United States District Court, D. Maryland
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[Copyrighted Material Omitted]
For View Point Medical Systems, LLC, Plaintiff: Paul M D Amore, LEAD ATTORNEY, Wais & Vogelstein, LLC, Baltimore, MD; Stephen L Snyder, LEAD ATTORNEY, Snyder Slutkin and Snyder, Baltimore, MD.
For athenahealth, Inc., Defendant: Alex Jonathan Brown, Edward P Parent, LEAD ATTORNEYS, Silverman Thompson Slutkin and White LLC, Baltimore, MD; Ethan Z Davis, Peter E Ball, PRO HAC VICE, Sally and Fitch LLP, Boston, MA.
Ellen Lipton Hollander, United States District Judge.
View Point Medical Systems, LLC (" View Point" ), plaintiff, brought suit against athenahealth, Inc. (" Athena" ), defendant, alleging six claims: fraud in the inducement (Count I); breach of contract (Count II); two claims of intentional breach of the implied covenant of good faith and fair dealing (Counts III and IV); tortious interference with prospective advantage (Count V); and " Tort Arising From Breach of Contract -- Actual Malice" (Count VI). See First Amended Complaint (ECF 20, " Amended Complaint" or " Am. Compl." ). Plaintiff seeks compensatory damages, punitive damages, attorneys' fees, interest, and costs.
Defendant has filed a motion to dismiss (ECF 21), to which it has attached a legal memorandum (ECF 21-1, " Mem." ) (collectively, the " Motion" or " Mot." ) and several exhibits. Plaintiff opposes defendant's Motion (ECF 25, " Opposition" or " Opp." ), and defendant has replied (ECF 28, " Reply" ). No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons that follow, I will grant the Motion in part and deny it in part.
I. Factual Background
View Point, located in Baltimore City, is in the business of healthcare information technology, software development, and sales. Am. Compl. ¶ 3. It is owned by Jonathan Radding, who has experience working with physicians and other healthcare providers to implement such technology. Id. ¶ 4. Athena is a publicly traded corporation " that specializes in providing cloud-based practice management services to medical practices." Id. ¶ 8.
Athena uses individuals or entities, known as " Lead Identifiers," to help " identify medical practices, including physician offices, hospitals and health systems" that might be interested in purchasing Athena's products and services. Am. Compl. ¶ 9. Lead Identifiers obtain relevant information about a medical practice, such as its size and contact information, and provide the information to Athena, which may assign a member of its sales force to approach the practice. Id. ¶ 11. Athena, which had its own sales force, was " responsible for all sales efforts once leads were generated." Id. ¶ 12. Lead Identifiers are contractors of Athena (not employees) and are paid a commission only if Athena subsequently enters into a contract with a
medical practice that a Lead Identifier has located. Id. ¶ ¶ 10, 13.
In August 2009, Radding discussed with Athena's Laurie Saltonstall the possibility of View Point becoming a Lead Identifier for Athena. Am. Compl. ¶ 14. At all relevant times, Saltonstall worked in Athena's Business Development department. Id.  Plaintiff maintains that Saltonstall " induced View Point to become a Lead Identifier for Athena under the false promise that Athena would pay substantial commissions on leads generated." Id. ¶ 16. View Point, " [r]elying on Ms. Saltonstall's false representations as to Athena's intent to pay commissions on leads generated," entered into an Agreement for Lead Identification (the " Agreement" ) with Athena on August 18, 2009. Id. ¶ 17.
The Agreement contains the terms of View Point's role as a Lead Identifier. Am. Compl. ¶ 17. It provides for a one-year term, with automatic renewal for one year unless the parties expressly decline to renew the contract. Id. ; Agreement ¶ 8. Paragraph 1 provides, in part: " This Agreement contains the entire agreement between [the parties] concerning sales leads identified by [View Point] for Athena. Any changes to this Agreement must be made in writing by mutual agreement of both Parties." An integration clause states: " This Agreement constitutes the entire agreement between the Parties relating to the subject matter hereof, and supersedes all prior agreements and understandings, whether explicit or implicit, which have been entered into before the execution hereof." Agreement ¶ 18.
Notably, View Point " is not required under this Agreement to provide leads to Athena; and, Athena is not required to pursue any leads provided by [View Point]." Agreement ¶ 13. And, the Agreement is " not exclusive" ; " either party can enter similar arrangements with any other parties at their sole discretion." Agreement ¶ 1.
The Agreement sets forth the process by which View Point could communicate possible leads to Athena, and details how those leads could become " Qualified Leads." In particular, ¶ 2 states:
Athena is interested in identifying as potential sales leads, physician practices to which it may sell its [administrative office workflow and billing services] (the " Services" ). While this Agreement is in effect, if Lead Identifier [i.e., View Point] locates a practice that it believes would be interested in the Services, Lead Identifier may (at its sole discretion) send a letter or e-mail to the undersigned representative of Athena with the practice name, general location, size and type of business. If Athena is interested in the assistance of Lead Identifier in identifying and getting contact information regarding that practice, it will notify Lead Identifier in writing or by e-mail at the address below and will request in that letter or message specific information on contact names, information on the practice's interest in receiving information on the Services and other
basic information that it reasonably needs to qualify the practice for its sales effort. When Lead Identifier provides the information requested, the practice will be deemed a " Qualified Lead" of Athena.
See also Am. Compl. ¶ ¶ 17-20. Further, the Agreement provides that, " [i]f Athena signs a contract for provision of Services with a Qualified Lead within one year after the Qualified Lead is first qualified," then View Point is entitled to receive a commission. Agreement ¶ 3; see Am. Compl. ¶ 21. The parties refer to this period, defined in the Agreement as a one-year period, as the " lead-protection time."
Schedule A to the Agreement establishes that any commission owed to View Point is calculated based on " the number of billing providers" of the Qualified Lead. Am. Compl. ¶ 22. More precisely, Schedule A states, in relevant part:
Compensation shall equal (a) the number of Billing Providers (as defined in the contract between Athena and the Qualified Lead*) that are registered by the Qualified Lead on Athena's system for Services at the time that the Qualified Lead first goes live on that system multiplied by (b) $1000.00.
The Agreement lacks any notification process regarding the creation or status of a Qualified Lead. As noted, it provides that once a Lead Identifier supplies certain information in response to a request by Athena, the lead will be " deemed" a Qualified Lead. Agreement ¶ 2. However, the Agreement does not require Athena to notify the relevant Lead Identifier once it believes a Qualified Lead has been created, nor does it indicate how notice is to be provided. Moreover, the Agreement does not specify how a Lead Identifier is to confirm the status of its leads with Athena.
After the Agreement was executed, View Point worked to identify medical practices that might be interested in purchasing Athena's services. Am. Compl. ¶ 24. On February 8, 2010, Radding sent an email to Saltonstall with the subject " New Lead," in which Radding provided general background information on the healthcare provider Health Management Associates (" HMA" ), including its size, location, and type of business. Id. ¶ 26. HMA is large provider, with 70 hospitals located in 15 states and a total medical staff of more than 11,000 physicians. Id. It thus appears that, in the event Athena entered into a contract with HMA and all of HMA's physicians were registered on Athena's system, a qualifying Lead Identifier could be entitled to a total commission in excess of $11,000,000. See Agreement, Schedule A.
Also on February 8, 2010, Radding sent an email to Jennifer Ortyl at HMA in an effort to schedule a meeting between HMA and Athena. Am. Compl. ¶ 27. Attached to defendant's motion is a copy of that email, which indicates that Radding copied Saltonstall on the message. ECF 21-4. Ortyl responded to Radding that same day and told him that Athena's Geoff Payson had already contacted HMA two months earlier and that HMA had not been interested in Athena's services at that time. Am. Compl. ¶ 27. Radding then sent an email to Saltonstall, advising that HMA had indicated it was not interested in Athena's services, and asking if he should follow up within six to twelve months. Id. ¶ 28. Saltonstall responded by email, also on February 8, stating: " 'Please put on your radar for 12 months out.'" Radding replied: " 'Will do. Thanks for getting back to me. I will do my best to get [an] introduction.'" Id. ¶ 29 (quoting email messages).
On May 18, 2010, Saltonstall sent Radding an email in which she asked him to provide a " complete list/spreadsheet of the
various organizations and practices that he had been working with or trying to speak with to get Athena an introduction." Am. Compl. ¶ 30. Radding provided a spreadsheet entitled " Leads" that included HMA, among other organizations. He also included the date of his initial contact, as well as his contacts at HMA and contact information. Id. ¶ 31.
In May 2010, Radding also sought to modify the Agreement, to compensate View Point on a salaried basis and to extend the Agreement's one-year lead-protection time to two years. Id. ¶ 32. In an email message dated May 24, 2010, Saltonstall told Radding that Athena declined to provide a salary but would agree to the lead time extension for practices with more than 50 physicians. Id. ¶ 33. She added that " 'we appreciate your efforts and love the introductions you are making . . . .'" Id. (quoting email message). Further, on May 26, 2010, Saltonstall sent an email to Radding in which she stated: " 'Your leads have been great.'" Id. (same).
On June 2, 2010, Radding sent an email to Saltonstall with the subject " HMA Lead," in which he asked her to call " Jennifer" at HMA. Am. Compl. ¶ 34. Radding identified Jennifer as the executive assistant to HMA's Senior Vice President of Financial Operations, and he provided Saltonstall with her phone number as well as further information concerning HMA, including information about Kelly Curry, HMA's Executive Vice President and Chief Financial Officer. Radding told Saltonstall that he had spoken to Jennifer, who was looking forward to speaking with Saltonstall. Id.
The Amended Complaint indicates that Saltonstall responded to Radding's email concerning " Jennifer" on June 9, 2010, via an email with the subject " Update." She wrote: " 'Work is crazy and prevented my ability until now to provide you with an update.'" Am. Compl. ¶ 35 (quoting email message). In the balance of the email, Saltonstall updated Radding regarding three of his leads, including HMA. Id. The Amended Complaint asserts: " Athena considered HMA to be View Point's qualified lead as of June 9, 2010." Id.
Subsequently, on July 23, 2010, Athena and View Point entered into an Amended and Restated Agreement for Lead Identification (the " Amended Agreement" ). Am. Compl. ¶ 36. As the parties had discussed via email in May 2010, the " primary difference" between the original Agreement and the Amended Agreement (collectively, the " Agreements" ) was that the lead-protection time for practices with more than 50 physicians (such as HMA) was extended from one year to two years. Id. According to plaintiff, the change was intended to account for the fact that, " with larger medical practices, it often took longer than one year for Athena to consummate a contract with such medical practice once the lead was deemed to be a Qualified Lead." Id.
With the exception of a provision added to Schedule A, discussed infra, and the extension of the lead time to two years, the relevant provisions of the Agreements are identical. Like the Agreement, the Amended Agreement contains no terms obligating either party to notify the other upon belief that a Qualified Lead was created. The Amended Agreement's revised lead time provision is found in ¶ 4:
If Athena signs a contract for provision of Services with a Qualified Lead . . . within two years after the Qualified Lead is first qualified and that Qualified Lead has more than 50 physicians authorized
to use the Services, then Athena will pay compensation to Lead Identifier at the rate set forth in the attached Schedule A . . .
Athena allegedly began discussions with HMA in 2010 regarding Athena's services. Am. Compl. ¶ 38. In May 2012, Athena and HMA entered into a contract under which HMA agreed to purchase Athena's services. According to plaintiff, Athena delayed the finalization of the contract with HMA in order to avoid paying a commission to View Point. Id. When Radding learned of the contract between Athena and HMA, he contacted Saltonstall, who wrote in response: " 'I do not recall -- nor can I find in any of our reports -- any referral of HMA to you.'" Am. Compl. ¶ 40. Plaintiff maintains that it is entitled to a commission, despite Athena's refusal to recognize HMA's status as View Point's Qualified Lead. Id. 
Additional facts will be presented in the Discussion.
A. Rule 12(b)(6) Standard of Review
A defendant may test the adequacy of a complaint by way of a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure. See McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010). To survive a Rule 12(b)(6) motion, a complaint must satisfy the pleading standard articulated in Fed.R.Civ.P. 8(a)(2), which requires a " short and plain statement of the claim showing that the pleader is entitled to relief." The purpose of the rule is to provide the defendant with " fair notice" of the claim and the " grounds" for entitlement to relief. Bell A. Corp. v. Twombly, 550 U.S. 544, 555-56, 127 S.Ct. 1955, 167 L.Ed.2d 929 & n.3 (2007). That showing must consist of more than " a formulaic recitation of the elements of a cause of action" or " naked assertion[s] devoid of further factual enhancement." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal citations omitted); see Painter's Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013). Rather, to defeat a motion under Rule 12(b)(6), a complaint must contain facts sufficient to " state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570; see Iqbal, 556 U.S. at 684 (" Our decision in Twombly expounded the pleading standard for 'all civil actions' . . . ." ) (citation omitted); see also Epps v. JP Morgan Chase Bank, N.A., 675 F.3d 315, 320 (4th Cir. 2012); Simmons v. United Mortg. & Loan Inv., LLC, 634 F.3d 754, 768 (4th Cir. 2011). " [W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged--but it has not 'show[n]'--'that the pleader is entitled to relief.'" Iqbal, 556 U.S. at 679 (quoting Fed.R.Civ.P. 8(a)(2)).
" Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679. " A court decides whether this standard is met by
separating the legal conclusions from the factual allegations, assuming the truth of only the factual allegations, and then determining whether those allegations allow the court to reasonably infer" that the plaintiff is entitled to relief. A Society Without A Name v. Virginia, 655 F.3d 342, 346 (4th Cir. 2011), cert. denied, ___ U.S. ___, 132 S.Ct. 1960, 182 L.Ed.2d 772 (2012). Dismissal " is inappropriate unless, accepting as true the well-pled facts in the complaint and viewing them in the light most favorable to the plaintiff, the plaintiff is unable to 'state a claim to relief . . . .'" Brockington v. Boykins, 637 F.3d 503, 505-06 (4th Cir. 2011) (citation omitted). See Hartmann v. Cal. Dept. of Corr. & Rehab., 707 F.3d 1114, 1122 (9th Cir. 2013) (" 'Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.'" ) (citation omitted); Commonwealth Prop. Advocates, LLC v. Mortg. Elec. Reg. Sys., Inc., 680 F.3d 1194, 1201-02 (10th Cir. 2011) (" When reviewing a 12(b)(6) dismissal, 'we must determine whether the complaint sufficiently alleges facts supporting all the elements necessary to establish an entitlement to relief under the legal theory proposed.' Dismissal is appropriate if the law simply affords no relief." ) (citation omitted).
In considering a Rule 12(b)(6) motion, the court '" must accept as true all of the factual allegations contained in the complaint,'" and must '" draw all reasonable inferences [from those facts] in favor of the plaintiff." ' E.I. du Pont de Nemours & Co., supra, 637 F.3d at 440 (citations omitted); see, e.g., Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir.), cert. denied, ___ U.S. ___, 132 S.Ct. 402, 181 L.Ed.2d 257 (2011). But, the court need not accept unsupported or conclusory factual allegations devoid of any reference to actual events. United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979); see also Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009). Nor must it accept legal conclusions couched as factual allegations, Iqbal, 556 U.S. at 678, or legal conclusions drawn from the facts. See Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986); Monroe v. City of Charlottesville, 579 F.3d 380, 385-86 (4th Cir. 2009), cert. denied, 559 U.S. 992, 130 S.Ct. 1740, 176 L.Ed.2d 214 (2010). If the " well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct," the complaint has not shown that '" the pleader is entitled to relief." ' Iqbal, 556 U.S. at 679 (citation omitted).
Generally, the parties' disputes of fact " cannot be decided on a motion to dismiss pursuant to Rule 12(b)(6)," Andrew v. Clark, 561 F.3d 261, 267 (4th Cir. 2009), because the court must construe the well-pled facts " in the light most favorable to the nonmoving party." Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011). Put another way, a motion pursuant to Rule 12(b)(6) typically " does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999) (internal quotation marks omitted). But, " in the relatively rare circumstances where facts sufficient to rule on an affirmative defense are alleged in the complaint," the court may resolve the applicability of a defense by way of a Rule 12(b)(6) motion. Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007). " This principle only applies, however, if all facts necessary to the affirmative defense ' clearly appear [ ] on the face of the complaint,'" or in other documents that are proper subjects of consideration under Rule 12(b)(6). Id. (quoting Richmond, Fredericksburg & Potomac R.R. v. Forst,
4 F.3d 244, 250 (4th Cir. 1993)) (emphasis in Goodman ).
Ordinarily, in resolving a motion under Rule 12(b)(6), a court " is not to consider matters outside the pleadings . . . ." Bosiger v. U.S. Airways, Inc., 510 F.3d 442, 450 (4th Cir. 2007); see Clatterbuck v. City of Charlottesville, 708 F.3d 549, 557 (4th Cir. 2013). If a court considers material outside of the pleadings, " the motion must be treated as one for summary judgment under Rule 56," in which case " [a]ll parties must be given a reasonable opportunity to present all the material that is pertinent to the motion." Fed.R.Civ.P. 12(d). Under certain limited exceptions, however, a court may consider exhibits without converting the motion to one for summary judgment. For instance, a court may properly consider documents " attached to the complaint, as well those attached to the motion to dismiss, so long as they are integral to the complaint and authentic." Philips v. Pitt Cnty. Mem. Hosp., 572 F.3d 176, 180 (4th Cir. 2009) (citations omitted); see Am. Chiropractic Ass'n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004). To be " integral," a document must be one " that by its 'very existence, and not the mere information it contains, gives rise to the legal rights asserted.'" Chesapeake Bay Found., Inc. v. Severstal Sparrows Point, LLC, 794 F.Supp.2d 602, 611 (D. Md. 2011) (citation omitted) (emphasis in original). Further, in resolving a motion to dismiss, a court may consider " documents which are referred to in the Complaint and upon which Plaintiff relies in bringing the action." Biospherics, Inc. v. Forbes, Inc., 989 F.Supp. 748, 749-50 (D. Md. 1997), aff'd, 151 F.3d 180 (4th Cir. 1998); accord Mid-Atlantic Soaring Ass'n, Inc. v. F.A.A., 2006 WL 1892412, at *7 (D. Md. June 29, 2006). Additionally, facts and documents subject to judicial notice may be considered by a court, without converting the motion under Rule 12(d). Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007); Katyle v. Penn Nat'l Gaming, Inc., 637 F.3d 462, 466 (4th Cir.), cert. denied, ___ U.S. ___, 132 S.Ct. 115, 181 L.Ed.2d 39 (2011).
As noted, plaintiff did not attach to the Amended Complaint either the Agreement or the Amended Agreement. Nevertheless, defendant attached both documents to its Motion. See Mot. Exh. A, ECF 21-2 (Agreement) and Mot. Exh. B, ECF 21-3 (Amended Agreement). In its Opposition, plaintiff raises no objections to any exhibit attached to the Motion, including the two Agreements. Because the Agreements are integral to the Amended Complaint and no party disputes their authenticity, I may consider them in ...