United States District Court, S.D. Alabama, Southern Division
MEMORANDUM OPINION AND ORDER
F. MOORER UNITED STATES DISTRICT JUDGE
before the Court is the Motion to Dismiss Texas General
Hospital and Texas General Hospital-VZRMC's Counterclaims
and Incorporated Memorandum of Law. Doc. 49, filed
January 19, 2019. Pursuant to Fed.R.Civ.P. 12(b)(6),
Plaintiffs move the Court dismiss Defendants'
counterclaims against them because the counterclaims are
either not plausibly pled, not actionable in the present
context, or both. Id. at 2-3. Having considered the
motion and relevant law, the Court finds the motion to
dismiss is due to be GRANTED IN PART and
DENIED IN PART.
Memorandum Opinion and Order, Plaintiff/Counterclaim
Defendant Computer Programs & Systems, Inc., will be
referred to as “CPSI”; Plaintiff/Counterclaim
Defendant Trubridge, L.L.C., will be referred to as
“Trubridge”; and CPSI and Trubridge will be
collectively referred to as “Plaintiffs.” The
Court will refer to Defendant/Counterclaim Plaintiff Texas
General Hospital as “Texas General” and
Defendant/Counterclaim Plaintiff Texas General
Hospital-VZRMC's as “Van Zandt.” The Court
will collectively refer to Texas General and Van Zandt as
JURISDICTION AND VENUE
district court has subject matter jurisdiction over the
claims in this action pursuant to 28 U.S.C. § 1332
district court has personal jurisdiction over the claims in
this action because CPSI and Trubridge both have their
principal place of business in Mobile County, Alabama, which
is within the Court's district. See BNSF Ry. Co. v.
Tyrrell, ___ U.S. ___, 137 S.Ct. 1549, 1558, 198 L.Ed.2d
36 (2017) (internal citations and quotation marks omitted)
(“Goodyear and Daimler clarified that
a court may assert general jurisdiction over foreign
(sister-state or foreign-country) corporations to hear any
and all claims against them when their affiliations with the
State are so continuous and systematic as to render them
essentially at home in the forum State. The paradigm forums
in which a corporate defendant is at home, explained, are the
corporation's place of incorporation and its principal
place of business.”); see also Consol. Dev. Corp.
v. Sherritt, Inc., 216 F.3d 1286, 1291-92 (11th Cir.
2000) (citations omitted) (“Specific jurisdiction
arises out of a party's activities in the forum that are
related to the cause of action alleged in the complaint. . .
. General personal jurisdiction, on the other hand, arises
from a defendant's contacts with the forum that are
unrelated to the cause of action being litigated. The due
process requirements for general personal jurisdiction are
more stringent than for specific personal jurisdiction, and
require a showing of continuous and systematic general
business contacts between the defendant and the forum
is proper in this Court pursuant to 28 U.S.C. §
1391(b)(1) because CPSI and Trubridge have their principal
places of business in this judicial district.
FACTUAL AND PROCEDURAL BACKGROUND
February 7, 2018, Plaintiffs originally filed their complaint
in the Circuit Court of Mobile County. Doc. 1 ¶ 1. In
Plaintiffs' complaint, they bring against Defendants two
(2) Alabama state law claims for breach of contract. Doc. 1-1
March 12, 2018, Defendants filed their notice of removal to
this Court based on diversity of citizenship, which the Court
orderd Defendants to amend to correct their jurisdictional
pleadings. See Docs. 1, 5. Defendants filed
their answer to the complaint on March 19, 2018, and their
amended notice of removal on March 22, 2018. Docs. 7, 15. The
Court denied Defendants' motion to transfer venue to the
Northern District of Texas on August 7, 2018. See
Docs. 16, 38.
November 2, 2018, Defendants filed their Motion for Leave to
Amend Pleadings to add defenses and counterclaims and amend
their answer to the complaint, which the Court granted. Docs.
40, 46. On December 5, 2018, Defendants filed their amended
answer, in which they brought against Plaintiffs Alabama
state law counterclaims of breach of contract, negligence,
wantonness, breach of warranty for services, breach of duty
of good faith and fair dealing, breach of fiduciary duty,
fraud or negligent misrepresentation, fraudulent concealment,
fraudulent inducement, and estoppel. Doc. 47.
filed the instant motion to dismiss counterclaims on December
19, 2018. Doc. 49. Defendants timely responded in opposition,
to which Plaintiffs filed their reply. Docs. 51, 52. The
Court finds oral argument unnecessary for resolution.
Therefore, the motion is fully briefed and ripe for
STANDARD OF REVIEW
to Fed.R.Civ.P. 12(b)(6), a defendant may move to dismiss a
complaint on the basis that the plaintiff has failed to state
a claim upon which relief may be granted. See Fed.
R. Civ. P. 12(b)(6). To survive a motion to dismiss, a
plaintiff must plead “only enough facts to state a
claim to relief that is plausible on its face.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127
S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007); see also
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937,
1949, 173 L.Ed.2d 868 (2009) (“To survive a motion to
dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.' [Twombly, 550 U.S.] at
570, 127 S.Ct. [at] 1955. A claim has facial plausibility
when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged. Id. at 556, 127
S.Ct. [at] 1955.”). Since a Fed.R.Civ.P. 12(b)(6)
motion questions the legal sufficiency of a complaint, in
assessing the merits of the motion, the court must assume
that all the factual allegations set forth in the complaint
are true. See, e.g., United States v. Gaubert, 499
U.S. 315, 327, 111 S.Ct. 1267, 1276, 113 L.Ed.2d 335 (1991);
Powell v. Lennon, 914 F.2d 1459, 1463 (11th Cir.
1990); but see also Iqbal, 556 U.S. at 678, 129
S.Ct. at 1949 (citing Twombly, 550 U.S. at 555, 127
S.Ct. at 1955) (“[T]he tenet that a court must accept
as true all of the allegations contained in a complaint is
inapplicable to legal conclusions. Threadbare recitals of the
elements of a cause of action, supported by mere conclusory
statements, do not suffice.”). Moreover, all factual
allegations shall be construed in the light most favorable to
the plaintiff. See, e.g., Brower v. County of Inyo,
489 U.S. 593, 598, 109 S.Ct. 1378, 1382, 103 L.Ed.2d 628
(1989). Obviously, therefore, a district court may not
resolve factual disputes when adjudicating a motion to
dismiss. Page v. Postmaster Gen. and Chief Exec. Officer
of the U.S. Postal Serv., 493 Fed.Appx. 994, 995 (11th
Cir. 2012) (citing, among other cases, Lawrence v.
Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990), for the
proposition that, under Fed.R.Civ.P. 12(b)(6), the existence
of disputed material facts precludes a district court from
granting a motion to dismiss). “‘When considering
a motion to dismiss . . . the court limits its consideration
to the pleadings and all exhibits attached
thereto.'” Thaeter v. Palm Beach Cty.
Sheriff's Office, 449 F.3d 1342, 1352 (11th Cir.
2006) (quoting Grossman v. Nationsbank, N.A., 225
F.3d 1228, 1231 (11th Cir. 2000) (per curiam)); see also
Reese v. Ellis, Painter, Ratterree & Adams,
LLP, 678 F.3d 1211, 1215-16 (11th Cir. 2012)
(“Because the Ellis law firm's dunning letter and
enclosed documents were attached to the Reeses' complaint
as an exhibit, we treat them as part of the complaint for
[Fed. R. Civ. P.] 12(b)(6) purposes.”).
DISCUSSION AND ANALYSIS
Court will address Plaintiffs' arguments for the
corresponding counterclaim in order.
Counterclaim 1 (Breach of Contract)
Defendants' first counterclaim, they allege Trubridge
breached Section A(1) of Exhibit A to the Master Services
Agreement because Trubridge failed to provide medical coding
of all patient encounters, charge for observation and
emergency department services, jointly establish a policy for
updating a problem list, and provide hospital management with
quarterly quality assurance reporting. Doc. 47 ¶ 84.
Defendants allege CPSI breached the License and Equipment
Agreement because CPSI withheld Defendants' access to
software that Defendants need to operate their business,
despite their payment for the software, and failed to provide
service under certain agreements. Id. ¶ 85.
argue Defendants admit in their allegations they failed to
perform under the agreements at issue, and because they
admitted such, they cannot demonstrate they performed under
the agreements and their breach of contract claim fails. Doc.
49 at 4. In response, Defendants argue they were excused from
their contractual obligations because Plaintiffs failed to
perform their part of the agreements before Defendants'
alleged breach. See Doc. 51 at 7.
Alabama law, “[i]n the ordinary breach of contract
action, the claimant must prove: (1) the existence of a valid
contract binding the parties in the action, (2) his own
performance under the contract, (3) the defendant's
nonperformance, and (4) damages.” S. Med. Health
Sys., Inc. v. Vaughn, 669 So.2d 98, 99 (Ala. 1995).
“‘Where [a party] has agreed under the contract
to do a particular thing, there is a breach and the right of
action is complete upon [the party's] failure to do the
particular thing he agreed to do.'” Cunningham
v. Langston, Frazer, Sweet & Freese, P.A., 727 So.2d
800, 805 (Ala. 1999) (quoting Seybold v. Magnolia Land
Co., 376 So.2d 1083, 1085 (Ala. 1979)). “‘In
order to establish that a defendant is liable for a breach of
a bilateral contract, a plaintiff must establish that he has
performed, or that he is ready, willing, and able to perform
under the contract.'” Beauchamp v. Coastal Boat
Storage, 4 So.3d 443, 450 (Ala. 2008) (quoting
Winkleblack v. Murphy, 811 So.2d 521, 529 (Ala.
Defendants allege Plaintiffs breached the agreements at issue
from at least March 2017 because Plaintiffs failed to
adequately perform their contractual duties, while Defendants
admit they ceased payments under the agreements in fall 2017.
See Doc. 47 ¶¶ 16, 62-63; see also
Id. ¶¶ 64-79 (describing Plaintiffs'
failures to perform contractual duties). Defendants also
allege they “performed, tendered performance, or were
excused from performing their contractual obligations”
because of Plaintiffs' breach. Id. ¶ 81.
Therefore, Defendants have properly alleged a breach of
contract claim because, at the time of Plaintiffs'
alleged breach, Defendants allege they performed under the
motion to dismiss Defendants' first counterclaim is
Counterclaims 2 (Negligence) and 3
Defendants' second and third counterclaims, they allege
Plaintiffs were negligent when they breached their
contractual duty to timely submit claims to payors for
reimbursement of healthcare services that were provided by
Defendants. Doc. 47 ¶¶ 87-90. Defendants further
allege Plaintiffs breached their contractual duty with a
reckless or conscious disregard of Defendants' rights.
Id. ¶¶ 91-93.
argue, under Alabama law, a tort has not been committed when
a party fails to perform a contractual obligation. Doc. 49 at
4-5. In response, Defendants argue Alabama law does provide,
when a party performs a contractual obligation, the
performance of the obligation may be negligent and give rise
to a tort and, in any case, these counterclaims need factual
development for the Court to ...