ARSENAL, INC. et al v. AMMONS et al
MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE ANITA B. BRODY ON 9/28/2017. 9/28/2017 ENTERED AND COPIES VIA ECF.(mo, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
ARSENAL, INC., t/a ARSENAL
ASSOCIATES; and 5301 LLC.,
LARRY AMMONS; PETER
AMMONS; MELISSA BULLARD;
BEN AMMONS, AMMONS
SUPERMARKET LLC; and
September 28, 2017
Anita B. Brody, J.
Plaintiffs Arsenal, Inc. and 5301 LLC (collectively “Arsenal” or “Plaintiffs”) bring suit
against Defendant Wakefern Food Corporation (“Wakefern”), as well as Larry Ammons, Peter
Ammons, and Ammons Supermarket LLC (the latter three constituting the “Ammons
Defendants,” and all four collectively the “Defendants”) for promissory estoppel, tortious
interference, and fraudulent misrepresentation.1 Arsenal claims the Defendants engaged in years
of dishonest negotiations with Arsenal, negatively impacting Arsenal’s proposed real estate
development project. Both parties filed cross-motions for summary judgment. For the reasons
discussed below, I will grant the Defendants’ motion for summary judgment, and I will deny
Plaintiffs’ motion for summary judgment.
Jurisdiction is based on diversity of citizenship under 28 U.S.C. § 1332.
The following facts are either not in dispute, or are presented in the light most favorable
to the non-moving party. Because I conclude that, even viewing the facts in the light most
favorable to the Plaintiffs, they are not entitled to summary judgment, I present the facts as
though the Plaintiffs are the non-moving party.
In 1983, Mark Hankin, through an entity that is now known as Arsenal, Inc., purchased
an 87-acre portion of the former Frankford Arsenal (“the Arsenal”) with the intent to develop the
northern half into a shopping center. Pl.’s Statement of Undisputed Material Facts ¶ 1, ECF No.
155. In search of an anchor tenant,2 in 2002 Arsenal’s broker, Legend Properties, reached out to
the Wakefern Cooperative to inquire about opening a supermarket location at the shopping
center. Pl.’s Statement ¶¶ 3-4. Wakefern owns and operates the ShopRite trade name, and is
organized as a cooperative corporation. Def.’s Statement of Undisputed Material Facts ¶ 5, ECF
No. 152. The members of the cooperative negotiate independently to open supermarket
locations bearing the ShopRite name.
A. Negotiations Between Arsenal and the Ammons Defendants
The Ammons Defendants are members of the Wakefern Cooperative. Pl.’s Statement ¶
2. On or about March 9, 2004, the Ammons Defendants were designated the approved Wakefern
operator for the proposed shopping center at the Arsenal by Wakefern’s Site Development
Committee (“SDC”). Pl.’s Statement ¶ 5. When the SDC approves a member for a particular
location, that member has the exclusive right to negotiate at that location on behalf of ShopRite.
See Daly Dep. 99:5-22, Nov. 16, 2016, Braverman Decl. Ex. 6. Larry Ammons had first learned
of the proposed shopping center at the Arsenal through Richard Matwes at Wakefern’s Real
An anchor tenant is a major tenant which is the main draw of a shopping center. It is meant to draw
shoppers to the location in order to increase the center’s customer base. See Aristone Dep. 172:2-4, June
2, 2016, Braverman Decl. Ex. 14, ECF No. 156.
Estate Department. Pl.’s Statement ¶ 4. The SDC approved the shopping center at the Arsenal
as a Member Identified Site, meaning the Ammons Defendants were the only Wakefern
cooperative member who would be able to negotiate on the site. See Braverman Decl. Ex. 4, at
1, ECF No. 156.
After preliminary negotiations, the Ammons Defendants and Arsenal began to negotiate a
Letter of Intent. Arsenal was represented by Jim DePetris and Maria Aristone of Legend
Properties, and Wakefern and the Ammons Defendants negotiated through Tish Daly and Joe
Gilchrist. All the parties involved in negotiations were highly sophisticated. Wakefern owns the
name and trademark of a major regional supermarket, two of which are operated by the Ammons
Defendants. See Def.’s Statement ¶¶ 4-5. Similarly, those involved with Arsenal all had
extensive experience in real estate development, especially Mark Hankin whose management
company had been involved in substantial development projects in the past. See McCormick
Decl. Ex. 2, at 2, ECF No. 153; Aristone Dep. 119:21-22, June 2, 2016, Braverman Decl. Ex. 14;
DePetris Dep. 13:9-14, May 17, 2016, McCormick Decl. Ex. 70.
Between November 16, 2010 and May 9, 2012, the parties traded no less than six draft
Letters of Intent, Pl.’s Statement ¶ 19, each letter containing language informing the other that
the letters were not meant to be binding agreements. Arsenal’s November 16, 2010 proposed
Letter of Intent provided:
This letter of intent is for presentation purposes only. It is not to be considered
binding on any party unless a mutually acceptable Lease Agreement is fully
executed by both parties. We reserve the right to continue to market this property
and al[l] of the properties within The Shopping Center at the Arsenal. No
reservations or rights are deemed to be granted to any party with respect to this or
any other property within The Shopping Center at the Arsenal.
McCormick Decl. Ex. 9, at 6. The Defendants’ December 15, 2010 response to the November
16, 2010 Letter of Intent contained the provision: “It is expressly understood that no contract
shall exist until a formal lease is executed and delivered by both parties.” McCormick Decl. Ex.
10, at 4. After discussions with Arsenal, the Defendants sent a revised Letter of Intent on August
3, 2011, which retained the previous language: “It is expressly understood that no contract shall
exist until a formal lease is executed and delivered by both parties.” Braverman Decl. Ex. 30, at
4. On or about October 11, 2011, Arsenal responded with a counter Letter of Intent which
contained the following language:
This letter . . . is not legally binding on either party. The parties will be bound
only when the Lease contemplated by this Letter of Intent has been approved and
executed . . . . Neither the negotiation nor execution of this letter, and/or the
negotiation, preparation, revision or delivery of the proposed lease for
examination and discussion, shall in any event be deemed to create any obligation
or liability of either party, and neither party hereto shall have any obligation or
liability to the other party whatsoever at law or in equity (including any claims for
contractual breach, detrimental reliance, promissory estoppel, or otherwise) unless
. . . both parties shall have executed and delivered a lease. Notwithstanding past,
present, or future written or oral indications of assent or indications of results or
negotiations . . . it is agreed that no legal obligations will be created unless this
transaction has been finally approved . . . . Neither party shall have any legal
rights or claims against the other party by reason of any action taken, statements
made, writings delivered or other matters undertaken by a party in reliance upon
this non-binding Letter of Intent, including . . . any expenditure of funds, partial
performance of transactions contemplated herein, or any other actions of a party.
Braverman Decl. Ex. 31, at 3-4. On or about March 23, 2012, Arsenal sent the Defendants
another Letter of Intent which contained a provision similar to its November 16, 2010 Letter of
This Letter of Intent is for presentation purposes only. It is not to be considered
binding on either party unless a mutually acceptable lease agreement is fully
executed by both parties. We reserve the right to continue to market this property
to other parties. No reservations or rights are deemed to be granted to any party
with respect to the proposed supermarket building and/or the proposed Pad Site
by this Letter of Intent.
McCormick Decl. Ex. 17, at 5. Four days later, on March 27, 2012, the Defendants rejected
Arsenal’s proposed Letter of Intent, returning Arsenal’s letter with their proposed changes, but
retaining the language above. Def.’s Statement ¶ 19. At no point did the parties execute any of
the Letters of Intent.
Throughout these negotiations, the parties had sharp disagreements on multiple material
terms, notably the base rent and the distribution of tax benefits. See McCormick Decl. Ex. 9.
Mark Hankin’s and Larry Ammons’ negotiating styles also clashed. See McCormick Decl. Ex.
32, at 1; Braverman Decl. Ex. 15. Arsenal complained that Larry Ammons would “retrade” key
issues, often backtracking from oral understandings in written correspondence. Braverman Decl.
Ex. 50. Frustrated with Larry Ammons, Arsenal spoke with another member of the Wakefern
Cooperative, George Zallie, Jr., to discuss the possibility of Mr. Zallie substituting for the
Ammons Defendants as the approved Wakefern operator. Arsenal spoke with George Zallie, Jr.
two or three times in person and multiple times over the phone. Aristone Dep. 24:19-22, June 2,
2015, Braverman Decl. Ex. 14. During those meetings, George Zallie, Jr. expressed interest in
the Arsenal project. Aristone Dep. 24:15-16, June 2, 2016, Braverman Decl. Ex. 14. As a
Member Identified Site, Larry Ammons exercised considerable control as to whom from
Wakefern negotiated with Arsenal, and therefore he was able to successfully prevent George
Zallie, Jr. from engaging in any substantive negotiations with Arsenal. See Braverman Decl. Ex.
As Arsenal’s frustration with the pace of negotiations grew, Joe Gilchrist and Tish Daly
continued to reassure Arsenal that Wakefern had significant interest in entering into a lease with
Arsenal. Among these reassurances were statements by the Defendants’ representatives that it
was Wakefern’s “intent to have a ShopRite built and in operation at the shopping center at the
Arsenal site . . . . [T]hat they wanted the site; that they considered [it] a Wakefern development,
where they were going to put their store[,]” Hankin Dep. 26:3-8, 196:12-16, October 14, 2016,
Braverman Decl. Ex. 16, and that “Arsenal was the deal to make.” Jim DePetris Dep. 135:9-13,
May 17, 2016, Braverman Decl. Ex. 2. But even within the Defendants’ own camp, some had
grown frustrated with Larry Ammons’ negotiation style. In conversations with Arsenal, Joe
Gilchrist and Tish Daly both told Arsenal that they were going to give Larry Ammons an
ultimatum that he either needed to move forward with a lease, or drop out of the negotiations.
See Braverman Decl. Ex. 43, at 1; Braverman Decl. Ex. 51, at 2. In the end, the Ammons
Defendants remained the only party approved by Wakefern to negotiate at shopping center at the
On May 9, 2012, Mark Hankin, Jim DePetris, and Maria Aristone met with the Ammons
Family and Joe Gilchrist at the Ammons family’s Aramingo Avenue ShopRite. See McCormick
Decl. Ex. 21. At this meeting, the parties agreed that they would bypass the Letter of Intent
process and proceed directly to negotiating a lease. Pl.’s Statement ¶ 22. Maria Aristone recalls
all the terms of the lease being agreed upon, prompting Joe Gilchrist to say “[l]et’s enter into a
lease agreement[,]” because signing the lease was all that was left to be done. Aristone Dep.
71:18-72:13, June 2, 2016, Kaplan Decl. Ex. 5, ECF No. 162.
Nevertheless, the parties left the meeting with vastly different interpretations of the
significance of bypassing a Letter of Intent and negotiating a lease. The Defendants thought that
bypassing a Letter of Intent would speed up an otherwise arduous process because the
Defendants felt the parties “couldn’t get anywhere with the letter of intent.” Gilchrist Dep.
120:19-121:7, Nov. 15, 2016, McCormick Decl. Ex. 20. Arsenal, however, left the meeting
believing the parties had come to an agreement in principle. Mark Hankin believed that they
bypassed the Letter of Intent process because “the business terms had been discussed and seemed
to be mutually agreeable . . . .” Hankin Dep. 185:17-20, Oct. 14, 2016, Braverman Decl. Ex. 16.
Mr. Hankin requested that the Ammons Defendants send over one of their recent leases from
another ShopRite location, assuring the Defendants that he could agree to those terms with only
site-specific changes needing to be made. Braverman Decl. Ex. 34, at 2.
Believing the shopping center at the Arsenal was going to be anchored by ShopRite,
Arsenal had suspended its effort to find another anchor, and instead diverted its efforts to
courting other tenants to fill out the rest of the shopping center.3 See Hankin Dep. 15:15-21, Oct.
28, 2016, Braverman Decl. Ex. 17. Some of these negotiations resulted in Letters of Intent being
executed between Arsenal and the prospective tenants during 2013. See Braverman Decl. Ex.
Despite Arsenal’s belief that there was an agreement in principle, the parties kept
negotiating over the substance of the lease, and eventually reverted to the exchange of Letters of
Intent. See McCormick Decl. Ex. 28; Braverman Decl. Ex. 63, at 2. Mark Hankin had waited
for months for the Defendants to send over a sample lease to close the deal, but when
negotiations eventually broke down between the parties, one had never been sent. See
McCormick Decl. Ex. 35, at 2.
B. The Ammons Defendants’ Negotiations at the Harbison Site
In the summer of 2012, the Ammons Defendants became aware of a potential new
shopping center (the “Harbison Site”) less than a mile from the Arsenal. Pl.’s Statement ¶ 27;
Larry Ammons Dep. 24:8-11, Nov. 23, 2016, Braverman Decl. Ex. 3. While they were still
The Defendants contend that Arsenal continued searching for an alternative anchor tenant throughout
the entire negotiation process. It is true that the record contains a number of letters from Arsenal to WalMart, BJ’s Wholesale Club, A&P Super Fresh, and Costco, seeking their tenancy at the shopping center at
the Arsenal. See McCormick Decl. Ex. 42, 44-46, 49, 51. There is a gap in these letters, however,
between April 14, 2011 and November 27, 2012 which, in the light most favorable to Arsenal, is
construed as a suspension of their efforts to secure a tenant other than ShopRite.
negotiating with Arsenal, the Ammons Defendants opened negotiations with representatives
from the Harbison Site. Pl.’s Statement ¶ 33.
From at least the May 9, 2012 meeting, Arsenal had suspended its search for another
anchor tenant. Frustrated with negotiations, however, on or about September 11, 2012 Arsenal
informed the Defendants that they were going to begin pursuing other potential anchors. Despite
still hoping that the parties could come to a mutually acceptable agreement, they were not
committed to entering into a lease with the Defendants if the terms left Arsenal financially
exposed. Braverman Decl. Ex. 36.
As early as October 31, 2012, Arsenal became cognizant of the possibility that a
competing site had reached out to the Ammons Defendants about opening a ShopRite. Mark
Hankin informed Tish Daly and Joe Gilchrist that he was aware “that Mr. A[m]mons may have
received a submission through another broker for a potentially competing site,” but that he did
“not know if Mr. A[m]mons [was] considering th[at] location . . . .” McCormick Decl. Ex. 25, at
On or about May 7, 2013, the Ammons Defendants signed a Letter of Intent with the
Harbison Site. Pl.’s Statement ¶ 34. Arsenal claims that if it had been aware of the existence of
this Letter of Intent, it would have effectively put an end to the prospect of ShopRite anchoring
their shopping center because Wakefern would not put two supermarkets within a mile of each
other. See Aristone Dep. 229:18 – 230:14, June 2, 2016, Braverman Decl. Ex. 14.
By August 6, 2013, Mark Hankin’s suspicions that Ammons had been negotiating with
the Harbison Site had grown. He confronted Tish Daly and Joe Gilchrist in an email alleging
that he had “heard from more than one source that Larry Ammons and his family ha[d]
committed to opening a store . . . at Harbison and Tulips Street, not far from the Arsenal.”
Braverman Decl. Ex. 63, at 8. These sources included multiple local councilmembers, members
of the Philadelphia Department of Commerce, a representative from Giant Supermarkets, and
another potential tenant. Braverman Decl. Ex. 63, at 8; Braverman Decl. Ex. 64, at 1.
On or about August 27, 2013, Mark Hankin sent another email to Tish Daly and Joe
Gilchrist explaining that although he recognized that “both [parties were] operating in an open
and competitive environment and [were] permitted to negotiate with whomever they please,” in
light of the recent information they had received regarding the Defendants’ negotiations at the
Harbison Site, they had “substantial concerns about the Ammons family’s bona fides . . . .”
McCormick Decl. Ex. 35, at 3.
Even after Mark Hankin’s emails, and a subsequent email from Maria Aristone alleging
the same, the Defendants continued to push negotiations with Arsenal by adamantly assuring
them that the Defendants were not negotiating at the Harbison Site. See Braverman Decl. Ex. 64,
at 1; Hankin Dep. 86:7-12, Oct. 28, 2016, Braverman Decl. Ex. 17; Aristone Dep. 232:18233:18, June 2, 2016, Braverman Decl. Ex. 14. This was untrue, as the Defendants were not
only negotiating with the Harbison Site, but had signed a Letter of Intent.
Still, Tish Daly and Joe Gilchrist continued negotiating with Arsenal through January of
2014. Pl.’s Statement ¶ 35; see also Braverman Decl. Ex. 62. Six months later, in June of 2014,
the Defendants signed a lease to open a ShopRite at the Harbison Site. Pl.’s Statement ¶ 40. The
shopping center at the Arsenal never materialized, and the property was ultimately sold back to
the City of Philadelphia. See McCormick Decl. Ex. 7.
On October 7, 2013, Arsenal filed a complaint in the Philadelphia Court of Common
Pleas against the Ammons Defendants, as well as Ben Ammons and Melissa Bullard, alleging
promissory estoppel, tortious interference, fraud, negligent misrepresentation, and unfair
competition. See ECF No. 1. On February 11, 2014, Arsenal filed an amended complaint
adding Defendant Wakefern and a claim of Civil Conspiracy. See ECF No. 1. The case was
subsequently removed to this Court on March 3, 2014. See ECF No. 1. The Defendants moved
to dismiss the Complaint on April 4, 2014. See ECF No. 11, 12. On December 1, 2014, I
dismissed all of Arsenal’s claims against Ben Ammons and Melissa Bullard (associates of the
Ammons Defendants), as well as Arsenal’s claims for negligent misrepresentation, unfair
competition, and civil conspiracy in their entirety. See ECF No. 37. Following discovery, the
parties filed cross-motions for summary judgment on Arsenal’s remaining promissory estoppel,
tortious interference, and fraud claims. See ECF. No. 152, 155.
Summary judgment will be granted “if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56. A fact is “material” if it “might affect the outcome of the suit under the governing law . . . .”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is “genuine” if the
evidence would permit a reasonable jury to return a verdict for the nonmoving party. Id.
The moving party “always bears the initial responsibility of informing the district court of
the basis for its motion.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). After the moving
party has met its initial burden, the nonmoving party must then “make a showing sufficient to
establish the existence of [every] element essential to that party's case, and on which that party
will bear the burden of proof at trial.” Id. at 322. Both parties must support their factual positions
by: “(A) citing to particular parts of materials in the record . . . ; or (B) showing that the materials
cited do not establish the absence or presence of a genuine dispute, or that an adverse party
cannot produce admissible evidence to support the fact.” Fed. R. Civ. P. 56(c)(1). The materials
in the record that parties may rely on include “depositions, documents, electronically stored
information, affidavits or declarations, stipulations (including those made for purposes of the
motion only), admissions, interrogatory answers, or other materials . . . .” Fed. R. Civ. P.
56(c)(1)(A). In opposing a motion for summary judgment, the nonmoving party may not “rely
merely upon bare assertions, conclusory allegations or suspicions.” Fireman's Ins. Co. of
Newark, N.J. v. DuFresne, 676 F.2d 965, 969 (3d Cir. 1982).
“The rule is no different where there are cross-motions for summary judgment.”
Lawrence v. City of Phila., 527 F.3d 299, 310 (3d Cir. 2008).
Cross-motions are no more than a claim by each side that it alone is entitled to
summary judgment, and the making of such inherently contradictory claims does
not constitute an agreement that if one is rejected the other is necessarily justified
or that the losing party waives judicial consideration and determination whether
genuine issues of material fact exist.
Rains v. Cascade Indus., Inc., 402 F.2d 241, 245 (3d Cir. 1968). “The court must rule on each
party's motion on an individual and separate basis, determining, for each side, whether a
judgment may be entered in accordance with the Rule 56 standard.” 10A Charles A. Wright,
Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2720 (3d ed. 1998).
In essence, the inquiry at summary judgment is “whether the evidence presents a
sufficient disagreement to require submission to a jury or whether it is so one-sided that one
party must prevail as a matter of law.” Anderson, 477 U.S. at 251–52.
Arsenal’s complaint has three remaining counts: promissory estoppel, tortious
interference with prospective contractual relations, and fraudulent misrepresentation.
A. Promissory Estoppel
Arsenal’s promissory estoppel claim alleges that in reliance on two of the Defendants’
promises, Arsenal postponed its efforts to locate another anchor for the shopping center at the
Arsenal. Arsenal first alleges that the Defendants promised that they would negotiate with
Arsenal in good faith. In the alternative, Arsenal alleges that the Defendants promised that they
would enter into a lease with Arsenal to open a ShopRite location at the shopping center at the
Pennsylvania has accepted § 90 of the Restatement (Second) of Contracts for promissory
estoppel claims which provides that “[a] promise which the promisor should reasonably expect
to induce action or forbearance on the part of the promisee or a third person and which does
induce such action or forbearance is binding if injustice can be avoided only by enforcement of
the promise.” Thatcher’s Drug Store of W. Goshen, Inc. v. Consol. Supermarkets Inc., 636 A.2d
156, 160 (Pa. 1994) (quoting Restatement (Second) of Contracts § 90 (1981)). The Pennsylvania
Supreme Court explained that:
In order to maintain an action in promissory estoppel, the aggrieved party must
show that 1) the promisor made a promise that he should have reasonably
expected to induce action or forbearance on the part of the promisee; 2) the
promisee actually took action or refrained from taking action in reliance on the
promise; and 3) injustice can be avoided only by enforcing the promise.
Crouse v. Cyclops Indus., 745 A.2d 606, 610 (Pa. 2000).
Both of Arsenal’s theories of promissory estoppel fail the above test under the first prong.
Promissory estoppel’s first prong requires both an express promise, C & K Petroleum Prods.,
Inc. v. Equibank, 839 F.2d 188, 192 (3d Cir. 1988), and reasonable reliance on that promise,
Green v. Interstate United Management Services Corp., 748 F.2d 827, 830 (3d Cir. 1984).
Arsenal’s promissory estoppel claim alleging a promise to negotiate in good faith fails because
there is nothing in the record to indicate that the Defendants ever made a promise to negotiate in
good faith. Arsenal’s alternative argument that the Defendants promised to enter into a lease
fails because Arsenal could not have reasonably relied on the Defendants’ promise.
1. Promise to Negotiate in Good Faith
While the Pennsylvania Supreme Court has yet to find a cause of action for breach of an
agreement to negotiate in good faith, the Third Circuit has predicted that Pennsylvania would
accept such a rule if the agreement otherwise met the requirements of an enforceable contract.
Channel Home Ctrs. v. Grossman, 795 F.2d 291, 299 (3d Cir. 1986). Whether the Pennsylvania
Supreme Court would extend this to a cause of action in promissory estoppel, however, is an
open question. Even assuming that they would, Arsenal’s claim still fails.
The first element of promissory estoppel requires there to be an express promise. A
“broad and vague implied promise” will not suffice. C & K Petroleum Prods, 839 F.2d at 192.
“Even an express promise must indicate with ‘reasonable certainty’ the intent of the parties.”
Burton Imaging Grp. v. Toys “R” Us, Inc., 502 F. Supp. 2d 434, 439 (E.D. Pa. 2007); see also
Channel Homes Ctrs. v. Grossman, 795 F.2d 291, 299 (3d Cir. 1986) (requiring that agreements
to negotiate in good faith be “sufficiently definite to be enforced”). In Burton, the plaintiff rested
its promissory estoppel claim on the defendant’s statement that they were “going to move ahead
with [Burton] as long as everything that [they were] doing passe[d] the Revolution Power
Test[,]” which was subsequently passed. Burton, 502 F. Supp. at 439. Such a promise, although
express, was too vague to qualify as enforceable because it fell short of expressing the intent of
the parties with reasonable certainty by failing to indicate key terms. Id.
Arsenal alleges that the parties had agreed to negotiate in good faith. “The obligation to
negotiate in good faith has been generally described as preventing one party from, ‘renouncing
the deal, abandoning the negotiations, or insisting on conditions that do not conform to the
preliminary agreement.’” Jenkins v. Cnty. of Schuylkill, 658 A.2d 380, 385 (Pa. Super. Ct. 1995)
(quoting A/S Apothekernes Laboratorium for Specialpraeparater v. I.M.C. Chem. Grp., Inc., 873
F.2d 155, 158 (7th Cir. 1989)), appeal denied, 666 A.2d 1056 (Pa. 1995). The statements which
Arsenal claims induced its reliance, however, contain even less indicia of the intent of the parties
than those made in Burton. Arsenal puts forth an abundance of statements made by the
Defendants that it contends constitute a promise to negotiate in good faith. Among these
statements are that “it was [Wakefern’s] intent to have a ShopRite built and in operation at the
shopping center at the Arsenal site[,]” Hankin Dep. 26:3-8, Oct. 14, 2016, Braverman Decl. Ex.
16, “that they wanted the site; that they considered [the shopping center at the Arsenal] a
Wakefern development, where they were going to put their store[,]” Hankin Dep. 196:13-16,
Oct. 14, 2016, Braverman Decl. Ex. 16, that Wakefern was “still very interested in the
location[,]” Braverman Decl. Ex. 24, at 1, and that Wakefern was “committed to [their] future
development at the Arsenal project.” Braverman Decl. Ex. 27, at 2.
These statements are too vague to qualify as enforceable promises. An intent to negotiate
in good faith cannot be surmised from these statements alone. One cannot say these statements
even relate to negotiating in good faith. Statements such as these are more properly
characterized as expressions of interest rather than promises not to renounce the deal or abandon
negotiations. Arsenal’s theory of promissory estoppel grounded in alleged promises to negotiate
in good faith fails.
2. Promise to Enter Into a Lease
Arsenal next contends that the Defendants’ promise to enter into a lease is an enforceable
promise. To survive summary judgment on this theory, Arsenal must present sufficient evidence
from which a reasonable jury could find that reliance upon the promise was reasonable.
Greenberg v. Tomlin, 816 F. Supp. 1039, 1056 (E.D. Pa. 1993). “[T]he degree of sophistication
of the parties and the history, if any, behind the negotiation process are relevant factors in
ascertaining reasonableness.” Greenberg, 816 F. Supp. at 1056. Taking these considerations
into account, no reasonable fact finder could conclude that Arsenal’s reliance on the Defendants’
promise to enter into a lease was reasonable.
Arsenal relies on a statement made by Joe Gilchrist at a meeting on May 9, 2012 as a
promise to enter into a lease. According to Arsenal, after allegedly agreeing on the principle
terms of the lease, Mr. Gilchrist said “[l]et’s enter into a lease agreement.” Aristone Dep. 71:1872:13, June 2, 2016, Kaplan Decl. Ex. 5.
Importantly, both parties in this case are highly sophisticated in the realm of real estate
development, each having worked on numerous real estate projects in the past. Moreover, every
exchanged Letter of Intent contained language that put the parties on notice that anything short
of a written lease would not be a binding agreement. In particular, in a Letter of Intent from
Arsenal to the Defendants prior to the May 9, 2012 meeting, Arsenal explicitly denounced the
possibility of the cause of action they are currently pursuing, stating:
The parties will be bound only when the Lease contemplated by this Letter of
Intent has been approved and executed . . . . neither party hereto shall have any
obligation or liability to the other party whatsoever at law or in equity (including
any claims for contractual breach, detrimental reliance, promissory estoppel, or
otherwise) unless and until such time as both parties shall have executed and
delivered a lease. Notwithstanding past, present, or future written or oral
indications of assent or indication of results or negotiations or agreements to some
or all matters then under negotiation . . . .
Braverman Decl. Ex. 31, at 3-4. Although this Letter of Intent was never executed, the fact that
it was drafted by Arsenal indicates that they were well aware of the legal framework supporting
their negotiations with the Defendants.
Arsenal’s reliance on oral statements made by the Defendants while simultaneously being
aware that any final agreement would have to be reduced to writing in order to make it
enforceable makes Arsenal’s reliance unreasonable as a matter of law given the sophistication of
the parties and the communications they previously exchanged. See Thatcher’s, 636 A.2d at 160
(finding that “it was unreasonable for Thatcher's to proceed on the basis of indefinite oral
assurances” in the absence of a written agreement with the landlord to not place a competing
pharmacy next door); cf. Mellon Bank Corp. v. First Union Real Estate Equity & Mortg. Invs.,
951 F.2d 1399, 1412 (3d Cir. 1991) (granting summary judgment based on the lack of justifiable
reliance because “sophisticated businessmen . . . . never had any intention of closing [an
agreement] on handshakes”).
Accordingly, I will grant Summary Judgment on Arsenal’s promissory estoppel claim
against all the Defendants.
B. Tortious Interference
Arsenal next claims that the Defendants tortiously interfered with prospective leases they
had negotiated with non-anchor tenants, and also prevented them from entering into a lease with
fellow Wakefern member George Zallie, Jr. In Pennsylvania, tortious interference with existing
or prospective contractual relationships requires the plaintiff to prove:
(1) the existence of a contractual or prospective contractual or economic
relationship between the plaintiff and a third party; (2) purposeful action by the
defendant, specifically intended to harm an existing relationship or intended to
prevent a prospective relation from occurring; (3) the absence of privilege or
justification on the part of the defendant; (4) legal damage to the plaintiff as a
result of the defendant's conduct; and (5) for prospective contracts, a reasonable
likelihood that the relationship would have occurred but for the defendant's
Acumed LLC v. Advanced Surgical Servs., Inc., 561 F.3d 199, 212 (3d Cir. 2009) (citing
Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 140 F.3d 494, 530 (3d Cir. 1998)). Both of
Arsenal’s claims fail the above test.
1. Prospective Leases
While Arsenal was negotiating with the Defendants, Arsenal was simultaneously
negotiating with third-parties to fill out the shopping center’s other storefronts. Arsenal claims
that the Defendants’ failure to enter into a lease with Arsenal constitutes tortious interference
with the prospective leases Arsenal was negotiating with the shopping center’s other prospective
tenants. To succeed, Arsenal must show that the Defendants’ decision was neither privileged, nor
justified. Id. In the usual case, the interference is an affirmative act. See, e.g., Assembly Tech.
Inc. v. Samsung Techwin Co., Ltd., 695 F. Supp. 2d 168 (E.D. Pa. 2010). In this case, the
claimed interference was the Defendants’ failure to enter into a lease. To show an absence of
privilege or justification, therefore, Arsenal must show that the Defendants were under some
requirement to enter into a lease with Arsenal.
While “[w]hat is or is not privileged conduct in a given situation is not susceptible of
precise definition[,]” Alder, Barish, Daniels, Levin and Creskoff v. Epstein, 482 A.2d 1175,
1183-84 (Pa. 1978), “a person or entity is generally free to choose whether or not to do business
with another[,]” Int’l Hobby Corp. v. Rivanossi S.P.A., No. Civ.A.96-3082, 1998 WL 376053, at
*7-8 (E.D. Pa. June 30, 1998) (citing Restatement (First) of Torts § 762 (1939)), aff’d, 203 F.3d
817 (3d Cir. 1999); see also Restatement (Second) of Torts § 766, Comment b (1979)
(“Deliberately and at his pleasure, one may ordinarily refuse to deal with another, and the
conduct is not regarded as improper . . . .”). As explained in the promissory estoppel section, the
Defendants were under no obligation to enter into a lease with Arsenal. Since the Defendants
had no obligation to enter into a lease, the Defendants cannot be held liable when their decision
not to do so prevented Arsenal from finalizing leases with third parties. Cf. Green, 748 F.2d at
831 (holding that a parent company was privileged in preventing its wholly-owned subsidiary
from entering into a lease with the plaintiff). The Plaintiffs do not cite any case that permits
recovery against a defendant for tortiously interfering with a prospective contract by electing not
to do something they had no legal obligation to do. Arsenal, in essence, seek to use the claim of
tortious interference to police their business negotiations and insure against the downstream
consequences of failing to come to an enforceable agreement, something this cause of action
2. Negotiations with George Zallie, Jr.
Arsenal’s second tortious interference theory alleges that the Ammons Defendants
improperly interfered with Arsenal’s attempt to negotiate with George Zallie, Jr. As this claim
relates to a prospective contractual relationship, Arsenal must show a “reasonable likelihood or
probability” that that a lease with George Zallie, Jr. would have materialized. Glenn, 272 A.2d
at 898-99. While a “reasonable likelihood” does not require a contractual right, it requires more
than “a mere hope that there will be a future contract.” Acumed, 561 F.3d at 213. The
preliminary negotiations that Arsenal had with George Zallie, Jr. are insufficient to show a
reasonable likelihood that the parties would have entered into a lease.
Arsenal’s negotiations with George Zallie, Jr. were still in their infancy at the time Larry
Ammons prevented George Zallie, Jr. from negotiating with Arsenal. In her deposition, Maria
Aristone claimed that she had “met with [George Zallie, Jr.] two or three times in person, and
Jim and [she] spoke to him several times over the phone.” Aristone Dep. 24:19-22, June 2, 2016,
Braverman Decl. Ex. 14. During those meetings, she claimed that he “very much wanted . . . to
be in the Arsenal project.” Aristone Dep. 24:15-16, June 2, 2016, Braverman Decl. Ex. 14. Jim
DePetris characterized George Zallie, Jr. as having “definite interest” in the shopping center at
the Arsenal. DePetris Dep. 164:23, May 17, 2016, Braverman Decl. Ex. 2. Beyond that, the
record is devoid of anything that would even remotely indicate that there was a reasonable
likelihood that George Zallie, Jr. would enter into a lease with Arsenal. What the record does
indicate is that George Zallie, Jr. had an interest in entering into negotiations with Arsenal, but
there is nothing to suggest that the parties had discussed terms, or that negotiations had
progressed anywhere past the most preliminary of stages. Arsenal had nothing more than a mere
hope of a future contract with George Zallie, Jr., and their contention to the contrary is nothing
more than wishful thinking. Without a prospective contract, Arsenal cannot make out a claim for
Therefore, I will grant summary judgment on Arsenal’s tortious interference claim in its
C. Fraudulent Misrepresentation
Fraudulent misrepresentation in Pennsylvania requires proof of six elements:
(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.
Gibbs v. Ernst, 647 A.2d 882, 889 (Pa. 1994). These elements must be proven by “evidence that
is clear, direct, precise and convincing.” Knop v. McMahan, 872 F.2d 1132, 1140 (3d Cir. 1989)
(quoting Carlson v. Sherwood, 416 Pa. 286, 287, 206 A.2d 19, 20 (1965)).
Arsenal alleges that the Defendants made four separate misrepresentations that they
contend constitute fraud. First, Arsenal alleges that the Defendants falsely represented that they
were negotiating in good faith (the “Good Faith Misrepresentation”). Second, they claim that the
Defendants were untruthful when they denied that they had signed a Letter of Intent at the
Harbison Site (the “Letter of Intent Misrepresentation”). Third, Arsenal asserts that Joe Gilchrist
and Tish Daly informed Arsenal that they were attempting to remove Larry Ammons as the
approved Wakefern operator for the shopping center at the Arsenal with no intention of actually
making such an attempt (the “Removal Misrepresentation”). Finally, Arsenal claims that the
Defendants failed to tell Arsenal they had committed to a lease at the Harbison Site (the
“Harbison Site Omission”).
Arsenal’s fraud claim based on the Good Faith Misrepresentation and the Letter of Intent
Misrepresentation fail because Arsenal was not justified in relying on the Defendants’
representations under the fifth prong of the test—justifiable reliance. Arsenal’s claim based on
the Removal Misrepresentation fails because there is no evidence that the Defendants’ statements
were false when made. Arsenal’s final claim based on the Harbison Site Omission cannot serve
as a fraudulent omission because the Defendants were under no duty to tell Arsenal of their
negotiations at the Harbison Site.
1. Good Faith Misrepresentation
Arsenal’s first contention is that the Defendants misrepresented that they were
negotiating in good faith despite concurrently negotiating at the Harbison Site. In support of that
contention, Arsenal cites to a deposition of Joe Gilchrist in which Mr. Gilchrist admits to telling
Arsenal that they were negotiating in good faith during April and May of 2013:
Q: But clearly, you were telling Legend and through Legend Mr. Hankin that you
were still negotiating in good faith to get a deal done at the Arsenal?
A: Yes, because that was the task that was given to me by Wakefern when I first
joined the company and until Wakefern said no or until Larry Ammons said no,
my task was to attempt to get a deal done at Arsenal.
Gilchrist Dep. 191:23-192:9, Nov. 15, 2016, Braverman Decl. Ex. 7. As discussed earlier,
negotiating in good faith means refraining from “renouncing the deal, abandoning the
negotiations, or insisting on conditions that do not conform to the preliminary agreement.”
Jenkins, 658 A.2d at 385 (quoting Apothekernes, 873 F.2d at 158). In order to succeed on a
claim of fraud, Arsenal must establish that justifiable reliance on the Defendants’ false
statements. Gibbs, 647 A.2d at 889.
“To be justifiable, reliance upon the representation of another must be reasonable.”
Porreco v. Porreco, 811 A.2d 566, 571 (Pa. 2002). “Whether reliance on an alleged
misrepresentation is justified depends on whether the recipient knew or should have known that
the information supplied was false.” Id. (quoting Fort Washington Resources, Inc. v. Tannen,
858 F. Supp. 455, 460 (E.D. Pa. 1994)). “[T]he recipient of an allegedly fraudulent
misrepresentation is under no duty to investigate its falsity in order to justifiably rely, but . . . he
is not justified in relying upon the truth of an allegedly fraudulent misrepresentation if he knows
it to be false or if its falsity is obvious. Toy v. Metropolitan Life Ins. Co., 928 A.2d 186, 207 (Pa.
2007); see also Emery v. Third Nat. Bank of Pittsburgh, 162 A. 281, 284 (Pa. 1932) (“If a man
knows the truth about a representation, he is neither deceived nor defrauded, and any loss he may
sustain is in effect self-inflicted.”). This is because “knowledge negates the affirmative element
of reliance . . . .” City of Philadelphia v. Lead Indus. Ass’n, No. 90-7064, 1992 WL 98482, at *3
n.4 (E.D. Pa. Apr. 23, 1992).
By 2013, these highly sophisticated parties had been in substantive negotiations for over
three years. Negotiations were often terse, and had been deteriorating for some time. Mark
Hankin had repeatedly expressed his frustration over what was, in his view, Larry Ammons
attempting to renegotiate terms that had already been orally agreed upon, resulting in
“extraordinary delays.” Braverman Decl. Ex. 63, at 9; see also Braverman Decl. Ex. 27, at 3.
Put plainly, negotiations were not going well. Neither party should have had any expectation that
an agreement would inevitably be reached. Arsenal should have known that the Defendants
were not required to sign a lease with them, and that the Defendants very well may abandon
negotiations with them notwithstanding Joe Gilchrist’s assurances to the contrary.
Moreover, Arsenal was aware of the parties’ non-exclusive negotiating environment as
evidenced by Mark Hankin’s email to the Defendants in August of 2013 recognizing that both
parties “were operating in an open and competitive environment and [were] permitted to
negotiate with whoever they please[d.]” McCormick Decl. Ex. 35, at 3. Mr. Hankin’s
awareness is unmistakable because on or about September 11, 2012, Arsenal told the Defendants
that Arsenal would no longer be negotiating exclusively with the Defendants, and would instead
begin negotiating with other potential anchors. Braverman Decl. Ex. 36, at 2. Accordingly, on
or about November 27, 2012, Arsenal executed on its promise and began reaching out to other
supermarkets. McCormick Decl. Ex. 46. To then turn around and claim Arsenal was justified in
relying on Joe Gilchrist’s statements that the Defendants were negotiating in good faith is
incredible. By April and May of 2013, the behavior of both parties had made it so blatantly
obvious that neither party was negotiating in good faith such that no reasonable fact finder could
conclude that Arsenal justifiably relied upon Joe Gilchrist’s statements. As a result, Arsenal
cannot maintain an action for fraud based on Joe Gilchrist’s statements that the Defendants were
negotiating in good faith.
2. Letter of Intent Misrepresentation
Arsenal also argues that the Defendants’ affirmative representations that they had not
signed a Letter of Intent with the Harbison Site constitute fraud. On or about May 7, 2013, the
Defendants signed a Letter of Intent at the Harbison Site, but when confronted in August of 2013
the Defendants denied being committed to opening a ShopRite location at the Harbison Site. As
with the statements above, Arsenal must show that they justifiably relied upon the Defendants’
misrepresentations to succeed. Gibbs, 647 A.2d at 889.
In addition to the parties’ deteriorating negotiations evident throughout this case, Arsenal
had long been aware that the Defendants may have been negotiating at the Harbison Site. By the
time the Defendants represented that they had not signed a Letter of Intent with the Harbison Site
in August of 2013, Arsenal had been informed by multiple local councilmembers, members of
the Philadelphia Department of Commerce, a representative from Giant Supermarkets, and
another unnamed potential tenant that the Defendants had, in fact, committed to the Harbison
Site. Braverman Decl. Ex. 63, at 8; Braverman Decl. Ex. 64, at 1. The falsity of the Defendants’
statements was obvious. It was Arsenal’s choice to turn a blind eye to the overwhelming
evidence that the Defendants had committed to the Harbison Site, and as a result Arsenal cannot
claim justifiable reliance on the Defendants’ representations that they had not committed.
3. Removal Misrepresentation
Arsenal’s next allegation of fraud hinges on Joe Gilchrist and Tish Daly’s stated intention
to perform a promised act, namely to attempt to remove Larry Ammons from the negotiations
between Wakefern and Arsenal. In order to be actionable as fraud, statements of present
intention to do a particular act in the future must be fraudulent when made, meaning that the
promisor must not intend to take the promised action at the time he or she makes the promise.
See Mellon Bank, 951 F.2d at 1410. “Non-performance does not by itself prove a lack of present
intent[;]” there must be something more. Id. (citations omitted). The record presents no
evidence, other than the fact of non-performance, that would indicate that either Joe Gilchrist’s
or Tish Daly’s promises were false when made. Accordingly, these promises cannot serve as the
basis of Arsenal’s claim for fraud.
4. Harbison Site Omission
Arsenal claims that it was fraudulent for the Defendants not to tell them that they had
committed to a lease with the Harbison Site. Silence alone is not fraudulent absent a duty to
speak. Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604, 611-12 (3d Cir. 1995)
(citing Smith v. Renaut, 564 A.2d 188 (Pa. Super. Ct. 1989)). A duty to speak typically only
arises when the parties share a fiduciary or confidential relationship. WP 851 Assocs., L.P. v.
Wachovia Bank, N.A., No. Civ.A.07-2374, 2008 WL 114992, at *6 (E.D. Pa. Jan. 10, 2008)
(citing Sunquest Info. Sys., Inc. v. Dean Witter Reynolds, Inc., 40 F. Supp. 2d 644, 656 (W.D. Pa.
1999)). It is exceedingly rare in Pennsylvania for a duty to speak to arise between sophisticated
business entities conducting an arm’s length transaction. Paramount Fin. Commc'ns, Inc. v.
Broadridge Investor Commc'n Solutions, Inc., No. Civ.A.15-405, 2015 WL 4093932, at *5 (E.D.
Pa. July 7, 2015); see also Local 30, United Union of Roofers, Waterproofers and Allied Workers
v. D.A. Nolt, Inc., 625 F. Supp. 2d 223, 230-31 (E.D. Pa. 2008) (finding that parties on opposite
sides of the negotiating table had no duty to inform the other of the status of their negotiations
Arsenal does not argue that any fiduciary or confidential relationship existed between the
parties, and there is no reason why the Defendants were under any obligation to disclose to
Arsenal their negotiations with a competing site. The parties were sophisticated business entities
negotiating in an open and competitive environment, and, until a lease was signed, were free to
abandon negotiations at any time. Because the Defendants were under no duty to speak, their
decision not to tell Arsenal that they had committed to the Harbison Site was not fraudulent.
If Arsenal’s factual allegations are accurate, Defendants’ behavior during negotiations
with Arsenal may deviate from a model of ethical behavior, and might cause any of the
Wakerfern or the Ammons Defendants’ present and future business partners to think twice
before engaging in business with them, it cannot be said that their behavior was fraudulent.
Accordingly, I will grant summary judgment on Arsenal’s fraud claim in its entirety.
For the reasons set forth above, I will grant Defendants’ motion for summary judgment
on Plaintiffs’ promissory estoppel, tortious interference, and fraudulent misrepresentation claims.
I will deny Plaintiffs’ motion for summary judgment in its entirety.
s/Anita B. Brody
ANITA B. BRODY, J.
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