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January 31, 1997


The opinion of the court was delivered by: EDELSTEIN

 EDELSTEIN, District Judge :

 This is a declaratory judgment action instituted by plaintiff commercial lender seeking a determination that it has no contractual obligation to make two loans to defendant based on alleged oral statements. In their answer to plaintiff's complaint, defendants raise six counterclaims in opposition to plaintiff's cause of action. Plaintiff moves this Court for summary judgment on their Complaint, and defendant opposes this motion on grounds that triable issues of fact exist on both plaintiff's cause of action and defendant's counterclaims. For the following reasons, this Court finds that plaintiff's motion should be granted in its entirety.


 Plaintiff Philips Credit Corporation ("Philips" or "PCC") is "engaged in the business of commercial lending, but only in very limited markets." (Memorandum of Law of Philips Credit Corporation in Support of Motion for Summary Judgment, Philips Credit Corp. v. Regent Health Group, Inc., 90 Civ. 2838 ("Pltf. Memo") at 2 (Aug. 1, 1994)); see, (Complaint, Philips Credit Corp. v. Regent Health Group, Inc., 90 Civ. 2838 ("Complaint") P 5 (April 27, 1990).) PCC is organized under the laws of Delaware, and has its principal place of business in New York, New York. (Complaint P 1); see (Answer and Counterclaim, Philips Credit Corp. v. Regent Health Group, Inc., 90 Civ. 2838 ("Answer") P 1 (June 29, 1990).)

 Defendant Regent Health Group, Inc. ("Regent") is "engaged in the development, ownership and management of medical and surgical hospitals." (Affidavit of Brent W. Jorgeson, Philips Credit Corp. v. Regent Health Group, Inc., 90 Civ. 2838 ("Jorgeson Aff.") P 2 (Sept. 29, 1990).) Regent, a Texas corporation headquartered in Austin, Texas, (Regent Health Group Inc.'s Memorandum of Law in Opposition to Philips Credit Corporation's Second Motion for Summary Judgment, Philips Credit Corp. v. Regent Health Group, Inc., 90 Civ. 2838 ("Dfts. Memo") at 2 (Sept. 28, 1994)), was formed in August 1988 by Brent W. Jorgeson ("Jorgeson"). (Jorgeson Aff. P 3.) Jorgeson has served as Regent's Chairman and President since its founding. Id. P 1.

 Defendant Sugar Mill Point Medical Center, Ltd. ("Sugar Mill" or "SMPMC") was intended by Regent to be formed as a Texas limited partnership for the purpose of acquiring property in Houma, Louisiana, and constructing a hospital to be known as the Sugar Mill Point Medical Center. (Dfts. Memo at 9-10 & n. 11); (Pltf. Memo at 3); (Jorgeson Aff. P 9.) The SMPMC project "was initiated by several physicians in the Houma area, including Dr. Barry Shelby, M.D. ("Shelby"), because [they] saw a need for a hospital in order to serve adequately the needs of their patients." (Dfts. Memo at 15.) Approximately twenty local physicians in the Houma area "committed to invest a total of approximately $ 1 million as limited partners as part of the equity for the project." (Dfts. Memo at 10.) According to Regent, "all elements of the SMPMC financing . . . were planned to close concurrently with the closing of a loan from PCC." Id. Because "there was no closing on the PCC loan," however, SMPMC was never formed. Id. ; (Jorgeson Aff. P 9); see (Pltf. Memo at 3-4.)


 Plaintiff commenced this diversity action in April 1990, seeking "a judgment declaring that there exists no valid, enforceable contractual obligation" between plaintiff and defendants. (Complaint, PP 4, 17.) Defendants filed an Answer containing six counterclaims on July 29, 1990. (Answer.) On August 17, 1990, prior to discovery, PCC moved for summary judgment on its complaint on the grounds that no triable issue of fact existed regarding the lack of contractual obligations between the parties. (Pltf. Memo at 15.) On November 12, 1991, this Court denied PCC's motion for two reasons: (1) the parties had not had opportunity to conduct discovery; and (2) genuine issues of material fact existed regarding several elements of both plaintiff's claim and defendants' counterclaims. Order, Philips Credit Corp. v. Regent Health Group, Inc., 90 Civ. 2838 ("November Order") at 1-2 (Nov. 12, 1991).

 Following discovery, plaintiff requested this Court's permission to file a second motion for summary judgment pursuant to Federal Rule of Civil Procedure 56 ("Rule 56"). This Court granted plaintiff's request, (Pltf. Memo at 1); (Dfts. Memo at 7), and the instant motion was filed on August 22, 1994. (Notice of Motion, Philips Credit Corp. v. Regent Health Group, Inc., 90 Civ. 2838 (Aug. 22, 1994) ("Notice of Motion").)


 The facts underlying plaintiff's motion are lengthy, detailed, and consist of numerous pieces of correspondence between the parties. For organizational purposes, this Court will recite the facts chronologically, in five parts: (1) defendants' preliminary financing efforts; (2) PCC and Regents' negotiations prior to the issuance of commitment letters; (3) PCC's first commitment letter; (4) events subsequent to the issuance of PCC's first commitment letter; and (5) PCC's second commitment letter.

 I. Defendant's Preliminary Financing Efforts

 In 1989, Shelby initiated a meeting with Jorgeson regarding the possibility of building a new hospital in Houma, SMPMC. (Deposition of Dr. Barry Shelby, M.D., Philips Credit Corp. v. Regent Health Group, Inc., 90 Civ. 2838 ("Shelby Dep.") at 7 (Mar. 26, 1993)); (Dfts. Memo at 15-16.) Jorgeson and Regent then prepared a financial plan for the development of SMPMC. (Jorgeson Aff. P 15); (Dfts. Memo at 15.) Health Finance Corporation ("HFC"), an investment banking firm headquartered in Houston, Texas, "issued a commitment to provide $ 5 million to finance the purchase of medical equipment for SMPMC." (Jorgeson Aff. P 15); (Dfts. Memo at 14-16.) In addition, by June 1989, approximately twenty Houma-area physicians had committed to invest a total of approximately $ 1 million as limited partners of the project. (Jorgeson Aff. P 15); (Dfts. Memo at 10.)

 II. PCC and Regents Negotiations Prior to the Issuance of Commitment Letters

 Following the June Meeting, Corcoran wrote to Jorgeson stating that PCC "is interested in providing you with the financing requirements you may have. However, before formal credit approval can be granted," PCC required detailed financial information and documentation regarding Regent and the SMPMC project. (Letter from J. Walter Corcoran, President, Philips Credit Corp., to Brent W. Jorgeson, President, Regent Health Group, Inc. (June 21, 1989) ("June 1989 Letter").)

 Regent provided PCC the information requested. (Jorgeson Aff. P 19); (Letter from Brent W. Jorgeson, President, Regent Health Group, to J. Walter Corcoran, President, Philips Credit Corp. (July 3, 1989).) On July 7, 1989, Jorgeson and another Regent representative Steven Bell ("Bell") travelled to PCC's offices in New York to meet with McKinney "to negotiate the terms and conditions regarding the Sugar Mill transaction in Houma, Louisiana between Regent Health Care and PCC." (Memorandum to J. Walter Corcoran from W.G. Blieberg (June 29, 1989); (Jorgeson Aff. P 20); (Dfts. Memo at 20.) According to defendants,

by the end of the meeting, PCC and Regent had reached agreement on the major terms of the transaction. Mr McKinney stated that the terms agreed to during that meeting would be presented to the PCC Credit Committee for approval, and that he and Mr. Corcoran had decided to recommend to the Credit Committee that PCC finance the entire project. Mr. McKinney stated that if the Credit Committee approved the transaction, that would constitute a "formal commitment" by PCC to do the transaction on those terms.

 (Jorgeson Aff. P 22); see (Dfts. Memo at 20.)

 Defendants explain that that same day, Jorgeson and Bell also met with various individuals on PCC's Credit Committee. (Jorgeson Aff. P 24); (Dfts. Memo at 22.). Jorgeson states that "after meeting with these individuals, Mr. Mckinney informed Mr. Bell and me that the project would be submitted to the PCC Credit Committee the following week and that, if approved, PCC would prepare a written document which would reflect the terms of the transaction as approved by the Credit Committee." (Jorgeson Aff. P 24); see (Dfts. Memo at 22.)

 Defendants state that on July 13, 1989, PCC's Credit Committee approved the SMPMC financing. (Jorgeson Aff. P 25); see, (Dfts. Memo at 22-25.) On July 14, 1989, Wynn Blieberg ("Blieberg") telephoned Jorgeson at Regent's office in Texas to inform Jorgeson that the "the transaction had been approved by the [PCC] Credit Committee on the terms that had been previously discussed with Regent." (Affidavit of Wynn G. Blieberg, Philips Credit Corp. v. Regent Health Group, Inc., 90 Civ. 2838 ("Blieberg Aff.") P 6 (Sept. 27, 1990)); see (Dfts. Memo at 25.) Blieberg then orally "set forth the general terms which had been approved by the Credit Committee." (Blieberg Aff. P 6); see, (Dfts. Memo at 26.)

 In a letter dated August 8, 1989, Corcoran on behalf of PCC, informed Regent and SMPMC that PCC "was considering a loan" to SMPMC in the amount of $ 10,850,000. (Letter from J. Walter Corcoran, President, Philips Credit Corp., to Sugar Mill Point Medical Center, Ltd. c/o Regent Health Group Louisiana, Ltd. (Aug. 8, 1989) ("August 8 Letter") at 1.) The August 8 Letter expressly stated that the loan, "if approved," was subject to various terms and conditions. Id. Specifically, the August 8 Letter in relevant part provides that:

(1) The Loan would be evidenced by a note ("the Note"), and the proceeds of the Loan would be used "to construct a 60-bed medical and surgical hospital" in Sugar Point, Houma, Louisiana. Id. P 1.
(2) The Note would bear interest, the interest would be calculated and paid according to a set schedule, and that payments on the Note would "be applied first to interest and then to principal allocated in accordance with the Rule of 78's (the Sum of the Months Digit Method). Id. P 2.
(3) All of SMPMC's obligations to PCC "shall be secured by a first mortgage lien on the Premises and all improvements thereon ("the Mortgage") and shall be guaranteed by Regent . . . ." Id. P 3.
(4) The Loan Agreement, the Note, the Mortgage, and all other documents required by PCC to evidence and secure the Loan "shall contain such terms, conditions, and covenants, financial and otherwise, as PCC shall require to protect its interest, and shall be in form and substance satisfactory to PCC and its counsel." Id. P 4.
(5) PCC's commitment to SMPMC would be issued "on the basis of all information provided by [SMPMC]," and any misinformation or withholding of material information "shall, at the option of PCC, void all of PCC's obligations thereunder." Id. P 5.
(6) The closing of the Loan transaction "shall be subject to" eighteen separate conditions including "execution and delivery to PCC of all instruments and documents herein contemplated or required to evidence the Loan and grant PCC a valid and perfected lien on the security interest and collateral therefor, all in form and substance satisfactory to PCC and its counsel." Id. P 6 & 6(a).
(7) SMPMC would be responsible for paying all fees and expenses incurred in connection with the Loan. Id. P 7.

 The August 8 Letter concluded with the following request: "If the foregoing terms and conditions provide a basis for funding of this project, please call to arrange a meeting in New York where you and the principals of the Borrower may discuss the issues in this letter." Id. at 3.

 Defendants explain that after reading the August 8 Letter, Jorgeson telephoned McKinney and Blieberg to point out that the terms set forth in the August 8 Letter "did not accurately set forth the transaction approved by the Credit Committee." (Dfts. Memo at 32.) According to defendants, McKinney and Blieberg agreed that the August 8 Letter did not reflect the terms approved by PCC's Credit Committee, attributed these discrepancies to PCC's legal department's failure to act consistently with the instructions of the Credit Committee, and stated that the August 8 Letter would be withdrawn and replaced with a correct letter. Id. ; (Jorgeson Aff. PP 31-32.)

 The next day, August 16, 1989, Jorgeson and Shelby again met with Blieberg and McKinney, as well as with Corcoran and Beth Walman ("Walman"), PCC's General Counsel. Id. P 35; (Dfts. Memo at 35.) Defendants contend that Walman continuously questioned Jorgeson and Shelby during the meeting. In response to this questioning, Jorgeson asserts that he stated to Corcoran "that [Regent] expected to be dealing with people at PCC who understood the hospital business; that the transaction had already been negotiated and approved, and that after more than three months of negotiations this was not the time to re-examine and re-negotiate it." (Jorgeson Aff. P 36.) Walman purportedly responded "that her job was not to re-negotiate the transaction, but only to document it." Id. Jorgeson states that he then "responded that [Walman] should document the deal as it had already been negotiated and approved by PCC and Regent." Id. According to Jorgeson, when he spoke again with Walman later that same day, she "was indignant with [Jorgeson] and stated that she had taken [Jorgeson's] comments personally." Id. P 37.

 Immediately following the August 16, 1989, meeting, Shelby spoke with Corcoran. (Shelby Aff. P 5); (Dfts. Memo at 38.) According to Shelby, Corcoran reassured Shelby "that PCC intended to finance the SMPMC project, and it was clearly understood that it would be on the terms approved by Mr. Corcoran and the Credit Committee in July, 1989." (Shelby Aff. P 5); (Dfts. Memo at 38.) Later, Jorgeson apparently met again with Corcoran and Walman, and Corcoran "assured [Jorgeson] that it was his and PCC's intent to issue a commitment letter to Regent reflecting the terms agreed to between Regent and PCC in July 1989." (Jorgeson Aff. P 40); (Dfts. Memo at 38.) It is Jorgeson's testimony that Corcoran then "instructed Ms. Walman to issue such a commitment letter by Friday of that week." (Jorgeson Aff. P 40); (Dfts. Memo at 38.)

 III. PCC's First Commitment Letter

 In a letter dated August 18, 1989, PCC informed defendants it had approved a loan to defendants in the amount of $ 10,850,000, subject to ten pages of terms and conditions. (Letter from J. Walter Corcoran, President, Philips Credit Corp., to Sugar Mill Point Medical Center, Ltd. c/o Regent Health Group, Inc. (Aug. 18, 1989) ("August Commitment Letter").) Among these terms and conditions, PCC included the following:

The Loan and the Note shall be secured by a first priority lien on and security interest in all now existing or hereafter acquired assets of Borrower, both tangible and intangible, including but not limited to all accounts receivable, licenses, contract rights, equipment, general intangibles, real property, personal property and all other assets relating to the Hospital. Id. P A.5.A.
The Loan Agreement, the Note, the Leases and related agreements, all of which shall be governed by New York law . . . . Id. P C.1.
The execution, acknowledgement (when necessary) and delivery of all documents in connection with this transaction, including but not limited to the Loan Agreement, the Note, the Leases, all security agreements, . . . and other related agreements and instruments executed in connection with this transaction shall be in form and substance satisfactory to PCC and its counsel. Id. P C.2.
This Commitment shall automatically expire and terminate if (i) PCC has not received the enclosed copy of this letter duly executed and accepted by Borrower within ten (10) days from the date hereof, and (ii) if the transactions referred herein have not closed within ninety (90) days from the date hereof. Id. P C.4.

 On the last page of the August Commitment Letter, PCC provided signature lines for both SMPMC and Regent as follows:

ACCEPTED AND AGREED to this day of , 1989
its sole general partner
As Guarantor

 Id. at 10. It is undisputed that neither Regent nor SMPMC executed the August Commitment Letter. (Answer P 9); (Pltf. Memo at 8.)

 IV. Events Subsequent to the Issuance of PCC's First Commitment Letter

 The parties present different versions of some events that immediately followed PCC's issuance of the August Commitment Letter.

 According to defendants,

in several respects the [August Commitment Letter] did not reflect the terms of the transaction as they had been agreed to between Regent and PCC in July. Within 15 minutes after receiving [the August Commitment Letter] on August 18, Mr. Jorgeson pointed this out to Mr. Corcoran in person. Mr. Corcoran responded that the commitment letter should reflect the terms agreed to between the parties in July, and that if it did not, it must have just been a drafting error, and that a corrected commitment letter would be issued reflecting the terms as agreed to in July. The August 18 letter was thus immediately withdrawn by the President of the Company. At the time it was withdrawn, Mr. Corcoran was leaving for a two week vacation. Since he himself had to sign the commitment letter, it was at that point physically impossible to issue a final commitment letter before another 14 days would pass. Mr. Blieberg, in his deposition, confirmed that the commitment letter was shown as "back" on August 18, 1989, the same day it was issued.

 (Dfts. Memo at 40.) Plaintiff neither admits that these incidents took place, nor responds to defendants' recitation of them. See generally (Pltf. Memo); (Reply Memo.)

 Both plaintiff and defendants agree, however, on the next sequence of events. Beginning in Fall 1989, defendants sought financing for SMPMC from sources other than PCC. According to Jorgeson, defendants discussed the working capital and real estate financing of SMPMC with Sovran Bank in Nashville, Tennessee ("Sovran"). (Deposition of Brent W. Jorgeson, Philips Credit Corp. v. Regent Health Group, Inc., 90 Civ. 2838 ("Jorgeson Dep.") at 474-75 (Sept. 15, 1992).) Jorgeson testified that defendants met with Sovran as an alternative source of financing "if for some reason, Philips did not perform . . . ." Id. at 476. Samuel W. Chopin, the Sovran representative with whom Jorgeson dealt, corroborates Jorgeson's efforts to obtain financing through Sovran. (Deposition of Samuel L. Chopin, Philips Credit Corp. v. Regent Health Group, Inc., 90 Civ. 2838 ("Chopin Dep.") at 60-65 (Aug. 12, 1992).)

 On September 2, 1989, Jorgeson wrote to Corcoran regarding the August Commitment Letter. (Letter from Brent W. Jorgeson, President, Regent Health Group Inc., to J. Walter Corcoran, President, Philips Credit Corp. (Sept. 2, 1989) ("September 2 Letter")); (Pltf. Memo at 8-9); (Dfts. Memo at 41-42.) In the September 2 Letter, Jorgeson states that Regent is "pleased to have received [PCC's] letter of August 18, 1989 regarding Philips Credit's loan commitment for the Sugar Mill Point Medical Center in Houma Louisiana," and that he "appreciate[s] the time that [PCC's] staff has taken to familiarize [itself] with the project and with our company, and for the time that was spent in drafting the commitment letter." (September 2 Letter at 1.) Jorgeson continues that "as can be expected with any document of similar length, there are several modifications and clarifications that [Regent] would like to see made in the commitment letter." Id. Jorgeson then provides approximately five pages of these "modifications and clarifications." Specifically, Jorgeson and Regent objected to or requested additional information regarding at least seventeen separate items in the August Commitment Letter, including (1) the interest rates, (2) the amortization period, (3) the "Rule of 78's" methodology, (4) the prepayment penalty calculation, (5) the contingent interest provision, (6) the provision regarding the pledge of the partnership interests in SMPMC, (7) the requirement that the SMPMC partners evidence their commitment to invest additional equity to cover cost overruns and cash flow shortfalls, (8) the commitment fee, (9) estimated costs and expenses, and (10) Regent's deadline for accepting the commitment. Id. at 1-5; see (Pltf. Memo at 8); (Dfts. Memo at 41.)

 Jorgeson concluded the September 2 Letter by suggesting that he and Corcoran "discuss the best way to reach clarification and resolution on these issues," and stating that he "would be glad to come to New York if that would expedite the process." (September 2 Letter at 5.) Jorgeson further opined that he "thought that we are very close to having a financing agreement that is acceptable to both parties and that will result in a successful financing for what will be a successful project." Id.

 On September 19, 1989, PCC wrote to Jorgeson requesting additional documentation and information regarding SMPMC, noting that "this information will assist in [PCC's] evaluation of the overall feasibility of the proposed project." (Letter from Morrey S. Halfon, Philips Credit Corp., to Brent W. Jorgeson, President, Regent Health Group, Inc. ("Morrey Letter") at 1 (Sept. 19, 1989).) The Morrey Letter covered almost four pages, and included requests for such information as (1) the service area demographics for the geographic area SMPMC intended to serve, id. at 1, (2) the percentage of potential SMPC patients covered by Medicare, id., (3) whether private insurance coverage, HMOs, and PPOs in the Houma area were expanding, id., (4) profiles on the physicians involved in the SMPMC project, id. at 1-2, (5) reports on the medical providers with whom SMPMC would compete, id. at 2, (6) "a contingency plan for SMPMC should [the existing local hospital] inact [sic] any sanctions against the investing physicians," id., (7) additional facilities plans, id., (8) information on the average salaries for nurses, technicians, and other professional staff that SMPMC would hire, id. at 3, (9) detailed financial analysis regarding the expected sources of SMPMC's revenues, SMPMC's anticipated growth rate, and its costs and expenses, id., and (10) "a detailed map of the location of SMPMC and the distance to the other hospital [in the area]," as well "a copy of the master plan for the Sugar Mill Point area. . . ." Id. at 4.

 On September 20, 1989, Shelby, Bell, and Jorgeson again travelled to New York to meet with PCC representatives to discuss the SMPMC project. (Letter from Brent W. Jorgeson, President, Regent Health Group, Inc., to J. Walter Corcoran, President, Philips Credit Corp. (Sept. 22, 1989) ("September 22 Letter")); (Pltf. Memo at 9.) In a letter addressed to Corcoran following this meeting, Jorgeson stated that he "believed that within two weeks [Regent and SMPMC] will have almost all of the information [PCC] requested [in the September 2 Letter] and we are confident that it will support the basis for our business plan. Id. at 1. Jorgeson also revealed, however, that "while we made progress in several areas this week, we also faced new, significant problems raised by Beth Walman." Id. These problems included (1) PCC's prohibition on SMPMC "making any cash distributions to partners until half of the principal balance on the loan had been paid off," id., and (2) Walman's desire "to wait to try and reach agreement on other key elements until Philips has had time to 'process' the information [defendants] supplied in response to the [September 2 Letter]." Id. Jorgeson also requested Corcoran's "immediate, direct, and continuous personal involvement" in the SMPMC negotiations because Corcoran "clearly had the final decision making authority for [his] company. . . ." Id. at 2. Jorgeson offered to return to New York for further negotiations, and alternatively, suggested that the parties meet in either New Orleans or Nashville. Id. at 2-3.

 In a letter dated September 28, 1989, Corcoran responded to Jorgeson's concerns. (Letter from J. Walter Corcoran, President, Philips Credit Corp., to Brent W. Jorgeson, President, Regent Health Group, Inc. (Sept. 28, 1989) ("September 28 Letter").) Regarding PCC's prohibition against distributions to partners prior to the prepayment of a significant portion of defendants' indebtedness to PCC, Corcoran informed Jorgeson "that this issue had been previously discussed with and agreed to by [Corcoran]." Id. Corcoran explained that "it is the position of PCC as a general rule that the equity investment remains until all of PCC's indebtedness has been repaid otherwise it can hardly be considered equity," and that the contractual "language restricting payments to investors is part of the 'boiler plate' of all our major financing agreements." Id.

 As for PCC's continued due diligence, Corcoran stated that the due diligence, "if successfully concluded, will enable PCC to have more confidence in the economic viability of this project than we are currently able to justify based on the information currently in our possession." Id. at 2. Corcoran continued:

we recognize, and hope you do too that due diligence is a continuing process as a general rule until a transaction is closed, and in this particular transaction would be a continuing process even after a preliminary closing since, in this particular transaction any loan agreement which we might enter into would contain numerous conditions of funding. However, before we go further, I feel it would be useful for you to have resolved the issue [regarding distributions to partners] and for us to obtain and analyze the information that we've previously requested.


 Finally, Corcoran addressed Jorgeson's characterization of Corcoran's role in PCC's decision-making process. Corcoran stated that he was certain that Jorgeson

must understand from [his] current work experience and your previous work experience that no successful business enterprise can operate successfully through a single human being and of course, PCC is no different. What this means is that of course as President of this Corporation I have the final decision making authority and have a very positive attitude toward this project, I delegate much of the responsibility for obtaining information and analyzing that information to trusted members of my staff who, are fully capable of functioning in their assigned roles.

 Id. at 3. Corcoran also addressed Jorgeson's earlier concern's regarding the negative attitude toward the SMPMC that Jorgeson claimed to have perceived in some PCC representatives. Corcoran assured Jorgeson that Corcoran had "discussed this transaction at great length with both Ms. Walman and Mr. Halfon and [was] satisfied that neither person had a 'negative attitude' towards this transaction, but rather, that both individuals have the normal skepticism of lending officers attempting to make a prudent lending decision." Id. Finally, Corcoran stressed the need for Jorgeson to cooperate with Walman and other PCC representatives in order to reach "a prudent lending decision." Id.

 According, to defendants, "beginning in September, 1989, PCC retained Deloitte, Haskins & Sells ("DHS") of Houston, Texas to complete the due diligence process contemplated by the August 18 draft letter. Much of Regent's time during the months of September, 1989 through January, 1990 was spent complying with due diligence requests propounded by PCC and DHS." (Dfts. Memo at 43-44.) Defendants state that "the demands made by PCC during this time period specifically tracked the closing conditions and other preparations for closing reflected in the August 18 draft letter." Id. at 45. Defendants allege that their efforts to comply with PCC's demands forced defendants to "expend[] substantial sums of money and several months of man-hours." Id.

 Two days later, Corcoran responded to Jorgeson's correspondence, stating that Jorgeson's proposal regarding equity distributions was "a step in the right direction, but it [was] still generally unacceptable." (Letter from J. Walter Corcoran, President, Philips Credit Corporation, to Brent W. Jorgeson, President, Regent Health Group, Inc., at 1 (Nov. 9, 1989) ("November 9 Letter").) Corcoran further advised Jorgeson that PCC had received "the voluminous material which [defendants] prepared in response to [PCC's] August request and . . . [was] sending it to [PCC's outside] consultants for their immediate review." Id. Corcoran concluded this letter by stating that no further meeting between the parties were necessary "until [PCC] had feed back from [its] consultants and [could] hopefully formulate the remaining questions needed to allow [PCC] to make a final decision." Id. at 2.

 On December 4, 1989, Jorgeson wrote to Corcoran to complain that Morrey of PCC was not responding to Jorgeson's phone calls or otherwise being cooperative in dealing with the SMPMC project. (Letter from Brent W. Jorgeson, President, Regent Health Group, Inc., to J. Walter Corcoran, President, Philips Credit Corp. (Dec. 4, 1989).) On December 12, 1989, Bell, Regent's Vice-President, sent a letter to a potential investor in the SMPMC project stating that PCC's funding commitment for the project "is subject to the lender conducting its' [sic] due diligence." (Letter from Steven J. Bell, Vice-President, Regent Health Group, Inc., to Dr. Thomas H. Ellender (Dec. 12, 1989) ("Bell Letter").)

 In January 1990, Jorgeson sent two letters to DHS, PCC's outside consultants, regarding the SMPMC project. These letters contained information regarding topics such as the composition of the SMPMC limited partners' medical practices, estimated average revenue and occupancy for SMPMC, and detailed cost projections for the facility's first three years. These letters spanned seventeen and forty pages respectively. See generally (Letter from Brent W. Jorgeson, President, Regent Health Group, Inc., to W. Roger Stroud, Senior Manager, The Douglass Group of Deloitte & Touche (Jan. 9, 1990)); (Letter from Brent W. Jorgeson, President, Regent Health Group, Inc., to W. Roger Stroud, Senior Manager, The Douglass Group of Deloitte & Touche (Jan. 3, 1990).)

 On January 16, 1990, Jorgeson and Bell met with Blieberg in New Orleans. According to Jorgeson, Blieberg stated during this meeting that Corcoran and PCC still intended to do the SMPMC transaction on the terms agreed to in July 1989, and that if either Corcoran or PCC decided not to do the transaction on those terms, Blieberg would so inform defendants. (Dfts. Memo at 56); (Jorgeson Aff. P 61.) On January 17, 1990, Blieberg and Halfon of PCC, and representatives from DHS and HFC, met with Jorgeson, Bell and other Regent representatives in Houma. (Dfts. Memo at 56-57); (Jorgeson Aff. P 62.) According to defendants, at the conclusion of this meeting, "Halfon stated that what he had seen and heard that day supported the assumptions in the SMPMC business plan," and Blieberg reiterated "that the PCC Credit Committee had already set the terms of the transaction (i.e., in July, 1989) and that the Credit Committee (including Mr. Corcoran) had decision-making authority in the matter and had already made its decision in July, 1989." (Dfts. Memo at 57.) Following this meeting, defendants assert that they learned that certain PCC representatives were hostile to Regent and Jorgeson. Id. at 57-58.

 According to Jorgeson, on February 9, 1990, Blieberg told Regent that a corrected commitment letter would be issued the following week. Id. at 59; (Jorgeson Aff. P 64.) Defendants state that they never received such letter. Jorgeson further asserts that on February 16, 1990, Blieberg again told Regent that a corrected commitment letter would be issued the following week. (Dfts. Memo at 59); (Jorgeson Aff. PP 65-66.) Defendants proclaim that they were "given no reason to believe that the letter would be anything other then the terms set forth in July, 1989." (Dfts. Memo at 59.)

 Defendants allege that on February 27, 1990, Blieberg spoke to Jorgeson, and "Blieberg expressed his frustration that the PCC legal department had still not produced the letter." Id. That same day, Jorgeson wrote Corcoran to request Corcoran's "assistance in breaking the log-jam in getting a final commitment letter produced at PCC." (Letter from Brent W. Jorgeson, President, Regent Health Group, Inc., to J. Walter Corcoran, President, Philips Credit Corp., at 1 (Feb. 27, 1990) ("February 27 Letter").) Jorgeson concluded his letter by asking Corcoran to "please let [Jorgeson] know when [defendants] could expect to receive the commitment letter." Id. at 2.

 Defendants assert that the following events occurred subsequent to Jorgeson's February 1990, correspondence. On March 5, 1990, Jorgeson called Halfon. (Dfts. Memo at 60.) During this conversation, Halfon allegedly told Jorgeson "that the SMPMC project had been the subject of extensive discussion during PCC's quarterly sales meeting," that the SMPMC project "was the type of project that PCC wanted to do more of, and that PCC was therefore instructing its sales personnel on how to evaluate and work up more such projects in the future." (Jorgeson Aff. P 68.) Halfon further "stated that he was working on the commitment letter," but "there was no implication . . .that the commitment letter would be inconsistent with the terms agreed to in July, 1989." Id.

 According to Jorgeson, on March 9, 1990, Halfon again called Jorgeson to discuss the commitment letter. Id. P 69. Jorgeson claims that Halfon "stated that he had removed some of the closing conditions that had been contained in the August 18, 1989 closing letter," and that there were "a couple of minor changes" that Halfon wanted to review with Jorgeson. Id. Jorgeson states that the only change that Halfon mentioned at this time "was that PCC wanted Regent to pay $ 50,000 toward the commitment fee at the time of signing the letter (with the balance due at closing)." Id. Jorgeson further avers that Halfon also made two "clarifications of the August 18 letter": (1) that two banks in Louisiana acceptable to PCC would be established as the banks upon which the physician limited partners could rely to back the portion of their commitments due at closing; and (2) that the equipment lessor could be any equipment lessor satisfactory to both PCC and Regent. Id.

 Jorgeson next asserts that he spoke frequently with PCC during the week of March 12-16, 1990, and that although PCC told him that the commitment letter would be sent by the end of the week, "further dells ensued." Id. P 70. On March 20, 1990, Jorgeson states that he received a phone call from Walman and Halfon who "indicated for the first time that PCC was contemplating changes in the major terms of the transaction." Id. P 71. According to Jorgeson, following this call, PCC continued to tell Jorgeson that "PCC would get to [the commitment letter] as soon as it could, and PCC proffered numerous excuses for the delay." Id.

 According to Shelby, in early April 1990, Shelby called Blieberg "to ask the reasons for the repeated delays by PCC in getting the commitment letter," and Blieberg "relayed his extreme frustration at the unwillingness of the PCC legal department to issue the letter as had been repeatedly promised by PCC to Regent." (Shelby Aff. P 10); see (Deposition of Dr. Barry Shelby, Philips Credit Corp. v. Regent Health Group, Inc., 90 Civ. 2838 ("Shelby Dep.") at 84-86 (March. 26, 1993).) Both Corcoran and Blieberg acknowledge that Blieberg was frustrated with the pace of the SMPMC transaction. (Corcoran Dep. at 109-10.)

 On April 2, 1990, Jorgeson wrote Corcoran "expressing Regent's frustration over the unexplained delays in issuing the commitment letter." (Jorgeson Aff. P 72.) In this letter, Jorgeson stated the following:

As things stand now, I believe that we are worse off now than we were nearly two moths ago when we at least thought we would be getting the commitment letter within a week. Now I don't know when or if we will ever get the letter, I don't know whom our contact person should be, and I get the feeling that PCC wishes that we would just go away and stop "bothering" you with business.
While we have been exceedingly patient during this process of repeatedly raised expectations followed by inaction and broken commitments, our patience has now been consumed. In our opinion, PCC has not dealt with Regent Health Group and our SMPMC partners in a fair and responsible manner. I must tell you that the apparent disorganization, confusion and misrepresentation emanating from the legal/credit side of PCC involving our project it totally unacceptable, and is causing us significant expense, risk exposure, and opportunity cost.
Walter, I honestly believe your intentions to be good, as well as those of many others at PCC; but somehow, those intentions are not translating into action. I also honestly believe that an impartial observer would find PCC's good faith and veracity as a lender and as a commercial enterprise to be lacking in this transaction.
We have believed throughout this process that we could meet the criteria that you set forth for us last summer and fall. We, along with our partners and investors, have diligently worked and spent a large amount of money to meet the criteria. We believe that the criteria have been met. In the process we have eschewed almost all other potential lending sources, believing that we (PCC and Regent) were each working in good faith to accomplish the transaction as set forth last summer and fall.
We are now faced with the growing belief among Regent and SMPMC officers, partners, investors and supporters that PCC is now trying to renege on its commitment and thereby kill the project. If that is the case, then we should be so informed in writing. If that is not the case, then we need to set up a meeting immediately to discuss how to move this project forward.

  (Letter from Brent W. Jorgeson, President, Regent Health Group, Inc., to J. Walter Corcoran, President, Regent Credit Corp., at 2-3 (April 2, 1990) ...

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