiffs. We

remand this case with instructions for the trial court to issue a new verdict:

(1) finding in favor of Big Bite on its fraud and conspiracy counts and

specifying the amount of damages to which the Individual Defendants are

liable to Big Bite for those claims; and (2) finding in favor of Defendants as to

all remaining counts. The parties may thereafter file post-trial motions

concerning the new verdict prior to entry of judgment thereupon.

Judgment and verdict vacated. Fee petition order reversed. Case

remanded with instructions. Jurisdiction relinquished.

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Date: 4/8/2026

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