Marans, M.D. v. Intrinsiq Specialty Solutions, Inc. et al

Filing 19

OPINION & ORDER re: 11 MOTION to Dismiss Plaintiff's Amended Complaint. filed by AmerisourceBergen Drug Corp., Intrinsiq Specialty Solutions, Inc. For the foregoing reasons, Defendants' motion to dismiss, (Doc. 11), is GRANTED. The Clerk of Court is respectfully directed to enter judgment for Defendants and close this case. SO ORDERED. (Signed by Judge Vernon S. Broderick on 9/30/2018) (rro) Transmission to Orders and Judgments Clerk for processing.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
--------------------------------------------------------- X
:
HILLEL Y. MARANS, M.D.,
:
:
Plaintiff,
:
:
- against :
:
:
INTRINSIQ SPECIALTY SOLUTIONS,
:
INC. d/b/a INTRINSIQ SOFTWARE and
:
AMERISOURCEBERGEN DRUG CORP., :
:
Defendants. :
:
--------------------------------------------------------- X

9/30/2018

18-CV-256 (VSB)
OPINION & ORDER

Appearances:
Martin H. Kaplan
Gusrae Kaplan Nusbaum PLLC
New York, New York
Counsel for Plaintiff
Paul E. Asfendis
Amy M. Handler
Gibbons P.C.
New York, New York
Counsel for Defendants
VERNON S. BRODERICK, United States District Judge:
Plaintiff Hillel Y. Marans, M.D. brings this action alleging causes of action for breach of
contract, breach of the implied covenant of good faith and fair dealing, and declaratory judgment
against Defendants Intrinsiq Specialty Solutions, Inc. (“Intrinsiq”) and AmerisourceBergen Drug
Corp. (“ABDC”) (together, “Defendants”). Before me is Defendants’ motion to dismiss the First
Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Because Plaintiff
fails to plausibly allege claims for (1) breach of contract, and (2) breach of an implied covenant

of fair dealing, and because the liability limitation provisions of the contract at issue are
enforceable, Defendants’ motion is GRANTED.
Background1
In March 2010, the Patient Protection and Affordable Care Act (“ACA”) was signed into
law. (FAC ¶ 2.)2 The ACA promoted the development of electronic health records (“EHR”)
systems as part of an effort to limit medical errors, reduce costs, and streamline patient care.
(Id.) Together with other legislation, the ACA funded health care providers’ establishment of
EHR systems. (Id.) In particular, Medicare and Medicaid EHR Incentive Programs provided
incentive payments to medical professionals who, among other things, demonstrated
“meaningful use” of certified EHR technology. (Id.)
Plaintiff is a licensed urologist in New York. (Id. ¶ 3.) In 2012, he entered into an
agreement (the “Agreement”) with meridianEMR, Inc. (“meridianEMR”) to purchase services
and to license certain EHR software (the “Meridian Software”) for operation of Plaintiff’s
medical practice. (Id.) Among other things, the Agreement provides:
1. meridianEMR Services and Licenses.
a) Services. meridianEMR shall provide the “Services” as described in the
Exhibits herein. meridianEMR will provide application and operational
support services to [Plaintiff] only for the software application programs
specifically identified in the Exhibits.
b) License. In accordance with the Agreement, and subject to the termination
clauses herein, meridianEMR hereby provides [Plaintiff] a restricted, nontransferable and nonexclusive license to use the Services and software for
the sole purpose of supporting the internal operations of [Plaintiff’s]

1
The following factual summary is drawn from the allegations of the First Amended Complaint and exhibits
attached thereto. (Doc. 16.) See Kassner v. 2nd Ave. Delicatessen Inc., 496 F.3d 229, 237 (2d Cir. 2007). My
references to these allegations and exhibits should not be construed as a finding as to their veracity, and I make no
such findings.
2

“FAC” refers to the First Amended Complaint, filed March 2, 2018. (Doc. 16.)

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business . . . .
(Id. ¶ 16, Ex. A.) In exchange for the license and services, Plaintiff paid startup and interface
costs and annual support fees of approximately $2,500 per year. (Id. ¶ 17.) He also spent
hundreds of work hours learning and implementing the Meridian Software, which became an
essential part of Plaintiff’s business. (Id. ¶¶ 3, 18.)
The Agreement also contains provisions governing its term, termination, and limitations
on the parties’ liability. In particular, it states:
6. Term and Termination.
a) Term of Licensed Application Software. The term for [Plaintiff’s] use of
the [Meridian Software] shall be from [January 13, 2012] . . . until this
Agreement is terminated as provided in this section . . . . The support part
of this agreement will begin from [January 13, 2012] and will automatically
renew based upon payment for annual support services for successive one
year terms unless either one of the parties terminates the Agreement by
providing written notice to the other party at least 90 days before the
Termination Date.
(Id. Ex. A § 6.) It also states:
5. Limitation of Liability and Disclaimer of Warranty.
a) Exclusive Remedy. meridianEMR’s obligation and [Plaintiff’s] sole and
exclusive remedy from a breach of this agreement . . . shall be that
meridianEMR will credit [Plaintiff] a portion of [Plaintiff’s] fee for the time
period during which the Services were inoperative.
...
d) Limitations.
Unless otherwise expressly stated herein, neither
meridianEMR nor any of its service providers, licensors, employees or
agents warrant (i) that the operation of the Services will be uninterrupted or
error free; or (ii) that the Services meet [Plaintiff’s] requirements. Except
as set forth herein, meridianEMR will not be responsible for any damages
that [Plaintiff] may suffer arising out of use, or inability to use, the software
and services.
(Id. § 5.)

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7. General.
...
d) Entire Agreement; Amendments, Exhibits. This Agreement (including the
Exhibits attached hereto) embodies the entire understanding of the parties
in relation to its subject matter, and supersedes all proposals, letters of intent
or prior agreements, oral or written, and all other communications and
representations between the parties relating to the subject matter of this
Agreement and no other agreement or understanding, verbal or otherwise,
relative to this subject matter exists between the parties at the time of
execution of this Agreement. This Agreement may be amended only by a
written agreement signed by both parties . . . .
(Id. § 7.)
In or about 2015, Intrinsiq—a subsidiary of ABDC—acquired meridianEMR. (Id. ¶ 19.)
The same year, Intrinsiq demanded that Plaintiff replace his working server with a new model
because of “anticipated” updates and enhancements to the Meridian Software. (Id. ¶ 20.)
Intrinsiq “assured Plaintiff that it had every intention of continuing product developments of the
Meridian Software for years to come.” (Id.) In reliance on Intrinsiq’s assertions, Plaintiff
purchased a new server for approximately $10,510 on July 30, 2015 pursuant to a Supplemental
Purchase Agreement with Intrinsiq. (Id. ¶ 21.)
In or about June 2017, Intrinsiq informed Plaintiff that it was terminating support for the
Meridian Software license, effective January 1, 2018. (Id. ¶ 22.) Intrinsiq also informed
Plaintiff that it would be offering its customers an alternative software program called
UroChartEHR (“UroChart”), which, according to Intrinsiq, offered a better software solution for
the migration of patients’ medical data. (Id. ¶ 23.) Plaintiff could either choose to purchase a
license for UroChart and pay additional costs of approximately $1,000 per month for training,
support, and a monthly subscription, or he could transition his data into an alternative EHR
system for a one-time cost of approximately $15,000. (Id. ¶¶ 24–25.) Based on his

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conversations with other physicians who converted to UroChart, UroChart has several
shortcomings in comparison with the Meridian Software. (Id. ¶¶ 26–27.) Plaintiff expects to
lose millions of dollars in practice income from a potential switch to UroChart or an alternative
EHR software due to costs associated with implementing the new software and training staff.
(Id. ¶ 28.)
Procedural History
Plaintiff filed this action on October 4, 2017 in the Supreme Court of the State of New
York, County of New York. (Doc. 1.) Defendants removed the action to this court on January
11, 2018. (Id.) On January 18, 2018, Defendants filed a motion to dismiss the complaint. (Doc.
5.) Plaintiff filed the First Amended Complaint on February 9, 2018.3 (Doc. 8.) Defendants
filed their opposition on March 26, 2018. (Doc. 17.) Plaintiff filed his reply on April 13, 2018.
(Doc. 18.)
Legal Standard
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), “a
complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). A claim will have “facial plausibility when the plaintiff
pleads factual content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. This standard demands “more than a sheer possibility
that a defendant has acted unlawfully.” Id. “Plausibility . . . depends on a host of considerations:
the full factual picture presented by the complaint, the particular cause of action and its elements,
and the existence of alternative explanations so obvious that they render plaintiff’s inferences

3

Due to a clerical error, Plaintiff re-filed the First Amended Complaint on March 2, 2018. (Doc. 16.)

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unreasonable.” L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 430 (2d Cir. 2011).
In considering a motion to dismiss, a court must accept as true all well-pleaded facts
alleged in the complaint and must draw all reasonable inferences in the plaintiff’s favor.
Kassner, 496 F.3d at 237. A complaint need not make “detailed factual allegations,” but it must
contain more than mere “labels and conclusions” or “a formulaic recitation of the elements of a
cause of action.” Iqbal, 556 U.S. at 678 (internal quotation marks omitted). Finally, although all
allegations contained in the complaint are assumed to be true, this tenet is “inapplicable to legal
conclusions.” Id. A complaint is “deemed to include any written instrument attached to it as an
exhibit or any statements or documents incorporated in it by reference.” Chambers v. Time
Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002) (quoting Int’l Audiotext Network, Inc. v. Am. Tel.
& Tel. Co., 62 F.3d 69, 72 (2d Cir. 1995)).
Discussion
Defendants contend that Plaintiff fails to state a claim as to each of his causes of action.
As an initial matter, (1) the First Amended Complaint fails to include any substantive allegations
of wrongful conduct by ABDC or to state a basis upon which liability might be predicated
against ABDC, and (2) Plaintiff fails to address in his opposition Defendants’ argument that the
First Amended Complaint fails to state a claim against ABDC. Therefore, the First Amended
Complaint fails to plausibly allege any claims against ABDC, see Pollack v. Nash, 58 F. Supp.
2d 294, 304 (S.D.N.Y. 1999) (dismissing complaint that names a defendant but fails to include
any substantive allegations against that defendant), and by not addressing Defendants’ arguments
concedes the issue, see AT&T Corp. v. Syniverse Techs., Inc., No. 12 Civ. 1812(NRB), 2014 WL
4412392, at *7 (S.D.N.Y. Sept. 8, 2014) (concluding that plaintiff’s “silence [in its opposition]
concedes the point” ). As such, Plaintiff’s causes of action against ABDC are dismissed. I

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address each of Plaintiff’s claims against Intrinsiq in turn below.
A.

Breach of Contract
1. Applicable Law4

New York law requires that a plaintiff asserting a claim for breach of contract must
allege: “(i) the formation of a contract between the parties; (ii) performance by the plaintiff; (iii)
failure of defendant to perform; and (iv) damages.” Orchard Hill Master Fund Ltd. v. SBA
Commc'ns Corp., 830 F.3d 152, 156 (2d Cir. 2016) (citation omitted). “A sufficient pleading for
breach of contract must, ‘at a minimum, allege the terms of the contract, each element of the
alleged breach and the resultant damages in a plain and simple fashion.’” Warren v. John Wiley
& Sons, Inc., 952 F. Supp. 2d 610, 624 (S.D.N.Y. 2013) (quoting Zaro Licensing, Inc. v. Cinmar,
Inc., 779 F. Supp. 276, 286 (S.D.N.Y. 1991); see also Sirohi v. Trs. of Columbia Univ., No. 977912, 1998 WL 642463, at *2 (2d Cir. 1998) (summary order) (concluding that plaintiff must
allege “the essential terms of the parties’ purported contract in nonconclusory language,
including the specific provisions of the contract upon which liability is predicated” (internal
quotation marks omitted)). New York courts require plaintiffs to “plead the provisions of the
contract upon which the claim is based”—in other words, “a complaint in a breach of contract
action must set forth the terms of the agreement upon which liability is predicated.” Window
Headquarters, Inc. v. MAI Basic Four, Inc., No. 91 Civ. 1816 (MBM), 1993 WL 312899, at *3

4

Although the Agreement contains a New Jersey choice of law provision, (see FAC Ex. A § 7(i)), the parties do not
explicitly address the applicable law. However, they apparently agree that New York law governs the interpretation
of the Agreement because they both cite exclusively to New York law, (see generally Defs.’ Mem.; Pl.’s Opp.).
Tehran-Berkeley Civil & Envtl. Eng’rs v. Tippetts-Abbett-McCarthy-Stratton, 888 F.2d 239, 242 (2d Cir. 1989)
(applying New York law under the principle of implied consent to use the forum’s law where the parties’ briefs rely
on New York law).
“Defs.’ Mem.” refers to the Memorandum of Law in Support of Defendants’ Motion to Dismiss Plaintiffs’
Amended Complaint, filed February 23, 2018. (Doc. 12.) “Pl.’s Opp.” refers to the Memorandum of Law of
Plaintiff in Opposition to Defendants’ Motion to Dismiss Plaintiffs’ Amended Complaint, filed March 26, 2018.
(Doc. 17.)

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(S.D.N.Y. Aug. 12, 1993); see also CreditSights, Inc. v. Ciasullo, No. 05 CV 9345(DAB), 2008
WL 4185737, at *11 (S.D.N.Y. Sept. 5, 2008) (“New York law is eminently clear that a proper
breach of contract claim must identify specifically breached contract terms.”).
2. Application
Plaintiff fails to allege which terms of the Agreement Defendants purportedly breached.
The only terms of the Agreement that Plaintiff alleges are the terms dealing with the services and
license meridianEMR agreed to provide Plaintiff, (FAC ¶ 16, Ex. A § 1), and the terms limiting
the liability of meridianEMR, (id. ¶ 36, Ex. A § 5). However, Plaintiff does not allege that
Defendants breached either of those sections of the Agreement. Rather than identify the
provision or provisions of the Agreement he alleges has been violated, Plaintiff asks that I
invalidate the limitations of liability provisions of the Agreement. (Pl.’s Opp. 10–13.)
Plaintiff contends that at the motion to dismiss stage, he is only required to “give the
defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests.” (Pl.’s
Opp. 6 (quoting Wynder v. McMahon, 360 F.3d 73, 76–77 (2d Cir. 2004)).) While Defendants
appropriately point out that the correct pleading standard is plausibility pursuant to Twombly and
Iqbal, (Defs.’ Reply 1–2),5 Plaintiff’s breach of contract cause of action would fail even under
the permissive standard he sets forth, see Wolff v. Rare Medium, Inc., 171 F. Supp. 2d 354, 358
(S.D.N.Y. 2001) (holding, prior to Twombly and Iqbal, that “a plaintiff must identify what
provisions of the contract were breached as a result of the acts at issue”); Sirohi, 1998 WL
642463, at *2; Window Headquarters, 1993 WL 312899, at *3.
Even if I were to construe the First Amended Complaint to allege a breach of the

5
“Defs.’ Reply” refers to the Reply Memorandum of Law in Further Support of Defendants’ Motion to Dismiss
Plaintiff’s Amended Complaint, filed April 13, 2018. (Doc. 18.)

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“Services and Licenses” section of the Agreement, Plaintiff would fail to make out a claim based
on the plain terms of the Agreement. That section does not state that meridianEMR may not
terminate the license to the Meridian Software. Nor does it state that meridianEMR must
provide Plaintiff compensation or credit for terminating the Meridian Software. To the contrary,
that section is explicitly made “subject to the termination clauses” of the Agreement, (FAC Ex.
A. § 1(b)), which require meridianEMR to provide ninety days’ written notice prior to
terminating the Agreement, (id. § 6(a)). Plaintiff does not dispute that under the terms of the
Agreement, either party could terminate the Agreement as long as they provided ninety days’
written notice. The First Amended Complaint alleges that Intrinsiq provided notice in June 2017
that it would terminate support for the Meridian Software effective January 1, 2018, (id. ¶ 22),
which is more than sufficient notice of termination under the Agreement. Therefore, Plaintiff’s
breach of contract cause of action fails.
B.

Breach of Implied Covenant of Good Faith and Fair Dealing
1. Applicable Law

“Under New York law, the implied covenant of good faith and fair dealing
inheres in every contract.” Travellers Int'l, A.G. v. Trans World Airlines, Inc., 41 F.3d
1570, 1575 (2d Cir. 1994). The implied covenant prevents the parties from taking actions
that would deny another party the benefits of the parties’ bargain. Carvel Corp. v.
Diversified Mgmt. Grp., Inc., 930 F.2d 228, 230 (2d Cir. 1991). However, “the implied
covenant arises only in connection with the rights or obligations set forth in the terms of
the contract, and cannot create duties that negate explicit rights under a contract.” In re
LIBOR–Based Fin. Instruments Antitrust Litig., 962 F. Supp. 2d 606, 632 (S.D.N.Y.
2013) (internal citations and quotation marks omitted).

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This implied duty of good faith “is merely a breach of the underlying contract.” Fasolino
Foods Co. v. Banca Nazionale del Lavoro, 961 F.2d 1052, 1056 (2d Cir. 1992) (internal
quotation marks omitted). Accordingly, “New York law . . . does not recognize a separate cause
of action for breach of the implied covenant of good faith and fair dealing when a breach of
contract claim, based upon the same facts, is also pled.” Harris v. Provident Life & Accident Ins.
Co., 310 F.3d 73, 81 (2d Cir. 2002). Therefore, “[c]ourts in this circuit consistently dismiss
claims for breach of the implied covenant of good faith on these grounds.” See Joseph v. Gnutti
Carlo S.p.A., No. 15-cv-8910 (AJN), 2016 WL 4764924, at *7 (S.D.N.Y. Sept. 12, 2016) (citing
cases).
In order for Plaintiffs “to assert a cause of action for the breach of good faith and fair
dealing that is not duplicative of their breach of contract claim,” they “must allege that
Defendants ‘fulfilled their contractual obligations’ but that those obligations were carried out ‘in
bad faith in order to deprive Plaintiffs of the benefit of their bargain.’” Id. (quoting Serdarevic v.
Centex Homes, LLC, 760 F. Supp. 2d 322, 333–34 (S.D.N.Y. 2010)). In other words, Plaintiffs
must allege that Defendants, “in bad faith, engaged in acts that had the effect of destroying or
injuring plaintiffs’ right to receive ‘the fruits of the contract.’” Demetre v. HMS Holdings Corp.,
7 N.Y.S.3d 110, 112 (1st Dep’t 2015) (quoting Dalton v. Educ. Testing Serv., 663 N.E.2d 289,
291 (N.Y. 1995)).
2. Application
Defendants argue that Plaintiff’s implied covenant cause of action should be dismissed
because: (1) Plaintiff fails to allege how Defendants prevented him from obtaining the benefits
of the Agreement; (2) Plaintiff’s implied covenant cause of action is duplicative of his breach of
contract cause of action; and (3) Plaintiff’s implied covenant cause of action imposes obligations

10

that were not part of the Agreement. (Defs.’ Mem. 8–11.) Plaintiff contends that his implied
covenant cause of action can stand alongside his breach of contract cause of action because he
has sufficiently alleged that Defendants’ conduct subverted the Agreement and prevented him
from receiving the fruits of the bargain. (Pl.’s Opp. 7–10.)
First, Plaintiff’s implied covenant cause of action is clearly duplicative of his breach of
contract cause of action. It is based on the same set of factual allegations regarding Defendants’
decision to terminate the Meridian Software license, and it seeks identical damages for injuries
caused by that decision. Courts have dismissed implied covenant claims as duplicative in similar
circumstances. See, e.g., Amcan Holdings, Inc. v. Canadian Imperial Bank of Commerce, 70
A.D.3d 423, 426 (1st Dep’t 2010) (dismissing implied covenant claim as duplicative of breach of
contract claim where “both claims arise from the same facts and seek identical damages”
(internal citation omitted)).
Plaintiff claims that even if the two causes of action overlap, his implied covenant cause
of action should still survive because Defendants have prevented him from receiving the benefits
of the Agreement. (Pl.’s Opp. 8–9.) Specifically, Plaintiff claims that Defendants
misrepresented to him that they would maintain and continue to develop the Meridian Software
“for years to come.” (Pl.’s Opp. 9; FAC ¶ 20.) However, Plaintiff fails to explain how this
statement was a misrepresentation. The First Amended Complaint does not specify when the
purported misrepresentations occurred, what was specifically said, or who made the
misrepresentations, but assuming they occurred at the time of the signing of the Agreement in
2012, (FAC ¶ 3), meridianEMR did maintain and develop the Meridian Software “for years to
come,” as the termination was to occur on January 1, 2018, (id. ¶ 22). Similarly, assuming the
statements occurred in 2015—when Intrinsiq asked Plaintiff to replace his server due to

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anticipated updates and enhancements of the Meridian Software, (id. ¶ 20)—Defendants still
maintained and developed the Meridian Software “for years to come.”
In any event, the Agreement imposes no obligation, implicit or explicit, compelling
Defendants to maintain the Meridian Software “for years to come.” As mentioned above, the
Agreement explicitly provides that its term will automatically renew annually until either party
terminates it by providing at least ninety days’ written notice. (Id. Ex. A § 6(a).) Intrinsiq
provided such notice, and Plaintiff has presented no reason why the termination provision is
unenforceable or why Intrinsiq was obligated to do more. To the extent Plaintiff suggests that
Defendants made oral representations regarding the term of the Agreement, those representations
do not form part of the Agreement, as the Agreement explicitly states that it supersedes any oral
representations made by either party prior to its signing and any subsequent amendment must be
made in writing and signed by both parties. (Id. § 7(d).) Because the implied covenant of good
faith and fair dealing “does not create obligations that go beyond those intended and stated in the
language of the contract,” Wolff, 210 F. Supp. 2d at 497, Plaintiff’s argument is unpersuasive.
Therefore, Plaintiff’s implied covenant cause of action must be dismissed.
C.

Limitation of Liability Provisions
1. Applicable Law

Plaintiff seeks a judgment declaring that the limitation of liability provisions in the
Agreement are unconscionable and/or void as a matter of public policy. (FAC ¶¶ 30–43.)
Generally, under New York law, “[a] limitation on liability provision in a contract represents the
parties’ [a]greement on the allocation of the risk of economic loss in the event that the
contemplated transaction is not fully executed, which the courts should honor.” Metro. Life Ins.
Co. v. Noble Lowndes Int'l, Inc., 643 N.E.2d 504, 507 (N.Y. 1994); see also Grumman Allied

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Indus., Inc. v. Rohr Indus., Inc., 748 F.2d 729, 735 (2d Cir. 1984) (“[W]here the parties to an
agreement have expressly allocated risks, the judiciary shall not intrude into their contractual
relationship.”). When contracts including provisions limiting liability are “entered into at arm’s
length by sophisticated contracting parties,” they are generally enforceable. Kalisch-Jarcho, Inc.
v. City of New York, 448 N.E.2d 413, 416 (N.Y. 1983).
However, “an exculpatory agreement, no matter how flat and unqualified its terms, will
not exonerate a party from liability under all circumstances.” Id. For example, “a contractual
provision limiting damages” may be unenforceable pursuant to “an overriding public policy.”
Smith-Hoy v. AMC Prop. Evaluations, Inc., 52 A.D.3d 809, 810 (2d Dep’t 2008). In addition, a
liability limitation provision “will not apply to exemption of willful or grossly negligent acts.”
Kalisch-Jarcho, 448 N.E.2d at 416. In other words, a liability limitation provision will not
protect a party who engages in “conduct that evinces a reckless disregard for the rights of others
or smacks of intentional wrongdoing.” Colnaghi, U.S.A., Ltd. v. Jewelers Prot. Servs., Ltd., 611
N.E.2d 282, 283–84 (N.Y. 1993).
2. Application
Plaintiff argues that the Agreement’s liability limitation provisions are unenforceable
because: (1) they limit liability for Defendants’ conduct, which was “intentional, dishonest,
and/or evinced a reckless disregard for Plaintiff’s . . . rights,” and (2) they violate a public policy
to achieve “meaningful use” of EHR technology. (Pl.’s Opp. 11.) Neither argument is
persuasive.
First, Plaintiff has failed to establish that Defendants’ termination of the Meridian
Software license was wrongful, dishonest, or done in bad faith. As discussed above, the notice
of termination provisions of the Agreement permitted Defendants’ termination of the Meridian

13

Software license upon ninety days’ notice, which Defendants provided. It cannot be said,
therefore, that Defendants engaged in any wrongful or dishonest conduct. To the extent Plaintiff
asserts that Defendants made certain “misrepresentations” regarding the term of the Meridian
Software license, Plaintiff has failed to allege the specific substance of the misrepresentations,
how they were misrepresentations, when those misrepresentations were made, or who made
those misrepresentations, as discussed above.6
Second, Plaintiff has failed to establish that New York law recognizes any public policy
preventing EHR technology providers from terminating licenses to their products upon duly
provided notice and in accordance with the terms of a governing contract. The fact that the
federal government passed legislation providing incentives to medical providers for using EHR
technology does not create new obligations under a contract negotiated at arm’s length that are
not spelled out in the contract. As such, Plaintiff’s declaratory judgment cause of action fails.
Conclusion
For the foregoing reasons, Defendants’ motion to dismiss, (Doc. 11), is GRANTED. The
Clerk of Court is respectfully directed to enter judgment for Defendants and close this case.
SO ORDERED.
Dated: September 30, 2018
New York, New York
______________________
Vernon S. Broderick
United States District Judge

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Because I find that Plaintiff fails to allege bad faith conduct on the part of Defendants, I have no occasion to rule
on whether the liability limitation provision in the Agreement would absolve Defendants of liability for such
conduct.

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