Ventas, Inc. v. HCP, INC.
2011 U.S. App. LEXIS 9941
| 6th Cir. | 2011Background
- Sunrise conducted a confidential two-round asset auction in late 2006, with Ventas and HCP as invited bidders bound by Standstill Agreements.
- HCP’s Standstill allowed only certain final bids and Ventas’ Standstill permitted a second final bid if Sunrise accepted a competing offer; both Standstills were with Sunrise independently.
- Ventas secured an agreement with SSL and submitted a binding bid of $15.00 per unit; Sunrise approved and entered a Purchase Agreement with Ventas, contingent on unitholder approval.
- HCP failed to reach an agreement with SSL and withdrew from the Sunrise process; Sunrise and Ventas proceeded with the Ventas transaction, and unitholders eventually approved a higher bid of $16.50 after Ventas raised its offer.
- HCP publicly announced an $18.00 per unit bid in February 2007, claiming a transaction identical to Ventas’ and stating no due diligence or financing contingencies; this bid was later clarified as conditioned on SSL and breached confidentiality.
- Canadian litigation in Ontario court affirmed Sunrise enforcing Standstill Agreements and rejecting HCP’s bid; Sunrise later supported Ventas’ deal while Ventas sued HCP in the U.S. district court for tortious interference.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Res judicata applicability | Ventas contends Canadian declaratory action cannot bar later tort claims. | HCP asserts preclusion due to prior Canadian action. | Res judicata does not bar Ventas; declaratory Canada action lacks preclusive effect. |
| Jury instructions on § 767 vs § 768 | Venturas argues Kentucky would apply § 768; district court erred by blending § 767 and § 768. | HCP argues court erred in applying § 768 and considering § 767 factors. | District court properly used § 768 with § 767 guideposts; no reversible error. |
| Breach of Standstill as wrongful means | Ventures contends breach evidence supports improper interference. | HCP contends breach should not be treated as wrongful means. | Breach properly considered as evidence of improper interference within trial context. |
| Causation (but-for) | Venturas asserts HCP’s improper interference caused Ventas to pay more. | HCP argues causation requires separation of misrepresentation effects from truthful disclosures. | But-for causation instruction given; sufficient evidence supported finding of causation. |
| Punitive damages remand | Ventas argues punitive damages should be tried due to fraud evidence. | HCP contends no basis for punitive damages existed. | punitive damages reversed and remanded for trial on the single issue of punitive damages. |
Key Cases Cited
- NCAA v. Hornung, 754 S.W.2d 855 (Ky. 1988) (established tort of improper interference with prospective relations; malice standard)
- Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476 (Ky. 1991) (unlawful means and malice definitions in tort interference)
- Die Deutsche Bank Filiale Nürnberg v. Humphrey, 272 U.S. 517 (U.S. 1926) (foreign currency conversion timing in diversity cases (injury date rule))
- Layne v. Bank One, Ky., N.A., 395 F.3d 271 (6th Cir. 2005) (foreseeability and consequential damages in KY law)
- Estate of Riddle ex rel. Riddle v. S. Farm Bureau Life Ins. Co., 421 F.3d 400 (6th Cir. 2005) (remand for punitive damages in fraud cases; standards for punitive awards)
- Virostek v. Liberty Twp. Police Dep't, 14 Fed.Appx. 493 (6th Cir. 2001) (de novo review for punitive damages questions in diversity cases)