IN THE SUPERIOR COUR T OF THE STATE OF DE LAWARE

ENVOLVE PHARMACY SOL UTIONS, INC., ) ET AL , ) Plaintiffs , )

) v . ) C.A. N o. N19C
- 12
- 214 ) PRW CCLD ) RITE AID HDQTRS. CORP. AND RITE AID ) CORP., ) ) Defendants. )
Submitted: October 16 , 2020 Decided: January 1 5 , 2021
MEMORANDUM OPINION AND ORDER

Upon Defendants Rite Aid Hdqtrs. Corp. and Rite Aid Corp.’s

Motion to Dismiss , GRANTED in part, DENIED in part

.
Alexandra M. Cum ings, Esquire, Karen Jacobs, Esquire, MORRIS, NICHOLS, ARSHT & TUNNELL LLP , Wilmington, Delaware; Jerome P. DeSanto, Esquire, Chri stopher Flynn, Esquire, Keith J. Harrison, Esquire, Daniel W. Wolff, Esquire, CROWELL & MOR ING LLP, Washington, D.C., Attorneys for Plaintiffs Envolve Pharmacy Solutions, Inc., et al. Corinne Elise Amato, Esquire, PRICKETT, JONES & EL LIOT , P.A., Wilmington, Delaware; Jordan Z. Dillion, Esquire, SHOOK, HARDY & BACON L.L.P., Kansas City, Missouri; Thomas J. Sullivan, Esquire, SHOOK, HARDY & BACON L.L.P., Philadelphia, Pennsylvania, Attorneys for Defendants Rite Aid Hdqtrs. Corp. and Rite Aid Corp.

WALLACE, J.- 1

-

This dispute between the plaintiff group of health insurance and pharmacy benefit companies ( collectively “ Centene Entities”) 1 , and the defendant pharmacy
Rite Aid Headquarters Corp oration and Rite Aid Corporation (collectively “Rite
Aid ” ) , centers on the proper definition of Usual and Customary Price (“U&C Price”) in certain operative agreements between them

. The Centen e Entities allege that Rite Aid fraudulently misrepresented the benchmark prices it charged customers for pharmaceuticals, so as to get higher payments from the Centene Entities than Rite
Aid is entitled to under their 2003 and 2013 Contract s
. The Centen e Entities allege that the mechanism of fraud was to qu ote an inflated sticker price that Rite Aid

customers never paid , while chargi ng a discount price to holders of customer loyalty
cards from its Rx Savings Card (“RSC”) Program

. The Centene Entities ’ Complaint alleges that in reporting the U&C Price of the pharmaceuticals sold, Rite Aid failed to include the discounted prices o ffered through its RSC. The Centene Entities characterize the RSC as a simple shopper discount card, without any fees or membership requirements. The Centene Entities allege that Rite Aid used this RSC pricing to overstate the sticker prices of its pharmaceuticals

. Not only did these actions allegedly breach contractual agreements

1 The p laintiffs in this case are dozens of entities and subsidiaries, as discussed below. For ease of understanding, they will be collectively referred to as “the Centene Entities.”- 2

-

between the parties, they also caused the Centene Entities to over pay Rite Aid an unspecified sum that could be in the millions of dollars.
Before the Court is Rite Aid’s Motion to Dismiss under Superior Court Civil Rule 12(b)(6). Having consider ed the record and the parties’ arguments, the Court concludes that some claims against Rite Aid should be dismisse d, while other claims
survive

. The Centene Entities have pled fac ts that i f proven would show that a shopper using the RSC is obtaining a discount and is still a non

- contracted buyer

. So Rite
Aid ’ s m otion to d ismiss based on the definition of U&C Price and under
breach

- of

- contract pleading requirements is denied.
Rite Aid ’ s argument that the statute of limitations bars recovery for any overpayments for which the Centene Entities were on inquiry notice is a fact

- specific inquiry that cannot be resolved at this procedural stage. Accordingly , t h e Court
denies Rite Aid’s request for dismissal brought on statute of limitations grounds

. While the Centene Entities have ple d fraud with the particularity required under Superior Court Civil Rule 9(b), it fails to plead injury from the fraud separat e
from its breach

- of

- contract claims. T he Court , therefore, grants Rite Aid ’ s m otion

to d ismiss as to the Centene Entities’ fraud claim. Finally, because the 2003 and 2013 Contracts disclaim third

- party beneficiary enforcement, Rite Aid ’ s m otion to d ismiss the breach

- of

- contract claims by the- 3

-

non
- Envolve parties is granted. But because they cannot sue as third

- party beneficiaries under the contract, there is no bar against the Centene Entities

— other
than Envolve

— from seeking to recover under an unjust enrichment theory

. Thus,
the Court denies Rite Aid ’ s m otion to d ismiss as to the Centene Entities’ unjust
enrichment claim. In sum, Rite Aid ’ s Motion to Dismiss is GRANTED IN PART AND
DENIED IN PART.
I. FACTUAL BACKGROUND
A. T HE P ARTIES The plaintiffs in this suit are dozens of entities under common ownership of
nonparty Centene Corporation. There are two major groupings of these subsidiary plaintiffs. The first are the “ Centene Health Plans” consisting of 48 subsidiaries ; the
second ar e the “Health Net Plans” consisting of nine subsidiaries. 2 Both groups of plaintiff subsidiaries are third

- party payors that offer both commercial and
government

- sponsored plans, including pharmaceutical benefits, to members. 3 The remaining two plaintiff entities, also Centene Corporation subsidiaries, are Envolve Pharmacy Solutions, Inc. (“Envolve”) and Health Net Pharmaceutical

2 Compl. ¶¶ 11

- 12, Dec. 23, 2019 (D.I. 1).

3 Id.- 4

-

Services (“HNPS”). 4 Envolve, formerly known as US Script, was the entity that
entered into the disp uted 2003 and 2013 Contract s
. The role of these entities w as to “facilitate transactions between the Health [Net] Plans and pharmacies by processing pharmaceutical claims and reimbursing the pharmacies. . .

. The Health [Net] Plans , in turn, reimburse Envolve and H NPS for the claims that they pay on their behalf.” 5
Rite Aid is a chain of pharmacies comprising of more than 2,600 retail
locations in the United States that fill hundreds of millions of prescriptions annually. 6
Rite Aid is an in

- network pharmacy for the Centene Health Plans and Health Net Plans, meaning that the individuals with health plans from those entities can purchase pharmaceuticals at Rite Aid pharmacies under the plans’ coverage. 7
B. T HE A GREEMENTS AND D EFINITION OF “U SUAL AND C USTOM ARY P RICE ” In 2003, the parties entered into a Participating Pharmacy Agreement (“2003 Contract”). 8 A continuing feature of that and all subsequent contractual instruments governing their rel ationship is that Rite Aid would bill the lesser of two

4 Id . ¶¶ 14

- 15.

5 Id . ¶ 16.

6 Id . ¶ 20.

7 Id . ¶ 19.

8 Id . ¶ 39 (contract was entered into with US Scripts, pre decessor of Envolve).- 5

-

prices

— the price negotiated by the various plans or the U&C P rice. 9 The contracts
als o provided for Rite Aid to report its U&C P rice to Envolve. 10 The 2003 Contract
defines U&C Price as “[t]hose amounts which participating Pharmacy normally charges its private pay patients for comparable Pharmaceutical Services and as may be provided to Patient Beneficiaries of a Third Party Payor.” 11 In 2013, the parties entered into a second Partici pating Party Agreement (“2013 Contract”), altering the definition of U&C P rice to “the lowest price the Pharmacy would charge to a non

- contracted, cash

- paying customer with no
insurance for an identical Pharmaceutical Service on the date and at the locatio n that the product is dispensed, inclusive of all applicable discounts, promotions, or other
offers to attract customers.” 12
C. R X S AVINGS P LAN
In 2006 , Rite Aid began facing strong price pressure fro m “big box” retailers moving in to the retail pharmaceutical space. 13 In response to th os e retailers’

9 Id . ¶¶ 40, 42.

10 Id

.
11 Tr. Aff. Ex. A § 1.7, Feb. 28, 2020 (D.I. 30).

12 Compl. ¶ 41; Tr. Aff. Ex. B. § 1(U) (D.I. 30).

13 Compl. ¶ 29.- 6

-

competitive pricing, Rite Aid created the Rx Saving s Club P rogram in 2008. 14 The RSC is a membership program for which enrollment and continued membership have no requirements, fees, or delay between application an d full availability of
benefits. 15
Follow ing the creation of the RSC, Rite Aid reported only the non

- RSC price of pharmaceuticals as its U&C Price. 16 So w here the RSC price was lower than the Centene Entities’ negotiated price, Rite Aid obtain ed larger payments than if the RSC price had been reported as the U&C Price. 17
D. P AYMENT S CHEME AND D IVERGENCE IN P AYMENTS
All Centene Entities handle payments through non

- party Caremark as a prescription benefit manager. 18 The Health Net Plans and HNPS have used Caremark since 2008, while the other Centene Entities have used Caremark since
2016. 19 A Rite Aid r etail customer makes a copayment at the point

- of

- sale pharmacy
when she purchas es pharmaceuticals. 20 The Centene Enti ties then report the sale,

14 Id . ¶¶ 28

- 29.

15 Id . ¶ 30.

16 Id . ¶ 43.

17 Id . ¶¶ 44

- 46.

18 Id . ¶ 48.

19 Id . ¶ 49.

20 Id . ¶ 51.- 7

-

the customer’s health insurance information , and the U&C Price of the pharmaceutical to Caremark

. 21 Caremark then invoices a paymen t from the health
insurer to Rite A id of the lesser of the reported U&C Price and the insurer

- nego tiated price, excluding the money already paid by the customer at point

- of

- sale. 22
Where the Centene Entities had negotiated a lower price than the RSC price, no change resulted from the divergence between RSC price and reported U&C
Price

. 23 Where the RSC price was lower than the negotiated price, each prescription sale might result in a several

- dollar

- higher invoice than had the RSC price been reported as the U&C Price. 24
Rite Aid reported the non

- RSC price as the U&C Price in a ll disclosu res
accessible to the Centene Entities. 25 The Centene Entities learned of the divergence between the RSC and U&C Prices some time before October 18, 2018 . And that’s when they contacted Rite Aid about this dispute. 26 As of the Centene Entiti es’ filing

21 Id

.
22 Id

.
23 Id . ¶ 57.

24 Id . ¶ 58.

25 Id . ¶¶ 61

- 62.

26 Id . ¶ 68.- 8

-

of the ir c omplaint here , Rite Aid continued to represent the non

- RSC sticker price as the U&C Price for pharmaceuticals. 27

II. THE PARTIES’ CONTENTIONS
A. T HE C ENTENE E NTITIES ’ C LAIMS
The Centene Entities put six counts in its C omplaint. In “Count 1 , ” the
Centene Entities bring a claim for fraud. They allege that Rite Aid intentionally misrepres ented the RSC price as the U&C P rice, inflating millions of claims paid by
the Centene Entities. 28 T his misrepresentation , they say, caused the Centene Entities

to overpay an amount determinable at trial, but not less than 50 million dollars. 29
In “Count 2” and “Count 4” of the Complaint, the Centene Entities allege
breach of the 2003 Contract and the 2013 Contract relating to Envolve. 30 The
Centene Entities aver that Rite Aid’ s alleged submission of inflated prici ng caused Envolve to overpay Rite Aid, breaching both the 2003 and 2013 C ontract s and entitling them to compensatory damages. 31

27 Id . ¶ 69.

28 Id . ¶ 71.

29 Id . ¶ 86 (this number includes punitive damages).

30 Id . ¶¶ 87

- 94, 110

- 17.

31 Id . ¶ 94, 117.- 9

-

In “Count 3” and “Count 5” of the Complaint, the Centene Ent ities set forth
breach

- of

- contract claim s for the 2003 Contract and 2013 Contract relating to the
Centene Health Plans as third

- party beneficiaries. 32 In these counts, t he Centene
Entities complain that Rite Aid ’s alleged submission of inflated pricing caused Envolve to overpay R ite Aid, in turn denying the Centene Health Plans the rights
and benefits entitled to t hem u nder the 2003 and 2013 Contract s
. 33 The Centene
Entities insist that such breaches entitle the Centene Health Plans to compensatory damages in an amount determinable at trial. 34

In “Count 6” of the Complaint, the Centene Entities bring a cl aim for unjust
enrichment as Rite Aid ’s alleged inflation in billing violated its quasi

- contractual relationship

. 35
B. D EFENDANTS ’ M OTION
Rite Aid seek s wholesale dismissal of the Complaint. First, Rite Aid argue s
that the three

- year statute of limitations, under 10 Del. C

. § 8106, bars all counts of
the action. 36

32 Id . ¶¶ 95

- 109, 118

- 32.

33 Id

.
34 Id . ¶¶ 109, 132.

35 Id . ¶¶ 133

- 37.

36 Rite Aid’s Op. Br. at 18, Feb. 28, 2020 (D.I. 29).- 10

-

Second, they argue that Count 1, the Centene Entities’ fraud claim, should be dismissed for failure to adequately plead each necessary element with particularity. 37
Rite Aid assert s that the Centene Entities are required to plead : (1) false representation; (2) Rite Aid’s knowledge or belief that th e representation was false,

or made with reckless indifference to the truth; (3) an intent to induce the aggrieved
party to act or to refrain from acting; (4) that the aggrieved party ’s action or inaction was taken in justifiable reliance upon the representation; and (5) damages caused by
such reliance. 38 Rite Aid says that the Centene Entities have failed to identify which entity it allegedly defrauded, or to describe any knowledge of falsity. 39 Third, Rite Aid argue s that the economic loss doctrin e bars the Centene
Entities’ claim for fraud. It argue s that this tort claim requires pleading conduct that is separate and distinct from the conduct constituting breach

- of

- contract

. 40 Rite Aid

says that because the Centene Entities do not allege any fraud in the formation or inducement of the contractual relationship, this fraud claim cannot survive the application of the economic loss doctrine. 41

37 Id . at 24.

38 Id . (citing Hauspie v. Stonington Partners, Inc. , 945 A.2d 584, 586 (Del. 2008)).

39 Id . at 24

- 25.

40 Id . at 28.

41 Id . at 28

- 29

.- 11

-

Fourth, Rite Aid assert s that the Centene Entities f ail to state a claim for
b reach of contract. 42 Rite Aid a rgue s that the Centene Entities must plead “(1) the existence of a contract; (2) a violation of duty under the contract; and (3) damages resulting from the violation.” 43 Rite Aid claim s that the Centene E ntities fail to plead
how Rite Aid breached its duties under e ither the 2003 Contract or the 2013 Contract , nor do they elaborate any suffered losses. 44 Fifth, Rite Aid insist s that all counts must be dismissed because the prices
offered under the RSC do not satisfy the defini tion of U&C P rice under the 2013
Contract. 45 Rite Aid argue s that because the RS C is a membership program, it isn ’ t
“non

- contracted” under the 2 013 Contract definition of U&C P rice. 46 Due to this,
Rite Aid assert s it had no duty to factor these purchases into the U&C Price calculation when conducting its reporting. 47 Sixth, Rite Aid argue s that both the 2003 Contract and the 2013 Contract expressly bar third

- party beneficiaries from th is action so Counts 3 and 5 should be

42 Id . at 30.

43 Id . (citing Carlson v. Hallinan , 925 A.2d 506, 529 (Del. Ch. 2006)).

44 Id . at 30

- 31.

45 Id . at 32.

46 Id

.
47 Id

.- 12

-

dismissed. 48 According t o Rite Aid, no evidence exists to show that the parties’

agre ements intended to create third

- party beneficiary status for the Centene Health
P lans. 49 Further, Rite Aid s ays that the 2003 Contract fail s to designate any of the
third

- party plaintiffs as beneficiaries and the 2013 Contrac t expressly disclaims any
third

- party beneficiary rights. 50 Seventh, Rite Aid suggests that the unjust enrichment claim must be dismissed because an express contract covers the same subject matter. 51 It argue s that a claim for unjust enrichment is unrecoverable if a contract governs the relationship between the contesting parties that gives rise to the claim. 52 According to Rite Aid , because
the 2003 Contract and the 2013 Contract govern the relationship between the parties to this case, the unjust enrichment claim should be dismissed. 53 Lastly, Rite Aid assert s that the voluntary payment doctrine bars this action. 54
It argue s that the Centene Entities voluntarily paid the claims it now disputes with

48 Id . at 34.

49 Id . at 34

- 35.

50 Id . at 35; Tr. Aff. Ex. B, § 11(D).

51 Rite Aid’s Op. Br. at 36.

52 Id . (citing Vichi v. Koninklijke Philips Elecs. N.V ., 62 A.3d 26, 58 (Del. Ch. 2012)).

53 Id

.
54 Id . at 3 7.- 13

-

full knowledge of its rights and the facts underlying its claims

. 55 A nd so, Rite Aid says, the Centene Entities cannot recover that payment feigning misapprehension of the legal rights and obligations of the payee. 56

III. STANDARD OF REVIEW “Under Superior Court Civil Rule 12(b)(6), the legal issue to be decided is, whether a plaintiff may recover under any reasonably conceivable set of circumstances susceptible of proof under the complaint.” 57 Under that Rule, the
Court will (1) accept all well pleaded factual allegations as true, (2) accept even vague allegations as “well pleaded” if they give the opposing party notice of the claim, (3) draw all reasonable inferences in favor of the non

- moving party, and (4) not dismiss the claims unless the plaintiff would not be ent itled to recover under any reasonably conceivable set of circumstances. 58 “If any reasonable conception can be formulated to allow Plaintiffs’ recovery, the
motion must be denied.” 59

55 Id

.
56 Id

.
57 Vinton v. Grayson , 189 A.3d 695, 700 (Del. Super. Ct. 2018) (quoting Superior Court Civil Rule 12(b)(6)).

58 Id . (quoti ng Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Hldgs. LLC , 27 A.3d 531, 535 (Del. 2011)).

59 Id . (citing Cent. Mortg. Co ., 27 A.3d at 535).- 14

- IV. CHOICE OF LAW Delaware law applies to all counts in this dispute. Delaware’s choice of law analysis has three steps. First, it must be determined whether the parties made an
effective choice of law clause through their contract. 60 Second, if there is no choice of law provision in the parties’ contract, it must be determined whether an actual conflict exists between the laws of the different states each party seeks to apply. 61 Third, if an actual conflict exists, the “most significant relationship test” should be analyzed to determine which state’s law applies

. 62
The parties agree that Counts 2 through 5 are governed by Delaware
substantive law as provided for in the 2013 Contract. 63 But the 2013 Contract is
silent as to the law governing the unjust enrichment claim (Count 6). Because the parties’ agreement does not dictate the governing law as to this claim, the Court must
consider whether a conflict between Delaware and California law exists. Both
states’ law s bar s recovery on an unjust enrichment claim that is within the subject

60 Pfizer v. Arch Ins. Co. , 2019 WL 3306043, at *6 (Del. Super. Ct. Jul. 23, 2019).

61 Id

.
62 Id

.
63 Rite Aid’s Op. Br. at 16; Centene Entities’ Opp’n Br. at 18 , Apr. 15, 2020 (D.I. 39)

. See Tr. Aff. Ex. B § 11(F) (the Contracts “shall be construed, interpreted and enforced in accordance with federal law and the laws of the state of Delaware.”).- 15

-

matter of an express contract. 64 The parties agree that no such conflict exists regarding this rule and say that the Court need not engage in a choice of law analysis
as to Count 6

. 65 Finally, t he Centene Entities insist that the “most significant relationship test”

re quires its fraud claim (Count 1) to be analyzed und er California law. 66 But in their analysis the Centene Entities bypass the second step of Delaware’s choice of law analysis. Before employing the “most significant relationship test , ” the Court must
first determine whether the competing states’ laws are in actual conflict. The question is simple : “does the application of the competing laws yield the same
result?” 67 The answer here is yes. Accordingly, Delaware law is the sole body of law applica ble to resolve all counts in this dispute.

64 Khus haim v. Tullow, Inc ., 2016 WL 3594752, at *8 (Del. Super. Ct. June 27, 2016); Kuroda v. SPJS Holdings, L.L.C ., 971 A.2d 872, 891 (Del. Ch. 2009); CRV Imperial

- Worthington, LP v. Gemini Ins. Co. , 770 F. Supp. 2d 1074, 1078 (S.D. Cal. 2010) (citing Paracor F inance, Inc. v. General Elec. Capital Corp. , 96 F.3d 1151, 1167 (9th Cir. 1996)).

65 Centene Entities’ Suppl. Letter at 3, Oct. 16, 2020 (D.I. 58); Rite Aid’s Suppl. Letter at 3

- 4, Oct. 16, 2020 (D.I. 60).

66 Centene Entities’ Opp’n Br. at 20

- 22

.
67 Laugelle v. Bell Helicopter Textron, Inc. , 2013 WL 5460164, at * 2 (Del. Super. Ct. Oct 1, 2013).- 16

- V. DISCUSSION
A. T HE RSC IS A DISCOUNT THAT MEETS THE U&C P RICE DEFINITION IN B OTH THE 2003 C ONTRACT AND 2013 C ONTRACT . Rite Aid’ s contention is that the RS C prices do not fit within the definition of
U&C Price under either the 2003 Contract or the 2013 Contract , and therefore are
not to be included in th e calculation of U&C Price

. 68 When a term is defined in a contract, and that definition is unambiguous, that definition controls. 69 Here, the
definition of U&C Price is set forth in both the 2003 Contract and the 2013 Contract,
and the plain words there of control.
The 2003 Contract defines U&C Price as “[t] hose amounts which participating Pharmacy normally charges its private pay patients for comparable Pharmaceutical Services and as may be provided to Patient

- Beneficiaries of a Third Party Payor.” 70 Nowhere i n either its op ening or its reply brief do es Rite Aid say

t hi s definition excludes the RSC. ‘Private pay’ unambiguously refers to customers paying for their own pharmaceut icals, without relying on third

- party entities ( i.e. insurers) to pay any part of their pharmaceutical purchase.

68 Rite Aid Op. Br. at 32.

69 Radio Corp. of America v. Philadelphia Storage Battery Co. , 6 A.2d 329, 334 (Del. 1939).

70 Tr. Aff. Ex. A § 1.7.- 17

-

Instead, Rite Aid relies on the 2013 Contract’s definition to ar gue that RSC prices are excluded from the U&C Price definition. 71 In that contract , U&C Price is “the lowest price the Pharmacy would charge to a non

- contracted, cash

- paying
customer with no insurance for an identical Pharmaceutical Service on the date and at the location that the product is dispensed, inclusive of all applicable discounts, promotions, or other offers to attract customers.” 72
Rite Aid says that the RSC is a contract between the pharmacy and the

customer

— not a discount. 73 F ocusing then on the term “non

- contracted ” found in
the 2013 Contract definition , Rite Aid insist s it had no duty to add the RS C pricing
in to its U&C Price calculation. 74 Not surprisingly, t he Centene Ent ities argue that the 2013 Contract definition
of U&C Price favors them as it includes “all applicable discounts, promotions, or
othe r offers to attract customers.” 75 T his phrasing , they say, covers Rite Aid’s RSC prices because the RSC has no fees or membership requirements and is given to all

71 Rit e Aid Op. Br. at 32.

72 Tr. Aff. Ex. B. § 1(U).

73 Rite Aid’s Op. Br. at 32

- 33.

74 Id.

75 Centene Entities’ Opp’n Br. at 36; Tr. Aff. Ex. B. § 1(U); Compl. ¶ 42.- 18

-

customers upon request

. 76 “In legal contemplation a contract is an agreement between two or more persons, upon sufficient consideration, to do or not to do a particular thing.” 77 The Complaint alleges, and at this procedural stage the Court mu st accept as true, that
the RSC has no fees or m embership requirements and is provided to all custo mers immediately upon request. 78 The Centene Entities thus plausibly allege that the RSC
is not founded on any consideration, and is in deed a discount program. 79 Rite Aid
will have the opportunity to prove that the RSC is an actual contract between the pharm acy and customers and not a discount program via discovery or trial. But the
Court can’ t buy that now. And so, at thi s threshold pleading stage, the Court must reject Rite Aid’ s dismissal request on these grounds.
B. T HE FRAUDULENT CONCEA LMENT INQUIRY BARS D ISMISSAL BASED ON TH E THREE YEAR STATUTE O F LIMITATIONS AT THI S PROCEDURAL STAGE . While both parties agree that 10 Del. C. § 8106(a)’s three

- year statute of
limitat ions applies to this action, the Centene Entities seek to avoid this bar by

76 Centene Entities’ Opp’n Br. at 36; Compl. ¶ 30.

77 Speakman v. Price , 80 A. 627, 630 (Del. Super. Ct. 1911).

78 Compl. ¶ 30.

79 Id.- 19

-

alleging fraudulent concealment. 80 The fraudulent concealment inquiry here is
fact

- specific and un resolvable on this motion to dismiss.
Dismissal based on statute of limitations is “appropriate only if it appears with reasonable certainty that, under any set of facts that could be proven to support the claims asserted, the plaintiff would not be entitled to relief.” 81 The Centene Entities
filed its Complaint more than eleven years after Rite Aid unveiled its RSC. 82
Because the RSC is still ongoing, and Rite Aid continue s to exclude RSC discount prices from its calculation of U&C P rice, at least some transactions at issue are timely. Therefore section 8106(a) certainly does not bar recovery entirely. An applicable statute of limitations may be overcome when a defendant has fraudulently concealed information from a plaintiff that was necessary to put him on
notice of the truth

. 83 To invoke the fraudulent concealment protection, the aggrieved party must show two elements: (1) that the defendant acted in a manner to conceal

80 Rite Aid’s Op. Br. at 2 (citing Del. Code Ann. tit. 10 , § 8106(a) (2018) ) ; Centene Entities Opp’n Br. at 49

- 50

.
81 King Const., Inc. v. Plaza Four Realty, LLC , 976 A.2d 145, 151

- 52 (Del. 2009) (quoting Gantler v. Stephens , 965 A.2d 695, 703 (Del. 2009)).

82 Compl. (D.I. 1) (filed December 23, 2019).

83 In re Tyson Foods, Inc. , 919 A.2d 563, 585 (Del. Ch. 2007).- 20

-

the wrongful action from the plaintiff, and (2) the defendant knew about the alleged wrongfulness of their actions. 84
Rite Aid’s reporting of U&C Prices exclusive of RSC discounts on the form s reporting pharmaceutical transactions were affirmative act s that concealed
information from the Centene Entities. The Centene Entities plead that Rite Aid had the requisite knowledge and intent to report inflated U&C Prices. 85
But Rite Aid protests the re was no fraudulent concealment here. B ecause of
its good faith belief that RSC discounts need not be factor ed into the U&C Price , Rite Aid says there is no pro of of their knowledge that they were concealing an alleged wrong. 86 Whether Rite Aid acted on some good faith belief or there exist
evidence that they had no knowledge of the concealment charged can’t be determined on the pleadings (and permissible inclusions) available now. Additionally, Rite Aid suggests that the distribution of circulars advertising the RSC discount prices made the inform a tion generally available to the Centene Entities, putting them on notice of such pricing discrepancies. 87 True, t he tolling of

84 Washington House Condominium Assoc. of Unit Owners v. Daystar Sills, Inc. , 2017 WL 3412079, at *18 (Del. Super. Ct. Aug. 8, 2017).

85 Compl. ¶ 59.

86 Rite Aid’s Op. Br. at 26

- 27.

87 Id . at 10.- 21

-

the statute of limitations due to fraudulent concealment lasts only until “such time that persons of ordinary intelligence and pr udence would have facts sufficient to put them on inquiry which, if pursued, would lead to the discovery of the injury.” 88 And

t he availability of public pricing material again st which the Centene Entit ies could
have cross

- checked Rite Aid’s self

- reported prices may well go to this inquiry. But
d etermining when a person of ordinary intelligence and prudence would have
audited the transaction data Rite Aid reported in the way Rite Aid now claims should
and could have occurred is not a questio n amenable o n a motion to dismiss. 89 In short, a ll of these arguments by Rite Aid require specific facts not yet available and inquiries never engaged under Rule 12(b)(6)

.
C. T HE C ENTENE E NTITIES PLEAD FR AUD WITH A DEQUATE PARTICULARIT Y BUT FAIL TO PLEAD A SEPARATE INJURY FOR FRAUD . Our Civil Rule 9(b) states “ all averments of fraud, negligence or mistake, the circumstances constituting fraud, negligence or mistake shal l be stated with particularity. Malice, intent, knowledge and other condition of mind of a person may be averred generally.” To meet Rule 9(b)’s heightened pleading standard, a party must present the following elements: (1) the time, place, and contents of the

88 In re Nine Systems Corp. Shareholder Litig. , 2013 WL 4013306, at *11 (Del. Ch. Jul. 31, 201 3 ).

89 See Thomas v. Capano Homes Inc. , 2015 WL 1593618, at * 2 (Del. Super. Ct. Apr. 2, 2015) (calling an evaluation of inquiry notice “premature” at the motion to dismiss stage).- 22

-

false representation, (2) the facts misrepresented, (3) the identity of the party making such misrepresentations, and (4) what the party gained by making such misrepresentation. 90 “Put another way, Plaintiff must allege with sufficient particularity the ‘who, what, where, when and how’ of the fraud.” 91
Here, the Centene Entities’ Complaint covers the “who, what, where, when
and how: of the fraud. ” 92 The “who” pleaded is Rite Aid

. 93 The “wha t” is the
inflation of the U&C P rices on the claim submission forms. 94 The “when” alleged is every time, starting in September 2008, Rite Aid reported higher prices than the
RSC prices as the U&C P rice. 95 The “where” includes every location Rite Aid’ s misrepresentations were made and those locations where they were received

. 96 The Centene Entities plead the “how” occurred in two manners. The first, dir ect misrepresentations , in which Rite Aid misrepresented the U&C Price s directly to

90 Nutt v. A.C. & S. Inc. , 466 A.2d 18, 23 (Del. Super. Ct. 1983); Spanish Titles, Ltd. v. Hensey , 2005 WL 3981740, at * 5 (Del. Super. Ct. Mar. 30, 2005).

91 State Dept. of Labor Div. of Unemployment Ins. v. Pasquale , 2015 WL 5461540, at *3 (Del. Super. Ct. Sept. 17, 2015).

92 Id

.
93 Compl. ¶ 18.

94 Id . ¶ 55.

95 Id . ¶¶ 32, 35.

96 Id . ¶¶ 61, 76

- 78; see Centene Entities’ Opp’n Br. at 25.- 23

-

Envolve, and the second, indir ect misrepresentations , in which Rite Aid made its
misr eprese ntations of inflated U&C P rices to Caremark, who then invoiced Envolve for those amounts paid. 97 Further, the Complaint lists specific drugs on specific days, the negotiated price, the putative U&C Price, and the lower RSC price, and the resulting overbilling per prescription. 98 These disclosures satisfy the particularity requirement of Rule 9(b). 99
So w here does the Centene Entities ’ fraud claim fail ? Well, it plead s no separate injury derived from the fraud alleged

. A contract creates reciprocal duties, and where those duties overlap preexisting common

- law tort duties, “it is presumed that the parties to the transaction have allocated the risk of product nonperformance through the bargaining process,” 100 supplanting the common law of torts. In tur n, one seeking recovery in
both fraud and breach

- of

- contract must plead a different injury inflicted by the tort than is accounted for by the duties under the contract . Failure to do so invites

97 Compl. ¶¶ 51

- 54 , 73; see Centene Entities’ Opp’n Br. at 25

- 26.

98 Compl. ¶ 46.

99 See Nutt , 466 A.2d at 23 (“It may not be necessary that all evidence of fraud within the knowledge of the plaintiffs be disclosed sh ort of discovery but it is essential that the precise theory of fraud with supporting specifics appear in the complaint.”).

100 Danforth v. Acorn Structures, Inc. , 608 A.2d 1194, 1200 (Del. 1992).- 24

-

dismissal of the concomitant fraud claim

. 101 A nd a bald plea for punitive damages is insufficient to satisfy the separate injury requirement. 102
The Centene Entit ies all ege nothing more than Rite Aid’s failure of a contractual duty to report the U&C Price, leading to injury through inflating the payments due under the contract. The Centene Entities allege no injury or damage outside of the contract itself. Even construed in the light most favorable to the Centene Entities, the fraud count fails t o allege the required separate injury.
D. E NVOLVE SUFFICIENTL Y STATES A C LAIM FOR BREACH - OF - CONTRACT (C OUNTS 2 & 4) AGAINST R ITE A ID . An action for a breach

- of

- contract requires three elements: (1) a contractual obligation, (2) a violation of duty under the contract by the defendants, and (3) resulting damages to the plaintiff. 103 Rite Aid argue s that the Centene Entities
fail to plead what duties under the contract were breached and what injuries resulted by such breach. 104 Not so. 105

101 Cornell Glasgow, LLC v. La Grange Props

. , LLC , 2012 WL 2106945, at *9 (Del. Super. Ct. Jun. 6, 2012).

102 EZLinks Golf, LLC v. PCMS Datafit, Inc. , 2017 WL 1312209, at *6 (Del. Super. Ct. Mar. 13, 2017).

103 Carlson v. Hallinan , 925 A.2d 506, 5 28

- 29 (Del. Ch. 2006). 104 Rite Aid’s Op. Br. at 30

- 31.

105 See Comp l. ¶¶ 42, 87

- 94, 110

- 17

.- 25

-

In its Complaint, the Centene Entities allege that under both the 2003 Contract
and the 2013 Contract , Rite Aid had an obligation to accurately report and submit
the U&C Prices charged in each claim submitted to Envolve for payment. 106 And the Complaint charges that Rite Aid breached this obligation each time it failed to report the RS C p rice as the U&C Price on a claim submitted to Envolve for
payment. 107 Envolve, holding up its contractual duties, was obligated to and made
payments to Rite Aid, the measure of which was based in part upon the U&C Prices
submitted. 108 The Cente ne Entities say that Rite Aid’s repeated material breaches ( millions of such transactions occurred ) , coupled with Rite Aid’ s intentional failure

to accurately submit the U&C P rice resulted in massive overpayments causing them economic injury. 109
The Centene Entities have identified the obligation, breach of duty , and resulting injur y required to sufficiently plead their breach

- of

- contract claims

.

106 Id . ¶¶ 89, 112. See Tr. Aff. Ex. B. § 4(D) (“Pharmacy must submit all required information for the claim, which includes but is not limited to. . . the Pharmacy’s Usual and Customary charge of the medication dispensed.”); see also id . § 4(F) (reciting the Rite Aid’s certification and representation that the information in §4(D) was accurate).

107 Compl. ¶¶ 90, 113.

108 See Tr. Aff. Ex. B. § 5(A).

109 Compl. ¶¶ 94, 117.- 26

-

E. T HE C ENTENE E NTITIES ’ THIRD - PARTY BENEFICIARY CL AIM (C OUNTS 3 & 5) AND UNJUST ENRICHME NT CLAIM (C O UNT 6) ARE ALTERNATIVE THE ORIES OF RECOVERY FOR THE SAME INJURY . When a claim for unjust enrichment is within the same subject matter of an express contract, recovery is governed by that contract and a claim for unjust
enrichment is unavailable. 110 The Centene Entities argue that Delaware allow s parties to plead unjust enrichment claims alternatively to their breach

- of

- contract
claims. 111 But pleading unjust enrichment in the alternative is generally only allowed “when there is doubt surrounding the enforceability or the existence of the
contract.” 112 Here, the validity of the 2003 and 2013 Contracts are not in question.
So the Centene Entities’ unjust enrichment claim is dismissed with respect to Envolve, the party to the Contracts.
Rite Aid argue s that the existence of the 2003 and 2013 Con tract s as express agreements bar s recovery by anyone under an allegation of unjust enrich ment. 113 But
at the same time , Rite Aid disclaim s any third

- party beneficiary rights under the

contract s
. 114 The true q uestion becomes not whether the facts the Centene Entities

110 See Kuroda , 971 A.2d at 891

.
111 Centene Entities’ Opp’n Br. at 47. See Great Hill Equity Partners IV, LP v. SIG Growth Equity Fund I, LL l P , 2014 WL 6703980, at *28 (Del. Ch. Nov. 26, 2014)

.
112 Khushaim , 2016 WL 3594752, at *8.

113 Rite Aid Op. Br. at 36.

114 Id . at 34.- 27

-

plead state a cause of action, but precisely wh ich of the Centene Entities might bring that unjust enrichment action under the facts here . If recovery is possible under the

contract , the unjust enrichment claim is displaced

. 115 W hile if the contract claim is disallowed then unju st enrichment remains available. 116 “As a general rule, a nonparty to a contract has no legal right to enforce it.” 117 This general rule yields to the enforceable rights of intended beneficiaries, so long
as those beneficiaries are not incidental. 118 The test is satisfied when “conferring of

a beneficial effect on such third party. . . [is] a material part of the contract’s purpose.” 119 The entire purpose of the 2003 and 2013 Contract s was to intermediat e pharmaceutical purchase transactions for the other Centene Entities. Those
transactions

—

the core of Envolve and Rite Aid ’s relationship

— are indeed material.
As for the third

- party be neficiaries involved in this matter, section 11(D) of
the 201 3 Contract expressly states: “[n] othing in this Agreement shall be construed as, or deemed to create, any right or remedy in any third party, and no third party

115 JCM Innovation Corp. v. FL Acqui sition Holdings, Inc. , 20 1 6 WL 5793192, at * 7 (Del. Super. Ct. Sept. 30, 2016).

116 ID Biomedical Corp. v. TM Techs

. , Inc. , 1995 WL 130743, at *15 (Del. Ch. Mar. 16, 1995).

117 Comrie v. Enterasys Networks, Inc. , 2004 WL 293337, at *2 (Del. Ch. Feb. 17, 2004).

118 Id

.
119 Id

. at *3 (quoting Insituform of North America, Inc. v. Chandler , 534 A.2d 257, 270 (Del. Ch. 1987)).- 28

-

shall have any right or cause of a ction under this Agreement, including any Member, except as otherwise specifically provided herein.” Absent this clause, the Centene
Health Plans would sat isfy the requirements for third

- party beneficiary standing for
breach

- of

- contract, disposing any cla im by them for unjust enrichment. But, by the plain language of this clause , the Centene Health Plans cannot claim third

- party beneficiary status under the contracts; they may , however, bring the quasi

- contract
claim of unjust enrichment. 120 Still, Rite Aid says the Court should dissect the Centene Entities ’ unjust enrichment claim into three separate time periods and apply to the statute of
limitations to each excised portion

. 121 Rite Aid argues first that any unjust enrichment claim with respect to claim submissions occurring before December 23,
2016 , is time barred by both Delaware ’s and California’s statutes of limitations. 122
Rite Aid says then that a ny unjust enrichment accusation derived from claim submissions occurring between December 23, 2016 , and December 23, 2017, is time barred by Delaware’s statute of limitations. 123 But t he Centene Entities’ complaint

120 See Dorsey v. State ex rel. Mulrine , 301 A.2d 516, 518 (Del. 1972) (“The implied, or quasi

contract, is one where the law will infer the existence of a contractual relationship without regard to the actual intention of the parties where circumstances are such that justice warrants a recovery as though there had been a promise or contract.”).

121 See Rite Aid’s Suppl. Letter (D.I. 60).

122 Id. at 2.

123 Id. at 3

- 4; Rite Aid Op. Br. at 16

- 17.- 29

-

doesn ’ t separate its unjust enrichment claim into such time periods. 124 And t his Court will not engage in such vivisection of otherwise health y and well

- pled claims

now. At this motion to dismiss stage, it is simply too early to determine the specific
dates to which each of the special claim s relates and whether any potential tolling mechanism might appl y
. Rite Aid’s motion regarding the remaining non

- Envolve Centene Entities ’ unjust enrichment claim is therefore denied.
F. T HE VOLUNTARY PAYMENT D OCTRINE DOE S NOT BA R THE C ENTENE E NTITIES ’ C LAIMS . Rite Aid’s requ est for dismissal based on the voluntary payment d octrine is
denied. “The voluntary payment doctrine provides that ‘ where money has been voluntarily paid with full knowledge of the facts, it cannot be recovered on the ground that the payment was made under a misapprehension of the legal rights and obliga tions of the person paying. ’ ” 125 But no Delaware Court has imposed this doctrine as a bar to recovery on the basis of constructive, instead of actual, knowledge. Rite Aid argue s that the payments at issue were made with full
kn owledge of the facts because the Centene Entities had acc ess to the contents of

124 See Compl. ¶¶ 1

- 69; 133

- 37.

125 Winshall v. Viacom Int’l, Inc. , 2019 WL 960213, at *15 (Del. Super. Ct. Feb. 25, 2019) (quoting Nieves v. All Star Title, Inc. , 2010 WL 29 77966, at *6 (Del. Super. Ct. Jul. 27, 2010)).- 30

-

Rite Aid’s published RSC pricing advertisements. 126 This argument fails to show
that the Centene Entities had actual knowledge of the pricing discrepancies at issue
in this case. And even where this Court might apply the voluntary payment rule, it would
not do so when the payor acted pursuant to “fraud, misrepresentation, or mistake of
fact.” 127 Indeed, ou r Supreme Court has observed that even when there is no
accusation of miscondu ct on the part of the payee, “money paid under a mistake of fact may be recovered in equity under an unjust enrichment theory.” 128

126 Rite Aid’s Op. Br. at 37.

127 King v. First Capital Fin. Servs. Corp. , 828 N.E.2d 1155, 1171 (Ill. 2005); see also Nieves , 2010 WL 2977966, at *6 (adopting “the thorough opinion of the Supreme Court of Ill inois in King v. First Capital Financial Services Corp. ”).

128 Home Ins. Co. v. Honaker , 480 A.2d 652, 653 (Del. 1984).- 31

- VI. CONCLUSION
Rite Aid’ s Motion to Dismiss is hereby GRANTED as to the Centene
Entities’ fraud claim with its attendant prayer for punitive damages (Cou nt 1), and
as to the third

- party beneficiaries’ breach

- of

- contract claims (Counts 3 and 5). But
the Motion to Dismiss is DENIED as to Envolve’s breach

- of

- contract claims (Counts 2 and 4), and the remaining Centene Enti ties’ (excluding Envolve) claim for unjust enrichment (Count 6).
IT IS SO ORDERED.
Paul R. Wallace

_______________________ Paul R. Wallace, Judge