The Genterra Group, LLC v. Sanitas USA Inc.

CourtDistrict Court, S.D. Florida
DecidedJanuary 15, 2021
Docket1:20-cv-22402
StatusUnknown

This text of The Genterra Group, LLC v. Sanitas USA Inc. (The Genterra Group, LLC v. Sanitas USA Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
The Genterra Group, LLC v. Sanitas USA Inc., (S.D. Fla. 2021).

Opinion

United States District Court for the Southern District of Florida

The Genterra Group, LLC, Plaintiff, ) ) v. ) Civil Action No. 20-22402-Civ-Scola ) Sanitas USA, Inc., Defendant. )

Order on Motion to Dismiss This matter is before the Court upon the motion filed by Defendant Sanitas USA, Inc. (“Sanitas”) to dismiss the amended complaint filed by Plaintiff The Genterra Group LLC (“Genterra”) for breach of contract. (Def.’s Mot., ECF No. 15; Pl.’s Compl., ECF No. 6.) Genterra contends that Sanitas breached its right of first refusal over certain development opportunities by contracting with third parties to construct medical facilities without first notifying Genterra of the business opportunities. Additionally, Genterra asserts that Sanitas breached the restrictive covenants set forth in the agreement by directly employing Genterra’s subcontractor to construct the new facilities, in violation of the non-solicitation and no hire clauses of their agreement, and by disclosing Genterra’s proprietary information, in violation of the confidentiality clause. Genterra has responded to the motion (Pl.’s Resp., ECF No. 28) and Sanitas has filed a reply (Pl.’s Reply, ECF No. 30). Having reviewed the record, the parties’ briefing, and the relevant legal authorities, the Court grants in part and denies in part Sanitas’s motion. (ECF No. 15.) 1. Background.1 Genterra is in the business of finding, developing, and managing real property. (ECF No. 3 at 2.) Sanitas is in the business of operating medical facilities. (Id.) On February 14, 2017, Genterra entered into a multi-year master development agreement (“MDA”) with Sanitas. (ECF No. 15 at 1.) The MDA allowed Sanitas to engage Genterra on a preference basis to acquire real property, and to design and build medical facilities according to Sanitas’s specifications, and to lease such property and improvements to Sanitas. (Id. at 2.)

1 The Court accepts Sanitas’s factual allegations as true for the purposes of evaluating Genterra’s motion to dismiss. Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997). The MDA contained a right of first refusal clause that required Sanitas to present to Genterra business opportunities to operate a medical facility under the trade name “Clinisanitas” if the opportunity required the engagement of development services. (ECF No. 6-1 at 3, § 2.) The MDA describes development services as the acquisition, entitlement, design and building of a particular project. (Id. at 3, § 1.4.) Sanitas was responsible for identifying geographical areas in the United States within which it would seek to develop contractual arrangements with third party payors and managed care plans and operate medical facilities that deliver health care services to patients. (Am. Compl., ECF No. 6 at ¶12.) Once Sanitas identified a suitable area, Sanitas was required to deliver written notice to Genterra specifying the geographical boundaries, the number of facilities, timelines and completion dates, and proposed rental rates. (Id. at ¶ 13.) Genterra could then accept or decline to build and lease the facilities within thirty days of receiving the notice. (Id. at ¶ 14.) If Genterra timely accepted, Genterra was required to conduct an inspection of the area to identify specific areas for facilities and prepare and submit to Sanitas a preliminary report and analysis. (Id. at ¶ 15.) Once Genterra delivered the preliminary report to Sanitas, the MDA allegedly required Genterra to develop a definitive proposal for the acquisition, entitlement, design, building, and leasing of the completed project. (Id. at ¶ 16.) The obligations of both parties through this process were collectively referred to as development services. (Id. at ¶ 17.) Between the summer of 2017 and February 2019, Sanitas and Genterra worked together to build two facilities. (Id. at ¶ 28.) Genterra had also begun preparing proprietary information for Sanitas in connection with a third facility (together the “Initial Facilities”). (Id.) Since the completion of the Initial Facilities, Sanitas has developed and constructed at least twelve new operating medical facilities in Texas, Florida, and elsewhere in the United States (collectively the “New Facilities”). (Id. at ¶ 31.) However, Genterra alleges Sanitas cut Genterra out by failing to provide Genterra with notice of the business opportunity to provide development services for the New Facilities. (Id. at ¶ 32.) According to the amended complaint, Sanitas instead offered the business opportunities to third parties, in breach of the right of first refusal and the restrictive covenants provided by the MDA. (Id.) Moreover, during the development of the Initial Facilities, Genterra allegedly employed an architect, Daniel Perez and his firm, as a subcontractor. (Id. at ¶ 34.) Once the relationship between Genterra and Sanitas began to deteriorate, Genterra alleges Sanitas continued to communicate with Perez, propositioned Perez to circumvent Genterra and provide development services to Sanitas directly, and hired him for the New Facilities in violation of the MDA’s non-solicitation and no hire clauses. (Id. at ¶ 36.) Sanitas alleges Perez’s website proves this as it lists Sanitas as a direct client as of 2018. (Id. at ¶ 38; ECF No. 28 at 6.) Genterra further alleges that Sanitas utilized Genterra’s proprietary information for its own general benefit in engaging other developers, including Perez, for development services on the New Facilities, in violation of the MDA’s restrictive covenants. (ECF No. 6 at ¶ 40.) Particularly, Genterra alleges it developed proprietary information for four of the New Facilities located in Florida (“Florida Facilities”) and delivered the proprietary information to Sanitas in anticipation of providing development services for the Florida Facilities. (Id. at ¶ 49.) On June 26, 2018, Sanitas sent an email to Genterra and Perez stating “[b]ased on our conversation attached please find the drawings, please advise if you have these, or you already worked on these.” (Id. at ¶ 43.) The email contained blueprints for the Florida Facilities in Orlando. (Id.) Perez allegedly responded to the email, stating “we will review these programs and do code analysis.” (Id.) On July 3, 2018, Sanitas sent Genterra and Perez another blueprint and included the street addresses for all four of the Florida Facilities. (Id. at ¶ 45.) On July 10, 2018, Genterra sent an email to Sanitas stating “[w]e are moving forward with design and permits for . . . Florida Projects as directed and discussed in our meeting today.” (Id. at ¶ 47.) Without Genterra’s knowledge or consent, Sanitas purportedly utilized Genterra’s proprietary information and employed third parties instead of Genterra to develop the Florida Facilities. (Id. at ¶ 57.) Genterra now complains that Sanitas breached the right of first refusal by providing business opportunities to third parties without first notifying and making them available to Genterra. Additionally, Genterra alleges that by disclosing proprietary information to third parties and directly employing Perez for the construction of the New Facilities, Sanitas breached the following restrictive covenants set forth in the MDA: (i) confidentiality clause, (ii) non- solicitation clause, (iii) no hire clause, (iv) non-circumvention clause, and (v) right of injunction clause. 2. Legal Standard. When considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court must accept all of the complaint’s allegations as true, construing them in the light most favorable to the plaintiff. Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008).

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The Genterra Group, LLC v. Sanitas USA Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/the-genterra-group-llc-v-sanitas-usa-inc-flsd-2021.