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THE T
THE HOMAS L. PEARSON
THOMAS PEARSON AND
T
THE PEARSON FAMILY
HE PEARSON FAMILY MEMBERS
MEMBERS FOUNDATION,
FOUNDATION,
v.
V.
T
THE UNIVERSITY OF CHICAGO,
HE UNIVERSITY CHICAGO,
AND
AND No. 18-cv-99-GKF-FHM
JURY TRIAL DEMAND
T
THE UNIVERSITY OF CHICAGO,
HE UNIVERSITY CHICAGO,
v.
THE T
THE HOMAS L. PEARSON
THOMAS PEARSON AND
T
THE PEARSON FAMILY
HE PEARSON FAMILY MEMBERS
MEMBERS FOUNDATION,
FOUNDATION,
T
THOMAS PEARSON,
HOMAS L. PEARSON,
Counterclaim Defendant.
The Thomas L. Pearson and The Pearson Family Members Foundation (“the Foundation”) as set
("the Foundation")
forth below. To the extent not specifically admitted, the University denies all allegations in the
complaint.
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1.
1. The University admits that, subject to the April 3, 2015 Grant Agreement by and
among The Thomas L. Pearson and The Pearson Family Members Foundation, the University of
$100 million to the University and the University agreed to establish The Pearson Institute for
the Study and Resolution of Global Conflicts and The Pearson Global Forum. The University is
without knowledge or information sufficient to form a belief as to the truth of the allegations
contained in the second sentence of Paragraph 1 and therefore denies them, and denies all other
allegations in Paragraph 1.
2.
2. The University admits that it, the Foundation, and Thomas Pearson agreed to the
terms of the Grant Agreement, and denies the allegations in Paragraph 2 to the extent they
mischaracterize, vary from, or are otherwise inconsistent with the terms of the Grant Agreement.
3.
3. Denied.
4. Denied.
5.
5. Denied.
6.
6. The University admits that the Foundation paid $11.0 million in 2015, $11.0
million in 2016, nothing in 2017, and $900,000 in 2018. The University admits that the
Foundation’s complaint seeks the return of those payments. The University denies the
Foundation's
Foundation is entitled to the return of these funds or any other relief, and denies all other
allegations in Paragraph 6.
Parties
8.
8. Admitted.
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9.
9. Admitted.
10.
10. The University admits that, as stated in Section 10.4 of the Grant Agreement, the
parties have agreed that the United States District Court in the Northern District of Oklahoma
shall be the exclusive venue for any litigation, special proceeding or other proceeding between
the parties that may arise out of, or be brought in connection with or by reason of, the Grant
Agreement.
11.
11. Admitted.
Factual Allegations
12.
12. The University admits that in January 2014, the Pearsons and the University
discussed a large grant from the Foundation related to global conflict, denies that the concept for
the Institute originated with the Pearsons, and is without knowledge or information sufficient to
form a belief as to the truth of the remaining allegations in Paragraph 12 and therefore denies
them.
13.
13. The University is without knowledge or information sufficient to form a belief as
14.
14. The University admits that the parties executed the Grant Agreement on April 3,
2015, after months of discussions and negotiations. The University is without knowledge or
information sufficient to form a belief as to the truth of the remaining allegations in Paragraph 14
15.
15. The University admits that Paragraph 15 accurately quotes a selected portion of
the mission statement of the Institute and Forum, as stated in Section 1.2 of the Grant
Agreement. The University denies all other allegations in Paragraph 15 to the extent they
mischaracterize, vary from, or are otherwise inconsistent with the terms of the Grant Agreement.
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16.
16. The University admits that it was obligated to perform under the terms of the
Grant Agreement, denies the allegations in Paragraph 16 to the extent they mischaracterize, vary
from, or are otherwise inconsistent with the terms of the Grant Agreement, and denies all other
17.
17. The University admits that the Grant Agreement obligated the University to
appoint an Institute Director as described in Section 3.2 of the Agreement, and that the due date
for this appointment is September 1, 2016, with a one-year cure period ending on September 1,
18.
18. The University admits that Section 3.2 of the Grant Agreement describes the
Institute Director, and denies the allegations in Paragraph 18 to the extent they mischaracterize,
vary from, or are otherwise inconsistent with the terms of the Grant Agreement.
19.
19. Denied.
20. The University admits that in June 2016, it appointed Professor James Robinson
to the position of The Reverend Dr. Richard L. Pearson Professor of Global Conflict Studies and
Faculty Director, The Pearson Institute for the Study and Resolution of Global Conflicts, which
is the Institute Director as defined by Section 3.2(a) of the Grant Agreement. The University
admits that the second sentence in Paragraph 20 selectively quotes from a June 2, 2016, press
release; that press release further states that, effective July 1, 2016, Professor Robinson will be
faculty director and The Reverend Dr. Richard L. Pearson Professor of Global Conflict Studies,
which is the Institute Director as defined by Section 3.2(a) of the Grant Agreement.
21. Denied.
22. Denied.
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23. The University admits that in or around August 2017 it made changes to the
“Institute Director"
uses the terms "Institute Director” and "Faculty
“Faculty Director"
Director” interchangeably to describe Professor
Robinson’s position with the Institute. The University denies all other allegations in Paragraph
Robinson's
23.
24. The University admits that, as stated in Section 5.1(a) of the Grant Agreement, the
University will keep the Donor reasonably informed of its progress in recruiting the initial and
any subsequent Institute Director, Forum Executive Director, and the Faculty Chairs in the
Pearson Institute. The University denies the allegations in Paragraph 24 to the extent they
mischaracterize, vary from, or are otherwise inconsistent with the terms of the Grant Agreement.
25. Denied.
26. Denied.
“Faculty Director,"
Robinson as the "Faculty Director,” a term used interchangeably with "Institute
“Institute Director"
Director” in
Section 3.2(a) of the Grant Agreement. The University denies all other allegations in Paragraph
27.
28. The University admits that, as stated in Section 3.2(a) of the Grant Agreement, the
Institute Director shall be selected by the Dean of the Harris School to hold a named
Professor of Global Conflict Studies and Faculty Director, The Pearson Institute for the Study
and that Section 3.4(a) creates three chaired faculty positions (The Ramalee E. Pearson Professor
of Global Conflict Studies, The Philip K. Pearson Professor of Global Conflict Studies, and The
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David L. Pearson Professor of Global Conflict Studies). The University is without knowledge or
information sufficient to form a belief as to the truth of the remaining allegations in Paragraph 28
and therefore denies them, and denies all other allegations in Paragraph 28.
29. Denied.
30.
30. The University admits that three of the four chaired professorships have been
31.
31. Denied.
32.
32. Denied.
33.
33. The University admits that, as stated in Section 5.1(a) of the Grant Agreement, the
University will keep the Donor reasonably informed of its progress in recruiting the initial and
any subsequent Institute Director, Forum Executive Director, and the Faculty Chairs in the
Pearson Institute. The University denies the allegations in Paragraph 33 to the extent they
mischaracterize, vary from, or are otherwise inconsistent with the terms of the Grant Agreement,
34.
34. Denied.
35.
35. The University admits that, as stated in a recital to the Grant Agreement, the
focused activities such as conferences, awards and related events advocating the application of
makers from around the world to ensure the regular exchange of ideas and to maximize the
potential for impact in preventing and resolving violent conflicts and informing policy relating
thereto. The University denies the allegations in Paragraph 35 to the extent they mischaracterize,
vary from, or are otherwise inconsistent with the terms of the Grant Agreement.
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36.
36. Admitted.
37.
37. Denied.
38.
38. Paragraph 38 contains characterizations, legal arguments, or conclusions of law to
which no response is required. To the extent a response is required, the University denies the
39.
39. Paragraph 39 contains characterizations, legal arguments, or conclusions of law to
which no response is required. To the extent a response is required, the University denies the
40. The University admits that Exhibit A of the Grant Agreement sets a due date of
March 31, 2017 for the University to create the first definitive operating plan and budget, and a
one-year cure period ending March 31, 2018. The University denies the allegations in Paragraph
40 to the extent they mischaracterize, vary from, or are otherwise inconsistent with the terms of
41. The University admits that it delivered the operating plan and budget to the
Foundation on March 31, 2017, and delivered revisions to the budget after March 31, 2017. The
42. The University admits that, as stated in Section 3.1(f) of the Grant Agreement, the
Pearson Institute shall be a component part of the Harris School unless the University later
determines that the Institute should no longer be situated within the Harris School. The
43. Denied.
44. Denied.
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45. The University admits that, as set forth in Exhibit C of the Grant Agreement,
Masters of Public Policy students and Ph.D. students will be eligible to be "Pearson
“Pearson Fellows"
Fellows”
“Pearson Scholars”
and "Pearson Scholars" respectively, and it is within the University's
University’s authority to administer
these scholarships. The University denies the allegations in Paragraph 45 to the extent they
mischaracterize, vary from, or are otherwise inconsistent with the terms of the Grant Agreement,
46. Denied.
47. Denied.
48. The University admits that it is within its authority under the Grant Agreement to
create and develop the academic curriculum for the Institute, and denies all other allegations in
Paragraph 48.
49. Denied.
50.
50. Denied.
51.
51. Denied.
[1]
53.
53.E11 The University admits that in May 2014 it announced that Daniel Diermeier
The
would be Dean of the Harris School of Public Policy, effective September 1, 2014, and denies all
54.
54. The University admits that in March 2016 it announced that Daniel Diermeier
55.
55. The University admits that an interim Dean was appointed to serve as Dean of the
Harris School after Daniel Diermeier was appointed Provost. The University denies all other
1
1 The Foundation’s complaint does not include Paragraph 52.
Foundation's
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56.
56. Denied.
57.
57. The University admits that the Pearsons and the University had discussions about
possible amendments to the Grant Agreement, denies that the Grant Agreement was ever
58.
58. Denied.
59.
59. Denied.
60.
60. The University admits that Exhibit A of the Grant Agreement sets a due date of
61.
61. The University admits that it has not yet appointed the final faculty chair, and
62.
62. The University admits that, as stated in Section 5.1(b) of the Grant Agreement, it
shall deliver annual written reports to the Foundation, and denies the allegations in Paragraph 62
to the extent they mischaracterize, vary from, or are otherwise inconsistent with the terms of the
Grant Agreement.
63.
63. Denied.
64.
64. Denied.
65.
65. The University admits that it has not hired a Grants Administrator because the
66.
66. The University admits that the Initial Operating Plan set forth in Exhibit C of the
Grant Agreement estimates that the University would develop strategies for additional
fundraising between September 1, 2016, and June 30, 2017, and denies the allegations in
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Paragraph 66 to the extent they mischaracterize, vary from, or are otherwise inconsistent with the
67.
67. Denied.
68.
68. The University admits that Section 5.1(c) of the Grant Agreement states that the
University agrees to cause the Dean of the Harris School and the Institute Director of the Pearson
Institute to meet at least semi-annually with the Donor. The University denies the allegations in
Paragraph 68 to the extent they mischaracterize, vary from, or are otherwise inconsistent with the
69.
69. Denied.
70. The University admits that Section 5.1(d) of the Grant Agreement states that the
University shall extend invitations to the Donor, its officers and its designated representatives for
events and activities taking place at the Pearson Institute or the Pearson Forum, and denies the
allegations in Paragraph 70 to the extent they mischaracterize, vary from, or are otherwise
71. The University admits that the Institute held numerous events during the 2016-
2016–
extended invitations to the Pearson family to some events during the 2016-2017
2016–2017 and 2017-2018
2017–2018
school years. The University denies all other allegations in Paragraph 71.
72. The University admits that Section 3.1(b) of the Grant Agreement provides that
within 30 days of learning that the University has failed to meet any Founding Obligation or has
breached any Maintenance Obligation, the University shall report to the Foundation such failure
or breach and the plan and timetable for curing that failure or breach. The University denies the
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allegations in Paragraph 72 to the extent they mischaracterize, vary from, or are otherwise
73. Denied.
74. The University admits Section 4.3 of the Grant Agreement provides that the
University shall create and maintain a website dedicated solely to the Institute, which shall
promote the purpose, mission and activities of the Institute, including the Forum, and shall
launch such website no later than September 1, 2016. The University denies the allegations in
Paragraph 74 to the extent they mischaracterize, vary from, or are otherwise inconsistent with the
76. The University admits that Section 4.4 of the Grant Agreement provides that the
University will develop and consult with the Donor regarding a logo for the Institute and Forum
shall be subject to the reasonable approval of the Donor, and that the Initial Operating Plan set
forth in Exhibit C of the Grant Agreement estimated that the University would create visual
identity, branding, and signage for Pearson Institute and Pearson Forum temporary space
between July 2015 and June 2016. The University denies the allegations in Paragraph 74 to the
extent they mischaracterize, vary from, or are otherwise inconsistent with the terms of the Grant
Agreement.
77. The University admits that an identity and branding plan for the Institute and
Forum were completed in the summer of 2016 and admits that the New Jersey Ad Club
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78.
78. Denied.
79.
79. The University admits that it appointed two University leaders to the Advisory
Council and that Section 3.5(a) of the Grant Agreement provides that the Advisory Council will
provide advice to the Dean of the Harris School and to the Institute Director regarding the
Pearson Institute and the Pearson Forum and that the Advisory Council will provide advocacy
and philanthropic support for the Institute and Forum. The University denies the allegations in
Paragraph 79 to the extent they mischaracterize, vary from, or are otherwise inconsistent with the
terms of the Grant Agreement, and denies all other allegations in Paragraph 79.
80.
80. The University admits that Section 3.5(a) of the Grant Agreement provides that
the Advisory Council will provide advocacy and philanthropic support for the Institute and
Forum, denies the allegations in Paragraph 80 to the extent they mischaracterize, vary from, or
are otherwise inconsistent with the terms of the Grant Agreement, and denies all other
81.
81. Denied.
82.
82. Denied.
Count I
(Breach of Contract)
83.
83. The University incorporates by reference its answers to Paragraph 1-82
1–82 above as
84.
84. Paragraph 84 contains characterizations, legal arguments, or conclusions of law to
85.
85. Denied.
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86.
86. Denied.
87.
87. The University denies the allegations in Paragraph 87 and in the Prayer for Relief,
Count II
(Breach of Fiduciary Duty)
88.
88. The University incorporates by reference its answers to Paragraph 1-87
1–87 above as
89.
89. Paragraph 89 contains characterizations, legal arguments, or conclusions of law to
which no response is required. To the extent a response is required, the University denies the
90.
90. Denied.
91.
91. Denied.
92.
92. Denied.
93.
93. Denied.
94.
94. Denied.
95.
95. The University denies the allegations in Paragraph 95 and in the Prayer for Relief,
Count III
(Fraudulent Concealment)
96.
96. The University incorporates by reference its answers to Paragraph 1-95
1–95 above as
97.
97. Denied.
98.
98. Denied.
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99.
99. The University admits that since his June 2016 appointment to the position of The
Reverend Dr. Richard L. Pearson Professor of Global Conflict Studies and Faculty Director, The
Pearson Institute for the Study and Resolution of Global Conflicts, which is the Institute Director
remained unchanged. The University denies all other allegations in paragraph 99.
100.
100. Denied.
101.
101. The University admits that, as stated in Section 5.1(a) of the Grant Agreement, the
University will keep the Donor reasonably informed of its progress in recruiting the initial and
any subsequent Institute Director, Forum Executive Director, and the Faculty Chairs in the
Pearson Institute. The University denies the allegations in Paragraph 101 to the extent they
mischaracterize, vary from, or are otherwise inconsistent with the terms of the Grant Agreement,
102.
102. Denied.
103.
103. Denied.
104.
104. Denied.
105.
105. Denied.
106. The University denies the allegations in Paragraph 106 and in the Prayer for
106.
Count IV
(Breach of Duty of Good Faith and Fair Dealing)
107.
107. The University incorporates by reference its answers to Paragraph 1-106
1–106 above as
108.
108. Paragraph 108 contains characterizations, legal arguments, or conclusions of law
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109.
109. Denied.
110. The University denies the allegations in Paragraph 110 and in the Prayer for
110.
Count V
(Anticipatory Repudiation)
111.
111. The University incorporates by reference its answers to Paragraph 1-110
1–110 above as
112.
112. The University admits that Exhibit A of the Grant Agreement states that the due
date for the first Pearson Forum is October 31, 2018, with a cure period that ends on October 31,
2020. The University denies the allegations in Paragraph 112 to the extent they mischaracterize,
vary from, or are otherwise inconsistent with the terms of the Grant Agreement.
113.
113. Denied.
114.
114. Denied.
115. The University denies the allegations in Paragraph 115 and in the Prayer for
115.
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AFFIRMATIVE DEFENSES
The University pleads the following affirmative defenses based on the information
available to it at this time. The University reserves the right to amend its Answer and to add
additional defenses not presented here, including but not limited to those defenses revealed
during discovery. Without admitting or acknowledging that the University bears the burden of
proof as to any of the following, based upon information and belief, the University asserts the
following:
First Defense
(Failure to State a Claim)
116.
116. As detailed in the University's
University’s Motion to Dismiss for Failure to State and Claim
fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6).
Second Defense
Foundation's Failure to Perform)
(The Foundation’s
117.
117. The Foundation's
Foundation’s claims are barred in whole or in part by failure to perform its
118.
118. The Foundation has not given timely notice of some or all of the alleged breaches.
119.
119. As detailed in the University's
University’s counterclaim, the Foundation and Thomas L.
Pearson have materially breached the Grant Agreement by failing to pay the installment payment
120.
120. The Foundation's
Foundation’s failure to perform excuses any claimed nonperformance of the
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Third Defense
(Limitations of Liability)
121.
121. The Foundation's
Foundation’s claimed damages are limited in whole or in part by provisions
122.
122. Article 6 contains provisions limiting the University's
University’s liability under the
Agreement.
123.
123. Among other limitations, Section 6.4 of the Grant Agreement permits the
Foundation to demand a full refund only after the Foundation terminates the Agreement based on
124.
124. Among other limitations, Section 6.6 of the Grant Agreement prohibits the
Foundation from seeking other remedies available under applicable law for the University's
University’s
Fourth Defense
Foundation’s Unclean Hands)
(The Foundation's
125.
125. The Foundation's
Foundation’s claims are barred in whole or in part by the doctrine of unclean
hands.
126.
126. As detailed in the University's
University’s counterclaim, the Foundation has materially
breached the Grant Agreement by failing to pay the installment payment due on June 30, 2017.
127.
127. The Foundation's
Foundation’s uncured material breach of the Grant Agreement leaves it with
unclean hands, precluding some or all of the relief sought in the Foundation's
Foundation’s complaint.
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Fifth Defense
(The Foundation’s
Foundation's Acquiescence and Waiver)
128.
128. The Foundation has acquiesced to some or all conduct alleged to be a breach of
the Grant Agreement and has waived its claims in whole or in part, including but not limited to
the following.
129.
129. With respect to the appointment of the final faculty chair, the Foundation agreed
that the appointment need not be made by September 1, 2017, as set forth in the Grant
Agreement.
130.
130. With respect to the appointment of a Grants Administrator, the Foundation agreed
that the University could perform the grant-related functions and the Institute therefore did not
131.
131. Institute’s website, the parties agreed to extend the time
With respect to the Institute's
allotted for the website launch. The parties also mutually agreed to Timothy Pearson's
Pearson’s request to
132.
132. With respect to the Institute's
Institute’s logo, the parties mutually agreed to Timothy
Pearson’s request to take a substantial role in the project after the Foundation, through Thomas
Pearson's
133.
133. With respect to the first annual Forum, the Foundation proposed and agreed that
the due date for the first Forum should be postponed by one year until October 31, 2019.
Sixth Defense
(Estoppel)
134.
134. The doctrine of estoppel bars the Foundation's
Foundation’s claims in whole or in part.
135.
135. The Foundation was aware of and acquiesced to conduct it complains of in its
complaint.
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136.
136. The University relied on the Foundation's
Foundation’s acquiescence to this conduct and
137.
137. The Foundation is estopped from pursuing claims related to the conduct to which
it acquiesced.
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Andrew C. Baak
BARTLIT
BARTLIT BECK
BECK HERMAN
HERMAN PALENCHAR
PALENCHAR
&SSCOTT
COTT LLP
1801 Wewatta Street, Suite 1200
Denver, Colorado 80202
t: (303) 592-3100
f: (303) 592-3140
andrew.baak@bartlit-beck.com
And
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CERTIFICATE OF SERVICE
I hereby certify that on this 5th day of April, 2018, I electronically transmitted the
attached document to the Clerk of Court using the ECF System for filing. Based on the records
currently on file, the Clerk of Court will transmit a Notice of Electronic Filing to the following
registrants:
P. Scott Hathaway
Isaac R. Ellis
4000 One Williams Center
Tulsa, Oklahoma 74172
Attorneys for Plaintiffs
21