MedPricer.com, Inc. v. Becton, Dickinson and Co

Filing 35

ORDER. As set forth herein, Defendant's 23 Motion to Dismiss is DENIED. Signed by Judge Michael P. Shea on 7/25/14. (Khan, J)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
MEDPRICER.COM INC.,
Plaintiff,

No. 3:13cv01545 (MPS)

v.
BECTON, DICKINSON AND COMPANY,
Defendant.
MEMORANDUM OF DECISION
Introduction
Plaintiff, MedPricer.com (―MedPricer‖), filed this action in Connecticut Superior Court
alleging four causes of action: Count One, breach of contract; Count Two, breach of the
covenant of good faith and fair dealing; Count Three, unjust enrichment; and Count Four,
violation of the Connecticut Unfair Trade Practices Act (―CUTPA‖). Defendant, Becton,
Dickinson and Company, removed the case to this Court under 28 U.S.C. § 1332(a)(1) and 28
U.S.C. § 1441(a). (Notice of Removal [Dkt. #1] at ¶ 10.) On January 23, 2014, Defendant moved
to dismiss the Second, Third, and Fourth Counts of the Amended Complaint. (Dkt. #23.)
Because the facts pled in the Counts Two and Four of the Amended Complaint are
sufficient to state claims for relief, Defendant‘s Motion to Dismiss as to Counts Two and Four is
DENIED. Because Rule 8 of the Federal Rules of Civil Procedure allows Plaintiff to plead
alternative and inconsistent theories, Defendant‘s Motion to Dismiss as to Count Three is
DENIED.
Legal Standard
Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain ―‗a short and
plain statement of the of the claim showing that the pleader is entitled to relief.‘‖ Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Fed. R. Civ. P. 8). Although Rule 8 does not require a
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pleading to contain detailed factual allegations, ―[a] pleading that offers ‗labels and conclusions‘
or ‗formulaic recitation of the elements of a cause of action will not do.‘ Nor does a complaint
suffice if it tenders ‗naked assertion[s]‘ devoid of ‗further factual enhancement.‘‖ Id. (internal
quotations omitted). ―Where a complaint pleads facts that are ‗merely consistent with‘ a
defendant‘s liability, it ‗stops short of the line between possibility and plausibility of ‗entitlement
to relief.‘‖ Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007)). ―To survive a
motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a
claim to relief that is plausible on its face. A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.‖ Id. In evaluating a motion to dismiss the Court accepts as true
all of the complaint‘s factual, non-conclusory allegations. Bell Atl. Corp. v. Twombly, 550 U.S. at
570. Finally, the Court must ―draw all reasonable inferences in favor of the nonmoving party.‖
Vietnam Ass’n for Victims of Agent Orange v. Dow Chem. Co., 517 F.3d 104, 115 (2d Cir. 2008).
Factual Background
According to the Amended Complaint, Plaintiff provides services to the healthcare
sector, including helping ―facilitate the negotiation of contracts between the healthcare sector
and suppliers.‖ (Am. Compl., [Dkt. #26] First Count at ¶ 3.) Of Plaintiff‘s four alleged causes of
action against Defendant, three of them – breach of contract, breach of the covenant of good faith
and fair dealing, and violation of CUTPA – are based on a contract entered into by the parties.
Defendant allegedly entered into MedPricer‘s standard Supplier Agreement (the ―Agreement‖)
with Plaintiff, first on October 3, 2011, and again on August 27, 2012. (Id. at ¶ 5.) According to
the Amended Complaint, the Agreement required Plaintiff to provide Defendant, and other
suppliers of medical goods and services, a place to conduct negotiations (―Sourcing Events‖)

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with buyers. In exchange, Defendant would pay Plaintiff 1.5 percent of the value of the
transaction arising out of a Sourcing Event. (Id. at ¶ 13.)
Plaintiff alleges that Defendant participated in several Sourcing Events and received three
contracts because of the events. (Am. Compl., First Count at ¶¶ 12, 21, 30.) Although Defendant
accepted the Agreement, it failed to comply with several of its terms. Defendant did not pay the
required fee of 1.5 percent of the total value of any of the contracts arising out of the Sourcing
Events and did not provide Plaintiff with the required monthly sales reports. (Id. at ¶¶ 17, 26,
35.)
Count One sets out the factual allegations summarized above. Count Two repeats the
factual allegations of Count One and also alleges that Defendant acted in bad faith and entered
into the Agreement with no intention of abiding by its terms. Count Four repeats the factual
allegations of Count Two and also alleges that Defendant‘s conduct was deceitful and deceptive.
In Count Three, Plaintiff alleges the absence of a binding agreement and asserts a claim for
unjust enrichment. The unjust enrichment claim repeats the facts as summarized above, but omits
any reference to the existence of the Agreement.
Discussion
Count Two – Breach of the Covenant of Good Faith and Fair Dealing
―In order to prevail on a claim of bad faith, it is necessary for the complaint to allege a
specific act that was performed purposefully, with a sinister intent . . . . Even if it was found that
there was a breach of contract, not all contracts are breached with a sinister intent.‖ Longo v.
Longo, 2012 Conn. Super. LEXIS 1328, at *7 (Conn. Super. Ct. May 15, 2012). ―Absent
allegations and evidence of a dishonest purpose or sinister motive, a claim for breach of the

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implied covenant of good faith and fair dealing is legally insufficient.‖ Alexandru v. Strong, 837
A.2d 875, 883 (Conn. App. Ct. 2004).
Plaintiff alleges that Defendant‘s conduct was ―done in bad faith, with a dishonest
purpose and/or sinister motive in that Defendant entered into the Agreement, was well aware of
its provisions, yet had no intention of abiding by its terms and compensating MedPricer for the
services MedPricer provided to it and from which Defendant benefitted.‖ (Am. Compl., Second
Count at ¶ 39.) By themselves, these allegations are conclusory. But they are accompanied by
factual allegations that Defendant repeated the same conduct—voluntarily entering into an
agreement, accepting Plaintiff‘s services, and deriving the benefits of the virtual marketplace
Plaintiff created—three times over the course of two years. Drawing all reasonable inferences in
Plaintiff‘s favor, the allegations are sufficient to state a claim for a breach of the covenant of
good faith and fair dealing. Because Defendant repeatedly ignored the same clear and simple
terms of the Agreement without informing Plaintiff that it intended to use Plaintiff‘s virtual
marketplace without compensating Plaintiff, it is plausible that Defendant agreed to Plaintiff‘s
terms and conditions intending to gain access to Plaintiff‘s resources without intending to abide
by those terms and conditions.
"[W]hether particular conduct violates or is consistent with the duty of good faith and
fair dealing necessarily depends upon the facts of the particular case, and is ordinarily a question
of fact to be determined by the . . . finder of fact." Landry v. Spitz, 925 A.2d 334, 344 (Conn.
App. Ct. 2007) (internal quotation marks omitted). Plaintiff has sufficiently alleged that
Defendant acted with the required intent to state a claim for breach of the covenant of good faith
and fair dealing. Therefore, Defendant‘s Motion to Dismiss as to Count Two is DENIED.

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Count Three – Unjust Enrichment
Defendant also moves to dismiss Plaintiff‘s third count of unjust enrichment. ―Unjust
enrichment applies whenever justice requires compensation to be given for property or services
rendered under a contract, and no remedy is available by an action on the contract . . . . Indeed,
lack of a remedy under a contract is a precondition for recovery based upon unjust enrichment.‖
Gagne v. Vaccaro, 766 A.2d 416, 424 (Conn. 2001) (citation omitted; internal quotation marks
omitted).
Defendant argues that ―because an express contract existed between the parties, the
Plaintiff cannot maintain an unjust enrichment claim.‖ (Def.‘s Mem. in Supp. of Mot. to Dismiss
[Dkt. #24] at 12.) This argument ignores Plaintiff‘s right to plead in the alternative. ―While proof
of an enforceable contract might preclude application of an unjust enrichment theory, the
plaintiff may be unable to prove an enforceable contract and, at least in the early stages of the
proceedings, is entitled to plead inconsistent theories.‖ William Raveis Real Estate v. Cendant
Mobility Corp., 2005 Conn. Super. LEXIS 3510, at *4-5 (Conn. Super. Ct. Dec. 1, 2005).
Though ―[p]roof of a contract enforceable at law precludes the equitable remedy of unjust
enrichment,‖ Lieberman v. Emigrant Mortg. Co., 436 F. Supp. 2d 357 (D. Conn. 2006), the
existence of an enforceable contract in this case has merely been alleged, not proven. In fact,
Defendant itself contends that the Agreement, as alleged by Plaintiff, exists but is unenforceable.
(Def.‘s Mem. in Supp. of Mot. to Dismiss at 3.)
At this point in the proceedings, the Amended Complaint‘s inconsistent allegations do
not compel dismissal of Plaintiff‘s claim for unjust enrichment. ―It is well established that
plaintiffs may plead in the alternative for recovery under contract or unjust enrichment.‖ A&R
Body Specialty v. Progressive Cas. Ins. Co., 2013 U.S. Dist. LEXIS 26502, at *18 (D. Conn.

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Feb. 27, 2013); see also Fed. R. Civ. P. 8(d)(2). As such, Defendant‘s Motion to Dismiss as to
Count Three of the Amended Complaint is DENIED.
Count Four – Violation of Connecticut Unfair Trade Practices Act
Defendant moves to dismiss the fourth count of the Amended Complaint because ―its
claims rely upon a simple breach of contract as the underpinning of the CUTPA count and such
contractual breach cannot provide the basis for a CUTPA claim under Connecticut law.‖ (Def.‘s
Mot. to Dismiss [Dkt. #23] at 2.) ―CUTPA was intended to provide a remedy that is separate and
distinct from the remedies provided by contract law when the defendant's contractual breach was
accompanied by aggravating circumstances.‖ Ulbrich v. Groth, 78 A.3d 76, 101 (Conn. 2010).
―Conduct that has been held to be substantial aggravating circumstances sufficient to support
CUTPA claims includes fraudulent representations, fraudulent concealment, false claims . . . and
multiple breaches of contract.‖ Leonard v. Tabacco Const., LLC, 2012 Conn. Super. LEXIS
1267, at *6 (Conn. Super. Ct. May 10, 2012).
Plaintiff alleges that Defendant ―consistently and repeatedly breached the Agreement by
its refusal to pay invoices issued by MedPricer, and such conduct involved fraud, deceit,
dishonesty and was done unscrupulously in that Defendant entered into the Agreement, but had
no intention of abiding by its terms and compensating MedPricer for the services it provided.‖
(Am. Compl., Fourth Count at ¶ 46). Many courts have stated that multiple breaches of contract
can be sufficient to state a claim under CUTPA. See, e.g., Metro. Trucking v. Rand-Whitney
Containerboard, LP, 2010 Conn. Super. LEXIS 802, at *12 (Conn. Super. Ct. Mar. 31, 2010)
(finding that an allegation of multiple breaches of contract was sufficient to state a claim under
CUTPA); Webster Fin. Corp. v. McDonald, 2009 Conn. Super. LEXIS 169, at *50 (Conn. Super.
Ct. Jan. 27, 2009) (holding that multiple breaches of a restrictive covenant were sufficient

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aggravating circumstances to support a CUTPA claim). Plaintiff‘s allegations contained in Count
Four are sufficient to survive a motion to dismiss. Whether Plaintiff has ultimately alleged
sufficient facts to prove a violation of CUTPA is an issue that is best resolved at summary
judgment or at trial. See, e.g., Metro. Trucking, 2010 Conn. Super. LEXIS 802, at *12-13.
For the foregoing reasons, Defendant‘s Motion to Dismiss is DENIED.

IT IS SO ORDERED.

/s/
Michael P. Shea, U.S.D.J.
Dated:

Hartford, Connecticut
July 25, 2014

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