[Doc. No. 69]

THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

CAMDEN VICINAGE

TWIN CREST GROUP, :

: 

Plaintiff, :

:

v. : Civil No. 10-6350 (JS)

:

DELAWARE VALLEY :

UROLOGY, LLC, :

:

Defendant. :

______________________________:

DELAWARE VALLEY :

UROLOGY, LLC :

: 

Third-Party Plaintiff, :

:

v. :

:

JOSEPH PLANDOWSKI, et al., :

:

Third-Party Defendants. :

______________________________:

OPINION

This matter is before the Court on the “Motion for Partial 

Summary Judgment” [Doc. No. 69] filed by plaintiff Twin Crest 

Group (“TCG”) and third-party defendants Joseph Plandowski,

Bernie Ness, B.J. Ness Consulting, LLC, Lakewood Consulting, 

LLC, Twin Crest, LLC, and In-Office Pathology, LLC. TCG is 

seeking partial summary judgment on Delaware Valley Urology’s

(“DVU”) counterclaims for breach of contract, breach of covenant 

of good faith and fair dealing, and unjust enrichment. The 

1
third-party defendants are seeking summary judgment on all of 

DVU’s third-party claims. (Unless otherwise noted, TCG and 

third-party defendants shall be collectively referred to as 

“movants”). The Court received DVU’s opposition. [Doc. No. 78].

The Court exercises its discretion to decide movants’ motion 

without oral argument. See Fed. R. Civ. P. 78; L. Civ. R. 78.1. 

For the reasons to be discussed, movants’ motion is DENIED.

Background

Since this Order is primarily for the benefit of the parties 

who are already familiar with the background of this matter, 

only the most salient facts are set forth herein. DVU is a 

urology physician practice group serving the Southern New Jersey 

and Philadelphia area. Am. Third-Party Compl. ¶ 1 [Doc. No. 67]. 

Prior to judicial dissolution, TCG was a consulting group that 

provided consulting services to physician practice groups

seeking to set up in-office pathology laboratories. Id. at ¶ 2; 

see Answer to Movants’ Statement of Material Facts at ¶¶ 3-4 

[Doc. No. 78].1 On May 23, 2007, the parties entered into an “InOffice Laboratory Agreement” (“Agreement”) in which TCG agreed 

to install a 600 square foot, fully functional in-office 

1 On February 22, 2010, the partnership of TCG was judicially 

dissolved in Ohio’s Lucas County Court of Common Pleas. See

Cunningham v. Ness, No. CI200806180 (Oh. Ct. C.P. Feb. 22, 2010) 

(hereinafter referred to as “Dissolution Decree”) [Doc. No. 78-

1, Ex. 1].

2

 
anatomic pathology laboratory within DVU’s existing Voorhees, 

New Jersey facility. Movants’ Statement of Material Facts, ¶ 6

[Doc. No. 69-2]. Under the Agreement, TCG was responsible for 

completing the following work: (1) design, construct, and equip 

the laboratory; (2) select, order, and install necessary 

equipment; (3) recruit and recommend medical and technical staff 

needed to operate the laboratory; (4) assure that “the 

laboratory [was] inspected by all necessary governmental, 

professional and other entities and obtain all necessary 

licenses and permits for construction and . . . assure that the 

[l]aboratory receive[d] its Clinical Laboratory Improvement 

Amendment (CLIA) certification prior to processing patient 

tests”; (5) flowchart specimens and paperwork routing to ensure 

a smooth workflow; (6) review laboratory operations; (7) 

recommend a billing services company; and (8) provide a 

Physician Office Laboratory pathology reporting system. Id. at ¶

7; see Agreement, Ex. A ¶¶ 1-9 [Doc. No. 78-1]. 

In consideration for TCG’s services, DVU agreed to pay TCG in 

accordance with the compensation schedule set forth in the 

Agreement. See Agreement, Ex. C. Specifically, TCG was to be 

paid “Specimen Fees” for “Covered Procedures” as defined by 

Schedule C-3 of the Agreement. Id. at C-3; see Answer to 

Movants’ Statement of Material Facts, ¶ 8-9. The Agreement also 

3
prescribed the manner in which DVU was “entitled” to terminate

the contract in the event of a breach by TCG, providing: 

Any breach by TCG of this Agreement shall be 

actionable by DVU. DVU shall be entitled to terminate 

this Agreement upon 10 days notice for any breach not 

cured within such 10 day period, may sue for damages 

and may withhold and set off against such damages any 

amount owing by it to TCG.

Agreement at 3, ¶ 18.2 Subsequently, on January 31, 2009, counsel 

for DVU notified Bernie Ness, then Vice President of TCG, that 

DVU was exercising its right to terminate the Agreement based 

upon TCG’s alleged material breach. Movants’ Statement of 

Material Facts, ¶ 11; see also Termination Email [Doc. No. 69-

8]. DVU’s counsel specified that TCG had “materially breached 

the Agreement by its failure to obtain the required CLIA 

licenses and certifications for DVU’s Voorhees Laboratory.” See

Termination Email.

TCG filed the instant action against DVU on December 8, 2010,

asserting claims for breach of contract, promissory estoppel, 

2 The Agreement included specific requirements to effectuate 

notice

Any notice required or permitted to be given hereunder 

shall be in writing and shall be deemed to have been 

duly given if delivered personally, delivered, or 

mailed by certified or registered mail, postage 

prepaid, or sent by national recognized overnight 

courier to the parties at the addresses set forth [in 

the Agreement] or at such other address as a party 

shall designate by notice to the other . . . .

Agreement at 2, ¶ 12.

4

 
unjust enrichment, and breach of good faith and fair dealing.

See generally Complaint [Doc. No. 1]. TCG alleges that DVU 

wrongfully terminated the Agreement and refused to remit 

payments owed to TCG for performing its obligations under the 

contract. See id. at ¶¶ 15-18. In response, DVU denies breaching 

the contract, arguing that it exercised its contractual right to

terminate the Agreement in light of TCG’s “fail[ure] to timely 

construct [DVU]’s Laboratory . . . fail[ure] to obtain necessary 

building permits to construct [DVU’s lab] . . . fail[ure] to 

obtain the necessary Clinical Laboratory Improvement Amendment 

license certifications for [DVU] to operate its laboratory . . .

fail[ure] to oversee and ensure preparation or all necessary 

laboratory manuals and specimen processing practices . . . [and] 

fail[ure] to perform monthly inspections of the Laboratory as 

required by the Agreement.” Am. Answer, ¶ 8 [Doc. No. 66].3 In 

addition, DVU asserts six counterclaims against TCG.4

3 On January 28, 2011, DVU filed its initial answer and 

counterclaims against TCG. [Doc. No. 8]. On March 5, 2013, this 

Court granted DVU’s motion for leave to file an amended answer, 

amended counterclaims, and an amended third-party complaint. See

March 5, 2013 Order [Doc. No. 65]. DVU subsequently filed its 

amended answer and amended counterclaims [Doc. No. 66] against 

TCG, as well at its amended third-party complaint against thirdparty defendants. [Doc. No. 67].

4 DVU asserts the following counterclaims against TCG: fraud in 

the inducement, negligent misrepresentation, breach of contract, 

breach of covenant of good faith and fair dealing, unjust 

enrichment, and a violation of the New Jersey Consumer Fraud Act

5

 
DVU filed its initial third-party complaint on January 28, 

2011, against third-party defendants, a group comprised of 

partners and/or successor entities of TCG asserting the 

following claims: fraud in the inducement, negligent 

misrepresentation, breach of contract, breach of covenant of 

good faith and fair dealing, unjust enrichment, tortious 

interference with contract, and a violation of the New Jersey 

Consumer Fraud Act pursuant to N.J. Stat. Ann. § 56:8-1 et seq.

See generally Third-Party Compl. [Doc. No. 9]. DVU’s third-party 

complaint was later amended to include allegations that TCG 

failed to perform monthly inspections of the lab as required by 

the Agreement and committed “unconscionable commercial 

practices” by representing that it would continue to service DVU 

despite having no intention to do so. See Am. Third-Party 

Compl., ¶¶ 15, 55-56. 

In sum and substance, DVU alleges that third-party 

defendants intentionally misrepresented their background, 

experience and ability to construct, operate, design, and 

license DVU’s pathology lab which ultimately led to DVU being 

cited for various deficiencies and the need for corrective 

action. Id. at ¶ 8. DVU claims that under the Agreement, the 

laboratory was to be “designed, built, equipped, and CLIA 

pursuant to N.J. Stat. Ann. § 56:8-1 et seq. See generally Am. 

Answer and Counterclaim.

6

 
licensed” within ninety (90) days, meaning the project was to be 

fully completed by August 23, 2007. Supplemental 

Counterstatement of Material Facts, ¶ 32 [Doc. No. 78].5 DVU 

accuses TCG of hiring “unqualified” subcontractors, whose lack 

of experience and expertise led to defective work, problems and

delays in the completion of the laboratory. Id. at ¶¶ 41-46. 

DVU also accuses TCG of breaching the Agreement by failing 

to obtain the proper certification under the Clinical Laboratory 

Improvement Amendments of 1988 (“CLIA”) (42 U.S.C. § 263a), 

which is required to operate DVU’s laboratory. Id. at ¶¶ 48-50.

DVU claims that after operating its facility for eight months,

it discovered that its CLIA certification was invalid. Id. at ¶

51. As a result, DVU was unable to retroactively recover lost 

Medicare payments that were denied because of the invalid CLIA 

license. Id. at ¶ 52. DVU also claims to have suffered damages 

as a result of its inability to perform additional lab 

procedures while waiting to receive a proper CLIA certification. 

Id. at ¶ 53.6

5 The Court notes that movants did not respond to DVU’s 

Supplemental Counterstatement of Material Facts as required 

pursuant to L. Civ. R. 56.1(a).

6 Given that TCG does not seek the dismissal of DVU’s 

counterclaims for violations of the New Jersey Consumer Fraud 

Act, fraud in the inducement, negligent misrepresentation, and 

tortious interference with contract, the Court will only address 

DVU’s counterclaims for breach of contract, breach of covenant 

of good faith and fair dealing, and unjust enrichment.

7

 
In the present motion, movants seek partial summary 

judgment in favor of TCG on DVU’s counterclaims for breach of 

contract, breach of covenant of good faith and fair dealing, and 

unjust enrichment. Movants also seek partial summary judgment on 

all of DVU’s third-party claims.7 The gravamen of movants’

argument as to the contract claims is that under the Agreement, 

DVU was required to provide written “notice to [TCG] and the 

opportunity to cure any alleged default before it [could] sue 

for damages.” Brief at 6; see Agreement at 2-3, ¶¶ 12, 18. 

Movants argue that the “notice provision was clearly a condition 

precedent to DVU’s right to bring a lawsuit for any alleged 

breach.” Brief at 7. Movants rely heavily on the deposition 

testimony of Nancy Romeo, DVU’s chief operating officer, to show

that TCG was never notified of its alleged breach or given an 

opportunity to fix any such breach. Id.; see Romeo Dep. ¶¶ 79:5-

12, 80-81:13-2 [Doc. No. 69-7]. Furthermore, movants argue that

DVU’s claims against third-party defendants should be dismissed 

as a matter of law because they were not parties to the 

Agreement and thus cannot be held individually liable for 

actions taken on behalf of TCG. Brief at 7-9.

7 On June 21, 2013, the Honorable Jerome B. Simandle entered an 

order approving the stipulation of the parties to voluntarily 

dismiss the third-party complaint against Douglas Cunningham. 

[Doc. No. 71]. 

8

 
In its opposition, DVU contends that “it did, in fact, 

provide [TCG] written notice of its breach of the Agreement, but 

[TCG] failed to provide any assistance” in fixing the problems 

arising out of the invalid CLIA certification. Brief at 1. DVU 

argues that TCG was not only notified of its failure to acquire 

a valid CLIA license in an email sent by Ms. Romeo to Bernie 

Ness on November 17, 2008, but it also refused to assist DVU in 

correcting the CLIA problems or perform any work for DVU due to 

TCG’s internal partnership dispute. Id. at 5, 15; see November 

17, 2008 Email [Doc. No. 78-1, Ex. 5]. To support its claims, 

DVU cites to the following exchange in Mr. Ness’ deposition 

testimony:

Question: The email is dated November 17th. My 

question is, after that, did you provide any 

assistance [on the CLIA issue]?

Answer (Ness): No.

Supplemental Counterstatement of Material Facts, ¶ 58; see Ness 

Dep. ¶¶ 429-30:23-4 [Doc. No. 78-1, Ex. 6]. In explaining the 

nature of its business relationship with TCG, DVU claims that it

“could no longer reasonably trust that [TCG] was capable of 

overseeing compliance, billing, and operations of the 

[l]aboratory.” Id. at ¶ 59.

DVU argues that “the termination provision in the Agreement 

is not the exclusive remedy for terminating the Agreement.”

Brief at 2. DVU contests movants’ interpretation of the notice 

9
and cure provision, arguing that the “provision applies only to 

terminating the Agreement, not suing [TCG] for damages.” Brief 

at 6 (emphasis in original). From DVU’s perspective, the 

provision provided two independent remedies: “(1) to terminate 

the Agreement upon notice and an opportunity to cure and/or (2) 

to sue for damages.” Id. As such, DVU argues that it was not 

required to provide TCG with notice of its breach or an 

opportunity to cure before exercising its right to sue for 

damages. Id. at 7. DVU asserts that “notwithstanding that the 

notice and opportunity to cure provision applies only to 

terminating the [A]greement, DVU had the right to terminate the 

Agreement and to sue [TCG] for damages without providing any 

written notice and an opportunity to cure because TCG materially 

breached the Agreement.” Id. In other words, the provision “did 

not abrogate or diminish DVU’s common law right” to terminate 

for material breach. Id.

Alternatively, DVU argues that even if it were required to 

give TCG written notice of breach and an opportunity to cure, 

doing so would have been a “futile act” given the materiality 

and circumstances surrounding TCG’s alleged breach. Id. at 13.

DVU explains that because laboratories must be properly 

certified in order to receive Medicare or Medicaid payments, 

there was no way for TCG to “go back in time to cure its breach 

by acquiring a valid CLIA ‘prior to [DVU] processing patient

10
tests.’” Id. at 12-13. DVU argues that there was no way to

recover the “lost reimbursements for the procedures that [DVU]

performed and Medicare rejected and . . . the lost profits for 

the time DVU was required to close its [l]aboratory.” Id. In

further support of its argument that providing notice of breach

and an opportunity to cure would have been a “useless gesture,” 

DVU attributes TCG’s refusal to perform services to an alleged

internal partnership dispute amongst TCG’s principals. Id. at 

19. DVU submits that TCG’s alleged breach and refusal to perform 

services under the Agreement provided DVU with “absolute 

justification” for terminating the Agreement. Id.

With respect to movants’ argument that third-party 

defendants are immune from liability because they were not 

parties to the Agreement, DVU cites to the Dissolution Decree in 

arguing that “[Bernie] Ness, [B.J.] Ness Consulting, [Joseph] 

Plandowski, and Lakewood Consulting are liable for all 

liabilities associated with the Agreement.” Id. at 21 (citing to 

Dissolution Decree at 5, ¶ 4:e-f). The Dissolution Decree

provides in pertinent part:

As set forth in the Settlement Agreement, the assets 

and liabilities of the Partnership shall be 

distributed in liquidation of the Partnership as 

follows:

• Cunningham shall assume all of the duties 

and liabilities associated with the 

[Consultants in Gastroenterology] Contract 

11
and [Desert Gastroenterology Consultants]

Contract.

• Ness/Ness Consulting and 

Plandowski/Lakewood Consulting, are 

assigned all other Partnership contracts 

(“Remaining Contracts”) effective December 

31, 2009. The assignment includes all 

assets and liabilities associated with the 

Remaining Contracts.

• Ness/Ness Consulting and 

Plandowski/Lakewood Consulting shall 

assume all of the duties and liabilities 

associated with the Remaining Contracts 8

Id. (emphasis omitted). Furthermore, DVU contends that both InOffice Pathology and Twin Crest LLC are subject to liability as 

successor companies to TCG. Id. at 22.

For the reasons to be discussed, movants’ motion is denied. 

As to DVU’s contract counterclaims, the Court finds that DVU’s 

right to sue for damages was not contingent upon first providing

TCG with notice of TCG’s alleged breach and an opportunity to 

cure. Moreover, assuming arguendo that the provision imposed 

such an obligation, a question of fact exists as to whether 

DVU’s adherence to such a provision was excused in light of 

TCG’s alleged material and irreparable breach, and whether it 

would have been futile to give notice. The Court also finds that 

DVU has raised a fact question as to whether DVU put TCG on 

8 It is undisputed by the parties that the “Remaining Contracts”

assigned to Mr. Ness, Mr. Plandowski, B.J. Ness Consulting, and 

Lakewood Consulting in the Dissolution Decree includes the 

Agreement at issue in this case.

12

 
notice of its material breach in a November 17, 2008 email 

exchange discussing TCG’s failure to acquire a valid CLIA

license. 

As to DVU’s third-party claims, TCG’s status as a general 

partnership, rather than a limited liability corporation, allows

for the imposition of joint-liability on third party-defendants

Joseph Plandowski, Bernie Ness, B.J. Ness Consulting, and

Lakewood Consulting for TCG’s remaining contractual debts and 

obligations. As a general partner and/or successor in interest 

to TCG, third-party defendant Twin Crest LLC is potentially 

liable for the debts and obligations stemming from the 

Agreement. Consequently, as the successor to Twin Crest LLC, 

third-party defendant In-Office Pathology is also potentially 

liable for the debts and obligations arising out of the 

Agreement. Therefore, movants’ motion for partial summary 

judgment is denied. 

Discussion

Pursuant to Fed. R. Civ. P. 56, summary judgment is 

appropriate where the Court is satisfied that “the pleadings, 

depositions, answers to interrogatories, and admissions on file, 

together with the affidavits, if any . . . demonstrate the 

absence of a genuine issue of material fact.” Celotex Corp. v. 

Catrett, 477 U.S. 317, 323 (1986). Summary judgment will not lie 

if the dispute about a material fact is “genuine,” that is, if 

13
the evidence is such that a reasonable jury could return a

verdict in favor of the non-moving party. Anderson v. Liberty 

Lobby, Inc., 477 U.S. 242, 248 (1986). The materiality of a fact 

turns on whether under the governing substantive law, a dispute 

over the fact might have an effect on the outcome of the suit. 

Id.; see Red Roof Franchising, LLC v. Patel, 877 F. Supp. 2d 

124, 129-30 (D.N.J. 2012). A court must draw all reasonable 

inferences from the underlying facts in the light most favorable 

to the non-moving party when considering a motion for summary 

judgment. See Emerson Radio Corp. v. Orion Sales, Inc., 253 F.3d 

159, 162 (3d Cir. 2001).

The moving party bears the initial burden of informing the 

court of the basis for its motion and demonstrating the absence 

of a genuine issue of material fact. Celotex, 477 U.S. at 323. 

Once the burden is met, the burden shifts to the non-moving 

party to “set forth specific facts showing that there [are] . . 

. genuine factual issues that properly can be resolved only by a 

finder of fact because they may reasonably be resolved in favor 

of either party.” Anderson, 477 U.S. at 250. The party opposing 

summary judgment may not “rest upon mere allegation or denials 

of his pleading,” but must set forth specific facts and present 

affirmative evidence demonstrating that there is a genuine issue 

for trial. Id. at 256-57; see also Red Roof, 877 F. Supp. 2d at 

130.

14
1. Counterclaim

Movants’ motion is predicated upon the following two facts

being undisputed: (1) the notice and cure provision required DVU 

to provide TCG with written notice of breach and ten days to 

cure before DVU was entitled to sue for damages; and (2) DVU did 

not provide TCG with notice and an opportunity to cure its 

alleged breach.

With respect to movants’ assertion that the Agreement

required DVU to provide TCG with notice of TCG’s alleged breach 

and an opportunity to cure before suing for damages, DVU argues

that the Agreement imposed no such obligation. Brief at 6. In 

light of the parties’ conflicting interpretations of the notice 

and cure provision, the Court must determine whether the 

relevant terms of the contract are susceptible to more than one 

meaning. Reed Elsevier, Inc. v. Inherent.com, Inc., No. 05-4048 

(JLL), 2006 WL 3827414, at **1, 5 (D.N.J. Dec. 27, 2006) (“It is 

hornbook law that if the relevant terms in a contract are 

ambiguous, the issue must go to a jury.”) (internal citations 

omitted). 

A court “can grant summary judgment on an issue of contract 

interpretation if the contractual language being interpreted is 

subject to only one reasonable interpretation.” Id.; see also

Arnold M. Diamond, Inc. v. Gulf Coast Trailing Co., 180 F.3d 

518, 524 (3d Cir. 1999) (finding that the trial court erred in 

15
granting summary judgment for defendants because plaintiff 

provided a reasonable alternative reading of the assignment 

clause in dispute). If the terms of a contract are clear and 

unambiguous “there is no room for interpretation or construction 

and the courts must enforce those terms as written.” Travelodge 

Hotels, Inc. v. Elkins Motel Assocs., Inc., No. 03-799 (WHW), 

2005 WL 2656676, at **1, 4 (D.N.J. Oct. 18, 2005) (“Whether a 

contract provision or term is clear or ambiguous is a question 

of law and therefore suitable for a decision on a motion for 

summary judgment.”). In deciding whether a contract is 

ambiguous, courts must “consider the contract language, the 

meanings suggested by counsel, and the extrinsic evidence 

offered in support of each interpretation.” Teamster Indus. 

Employees Welfare Fund v. Rolls-Royce Motor Cars, Inc., 989 F.2d 

132, 135 (3d Cir. 1991) (“To decide whether a contract is 

ambiguous, we do not simply determine whether, from our point of 

view, the language is clear. Rather, we ‘hear the proffer of the 

parties and determine if there are objective indicia that, from 

the linguistic reference point of the parties, the terms of the 

contract are susceptible to different meanings.’”) (internal 

citations omitted); see also Emerson, 253 F.3d at 164. Where the 

parties “do not dispute the contents of the writings but 

disagree on the document’s legal effect there are no genuine 

issues of material fact.” FPM Financial Services, LLC v. Redline 

16
Products, Ltd., No. 10-6118 (LHG), 2013 WL 5288005, at **1, 2 

(D.N.J. Sept. 17, 2013) (quoting CECG, Inc. v. Magic Software 

Enter., Inc., 51 Fed. Appx. 359, 363 (3d Cir. 2002)).

The parties do not deny the existence of a valid contract. 

Rather, the parties adopt conflicting views over whether the

language outlining the obligation to provide notice of breach

and an opportunity to cure applies to DVU’s right to sue for 

damages. After reviewing the Agreement’s language and 

considering the parties’ suggested interpretations, the Court

finds that DVU’s right to sue for damages was not contingent 

upon first providing TCG with notice of its breach and an 

opportunity to cure. In the Court’s view, DVU’s obligation to

give notice and an opportunity to cure applied only to DVU’s 

right to terminate, not its right to sue for damages. A reading

of the provision’s first sentence, which provides that “[a]ny 

breach by TCG of this Agreement shall be actionable by DVU,” 

illustrates the broad latitude afforded to DVU in seeking legal 

redress for TCG’s deficient performance. See Agreement at 3, ¶ 

18. While the first clause of the provision’s second sentence 

limits DVU’s right to terminate “upon 10 days notice for any 

breach not cured within such 10 day period,” the second clause 

of the same sentence independently provides that DVU “may sue 

for damages and may withhold and set off against such damages 

any amount owing by it to TCG.” Id. While neither party has 

17
provided the Court with extrinsic evidence explaining why the 

provision was drafted in this manner, in light of the broad 

authority afforded to DVU in bringing actions for “any breach by 

TCG,” it is unlikely that the parties intended to limit DVU’s 

common law right to sue for a material breach. Similarly, the 

Court finds that a provision contractually obligating DVU to

notify TCG of a material breach that could not be cured within 

the prescribed ten day period would be counterintuitive and 

serve no benefit to the parties. Under the terms of the 

Agreement, DVU’s right to sue for damages was available as an

independent remedy separate from its expressly granted right to 

terminate the Agreement. The Court interprets the Agreement as 

providing that DVU retained its right to sue for damages based 

upon a material breach, even if it did not first give TCG notice 

and an opportunity to cure.9

However, even if the Agreement did require DVU to provide 

TCG with notice and an opportunity to cure its alleged breach 

before suing for damages, the Court finds that a question of 

fact exists as to whether Ms. Romeo’s November 17, 2008 email to 

Mr. Ness discussing potential costs stemming from the invalid 

9 Movants also request partial summary judgment on DVU’s 

counterclaims for breach of covenant of good faith and fair 

dealing and unjust enrichment. These arguments stem from the 

same assertion that DVU was required to provide notice of breach 

and an opportunity to cure before suing for damages. In finding 

that the provision does not impose such an obligation, movants’

request with respect to these claims is also denied.

18

 
CLIA license constituted notice. See November 17, 2008 Email.

While DVU does not contend that Ms. Romeo’s email complied with 

the specific notice requirements set forth in the Agreement [see

Agreement at 3, ¶ 12], a fact-finder could determine that the 

content and substance of the email exchanges between Ms. Romeo 

and Mr. Ness concerning the status of the CLIA license was 

sufficient to put TCG on notice of its material breach. As such, 

the Court finds that the factual issues raised by Ms. Romeo’s 

email that purportedly provided TCG with notice of its breach 

precludes summary judgment in favor of the movants. See Ryan v. 

Henderson, 533 A.2d 70, 73 (N.J. Super. Ct. Law Div. 1986) 

(finding genuine issue of material fact existed as to whether 

insurance company provided insured with adequate notice of 

intent to cancel coverage policy).

There are other questions of material fact that preclude 

summary judgment in movants’ favor. One is whether TCG’s actions

constituted a material breach of the Agreement, thereby 

justifying DVU’s termination of the contract. A “breach of 

contract and termination are two very different concepts.” In re 

Nickels Midway Pier, LLC v. Wild Waves, LLC, 372 B.R. 218, 222 

(D.N.J. 2007). While a “breach of contract gives rise to a claim 

for damages by the non-breaching party . . . [t]ermination, on 

the other hand, causes the contract to cease existing.” Id. at 

222-23 (“A material breach of contract on the part of one party 

19
entitles the other party to terminate it. If the breach is 

material . . . the non-breaching party may treat the contract as 

terminated and refuse to render continued performance.”)

(citation omitted). Courts have described a material breach as 

follows: 

Where a contract calls for a series of acts over a 

long term, a material breach may arise upon a single 

occurrence or consistent recurrences which tend to 

defeat the purpose of the contract. In applying the 

test of materiality to such contracts a court should 

evaluate ‘the ratio quantitatively which the breach 

bears to the contract as a whole, and secondly the 

degree of probability or improbability that such a 

breach will be repeated.’

Magnet Resources, Inc. v. Summit MRI, Inc., 723 A.2d 976, 981

(N.J. Super. Ct. App. Div. 1998) (citing Medivox Productions, 

Inc. v. Hoffman LaRoche, Inc., 256 A.2d 803, 809 (N.J. Super. 

Ct. Law Div. 1969)). The New Jersey Supreme Court has explained:

The fact that the defendant has been guilty of 

substantial breaches of essential obligations under 

the contract would ordinarily give the plaintiff the 

right to deem itself discharged from further 

performance and to sue the defendant for damages under 

the contract. But this is not always the injured 

party’s only course of action. In a case of a 

‘material breach of contract which does not, however, 

indicate any intention to renounce or repudiate the 

remainder of the contract the injured party has a 

genuine election offered him of continuing performance 

or of ceasing to perform, and any action indicating an 

intention to perform will operate as a conclusive 

choice, not indeed depriving him of a right of action 

for the breach which has already taken place, but 

depriving him of any excuse for ceasing performance on 

his own part.’ 

20
Frank Stamato & Co. v. Borough of Lodi, 71 A.2d 336, 339 (N.J. 

1950) (citation omitted). Guided by these principles of contract 

law, the Court finds that even if DVU’s right to sue for damages

was contingent upon first providing TCG with notice and an 

opportunity to cure, there is a fact question as to whether 

TCG’s alleged breach justified DVU’s termination of the 

Agreement.

Another fact question is whether TCG was capable of fixing 

the problems caused by the invalid CLIA certification, 

particularly the lost Medicare reimbursements. There is a fact 

question as to whether it was futile to allow TCG, an internally 

feuding partnership with a record of substandard performance

under the Agreement, to fix the CLIA licensing problems that 

already resulted in months worth of denied payments. Brief at 

15. The following excerpt from Ms. Romeo’s deposition sheds 

light on the rationale underlying DVU’s decision not to provide

TCG with an opportunity to cure its alleged breach:

Question: Did anybody either you or anyone on behalf 

of [DVU], give [TCG] an opportunity to cure any 

breaches?

Answer [Ms. Romeo]: I don’t – I think that at that 

point we realized [Ness] couldn’t live up to his 

obligation. [Ness] already failed us. We weren’t going 

to take any chances. We already corrected the problem. 

The CLIA was corrected by us. What was [Ness] going to 

cure? There was no reason to think [Ness] would – it 

was already taken care of. 

21
Romeo Dep. ¶ 80:13-22. The deposition continues:

Question: When the CLIA issue arose, why didn’t 

somebody call Bernie [Ness] to tell him that you 

messed up, you got to fix this?

Answer [Ms. Romeo]: We had multiple conversations 

about the problems we were having. But at this point 

there was no way we were going to trust [Ness]. [Ness]

had already messed up pretty badly and we weren’t 

going to allow [Ness] to do anything more. We had to 

directly work with the state to try to get [the 

problem] rectified.

Id. at ¶ 81:3-12. Through the deposition testimony of Ms. Romeo, 

DVU has shown that it sustained substantial financial harm after 

being forced to close its laboratory due to the invalid CLIA

license. Brief at 12-13; Romeo Dep. ¶¶ 56:2-19, 60-61:8-5. Ms. 

Romeo explained that DVU first started to notice that some of

its reimbursements were being denied in July of 2008, and by 

September of the same year, all charges were being denied. Id.

at ¶ 56:2-19. According to Ms. Romeo, DVU’s reimbursements were

being denied by Medicare because the laboratory was performing 

“professional and technical” services that required a “complex” 

CLIA license, rather than the “waived CLIA license” TCG obtained 

on DVU’s behalf. Id. at ¶ 64:2-9. Furthermore, Ms. Romeo claims 

that DVU is unable to retroactively recover the reimbursements

that were denied due to the invalid CLIA license. Id. at ¶¶ 64-

65:15-12. Given the numerous delays and problems allegedly 

caused by TCG’s deficient performance under the Agreement, the 

22
Court finds that there is a fact issue as to whether it would

have been futile to provide TCG with notice.

In support of its argument that providing notice to TCG 

would have been futile given the irreparable damage caused by 

TCG’s failure to obtain a valid CLIA certification, DVU cites to 

Young Traveler’s Day Camps, Inc. v. Felson, 287 A.2d 231, 237 

(Essex County Ct. 1972). In Felson, the plaintiff entered into a 

franchise agreement with the defendant, granting the defendant 

licenses to establish children’s summer day camps. Id. at 232. 

The franchise agreement set forth the defendant’s payment 

obligations and performance expectations, and included a 

termination clause that permitted the plaintiff, upon written 

notice, to terminate the contract if the defendant failed to pay 

the plaintiff a minimum amount of profit. In addition, the 

contract contained a notice of default provision which provided:

If the Licensee shall become in default. . . in the 

performance of any covenant or agreement made 

hereunder . . . and such default shall not be remedied 

to the Licensor’s satisfaction within five (5) days 

after notice of such default, then the Licensor may 

thereupon terminate this Agreement and all rights 

hereunder of the Licensee, but such termination shall 

not affect the obligations of the Licensee to take 

action or to abstain from taking action after 

termination hereof, in accordance with this Agreement.

Id. at 233. The plaintiff later sued the defendant after he

failed to fulfill his contractual obligations and refused to 

deliver camper contracts that were “vital” to the plaintiff’s 

23
preparation for the upcoming camping season. Id. at 233-34. 

After the plaintiff won a favorable judgment at trial, the 

defendant moved for a new trial, arguing that “material breach 

or no, the law is that where a contract contains a provision 

such as that quoted [in the franchise agreement], the only 

method of terminating is by the notice required under such 

provisions.” Id. at 235. The court considered whether the notice 

of default provision served as an exclusive or cumulative means 

of terminating the contract, finding that the issue presented “a 

fact question as to whether the notice provision prevented a 

party from terminating” for material breach. Id. at 237. In 

denying the defendant’s motion, the court concluded that the 

defendant’s failure to deliver the camper contracts constituted 

a “breach [that] was not merely material, it was irreparable; 

[because] the campers which had not been obtained by the 

beginning of July could not be supplied thereafter.” Id.

Here, the Court concludes that a question of fact exists as 

to whether TCG’s failure to obtain a valid CLIA license 

constituted an “irreparable” breach of the Agreement, thereby 

rendering notice futile. The resolution of this question goes to 

the heart of the parties’ dispute: whether TCG’s material and 

alleged incurable breach excused DVU’s adherence to the notice 

and cure provision. The Court finds that reasonable minds could 

conclude that TCG’s obligation to obtain a valid CLIA license 

24
was so “vital” to the operation of DVU’s laboratory that it went 

to the “essence” of the Agreement. Id. at 235.

In their motion, movants make no attempt to refute DVU's 

claims that TCG breached the Agreement by failing to obtain a 

proper CLIA license, nor do they affirmatively contest the 

allegations that TCG’s partners misrepresented their ability to 

construct the lab in a timely and professional manner. Movants

noticeably omit any reference to the allegedly invalid CLIA 

license and only summarily note that TCG “performed its 

contractual obligations pursuant to the [A]greement.” Brief at 

2. TCG’s request for partial summary judgment hinges on whether 

DVU was contractually obligated to provide TCG with notice of 

breach and an opportunity to cure. Given the Court’s 

interpretation of the disputed provision, TCG’s motion is 

denied.

2. Third-Party Claims

The Court finds that the arguments set forth in the motion 

filed by third-party defendants Joseph Plandowski, Bernie Ness, 

B.J. Ness Consulting, Lakewood Consulting, In-Office Pathology, 

and Twin Crest LLC are without merit. See Brief at 7-9.10 In 

answering the third-party complaint, third-party defendants

10 While movants seek to dismiss all of DVU’s third-party claims, 

movants omit any reference to Twin Crest LLC when arguing that 

third-party defendants are immune from liability because they 

were not parties to the Agreement. See Brief at 7. The Court 

assumes this was an inadvertent error. 

25

 
admit that Mr. Plandowski, Mr. Ness, B.J. Ness Consulting, 

Lakewood Consulting, and Twin Crest LLC are jointly and 

severally liable for the debts, acts, and omissions of TCG as 

general partners and/or successors to TCG. See Answer to ThirdParty Compl. ¶¶ 11-15, 18 [Doc. Nos. 27, 28]. Furthermore, 

third-party defendants concede that In-Office Pathology is the

successor to Twin Crest LLC. Id. at ¶ 17. Mr. Ness’ deposition 

testimony also provides insight into the relationship between 

the partnership and/or successor entities of TCG by outlining 

the manner in which client fees from TCG’s “remaining contracts” 

were distributed amongst third-party defendants following 

judicial dissolution. According to Mr. Ness, he and Mr. 

Plandowski “had In-Office Pathology set up at the time of the 

dissolution of the partnership, and in reality . . . all of the 

additional clients that were left in the partnership were 

basically assumed by [Plandowski] and [Ness] . . . .” Ness Dep.

¶¶ 44-45:23-3. Rather than requiring TCG’s remaining clients to

sign new contracts with In-Office Pathology, Ness and Plandowski 

decided to “let them continue their contracts until they were 

terminated.” Id. at ¶ 45:14-18. To account for the money they 

were receiving from TCG’s remaining clients, Plandowski and Ness 

set up another company doing business as TCG called Physician 

Pathology Laboratories (“PPL”). Id. at ¶¶ 45-46:21-20. Mr. Ness 

explained that both he and Plandowski are entitled to the funds 

26
received by PPL, as PPL is comprised of third-party defendants 

B.J. Ness Consulting and Lakewood Consulting. Id. at ¶ 46:18-20. 

Mr. Ness further testified that money is distributed into InOffice Pathology “for [legal] cases like this one.” Id. at ¶ 

46:4-12.

As part of the dissolution of TCG’s partnership, Ohio’s

Court of Common Pleas assigned to Mr. Ness, B.J. Ness 

Consulting, Mr. Plandowski, and Lakewood Consulting all assets, 

duties and liabilities arising out of the partnership’s 

“Remaining Contracts,” which includes the Agreement with DVU. 

See Dissolution Decree at ¶ 5. Furthermore, the Ohio Court of 

Common Pleas concluded that TCG’s founding partners “[Douglas] 

Cunningham, [Bernie] Ness or Ness Consulting, and [Joseph] 

Plandowski or Lakewood Consulting . . . did not execute a 

written agreement formalizing their relationship; thus, the 

business relationship between the [p]artners was governed by the 

Ohio Uniform Partnership Law (“OUPL”)(R.C. §§ 1775.01, et seq.)

. . . .” Dissolution Decree at ¶ 2.11

At a minimum, the partners of TCG can be held jointly

liable for the ordinary debts of the partnership. See PNC Bank 

v. Farinacci, 964 N.E.2d 1124, 1126 (Ohio Ct. App. 2011).12

11 In 2010, the OUPL was repealed and replaced by the Ohio 

Uniform Partnership Act (“OUPA”) (Ohio Rev. Code Ann. § 1776.01 

et seq.).

27

 
Although TCG was registered as a limited liability company at 

the time the Agreement was signed [See Articles of Organization,

Doc. No. 69-4, Ex. A], the Ohio Court of Common Pleas 

subsequently found that TCG operated as a general partnership, 

not a corporation or a limited partnership. See Dissolution 

Decree, Conclusions of Law at ¶ 1. Thus, the Court finds that

the cases relied upon by third-party defendants in support of

the proposition that corporate officers cannot be held liable 

for actions taken on behalf of a corporation are inapposite

given TCG’s status as a general partnership.

As partners and/or successors to the general partnership of 

TCG, Mr. Ness, B.J. Ness Consulting, Mr. Plandowski, Lakewood 

Consulting, and Twin Crest LLC can be held jointly liable for 

the partnership’s contractual debts and obligations. Moreover, 

as the successor to Twin Crest LLC, In-Office Pathology can also

be held liable for the debts and obligations arising out of 

TCG’s remaining contracts, including the Agreement. Movants have 

failed to provide evidence establishing TCG’s status as a 

limited partnership or a corporation. Therefore, since TCG was a 

general partnership, the Court denies movants’ motion requesting 

the Court to immunize the third-party defendants from liability 

12 The Court expresses no opinion as to whether TCG’s partners 

can be held jointly and severally liable.

28

 
arising out of TCG’s Agreement with DVU.13

Conclusion

In sum, the Court denies TCG’s request for partial summary 

judgment because the Agreement did not require DVU to give TCG 

notice and an opportunity to cure before it sued for breach of 

contract damages. In the alternative, even if DVU was required 

to give notice, which is not the case, TCG’s motion would be 

denied because there are fact questions as to whether: (1) DVU

gave notice to TCG through Ms. Romeo’s November 17, 2008 email 

to Mr. Ness; (2) TCG materially breached the Agreement to an 

extent justifying DVU’s termination of the contract; (3) notice 

would have been futile given the irreparable damage caused by 

the invalid CLIA certification; and (4) notice would have been 

futile given TCG’s alleged unwillingness to assist in fixing the 

CLIA certification problem.

With respect to movants’ request for partial summary 

judgment on all of DVU’s third-party claims, the motion is 

denied because all of the third-party defendants, except for InOffice Pathology, can be held jointly liable as general partners 

and/or successors to TCG. As a successor to Twin Crest LLC, InOffice Pathology can also be held liable for the debts and 

13 In light of the Court’s denial of movants’ motion for the 

reasons already discussed, the Court need not address DVU’s 

argument concerning the imposition of tort liability on Mr. Ness 

and Mr. Plandowski under New Jersey’s “participation theory.” 

See Brief at 23.

29

 
obligations arising out of TCG’s remaining contracts. In 

addition, Mr. Ness, B.J. Ness Consulting, Mr. Plandowski, and 

Lakewood Consulting were assigned TCG’s liabilities by Ohio’s 

Court of Common Pleas.

Accordingly, for all the foregoing reasons, the motion for 

partial summary judgment filed by TCG and third-party defendants 

is DENIED. Since DVU did not file a cross-motion for summary 

judgment, the Court is merely denying movants’ motion and not 

entering judgment in favor of DVU. An appropriate order will be 

entered.

s/ Joel Schneider 

Joel Schneider

UNITED STATES MAGISTRATE JUDGE

Dated: December 12, 2013 

30