Cases and Deals

Blank Rome Wins Motion to Dismiss for Apex Construction Management

A Blank Rome team recently won a motion to dismiss a $20 million claim in the Circuit Court of Cook County, Illinois, Chancery Division, for breach of fiduciary duty, conversion, civil conspiracy, and an accounting filed against Apex Construction Management LLC (“Apex”), a privately held construction project management firm based in Chicago that specializes in nursing home, senior living, and skilled nursing facility build outs, managing projects nationwide. The plaintiff, Omega Healthcare Investors, Inc. (“OHI”), a publicly traded real estate investment trust (“REIT”) that provides financing and capital to the long-term healthcare industry with $10.1 billion in total real estate investments, brought suit against Apex (and its principals Joshua Ray and Sam Turk) and a general contractor, claiming that Apex violated a fiduciary duty allegedly owed to OHI based on OHI’s payments to Apex for improvements to a number of properties across the country owned by OHI which OHI leases to third-party tenant-operators of healthcare facilities at each property.

Blank Rome successfully persuaded the court on a motion to dismiss that OHI had not stated any viable claim against Apex and its principals because it could not show that the defendants owed OHI any fiduciary duty based solely on the acceptance of money from OHI (and in the absence of any direct contractual relationship between OHI and Apex, or any special circumstances alleged between the two companies). Following briefing, the court held oral argument and challenged plaintiff’s counsel with all the arguments contained in defendants’ briefing and rejected plaintiff’s theory of the case. The court signed an order later that same day granting the defendants’ motion to dismiss the complaint.

The Blank Rome team was led by Real Estate industry group co-chair Massimo F. D’Angelo and Ofer Reger and included assistance from Basileios (Bill) Katris and Scott Kaplan in our Chicago Office.