Hooper Holmes, Inc. et al v. Wellness Corporate Solutions, LLC
Filing
171
MEMORANDUM AND ORDER. IT IS THEREFORE ORDERED BY THE COURT THAT plaintiffs Hooper Holmes and Accountable Health are awarded $2.00 in nominal damages.IT IS FURTHER ORDERED THAT counterclaim-plaintiff Wellness CorporateSolutions is awarded $3 46,226.10 in damages. FINALLY, THE COURT DIRECTS the Clerk of the Court to enter without delay a Judgment in Hooper Holmes and Accountable Health's favor for $2.00 and a Judgment in Wellness Corporate Solutions's favor for $346,226.10 under Rule 58. Signed by District Judge Daniel D. Crabtree on 8/1/18. (hw)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
ACCOUNTABLE HEALTH
SOLUTIONS, LLC and HOOPER
HOLMES, INC.,
Plaintiffs/Counterclaim
Defendants,
v.
Case No. 16-2494-DDC
WELLNESS CORPORATE
SOLUTIONS, LLC,
Defendant/Counterclaim
Plaintiff.
____________________________________
MEMORANDUM OF DECISION
In recent years, a variety of factors have generated a new market for something called
wellness services. In simple form, the market theorized that a healthier workforce would
produce lower health insurance costs for business owners and operators. And employees would
benefit, in turn, because their share of health insurance costs would reduce.
In one form of a typical wellness program, the employer selects a wellness provider.
This provider offers employees the chance to participate in on-site biometric screenings. These
screenings provide each participating employee with individualized data about that employee’s
current health profile. The wellness provider also supplies participating employees with
information and programs designed to improve—or, at least, maintain—their health.
In the case currently before the court, two wellness companies contracted so that one of
them—defendant Wellness Corporate Solutions, LLC—would perform on-site biometric
screenings for plaintiff Accountable Health Solutions, LLC. Accountable Health then would
coordinate and operate wellness plans with employers and the employees.
Things got more complicated in 2015. Plaintiff Hooper Holmes, Inc. bought
Accountable Health and the relationship with Wellness soured. A few months after Hooper
Holmes acquired Accountable Health, they fell behind on the payments owed to Wellness for
services it had rendered. Payment against the outstanding invoices continued to linger into 2016.
And in May 2016, Wellness contracted to provide wellness services directly to one of plaintiffs’
largest clients. When Accountable Health and Hooper Holmes learned about this contract, they
objected to it and stopped paying down the debt they owed Wellness. They also filed this
lawsuit.
In their Complaint, plaintiffs Accountable Health and Hooper Holmes asserted claims for
breach of contract, breach of the implied covenant of fair dealing and good faith, tortious
interference with contract, and tortious interference with prospective business expectancies or
relationships. See Doc. 1. Generally, they alleged that Wellness was liable under those theories
because it had entered into a contract directly with plaintiffs’ former client. Accountable Health
and Hooper Holmes also brought a declaratory judgment claim. This claim asked the court to
declare that they did not have to pay the amounts they owed to defendant Wellness on the
outstanding invoices. Id. at 10. Wellness answered and asserted a Counterclaim, alleging that
Accountable Health and Hooper Holmes had breached the parties’ contract by failing to pay the
overdue invoices. Doc. 35. On Wellness’s motions for summary judgment, the court granted
summary judgment in Wellness’s favor against Accountable Health and Hooper Holmes’s claims
for breach of an implied covenant, tortious interference with contract, tortious interference with
prospective business expectancy, and the declaratory judgment. See Doc. 140. This left, for
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trial, the Complaint’s breach of contract claim and the claim for breach of contract asserted in
Wellness’s Counterclaim.
The court conducted a bench trial in February 2018. Having reflected on the evidence
and the arguments, the court now is ready to rule on the claims made by both parties. The court
finds for plaintiffs Accountable Health and Hooper Holmes on their breach of contract claims
and awards them $2.00 in nominal damages. And the court finds for Wellness on its breach of
contract Counterclaim, awarding it $235,156.58 plus $111,069.52 in interest. The court does not
award Wellness its attorneys’ fees. The court explains the rationale for these holdings after
making its findings of fact.
Findings of Fact
I.
Legal Standard
“In an action tried on the facts without a jury . . . , the court must find the facts specially
and state its conclusions of law separately.” Fed. R. Civ. P. 52(a). While this rule “does not
require inordinately detailed findings,” the court must provide enough detail to “ʻindicate the
factual basis for the ultimate conclusion.’” Colo. Flying Acad., Inc. v. United States, 724 F.2d
871, 878 (10th Cir. 1984) (quoting Kelley v. Everglades Drainage Dist., 319 U.S. 415, 422
(1943)); see also OCI Wyo., L.P. v. PacifiCorp, 479 F.3d 1199, 1204–05 (10th Cir. 2007)
(holding that a district court failed its duty under Rule 52(a) by failing to set out the facts
supporting its verdict). With this standard in mind, the court makes the following findings of
fact.
II.
Facts
The story that brings these disputes to court involves two parallel series of events. So the
court cannot present the relevant facts in a strictly linear way. Instead, the court first addresses
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who the parties are and how they came to know one another. The court then discusses the facts
attendant to Wellness’s demands for payment. And last, the court recounts the facts that led
Hooper Holmes and Accountable Health’s customer to leave them for Wellness.
Background
The parties first encountered one another in 2014 when plaintiff Accountable Health
Solutions bought a company known as Principal Wellness. Accountable Health and Principal
Wellness both had provided wellness services to employers. For instance, Accountable Health
contracted with employers to provide their employees with health coaching, a website portal for
employees to track their health status, and on-site biometric screenings, among other things. The
on-site biometric screenings were performed at the employer’s office, usually during the spring
and summer months. These screenings provided employees with Lipid profiles, blood pressure
readings, and data about their height, weight, glucose, and Body Mass Index. Employees who
could not attend on-site screenings received a primary care physician (“PCP”) form that their
doctor could complete. The PCP form asked the doctor for the same information provided by
on-site screeners.
Originally, Principal Wellness had performed the on-site screenings for its clients. But
when Accountable Health bought it in 2014, Accountable Health delegated this work to
defendant Wellness Corporate Solutions under the terms of a contract known as the Master
Services Agreement (“MSA”). This MSA took effect on February 15, 2014, and ran for a term
of 36 months. See Pls.’ Ex. 25 (“the MSA”) ¶ 8. Generally, the MSA required Wellness to
provide on-site screening services to Accountable Health’s clients. In return, Accountable
Health promised to pay Wellness for those services. Id. ¶¶ 1, 7. For instance, under the MSA,
Wellness charged $39.50 per participant for each finger prick screening. Id. Ex. B § F. For each
4
PCP form an employee completed under the MSA, Wellness charged $7.50. Id. And the MSA
specified that Wellness would charge $50 to process at-home test kits and $15 if an employee
ordered such a kit but never had it processed. Id. Other services governed by the MSA included
cheek swab tests, reports about an employee’s overall health, and venipuncture tests. Id. The
MSA also contained provisions that governed the work needed to prepare the screening sites. Id.
When Wellness performed services under the MSA, it incurred the costs attendant to the
screenings and later, it billed Accountable Health. These expenses included things like charges
for the screeners’ time, purchasing supplies they needed, and travel expenses. Once Accountable
Health received Wellness’s bill, the MSA gave it 14 days to dispute the bill and 45 days to pay it.
Id. ¶ 7. If Accountable Health failed to pay any undisputed bill within 45 days, the MSA
permitted Wellness to charge interest “on past due accounts” at a rate of 1.5% per month. Id.
The duty to pay Wellness’s statements did not depend on Accountable Health receiving payment
from its clients. Id.
Five other provisions of the MSA matter to this dispute.
First, the MSA allows a party to recover attorneys’ fees in certain situations.
Specifically, the MSA provides:
Each Party agrees to indemnify, defend, and hold harmless the other Party . . . from
and against any and all third party claims, demands, damages or any other financial
demands (including, without limitation, attorneys’ fees and expenses) arising from
or related to the indemnifying Party’s breach of this agreement.
MSA ¶ 10. Second, the MSA provides that neither party would be liable to the other “for loss of
profits, loss of business, or special, indirect, incidental, exemplary, consequential, or punitive
damages arising from the performance or nonperformance of this agreement, or any acts or
omissions associated therewith.” Id. ¶ 11. Third, the MSA prohibits Wellness from competing
with Accountable Health. Specifically, it says that Wellness cannot “encourage any [client of
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Accountable Health], either directly or indirectly, to terminate its relationship with [Accountable
Health]” or “solicit or market [Wellness’s] Services [directly] to [a client] of [Accountable
Health] in any way to compete with [Accountable Health].” Id. ¶ 23(i). Also, the MSA provides
that Wellness cannot “use any confidential information, intellectual property, or any other data or
information provided by [Accountable Health], or gained pursuant to [the MSA], to compete in
any way with [Accountable Health] . . . .” Id. ¶ 23(ii). Fourth, the MSA incorporates by
reference a Non-Disclosure and Confidentiality Agreement (“NDA”). Id. ¶ 4. This NDA, as
relevant here, requires both parties to “use and disclose Confidential Information solely for the
purpose of evaluating the [business opportunity presented by the MSA].” MSA App. B
(“NDA”) ¶ 3. The NDA also defines “Confidential Information” as:
[A]ll oral, written, electronic[,] or documentary information disclosed prior to or
after execution of this Agreement, either furnished or made available (a) by
[Accountable Health] or its Agents . . . to [Wellness]; or (b) by [Wellness] or its
Agents to [Accountable Health], in connection with the [business opportunity
presented by the MSA], including, but not limited to, marketing philosophy,
techniques, and objectives; advertising and promotional copy; competitive
advantages and disadvantages; financial results; technological developments; loan
evaluation programs; customer lists; account information, profiles, demographics
and Non-Public Personal Information . . . ; credit scoring criteria, formulas and
programs; research and development efforts; any investor, financial, commercial,
technical or scientific information . . . and any and all other business information
....
Id. ¶ 2. And last, both the MSA and NDA provide that Delaware law governs all disputes
involving these contracts. MSA ¶ 13; NSA ¶ 11.
In May 2015, plaintiff Hooper Holmes, Inc.—a New York corporation with its principal
place of business in Kansas—bought Accountable Health and it became a wholly owned
subsidiary. Hooper Holmes already competing in the biometric screening business, was looking
to expand into the wellness coaching market. Even though it already was providing on-site
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screenings, Hooper Holmes agreed to continue honoring the MSA and use Wellness as an on-site
screener. The MSA thus became binding on it and Accountable Health—the plaintiffs here.
Before turning to the events that led the parties’ dispute to their current disagreements,
the court pauses to explain the naming convention used by the rest of this Order. Parties on both
sides of the caption have asserted claims against the other, so simply calling the parties
“plaintiffs” and “defendant” isn’t always helpful. So, the court has decided to refer to the parties
by their short form names—plaintiff Hooper Holmes, Inc. is simply “Hooper Holmes” and
defendant Wellness Corporate Solutions is simply “Wellness.” Because Accountable Health is a
wholly owned subsidiary of Hooper Holmes, the court typically does not distinguish between
Hooper Holmes and Accountable Health unless, in a particular context, that distinction matters to
the analysis.
Payment Issues
In May 2015, when Hooper Holmes bought Accountable Health, Accountable Health had
accumulated an $8,000 debt to Wellness. By July 2015, that debt had ballooned to more than
$600,000—and $300,000 of that balance was overdue by July 31, 2015. Hooper Holmes’s debt
increased so dramatically in such a short period because most of the screenings services occurred
in the spring and summer months. At the same time, Hooper Holmes was waiting for its clients
to pay it for the screenings and so, they lacked the cash to pay Wellness as promised.
On July 31, 2015, Wellness emailed Hooper Holmes about the debt and Hooper Holmes
offered to pay $64,000. Wellness accepted this partial payment but also demanded full payment
of the entire outstanding debt. Hooper Holmes acknowledged Wellness’s request and replied
that its CFO was aware of the issue and looking for solutions. In September—after hearing
nothing from Hooper Holmes since August—Wellness asked again for full payment. Hooper
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Holmes repeatedly promised that full payment would come but, when prompted by Wellness,
merely offered partial payments. In mid-October, with Hooper Holmes’s debt amounting to
some $575,000—$114,000 of which was overdue—Wellness’s CEO Fiona Gathright personally
emailed Arielle Band about the unpaid debt. Ms. Band was one of Hooper Holmes’s Vice
Presidents. Ms. Band responded that Steven Balthazor—Hooper Holmes’s new CFO—would
respond shortly to Wellness’s inquiry and present a plan to pay the outstanding debt.
But after a few more weeks of silence, on October 31, 2015, Wellness’s CFO, Jeffrey
Taylor, directly contacted Mr. Balthazor about the outstanding debt. The next day, Mr.
Balthazor responded with a plan to pay down the full debt. Mr. Balthazor offered to pay $10,000
each week until Hooper Holmes’s cash flow had improved. Once that improvement occurred,
Hooper Holmes would increase its weekly payments to pay the remainder of the debt as quickly
as possible. Mr. Taylor acknowledged Mr. Balthazor’s proposal but he explicitly invoked
Wellness’s contractual right to recover interest on all overdue amounts.1 Later, Mr. Balthazor
offered to make a $50,000 good faith payment. Hooper Holmes never made that payment,
however. On November 15, 2015, Hooper Holmes began paying $10,000 each week and in
February 2016, Hooper Holmes increased its weekly payments to $20,000.
While Wellness was trying to persuade Hooper Holmes to pay its outstanding bills, it
continued sending invoices to Hooper Holmes for its services, including screenings and PCP
forms. It appears that some employees who had missed Wellness’s health screenings mistakenly
sent the PCP forms to Wellness instead of sending them to Hooper Holmes. Ms. Gathright
1
Mr. Balthazor testified that he was the first person to suggest that Wellness charge interest on the
outstanding debt. Trial Tr. 98:15–16. The court does not credit this testimony, however, because Mr. Taylor, in an
email sent shortly after the telephone call where this purportedly happened, never mentioned Mr. Balthazor’s
suggestion. See Pls.’ Ex. 48 at 1. Instead, Mr. Taylor simply reminded Mr. Balthazor that the MSA imposes interest
on any outstanding debt. Id. The court finds this email—sent close in time to this phone conference—likely
presents a more accurate picture of the exchange between Mr. Balthazor and Mr. Taylor.
8
testified that Wellness debated whether to forward the forms because Wellness was unsure: (1)
whether the MSA was still binding; and (2) whether the MSA—assuming it was still binding—
required Wellness to forward the PCP forms. Trial Tr. 181:14–21. Ultimately, Wellness elected
to send the forms to Hooper Holmes and bill it $7.50 for each one—the price set by the MSA for
this service.
On June 6, 2016, Hooper Holmes made a $20,000 payment to Wellness. It was Hooper
Holmes’s last payment. But Wellness continued billing Hooper Holmes for PCP forms that
employees of Hooper Holmes’s clients sent through September 6, 2016. Hooper Holmes’s
unpaid balance topped out at $235,167.63 on September 6, 2016.2 At trial, Wellness produced
an aging summary of the remaining outstanding balance. Def.’s Ex. 411. The outstanding bills
and the interest accrued on them are described in detail in Appendix A.
On June 9, 2016—three days after Hooper Holmes sent its final $20,000 payment—
Hooper Holmes informed Wellness that it would make no more payments against its outstanding
debt. It explained that Hooper Holmes had made this decision because it recently had learned
that one of its long-time customers, Building Materials Corporation of America, doing business
as GAF (“GAF”), had decided not to renew its contract and, instead, begin contracting directly
with Wellness for GAF’s wellness services.
GAF
GAF is one of the largest roofing material producers in the country. It was also one of
Hooper Holmes’s largest clients. In 2012, GAF signed a two-year contract with Principal
2
Defendant explained in its Memorandum in Support of its Motion for Summary Judgment that it made an
accounting error when it calculated its total damages for its Counterclaim. Doc. 61 at 2 n.1. It explained that it
would forego the $11 disparity and only seek the damages alleged in its Amended Counterclaim, i.e., $235,156.68.
See Doc. 56.
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Wellness—one of Hooper Holmes’s predecessors—to provide wellness services. This contract
provided that it would renew automatically each year after the initial two-year term ended. The
contract included wellness coaching, on-site biometric screenings, and an online portal where
GAF employees could track their health status. At first, Principal Wellness performed the
screenings. After Accountable Health bought Principal Wellness in 2014, Wellness performed
GAF’s screenings under the MSA. It did so in 2014 and 2015. To prepare for these screenings,
Hooper Holmes provided Wellness with a company overview of GAF. See Pls.’ Ex. 42. This
overview included information about GAF’s business, where its offices were located, and the
date range when GAF’s screenings would take place. As the screenings approached, Wellness
created a checklist of tasks that it needed to complete to perform the screenings. During the
screenings, Wellness collected data about where it performed GAF’s screenings, how many GAF
employees had participated at each screening site, when Wellness had performed each screening,
and the number of screeners that Wellness had dispatched to GAF’s various offices. See Pls.’
Ex. 41.
In February 2015, GAF hired Jeanine Love as its Senior Benefits Manager. In that role,
Ms. Love led a team of people who managed GAF’s wellness program. In summer 2015, Ms.
Love and her team started evaluating GAF’s wellness program. Specifically, they wanted to cut
costs. By this time, the original contract between Hooper Holmes and GAF already had renewed
under the automatic renewal provision, but Hooper Holmes aspired to form a new contract with
GAF before its employees received their 2015 biometric screenings. In short, Hooper Holmes
hoped to lock GAF into a new three-year contract that charged higher prices. GAF, on the other
hand, wanted to maintain the same prices and sign a one-year contract. In the summer of 2015,
the parties came to an agreement whereby Hooper Holmes agreed to maintain existing prices and
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GAF agreed to a two-year contract. The effective date of the contract was retroactive to August
1, 2014. This contract also contained a provision that automatically extended the contract for a
one-year period after the initial term expired unless one of the parties gave 60 days’ notice that it
would not renew.
After the 2015 screenings were completed, GAF continued debating—internally—
whether it should retain Hooper Holmes to administer its wellness program. By February 2016,
Ms. Love and her team had decided that GAF was not receiving good value from Hooper
Holmes’s wellness program. Love Dep. 27:18–21. Ms. Love particularly disliked the online
portal because very few GAF employees used it. Id. at 13:12–20. But still, Ms. Love testified,
the screenings benefited the company. Id. at 13:4–6. So, GAF reached out to Aon Hewitt—a
wellness broker3—and commanded Aon to look for a suitable replacement provider of wellness
services. Aon first contacted a company called Catapult, but Catapult failed to impress GAF
because Catapult’s screening service provided employees, in effect, with an annual physical.
GAF believed that Catapult’s model provided more services than it desired to buy.
GAF then turned its attention to Wellness. Ms. Love testified that she and her team
believed Wellness would fit well with GAF’s goals because Wellness already had performed
screenings for GAF and the two had developed a good working relationship. Id. at 15:1–3. So,
Ms. Love asked Aon to reach out to Wellness. At no point during this process did GAF consider
renewing its contract with Hooper Holmes. Id. at 19:20–20:3. While Ms. Love knew that
Hooper Holmes had returned to the screening business when it acquired Accountable Health, she
distrusted Hooper Holmes because it was too new to the screening enterprise. Id. at 18:1–15.
3
A wellness broker serves as an intermediary between an employer and its wellness provider. It is standard
in the wellness industry for an employer to hire a broker to search for a wellness provider.
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On March 7, 2016, Aon contacted Wellness about GAF’s wellness work. Kelly Geppi—
Wellness’s sole salesperson at the time—took charge of formulating a sales pitch to GAF and
she set up a meeting with Aon. To prepare for its sales pitch with GAF, Ms. Geppi asked Emily
Kolakowski—Wellness’s chief operations officer—what Hooper Holmes had charged GAF for
the screening services that Wellness performed under the MSA. Pls.’ Ex. 37 at 6; Trial Tr.
428:11–21. Ms. Kolakowski replied that she believed Hooper Holmes charged 20% more than
Wellness’s pricing for the biometric screenings. Ex. 37 at 5. Ms. Geppi testified that 20% is the
standard mark-up in the wellness industry. Trial Tr. 428:14–21.
At the sales meeting, Wellness presented a slide show it had prepared for GAF. It
showcased Wellness’s capabilities and included information about an online health tracking
portal licensed through a company called Cerner. Ms. Love quickly informed Wellness that
GAF was not considering online portal services. After the meeting, Ms. Geppi used a workbook
of information that it had collected while screening GAF employees under the MSA to advise the
broker how much GAF likely would spend on screenings. Ari Klenicki—Wellness’s Director of
Screening Services—also used a workbook Wellness had created in 2015. This workbook
described GAF generally, how many employee locations had participated in screenings, the date
ranges the screening events took place, and a timeline when Wellness had completed the tasks
necessary to conduct the screenings. Pls.’ Ex. 42.
Though Ms. Geppi was Wellness’s only salesperson at the time, she did not attend the
April 27 sales meeting because she was far along in her pregnancy and could not make the
airplane trip to GAF’s headquarters. Wellness sent two other employees in her place. One was
Ms. Torroella and the other was Jennifer Silverman—Wellness’s Senior Program Manager. As
Senior Program Manager, Ms. Silverman worked with Wellness’s clients who used its online
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wellness portal. She was not in sales. But she had become involved with Wellness’s sales pitch
to GAF through a chance encounter at a birthday party a few months earlier.
In late February 2016, Ms. Silverman attended a birthday party for her sister-in-law. At
that party, she struck up a conversation with Jennifer Millstone. Ms. Millstone asked Ms.
Silverman what she did for a living and she explained that she worked for Wellness. She also
described what Wellness did in the wellness marketplace. Ms. Millstone then informed Ms.
Silverman that her husband’s company—GAF—was looking for a new wellness provider and
asked if she could connect Ms. Silverman with someone at GAF. Before Ms. Silverman
accepted Ms. Millstone’s offer, she emailed Ms. Gathright on March 3, 2016. Ms. Silverman’s
email asked if anything in the MSA precluded Ms. Silverman from speaking with GAF about
Wellness’s services. Ms. Gathright replied that she saw no problem. Ms. Millstone then put Ms.
Silverman in touch with Scott Carroll—Ms. Love’s boss. Mr. Carroll, in turn, directed Ms.
Silverman to Ms. Love. On March 31, 2016, Ms. Silverman sent Ms. Love an email asking if
they could discuss a potential contract.
Sometime before March 31, 2016, Ms. Geppi discovered that Ms. Silverman was
speaking with GAF. On March 21, 2016, she emailed Carisa Herweck—the person at Aon who
was working with GAF—to inform her about Ms. Silverman’s involvement. Ms. Geppi testified
that she did so because she wanted to maintain a strong relationship with Aon and didn’t want
Aon to think that Wellness had tried to circumvent Aon. Doing so, Ms. Geppi testified, would
violate industry norms. Trial Tr. 426:18–427:8. Even though Ms. Silverman had entered the
situation in an unusual fashion, Wellness decided to let her continue working with GAF because
Ms. Geppi was nearing her delivery date and thus couldn’t travel to the April 27 sales meeting at
GAF. But despite Ms. Silverman’s personal connection to GAF and her direct contact with
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GAF, Ms. Love testified that Ms. Silverman’s involvement did not affect GAF’s decision to
select Wellness for its new wellness contract. Love Dep. 25:7–13.
On May 6, 2016, GAF awarded Wellness the contract for its wellness screening services.
When Ms. Kolakowski emailed Ms. Gathright to inform her about this selection, Ms. Gathright
replied, “[Hooper Holmes] going down.” Pls.’ Ex. 20 at 1.
Shortly afterward, Hooper Holmes learned about GAF’s decision and it tried to woo GAF
back. On June 9, 2016—nine days after the contract between GAF and Hooper Holmes required
GAF to provide notice that it did not intend to renew—GAF gave Hooper Holmes official notice
that it did not intend to renew the contract. Hooper Holmes, as noted above, then informed
Wellness that it would not pay any more of its outstanding balance. This lawsuit followed.
Analysis and Conclusions of Law
As noted above, the parties presented breach of contract claims at trial. The court
structures its analysis of these claims and other issues raised during the trial by, first, discussing
which state’s law governs these disputes. The court then decides whether Wellness is liable for
breaching the MSA because of its contract with GAF. Then the court turns to the claim that
Wellness materially breached the NDA. Fourth, the court addresses Hooper Holmes’s oral
motion for reconsideration. Next, the court discusses whether Hooper Holmes is liable for
breach of contract because it failed to pay Wellness’s invoices sent under the MSA. And last,
the court addresses whether Wellness is entitled to recover its attorneys’ fees. The court
discusses each issue, in turn, below.
I.
Delaware law governs these breach of contract claims.
In a diversity jurisdiction case like this one, federal courts apply the choice of law rules
of the forum state. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). Kansas’s
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choice of law principles provide, “Where the parties to a contract have entered an agreement that
incorporates a choice of law provision, Kansas courts generally [apply] the law chosen by the
parties . . . .” Brenner v. Oppenheimer & Co. Inc., 44 P.3d 364, 375 (Kan. 2002). Here, the
MSA and the NDA recite that Delaware law governs. MSA ¶ 13; NDA ¶ 11. And the parties
agree that Delaware law applies. Doc. 120 at 2. The court thus applies Delaware law to decide
the parties’ contract claims.
II.
Wellness breached the MSA but the court only awards Hooper Holmes $1.00 in
nominal damages.
Hooper Holmes claims that Wellness is liable for breach of contract because it contracted
with GAF—Hooper Holmes’s former client—in violation of the MSA’s non-compete provisions.
Hooper Holmes claims that Wellness’s breach cost it to lose $710,436 in profits it would have
earned but for Wellness’s breach. To prove a breach of contract claim, under Delaware law, the
claiming party must show that (1) a contract existed, (2) a party materially breached an
obligation imposed by that contract, and (3) the breach damaged the other party. VLIW Tech.,
LLC v. Hewlett-Packard Co., 840 A.2d 606, 612 (Del. 2003). The parties agree that the MSA is
a binding contract. But the parties dispute whether Hooper Holmes has established the last two
elements.
Wellness argues that Hooper Holmes cannot prevail on this breach of contract claim for
four reasons. First, Wellness argues that Hooper Holmes’s earlier material breach discharged
any duty Wellness otherwise would have owed under the MSA. Second, Wellness contends that
it never breached the MSA—materially or otherwise. Third, Wellness argues that Hooper
Holmes failed to prove that Wellness’s breach caused Hooper Holmes to lose any lost profits.
And last, the MSA’s limitation of liability clause, Wellness argues, bars Hooper Holmes from
recovering anything. The court discusses these arguments in the following four subsections.
15
A.
Though Hooper Holmes materially breached the MSA by failing to pay its
bills on time, Wellness continued to accept the benefits of the MSA. Wellness
thus cannot claim that it was no longer bound by the MSA.
Wellness argues that Hooper Holmes’s prior material breach of the MSA relieves it from
any liability for contracting with GAF. Under Delaware law, a party who materially breaches a
contract first cannot recover for the other party’s later breach. Hudson v. D & V Mason
Contractors, Inc., 252 A.2d 166, 170 (Del. Super. Ct. 1969). Conversely, a minor breach will
not discharge the parties from their obligations under a contract. BioLife Sols., Inc. v. Endocare,
Inc., 838 A.2d 268, 278 (Del. Ch. 2003). Here, Wellness argues, Hooper Holmes materially
breached the MSA when it failed to pay its bills on time. Hooper Holmes responds, arguing that
it did not materially breach the MSA and, even if it did, Wellness waived its right to declare that
breach a material one because Wellness continued to accept the benefits of the MSA—
specifically, by continuing to bill Hooper Holmes for PCP forms that Hooper Holmes’s clients
sent to Wellness. The court concludes that Hooper Holmes materially breached the MSA before
Wellness did, but that Wellness waived its right to declare that this breach was material. The
court first explains why Hooper Holmes’s breach was material. It then explains why Wellness
waived its right to declare it was no longer bound by the MSA.
1. Hooper Holmes materially breached the MSA when it did not pay its bills
on time.
To determine if a breach is material, Delaware courts follow the Restatement (Second) of
Contracts. Id. (citing Restatement (Second) of Contracts § 241 (Am. Law Inst. 1981)). This
Restatement provision instructs courts to analyze several factors when assessing whether a
breach is material. They are: (a) the extent to which the breach deprived the injured party of a
reasonably expected benefit; (b) the extent to which the breaching party can compensate the
injured party adequately for the reasonably expected benefit; (c) “the extent to which the
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[breaching party] will suffer forfeiture;” (d) “the likelihood that the [breaching party] will cure
his failure;” and (e) “the extent to which the behavior of the [breaching party] comports with
standards of good faith and fair dealing.” Restatement (Second) of Contracts § 241. When
evaluating these factors, the court should consider “ʻthe consequences in light of the actual
custom of [people] in the performance of contracts similar to the one that is involved in the
specific case.’” BioLife, 838 A.2d at 278 (quoting E. Elec. & Heating, Inc. v. Pike Creek Prof’l
Ctr., Nos. 85C-MR-79, 85L-AP-21, 85L-MY-1, 1987 WL 9610, at *4 (Del. Super. Ct. Apr. 7,
1987) (further citations omitted)). After analyzing the § 241 factors under the evidence admitted
at trial, the court concludes they favor a finding that Hooper Holmes materially breached the
MSA when it failed to pay the outstanding invoices.
The first factor heavily favors a finding that Hooper Holmes’s breach was material.
“[A]n important circumstance in determining whether a failure is material is the extent to which
the injured party will be deprived of the benefit which he reasonably expected from the
exchange.” Restatement (Second) of Contracts § 241 cmt. b. This test requires the court to
consider how much of the contract’s benefit the injured party—here, Wellness—lost by virtue of
the breach. Also, the court must consider whether that benefit is one that the aggrieved party
reasonably expected to secure from the contract’s performance. Norfolk S. Ry. Co. v. Basell USA
Inc., 512 F.3d 86, 93 (3d Cir. 2008) (applying Delaware law to a breach of contract case).
Here, Hooper Holmes unmistakably deprived Wellness of an important contractual
benefit: the money that Hooper Holmes had promised to pay Wellness for its services under the
MSA. In July 2015, over $300,000 of Hooper Holmes’s $600,000 debt was overdue. While
Hooper Holmes made efforts to reduce the overdue payments—lowering it to just $114,000 by
mid-October 2015—it never fully eliminated that debt. Indeed, shortly after mid-October,
17
several more bills became past-due, pushing Hooper Holmes’s overdue debt to over $200,000.
These amounts—particularly given how long Hooper Holmes has owed the debt—represents a
substantial benefit. See Commonwealth Const. Co. v. Cornerstone Fellowship Baptist Church,
Inc., No. 04L-10-101 RRC, 2006 WL 2567916, at *21 (Del. Super. Ct. Aug. 31, 2006) (holding
that a breaching party materially breached a contract when it failed to pay a $150,000 bill).
Undeterred, Hooper Holmes argues that Wellness did not have a reasonable expectation
that Hooper Holmes would pay its bill on a timely basis. Indeed, on the summary judgment
facts, the court held that a reasonable factfinder could conclude as much. Doc. 140 at 12. But
after hearing and weighing all the evidence, the court is not persuaded by Hooper Holmes’s
position.
The parties specifically negotiated for and explicitly agreed to a 45-day pay schedule.
They also agreed that Hooper Holmes must pay Wellness even if Hooper Holmes’s customers
failed to pay it. MSA ¶ 7. And if Hooper Holmes failed to pay its debt on time, Wellness could
charge 1.5% interest per month on any overdue amount. Id. It’s easy to understand why
Wellness would insert this provision into the MSA: it had to front the cost of performing the
screenings. When Hooper Holmes scheduled a screening for an employer and had Wellness do
much of the work that screening required, Wellness paid the screeners who had worked the
screening event, paid for any supplies they needed, and covered travel expenses to the screening
site. Then, when billed, Hooper Holmes was supposed to reimburse Wellness for these
expenses. So, when Hooper Holmes failed to pay on time, Wellness had to continue carrying the
debt—this included borrowing money to cover those expenses. This burden makes timely
payment an essential and reasonably expected benefit of the MSA. This factor favors a finding
that Hooper Holmes materially breached the MSA.
18
The second factor—the extent to which Hooper Holmes can compensate Wellness
adequately for the overdue debt—favors a finding that the breach was not material. When a
court cannot calculate damages resulting from the breach with ease and certainty, this factor
favors a finding that the breach is a material one. See Norfolk, 512 F.3d at 94. For example,
when the injured party’s damages are lost profits, the breach is more likely a material one
because lost profits are difficult to calculate with certainty and ease. Id. Here, Wellness’s
damages are certain and one can calculate them with ease. Indeed, Wellness kept track of
Hooper Holmes’s unpaid balances. See Def.’s Ex. 411.
The third factor favors a materiality finding. This factor considers the hardship that the
breaching party—for purposes of this section, Hooper Holmes—will sustain if the court
concludes that Hooper Holmes’s breach discharged the parties from their obligations under the
MSA. Norfolk, 512 F.3d at 94. In short, if Hooper Holmes’s breach leaves it up the proverbial
creek, this favors a finding that the breach was immaterial. To conclude that Hooper Holmes’s
breach discharged Wellness from the MSA’s obligations would deprive Hooper Holmes the
primary benefit it derived from the MSA: Wellness’s on-site screening services. Indeed, at trial,
the evidence showed that Hooper Holmes itself could provide screening services to its clients.
To be sure, discharging Wellness from the MSA’s obligations allows Wellness to
compete against Hooper Holmes. And that competition constitutes a hardship. But Hooper
Holmes’s own conduct freed Wellness to impose this hardship because Hooper Holmes failed to
pay its bills. See id. at 94–95 (explaining that this hardship factor should not favor a finding that
a breach is immaterial when the breaching party caused its own hardship). Hooper Holmes’s
CFO, Mr. Balthazor, testified that Hooper Holmes lacked the necessary cash to pay its bills
because its customers hadn’t paid it when Wellness’s bills came due. Trial Tr. 25:1–18. The
19
MSA, however, explicitly precludes Hooper Holmes from using nonpayment by its customers as
an excuse for its payment obligation to Wellness. See MSA ¶ 7 (“Payment to [Wellness] by
[Hooper Holmes] is not contingent upon payment from any third party.”). In sum, this third
factor favors a materiality finding.
The fourth factor—likelihood that Hooper Holmes would cure its failure—favors a
materiality finding. At first glance, this factor would seem to favor finding that no material
breach occurred. After all, Hooper Holmes gave Wellness many assurances that it would fulfill
its obligation to pay. But these assurances proved hollow. Hooper Holmes never paid Wellness
what it fully owed. While Hooper Holmes proposed a payment plan in November 2015, this
payment plan called for weekly payments of $10,000 on a nearly $600,000 debt. Such a small
installment can hardly be considered a proper assurance. The court concludes that this fourth
factor favors a materiality finding
Last, the fifth factor—whether Hooper Holmes acted in good faith—favors a nonmateriality finding. One sign that a party has acted in good faith is conduct displaying that the
breaching party was willing to work with its contract partner to satisfy its obligations. Carey v.
Estate of Myers, C.A. No. S11C-10-029 MJB, 2015 WL 4087056, at *22 (Del. Super. Ct. July 1,
2015). Here, the evidence established that Hooper Holmes made verbal commitments to work
with Wellness and pay its debt beginning in July 2015. Hooper Holmes did not make good on its
promises to pay the entire debt, and, arguably, Hooper Holmes nullified its good intentions by
renouncing its promises when a substantial obligation still was unpaid. See Restatement
(Second) of Contracts § 205 cmt. d (“Subterfuges and evasions violate the obligation of good
faith in performance even though the actor believes his conduct to be justified.”). In short, the
evidence about Hooper Holmes’s real intentions is mixed. Some of it suggests they were
20
working to extricate themselves from a difficult cash position. A skeptic might view these
statements as placeholders, designed to buy more time. While both views find some support, the
evidence favors, on balance, the conclusion that Hooper Holmes acted in good faith. This factor
thus favors a finding that Hooper Holmes’s breach of the MSA was not a material one.
Summarizing the § 241 analysis, the factors are mixed. The first (the extent to which
Hooper Holmes deprived Wellness of a reasonably expected benefit), third (the hardship to
Hooper Holmes if its breach is deemed a material one), and fourth (the likelihood that Hooper
Holmes would cure its breach) factors favor a materiality finding. But the second (the extent to
which Hooper Holmes can compensate Wellness adequately for its breach) and the fifth factors
(the extent to which Hooper Holmes acted in good faith) favor a non-materiality finding. In sum,
three of them favor a materiality conclusion and two do not.
But the court’s conclusion does not rely merely on a majority of factors. Instead, the
court’s conclusion considers the guiding principle of the materiality analysis: “ʻthe
consequences in the light of the actual custom of [people] in the performance of contracts similar
to the one that is involved in the specific case.’” BioLife Sols., Inc., 838 A.2d at 278 (quoting E.
Elec. & Heating, Inc., 1987 WL 9610, at *4) (holding that breaches of contract provisions that
were unimportant to the overall contract were not material). Here, the consequences of Hooper
Holmes not paying Wellness are dire because payment is the only benefit Wellness receives
under the MSA. Similar placed service providers—namely subcontracting screeners—would
view payment for their work an important part of the contract. This consideration moves the
balance to favor the finding that Hooper Holmes materially breached the MSA when it failed to
pay its outstanding debt.
21
2. Wellness waived its right to claim that Hooper Holmes materially
breached the MSA.
Ordinarily, finding that Hooper Holmes materially breached the MSA before Wellness
breached would end the analysis. But Hooper Holmes argues that the analysis must continue
because Wellness waived its right to claim that Hooper Holmes’s actions discharged Wellness
from the MSA. The court agrees.
Under Delaware law, “‘the nonbreaching party may not, on the one hand, preserve or
accept the benefits of a contract, while on the other hand, assert that the contract is void and
unenforceable.’” In re Mobilactive Media, LLC, C.A. No. 5725-VCP, 2013 WL 297950, at *14
(Del. Ch. Jan. 25, 2013) (quoting DeMarie v. Neff, No. Civ.A. 2077-S, 2005 WL 89403, at *5
(Del. Ch. Jan. 12, 2005)). In Mobilactive Media, two parties contracted to form a joint venture in
the interactive video and advertisement industries. Id. at *3. One reason that defendant—an
interactive video and advertising firm based in the United Kingdom—partnered with plaintiff—a
consultant and former general counsel for Comcast Cable—was because plaintiff had many
connections in relevant American industries. Id. The contract that formed the joint venture
required both parties to contribute $75,000 to the initial investment and prohibited both parties
from developing businesses to compete against the joint venture. Id. at *4. Neither party fully
contributed its share of the initial investment. Id. at *13. But a few weeks after the parties
signed the contract, plaintiff introduced defendant to a number of executives who could help
jumpstart the joint venture’s business. Id. at *4. Later, defendant began developing an endeavor
that planned to compete with the joint venture. Id. at *9.
Plaintiff sued, arguing that defendant had breached the joint venture agreement by
competing with the joint venture. Id. In response, defendant argued that plaintiff had breached
the contract first by failing to contribute the full $75,000 the joint venture agreement required
22
him to invest. Id. The case proceeded to trial and the court found that, even if plaintiff had
breached the contract materially, defendant could not claim that the contract was unenforceable
because defendant accepted the benefits of the contract after it knew plaintiff had failed to
contribute the $75,000, i.e., using plaintiff’s connections to executives who could jumpstart the
joint venture. Id. at *14. The court explained that when an aggrieved party knows about the
other party’s breach but still acts as if the contract is valid, the aggrieved party later cannot claim
that the breach discharges it from the contract’s obligations. Id. Because defendant continued
working with plaintiff and continued accepting plaintiff’s invitations to meet with key executives
in the interactive video industry, it could not claim that plaintiff’s breach—which it knew
about—voided defendant’s contractual duties. Id.
An analogous situation presents itself here. Wellness knew that Hooper Holmes was well
behind on its payments. It sent Hooper Holmes multiple emails in 2015 about its debt under the
MSA. Nevertheless, Wellness continued supplying PCP forms to Hooper Holmes and billing it
for them at the contract rate. By forwarding the PCP forms to Hooper Holmes, Wellness acted
as if the MSA was a binding contract that permitted Wellness to bill Hooper Holmes. Wellness
thus cannot “ʻon the one hand, . . . accept the benefits of a contract, while on the other hand,
assert that contract is void and unenforceable.’” Id. (quoting DeMarie, 2005 WL 89403, at *5).
Thus, while Hooper Holmes materially breached the MSA first, Wellness cannot assert
that Hooper Holmes’s prior material breach frees it from the MSA’s obligations because
Wellness continued to accept the benefits of the MSA. The court rejects Wellness’s first
argument that Hooper Holmes cannot recover a breach of the MSA because Hooper Holmes
materially breached the MSA first.
23
B.
Wellness materially breached the MSA by giving a sales presentation to GAF
and using information it gathered about GAF while working for Hooper
Holmes.
The court now turns to Wellness’s second defense to Hooper Holmes’s contract claim.
Wellness argues that it never committed a breach. Wellness argues that it never breached the
MSA’s non-compete provisions because Aon—GAF’s wellness broker—reached out to it and so,
according to Wellness, it never competed with Hooper Holmes. Wellness also contends that
even if it breached the MSA, the breach was not material because it only took one customer from
Hooper Holmes’s larger stable of clients.
Starting with Wellness’s first argument, the court concludes that Wellness breached the
MSA’s non-compete clause. First, Wellness breached the non-compete clause when Ms.
Silverman contacted GAF about Wellness’s services in March 2016 and then, the next month,
made a sales pitch to GAF. The MSA prohibited Wellness from (i) “encourage[ing] any [client
of Hooper Holmes], either directly or indirectly, to terminate its relationship with [Hooper
Holmes]” and (ii) “directly solicit[ing] or market[ing] [Wellness’s] Services to a[] [client of
Hooper Holmes] in any way to compete with [Hooper Holmes].” MSA ¶ 23(i)(i), (i)(ii). When
it made the sales pitch to GAF, Wellness indirectly encouraged GAF to terminate its relationship
with Hooper Holmes. This action violated ¶ 23(i)(i) of the MSA. Wellness’s participation in
this sales meeting also amounted to a direct solicitation of Hooper Holmes’s customer because
Wellness’s goal for the meeting was to advertise its capabilities to GAF in a way that competes
with Hooper Holmes. This conduct violated ¶ 23(i)(ii). Similarly, Ms. Silverman’s contact with
GAF also constitutes solicitation because Ms. Silverman contacted GAF to advertise Wellness’s
services to GAF.
Wellness also breached the part of the MSA’s non-compete clause prohibiting Wellness
from “us[ing] any confidential information, intellectual property, or any other data or
24
information provided by [Hooper Holmes], or gained pursuant to this Agreement, to compete . . .
with [Hooper Holmes] . . . .” Id. ¶ 23(ii) (emphasis added). The workbooks Wellness used
before and after the sales meeting contained employee information about GAF’s employees and
qualified as “information . . . gained pursuant to this Agreement,” MSA ¶ 23(ii), because
Wellness gained access to it while screening GAF’s employees for Hooper Holmes under the
MSA. Wellness’s use of this information violated ¶ 23(ii) because Wellness used this
information to land a contract with GAF. These acts are garden variety forms of competition.
Wellness argues that even if it breached the MSA, the breach was not material. As noted
above, Delaware uses the factors listed in the Restatement (Second) of Contracts to evaluate if a
breach is material. BioLife, 838 A.2d at 278. These factors are: (1) the extent to which the
breach deprived Hooper Holmes of a reasonably expected benefit; (2) the extent to which
Wellness could compensate Hooper Holmes adequately for the breach; (3) the extent to which
Wellness will suffer forfeiture if its breach is deemed a material one; (4) the likelihood that
Wellness will cure its breach; and (5) the extent to which Wellness acted in good faith. Id.
These factors, when applied to the evidence here, strongly favor a finding that Wellness’s breach
was material.
The first factor favors finding that the breach was material. Here, Hooper Holmes
bargained for—and procured—language in the MSA that prevented Wellness from competing
with it. The value of this non-competition agreement to Hooper Holmes was a reasonably
expected benefit of the contract. See Norfolk, 512 F.3d at 93–94 (holding that a reasonable
factfinder could conclude that the first Restatement factor favors finding that a breach is material
when the breach causes a party to lose a benefit it specifically sought to secure through the
contract). Hooper Holmes lost that reasonably expected benefit when Wellness solicited GAF
25
and GAF left for Wellness. Also, while GAF was just one of Hooper Holmes’s 77 clients, this
breach prejudiced Hooper Holmes significantly because GAF was a top tier client.
The second factor also favors finding that Wellness’s breach was material. When a court
cannot calculate the damages caused by a breach with ease and certainty, this factor favors a
finding that the breach is a material one. Id. at 94. A breach is difficult to compensate for when
the measure of damages is lost profits. Id. Because the only measure of damages that could
compensate Hooper Holmes for Wellness’s breach is lost profits, this factor favors a finding of
materiality.
The third factor also favors materiality. This third factor asks whether Wellness would
sustain a “forfeiture if [Hooper Holmes] is permitted not to perform” its obligations in the MSA.
Id. To be sure, declaring Wellness’s competition a material breach of the MSA could lead to it
forfeiting its right to collect on its outstanding invoices. See Hudson, 252 A.2d at 170 (holding
that a party who materially breaches a contract first cannot recover under a breach of contract
theory for a later material breach). But Wellness still could recover payment from Hooper
Holmes under a restitution theory. See Preferred Inv. Servs., Inc. v. T & H Bail Bonds, Inc.,
C.A. No. 5886VCP, 2013 WL 3934992, at *21 (Del. Ch. July 24, 2013) (“ʻThe party in breach is
entitled to restitution for any benefit that he has conferred by way of part performance.’”
(quoting Restatement (Second) of Contracts § 374)); see also Restatement (Second) of Contracts
§ 241 cmt. d (“[T]he potential forfeiture may be mitigated if the [breaching party] has a claim in
restitution . . . .”). And Wellness certainly should recover for any performance it completed
before the competitive actions qualified as a material breach. Wellness will not suffer a
forfeiture if the court discharges the parties’ obligations because it can recover Hooper Holmes’s
unpaid bills through restitution.
26
The fourth factor—likelihood that Wellness will cure its failure—also favors finding that
Wellness’s breach was material. The likelihood that Wellness will cure its breach is low because
Wellness signed a contract with GAF. And no evidence suggested that Wellness would
terminate its contract with GAF so that GAF could resume contracting with Hooper Holmes.
Last, the fifth factor—extent to which Wellness acted in good faith—favors a materiality
finding. Evidence that a party was justified in its breach or did not realize it made a mistake can
establish good faith. Restatement (Second) of Contracts § 241 cmt. f. Here, Ms. Gathright
plainly expressed her delight over the prospect of Hooper Holmes losing GAF’s business.
Wellness plainly understood the effect of its conduct. And while Hooper Holmes’s delinquency
irked Wellness, it does not provide sufficient justification to poach one of Hooper Holmes’s
largest clients. Because all five Restatement factors favor the conclusion that Wellness’s breach
of the MSA was a material one, the court concludes that Wellness materially breached the MSA
by violating its non-compete obligations.
C.
Wellness’s conduct did not cause Hooper Holmes to sustain lost profit
damages.
Having concluded that Wellness materially breached the MSA, the court must determine
the damages, if any, Hooper Holmes should recover for that breach. Hooper Holmes claims that
Wellness’s material breach caused it to lose more than $700,000 in lost profits because Wellness
cost Hooper Holmes the opportunity to continue contracting with GAF. Wellness responds that
GAF would have moved its wellness business to another vendor even if Wellness never had
contacted GAF.
Delaware follows the familiar contract principle that Hooper Holmes is entitled to
recover its expectation damages. Siga Techs., Inc. v. PharmAthene, Inc., 132 A.3d 1108, 1130
(Del. 2015), as corrected (Dec. 28, 2015). Expectation damages are damages that place the
27
injured party in the same position it would have occupied if the breaching party had honored the
contract. Id. “In assessing damages for breach of contract and related claims, it is therefore
important to consider how the positions of the parties would differ in the ‘but-for’ world—i.e.,
the hypothetical world that would exist if the Agreement had been fully performed.”
eCommerce Indus., Inc. v. MWA Intelligence, Inc., No. CV 7471-VCP, 2013 WL 5621678, at
*43 (Del. Ch. Sept. 30, 2013). When a plaintiff claims that it would have earned profits but for
the contract breach, the plaintiff must prove that it would have received the claimed profit “with
reasonable certainty.” SIGA Techs., 132 A.3d at 1131. “ʻNo recovery can be had for loss of
profits which are determined to be uncertain, contingent, conjectural, or speculative.’” Id.
(quoting Siga Techs., Inc. v. PharmAthene, Inc., 67 A.3d 330, 351 (Del. 2013)).
Here, Hooper Holmes argues that in the world that would have developed “but-for”
Wellness’s conduct, GAF would still be contracting with it for wellness services. But the
evidence presented at trial won’t support this proposition. Ms. Love, GAF’s Senior Benefits
Manager, testified that before the April sales meeting with Wellness and Ms. Silverman’s
interaction at the February birthday party, GAF had decided to end its wellness relationship with
Hooper Holmes. Love Dep. 24:11–22. She testified that GAF did not see any benefit from using
Hooper Holmes’s comprehensive wellness services and simply wanted to continue with
biometric screenings for its employees. Id. at 12:19–13:8. By February 2016, Ms. Love testified
that GAF had no intention to renew its contract with Hooper Holmes. Id. at 27:18–21. Ms. Love
acknowledged that Hooper Holmes recently had entered the biometric screening business when it
bought Accountable Health, but she was skeptical of its capabilities because it was so new to the
screening endeavor. Id. at 18:1–9. And, despite Hooper Holmes’s assertions to the contrary,
Ms. Silverman played no role in GAF’s decision to contract with Wellness. Id. at 24:23–25. So,
28
if Ms. Silverman never had contacted Ms. Love, and even if Wellness never made a sales
presentation to GAF, Hooper Holmes has not carried its damages burden. It has failed to show
“with reasonable certainty” that it would have continued to earn profits from a relationship with
GAF.
D.
Even if Wellness’s breach caused Hooper Holmes’s damages, the MSA’s
limitation of liability clause precludes it from recovering lost profits.
But even if Hooper Holmes had proved lost profits, the MSA precludes it from
recovering lost profits. In relevant part, the MSA provides, “[N]either party to this agreement
shall be liable to the other party for loss of profits, loss of business, or special, indirect,
incidental, exemplary, consequential, or punitive damages arising from the performance or
nonperformance of this agreement, or any acts or omissions associated therewith.” MSA ¶ 11.
Hooper Holmes claims only just one form of damages—lost profits—and the simple language to
which the parties agreed precludes Hooper Holmes from recovery.
Hooper Holmes makes three arguments trying to avert this damages limitation clause.
First, it argues that the lost profit damages it seeks are direct damages, and thus the limitation
clause does not apply. Second, Hooper Holmes argues that the UCC would not enforce the
MSA’s limitation of liability clause. And last, it contends that Delaware common law does not
enforce limitation of liability clauses when the breaching party breaches the contract in bad faith.
None of these arguments persuade the court. The next three sections explain why.
1. Even though Hooper Holmes’s lost profit damages are direct damages,
the limitation of liability clause still bars their recovery.
Hooper Holmes argues that its lost profits damages are direct damages and the limitation
of liability thus does not apply. Hooper Holmes notes that in eCommerce, the Delaware
Chancery Court allowed the plaintiff to recover lost profit damages for breach of contract even
though the contract contained a limitation of liability clause. But the limitation of liability clause
29
in eCommerce differs substantially from the one in the MSA here. In eCommerce, the contract at
issue precluded recovery for “ʻspecial, incidental, indirect, statutory or consequential damages
(including lost revenue or profits)’ arising out of or related to that party’s breach of the
Agreement.” eCommerce, 2013 WL 5621678, at *47 (emphasis added) (quoting the contract).
When plaintiff sued defendants for breaching the contract’s non-compete provision and sought to
recover lost profit damages for that breach, defendants argued that plaintiff could not recover lost
profits because the contract prohibited recovery of consequential damages. Id. at *47.
The Chancery Court disagreed. Id. It concluded that profits lost because of
impermissible competition are the direct and natural consequence of a breach of a non-compete
clause. Id. Since consequential damages are damages that “ʻdo not flow directly and
immediately from an injurious act but that result indirectly from the act,’” these lost profit
damages did not constitute consequential damages. Id. (quoting Consequential Damages,
Black’s Law Dictionary (9th ed. 2009)). The contract’s limitation of liability clause thus did not
bar plaintiff’s recovery because it only covered lost-profit damages not flowing directly and
immediately from the breach.
Here, the MSA’s limitation of liability clause is different. It uses different words. The
MSA—unlike the contract at issue in eCommerce—does not categorize “loss of profits” as a type
of “consequential damages.” Instead, the MSA lists “loss of profit” damages separately from
“consequential” damages and prohibits recovery of both forms of damages. See MSA ¶ 11
(“Neither party to this agreement shall be liable to the other party for loss of profits . . . or . . .
consequential . . . damages arising from the performance or non-performance of this agreement
. . . .” (emphasis added)). The MSA bars loss of profit damages that result directly from a
breach—the type of damages Hooper Holmes seeks here.
30
2. Delaware common law—not the UCC as adopted by Delaware—governs
the entire MSA.
Next, Hooper Holmes argues that the MSA is a mixed goods and services contract,
partially governed by the UCC and the UCC would not enforce the MSA’s limitation of liability
clause. The court agrees with Hooper Holmes, in part. The MSA is a mixed goods and services
contract because the MSA involves the service of selling wellness screenings and it also involves
selling at-home test kits—which are goods. See Del. Code Ann. tit. 6 § 2-105(1) (“ʻGoods’
means all things . . . which are movable at the time of identification to the contract for sale
. . . .”). Because the MSA covers both goods and services, the court must decide whether
Delaware common law or the UCC—as adopted in Delaware—governs the limitation of liability
clause.
Article Two of the Uniform Commercial Code applies to “transactions in goods.” Id. §
2-102. When a contract involves both goods and services, the court must determine whether the
goods or services portion of the contract dominates. Neilson Bus. Equip. Ctr., Inc. v. Italo V.
Monteleone, M.D., P.A., 524 A.2d 1172, 1174 (Del. 1987). If the contract is primarily a contract
for the sale of goods, then the UCC applies to the whole contract. Id. Conversely, if the services
portion of the contract dominates, then the common law of contracts applies to the whole
contract. Id. In making this determination, the court reviews “the factual circumstances
surrounding the negotiation, formation and contemplated performance of the contract . . . .” Id.
Neilson illustrates how Delaware law applies this test. In Neilson, a doctor bought a
computer to help him maintain patient files. Id. at 173. The computer came with installed
software. Id. After problems developed with the software, the doctor sued the computer’s seller,
arguing that the seller had breached the implied warranties of merchantability and fitness for a
particular purpose, arising under the UCC. Id. at 1174. Defendant argued that since the doctor
31
took issue with the software—not a good—the UCC did not apply to the claim and the seller thus
could not breach the UCC’s warranties. Id. The Delaware Supreme Court disagreed. Id. It
explained that the trial court properly had concluded that the goods portion of the contract
dominated the services portion. Id. This dominance meant that the UCC governed any dispute
about the software problems even though the software was not a good. Id.
Here, the court concludes that the common law governs the MSA. The evidence adduced
at trial establishes that the fundamental goals of the parties when they entered into the MSA
called for Wellness to provide health screening services previously provided by Principal—
Hooper Holmes’s predecessor. The evidence established that biometric screenings easily was
the primary benefit of the MSA and thus it dominated the essence of the contract. It is true that
the MSA also called for Wellness to provide some goods to Hooper Holmes—i.e., at-home
testing kits. But both in scale and purpose, the MSA centered on services. The MSA required
Wellness to perform basic fingerstick blood screenings, conduct cheek swab tests, create reports
about employees’ overall health, perform venipuncture screenings, set up screenings, and
provide a registered dietician—among other services. MSA Ex. B § F. Only a discrete and
isolated portion of the MSA’s performance involved goods (health education booklets, PCP
forms, and at-home test kits). Id. And the price of simply giving an at-home testing kit to an
employee was merely $15. Id. The price to process a kit was $50. Id. So, the balance of the
price even for the sale of at-home test kits represented the services needed to process the kit—not
the kit itself. The court concludes that the common law governs the entire MSA—including its
limitation of liability clause—because the services portion of the MSA dominated the goods
portion.
32
3. Delaware common law enforces limitation of liability clauses in breach of
contract cases even when the breaching party acts in bad faith.
Finally, Hooper Holmes argues that even under Delaware common law, the court should
not enforce the limitation of liability clause. It argues that Delaware law does not enforce those
types of provisions when the breaching party acted in bad faith.
“Under Delaware law, limitation on liability clauses that preclude various types of
damages, such as consequential damages, are typically enforceable.” eCommerce Indus., 2013
WL 5621678, at *45. As eCommerce reasoned,
[F]reedom of contract would suggest that parties to a contract should be entitled to
draft agreements so as to avoid certain . . . duties and liabilities that are normally
part of a contractual relationship. Had the parties desired to carve out an exception
to the Agreement’s limitation of liability provision for instances of bad faith or
willful breach, they could have done so, but they did not. For this reason, and
because of the sophisticated nature of the parties, I find that, even if Plaintiffs
breached the Agreement in bad faith, that would not absolve [defendant] from the
consequences of the limitation on liability provision to which it agreed.
Id. Here, the MSA’s limitation of liability clause prevents both parties to the contract from
collecting lost profits. MSA ¶ 11. It does not create any exceptions for willful or bad faith
breaches. And given the “sophisticated nature of the parties,” Hooper Holmes must accept “the
consequences of the limitation on liability provision to which it agreed.” eCommerce, 2013 WL
5621678, at *45. So, even if Wellness acted in bad faith, Delaware law still would enforce the
limitation of liability clause.
Hooper Holmes acknowledges eCommerce, but urges the court to follow J.A. Jones
Construction Co. v. Dover, 372 A.2d 540 (Del. Super. Ct. 1977). There, Hooper Holmes says, a
Delaware court refused to enforce a limitation of liability clause because the plaintiff could prove
that a breach was in bad faith. The court finds J.A. Jones unpersuasive.
In J.A. Jones, the City of Dover contracted with plaintiff for plaintiff to install part of an
electrical grid. 372 A.2d at 543. Because of delays in the project allegedly caused by the City,
33
plaintiff incurred more expenses than it had predicted. Id. Plaintiff sued, asserting breach of
implied covenant of good faith and fair dealing, quantum meruit, and tort claims against the City.
Id. The City moved for summary judgment against all claims, arguing that the contract’s
limitation of liability clause prohibited plaintiff from recovering any damages. Id. at 545. The
trial court disagreed. Id. at 546. It held that Delaware law would not expand a limitation of
liability clause to exclude recovery for damages from torts “[u]nless it appears after trial that the
parties in their contractual relations specifically addressed themselves to this issue and
contemplated that the language used protected [the City] against its own negligence . . . .” Id.
eCommerce recognizes this holding. See eCommerce, 2013 WL 5621678, at *45
(acknowledging that courts can set aside limitations on liability arising from tort liability).
But J.A. Jones never extended this reasoning to the implied covenant claim at issue there.
To the contrary, the court enforced the limitation of liability clause against plaintiff’s implied
covenant claim. See J.A. Jones, 372 A.2d at 545. While the court allowed the implied covenant
claim to proceed because the clause did not bar damages from unreasonable delays caused by the
City, the court held that plaintiff could not recover contract damages for conduct otherwise
covered by the limitation clause. Id.; see also eCommerce, 2013 WL 561678, at *45 n.317
(rejecting a party’s argument that Delaware courts do not interpret J.A. Jones to proscribe
enforcement of liability limitation clauses in breach of contract cases even when the breaching
party acted in bad faith).
Here, Hooper Holmes only can recover under a breach of contract theory because the
court already has granted summary judgment against all its tort claims. See Doc. 140. J.A. Jones
does not apply, and Hooper Holmes’s argument is unpersuasive. 4
4
Hooper Holmes also cites other states’ case law to support its assertion that the court should ignore the
MSA’s limitation of liability clause. When interpreting a state’s substantive law, the Erie doctrine instructs the
34
E.
Because Wellness breached the MSA, Hooper Holmes is entitled to nominal
damages.
Even though Hooper Holmes cannot prove or recover any expectation damages,
Delaware law still permits Hooper Holmes to recover nominal damages. Palmer v. Moffat, No.
CIV.A.01C-03-114JEB, 2004 WL 397051, at *4 (Del. Super. Ct. Feb. 27, 2004). Because the
court concludes that Wellness breached the MSA but Hooper Holmes cannot prove or recover
any damages, see supra, Parts II.C., II.D., the court awards Hooper Holmes $1.00 in nominal
damages, see USH Ventures v. Global Telesystems Grp., Inc., 796 A.2d 7, 23 (Del. Super. Ct.
2000) (awarding $1.00 as nominal damages in a breach of contract case).
III.
Wellness is liable for breaching the NDA but the court only awards Hooper Holmes
$1.00 in nominal damages.
The court now considers Hooper Holmes’s remaining claim for breach of contract. This
claim contends that Wellness breached the NDA—a binding and enforceable contract—causing
Hooper Holmes damages. See VLIW Tech., LLC, 840 A.2d at 612 (listing elements of a breach
of contract case).
The parties agree that the NDA is a binding and enforceable contract. But Wellness
contends that it is not liable for breaching the NDA for two distinct reasons. First, Wellness
argues, it never breached the NDA. And second, even if it did, Hooper Holmes has not proved
that Wellness’s alleged NDA breach caused any damages. The court addresses each argument,
separately, below.
court to follow the state’s highest court’s decisions first. Etherton v. Owners Ins. Co., 829 F.3d 1209, 1223 (10th
Cir. 2016). If no decision from that court is on point, courts should follow lower court authority unless there is
persuasive evidence that the state’s highest court would not follow that lower court authority. Id. Here, the court
can find no case from the Delaware Supreme Court that addresses this issue. And Hooper Holmes has provided
nothing to suggest that Delaware’s Supreme Court disagrees with the Delaware Chancery Court’s decision in
eCommerce.
35
A.
Wellness breached the NDA.
Wellness argues that it never breached the NDA. To evaluate this argument, the court
must begin with the terms of the contract. The NDA required both parties to “keep Confidential
Information confidential and secure” and to “use and disclose Confidential Information solely for
the purpose of evaluating the [business opportunity presented by the MSA].” NDA ¶ 3. It
defined “Confidential Information” as:
[A]ll . . . information disclosed prior to or after the execution of this agreement,
either furnished or made available (a) by [Hooper Holmes] or [its] Agents . . . to
[Wellness] or (b) by [Wellness] or its Agents to [Hooper Holmes], in connection
with the Opportunity, including, but not limited to, marketing philosophy,
techniques, and objectives; advertising and promotional copy; competitive
advantages and disadvantages; financial results; technological developments; loan
evaluation programs; customer lists; account information, profiles, demographics
and Non-Public Personal Information . . . ; credit scoring criteria, formulas and
programs; research and development efforts; any investor, financial, commercial,
technical or scientific information . . . and any and all other business information
....
Id. ¶ 2. Hooper Holmes claims Wellness impermissibly used three sources of such information:
its pricing data, see Pls.’ Ex. 37, and two workbooks containing information about GAF that
Wellness had collected during its 2015 screenings, see Pls.’ Exs. 41, 42. Hooper Holmes’s
pricing data is confidential information.
In plaintiffs’ Exhibit 37, Ms. Geppi emailed Ms. Kolakowski, asking what Hooper
Holmes charged GAF for screening services. Pls.’ Ex. 37 at 5. Ms. Kolakowski replied that
Hooper Holmes charged GAF 20% more than Wellness had charged Hooper Holmes for the
screenings. Id. Ms. Geppi testified that 20% is a common mark-up in the wellness industry.
Trial Tr. 428:14–21. Wellness argues that Ms. Kolakowski arrived at this number by taking the
industry standard for up-charging employers—20%—and adding it to the $39 the MSA charged.
The court views the evidence differently.
36
When Ms. Kolakowski responded, she answered in definitive fashion—implying that she
knew that Hooper Holmes followed industry norms and was not simply guessing that it followed
industry norms. And this information must have come from Hooper Holmes because this email
was sent shortly after Aon—GAF’s wellness broker—first contacted Wellness about the
potential opportunity with GAF. This inquiry occurred long before GAF could have shared
information with Wellness about the prices that Hooper Holmes was charging. And this
information easily fell within the scope of the NDA’s protection because it is “account
information” about GAF, i.e., information about what prices Hooper Holmes charges GAF.
B.
Hooper Holmes sustained no damages because of Wellness’s breach.
This leads to Wellness’s second argument: Hooper Holmes cannot prove that it sustained
any damages because of Wellness’s actions. As explained above, Delaware law follows the
familiar contract principle that Hooper Holmes may recover its expectation damages when a
breach occurs. Siga Techs., 132 A.3d at 1130. Expectation damages are damages that would put
the injured party in the same position as it would be if the breaching party honored the contract.
Id. “In assessing damages for breach of contract and related claims, it is therefore important to
consider how the positions of the parties would differ in the ‘but-for’ world—i.e., the
hypothetical world that would exist if the Agreement had been fully performed.” eCommerce,
2013 WL 5621678, at *43. When a plaintiff claims that it would have recovered lost profits in
this hypothetical world, plaintiff must prove, “with reasonable certainty,” that it would have
received the claimed profit. Siga Techs., 132 A.3d at 1131. “ʻNo recovery can be had for loss of
profits which are determined to be uncertain, contingent, conjectural, or speculative.’” Id.
(quoting Siga Techs., 67 A.3d at 351).
As already explained in detail, GAF was not planning on renewing its contract with
Hooper Holmes. See supra, Part II.C. Ms. Love, GAF’s Senior Benefits Manager, testified that
37
GAF decided in February 2016 not to renew its wellness contract with Hooper Holmes.
Wellness created and used the “confidential information” in March and May 2016—after GAF
made its decision. So, Hooper Holmes sustained no lost profit damages from Wellness’s actions.
The court thus awards $1.00 in nominal damages to Hooper Holmes. See USH Ventures, 796
A.2d at 23 (awarding $1.00 as nominal damages in a breach of contract case where plaintiff
could not prove defendant’s breach of contract caused plaintiff to sustain any damages).
IV.
The court denies Hooper Holmes’s oral motion to reconsider.
In closing argument, Hooper Holmes’s counsel asked the court to reconsider its ruling at
summary judgment. Specifically, Hooper Holmes asked the court to revisit its order entering
judgment against Hooper Holmes’s claims for tortious interference with contract and tortious
interference with prospective business expectancies or relationships. Hooper Holmes argued that
if the court finds that Hooper Holmes cannot recover any damages on its contract claim, the
court should permit it to pursue its tort claims. The court denies Hooper Holmes’s motion for
two reasons. First, this motion is untimely. Second, Hooper Holmes’s arguments are wrong.
The court briefly explains both conclusions, below.
A.
Hooper Holmes’s motion is untimely.
On December 6, 2017, the court entered its Memorandum and Order on Wellness’s two
summary judgment motions. Doc. 140. One of the motions asked the court, in part, to enter
summary judgment against Hooper Holmes’s two tort claims because they duplicated Hooper
Holmes’s contract claim. Doc. 101 at 16. The court agreed with the legal premise of Wellness’s
motion and granted summary judgment against both tort claims. Doc. 140 at 27.
Because the court did not dispose of the case fully, D. Kan. Rule 7.3(b) governs Hooper
Holmes’s motion for reconsideration. See Ferluga v. Eickhoff, 236 F.R.D. 546, 548 (D. Kan.
38
2006) (applying D. Kan. Rule 7.3(b) to a motion to reconsider when the court did not enter a
judgment). Rule 7.3(b) gave Hooper Holmes two weeks after the court entered the Order to file
a motion for reconsideration. D. Kan. Rule 7.3(b). Hooper Holmes made its motion some two
months after the court entered its Order. It is untimely.
Moreover, apart from Rule 7.3(b), the timing of Hooper Holmes’s motion is unfair. In
effect, it asks the court to reinstate two claims after the evidence had closed. Doing so would
deprive Wellness of the chance to put on its defense. The court denies the motion for this reason
as well.
B.
The court correctly dismissed Hooper Holmes’s tort claims.
Even if Hooper Holmes had made a timely motion, the court still would not reverse its
summary judgment ruling. Hooper Holmes argues the court should not have entered summary
judgment against its tort claims because Kansas5 law allows a plaintiff to pursue a tort claim that
duplicates a contract claim if plaintiff cannot recover under a breach of contract theory. It cites
Bittel v. Farm Credit Services of Central Kansas, P.C., 962 P.2d 491 (Kan. 1998). This
argument fully misapprehends Kansas law.
Typically, a plaintiff cannot assert a tort claim that duplicates a contract claim. One
claim duplicates another claim when both claims assert that defendant breached the same duty
imposed by contract and tort law. Burcham v. Unison Bancorp, Inc., 77 P.3d 130, 146 (Kan.
2003). In Bittel v. Farm Credit Services, the Kansas Supreme Court recognized a situation
5
The court applied Kansas law to Hooper Holmes’s tort law claims because Kansas applies the “law of the
‘place of the wrong’” to tort claims. Atchison Casting Corp. v. Dofasco, Inc., 889 F. Supp. 1445, 1455 (D. Kan.
1995) (citing Ling v. Jan’s Liquors, 703 P.2d 731, 735 (Kan. 1985)). “In the case of alleged financial harm . . . , the
court looks to the state in which the plaintiff felt the harm.” Carolina Indus. Prods., Inc. v. Learjet, Inc., 189 F.
Supp. 2d 1147, 1163 n.12 (D. Kan. 2001). A plaintiff feels financial harm in the state where it resides. See id.
(using Kansas choice of law principles and applying Georgia law to a tortious interference with business expectancy
claim because plaintiffs’ principal place of business was Georgia). Here, Hooper Holmes’s principal place of
business is Kansas, so Kansas law governs Hooper Holmes’s tort claims.
39
where this rule didn’t apply. In that case, plaintiff brought a claim for breach of contract and one
for negligent misrepresentation. Bittel, 962 P.2d at 495. Plaintiff alleged that defendant had
breached an oral contract to renew a loan and the defendant negligently had misrepresented that
it would renew the loan. Id. The trial court granted summary judgment against the tort claim,
concluding that it, in essence, was a contract claim based on a tort theory. Id. The trial court
also entered summary judgment against the contract claim because the statute of frauds barred
enforcement of the oral contract. Id.
On appeal, the Kansas Supreme Court held that the trial court properly granted summary
judgment against the contract claim but reversed the decision about the tort claim. Id. at 497–98.
The court held that in situations “where a plaintiff is unable to recover under a breach of contract
theory because an enforceable contract was never made,” Kansas law allows the plaintiff to
pursue a tort claim even though it asserts the “same claim” as a contract claim. Id. (emphasis
added). In contrast, here, both parties agree that the MSA and the NDA are binding contracts.
Bittel thus does not apply. The court correctly granted summary judgment against Hooper
Holmes’s tort claims and the court denies its reconsideration motion for this reason as well.6
V.
Hooper Holmes owes Wellness $346,226.10.
The court now turns to Wellness’s Counterclaim. In its Counterclaim, Wellness asserts
that Hooper Holmes breached the MSA when it failed to pay Wellness’s outstanding invoices.
As a result, Wellness argues, Hooper Holmes owes $235,156.58 plus interest at a rate of 1.5%
per month.
6
Both of Hooper Holmes’s interference claims would require Hooper Holmes to prove that defendant’s
actions caused Hooper Holmes’s damages. See Cohen v. Battaglia, 293 P.3d 752, 755 (Kan. 2013) (listing causation
as an element for both tortious interference with contract and tortious interference with prospective business claims).
As the court has explained, Hooper Holmes failed to prove that defendant’s actions caused it to sustain any
damages. See supra, Part II.C. So, even if the court had allowed Hooper Holmes’s tort claims to proceed to trial,
Hooper Holmes still could not prevail on either claim.
40
As explained above, to succeed on its breach of contract claim, Wellness must show that
(1) the MSA is a valid and enforceable contract, (2) Hooper Holmes materially breached that
contract, and (3) Wellness sustained damages because of Hooper Holmes’s material breach.
VLIW Tech., 840 A.2d at 612. The parties stipulate that the MSA is a valid and enforceable
contract. This brings the analysis to the second element. Hooper Holmes materially breached
the MSA when it failed to pay its outstanding bills. See supra, Part II.A.1. But on June 9, 2016,
Wellness materially breached the MSA by contracting with GAF, so Wellness cannot recover for
breach of contract for any invoice due after that date. See Hudson, 252 A.2d at 170 (holding
that, under Delaware law, a party who materially breaches the contract first cannot recover for
the other party’s later breach). But “ʻ[t]he party in breach is entitled to restitution for any benefit
that he has conferred by way of part performance.’” Preferred Inv. Servs., 2013 WL 3934992, at
*21 (quoting Restatement (Second) of Contracts § 374). The court properly can measure the
benefit conferred by the price charged in the contract, but is not bound to accept that measure if
the evidence establishes that the breaching party conferred a lower benefit. Id. (citing
Restatement (Second) of Contracts § 374). “Since the party seeking restitution is responsible for
posing the problem of measurement of benefit, doubts will be resolved against [it] . . . .”
Restatement (Second) of Contracts § 374 cmt. b.
Here, Wellness conferred part performance after June 9 by forwarding PCP forms. See
Def.’s Ex. 411. And because no evidence proves otherwise, the court concludes that the price
listed in the MSA is a fair price. See Preferred Inv. Servs., 2013 WL 3934992, at *22 (awarding
a party who committed an earlier breach a restitution award equal to what it would have
recovered under the contract because no evidence existed that suggested it conferred a smaller
41
benefit). So, Wellness is entitled to recover $235,156.58 for Hooper Holmes’s breach of contract
and in restitution for part performance.
Wellness also asserts that it is entitled to recover prejudgment interest on the overdue
amount. Because Delaware law governs the contract, Delaware law governs the amount, if any,
of prejudgment interest Wellness can collect. See Travelers Cas. & Sur. Co. v. Ins. Co. of N.A.,
609 F.3d 143, 173 (3d Cir. 2010) (holding that New York law governed the award of
prejudgment interest on a breach of contract claim governed by New York law). “Delaware law
is settled that ‘a successful plaintiff is entitled to interest on money damages as a matter of right
from the date liability accrues.’” Valeant Pharm. Int’l v. Jerney, 921 A.2d 732, 755 (Del. Ch.
2007) (internal bracket omitted) (quoting Summa Corp. v. Trans World Airlines, Inc., 540 A.2d
403, 409 (Del. 1988)). When liability arises from a breach of contract, Delaware courts “look to
the contract itself to determine when interest should begin to accrue.” Citadel Holding Corp. v.
Roven, 603 A.2d 818, 826 (Del. 1992). Delaware’s substantive law confers “‘broad discretion,
subject to principles of fairness, in fixing the [interest] rate to be applied.’” Valeant Pharm., 921
A.2d at 755 (quoting Summa Corp., 540 A.2d at 409).
Here, the MSA required Hooper Holmes to pay Wellness within 45 days of receiving the
invoices. So, before June 9, Hooper Holmes’s liability accrued 45 days after the invoice date.
After June 9, Hooper Holmes’s liability did not arise from a breach of contract. Instead, its
recovery is based on restitution. Preferred Inv. Servs., 2013 WL 3934992, at *21. But since
restitution “often requires equitable considerations,” Rufus v. Ramsey, No. CIV.A. 03A-09005HDR, 2004 WL 838612, at *2 (Del. Super. Ct. Apr. 13, 2004), the court considers the MSA’s
terms and the dates of the invoices to set the proper amount of interest to award because that’s
what the parties bargained for and expected to happen. At trial, Wellness produced an aging
42
summary that showed the amount of each invoice and when it was sent. See Def.’s Ex. 411.
Using that summary, the court applies the MSA’s 1.5% interest rate to the outstanding bills,
starting from the date the bills became overdue. The amount of interest accrued on each overdue
invoice is identified in Appendix A. 7
But the court also must consider how the award to Hooper Holmes affects the interest
calculation. Fleet Fin. Grp., Inc. v. Advanta Corp., No. CIV.A. 16912-NC, 2003 WL 22707336,
at *1 (Del. Ch. Nov. 7, 2003). Delaware law typically requires courts to apply a single interest
rate to the net award—here $235,154.58. Id. at *3. This is commonly known as the Interest on
Balance Rule. Id. But if a claim and Counterclaim are not directly related to each other, the
court should apply a different interest rate to each claim. Id. at *4 (holding that claims and
Counterclaims arising from a single business acquisition were related and thus the Interest on
Balance Rule applied). Here, Hooper Holmes’s claim and Wellness’s Counterclaim arise from
the same contract—the MSA. So, these two claims are related directly, and thus the Interest on
Balance Rule applies.
In total, Hooper Holmes owes $111,069.52 in prejudgment interest, and the court awards
that amount to Wellness.
VI.
Wellness is not entitled to any attorneys’ fees.
Wellness contends that if it prevails on its Counterclaim, then the MSA allows it to
recover its attorneys’ fees from Hooper Holmes. The court disagrees.
7
Ms. Gathright testified that Hooper Holmes owed $120,280.79 in interest through February 9, 2018. Trial
Tr. 572:18. The court declines to adopt this number, however, because Ms. Gathright’s testimony on this subject
was not persuasive. Ms. Gathright could not explain how she arrived at that figure. Id. at 584:1–5. She did not
know whether the interest calculation used to produce the $120,200 figure was simple interest, or compound
interest, or even how Hooper Holmes’s weekly payments affected the interest calculation. And defendant never
offered the backup document showing how Ms. Gathright purportedly calculated the $120,280.79 figure. Id. at
571:8–9.
43
Delaware, like most states, generally requires litigants to pay their own attorneys’ fees.
Maurer v. Int’l Re-Ins. Corp., 95 A.2d 827, 830 (Del. 1953). One exception to this rule allows a
party to collect its attorneys’ fees where the parties’ contract allows for fee recovery. Del. Code
Ann. tit. 10, § 3912. Here, the MSA provides:
Each Party agrees to indemnify, defend, and hold harmless the other Party . . . from
and against any and all third party claims, demands, damages or any other financial
demands (including, without limitation, attorneys’ fees and expenses) arising from
or related to the indemnifying Party’s breach of this Agreement.
MSA ¶ 10. Wellness argues that this indemnification clause is sufficiently broad to support an
attorneys’ fees award against Hooper Holmes.
Pinkert v. John J. Olivieri, P.A., No. CIV. A. 99-380-SLR, 2001 WL 641737, at *6 (D.
Del. May 24, 2001), provides helpful guidance for Wellness’s indemnity-based fee claim. In that
case, plaintiffs alleged defendant—a construction company—defectively built their home, which
caused them damages. Id. at *1. Plaintiffs brought a breach of contract claim against defendant,
arguing that it had breached the construction contract between the parties. Id. at *2. Plaintiffs
asserted that the contract they were suing under allowed them to collect their attorneys’ fees
from defendant. Id. at *6. The contract, in relevant part, provided:
“[Defendant] agrees to defend, indemnify and hold [plaintiffs] harmless from and
against any and all loss, cost, expense, liability, actions, and claims whatsoever
(including, without limitation, reasonable attorneys[’] fees and court costs) incurred
by [plaintiffs] incident to any malfeasance or nonfeasance by [defendant] with
respect to [defendant’s] responsibilities under the terms of this Agreement.”
Id. (quoting the contract).
Defendant moved for summary judgment against plaintiffs’ claim for attorneys’ fees. Id.
The court sided with defendant, holding that the contract did not allow plaintiffs to recover their
attorneys’ fees. Id. The court explained that “[t]he language ‘defend, indemnify and hold
[plaintiffs] harmless’ clearly renders [this provision] an indemnification provision which acts to
44
protect plaintiffs from liability if they are sued by a third party . . . .” Id. (quoting the contract).
Because defendant “cannot agree to ʻdefend, indemnify and hold plaintiffs harmless’ from a
lawsuit filed . . . by the plaintiffs themselves,” plaintiffs could not collect their attorney’s fees
under the indemnification clause. Id. (internal brackets omitted) (quoting the contract).
Here, the MSA’s indemnification clause is nearly identical to the one in Pinkert. Both
require a breaching party—here, Hooper Holmes—to defend, indemnify, and hold harmless the
non-breaching party—Wellness—for a lawsuit brought by a third party against the nonbreaching party. There is no such party third in this case. See Doc. 120 at 1 (listing Hooper
Holmes, Accountable Health, and Wellness as the only parties to this suit). And, just as in
Pinkert, Hooper Holmes cannot “indemnify, defend, and hold harmless [Wellness] from and
against any and all [of Wellness’s] claims . . . .” MSA ¶ 10. The indemnification clause does
not apply to Wellness’s claim against Hooper Holmes. It does not entitle Wellness to recover
any attorneys’ fees incurred in this case.
VII.
Conclusion
For the reasons explained above, the court finds for plaintiffs Hooper Holmes and
Accountable Health on their breach of contract claim for Wellness’s breach of the MSA and
NDA and awards them a total of $2.00 in nominal damages. On Wellness’s Counterclaim for
breach of contract, the court awards Wellness $235,156.58 plus $111,069.52 in prejudgment
interest.
IT IS THEREFORE ORDERED BY THE COURT THAT plaintiffs Hooper Holmes
and Accountable Health are awarded $2.00 in nominal damages.
IT IS FURTHER ORDERED THAT counterclaim-plaintiff Wellness Corporate
Solutions is awarded $346,226.10 in damages.
45
FINALLY, THE COURT DIRECTS the Clerk of the Court to enter without delay a
Judgment in Hooper Holmes and Accountable Health’s favor for $2.00 and a Judgment in
Wellness Corporate Solutions’s favor for $346,226.10 under Rule 58.
IT IS SO ORDERED.
Dated this 1st day of August, 2018, at Topeka, Kansas.
s/ Daniel D. Crabtree
Daniel D. Crabtree
United States District Judge
46
Appendix A-Interest Accrued
Invoice Number8
7051
598214
5983
5984
5985
5986
5987
5988
5989
8
Invoice Date9
4/8/2015
9/2/2015
9/2/2015
9/2/2015
9/2/2015
9/2/2015
9/2/2015
9/2/2015
9/2/2015
Due Date10
Days Overdue
5/23/2015
10/17/2015
10/17/2015
10/17/2015
10/17/2015
10/17/2015
10/17/2015
10/17/2015
10/17/2015
1166
1019
1019
1019
1019
1019
1019
1019
1019
Amount Owed
12 13
$0.00
$10.70
$15.00
$742.50
$82.50
$285.00
$1,852.50
$15.00
$97.50
Interest Accrued11
$0.00
$5.38
$7.54
$373.12
$41.46
$143.22
$930.92
$7.54
$49.00
The court uses the invoice numbers and corresponding invoice information from the Aging Summary (Def.’s Ex. 411).
9
The court uses the invoice date as the date that Hooper Holmes received the invoice. See MSA ¶ 7 (requiring Hooper Holmes to pay any undisputed
invoices within 45 days of receiving the invoice). No evidence suggests that Hooper Holmes received the invoices after that date.
10
The court calculates the due date for each invoice by adding 45 days to the invoice date. See id. The court does not use the due date listed in the Aging
Summary (Def.’s Ex. 411) because it lists the due date as 30 days after the invoice date—not 45 days as specified in the MSA.
11
The court calculated the interest accrued by multiplying: (1) the number of days each invoice is overdue as of the date of this Order by (2) the amount
owed by (3) .00049315 (or .049315%). The court uses .049315% because that is quotient of dividing 1.5%—the monthly interest rate the MSA adopts, MSA ¶
7—by 30.4167—the average number of days in a month. This results in daily interest rate. The court then rounded that result to the nearest cent.
12
In the Aging Summary, Def.’s Ex. 411, this invoice provides that Hooper Holmes owes $7.50. But, in the line above this invoice, the Aging Summary
notes that Hooper Holmes has a $3.95 credit, presumably left over from earlier weekly payments. See Def.’s Ex. 411 at 1. The court credits this amount to the
oldest invoice.
13
In its Memorandum in Support of its Motion for Summary Judgment, Wellness informed the court that it incorrectly alleged in the Amended
Counterclaim that Hooper Holmes owed it $235,156.58. Doc. 61 at 2 n.1. The correct amount, Wellness explains, is $235,167.63. Id.; see also Def.’s Ex. 411 at
5 (showing the total amount due as $235,167.63). Instead of moving to amend its Counterclaim, Wellness has advised the court that it only will seek to recover
the $235,156.58 that it pleaded. Because Wellness only is entitled to interest on damages awarded by the court, Valeant Pharm., 921 A.2d at 755, the court
cannot award Wellness interest on the extra amount of the invoice. So, the court deducts $11.05—the difference between what Wellness pleaded in its
Counterclaim and the amount shown in the Aging Summary—from invoice numbers 7051 and 5982—the two oldest invoices.
14
The court deducted $2.00 from this invoice because that figure represents the offset that the court must apply to defendant’s prejudgment interest
recovery. Fleet Fin. Grp., 2003 WL 22707336, at *5; see also supra, Part V.
47
Invoice Number8
5990
5991
5992
5993
6007
6065
6016
6066
6064
6013
6015
6271
6272
6273
6274
6275
6276
6278
6277
6279
6280
6281
6282
6283
6284
6285
6286
6287
6288
6289
6290
6291
Invoice Date9
9/2/2015
9/2/2015
9/2/2015
9/2/2015
9/8/2015
9/28/2015
9/28/2015
9/28/2015
10/7/2015
10/7/2015
10/14/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
Due Date10
Days Overdue
10/17/2015
10/17/2015
10/17/2015
10/17/2015
10/23/2015
11/12/2015
11/12/2015
11/12/2015
11/21/2015
11/21/2015
11/28/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
1019
1019
1019
1019
1013
993
993
993
984
984
977
957
957
957
957
957
957
957
957
957
957
957
957
957
957
957
957
957
957
957
957
957
48
Amount Owed
$45.00
$15.00
$570.00
$570.00
$2,962.50
$13,259.76
$19,033.95
$2,577.50
$8,340.65
$72,266.13
$25,064.00
$37.50
$225.00
$90.00
$5,227.50
$15.00
$60.00
$82.50
$510.00
$52.50
$172.50
$45.00
$30.00
$7.50
$510.00
$7.50
$1,402.50
$30.00
$157.50
$22.50
$2,010.00
$532.50
Interest Accrued11
$22.61
$7.54
$286.44
$286.44
$1,479.95
$6,493.28
$9,320.89
$1,262.20
$4,047.38
$35,067.83
$12,076.02
$17.70
$106.19
$42.48
$2,467.09
$7.08
$28.32
$38.94
$240.69
$24.78
$81.41
$21.24
$14.16
$3.54
$240.69
$3.54
$661.90
$14.16
$74.33
$10.62
$948.61
$251.31
Invoice Number8
6292
6293
6294
6295
6296
6297
6298
6299
6300
6301
6302
6303
6304
6327
6370
6512
6513
6514
6515
6516
6517
6518
6519
6520
6521
6522
6523
6524
6525
6526
6527
6528
Invoice Date9
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/3/2015
11/4/2015
11/12/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
Due Date10
Days Overdue
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/18/2015
12/19/2015
12/27/2015
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
957
957
957
957
957
957
957
957
957
957
957
957
957
956
948
909
909
909
909
909
909
909
909
909
909
909
909
909
909
909
909
909
49
Amount Owed
$22.50
$337.50
$3,367.50
$112.50
$112.50
$60.00
$615.00
$7.50
$22.50
$52.50
$60.00
$487.50
$967.50
$7.50
$9,506.89
$7.50
$15.00
$1,177.50
$60.00
$6,225.00
$7.50
$112.50
$150.00
$15.00
$15.00
$187.50
$52.50
$75.00
$22.50
$532.50
$2,610.00
$187.50
Interest Accrued11
$10.62
$159.28
$1,589.27
$53.09
$53.09
$28.32
$290.25
$3.54
$10.62
$24.78
$28.32
$230.07
$456.61
$3.54
$4,444.53
$3.36
$6.72
$527.84
$26.90
$2,790.50
$3.36
$50.43
$67.24
$6.72
$6.72
$84.05
$23.53
$33.62
$10.09
$238.71
$1,169.99
$84.05
Invoice Number8
6529
6530
6531
6532
6533
6534
6535
6536
6537
6538
6539
6540
6541
6542
6543
6544
6545
6633
6634
6635
6636
6637
6638
6639
6640
6641
6642
6643
6644
6645
6646
6647
Invoice Date9
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
12/21/2015
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
Due Date10
Days Overdue
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/4/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
909
909
909
909
909
909
909
909
909
909
909
909
909
909
909
909
909
887
887
887
887
887
887
887
887
887
887
887
887
887
887
887
50
Amount Owed
$67.50
$3,202.50
$855.00
$517.50
$37.50
$37.50
$622.50
$1,515.00
$7.50
$15.00
$75.00
$30.00
$7.50
$30.00
$127.50
$1,500.00
$2,910.00
$7.50
$7.50
$1,327.50
$67.50
$10,387.50
$7.50
$187.50
$232.50
$37.50
$187.50
$15.00
$15.00
$30.00
$7.50
$225.00
Interest Accrued11
$30.26
$1,435.60
$383.27
$231.98
$16.81
$16.81
$279.05
$679.13
$3.36
$6.72
$33.62
$13.45
$3.36
$13.45
$57.15
$672.41
$1,304.48
$3.28
$3.28
$580.68
$29.53
$4,543.74
$3.28
$82.02
$101.70
$16.40
$82.02
$6.56
$6.56
$13.12
$3.28
$98.42
Invoice Number8
6648
6649
6650
6651
6652
6653
6654
6655
6656
6657
6658
6659
6660
6661
6662
6663
6711
6712
6713
6714
6715
6716
6717
6718
6719
6720
6721
6722
6723
6724
6725
6726
Invoice Date9
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
1/12/2016
2/1/2016
2/1/2016
2/1/2016
2/1/2016
2/1/2016
2/1/2016
2/1/2016
2/1/2016
2/1/2016
2/1/2016
2/1/2016
2/1/2016
2/1/2016
2/1/2016
2/1/2016
2/1/2016
Due Date10
Days Overdue
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
2/26/2016
3/17/2016
3/17/2016
3/17/2016
3/17/2016
3/17/2016
3/17/2016
3/17/2016
3/17/2016
3/17/2016
3/17/2016
3/17/2016
3/17/2016
3/17/2016
3/17/2016
3/17/2016
3/17/2016
887
887
887
887
887
887
887
887
887
887
887
887
887
887
887
887
867
867
867
867
867
867
867
867
867
867
867
867
867
867
867
867
51
Amount Owed
$330.00
$37.50
$82.50
$7,777.50
$67.50
$15.00
$37.50
$7.50
$255.00
$45.00
$15.00
$45.00
$7.50
$105.00
$1,327.50
$4,912.50
$7.50
$7.50
$75.00
$82.50
$2,940.00
$7.50
$7.50
$67.50
$67.50
$15.00
$7.50
$142.50
$3,120.00
$7.50
$15.00
$7.50
Interest Accrued11
$144.35
$16.40
$36.09
$3,402.07
$29.53
$6.56
$16.40
$3.28
$111.54
$19.68
$6.56
$19.68
$3.28
$45.93
$580.68
$2,148.85
$3.21
$3.21
$32.07
$35.27
$1,257.03
$3.21
$3.21
$28.86
$28.86
$6.41
$3.21
$60.93
$1,333.99
$3.21
$6.41
$3.21
Invoice Number8
6727
6728
6729
6730
6731
6896
6897
6898
6899
6900
6901
6902
6903
6904
6905
6906
6907
6908
6909
7046
7047
7048
7049
7050
7062
7063
7064
7065
7052
7054
7055
7056
Invoice Date9
2/1/2016
2/1/2016
2/1/2016
2/1/2016
2/1/2016
3/6/2016
3/6/2016
3/6/2016
3/6/2016
3/6/2016
3/6/2016
3/6/2016
3/6/2016
3/6/2016
3/6/2016
3/6/2016
3/6/2016
3/6/2016
3/6/2016
4/8/2016
4/8/2016
4/8/2016
4/8/2016
4/8/2016
4/8/2016
4/8/2016
4/8/2016
4/8/2016
4/11/2016
4/11/2016
4/11/2016
4/11/2016
Due Date10
Days Overdue
3/17/2016
3/17/2016
3/17/2016
3/17/2016
3/17/2016
4/20/2016
4/20/2016
4/20/2016
4/20/2016
4/20/2016
4/20/2016
4/20/2016
4/20/2016
4/20/2016
4/20/2016
4/20/2016
4/20/2016
4/20/2016
4/20/2016
5/23/2016
5/23/2016
5/23/2016
5/23/2016
5/23/2016
5/23/2016
5/23/2016
5/23/2016
5/23/2016
5/26/2016
5/26/2016
5/26/2016
5/26/2016
867
867
867
867
867
833
833
833
833
833
833
833
833
833
833
833
833
833
833
800
800
800
800
800
800
800
800
800
797
797
797
797
52
Amount Owed
$45.00
$7.50
$7.50
$30.00
$607.50
$7.50
$120.00
$90.00
$52.50
$45.00
$45.00
$7.50
$112.50
$120.00
$15.00
$60.00
$7.50
$30.00
$187.50
$30.00
$7.50
$45.00
$7.50
$15.00
$22.50
$15.00
$7.50
$7.50
$7.50
$15.00
$15.00
$37.50
Interest Accrued11
$19.24
$3.21
$3.21
$12.83
$259.74
$3.08
$49.30
$36.97
$21.57
$18.49
$18.49
$3.08
$46.21
$49.30
$6.16
$24.65
$3.08
$12.32
$77.02
$11.84
$2.96
$17.75
$2.96
$5.92
$8.88
$5.92
$2.96
$2.96
$2.95
$5.90
$5.90
$14.74
Invoice Number8
7066
7067
7141
7142
7207
7143
7144
7145
7146
7147
7208
7148
7149
7150
7151
7152
7209
7297
7298
7299
7321
7300
7301
7302
7303
7304
7305
7441
7442
7443
7454
7455
Invoice Date9
4/11/2016
4/11/2016
5/6/2016
5/6/2016
5/6/2016
5/6/2016
5/6/2016
5/6/2016
5/6/2016
5/6/2016
5/6/2016
5/6/2016
5/6/2016
5/6/2016
5/6/2016
5/6/2016
5/6/2016
6/1/2016
6/1/2016
6/1/2016
6/1/2016
6/1/2016
6/1/2016
6/1/2016
6/1/2016
6/1/2016
6/1/2016
6/29/2016
6/29/2016
6/29/2016
7/6/2016
7/6/2016
Due Date10
Days Overdue
5/26/2016
5/26/2016
6/20/2016
6/20/2016
6/20/2016
6/20/2016
6/20/2016
6/20/2016
6/20/2016
6/20/2016
6/20/2016
6/20/2016
6/20/2016
6/20/2016
6/20/2016
6/20/2016
6/20/2016
7/16/2016
7/16/2016
7/16/2016
7/16/2016
7/16/2016
7/16/2016
7/16/2016
7/16/2016
7/16/2016
7/16/2016
8/13/2016
8/13/2016
8/13/2016
8/20/2016
8/20/2016
797
797
772
772
772
772
772
772
772
772
772
772
772
772
772
772
772
746
746
746
746
746
746
746
746
746
746
718
718
718
711
711
53
Amount Owed
$22.50
$82.50
$37.50
$7.50
$67.50
$7.50
$52.50
$7.50
$45.00
$15.00
$7.50
$15.00
$7.50
$15.00
$7.50
$22.50
$52.50
$7.50
$45.00
$37.50
$22.50
$37.50
$7.50
$22.50
$30.00
$37.50
$75.00
$7.50
$7.50
$7.50
$7.50
$37.50
Interest Accrued11
$8.84
$32.43
$14.28
$2.86
$25.70
$2.86
$19.99
$2.86
$17.13
$5.71
$2.86
$5.71
$2.86
$5.71
$2.86
$8.57
$19.99
$2.76
$16.56
$13.80
$8.28
$13.80
$2.76
$8.28
$11.04
$13.80
$27.59
$2.66
$2.66
$2.66
$2.63
$13.15
Invoice Number8
7456
7457
7458
7459
7460
7461
7462
7463
7464
7634
7635
7636
7637
7638
7639
7706
7772
7773
Total
Invoice Date9
7/6/2016
7/6/2016
7/6/2016
7/6/2016
7/6/2016
7/6/2016
7/6/2016
7/6/2016
7/6/2016
8/4/2016
8/4/2016
8/4/2016
8/4/2016
8/4/2016
8/4/2016
8/5/2016
9/6/2016
9/6/2016
Due Date10
Days Overdue
8/20/2016
8/20/2016
8/20/2016
8/20/2016
8/20/2016
8/20/2016
8/20/2016
8/20/2016
8/20/2016
9/18/2016
9/18/2016
9/18/2016
9/18/2016
9/18/2016
9/18/2016
9/19/2016
10/21/2016
10/21/2016
711
711
711
711
711
711
711
711
711
682
682
682
682
682
682
681
649
649
54
Amount Owed
$22.50
$15.00
$7.50
$15.00
$7.50
$15.00
$75.00
$22.50
$22.50
$7.50
$7.50
$22.50
$7.50
$7.50
$15.00
$7.50
$7.50
$7.50
Interest Accrued11
$7.89
$5.26
$2.63
$5.26
$2.63
$5.26
$26.30
$7.89
$7.89
$2.52
$2.52
$7.57
$2.52
$2.52
$5.04
$2.52
$2.40
$2.40
$111,069.52
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