Sharbat v. Iovance Biotherapeutics, Inc.

Background

Solomon Sharbat, Solomon Capital LLC, Solomon Capital 401(K) Trust, and Shelhav Raff sued Iovance Biotherapeutics, Inc. and Manish Singh over an alleged finder’s fee agreement. The agreement was between Iovance and MBA Holdings, LLC, which had agreed to seek financing and strategic relationships for Iovance. The plaintiffs claimed they performed services under that arrangement and were entitled to compensation.

After earlier rulings and sanctions, the only claims remaining against Iovance were unjust enrichment and indemnity. The claims against Singh and the other claims against Iovance had already been dismissed. Iovance then moved for summary judgment, which asks whether the evidence leaves any genuine dispute requiring a trial. The motion was unopposed as to Solomon Capital LLC and Solomon Capital 401(K) Trust, but the court still reviewed the evidence as to all four plaintiffs rather than granting judgment by default.

Factual-dispute issue

The plaintiffs did not file a compliant response to Iovance’s required statement of material facts. Their first opposition was rejected for filing-rule violations. Their replacement filing contained only limited, conclusory responses without the required corresponding paragraphs or citations to admissible evidence. A later filing was both untimely and inadequately supported. The court therefore did not consider that later filing and deemed Iovance’s properly supported factual assertions admitted under the local rules. The court nevertheless noted that Iovance still had to show that it was entitled to judgment as a matter of law and considered only assertions supported by admissible evidence.

Unjust enrichment claim

Iovance offered several arguments for judgment on the unjust enrichment claim. The court rejected Iovance’s argument that the claim was duplicative of the already-dismissed contract claim. Because the contract claim had been dismissed, the court found no risk of double recovery on that basis.

The court nevertheless granted summary judgment on other grounds. The plaintiffs’ claim rested on the assertion that Sharbat introduced Joe Edelman and Wayne Rothbaum to Iovance. The evidence showed that Iovance’s former chief executive officer, Anthony Cataldo, had contacted Edelman months before Sharbat’s alleged introduction. The evidence also showed that a mutual friend introduced Rothbaum to Iovance’s then-chief executive officer, Manish Singh. Raff admitted that he had never met or communicated with either investor, and Sharbat also admitted that he had never met either investor.

The plaintiffs raised additional alleged services in their opposition, including an alleged introduction of New World, arranging for Jacob Schacter to join Iovance’s scientific advisory board, and introducing Rothbaum to Cataldo. The court held that the plaintiffs could not introduce a new theory of the claim for the first time in opposition to summary judgment. It also found that the new allegations lacked admissible supporting evidence. Because the plaintiffs did not provide sufficient evidence that they performed compensable services for Iovance, the court granted summary judgment on the unjust enrichment claim.

The court did not decide whether the plaintiffs had acted as unlicensed broker-dealers. It said the parties had not provided enough legal authority or factual evidence for the required fact-specific analysis, and that the issue did not need to be resolved because the unjust enrichment claim failed on other grounds.

Indemnity claim

The court also granted summary judgment on the indemnity claim. In an earlier ruling, it had determined that the plaintiffs were neither parties to nor intended third-party beneficiaries of the MBA Agreement. The court held that this determination barred the plaintiffs from enforcing the agreement’s indemnity provision. It also found that the provision did not list the plaintiffs among the expressly identified indemnified parties.

The plaintiffs argued that other agreements supported indemnity. The court declined to consider that theory because the plaintiffs had previously represented that their indemnity claim was based solely on the MBA Agreement, and a party may not introduce an entirely new theory in opposition to summary judgment.

Disposition

Judge Edgardo Ramos granted Iovance’s motion for summary judgment as to all claims by all plaintiffs. The clerk was directed to terminate the motion and close the case. The court separately stated that the amount of sanctions previously awarded in connection with Iovance’s sanctions motion remained undetermined because Iovance had not yet submitted the required accounting. The parties were permitted to submit the accounting and any opposition after the case was closed.