University of Chicago Obtains Partial Summary Judgment in Dispute With Pearson Foundation

After more than five years of litigation – see previous coverage of the initial complaint and the federal district court’s partial grant of a motion to dismiss – between The Thomas L. Pearson and The Pearson Family Members Foundation (and Thomas Pearson individually) and the University of Chicago, we have a ruling on the cross motions for partial summary judgment (2023 U.S. Dist. LEXIS 131701; 2023 WL 4868559). In a lengthy opinion dated July 31, 2023, the U.S. District Court for the Northern District of Oklahoma denied the plaintiffs’ motion and granted the defendant University’s motion in part.

The dispute arose over a $100 million grant to the University for The Pearson Institute for the Study and Resolution of Global Conflicts pursuant to a detailed Grant Agreement. According to the court, the Foundation and Mr. Pearson in an amended complaint asserted five claims: “(1) breach of contract, (2) breach of the duty of good faith and fair dealing, (3) fraudulent inducement, (4) unilateral mistake, and (5) equitable rescission.” (The court in 2018 dismissed claims of breach of fiduciary duty and fraudulent concealment that had been stated in the initial complaint.) The court granted the University summary judgment on certain aspects of the breach of contract claim , on the unilateral mistake claim, and with respect to the plaintiffs’ request for punitive damages (as well as striking one aspect of the breach of contract claim as being beyond the scope of the court-granted leave to amend the complaint). The remaining aspects of the breach of contract claim, along with the three other remaining claims, will now presumably proceed to trial, absent a settlement.

Lloyd Mayer