West Run Student Housing Associates, LLC v. Huntington National Bank
712 F.3d 165
| 3rd Cir. | 2013Background
- West Run, Mt. Tabor, and Campus View (Sponsors) pursued three university housing projects with Huntington as financier.
- CBRE/Melody provided confidential and proprietary information to Huntington in support of loan negotiations.
- West Run's Phase I completed Aug 2007; Phase II completed Aug 2008; occupancy dropped from 95% to 64% by 2009.
- Copper Beech financed by Huntington beginning around 2008–2009; West Run alleges Huntington financed a competitor and leaked West Run information.
- Mt. Tabor and Campus View loan agreements conditioned funding on presales; Huntington allegedly withheld funds when presales fell short.
- Plaintiffs amended their complaint; district court dismissed the amended complaint with prejudice; appellate court reviews de novo.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Huntington disclosed confidential West Run information to Copper Beech | West Run alleges disclosure of proprietary information by Huntington. | Insufficient facts to show disclosure or its content; no reliance alleged. | Count I affirmed; dismissal upheld for lack of factual pleadings. |
| Whether Huntington had a duty not to finance Copper Beech | Implied duty of good faith extends to external obligations beyond contract terms. | Duty bounded by contract; no external duty to refrain from financing a competitor. | Count II affirmed; implied duty not extended beyond contract terms. |
| Whether original pre-sale numbers were binding judicial admissions after amendment | Amended complaint superseded original; pre-sale numbers should not bind. | Original pre-sale numbers were judicial admissions binding on dismissal. | Count III/IV vacated and remanded; need to assess pre-sale figures under proper Rule 15 framework. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for complaint sufficiency)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (clear statement of pleading requirements after Twombly)
- Kaplan v. Cablevision of PA, Inc., 671 A.2d 716 (Pa. Super. Ct. 1996) (good faith duty not limitless; contract-centered)
- Sovereign Bank v. BJ’s Wholesale Club, Inc., 533 F.3d 162 (3d Cir. 2008) (amendments can defeat judicial admissions on motion-to-dismiss)
- Kelley v. Crosfield Catalysts, 135 F.3d 1202 (7th Cir. 1998) (amendments can withdraw earlier admissions; facts not binding on amended complaint)
- InterGen N.V. v. Grina, 344 F.3d 134 (1st Cir. 2003) (amended complaints can supersede prior pleadings for purposes of pleading standards)
- Giannone v. U.S. Steel Corp., 238 F.2d 544 (3d Cir. 1956) (withdrawn or superseded pleadings do not bind later proceedings)
- Huey v. Honeywell, Inc., 82 F.3d 327 (9th Cir. 1996) (amendments can alter the binding effect of prior admissions)