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American Center for Excellence in Surgical Assisting Inc. v. Community College District 502

United States District Court, N.D. Illinois, Eastern Division

May 29, 2018

AMERICAN CENTER FOR EXCELLENCE IN SURGICAL ASSISTING INC., Plaintiff,
v.
COMMUNITY COLLEGE DISTRICT 502, COLLEGE OF DUPAGE, THOMAS CAMERON, KAREN M. SOLT, and KATHY CABAI, Defendants.

          MEMORANDUM OPINION AND ORDER

          Gary Feinerman, Judge

         American Center for Excellence in Surgical Assisting Inc. (“ACE”) brought this diversity suit against Community College District 502, College of DuPage (“College” or “COD”), and College officials Thomas Cameron, Karen Solt, and Kathy Cabai for matters arising from the College's efforts to establish an accredited surgical assistant certification program. Doc. 1. The court dismissed some of ACE's claims at the pleading stage. Docs. 39-40 (reported at 190 F.Supp.3d 812 (N.D. Ill. 2016)). Discovery has concluded, and a bench trial is set for September 24, 2018. Doc. 145. Defendants now move for summary judgment on the remaining claims: breach of contract against the College, and misappropriation of trade secrets under the Illinois Trade Secrets Act (“ITSA”), 765 ILCS 1065/1 et seq., and fraud against all Defendants. Doc. 104. The motion is granted.

         Background

         The following facts are stated as favorably to ACE as permitted by the record and Local Rule 56.1. See Woods v. City of Berwyn, 803 F.3d 865, 867 (7th Cir. 2015). In considering Defendants' motion, the court must assume the truth of those facts, but does not vouch for them. See Arroyo v. Volvo Grp. N. Am., LLC, 805 F.3d 278, 281 (7th Cir. 2015).

         ACE markets itself as a provider of surgical assistant training programs. Doc. 107 at ¶ 2. (Where, as here, ACE's Local Rule 56.1(b)(3)(B) response, Doc. 125, does not dispute a fact asserted in Defendants' Local Rule 56.1(a)(3) statement, Doc. 107, only the Local Rule 56.1(a)(3) statement is cited and the fact is deemed admitted. See FTC v. Bay Area Bus. Council, Inc., 423 F.3d 627, 634 (7th Cir. 2005) (“[R]ules like 56.1 provide the only acceptable means of disputing the other party's facts and of presenting additional facts to the district court.”) (alteration and internal quotation marks omitted); Perez v. Town of Cicero, 2011 WL 4626034, at *2 (N.D. Ill. Sept. 30, 2011) (“Under settled law, facts asserted in a brief but not presented in a Local Rule 56.1 statement are disregarded in resolving a summary judgment motion.”) (citing cases).) Dan Bump is ACE's sole shareholder and president. Doc. 107 at ¶ 2. District 502 is an Illinois community college district created by the Illinois Public Community College Act, 110 ILCS 805/1 et seq. Doc. 50 at ¶ 2. The College, located in Glen Ellyn, Illinois, is a public community college within the District. Doc. 46 at ¶ 3. At all relevant times, Cameron was the College's Dean of Health and Sciences, Solt was the Associate Dean of Health and Biological Sciences, and Cabai was the Coordinator of the Surgical Assisting Program and Co-Director of the Anesthesia Technology Program. Doc. 107 at ¶¶ 4-6.

         In November 2013, ACE became aware through non-party Your Extra Hands Surgical Services (“YEHSS”) that the College was interesting in starting a surgical assistant training program. Doc. 125 at pp. 1-2, ¶ 25. To that end, on November 20, Cabai and Solt met with Keith Bump, ACE's Vice President of Marketing and Sales, and Kyle Black, a YEHSS employee. Doc. 107 at ¶¶ 25-26; Doc. 125 at pp. 1-2, ¶¶ 25-26. Cabai and Solt told Keith Bump and Black that the proposed program would need to pass through several administrative layers of approval-the “college system”-before it could be implemented. Doc. 125 at p. 2, ¶ 26.

         The next day, Keith Bump e-mailed Cabai and Solt several documents: (1) a consortium proposal; (2) the ACE Program Catalog; (3) the ACE Master Curriculum; and (4) a draft consortium agreement. Doc. 107 at ¶ 27; Doc. 125 at p. 2, ¶ 27; Doc. 107-1 at 23.[*] Section III.8 of the draft consortium agreement stated: “It is agreed that the curriculum and associated materials and simulators are proprietary in nature and are the property of ACE. College shall not copy or reproduce anything of a proprietary nature for any reason.” Doc. 107-1 at 11. However, Keith Bump did not ask Cabai or Solt to sign a confidentiality agreement before sending them the materials, nor did Keith Bump indicate-apart from the language in Section III.8-that the materials were confidential. Doc. 107 at ¶ 27; Doc. 125 at p. 2, ¶ 27; Doc. 107-1 at 23.

         On December 5, 2013, Dan Bump, Keith Bump, Black, Cabai, Cameron, and Solt had a conference call. Doc. 107 at ¶ 30; Doc. 125 at p. 3, ¶ 30. On December 9, Solt sent Keith Bump, Dan Bump, Black, Cameron, and Cabai an email stating:

I think our discussion was a great one, and we are at this point ready to move forward on our part. That consists of putting the curriculum through our college process and then on to the state's approval system. I am meeting with Kathy [Cabai] later this morning, so should have a better idea of how long that will take.

Doc. 107 at ¶ 32; Doc. 125 at p. 3, ¶ 32; Doc. 107-1 at 26. The draft consortium agreement was never formally executed. Doc. 107 at ¶ 31; Doc. 125 at p. 3, ¶¶ 32-33.[†] Nevertheless, based on Solt's email, ACE believed that the College had accepted its proposal (the draft consortium agreement) and that it therefore had a contract with the College to assist in setting up and running the surgical assistant training program. Doc. 125 at p. 3, ¶¶ 33-35.

         On February 17, 2014, Cabai told Keith Bump that the proposed program had passed the first level of internal College review, the Division Curriculum Committee. Doc. 107 at ¶ 37; Doc. 125 at p. 4, ¶ 37. The next month, Cabai asked ACE for a list of materials necessary for the proposed program's lab component. Doc. 107 at ¶ 40; Doc. 125 at p. 4, ¶ 40. ACE responded with the requested materials. Doc. 107 at ¶ 40; Doc. 125 at p. 4, ¶ 40; Doc. 111.

         On April 23, 2014, Cabai emailed Keith Bump and Black to say: “Just letting you know, after a long day today of a health care collaborative simulation on a trauma case, I received a message that all of the classes passed ICCB [the Illinois Community College Board]. We are ready to go. The certificate will be presented in October but because we can offer the first classes without it we are fine.” Doc. 125 at p. 7, ¶ 4; Doc. 125-3. ACE understood this to be the “final step to get the program started in [the] fall.” Doc. 125 at p. 7, ¶ 4.

         Two weeks later, on May 5, Dan Bump sent Cabai a revised draft consortium agreement and a nondisclosure agreement. Doc. 107 at ¶ 41; Doc. 125-4 at 2. The revised draft consortium agreement was never formally executed. Doc. 107 at ¶ 43, Doc. 125 at p. 4, ¶ 43. The next day, Cabai emailed Dan Bump: “I think this is an exciting time for COD, one that has taken me 5 years to get them to approve. The day Keith and Kyle walked into my lab was a wonderful day for me. I am sad that this is what it took for COD to finally say ok, but, the outcome is all that matters. It is here.” Doc. 125-4 at 1. Sometime later, in response to a request from Cabai, ACE sent her its “Self Study”-the materials a student would use to move independently through the proposed program. Doc. 107 at ¶¶ 44, 66; Doc. 125 at pp. 4-5, ¶ 44, p. 8, ¶ 7. A self study is a requirement for accreditation by the Commission on Accreditation of Allied Health Education Programs (“CAAHEP”), a large health sciences professions accreditor. Doc. 107 at ¶¶ 14, 59.

         At some point prior to July 2014, Cabai and ACE discussed the possibility of Cabai's attending ACE's “Surgical SkillLab” training-scheduled for mid-July 2014 in Denver-without charge. Doc. 46 at ¶¶ 19, 24; Doc. 125 at p. 5, ¶ 48, p. 8, ¶ 7; Doc 125-3. On July 8, Keith Bump asked Cabai about the status of the revised draft consortium agreement, noting that ACE “really want[ed] to have [the agreement] in place before the lab. As you know we are going to be sharing proprietary information in the lab and should really have the written agreement in place before we do that.” Doc. 107 at ¶ 45; Doc. 107-1 at 74-75. Cabai responded: “As I explained to you prior, Karen [Solt] is out of town. [The agreement] will not be signed prior to me coming to the lab. If you are going to cancel my attendance then you need to let me know in a hurry. … If I need to cancel arrangements, I must do it now.” Doc. 107 at ¶ 45; Doc. 107-1 at 74. Cabai also told Keith Bump that she would not sign the nondisclosure agreement before attending the SkillLab. Doc. 107 at ¶ 46.

         After receiving another email from Keith Bump, Cabai told him that “Tom” had told her “that nothing would be happening prior to [Solt] returning to the office.” Doc. 107-1 at 74. (ACE asserts that the person referred to in the email was not Tom Cameron, but rather Tom Glaser, the College's Vice President of Finance. Doc. 125, p. 9 at ¶ 14. Because the identity of the person with whom Cabai spoke is immaterial, he will be referred to as “Tom.”) Cabai indicated that she was “beginning to get concerned because I have things booked and need to know if I need to cancel.” Doc. 107-1 at 74. Later that day, Cabai followed up with Keith Bump, indicating that Tom “was not comfortable signing anything without having legal approve nor with [Solt] out of town.” Doc. 125 at p. 9, ¶ 13; Doc. 107-1 at 77. Bump responded: “That's OK Kathy. … We will see you in Denver next week.” Doc. 107 at ¶¶ 46, 48; Doc. 125 at p. 5, ¶ 48; Doc. 107-1 at 77.

         From July 14-19, Cabai attended ACE's Surgical SkillLab in Denver. Doc. 46 at ¶¶ 19, 24; Doc. 107 at ¶ 48; Doc. 125 at p. 5, ¶ 48. After returning, Cabai expressed concern that certain important subject matters were not adequately covered by ACE's curriculum. Doc. 107 at ¶¶ 49, 77; Doc. 125 at pp. 6-7, ¶ 77; Doc. 107-1 at 80-81. Cabai's written evaluation of the Surgical SkillLab noted “many concerns with curriculum, things/concepts covered and concepts not addressed. Honestly feel that many [surgical assisting] concepts were not addressed.” Doc. 107-1 at 80. On July 30, Solt emailed Dan and Keith Bump about those concerns. Doc. 107 at ¶ 50; Doc. 107-1 at 83-85. Dan Bump responded on August 13. Doc. 107-1 at 87-95.

         After further discussions, Doc. 107 at ¶ 51; Doc. 125 at p. 9, ¶¶ 16-17, Solt emailed Dan and Keith Bump on September 8 to say that the College had “deci[ded] … to decline to partner with ACE.” Doc. 107-1 at 97; see also Doc. 107 at ¶ 51. Solt's email listed “concerns includ[ing] the lack of preparation … for you to begin teaching this program for us in an on-line format” and the time it would take to prepare “a contemporary curriculum.” Doc. 107-1 at 97. Cabai then rewrote the surgical assistant training program's curriculum to comply with all CAAHEP requirements, as ACE was not at that point CAAHEP-accredited. Doc. 107 at ¶ 52; Doc. 125 at p. 5, ¶ 52. (ACE's Local Rule 56.1(b)(3)(B) response objects to this asserted fact, maintaining that Cabai's purpose was to ensure that the curriculum no longer included materials from ACE; in ...


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