Clinmicro Immunology Center, LLC v. Primemed, P.C. et al
Filing
82
MEMORANDUM Signed by Honorable A. Richard Caputo on 7/17/13. (jam)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
CLINMICRO IMMUNOLOGY CENTER,
LLC,
CIVIL ACTION NO. 3:CV-11-2213
Plaintiff,
(JUDGE CAPUTO)
v.
PRIMEMED, P.C. and JOAN SALIJKO,
Defendants.
--------------------------------------------------------PRIMEMED, P.C.,
Counterclaim and Additional-Party
Plaintiff,
v.
CLINMICRO IMMUNOLOGY CENTER,
LLC and HASAN NAMDARI,
Counterclaim and Additional-Party
Defendants.
MEMORANDUM
Presently before the Court are the motion to dismiss PrimeMed, P.C.’s (“PrimeMed”)
counterclaims (Doc. 57) filed by Counterclaim Defendant ClinMicro Immunology Center,
LLC (“ClinMicro”) and the motion to dismiss PrimeMed’s additional party claims (Doc. 58)
filed by Additional-Party Defendant Dr. Hasan Namdari (“Dr. Namdari”). For the reasons
that follow, the motions to dismiss will be granted in part and denied in part.
I. Background
A.
Factual Background
PrimeMed alleges the following:
After PrimeMed was formed in 1998, it built and staffed a radiology imaging center,
a nuclear imaging center, and a physical therapy center in the Scranton region. (Doc. 52,
Countercl., ¶ 6.) In 2004, PrimeMed opened a radiation oncology center for cancer
treatment, which has since been sold. (Id.) By 2006, PrimeMed had an extensive network
of physicians and other healthcare providers who referred patients to PrimeMed’s facilities.
(Id. at ¶ 7.) PrimeMed also handled the collection of samples for medical testing, which it
referred out to various laboratories. (Id.)
ClinMicro was formed in 2006. (Id. at ¶ 8.) ClinMicro provides microbiology and
immunology reference laboratory services, but apart from its laboratory itself, Clinmicro has
no collection centers, no phlebotomists, and no infrastructure for collecting samples for
testing. (Id.)
In or about 2007, PrimeMed sought to expand its medical services to include
laboratory testing. (Id. at ¶ 9.) PrimeMed contacted Dr. Namdari of ClinMicro. Ultimately,
a series of agreements were entered into, effective March 1, 2009. (Id.) Pursuant to these
agreements, ClinMicro would relocate its microbiology laboratory to a facility leased by
PrimeMed, consult in the design, staffing, and operation, at PrimeMed’s expense, of a
clinical laboratory for PrimeMed, and manage for a fee and staff PrimeMed’s clinical
laboratory. (Id.) The parties’ rights and obligations were set forth in the Laboratory
Management Agreement (“LMA”). Because ClinMicro did not have the funds necessary to
build or equip its new laboratory, PrimeMed advanced the money to ClinMicro. (Id. at ¶¶ 1112.) This money was repaid reluctantly and tardily by ClinMicro, and ClinMicro refused to
make payments on a promissory note for two years despite enjoying the use of the
laboratory constructed with PrimeMed’s money. (Id. at ¶ 12.)
Under a separate Reference Laboratory Service Agreement (“LSA”), ClinMicro
agreed to accept referrals from and perform microbiology/immunology tests for PrimeMed.
(Id. at ¶ 13.) There was not, however, an agreement to which ClinMicro would refer clinical
tests to PrimeMed’s laboratory. (Id. at ¶ 14.) PrimeMed did not make any money on tests
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it referred to ClinMicro under the LSA. (Id. at ¶ 15.) Instead, ClinMicro billed the patients’
insurance directly and retained all of the proceeds. (Id.)
The parties’ relationship soured shortly after its inception. (Id. at ¶ 18.) ClinMicro
failed to pay rent under its sublease, failed to reimburse PrimeMed for equipment
purchased for it, and failed to repay the loan made by PrimeMed. (Id. at ¶ 19.) ClinMicro
claimed that payments were not made as a result of unresolved issues relating to the
development fee provided for in the LMA. (Id. at ¶ 20.) ClinMicro and Dr. Namdari
attempted to surreptitiously insert an Addendum to the LMA which had never been agreed
to or discussed with PrimeMed. (Id. at ¶ 21.)
In the Spring of 2009, Dr. Namdari, in his position as Medical Director of PrimeMed
and employer of PrimeMed’s lab manager, took action to his own benefit at PrimeMed’s
expense with regard to the profitable Vitamin D testing. (Id. at ¶ 25.) When the PrimeMed
laboratory began operating, ClinMicro was not performing Vitamin D tests. (Id. at ¶ 27.) At
the time PrimeMed commenced operations, Dr. Namdari and ClinMicro obtained pricing
from Quest for referral of Vitamin D tests and other tests that ClinMicro and PrimeMed were
not performing. (Id. at ¶ 28.) Dr. Namdari learned that Quest’s price for Vitamin D testing
when compared with the much higher insurance reimbursement rate made those tests quite
profitable. (Id. at ¶¶ 29-30.)
Dr. Namdari instructed Joan Salijko (“Salijko”), the lab
manager, to refer Vitamin D tests to ClinMicro. (Id. at ¶¶ 31-32.) Vitamin D tests, however,
are classified as chemistry tests and not microbiology tests. (Id. at ¶ 33.) When ClinMicro
first began doing chemistry tests, it was not licensed to perform such tests. (Id. at ¶ 36.)
ClinMicro and Dr. Namdari never informed PrimeMed that the Vitamin D tests
directed to ClinMicro were actually chemistry tests. (Id. at ¶ 39.) Nor did ClinMicro and Dr.
Namdari advise PrimeMed that ClinMicro was not licensed to do Vitamin D testing. (Id. at
¶ 40.)
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B.
Procedural History
ClinMicro commenced this action on November 29, 2011 against PrimeMed and
Salijko asserting a federal law claim for violation of the Computer Fraud and Abuse Act, 18
U.S.C. §§ 1030, et seq., and a number of supplemental state law claims. (Doc. 1.)
PrimeMed subsequently sought dismissal of a number of the state law claims in January
2012. (Doc. 10.) The motion to dismiss was granted in part and denied in part. In
particular, the motion to dismiss was granted with respect to the fraudulent inducement and
the duty of good faith and fair dealing claims, and the claims were dismissed with prejudice.
The motion to dismiss the tortious interference with contracts claims was also granted, and
the claims were dismissed without prejudice. PrimeMed’s motion to dismiss was denied in
all other respects.
On August 8, 2012, ClinMicro filed an Amended Complaint. PrimeMed and Salijko
moved to dismiss the tortious interference claims. The motion to dismiss was denied, and
Defendants were ordered to file an answer to ClinMicro’s Amended Complaint.
On January 9, 2013, PrimeMed and Salijko filed their Answer and Affirmative
Defenses to the Amended Complaint. On that date, PrimeMed also filed counterclaims
against ClinMicro and additional party claims against Dr. Namdari. PrimeMed asserts the
following claims: Fraud (First Claim); Negligent Misrepresentation and Non-Disclosure
(Second Claim); Misappropriation (Third Claim); Breach of Trust/Fiduciary Duty (Fourth
Claim); Tortious Interference (Fifth Claim); Breach of Covenant of Good Faith and Fair
Dealing (Sixth Claim); and Unjust Enrichment (Seventh Claim). All claims except the Sixth
Claim, which is set forth against ClinMicro only, are asserted against both ClinMicro and Dr.
Namdari. On March 11, 2013, ClinMicro and Dr. Namdari moved to dismiss PrimeMed’s
counterclaims and additional party claims. Now, the motions to dismiss are fully briefed and
ripe for disposition.
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II. Legal Standard
“Courts use the same standard in ruling on a motion to dismiss a counterclaim under
Federal Rule of Civil Procedure 12(b)(6) as they do for a complaint.” PPG Indus., Inc. v.
Generon IGS, Inc., 760 F. Supp. 2d 520, 524 (W.D. Pa. 2011) (citing United States v. Union
Gas Co., 743 F. Supp. 1144, 1150 (E.D. Pa. 1990)).
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a counterclaim
plaintiff’s claims, in whole or in part, for failure to state a claim upon which relief can be
granted. See Fed. R. Civ. P. 12(b)(6). When considering a Rule 12(b)(6) motion, the
Court's role is limited to determining if a counterclaim plaintiff is entitled to offer evidence
in support of their claims. See Semerenko v. Cendant Corp., 223 F.3d 165, 173 (3d Cir.
2000). The Court does not consider whether a counterclaim plaintiff will ultimately prevail.
See id. A counterclaim defendant bears the burden of establishing that a counterclaim fails
to state a claim. See Gould Elecs. v. United States, 220 F.3d 169, 178 (3d Cir. 2000).
“A pleading that states a claim for relief must contain . . . a short and plain statement
of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a). The
statement required by Rule 8(a)(2) must “‘give the defendant fair notice of what the . . .
claim is and the grounds upon which it rests.’” Erickson v. Pardus, 551 U.S. 89, 93, 127 S.
Ct. 2197, 167 L. Ed. 2d 1081 (2007) (per curiam) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). Detailed factual allegations are
not required. Twombly, 550 U.S. at 555, 127 S. Ct. 1955. However, mere conclusory
statements will not do; “a [counterclaim] must do more than allege the [counterclaim]
plaintiff's entitlement to relief.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.
2009). Instead, a counterclaim must “show” this entitlement by alleging sufficient facts. Id.
“While legal conclusions can provide the framework of a [counterclaim], they must be
supported by factual allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1950,
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173 L. Ed. 2d 868 (2009).
As such, “[t]he touchstone of the pleading standard is
plausability.” Bistrian v. Levi, 696 F.3d 352, 365 (3d Cir. 2012).
The inquiry at the motion to dismiss stage is “normally broken into three parts: (1)
identifying the elements of the claim, (2) reviewing the [counterclaim] to strike conclusory
allegations, and then (3) looking at the well-pleaded components of the [counterclaim] and
evaluating whether all of the elements identified in part one of the inquiry are sufficiently
alleged.” Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011).
Dismissal is appropriate only if, accepting as true all the facts alleged in the
counterclaim, a counterclaim plaintiff has not pleaded “enough facts to state a claim to relief
that is plausible on its face,” Twombly, 550 U.S. at 570, 127 S. Ct. 1955, meaning enough
factual allegations “‘to raise a reasonable expectation that discovery will reveal evidence of’”
each necessary element. Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008)
(quoting Twombly, 550 U.S. at 556, 127 S. Ct. 1955). “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.” Iqbal, 556 U.S. at 678, 129 S. Ct. 1937. “When there are wellpleaded factual allegations, a court should assume their veracity and then determine
whether they plausibly give rise to an entitlement to relief.” Id. at 679, 129 S. Ct. 1937.
In deciding a motion to dismiss, the Court should consider the allegations in the
counterclaim, exhibits attached to the counterclaim, and matters of public record. See
Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.
1993).
The Court may also consider “undisputedly authentic” documents when the
counterclaim plaintiff's claims are based on the documents and the counterclaim defendant
has attached copies of the documents to the motion to dismiss. Id. The Court need not
assume the counterclaim plaintiff can prove facts that were not alleged in the counterclaim,
see City of Pittsburgh v. W. Penn Power Co., 147 F.3d 256, 263 & n.13 (3d Cir. 1998), or
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credit a counterclaim’s “‘bald assertions’” or “‘legal conclusions.’” Morse v. Lower Merion
Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997) (quoting In re Burlington Coat Factory Sec.
Litig., 114 F.3d 1410, 1429–30 (3d Cir. 1997)).
III. Discussion
ClinMicro and Dr. Namdari seek dismissal of PrimeMed’s counterclaims and
additional party claims in their entirety. The motions to dismiss will be granted in part and
denied in part for the reasons that follow.
A.
First Claim- Fraud
PrimeMed’s first claim against ClinMicro and Dr. Namdari is for fraudulent
misrepresentation and concealment. To state a claim of fraud under Pennsylvania law, a
plaintiff must allege:
(1) a representation; (2) which is material to the transaction at hand; (3) made
falsely, with knowledge of its falsity or recklessness as to whether it is true or
false; (4) with the intent of misleading another into relying on it; (5) justifiable
reliance on the misrepresentation; and (6) the resulting injury was proximately
caused by the reliance.
Gibbs v. Ernst, 538 Pa. 193, 647 A.2d 882, 889 (Pa. 1994); see also Bortz v. Noon, 556 Pa.
489, 729 A.2d 555, 560 (Pa. 1999). “The tort of intentional non-disclosure has the same
elements as the tort of intentional misrepresentation except that in a case of intentional
non-disclosure the party intentionally conceals a material fact rather than making an
affirmative misrepresentation.” Gibbs, 647 A.2d at 889 n.12; see also Boortz, 729 A.2d at
560.
ClinMicro and Dr. Namdari contend that PrimeMed’s fraud claim is barred by the gist
of the action doctrine and the economic loss doctrine. The gist of the action doctrine
“‘maintain[s] the conceptual distinction between breach of contract and tort claims[,]’ and
precludes plaintiffs from recasting ordinary breach of contract claims as tort claims.”
McShea v. City of Phila., 606 Pa. 88, 995 A.2d 334, 339 (Pa. 2010) (quoting eToll, Inc. v.
7
Elias/Savion Adver., Inc., 811 A.2d 10, 14 (Pa. Super. Ct. 2002)). The existence of a
contractual relationship between two parties does not preclude one party from bringing a
tort claim against the other. Bohler–Uddeholm Am., Inc. v. Ellwood Grp., Inc., 247 F.3d 79,
104 (3d Cir. 2001). However, if the tort claim is not separate and independent of the
contract claim, the claim is barred by the gist-of-the-action doctrine. See, e.g., Brown &
Brown, Inc. v. Cola, 745 F. Supp. 2d 588, 619 (E.D. Pa. 2010)
“When a plaintiff alleges that the defendant committed a tort in the course of carrying
out a contractual agreement, Pennsylvania courts examine the claim and determine
whether the ‘gist’ or gravamen of it sounds in contract or tort.” The Knit With v. Knitting
Fever Inc., Nos. 08–4221, 08–4775, 2009 WL 3427054, at *5 (E.D. Pa. Oct. 20, 2009)
(quoting Sunquest Info. Sys., Inc. v. Dean Witter Reynolds, Inc., 40 F. Supp. 2d 644, 651
(W.D. Pa. 1999)). This analysis requires consideration of the source of the duties allegedly
breached. The Knit With, 2009 WL 3427054, at *5; see also Weber Display & Packaging
v. Providence Washington Ins. Co., No. 02–7792, 2003 WL 329141, at *3 (E.D. Pa. Feb.
10, 2003) (“The difference between tort and contract actions is noted by the fact that tort
actions arise where a party breaches a duty imposed as a matter of social policy; whereas
contract actions arise where a party breaches a duty imposed by mutual consensus
between the parties.”).
“[I]f the duties in question are intertwined with contractual
obligations, the claim sounds in contract, but if the duties are collateral to the contract, the
claim sounds in tort.” The Knit With, 2009 WL 3427054, at *5.
The doctrine precludes tort claims: “(1) arising solely from a contract between the
parties; (2) where the duties allegedly breached were created and grounded in the contract
itself; (3) where the liability stems from a contract; or (4) where the tort claim essentially
duplicates a breach of contract claim or the success of which is wholly dependent on the
terms of the contract.” eToll, Inc., 811 A.2d at 19 (internal citations and internal quotation
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marks omitted).
With respect to their gist of the action doctrine argument, Dr. Namdari and ClinMicro
maintain that to the extent that any duties or obligations were breached in this case, the
duties or obligations arose from the parties’ written agreements. Specifically, they assert
that PrimeMed’s allegations that they fraudulently concealed the nature of Vitamin D tests,
ClinMicro’s lack of licensure to perform Vitamin D tests, and the profitability of those tests
if referred to Quest are inextricably intertwined with the terms of the LMA and the LSA. In
opposition, PrimeMed argues that ClinMicro and Dr. Namdari fail to identify the contractual
provision their allegedly deceptive conduct breached, and that it is premature at this stage
in the litigation to determine that the gist of its claim sounds in contract and not tort.
PrimeMed’s fraud claim will not be dismissed.
Considering the gravamen of
PrimeMed’s allegations, it is not apparent at this stage of the litigation that the gist of the
claim sounds in contract as opposed to tort. Significantly, although ClinMicro and Dr.
Namdari contend that PrimeMed’s fraud claim is predicated on contractual performance,
it is not clear that the duties they allegedly breached were grounded in the parties’
agreements. That is, while ClinMicro had a duty to manage PrimeMed’s laboratory under
the terms of the LMA, it is not evident at this time whether the alleged concealment of the
nature of Vitamin D tests was intertwined with ClinMicro’s obligations under the relevant
agreements or merely collateral to its management of PrimeMed’s laboratory. See, e.g.,
Always in Service, Inc. v. Supermedia Services-East, Inc., No. 11-127, 2012 WL 717233,
at *8 (E.D. Pa. Mar. 5, 2012) (“courts are hesitant to decide whether the gist of an action is
in contract or tort at the motion to dismiss stage of a proceeding, without the benefit of a
more developed factual record. “).
ClinMicro and Dr. Namdari also move to dismiss the fraud claim based on the
economic loss doctrine. In general, the economic loss doctrine “prohibits plaintiffs from
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recovering in tort economic losses to which their entitlement flows only from a contract.”
Duquesne Light Co. v. Westinghouse Elec. Corp., 66 F.3d 604, 618 (3d Cir. 1995).
Pennsylvania law “provides that no cause of action exists for negligence that results solely
in economic damages unaccompanied by physical or property damage.” Azur v. Chase
Bank, USA, N.A., 601 F.3d 212, 222 (3d Cir. 2010) (quoting Sovereign Bank v. BJ's
Wholesale Club, Inc., 533 F.3d 162, 175 (3d Cir. 2008)). “Although the Pennsylvania
Supreme Court has not ruled on the issue, the Third Circuit has predicted that it would not
create an exception to the economic loss doctrine for intentional torts.” Tubman v. USAA
Cas. Inc. Co., - - - F. Supp. 2d - - -, 2013 WL 1809345, at *4 (E.D. Pa. Apr. 20, 2013) (citing
Werwinski v. Ford Motor Co., 286 F.3d 661, 680-81 (3d Cir. 2002). While the Werwinski
court predicted that the Pennsylvania Supreme Court would not adopt a blanket exception
to the economic loss doctrine for intentional fraud, it also noted with approval an “emerging
trend” that “recognize[s] a limited exception to the economic loss doctrine for fraud claims,
but only where the claims at issue arise independent[ly] of the underlying contract.”
Werwinski, 286 F.3d at 676 (quoting Raytheon Co. v. McGraw–Edison Co., Inc., 979 F.
Supp. 858, 870 (E.D. Wis. 1997)). Such an exception would allow a plaintiff to bring a fraud
claim “only if the fraud is ‘extraneous to the contract,’ not ‘interwoven with the breach of
contract.’” Id. (quoting Huron Tool & Engineering Co. v. Precision Consulting Services, Inc.,
209 Mich. App. 365, 532 N.W.2d 541, 545 (1995)). Nevertheless, there remains a split
among courts in Pennsylvania and the federal district courts regarding the applicability of
the economic loss doctrine to intentional fraud claims. See, e.g., Oldcastle Precast, Inc. v.
VPMC, Ltd., No. 12-6270, 2013 WL 1952090, at *11 (E.D. Pa. May 13, 2013) (collecting
cases).
For reasons similar to that denying the motion to dismiss the fraud claim based on
the gist of the action doctrine, the fraud claim will not be dismissed on account of the
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economic loss doctrine. It is not apparent that the fraud claim is “interwoven with the breach
of contract.” In that regard, while ClinMicro and Dr. Namdari argue that PrimeMed’s only
alleged loss is the benefit of the parties’ bargained-for exchange, based solely on
PrimeMed’s allegations, it sufficiently asserts damages for deceptive conduct distinct from
any potential breaches of the parties’ contractual agreements. See, e.g., Cave v. Saxon
Mortg. Servs., Inc., No. 11-4586, 2012 WL 1957588, at *11 (E.D. Pa. May 30, 2012). Thus,
I decline, at this time, to conclude that PrimeMed’s fraud claim is barred by the economic
loss doctrine.
B.
Second Claim- Negligent Misrepresentation and Non-Disclosure
PrimeMed’s second claim against ClinMicro and Dr. Namdari is for negligent
misrepresentation and non-disclosure.
Under Pennsylvania law, a negligent
misrepresentation claim has four elements: “1) a misrepresentation of a material fact; 2)
made under circumstances in which the misrepresenter ought to have known its falsity; 3)
with an intent to induce another to act on it; and 4) which results in injury to a party acting
in justifiable reliance on the misrepresentation.” Smith v. Lincoln Ben. Life Co., 395F. App’x
821, 824 (3d Cir. 2010) (citing Bilt–Rite Contractors, Inc. v. The Architectural Studio, 581
Pa. 454, 866 A.2d 270 (2005)).
As with PrimeMed’s fraud claim, ClinMicro and Dr. Namdari seek dismissal of the
negligent misrepresentation claim based on the gist of the action doctrine and the economic
loss doctrine. For the reasons previously detailed, it is not evident that these doctrines are
applicable to the instant case. PrimeMed may proceed with its second claim.
C.
Third Claim- Misappropriation of Corporate Opportunity
PrimeMed’s third claim asserts that Dr. Namdari and ClinMicro misappropriated a
corporate opportunity by directing the Vitamin D tests to ClinMicro.
The corporate
opportunity doctrine “imposes liability on officers and directors who take personal advantage
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of business opportunities when these opportunities fall within the ‘scope of activities’ of, and
constitute a ‘present or potential advantage’ to, the corporation.” Levy and Surrick v. Surrick,
362 Pa. Super. 510, 515, 524 A.2d 993, 995 (Pa. Super. Ct. 1987) (quoting Seaboard
Industries, Inc. v. Monaco, 442 Pa. 256, 262, 276 A.2d 305, 309 (Pa. 1971)). The doctrine
prohibits an officer or director from competing with the corporation in any fashion, even in
areas outside the scope of the officer's or director's work for the corporation. Id. This duty
is broader than that owed by an agent to its principal. See id. “The duty of the agent . . .
extends only as far as the agency relationship itself. The agent can compete with his or her
principal in ‘matters not within the field of his agency.’” Id. (quoting Restatement (Second)
of Agency § 934, cmt. a); see also Restatement (Third) of Agency § 8.04.
ClinMicro and Dr. Namdari seek dismissal of the claim based on the fact that they
were not officials, directors, or even employees of PrimeMed. Thus, they surmise that no
fiduciary duty was owed to PrimeMed under the terms of the LMA. In support, ClinMicro
and Dr. Namdari rely on section 8.1 of the LMA, which provides:
RELATIONSHIP OF THE PARTIES. CIC [ClinMicro] is and shall continue to
be an independent contract for all services furnished pursuant to this
agreement by CIC and its employees. CIC and its employees shall provide
services hereunder free of any direction or control by PRIMEMED, in a manner
consistent with current standards of laboratory management practice. This
Agreement shall not expressly or by implication create any
employer/employee, joint venture or partnership relationship between
PRIMEMED and CIC or its employees.
(Doc. 52, Ex. 1, § 8.1.)
But, section 8.1 of the LMA, PrimeMed argues, does not preclude a finding that
ClinMicro and Dr. Namdari acted as its agents in running its laboratory. In reply, ClinMicro
and Dr. Namdari contend that PrimeMed has failed to allege specific facts showing that the
parties were in a principal/agent relationship.
In Pennsylvania, there are three basic elements necessary to establish an agency
relationship: (1) manifestation by a principal that an agent shall act for the principal; (2) the
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agent's acceptance of the undertaking; and (3) the parties' understanding that the principal
is to be in control of the undertaking. CGB Occupational Therapy, Inc. v. RHA Health Serv.,
Inc., 357 F.3d 375, 385 n.11 (3d Cir. 2004) (quoting Basile v. H & R Block Inc., 563 Pa. 359,
761 A.2d 1115, 1120 (Pa. 2000)). “An independent contractor is a person who contracts
with another to do something for him but who is not controlled by the other nor subject to
the other's right to control with respect to his physical conduct in the performance of the
undertaking. He may or may not be an agent.” Cohen v. Salick Health Care, Inc., 772 F.
Supp. 1521, 1528 (E.D. Pa. 1991) (quoting Restatement (Second) of Agency § 2(3)). Under
Pennsylvania law, whether a party is an independent contractor or an agent depends on the
relationship in the specific case, “and one may stand as both independent contractor and
agent to another.” Tax Review Bd. v. Slater Sys., Inc., 398 Pa. 477, 482, 158 A.2d 561, 563
(Pa. 1960) (citing Commonwealth v. Minds Coal Mining Corp., 360 Pa. 7, 60 A.2d 14 (Pa.
1948); Restatement (Second) of Agency § 2). “An independent contractor may be an agent
or non-agent, but cannot be a servant, since ‘servant’ and ‘independent contractor’ are
antithetical terms.” Kemether v. Pa. Interscholastic Athletic Ass’n, Inc., 15 F. Supp. 2d 740,
748 (E.D. Pa. 1998); see also Cohen, 772 F. Supp. at 1528 (“Under Pennsylvania law, it
has been expressly stated that not all independent contractors are agents.” (citing Minds
Coal, 360 Pa. 7, 17, 60 A.2d 14, cited with approval by Moon Area School District v.
Garzony, 522 Pa. 178, 189, n. 8, 560 A.2d 1361, 1367 n.8 (Pa. 1989))).
A non-agent independent contractor is defined by the Restatement as:
A person who contracts to accomplish something for another or to deliver
something to another, but who is not acting as a fiduciary for the other, is a
non-agent contractor. He may be anyone who has made a contract and who
is not an agent. The term is used colloquially to describe builders and others
who have contracted to accomplish physical results not under the supervision
of the one who has employed them to produce the results.
Restatement (Second) Agency § 14N, cmt. (b); see AT&T v. Winback & Conserve Program,
Inc., 42 F.3d 1421, 1437-39 (3d Cir. 1994); Montgomery Cnty. v. Microvote Corp., No. 9713
6331, 2000 WL 341566, at *6 (E.D. Pa. Mar. 31, 2000). A non-agency independent
contractor relationship can exist where prerequisites such as control are absent. See
Kemether, 15 F. Supp. 2d at 748.
Here, PrimeMed fails to adequately allege that the parties were in a principal/agent
relationship. The facts pled by PrimeMed indicate that it did not retain any control over
ClinMicro and Dr. Namdari’s operation of the laboratory. (Countercl., ¶¶ 69, 73-74.)
PrimMed further acknowledges this point in its brief in opposition to the motion dismiss,
where it notes that “[ClinMicro] and Dr. Namdari had complete control over the operation
of the PrimeMed lab by virtue of their respective roles as Lab Manager and Medical
Director.” (Doc. 74, 20.) PrimeMed, therefore, does not allege the essential element of an
agency relationship that it was “to be in control of the parties’ undertaking.” Pursuant to the
terms of the LMA and PrimeMed’s counterclaims and additional party claims, PrimeMed
simply asserts that ClinMicro and Dr. Namdari were non-agent independent contractors.
And, because PrimeMed does not otherwise suggest that a misappropriation of corporate
opportunity claim is applicable in such circumstances, its third claim will be dismissed.
D.
Fourth Claim- Breach of Trust/Fiduciary Duty
PrimeMed’s fourth claim asserts that ClinMicro and Dr. Namdari breached their
fiduciary duties when they failed to act in PrimeMed’s best interests. ClinMicro and Dr.
Namdari maintain that PrimeMed fails to allege facts showing that a fiduciary duty was owed
to PrimeMed. This conclusion, ClinMicro and Dr. Namdari contend, is compelled because
PrimeMed has not set forth sufficient facts which would establish a principal/agent
relationship. Thus, they insist that PrimeMed has not shown the existence of a fiduciary
relationship between the parties.
PrimeMed, in opposition, argues that a fiduciary
relationship arose based on the “confidential relationship” between the parties.
Pennsylvania courts recognize three categories of relationships between contracting
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parties: ordinary, arm’s-length relationships; agency relationships; and confidential
relationships. Wisniski v. Brown & Brown Ins. Co., 906 A.2d 571, 577 (Pa. Super. Ct. 2006)
(citing Basile v. H&R Block, Inc., 563 Pa. 359, 761 A.2d 1115, 1120 (Pa. 2000)). As
discussed in detail above, PrimeMed’s counterclaims and additional party claims fail to set
forth sufficient facts that the parties were in a principal/agent relationship.
Nevertheless, the third category of relationship, a confidential relationship, “can arise
even in the absence of an agency relationship.” Id. (citing Basile, 563 Pa. 359, 761 A.2d at
1121). “A confidential relationship is marked by such a disparity in position that the inferior
party places complete trust in the superior party's advice and seeks no other counsel, so
as to give rise to a potential abuse of power.” Id. (citing eToll, Inc. v. Elias/Savion Adver.,
Inc., 811 A.2d 10, 23 (Pa. Super. 2002)). Under Pennsylvania law, “[i]n the business
context, a confidential relationship is formed only if one party surrenders substantial control
over some portion of his affairs to the other.” Devon IT, Inc. v. IBM Corp., 805 F. Supp. 2d
110, 129-30 (E.D. Pa. 2011) (citation and internal quotation omitted).
Most commercial contracts for professional services involve one party relying
on the other party's superior skill or expertise in providing that particular
service. Indeed, if a party did not believe that the professional possessed
specialized expertise worthy of trust, the contract would most likely never take
place.
eToll, 811 A.2d at 23. This means that a fiduciary relationship does not arise simply
because one party relies and pays for the specialized knowledge of the other party. See id.
If the converse were true, a fiduciary relationship would result in all cases where one party
has a marginally greater level of expertise in a particular area. See id. Instead, “the critical
question is whether the relationship goes beyond mere reliance on superior skill, and into
a relationship characterized by ‘overmastering influence’ on one side or ‘weakness,
dependence, or trust, justifiably reposed’ on the other side.” Id. (quoting Basile v. H&R
Block, 777 A.2d 95, 101 (Pa. Super. Ct. 2001)).
15
Whether a confidential relationship exists between parties is an intensely fact-specific
question. Wisniski, 906 A.2d at 578.
Thus, “[i]n assessing whether a confidential
relationship exists, the Pennsylvania courts conduct a fact-intensive analysis of the relative
positions of the parties.” Rossi v. Schlarbaum, 600 F. Supp. 2d 650, 657 (E.D. Pa. 2009).
ClinMicro and Dr. Namdari’s motion to dismiss the breach of fiduciary duty claim will
be denied. PrimeMed alleges that ClinMicro and Dr. Namdari, in their respective positions
as manager and Medical Director, were in positions of substantial control and authority over
the operation of the PrimeMed laboratory. (Countercl., ¶¶ 73-74.) And, under the terms of
the LMA, “CIC shall provide day-to-day management services for and on behalf of
PRIMEMED related to the operation of the Laboratory, including, without limitation,
scheduling services and supervision of personnel, and such other services requested by
PRIMEMED from time to time.” (Doc. 52, Ex. 1, § 2.1.) The LMA further provides that
ClinMicro and its employees “shall provide services hereunder free of any direction or
control by PrimeMed.” (Id. at § 8.1.) Based on PrimeMed’s allegations and the terms of the
LMA, it would be premature to dismiss the claim without reviewing the evidence and
conducting a fact-intensive analysis of the positions of the parties. Although PrimeMed may
well be unable to satisfy the exacting standard to establish a confidential relationship in this
case, the breach of fiduciary duty claim will not be dismissed at this time.
E.
Fifth Claim- Tortious Interference
PrimeMed also asserts a claim for tortious interference with prospective contract
against ClinMicro and Dr. Namdari. To state a claim for interference with prospective
contractual relations, the plaintiff must allege the following elements: “(1) a prospective
contractual relation; (2) the purpose or intent to harm the plaintiff by preventing the relation
from occurring; (3) the absence of privilege or justification on the part of the defendant; and
(4) the occasioning of actual damage resulting from the defendant's conduct.” Thompson
16
Coal Co. v. Pike Coal Co., 488 Pa. 198, 412 A.2d 466, 471 (Pa. 1979). A prospective
contractual relation “is something less than a contractual right, something more than a mere
hope.” Santana Prods. v. Bobrick Washroom Equip., Inc., 401 F.3d 123, 140 (3d Cir. 2005)
(quoting Thompson Coal Co., 412 A.2d at 471). There must be an objectively reasonable
probability that a contract will come into existence. See Schulman v. J.P. Morgan Inv. Mgt.,
Inc., 35 F.3d 799, 808 (3d Cir. 1994).
PrimeMed sufficiently pleads the necessary elements of the tortitious interference
with prospective contract claim. PrimeMed asserts that pricing was obtained from Quest
for Vitamin D tests for referral to Quest, and that PrimeMed had the ability to refer these
tests to Quest. PrimeMed further alleges that ClinMicro and Dr. Namdari intended to
prevent PrimeMed’s relationship with Quest from occurring once they learned that Vitamin
D testing would be highly lucrative for ClinMicro. PrimeMed also adequately pleads that
ClinMicro and Dr. Namdari acted without privilege or justification, and that, as a result of
their conduct, PrimeMed lost significant profits and suffered increased costs.
Moreover, the claim will not be dismissed pursuant to the gist of the action doctrine.
“A tortious interference with contract claim is barred by the gist of the action doctrine if it is
not independent of a contract claim that is pled along with it.” Alpart v. Gen. Land Partners,
Inc., 574 F. Supp. 2d 491, 505 (E.D. Pa. 2008). At this time, it is not apparent that the
tortious interference claim is dependent upon the LMA or the LSA. And, as Dr. Namdari
does not appear to be a party to the LMA or the LSA, he cannot have individually breached
that contract. See, e.g., Alpart, 574 F. Supp. 2d at 506. Since the tortious interference claim
may be separate and distinct from any contract claims, PrimeMed may proceed with this
claim.
F.
Sixth Claim- Breach of Covenant of Good Faith and Fair Dealing
In its sixth claim, PrimeMed asserts that ClinMicro breached the covenant of good
17
faith and fair dealing. Specifically, PrimeMed argues that ClinMicro breached the covenant
of good faith implied in Pennsylvania contracts, as well as the express covenant of good
faith contained in the LMA. (Doc. 52, Ex. 1, § 8.12.)
In Pennsylvania, “‘in order to plead a cause of action for breach of the covenant of
good faith, whether it is an express or implied covenant, a plaintiff must properly plead the
elements of a claim of breach of contract.’” Pro Acoustics, LP v. Korn, No. 09-1076, 2010
WL 3370849, at *3 (E.D. Pa. Aug. 24, 2010) (quoting CRS Auto Parts, Inc. v. Nat'l Grange
Mut. Ins. Co., 645 F. Supp. 2d 354, 369 (E.D. Pa. 2009)). To state a claim for breach of
contract, Pennsylvania law requires a plaintiff to plead: “(1) the existence of a contract,
including its essential terms, (2) a breach of a duty imposed by the contract [,] and (3)
resultant damages.” Ware v. Rodale Press, Inc., 322 F.3d 218, 225 (3d Cir. 2003) (citing
CoreStates Bank, N.A. v. Cutillo, 723 A.2d 1053, 1058 (Pa. Super. Ct. 1999)). Because
PrimeMed adequately alleges each of the elements of a breach of contract claim,
PrimeMed’s sixth claim will not be dismissed.1
G.
Seventh Claim- Unjust Enrichment
Lastly, PrimeMed asserts in the alternative an unjust enrichment claim against
ClinMicro and Dr. Namdari. ClinMicro and Dr. Namdari argue, however, that an unjust
1
ClinMicro and Dr. Namdari argue that by advancing a breach of contract claim,
PrimeMed solidifies that its non-contract claims must be dismissed by the gist of
the action doctrine. But, as discussed at length, it is unclear at this time that
ClinMicro and Dr. Namdari’s alleged tortious conduct arises solely from the
parties contracts, that the duties breached were created and grounded in the
contracts, that liability stems from the contracts, or that the tort claims essentially
duplicate the contracts claim. See Pazzo, Inc. v. Innovative Custom Brands, Inc.,
No. 09-cv-1698, 2010 WL 4365818, at *4 (M.D. Pa. Oct. 28, 2010) (expressing
caution at deciding the gist of the action on a motion to dismiss and noting that
“although, ultimately, the defendant may be correct that the plaintiffs cannot
pursue their breach of contract claim as well as their tort claims discovery will
give the parties and the court a better idea of which, if any, claims are
precluded.”).
18
enrichment claim cannot stand in this case because the parties are in agreement that
express contracts, the LMA and the LSA, governed the parties’ relationship.
The elements of an unjust enrichment claim “are benefits conferred on defendant by
plaintiff, appreciation of such benefits by defendant, and acceptance and retention of such
benefits under such circumstances that it would be inequitable for defendant to retain the
benefit without payment of value.” Braun v. Wal–Mart Stores, Inc., 24 A.3d 875, 896 (Pa.
Super. Ct. 2011) (internal quotation marks omitted). However, “‘the doctrine of unjust
enrichment is inapplicable where the relationship between the parties is founded upon a
written agreement or express contract.’“ Leder v. Shinfeld, 609 F. Supp. 2d 386, 408 (E.D.
Pa. 2009) (quoting Wilson Area Sch. Dist. v. Skepton, 586 Pa. 513, 895 A.2d 1250, 1254
(2006)).
Nevertheless, a party may plead alternative theories of breach of contract and unjust
enrichment when there is a dispute about the existence or validity of the contract in
question. Premier Payments Online, Inc. v. Payment Sys. Worldwide, 848 F. Supp. 2d 513,
527 (E.D. Pa. 2012). The unjust enrichment claim will not be dismissed because there may
be an issue as to whether an agreement exists between the parties. In fact, as I expressed
at the hearing on ClinMicro’s request for a preliminary injunction, the existence of an
agreement remains an open question in this case. (Doc. 68, 203:11-21.) PrimeMed will be
permitted to proceed on its alternative claim for unjust enrichment.
IV. Conclusion
For the above stated reasons, ClinMicro and Dr. Namdari’s motions to dismiss will
be granted in part and denied in part.
An appropriate order follows.
July 17, 2013
Date
/s/ A. Richard Caputo
A. Richard Caputo
United States District Judge
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