IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

LIGHTHOUSE BEHAVIORAL HEALTH SOLUTIONS, LLC , Plaintiff,

v.

MILESTONE ADDICTION COUNSELING, LLC, GITI MAYTON, EDWARD TURNER, JO NATHAN BETHKE , and PATRICIA CHRISTIAN ,
Defendants. )

) ) ) ) ) ) ) ) ) ) ) ) ) C.A. No. 20 2 2

- 0 979

- MTZ

MEMORANDU M OPINION
Date Submitted: March 1 , 2023 Date Decided: May 1 7 , 2023

Phil ip A. Rovner, Jonathan A. Choa , POTTER ANDERS ON & CORROON LLP , Wilmington, Delaware ; Marisa B. Miller, Kevin K. Chang, SHEPPARD, MULLIN, RICH T ER & HAMPTON LLP, San Diego, California , Attorney s for P laintiff

. Sidney S. Liebesman, E. Chaney Hall, Nathaniel J. Klepser , FOX ROTHSCHIL D LLP , Wilmington, Delaware ; Eri k J. Clark, ORGAN LAW LLP, Columbus, Ohio , Attorney s for Defendants

.

ZURN, Vi c e Chancello r .1

Milestone Addi c tion Couns e ling , LLC (“Mileston e”), a ment al health a nd

substance u se disorder tr ea tment center , was acquired by plaintiff Lighthouse

Behavior al Health S o lutio n s , L LC (“Lig hthouse”) , a network of me nt a l health and

substance use dis order treatment centers

. In the governing a sset p urchase

a g re ement ( the “APA”), Mile stone made a series of promises that it cannot keep

.
Milestone promised to convey all its patient lists, ch a rts, and reco rds to Lig h thouse

. But federal regulation s require patient consent to convey patient

records : conveying all of Milestone ’ s records to L i ghthouse without obtaining

consent from every patient risk s criminal penalties

. Milestone also promis ed to

deliver the pat ient rec o rds and all d ocuments r eason ably required by applicable

law . B ut the patient consents required to deliver those patient records are not

within Milestone ’ s control, and the patients do not have to give consent. A n d

M ilestone rep r esented and warr anted th a t it had take n all neces sary action s t o perform t he agreeme nt , tha t it was in co mpl iance with all health care laws, and that
consummating the transaction would n ot violate any applicable law

. But

Milestone has not and , as a pr acti cal matter, likely canno t obtain patient consents

to t ransmit every record , and cannot transmit every record without consent without
violating federal law.

L i ghthouse has sued Milestone and its stakeh olders for not keeping their
promises , seek ing speci fi c per formanc e of Mileston e ’ s prom ise t o transfer all its2

patient records

. The defendants responded with a bevy of counter claims. On the
parties ’ cross

- motions for summary judgment, I conclude that federal law requires
obtaining patient co n sents befo r e conveying Milestone ’ s patient records to Lighthouse , and t hat M i lestone promised to deliver patient consents to Lighthouse

and so promised to obtain them

.
Those conclusions do not answer all of the parties ’ questio ns. Neither party

has estab lished the consequence s of Milestone having promised to delive r the

pa tient consents necessary to convey all the patient records it sold to Lighthouse,

when obtaining all the consents is likely impossible and conveyin g records w itho ut them is illegal. Th ese issue s will require further d evelop ment.

I. BACKGROUND 1

L ighthouse op e rates a networ k of outpat ient s ubsta nce use dis orde r and

ment al health trea tment faciliti es

. 2 Milesto n e operated a n outpatient substance use

1 For the purpose s of the pending Motions, I draw the rele vant fa cts from the Verifie d Co mplaint, Docket Item (“ D.I.”) 1 [hereina ft er “Compl. ” ], a s w ell as the admi ss io n s on file , together wi th an y affidavits

. See Ct. Ch. R. 56(c). Citations in the f orm of

“ Lighthouse OB

— ” refer to Plaintiff Lighthouse Behavior al Health Solutions, LL C ’s Ope ning Brief in Support of Mo tion for Summar y Judgment, av a ilable at D.I. 30

. Citations in the form of “ M i lestone OB

— ” refer to Defendan t s Miles ton e Addi ction Coun seling, LLC, Giti May ton, Edw ard Turner, Jonathan Bethke, a nd Patric ia C hristian ’ s Openi ng B rief in Support of its Motion fo r Partia l S ummary Ju dg ment , available at D

. I. 3 1

. Cit atio n s in the for m of “ Milestone A B

— ” refer t o Def endant s Mileston e Addi ction Counseling, LLC, Git i Mayton, Edward Turn er, Jonathan Bethke, a nd Patri ci a C hris tian ’s Answer ing Bri ef i n Opposition to Lig htho use ’s M otion for S umma ry Judg ment , av ailab le at D.I. 3 8

. Citatio ns in the form of “ Lighthouse A B

— ” refer to P laintiff Lighthou se Behavior al Health Solutions, LLC ’s Oppos ition to Defendants3

di sor d er and men tal health trea tment facility until it s assets were acquired by
Lightho u se and its aff

iliate

. 3 I n dividual d efendant Gi ti Mayton w as M ile stone’s
majori ty s tock holder , and individual defendants Edward Turn er, Jonathan Bethke,

and Patricia Christi a n we r e Mil esto ne’s minori t y stoc kholder s ( together, the

“ Owner Def

enda nts, ” and t ogethe r wi t h Mayton an d Mil estone , “ Defendants”)

. 4
Lighthouse and its affiliate acquired a 1 00% interes t in “ Acquired Assets, ” defined

as “all of [M ilestone’s] pr operties, r i gh ts, and asse ts , w heth er real or personal and
whether tangible o r intangible , ” other than certain excluded asset s. 5

The transaction was conducted in t wo parts. L ig hthouse paid cash for a

stake in the Acquired Assets defined as “ P u rchased Assets , ” in a t ransactio n

go verned by the APA w ith Miles t on e, Mayton as the owner represen tative, and
Turner, Bet h ke, and Christian as owne rs

. 6 The Owner Defendants and Mayton

cont ributed the remaining sta ke in the Acquired Ass ets to L i ghthouse ’ s affiliate in

Mileston e Ad di ction Counseling, LLC, Gi ti M ayton, Edward Turn er, J onatha n Bethke,

a nd P atricia C hristia n ’s Motion for Part i al Summar y Judgment , availa b le at D.I. 4 0

. 2 C ompl. ¶ 13 ; Milestone OB at 9; Milestone A B a t 1

– 2

. 3 Compl. ¶ 14; Milestone OB a t 9; Milestone A B at 2, 6

. 4 Compl. ¶ 14 , Milestone OB at 9

. 5 D.I. 29, A f

fida vit of Matt hew J. Romeo in Sup port of Plaintiff Light house B ehavioral Health Solutions, LLC ’ s Motion f or Summary Judgment [hereinafter “ Rome o Aff. ” ] Ex. 1 [he reinafter “ APA ” ] § 1

. 6 APA § 2.1.1

.4

exchange for equity , go verned by a Contr ibution and Ex change Agr eement

. 7 Both

agreements are governed by Delaware la w. 8 Li ghthou s e also entered into a one

year em ployment a greement with Mayton, employing h er as the Regional Clinic al

Director w ith managerial resp onsibi litie s ov er the former Mile stone fac ility. 9
In the APA, Milestone promised that “ [a ]t the Closing . . . [Milesto ne] wil l

se ll, transfe r, convey, ass ign and de l iver to [Light house], and [L igh t house] wil l
purch ase from [Mil estone] an und ivided interest in 5 3.98 773 % o f the Acquired

Assets (the ‘ Purchased Assets ’ ) . . . including

. . . any and all patient lis ts, charts,

record s , ledgers, and information

. ” 10 The APA also p rovided tha t at closin g ,

“ [Milestone ] and the Owne r s shall deliv er, or cau se t o be del iv ered, as a pplicable,
to [Lighthouse] . . . all ri ght, title and interest in and to th e Purchased Assets , including a Bill o f Sale in the f orm attached h e reto as E xh ibit C and such other

documen t s as m ay be reasonab ly re quired b y applicable La w.” 11 Finally,

7 Id. at Recital s ; Romeo Aff. , Ex. 2 [hereinafter “ Contributi on A gr. ” ] a t Re citals

. 8 APA § 8 .9 ; Contribution Agr

. § 1 8.

9 Comp l. ¶ 27

. 10 A PA § 2.1.1(g)

. Defendan ts do not dispute t hat APA Section 2.1.1 , standing alone, facially obliges Milestone to co n vey its patient records to L i ghthouse. See Mileston e OB at 10 ; Miles tone AB a t 42

. Section 2.1.1 is not a model of cla rity in its use of “ Acquired As sets ” and “ Pur chased Assets , ” but the only reasonabl e i nterp retation is that it simultaneously enumerates Acquired Assets , ident ifies the partial stake in th ose assets that consti tute s Purchased Assets , and bi nds Milestone to convey that stake and the

enum erated a ssets that are not amenab le to subdivision to L ighthouse

. It would be absu rd to read Section 2.1 .1 to bind M i lestone to convey only a 54% stake in p atient reco rds.

11 APA § 2. 5.3(b)(v)

.5

Miles to n e a n d th e Owner Defendants made s everal representations and warranties , promising that their pe rformance under th e transaction documents was within the
power of and authorized by Milestone and the Owner Defendants ; that their
performance would not viola te a ny law , including health care law s ; and that
Milestone and its fiduciaries and agents were in compliance with he a lth care laws , including those governing patient privacy and c onsent

. 12

After the trans acti on closed , a d i sput e a ro se between Lighthouse a nd M ayton concerning Lighth o use’s access to Milestone ’s patient recor ds. Milestone

maintained its patien t records o n a cust omer relati onship man a gement and

electronic health record database administer ed by BestNote s

. 13 Aft er closing,

Milestone remained th e ac count holder an d system administrator for the BestNotes

a ccount. 14 May t on, as Milesto n e ’ s ow ne r represe n tative , con trolled access to the

account before, du ring, and afte r her employme nt at Lighthou se. 15 Some

L i g hthou se employees had limited access duri ng d ue diligence an d for a brief
period after closing, but o n August 5, 202 2, Mayt on term i nated al l Lightho u se

12 Id. § § 3 .2 , 3.3, 3.21.1 , 4.1 , 4.2 ; id. § 1 ; Contribution Agr. § 3(a)

. 13 Compl. ¶ 29 ; D .I. 41 , Affidavit of Tia M o retti in Support of Plaintiff Lighthouse Behav ioral Heal th Solutions , LLC ’ s Oppositi on to Defendants Mil estone Addi c tion Coun s eli n g, LLC, Giti Mayton, E dward Turner, Jonatha n Bethke, and Patricia Christian ’ s Motion for Partial Summary Ju dgment [hereinafter “ Moretti Aff. ” ] ¶ 5

. 14 Compl. ¶ 29.

15 Id. ; M oretti Aff. ¶ 5

.6

empl oyees’ acce ss to the B estNotes pa tient recor ds

. 16 The part ies dispute wh y Mayton d id s o , and in part icula r w hether Lighthouse told her to do so

. 17 In the

weeks t h at followed, the parties sparred over Li ghthouse ’ s acc ess

. M ayton

m a intaine d that gra n ting fu ll access to the p atien t records v iolated f ed eral l aw regul ating disclosu re of substanc e use disorder pati ent records , co dified at 42

C.F.R. P art 2 ( “ Part 2 ” )

. 18 Lighthouse t erminated Mayton ’ s employ ment effective

O ctober 20, 202 2. 19

L igh tho u se fi l e d its complaint on October 28, 2022 . Cou nt I , against all
Defendants, seeks specifi c pe rformance of APA S ection 2 .1.1(g ) , requiring

Mile sto ne t o convey “any and all patient lists, charts, records, ledgers and

information” to Li ghthouse

. To the e x tent that f ederal l aw requ ires pati ent consent
to convey patient re cords , Ligh thouse furt her asserts th at Milesto ne m ust obtain

tho se conse nts un der A PA Section 2.5.3(b)(v) ’ s obligation to deliver “ all rig h t, title

and interest in and t o the Purc has e d A ss e ts, includi ng a Bil l of Sa le in the f orm

attached hereto as Exhibit C and such other docu ments as may b e reasonably

16 Li ghthouse OB at 13 ; M o retti Aff. ¶ 7

. 17 Lig htho use assert s th at M ayto n term i n ated acc es s because of a di spute with Li ghthouse about he r employ ment

. Compl. ¶ 48

. Milestone con tends that Lighthouse Preside nt Tia Moretti ordered Ma yton to termi nate Lightho use employee access to BestN otes. Miles ton e AB at 8

. In an a ffid avit , Mor e tt i explai n s t ha t she never d irect ed Mayto n to entirely t er minate L ighthouse’s BestNotes access. See M orett i Aff. ¶ 6

. 18 Compl. ¶ 32 ; Mil estone AB at 9

– 10 , 12

– 13 ; s ee 42 C

. F

. R

. § 2.1 et se q. ( 2022).

19 Compl. ¶ 32

.7

r equired by app licable Law.” 20 C o unt II reiterates th e alleged breach es of contract

unde r lying Count I against all Defe ndants , an d Co u nt II I claims Mayton , as “ key
manageria l personn el , ” b reached her fiduciary du ties t o Lighthous e

. 21

Defendants answered the complaint, ass erting amon g ot her s the affirmative
defense of illegality “ to the extent any agreement requires the di sclosure o f Pa t ien t

R ecord Assets to L i g hthouse without additional pat ient consent compliant with
applicable law. ” 22 Defendants also f iled c o unterclaim s

. Counterclaim C ount I

seeks nine decla ratory judgments establishing the parties ’ rights and obligations

wit h res p e ct to ob t aining patient consent for the tran sfer of pat i ent recor d s.

Counter claim Count II seeks specific performance compelling L ighthouse (1) to
obtain pa tien t consent before Milestone ’ s transfer of patient re cor ds, ( 2) to all ow

Mi l estone to retain copi es o f pa t ient records , a nd (3) to p r omptly for ward requests

fo r patient records to Milestone. Counter claim Count III all eges a breach of the

APA arising out of Lig hthouse ’ s failure to perform th ose same obligations

.
Af ter filin g the c omplaint , Li ghth ouse sent M i l e s tone a proposed patient

c onsent form. 23 The pa rties negotiated a form , and eventually

— once befo re the

20 APA § 2.5.3(b ) (v)

. 21 Comp l. ¶ 5 9.

22 D.I. 2 3 at 31

. 23 Milest o n e OB at 17

– 1 9, 21; D. I. 5 1 , Affidavit o f Tara Bradfor d in Support of Plaintiff Lighthouse Behavioral H ealth Solutions, LLC ’ s Motion for Summary J u dgm ent ¶ ¶ 4, 9 , 11

.8

hearing on this matter and then in bulk after ward s

— Lighthouse obtained patient

consents to transfer re cord s and Mile stone t ransferred tho se r ecords

. 24

O n J anuary 18, 2023, before conducting any discovery, L i ghth ouse and

Defendants moved for partial summary judgment

. 25 Light h ouse seeks p artial

summar y ju dgment on its breach of contract claim, asserting D efendan ts “ owed an

e nf o rceab le obligat ion to c on ve y t he [ p] atie nt [r] eco rd [a] ssets under the APA and
related agreements, ” and that they breached those obligatio ns ; 26 Lighthouse also
seeks summary judgm ent on its request for specific performance of that obligation.

I r ead Defendants ’ b rief

ing to seek part i a l su m mary judgme nt on two discre te legal

issues : whether Part 2 “ requires written consent from patients identifying

L i ghthouse as the recipient befo re M i lestone can transfer patient records, ” and

“ whether the A PA r eq uires M ilestone to transf er p atie nt r e c o r ds with out

con sent. ” 27 The par ties briefed the mot ions and I heard argument on March 1,

2023. 28

This opinion first ad dress es how Part 2 governs the flow of patient records

from Milestone to L i ghthouse, and then whe ther th e APA requ i res either party to

24 Milestone OB at 1 9

– 20

. 25 D.I. 28 ; D .I

. 31

. 26 Lightho use OB at 37

– 38 ; Li ghtho u se AB at 17

. 27 Miles tone OB at 2 2.

28 D.I. 50; D.I. 53 [hereina fter “ Hr ’ g Tr. ” ]

.9

o b t a i n patient consent . It ends with questions about how those conclusions affect

Defendants ’ contractual promises and obligations

.
II. A NALYSIS

A motion f

or s ummary ju dgment will be grant ed where the record before the

C ourt sh ows “th at t h ere is no gen uine iss u e a s to any material fact and that the
moving party is entitled t o a judgment as a m atter of law.” 29 Summary judgment
may only be granted when there i s no genuine issue as to any material fact and the
moving party is entitled to a judgment as a matter of l a w

. 30 When the movant
carries that burden, the burden shifts to the nonmoving party “to prese nt some specific, admissible evidence that there is a genuine issue of fact for a trial.” 31 On
any application for summary judgment, “the court must view t h e evid ence in the
light most favorable to the non

- moving party.” 32 “The Court will decline to enter
summary judgment when the record indicates a mate rial fact is in dispute or if it
seems desirable to inquire more thoroughly into the facts in order to c l arify th e

29 Ct. Ch. R. 56( c).

30 Twin Bridges Ltd. P’ship v. Draper , 2007 WL 2744609, at *8 (Del. Ch. Sept. 14, 2007) (citing Ct. Ch. R. 56( c) , and AHS N.M. H ld gs

. , I nc. v. Healthsource, Inc. , 2007 WL 431051 , at *3 (Feb. 2, 2007) ).

31 Deloitte LLP v. Flanagan , 2009 WL 52006 57, at *3 (Del. Ch. Dec. 29, 2009) (interna l quotation marks omitted) ( quoting Watson v. Taylor , 829 A.2d 936 , 2003 WL 2181 0822, at *2 (Del. Aug. 4, 2 003) (TABLE))

. 32 Merrill v. Crothall

- Am., Inc. , 606 A.2d 96, 99 (Del. 1992) (citing Adickes v. S. H. Kress & Co. , 398 U.S. 144, 157 (1970)).10

application of law to the circumstances.” 33 Wh e n presented with cr oss

- moti ons fo r

summ ary judg men t, the C our t must examine each moti o n separa tely

. 34
Additionally, “ [ t] he mere filing of a c ros s moti on for summary jud g ment does no t

serve as a wai v er of the movan t ’ s right to as sert the existence of a fac t ual dispute

as to t he other party ’ s mot ion

. ” 35 “[A] party moving for summary judgment

concedes the absence of a factual issue and the truth of the nonmoving party’s
allegations only for purposes of it s own m otion, and does not waive its right to
assert that there are disputed facts that preclude summary judgment in favor of the
other party.” 36

A. Part 2 Re quires Pa tient Conse nt To Convey Milestone Patient Records To L i ghtho use.
Pa rt 2 restrict s t h e disc l os ure and u se of substance use disorder patient

r ecords maintained by s ubs tance use di sorder treatment or rehabilitation

progra ms. 37 Part 2 re gulations are “ intend ed to ensure that a pa tient receiving

tre atment f

or a s ubstan ce use d iso rder in a p ar t 2 pro g ra m is no t ma d e more vulnerable by reas on of the availability of their patient record than an individual

33 In re Tesla Motors, Inc. S’holder Litig. , 2020 WL 553902, at *3 (Del. Ch. Feb. 4, 20 20) (in tern al quotation mark s and citations omitted).

34 Fasciana v. Elec. Data Sys. C orp ., 82 9 A.2d 160, 166

– 67 (Del. Ch. 2003) (c iti ng Empire of Am. Relocation Servs., Inc. v. Com

. Credit Co. , 551 A.2d 433 , 435 (Del. 1988) )

. 35 United Vanguard Fund, Inc. v

. TakeC are, In c

. , 69 3 A. 2d 1 076, 1079 (Del. 1997)

. 36 Id.11

with a substance use disorder who does not seek t re atment. ” 38 Accordingly, Part 2
regulations “proh ibit the discl osure and use of patient rec or d s unle s s certain

cir c umstances exist.” 39 Even i f circumstances permitting disc losure without
patient cons ent exist, the r egulations “ do [] not compel disclosure ” un der any

circumstances. 40 And “[a]ny disclosure m ade unde r the regula tions in th is part

mus t b e limi t ed to tha t in f ormation which is necessa ry to carry out the pur pose of

t he disclosure.” 41 Violating Part 2 carries criminal penalties. 42 I read Part 2 to

com pel a c onservative approach i n deciding that an exceptio n to c onfide ntiality

ap plies

.
L ig h thouse c o nt ends Mi lest o ne can transfer all of it s patient reco rds to Lighthouse without pati e nt conse nt because Lighthouse exercises “ direct

administrative contr o l ” over the former Milesto n e prog ram, a nd there for e fa lls

und er an exception to nondisclosure embo die d in Part 2 ’ s S e ction 2.12 (c) (3)

. 43

Defen dants d ispute that Lighthouse assumed “direc t administrative control” of

Mi lestone’s program

. Instead, Defendant s co ntend L i ghthouse acquired Milestone ,

37 42 C.F.R. § 2.2(a) (2022)

. 38 I d. § 2. 2 (b ) ( 2)

. 39 Id. § 2.2(b )(1)

. 40 Id.

41 Id. § 2 .13(a)

. 42 Id. § 2. 3

. 43 Li ghth ou se O B at 2 0

.12

an d so Section 2.19 requires patient consent to tr a ns fer patie nt r ecords

. 44 The
operative provisions fol low

.
Sectio n 2.12(c ) ( 3 ) : T he restrictions on disclosure in the regul ations in this pa rt do not app ly t o com municati ons of informa tion between or among personnel having a ne e d for the informat ion in con n ec tion wi th their dut ies that arise out of the provi sion o f diag nosis, t reatment, or referral for treatment of patients wi th substance use di sorders if the
commu nication s a re

. . . (i i) Between a part 2 program and an entity t h at has direct admi nistrative co ntrol o ver the prog ram.
Pursuant t o f

ederal gu idance fr om the Substance Abuse and Mental Health

Services Administ rati on , on e example of “ d irect ad mini s t ra tive control ” u nder

Sectio n 2.1 2(c)( 3) is “ [w] hen a su b stance use d isorder unit is a compo n ent of a

la r ger behaviora l hea lth pro gram or of a gener al health program. ” 45

S ection 2.19: I f a part 2 program di scontinues operations or is taken over or acqu ire d by anot her program, it mus t remove patie nt ide ntifying in formation f rom its r ecords or de s troy its re cords, inc l udi ng sa nitizing any associated hard c opy or electronic media, to render the pati ent identify ing information non

- retrievable in a manner
co nsi s tent wit h the policies and procedur es est ablish ed under § 2.16, unl es s

. . . T he patient w ho is th e s ubject of t h e recor ds gives written consent (meeti ng the requirement s of § 2.31) to a transfe r of the
rec ords to the acquiring program or to any other pro gram desi gnated in the conse nt (the manner of ob taining thi s consent m ust minim ize the lik e lihood o f a disclosure of pati ent identifying information to a third party)

. . . . 46

44 Mil e s tone AB at 21

– 22

. 45 Substance Abuse & Mental He alth Se rvs. Admin

. , F requently As ked Qu esti ons: A p p lyin g the Substance Abuse Confi de ntiality Regulations to He alth Inf ormation Exchange ( HIE) , at 5 (2010) , ht tps://www.samhsa.gov/site s/de fault/file s/faqs

- app l ying

confidential ity

- re gulations

- to

- hie.pdf

. 46 42 C.F.R. § 2.19 (a)(1) (2022)

.13

Whether Lightho use assumed di rect admini strative c ontrol over Mil eston e ’ s

pr ogr a m is a factua l question

. F or either side t o prevail on summa r y judg ment , it

must “ show th a t ther e i s no genuine iss ue as to any material fact and that the
moving part y is entitled to judgment a s a matter of law

. ” 47 Defendants conte n d

Li gh thouse acquir ed M ilestone ’ s progra m pursuant to the AP A and their
relationship is the refore governed by Par t 2 ’ s S e ct ion 2.19

. Defenda nts point to a provision in the APA p roviding that “[f]ollowing th e Closing D ate , [Miles to n e]

will cease to maint a in the busine ss as a goi ng concern and sh all cease to operate

the Business.” 48 For i t s part , Lighthouse argues it exerci s es “ direct adminis trativ e

control ” over the tre atment pro gram Milestone formerly operated based on the

und isputed fac ts that the program has t h e same pers on ne l, the same facility, the
same phone numb er and contact information, a n d prov ides the same servic e s as it

did before the A PA was executed

. 49 L i ghthouse as ser ts it h a s administrative

control ove r the progr am in this case bec ause Lighthouse m a nages s taff t ra ining ,
fund ing , and decide s wh at services to provide. 50

Defendants ha ve met t heir burden by pointi n g to the clear terms of the AP A : they show Lighthouse ’ s relationship to the program is that of an acquir er under

47 Ch. Ct. R. 56 (c )

. 48 APA § 6.8 ; Milestone AB at 6

– 7

. 49 Romeo Aff. ¶

¶ 10

– 1 4

. 50 L igh thous e OB at 11

– 12 ; see also Lighthouse AB at 11

– 16

.14

Sec tion 2.19, and not a n ad ministrat or a ddressed by Section 2.12 (c) (3)

. Lighthouse acquired the program, and Milestone promised to stop operating it.
Lighthouse is not in administrative control of a program operated by another. T h e

fact s that L i ghthouse point s to, indica ting that much about t he program has

r ema ine d the same under Lighthouse ’ s control, support the conclusion that

L i gh thouse is an acquirer, and fail t o generate a genu ine issue o f ma terial fact

.
E ven if Lighthouse had sh o wn tha t Section 2. 12(c)( 3 ) ’ s e xception for

a d ministrati v e control go ver n ed its exchange of patient records with Miles tone,

that section is limited in scope and does not support convey i ng “ any a nd all ”

Milestone pa t ie n t records to Lighthouse as an enterprise

. 51 S ection 2.12(c ) ( 3 ) of

Part 2 do es not permit Light h ous e to obt ai n, without patient consent , all records for
every f ormer Miles tone patient fo r use t hroughout Lighthouse

. 52 By i t s own terms ,
Section 2 .12(c)( 3 ) lim its disclosu r e of co mmunic ations without patient conse nt to

communic ations between personnel i n ad ministra ti ve control “having a need for

51 APA § 2.1.1(g).

52 S ee Hr ’ g Tr

. 2 4

– 25 ( “ A T TORN E Y MIL LER: ‘ All ’ means all. ‘ [A ] ny an d all patient lists, charts , records, ledge rs a nd i nfor m ation , ’ not just patient lists, charts, records, ledgers a nd infor mation for those pa tients who come into Lig hthouse after the closing date

. Th a t is not w h at the c ontract s ays

. ” ) ; see a lso id. at 25 ( “ THE COURT : How does that fi t wi th , ev en u nde r yo ur view, if this falls under the exception t o Part 2, given tha t the en t i ty with direct ad ministrative control stil l has to have a need for the i nfor m ation in
c o nnec tion with th e ir duties that arise ou t of the provision of diagnosis, t reat ment , or
r efe rral ? ATTORNEY M ILLER : Any time a

- - well, firs t, patient outrea ch. So p ati e nts who do n ot come in to Lighthous e aren ’ t necessaril y all of the patie nts w ho Light h ouse
c an serve

. ” )

.15

the information i n connection wi th their dut ies that a rise out of the provision of

di ag nosis, treatment, or refe rr al f or treatmen t of pati ents w it h substance use

disorders. ” 53 In other w ords, in the context of ad m inistrative c ontrol, Pa rt 2
permits the transmittal of patient records without consent where spec ific
administrative personnel “ need ” the information in conn ecti on with their patient

care duties.
Lighthouse seeks more than the M ilestone records its perso n nel needs t o

ca re for patients . It seeks all of Milestone ’ s records to be given to Lighthouse as
an enterprise, in order “ to pr ovide outreach to the patient pop ulati on , ” 54 i.e. , for

ma rketing purposes

. Sectio n 2. 12(c) ( 3 ) do e s not su pport such a broad disclosure , or any disclosure for “ outreach ” purposes

. T his restrictive reading o f Sectio n

2.12 (c)( 3 ) is reinforced by Part 2 ’ s gen eral interpretative provision req uir ing that
“[a]ny disc losure made under the reg u lat ions in thi s part mu st be limited t o tha t

inf ormation which is necessary t o carry out th e purpos e of the disc losure.” 55 And
transmitting records of former patients without their consent for reasons ot her than

their own care nee ds would violate Part 2 ’ s exp licit “ inte n[ t] to e nsure that a

53 42 C.F .R. § 2.12(c)( 3 ) (2022).

54 H r ’ g Tr. at 2 1 ( “ ATTO RNEY MILLER: We pr o vided eq uit y in the new entity in
e xchange for these records. W e need these records in or der to provide effec tive care to the patien t po p u lation. We also need these records to pr ovide outreach to the patient population.” ).

55 42 C.F. R. § 2.13(a) ( 2022 ).16

pa tient receiving tre atment f or a s ubstan ce use d iso rder in a p ar t 2 prog ram is not
made more vulnerable by reason of the availability of their patient record than an

indi vidual with a substance use disorder who does no t se ek t reatmen t. ” 56 Sec tion

2.1 2(c) ( 3 ) does not permit Milestone to convey “any and all patient lists, charts,

rec ords, ledg ers, and information ” to Lighthouse as an e nterpri se without patient

consent

.
Base d on the for egoing, Def endants ’ mo tion for parti a l s ummary jud g m e nt

is G RANTED IN PAR T : the conveyance of Milestone ’ s patient records to
Lightho use is gove rned b y Se ction 2.1 9 of Part 2

.

B. M i lestone Promised To Deliver Patie nt Consents To Lighthouse

. Ha ving determined that patient co nsent is required to tran sfe r M i les tone ’ s patient rec ords to Lighthou se accordin g to Part 2 ’ s S ection 2.19 , I now turn to the
parties ’ disagreement as to who, if anyone, was required to obt ain pat ient consents

. Lighth o us e ar gue s Section 2 .5.3(b)(v) of th e APA impos ed th at obligation on

M i lestone : I agree. Defend ants contend that mutual further assurances and
cooperation clauses require Lighthouse to obtain patient co nsents : I do n o t read

the m t hat way

.

56 Id. § 2. 2 (b) ( 2)

.17 1. APA Section 2 .5.3( b )( v ) Lig hthouse seeks a partial summary judgment to the effect tha t, if patient
consent is required fo r the t ransfer of Mi lestone ’ s patient records , Section

2.5. 3(b) (v) of the AP A imposes the ob ligatio n to obtain tho se cons en ts on

Milestone

. 57 That sectio n p r ovides that “ [Milestone ] and the Owner s s hall deli ver,
or cause to be delivered, a s applica ble, to [Lighthouse ]

. . . al l right, title and

inter est in and to the Purcha sed A ssets, i ncl udi ng a Bil l o f Sale in the f orm

attac hed hereto as Exhibit C a nd su ch o ther documen ts as may be reasonably

re quired by ap plicable Law

. ” 58 The APA defines “ Law ” to includ e “ Health Care
Laws, ” which is in turn define d to include an y law relati ng to “ medical privacy and

securit y, patient confi de ntiality [and] informed consent

. ” 59 The record does not

include the Bill of Sale.

Defendants re spond tha t be cause Part 2 regulations “ do not require

disclos ure under any circumstances , ” 60 patient c onsents to support disclosure are

not doc u ments that are “ reasonabl y re quired ” within t h e meaning of S ect i on

57 Lighthouse OB at 5 , 15 , 25

. 58 APA § 2.5.3( b)(v)

. 59 Id. § 1.

60 42 C. F .R

. § 2.2( b) (1) (2022)

.18

2 .5. 3(b)(v) of t he AP A. 61 De fendants also assert that the definition of “ Health Care

Law ” does not mention Part 2 and thus , arguably, exclu des Part 2. 62

The definition of Health Care Law does no t exclude Pa rt 2 just because it
does not specific ally enume rate it : it includes “ all Laws and all

. . . regulations . . .
in each case relating to health care providers or facilities , including any Law
relating to . . . medical privacy and se curity, pat ient confiden tiality , [and] inform e d

consent. ” 63 And certainl y, a s Defendants themselves argued, Part 2 “ require [s] ”
consents to convey Milestone ’ s patient records to L i ghthouse. In order for

M i lestone to convey “ all right, title and interest in and to ” its patient re c ords as part

of the Purchased Assets, Part 2 re quir es consent forms . The consent forms fall

under the documents M i lestone promised to deliver to L i ghthouse in Section
2.5.3(b). By promising to deliver the consent forms to Lighthouse, or cause them

to be delivered , Milest on e necessarily promised to obtain or request them : Milestone cannot deliver something it does not have , and cannot cause to be
delivered something it has not requested to be sent

. That patients are not required to give consents may ma ke it di fficult for
Milestone to perform its promise to deliver the consent forms Part 2 requires to
convey all of Milestone ’ s patient records. B ut patient au tono my does not change

61 Milestone A B at 25 (emphasis omitted )

. 62 See Mi les tone AB at 4 4

– 45

.19

the fact that Part 2 requires patient consents to convey right, title, and interest in
patient rec ords , and so Section 2.5.3(b)(v) requires Milestone to deliver those
consents to Lighthouse

. On this point, L i ghthouse ’ s motion for partial summary
judgment is GRANTED

.

2. APA Secti on s 6.3 a nd 6.7.3 (b)
Defendant s arg ue the APA impos es a conditio n p recedent on de livering
patient reco rds, re quiring that L ight hous e first obtain pat ient c onsen t before

Milestone must convey its records

. 64 Defendants point to Se ction 6.3 of the APA ,

a provision title d “ Further Assuranc e s ” t hat states that “ up on the req ues t of either

the Ow ner Representativ e o r [L ighthouse] , e ach o f th e parties hereto shall do,

execut e , acknowledg e, and d eliver all such fu rther

. . . papers as ma y be r easonabl y

req uired or appropriate to carry out and/or evid ence the Contemp lat ed

Trans ac tio ns. ” 65 Defendants a rgue this provis ion cre at es a cond it ion p rece dent
whereby Lighthous e must provide patient con sents befor e M i lestone can fulfill its

obli gation to d eliver patient records. 66 Li gh thouse disputes this in t erpr e tation. 67

“ A con di t io n pre ced ent is either an act of a party that m ust be performed or a

cer tain event that must hap pen b efo re a contractual right accrues or a contractual

63 APA § 1

. 64 Mile stone AB at 26

– 27 , 44

. 65 APA § 6.3

. 66 Milestone AB a t 26

– 27 ; Mil eston e OB at 41

– 43.20

dut y arises. ” 68 “ Because of the r isk of forfeiture, conditions are d isfavored a n d th e

l aw has evolve d t o protect par ties from forfeitures in certain in stances. ” 69
Accordingly, “ [w] hether the agreemen t establishes a condition is a question of

i ntent to be dra wn from the agreement ’ s plain , unambiguous language. Words and
ph rases such a s ‘ i f, ’ ‘ provided th at , ’ and ‘ o n the condition that ’ generally indi cate the parties have created a c ondition. ” 70 APA Section 6.3 contains no such pla in,
unambig uous language suggest ing that the parties have created a condition
precedent. T he provisio n doe s n ot de scribe an ac tio n th at must b e pe rfo rmed or

event t hat must happ en be fore a contractual r ight accrues

. Rather, Section 6.3 is both titled as, and reads as , a further as s urances provision. F u rthe r assurances pr ovis ions are a “ mechanism fo r confirming exis ting
rights an d ob l iga t ions, ” but they cannot “ be used to create new contractu al

commitmen ts o r to resolve ambig uities

. ” 71 They are “ catchall contract provision [s]
by which a party, after mak ing a precise commitment to perf or m in some manner,
makes a vague, more general comm itment to t ake other actions that a re incident al

67 Li gh thouse AB at 22

– 26.

68 13 S AMUEL W ILLISTON & R ICHAR D A. L ORD , A T REATISE ON THE L AW OF C ONTRACTS § 38:7 (4th ed. 1993 & 2023 update )

. 69 Ainslie v. Cantor Fitz gerald, L.P

. , 2023 WL 106924, at * 1 1 (Del. Ch. J an. 4, 2023 ) ( coll ecting cas es)

. 70 Id. at *10 ( foot notes omitted).

71 Hawkins v . Daniel , 273 A.3d 792, 82 8

– 29 (Del. Ch

. 2022) ( dis cu s sing an “ A ddi tional Documents Claus e, ” which the C ourt likens t o a fu rther assurances clause)

.21

to, and ne cessary for, the performance of th e core commitment

. ” 72 S uch a provision does not create a new obligation , muc h l ess o ne that serve s the singular

f unction of a condition precedent.

APA Section 6.3 does not im pose a new obligat ion on Lighthouse to obtain
patient co nsen t s , particularly given that Sectio n 2.5.3(b)(v) imposed that obligation

on Milestone. And Section 6. 3 provides that “ at the request of either the Owner
Representative or [Ligh thou se] , each of the parti es ” shall deliver t he papers at

issue. 73 E ither may ma ke s uch a request : nothing in this language i mposes a

unilat e ral obligation on Ligh thouse

.
Defendant s simi larly point to APA Section 6.7.3(b), a co operation prov ision ,

to im pos e the obligation to ob tain patient consents on L i ght hou s e. Section 6.7.3(b)

prov id es that “ [Lig ht house], [M ilest one], and the Owners wil l coope rat e fully , as

and to the extent reasona bl y requested by the other party, in connection with any

h ealth ca re matt e r or in connect ion w ith c om pliance with any H ealth Car e Law
relating to the

. . . Purchased Assets

. ” 74 Like th e further assurances provision, th is
cooperation prov is ion does not contain the language necessary to impose a

72 True N

. Comm c ’ ns I

n c. v. Publ icis S.A. , 71 1 A.2d 34, 39

– 40 (Del. Ch. 199 7) (describing language stating a p arty “ shal l if reasonably req uested pr ovide such ot her in forma tion as is necessary to ensure that the transaction q ualif ies for [a certain]

ac counting treatment ” as a “ further as surances cl ause ” ).

73 APA § 6.3 (emphasis added )

. 74 I d. § 6

. 7

. 3 (b).22

condition precedent of obtain ing patie nt consents , or creat e a new contractual

commi tmen t. And lik e the furt her assurances provision, it is exercisab le by request of either p a rty , and does n ot i mpose an y oblig ation on Lighthouse alone

.
Neit her the fur ther assurances clause nor the c oope ratio n clause im poses t he
obliga tion to obtain pati ent consent s on Li ghth ouse

. On this point, Defendants ’

motion is DENIED

.

C. The Part ies Ha ve Not De monstrated Whether Milestone Is Excused From C onveying Pat ient Rec ords T o L i ghthouse Without Consent

. I ha ve interp reted Part 2 to require patient con sent to convey Milestone ’ s

pa tient rec ords to Lighthouse , or risk criminal penalties

. 75 Milestone promised to
convey all its patient records to Lighthouse. Milestone also promised to convey all
documents requi re d by pati ent privacy laws to Lighthouse, incl uding the patient

consen ts r e quired to convey pat ient records. O f course, the decision of whether to
give consent rests with each patient

. Yet De fendants promised Milestone could
perform its promise to convey all its medical records without violating any laws.

Defendants mad e p romi ses that may prove difficult to keep. 76 “ [ I] t is n ot the job of

75 42 C.F.R. § 2. 3 ( 2022 )

. 76 A s Defen dants pointed o ut in their b riefing, APAs in similar transactions have acknowl edged th e a p plica bility of Part 2 and specifically account ed fo r thos e requirement s in pro vi sions re lating to the transf er of pat ient records

. Milest one AB at 20

– 2 1.23

a [Delaware] co urt to relieve sophistic ated p artie s of the burde ns of con tracts they
wish they ha d drafted differently but in fact did not.” 77

I turn to the parties ’ posi tions on the enf orc eabi lity of Milestone ’ s promise

to convey all its r ecords to L i ghthouse if, as seems likely, Milestone cannot obtain
consent from all its patients. Li ghthouse seeks summary judgment on the basis

that D e fendants “ owed an enforceable obligati o n to conve y th e P a ti en t Record

Assets under t he APA and relat ed agree ments , ” that they breached th at ob ligatio n ,
and that they s h o uld be ord ered t o specifically perf orm that obligation. 78

Defendants h a ve asserted an illegality defense, and on summary judg ment press

that any c ontractual requirement to immediately provid e patient records without

consent is unenforceable.

L i ghthouse has not eng aged w ith the idea that M ilestone ’ s obligation to convey all patient records might be un enforceable. Lighthouse ha s held fast to its
reading of Part 2, which as explained I do not agree with. L i ghthouse has not

shown it is enti tled t o summary judgment on the is sues of breach and the
availability of specific perfo rmance under this opinion ’ s interpretation of Par t 2

an d its impli cati ons on Milestone ’ s obli gations to perform under Section 2.1.1 of

the APA.

77 DeLuc ca v. KKAT Mgmt., L.L.C.
, 2006 W L 224058, at *2 (De l. Ch. Jan. 23, 2006)

. 78 Li ghthouse OB at 3 7

– 38 ; Lighthouse A B a t 17

. I note that the ob ligation under Section 2.1.1 bin ds th e “Company , ” not any other de fendant. APA § 2.1.1.24

F or their part, Defendant s ha ve fallen short of me eting their burden to show
they are entitled to judgment as a matter of law on their illegality defense.
Illegalit y is an affir mati ve d efense on which Defendants bear the burden of pr oof. 79

Defenda nts ’ brief in support of judgment i n thei r favor gave illega lity very q uick
treatment: four paragraphs and a quote that , “ I n general, Delaware law prohibits

cour ts from enf

or cing illeg a l ag reem ents. ” 80 That is certainly true in general, but

the devil is i n the d eta ils.

Defendants are corr ect in their recitation o f the gener al proposition

. Under Delaware law, it is agai nst the public policy of this State to permit its co urt s to enforc e an ill egal contract prohibited by law. Ordinarily, we think, when s uch is the fac t, neither party has a remed y to any extent aga inst the ot her. Moreover, this Court has held that a court may never enforce agreements void ab initio , no matt er what the i nten tion s of the parties. Thus, wh en an agreement is void ab initio a s against publ ic policy, the courts typica lly will not enforc e a remedy to any ex tent against either party. In other wo rds, the courts typically will leave the parties where they find t hem. 81

It follows that “specific per formanc e will b e denied if it appea rs that the a greement sought to be e nforce d is illegal becaus e i t involv es a violation of statutory

79 Ct. Ch. R. 8(c) ; Rothenberg v. Santa Fe Pac. Corp. , 199 2 WL 111206 , at *4 ( D el. Ch. May 18, 1992) (citing 31A C.J.S. Ev i dence § 104(b) (1964) , and 29 Am. Jur. 2d Evi dence § 129 (196 7 ) )

. 80 Miles tone OB at 44

– 46 (qu o t ation marks omitte d) (quoting Balooshi v. GVP Glob. Corp. , 2022 WL 576819, at *11 (Del. Super. F eb. 25, 202 2) , aff ’ d , 285 A.3d 839, 2022 WL 5052721 (Del. 2022) (TA BLE) )

. Milesto ne ’ s brief opposing L i ghthou se ’ s motion fo r summary judg ment briefi ng also ga ve illegality very quick treatment . Milestone AB at 24 , 37.25

pr ovision or r ule of law

. ” 82 Delaware co urts have r efused to “ use the po w er

entrusted it b y th e people of Delaware to com pel specific performance of an aspe c t

of a n ille gal contract.” 83

But whether a contract is void because i t , or a term within it, conflicts with a

statute i s more nuanced tha n the general proposition Defend ants offer

. “ [C ]our ts

a re averse to voiding agreem ents on public policy grounds unles s their ill egality is

clear and ce rta in. Further more, courts exercise this authority with caution, and
only in cases th at are free from doubt. ” 84 “Contracts may be unenf orcea ble if they

are eit her illegal per se or viola te public policy.” 85 While authorit y state s th at a

contract is il lega l per se if it “ violates th e explici t mandate of a statutory

81 Geronta Funding v. Brighthouse Lif e Ins. Co. , 2 84 A.3d 4 7 , 61 (Del. 2022) ( f ootn ote s, citations, a nd quotation ma rks omitted)

. 82 81A C.J .S. Ille gality § 44 (2023); see also 25 S AMUEL W ILLISTON & R ICHAR D A. L ORD , A T REATISE ON THE L AW OF C ONTRACTS § 67.3 (4t h e d. 1993 & 2023 upd ate ) (“If an agreement is illegal or opposed to public policy, specific perf orm anc e i s cle ar ly i mproper . . . .”).

83 Lynch v

. Gonzalez , 202 0 WL 43 8160 4, a t *44 (Del. Ch. J uly 31, 202 0) (citing Morente

v. More nte , 2000 WL 2 64329 , at *3 (De l. Ch. Feb. 29, 200 0) ) , aff ’ d , 253 A.3d 556 ( Del. 2021)

. 84 Bennett v. Lally , 201 4 WL 4674623, at *4 (Del. Ch. Sept. 5, 2014) (inter n al quotations and citati ons omit te d)

. 85 Bunting v. Citize ns Fin. G p. , 2007 WL 2122137, at *5 (Del. Super. June 29 , 2007) ( ci tations omitted).26

pr ovision , ” that same aut hori ty goes on to consider a multitude of factors to

de termine if that sam e violative contract is une nforceable. 86

T o determine i f a co ntract , which vio lates the terms o f a stat ute, should be unen forceable as a matter of public policy, the Court must
cons ider the statute ’ s language, nature, object, pur pose, s ubject matt er, reac h, the wrong or evil which the law seeks to remedy or pr event, the c lass of per sons sought to be control led, the legislativ e history and the effects of holding a contract in violatio n of the law invalid as well as balancing the in terest in enforcem ent of t he contract against the law ’ s underlying pu blic policy. 87

And D elaw are ’s prohib ition on enfor cing an ille gal contract contai ns three
exceptions: if denial of restitution would cause dis prop ortionate forfeiture ; if both
parties ar e excusa bly ignoran t an d on e party is less in the wron g ; and if the party

se eking restitu tion did not engage in serious mis conduct and either withdrew

before t he improper purpose was achieved , or allowance of the claim would end a
continuing situation that is cont rary to the pub lic interest. 88

The enforceabil ity of an ill egal contract becomes more complex when
dealing with an illegal term within an othe rwise leg al agreement.

86 Preferred Fin. Servs

. , I nc . v. A&R Bail Bonds L LC , 2019 WL 315331, at *5 ( Del. Super. Jan. 23, 2019).

87 Bunting , 2007 WL 2122137, at *5 ( citing Bank of Baltimore v. Auto ’ s Plus , 1994 WL 19937, * 2 (Del. Super. Jan. 4, 1994) ); s ee also id

. (conside ring a defens e of i llega lity to breach of an impl ied contract n ot to fire a notary f or notarizing documents in consistently with notary requirements) ; Preferred Fin

. Serv s. , I n c. v. A&R Bail Bonds LLC , 2018 WL 587023, at *6

– 7 (Del. Super . Jan . 26, 2018) (co nsidering a contrac tual arrangement designe d to circumvent statutes regulating the b ail bond business ) ; Della Corp. v. Diamond , 210 A.2d 847, 849 (Del. 1965) ( cons i dering a cont rac tual arrangement to circumvent a liquor licensing statut e).27

In that case, the contract may be divisible by its lawful and unlawful terms and so poten tially enfo rcea ble on its lawful terms. In de termining whether a partially illeg al contract is enforceable on its lawful t erms, two prelimina ry issues must be res olved. First, the Court must determine whether the contract ’ s illegal terms are so “c entral t o the parti es’ agre ement” that the plaintiff c annot prove its breach

- of

- contract claim without them. If they are, then the contract is void d espite an y lawful te rms expressed therein. Second, if the p laintiff can sustain its claim on the contract ’ s lawful terms alon e, t hen the Court must determine wh ether the parties intended the lawf

ul terms to b e “severable,” i.e. , enforced notwithstanding pa rtial avo idance.

. . . If the parties expressed in the
con tract directly an expectation of severability

— e. g. , inc luded an
un ambi guou s severability clause

— then the Court may sever and enforce the lawful terms. 89

Defendants ha ve no t engage d with the nuances of declarin g a contract void

because performing would viola te the terms of a statute. Nor ha ve they engaged

wi th the nuances of void ing one term of an otherwis e valid agreement , other than

to p o int out the APA ’ s severability pro vision

. 90 Defendants ha ve n ot met their

burde n to demonstrate they are entitled to a j ud gment as a matter of law. 91

88 Gero n ta Fundin g , 284 A.3d at 68

– 7 1

. 89 Balooshi , 2022 WL 5 76819, at *11 ( foot notes , citations , and quot ation mark s omitted) ; accord Bennett , 2014 WL 4674623, at *4

– 5

. 90 APA § 8.8

. 91 See Tafeen v. Homestore, Inc. , 2004 WL 1043721, at *1 (Del. Ch. Apr. 27, 2004) ( “ I t is we ll settled that whe re the opponent of summary judgment has the burden of proof at tr ial, he must show specific facts demonstrating a plausible ground for his c laim , and cannot rely merely upon allegations in the pleadings or conclusory assertions in affida vits in order to a v oid summary judgment being granted in favor of the proponent of t he motion. ” (internal quot ations, alterati ons, and cit ations omitted))

.28

III. CONCL US ION

In sum , Part 2 req uire s pa tien t co nsent for the tr ansfer of M ilestone ’ s patient

records to Lig ht house

. On this issue, Li ghtho use ’ s motion for summary judgme nt

is DENIED and Defe ndants ’ is GRANTED

. Milestone promise d to give the
required patient consents to Ligh thouse, the reby also pr omis ing to obtain them.

O n t his issue , L i ghthouse ’ s mot ion for summary ju dgment is GRANTE D and

Defendants ’ is DENIED

. A nd Defendants ’ motion is DENIED as to the
enforceability of Miles tone ’ s obligation to convey its patient records without

pat ient consen t. I ask the parties to submit a s tipulated order implementing these

de cisio ns, b y count and co unterclaim to the ext ent possible

. Despite having stipulated to filing cross

- m otions , t he part ies talked past each

ot her in br iefing. T he foregoing discussion has left some ques tions unanswered , particularly as to the conse qu enc es of De fendants ’ represent ations and warranties
and the consequences of my interpretation of Part 2 on M i lesto ne ’ s o bligations

under APA Section s 2. 1.1 and 2.5.3(b) . T he partie s appear to h ave anticipated

some loo se ends , having stipulate d to filing addit ional motions for summary judgment if this o p inion did not ful ly re solve the matter

. 92 There i s no right to a

s ummar y judgment ; the co rollary to t hat rule i s tha t there is also no right t o

92 D .I. 2 2 ¶ 5

.29

s ucce ssive attem pts at su mmary judgment. 93 I ask t he parties to con fer on an

efficie nt way t o resolve any remai n ing issues. If the path is to be moti on practi ce, I
ask the parti es to submit a joint le tter seekin g le ave and ou tl ining t he issues t o be

briefe d an d the specific judgm ents soug ht. If the path is to be trial, I ask the parties

to subm it a scheduling ord er.

93 See Tel xo n Corp. v. Meyerson , 802 A.2d 257, 262 (Del. 2002) (c i tations om i tted)

.