Mark Schwartz Obtains Summary Judgment for Subrogation Company Accused of Fraud, Breach of Contract and Breach of Fiduciary Duties

Chicago, September 29, 2017 – Butler Rubin partner Mark Schwartz obtained a complete victory on behalf of clients Keith Minella and Subrogation Holdings in Healthcare Recovery Group v. CoreSource, 07-CH-16360.  Defendant CoreSource had sued Minella and Subrogation Holdings as third-party defendants in 2011, alleging that Minella and Subrogation Holdings were liable for alleged fraud and contractual breaches of plaintiff HCRG on a veil-piercing theory.  CoreSource also brought direct claims against Minella and Subrogation Holdings for fraud, breach of contract, breach of fiduciary duties, tortious interference with contract, and conversion.  After years of written and oral discovery, Butler Rubin moved for summary judgment on all counts pending against Minella and Subrogation Holdings.  In a seventeen-page memorandum opinion, the Court granted the motion in its entirety and dismissed Butler Rubin’s clients from the case.

The Court first rejected CoreSource’s attempt to pierce the corporate veil of plaintiff HCRG in order to pursue Minella and Subrogation Holdings for HCRG’s alleged wrongdoing, concluding that the “evidence establishes that the [various entities] operated separately from the Subro Parties” and that “CoreSource lacks any evidence to prove that Subro Holdings was not a distinct entity.” The Court then proceeded to address, and dismiss, each of the claims CoreSource had asserted against Minella and Subro Holdings.

The Court held that CoreSource had not introduced evidence to support a finding that Butler Rubin’s clients had made any untruthful statements: “As CoreSource cannot allege with specificity (much less prove) what false representations Minella or Subro Holdings made, then its fraud claim fails as a matter of law.”  To buttress the dismissal of CoreSource’s fraud claim, the Court further held that neither Minella nor Subrogation Holdings could be found liable for fraud on an agency theory, and gave effect to anti-reliance language in CoreSource’s contract with HCRG.  The Court also dismissed CoreSource’s other tort and contract-based claims.   For example, the Court agreed that Minella and Subrogation Holdings cannot be liable for breaching a contract to which they were not a party.  And CoreSource failed to establish the existence of a fiduciary relationship between itself and either Minella or Subrogation Holdings, thus dooming CoreSource’s claim for breach of fiduciary duties.

Formed in 1980, Chicago-based Butler Rubin has established itself as a well-known law firm assisting clients nationally and internationally in complex business disputes, including insurance and reinsurance, post-closing disputes, antitrust law, class actions, defense of corporate directors and officers, labor and employment law, healthcare litigation, and insolvency.