IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

LCPS Acquisition, LLC d/b/a ) Omnicare of Chandler, )

Plaintiff, ) ) C.A. No. N19C

- 07

- 195 CEB

v. ) ) Allegiant Healthcare West, LLC d/b/a ) Allegiant Healthcare of Mesa; ) AllegiantHealthcare of Phoenix, LLC ) d/b/aAllegiant Healthcare of Phoenix; ) and Allegiant Healthcare East, LLC ) d/b/a Springdale Village, ) ) Defendant s

. )

Submitted: July 2, 2020 Decided: July 24 , 2020

Upon Consideration of Plaintiff’s Motion to Dismiss

the Fraud Counterclaims GRANTED

ORDER

Before the Court is a motion filed by LCPS Acquisition, LLC d/b/a Omnicare

of Chandler (“Plaintiff”) to dismiss counterclaims filed by Allegiant Healthcare of

Mesa, Allegiant Healthcare of Phoenix and Allegiant Healthcare East, LLC d/b/a

Spring dale Village (“Defendant s ”)

. 1 The Court makes the following findings:

1 Plaintiff ’s Complaint says it is owed $671,859.39 (including interest) for providing consulting services related to the Allegiant Mesa Pharmacy Agreement; $307,043.56 (including interest) for the Springdale Agreement and Allegiant Phoenix owes Plaintiff $567,553.88 (including interest).2

1. Plaintiff provides pharmaceutical goods an d consulting services to a

variety of customers. As briefly as can be stated, Plaintiff and Defendants entered

into several contracts for the provision of these goods and services and invoice

Defendants for compensation. Plaintiff filed a breach of contr act claim alleging that

it abided by the terms of the contract, but that D efendants did not pay as agreed and

Defendant has defaulted on the contracts

.

2. Defendant s ha ve answered and counterclaim ed. The counterclaims

allege common law fraud and breach of contract by Plaintiff. Plaintiff moves to

dismiss the fraud counterclaims, arguing that the fraud allegations fail to meet the

“particularity requirement” of D.R.C.P. Rule 9(b).

3. Rule 9(b) makes a specific demand on a complaint, one that is not found

wit h respect to other “general allegations.” While the rest of the complaint is

sufficient if it is a “ a short and plain statement of the claim showing that the pleader

is entitled to relief

, ” 2 “ In all averments of fraud, negligence or mistake, the

circumstances constituting fraud, negligence or mistake shall be stated with

particularity.” 3

4. The counterclaims here come in six counts: three allege breach of

contract on behalf of each of the three named Defendants. The other three counts

2 D.R.C.P. Rule 8 (a)(1).
3 D.R.C.P. Rule 9(b).3

allege common law fraud, again on behalf of each of the three Defendants. The three

common law fraud claims are substantially identical, save for the specific amount

allegedly lost by reason of Defendant’s alleged fraud. If one fails under Rule 9(b),

they all do as t hey are substantially the same in their specificity.

5. Reviewing these three pairs of complaints is telling. For example,

Counterclaim II alleges breach of contract in that instead of billing Defendant

according to the contract, Plaintiff “submitted deceitf ul, wrongful, and fraudulent

bills.” 4 Further, it is alleged that Plaintiff ’s “failure to adhere to the agreed upon

contract terms caused [ Defendant ] to be charged $56,254.71 in unjustified costs in

just an 8 month period.” 5

6. Counterclaim I alleging comm on law fraud , seeks the same $56,254.71,

alleging that the loss was caused by Plaintiff’s “ inaccurate, deceptive and

unconscionable billing practices.” 6 Other paragraphs claim that the “payment

amount were fraudulently determined” and that Plaintiff inten ded to “deceive,

damage and mislead” Defendant, all without further explanation. 7 So the allegation

is that the Plaintiff breached the contract through “deceitful, wrongful, and

fraudulent” conduct and committed fraud through “inaccurate, deceptive and

4 Counterclaim II ¶14 D.I.
5 Counterclaim II ¶15 D.I.

6 Counterclaim I, ¶7, D.I.

7 Counterclaim I, ¶¶4, 9.4

u nconscionable” conduct. It is difficult to imagine what words in Roget’s Thesaurus

were not hauled out and added to this mix and which category they would fit

– fraud

or breach of contract. Obviously, while the terms are certainly colorful, they are

gene ric and do not describe the fraud with anything like the particularity required by

Rule 9(b).

7. Further cementing the Court’s view that the fraud counterclaims fail

under the heightened pleading standard of Rule 9(b) is the recent decision of Judge

Wharton, who just recently dismissed the co unterclaims in another case brought by

an Omnicare entity ag ainst a customer who responded with allegations of fraud and

breach of contract

. 8 In granting the motion to dismiss the fraud counterclaim, Judge

Wharton noted there was no allegation of tortious conduct that is separate and apart

from the damages the def endant suffered under its breach of contract claims. The

same is equally true here.

8. Defendant s ’ breach of contract counterclaim s set forth all Defendant

needs to be made whole as a result of Plaintiff’s allegedly wrongful conduct. The

fraud counts add nothing to Defendant s ’ claim or their damages. There is no

particularity in these claims, save for some choice adjectives that do not describe a

8 Med World Acquisition Corp. d/b/a Omnicare of Plainview v. Friedwald Center for Rehabilitation and Nursing, LLC, C.A. No. N19C

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- 028 FWW ( Super. Ct. Ju ly 16 , 2020)5

time, place, or content of the allegedly false statements or the specific damages

caused.

In light of the foregoing, Plaintiff’s Motion to Dismiss the Fraud

Counterclaims is GRANTED

.

IT IS SO ORDERED

.

Judge Charles E. Butler