Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Oncology Specialties, P.C. v. McKesson Specialty Care Distribution Corp.

United States District Court, N.D. Alabama, Northeastern Division

May 24, 2017

ONCOLOGY SPECIALTIES, P.C., Plaintiff/Counterclaim Defendant
v.
MCKESSON SPECIALTY CARE DISTRIBUTION CORPORATION, Defendant/Counterclaim Plaintiff

          MEMORANDUM OPINION

          HARWELL G. DAVIS, III UNITED STATES MAGISTRATE JUDGE.

         This matter is before the undersigned U.S. Magistrate Judge based upon the consent of the parties pursuant to 28 U.S.C. § 636(c) and Fed.R.Civ.P. 73. Plaintiff, Oncology Specialties, P.C., d/b/a Clearview Cancer Institute (CCI) filed suit against defendant, McKesson Specialty Care Distribution Corporation (MSCD) in Madison County Circuit Court. Subsequently, the matter was removed to U.S. District Court for the Northern District of Alabama.

         In its complaint, CCI alleges that, for a significant period of time prior to April 2014, MSCD supplied CCI with oral and injectable pharmaceuticals without a written agreement. Subsequently, MSCD desired to memorialize its supply relationship with CCI in a written agreement. CCI alleges that MSCD agreed to an effective date of April 1, 2014, for this agreement. Further, it alleges that the agreement provided for an initial term of one year, beginning on this asserted effective date, and would automatically renew unless either party provided written notice of non-renewal at least 90 days prior to the end of the term.

         CCI further alleges that, on or about December 31, 2014, it drafted and sent a request for proposal for an oncology drug distribution partnership (RFP) to distributors of oncology medications. According to plaintiff, the RFP was notice to MSCD that it did not intend to renew its existing agreement with MSCD.

         According to CCI, on March 31, 2015, it became entitled to a rebate in excess of $400, 000 from MSCD, pursuant to their contract. After learning that it failed to win CCI's business under the RFP, MSCD sent a letter to CCI in May 2015 taking the position that the effective date of the agreement was July 3, 2014. It further denied that it received notice of non-renewal and that, as a result, the agreement had automatically renewed for an additional year to end in July 2016. MSCD refused to pay the $400, 000 rebate due to CCI under the written contract, alleging that none is owed due to CCI's having first breached the contract.

         In addition, MSCD sent a letter to Cardinal Health (Cardinal), the distributor with which CCI entered into a partnership following what CCI asserted to be the expiration of its agreement with MSCD. In the letter, MSCD advised Cardinal that it had an agreement with CCI that ran until July 2016 and demanded that it cease and desist all activities with CCI. CCI alleges that MSCD fraudulently represented to Cardinal that MCSD's agreement with CCI had an effective date of July 3, 2014 and had renewed through July 2016.

         In Count I of the complaint, CCI requests a declaratory judgment declaring that the effective date of the parties' agreement is April 1, 2014, and finding that CCI provided adequate written notice of its non-renewal of the agreement.

         Count II alleges fraud by MSCD in that it is alleged to have represented that its agreement with CCI would have an effective date of April 1, 2014, and that CCI would be entitled to a rebate calculated as a percentage of CCI's net purchases from MSCD under the agreement. CCI further alleges that MSCD fraudulently represented to CCI and Cardinal Health that the agreement had an effective date of July 3, 2014, and that CCI failed to timely provide written notice of non-renewal, resulting in a renewal effective until July 2016. It also alleged that MSCD fraudulently represented that it would pay CCI a rebate equal to a percentage of its net purchases of its products, calculated by CCI to be $400, 000.

         In Count III, CCI alleges fraudulent inducement by MSCD, asserting that it was fraudulently induced to enter into a contract with MSCD based on the latter's representation that the effective date of the contract would be April 1, 2014.

         Count IV alleges breach of contract based on MSCD's failure to pay the $400, 000 rebate supposedly due at the end of the one-year term ending March 31, 2015.

         Subsequent to plaintiff's complaint, MSCD filed a counterclaim asserting a breach of contract by CCI for its failure to provide written notice of its non-renewal of the contract.

         Pertinent to the issues currently before the Court, CCI filed a motion for summary judgment with regard to the counterclaim filed by MSCD. (Doc. 47). CCI alleges that the alleged contract that forms the basis of MSCD's counterclaim is unenforceable due to the parties' failure to reach a meeting of the minds on an essential term of the contract. Alternately, CCI alleges that it is due to be granted summary judgment because it provided timely notice of non-renewal and, therefore, did not breach the contract. In addition, CCI alleges that, in the event an enforceable contract exists, MSCD materially breached it prior to any alleged breach by CCI by failing to timely pay the rebate due under the contract.

         Likewise, MSCD filed a motion for summary judgment with regard to CCI's claims and in its favor with regard to its counterclaim against CCI. (Doc. 49). MSCD claims that the evidence shows that there was a valid contract effective in July 2014, rather than April 2014, and that CCI breached the contract when it failed to give proper notice of termination 90 days prior to the end of the term.

         Discussion

         Evidence reflects that in or around January 2014, Bennett Holtzman, the National Vice President of Sales and Account Management for MSCD, approached Gary Walton, the CEO of CCI, and began to try to negotiate a written contract between CCI and MSCD. (Holtzman Depo. at 25, 32-33). Holtzman met with Walton and Dr. John Waples of CCI on numerous occasions to discuss a possible agreement. (Id. at 33).

         On April 21, 2014, Holtzman sent Walton an email which stated as follows:

Gary,
As promised, here's the loyalty agreement that rewards you for staying with McKesson for 1 additional year.
It's 40bp.[1]
We are projecting you at approximately $85M ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.