SunDance Rehabilitation Corp. v. Hermitage Healthcare of Manokin Manor, LLC et al
Filing
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MEMORANDUM AND ORDER granting in part as to Count II and denying in part as to Count III and Count IV 7 Motion to Dismiss. Signed by Judge William M Nickerson on 6/13/12. (apls, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
SUNDANCE REHABILITATION CORP. *
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v.
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HERMITAGE HEALTHCARE OF
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MANOKIN MANOR, LLC et al.
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Civil Action No. WMN-12-153
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MEMORANDUM AND ORDER
Plaintiff SunDance Rehabilitation Corporation (SunDance) is
a Connecticut corporation which is in the business of providing
therapy services in nursing homes.
According to the Complaint,
Defendant Hermitage Healthcare of Manokin Manor, LLC (Manokin
Manor) is a Maryland limited liability company that, at all
times relevant, owned a skilled nursing facility in Princess
Anne, Maryland (the Facility).
Defendants Vintage Health Care,
LLC and Vintage Nursing Services, LLC (the Vintage Companies)
are California limited liability companies that “operated and/or
managed the Facility on behalf of Manokin Manor.”
Compl. ¶ 7.
On or about September 1, 2001, SunDance entered into a
written Therapy Services Agreement (the Agreement) with Manokin
Manor whereby SunDance agreed to provide certain defined therapy
services, including speech, physical, and occupational therapy
for the residents and patients of the Facility.
SunDance
commenced providing those services pursuant to the Agreement
shortly thereafter and continued to do so until June of 2011.
SunDance alleges that it fully performed its obligations under
the Agreement but, despite repeated demands for payment,
Defendants failed to send it payment in full for its services.
SunDance alleges that it is currently owed at least $227,920.46.
The Complaint contains four counts.
Count I is a breach of
contract claim against Defendant Manokin Manor only.
Counts II,
III, and IV are asserted against all three Defendants and bring
claims, respectively, of quantum meruit, unjust enrichment, and
“suit on account.”
Manokin Manor filed an Answer to the
Complaint and shortly thereafter all three Defendants moved to
dismiss Counts II, III, and IV.
ECF No. 7.
Defendants contend
that there are insufficient factual allegations to satisfy the
specificity requirements of the Federal Rules as to these three
counts and, furthermore, that these counts are barred by the
assertion of a written contract covering the same subject
matter.
In Bell Atlantic Corp. v. Twombly, the Supreme Court held
that to withstand a motion to dismiss, a plaintiff must plead
sufficient facts to “state a claim to relief that is plausible
on its face.” 550 U.S. 554, 570 (2007).
Under the plausibility
standard, while a complaint need not contain “detailed factual
allegations,” it must contain “more than labels and conclusions”
or a “formulaic recitation of the elements of a cause of
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action.”
Id. at 555.
In other words, the legal framework of
the complaint must be supported by factual allegations that
“raise a right to relief above the speculative level.”
Id.
In Ashcroft v. Iqbal, the Court expanded upon Twombly by
explicating the analytical approach to be followed in any Rule
12(b)(6) test to the sufficiency of a complaint.
First,
reviewing courts are instructed to identify and segregate out
the legal conclusions in the complaint, which, unlike the
factual allegations, are “not entitled to the assumption of
truth.”
Iqbal, 556 U.S. 662, 664 (2009).
Second, a court must
determine whether the factual allegations “plausibly suggest an
entitlement to relief.”
Id. at 681.
The Court advised that the
“plausibility standard is not akin to a ‘probability
requirement,’ but it asks for more than a sheer possibility that
a defendant has acted unlawfully.”
Id. at 678. Indeed, “[a]
claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.”
at 663.
Id.
Finally, the Court characterized the analysis as
“context-specific” and advised reviewing courts to draw upon
“judicial experience and common sense” in making their
determination.
Id. at 663-664.
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The Court turns first to Plaintiff’s unjust enrichment
claim.
To establish such a cause of action, a plaintiff must
show:
1) a benefit conferred upon the defendant by the
plaintiff;
2) an appreciation or knowledge by the defendant of
the benefit; and
3) the acceptance or retention by the defendant of the
benefit under such circumstances as to make it
inequitable for the defendant to retain the benefit
without the payment of its value.
Mohiuddin v. Doctors Billing & Mgmt. Solutions, Inc., 9 A.3d
859, 865 (Md. Ct. Spec. App. 2010).
SunDance alleges that it
provided therapy services for the residents and patients of a
facility owned by Manokin Manor and operated by the Vintage
Companies.
Compl. ¶ 38.
SunDance states that it provided those
services at the request of Defendants.
Id. ¶ 39.
As the owner
or as the operators of the Facility, each Defendant would have
benefited from the provision of those services that are clearly
a component of the services that a skilled nursing facility must
provide.1
If Defendants requested the services, they were aware
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Defendants protest that SunDance asserts in its Opposition that
“the ‘facility could not function’ without Sundance’s services
and that the ‘Facility was able to operate, and generate revenue
to all Defendants, as a direct result of Sundance’s services,’”
Reply at 3 (quoting Opp’n at 6), but that those specific
allegations did not appear in the Complaint. The Court,
however, can reasonably infer if not take judicial notice of the
fact that skilled nursing facilities would need to provide their
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of the benefit conferred.
Furthermore, SunDance’s allegation
that it provided the services as requested and yet Defendants
refused to pay the fair and reasonable value of the services,
Compl. ¶ 41, is sufficient to satisfy the third element of an
unjust enrichment claim.
Defendants criticize SunDance for not setting out the
specific activities attributable to each Defendant.
Beyond
identifying Manokin Manor as the owner of the Facility and the
Vintage Companies as the operators of the Facility, the only
other Defendant-specific allegation is that the partial payments
for SunDance’s services came by way of checks from a Manokin
Manor bank account signed by an employee of Vintage Companies.
Compl. ¶ 16.
In this context and at this stage of the
litigation, the Court finds that this is sufficient
specification.
Owners or operators of a skilled nursing
facility would receive a benefit from the rendering of therapy
services for the Facility’s residents and each Defendant is
alleged to have some role in the payment for those services.
The decisions relied upon by Defendants calling for more
specificity are readily distinguishable.
In Lawrie v. The Ginn
Companies, LLC, Civ. No. 09-446, 2010 WL 3746725 (M.D. Fla.
Sept. 21, 2010), the complaint that was found to have
residents and patients with the types of therapy services
provided by SunDance.
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“improperly lumped” defendants was 134 pages long, contained 566
paragraphs and asserted six counts against eleven defendants.
The court held in that context that “allegations of ‘generalized
conduct’ against multiple defendants are only proper if the
complaint also alleges facts which evoke more than “the mere
possibility” that each individual defendant acted unlawfully.”
Id. at *5.
Similarly, Pixler v. Huff, Civ. No. 11-207, 2011 WL
5597327 (W.D. Ky. Nov. 17, 2011), addressed a complaint against
nine defendants in the context of a complex web of various
business and corporate entities.
Harris v. Wells Fargo Bank,
Civ. No. 11-3279, 2011 WL 6294249 (E.D. Cal. Dec. 13, 2011), is
a one page decision denying a temporary restraining order to pro
se plaintiffs attempting to stop a foreclosure on their home.
After holding that the plaintiffs failed to meet procedural and
substantive standards for the issuance of a TRO, the court in
the dicta quoted by Defendants noted that the plaintiffs’
“allegations are confusing and conclusory, directed generally at
multiple Defendants without differentiating between the actions
of one defendant and another.”
Id. at *1.
In contrast, the
Complaint in this action involves rather straightforward claims
against three entities whose connection with the subject of the
complaint is clearly identified.
Defendants also argue that SunDance’s unjust enrichment
claim should be dismissed because it is inconsistent with
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SunDance’s contract claim.
While SunDance would not be
permitted to ultimately recover under both theories, the federal
rules freely permit pleading alternative theories of recovery,
even if inconsistent.
Fed. R. Civ. P. 8(d)(3).
Where the
existence of a contract covering the subject matter is
potentially in dispute, pleading alternative contract and quasicontract claims is a common and acceptable practice.
See
Swedish Civil Aviation Admin. v. Project Mgmt. Enter., Inc., 190
F. Supp. 785, 792 (D. Md. 2002) (“‘It is only upon a showing
that an express contract exists that the unjust enrichment or
promissory estoppel count fails. . . .
Until an express
contract is proven, a motion to dismiss a claim for . . . unjust
enrichment on these grounds is premature.’”) (quoting Mobil Oil
Corp. v. Dade County Esoil Mgmt. Co., Inc., 982 F. Supp. 873
(S.D. Fla. 1997)).
As to SunDance’s quantum meruit claims, the Court concludes
they should be dismissed.
The Maryland Court of Appeals in
Mohiuddin explained that a quantum meruit claim may be based
either on an implied-in-fact contractual duty or an implied-inlaw (quasi-contractual) duty requiring compensation for services
rendered.
9 A.2d at 864.
A quantum meruit claim based on a
quasi-contract (i.e., implied-in-law) is the same as a claim of
unjust enrichment, id., and, to the extent that this is what
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SunDance is asserting in Count II, it would be redundant of
Count III and should be dismissed on that ground.2
In contrast, quantum meruit claims based on implied-in-fact
contracts are actual contract claims: “An implied-in-fact
contract is a ‘true contract’ and ‘means that the parties had a
contract that can be seen in their conduct rather than in an
explicit set of words.’
Implied-in-fact contracts are
‘dependent on mutual agreement or consent, and on the intention
of the parties; and a meeting of the minds is required.’”
Id.
(quoting Mogavero v. Silverstein, 790 A.2d 43, 52 (Md. Ct. Spec.
App. 2002)).
To the extent that SunDance is attempting to state
a quantum meruit claim based upon an implied-in-fact contract,
the claim should still be dismissed.
As to the Vintage
Companies, there are no allegations in the Complaint that
SunDance and the Vintage Companies reached a mutual agreement
that the Vintage Companies would pay for the therapy services
provided by Sundance.
See Mohiuddin, 9 A.3d at 865 (dismissing
quantum meruit claim after concluding that complaint did not
contain the “critical allegation, to wit, that both parties
intended that [the to-be-dismissed defendant] (rather than [the
original contracting party]) was required to pay [the plaintiff]
for his services”).
As to Manokin Manor, the only allegations
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SunDance implicitly concedes in its Opposition that its unjust
enrichment and quantum meruit claims are redundant. Opp’n at 7.
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in the Complaint regarding a mutual agreement are those
connected with the written Agreement.
Those allegations give no
support to the conclusion that there was an implied-in-fact
contract, but simply an actual executed contract.
Finally, as to SunDance’s “suit on account” claim,
Defendants complain that SunDance fails to specify on which type
of account – a “running account” or an “account stated” – the
claim is premised.
account stated.
The claim, as pled, is clearly not on an
Such a claim requires “an agreement between
parties who have had previous transactions of a monetary
character that all the items of the account representing such
transactions, and the balance struck, are correct, together with
a promise, express or implied, for the payment of such balance.”
Wathen v. Perace, 3 A.2d 486, 491 (Md. 1939).
No allegation of
such an agreement is made here.
A running account, in contrast, “is one which is kept to
show all transactions between a debtor and creditor, i.e., a
continuous record of the entry of charges as well as payments on
account.”
Mullan Contracting Co. v. Int’l Bus. Mach. Corp., 151
A.2d 906, 911 (Md. 1959).
While questioning what this seldom
used cause of action might actually add to SunDance’s contract
and unjust enrichment claims, the Court finds the Complaint has
stated a claim for an action on a running account.
SunDance
alleges that it supplied services for which specified charges
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would be due, that Defendants made some payments for those
services, but despite these partial payments, a balance due to
SunDance remains on the account.
Accordingly, it is the 13th day of June, 2012, by the United
States District Court for the District of Maryland, ORDERED:
1) That Defendants’ Motion to Dismiss, ECF No. 7, is
GRANTED in part and DENIED in part in that the motion is GRANTED
as to Count II of the Complaint but DENIED as to Counts III and
Count IV; and
2) That the Clerk of the Court shall transmit this
Memorandum and Order to all counsel of record.
____________/s/___________________
William M. Nickerson
Senior United States District Judge
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