PHILADELPHIA (August 2023) - Stanley Parker, a shareholder in the firm’s litigation section, recently prevailed on behalf of a client in the United States Court of Appeals for the Third Circuit. Parker represented George Kelly, who is currently an executive of a Community Based service center serving children and adolescents operated by Pathways Health and Community Support, one of the largest providers of accessible behavioral and mental health services in the U.S. Mr. Kelly’s case involved a business dispute that he initiated against his former employer Peerstar and former business associates. This case presented many issues of first impression regarding Pennsylvania’s identity theft statute and Pennsylvania law for the reimbursement of services rendered to minors on the autism spectrum.
Our client, Mr. Kelly, originally sued Peerstar and his former business associate for breach of a settlement agreement that stemmed from him being bought out of the business. They countersued alleging fraudulent inducement of the settlement agreement and identity theft. After a one-week trial, Buchanan won a multi-million-dollar award in favor of our client before the United States District Court for the Western District of Pennsylvania. At the same time, the District Court fully rejected the Defendants’ counterclaim seeking over $30 million and awarded them no money at all.
The losing parties sought to have the case reversed by taking an appeal to the United States Court of Appeals for the Third Circuit. Following extensive briefing, the Court of Appeals rejected the appeal and fully affirmed the trial court’s decision in favor of Buchanan’s client. Notably, the Court of Appeals reviewed the breach of contract claim and the fraudulent inducement counterclaims. Appellants claimed that the District Court misapplied the “parol evidence rule.” However due to “fraud insulating clauses” that were included in the settlement agreement, the Court of Appeals affirmed the District Court’s decision in favor of our client. The Court of Appeals also reviewed the identity theft claims and affirmed the District Court’s finding that the Appellants failed to prove that our client used or possessed their identities without their consent.