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Connect Your Care, LLC v. Conduent HR Services, LLC

United States District Court, D. Maryland

July 18, 2018

Connect Your Care, LLC
v.
Conduent HR Services, LLC

          MEMORANDUM

          Catherine C. Blake United States District Judge

         The plaintiff, Connect Your Care, LLC (CYC), agreed by contract to provide the defendant, Conduent HR Services, LLC, consumer healthcare services. CYC now sues Conduent claiming that it breached the terms of that agreement. Conduent has counter-sued asserting claims for breach of contract and negligent misrepresentation.[1] Although the parties are working to resolve the parties' dispute over the contract, [2] CYC has moved to dismiss Conduent's tort counter-claims. For the reasons stated below, the court will grant CYC's motion.

         Background

         CYC and Conduent entered a written agreement in 2013 with an initial term that would end, if one or both parties desired, as early as 2016 but would otherwise be automatically extended for two two-year terms. (Def.'s Counter-Claim, ECF No. 7 at ¶ 22). As part of the agreement, CYC agreed to provide Conduent “recordkeeping services, reimbursement distribution services, debit card services, consumer information tools, customer service, and administrative services” to support Conduent's administration of consumer-directed healthcare. (Id. at ¶ 30). CYC also agreed to transfer Conduent's accounts and data off CYC platforms at a commercially reasonable price upon termination of the agreement. (Id. at ¶ 25). Specifically, the parties agreed that:

Upon notice of expiration or termination by either Party to this Agreement, [the parties] shall mutually, expeditiously, and in good faith proceed to agree upon and document a Transition Assistance plan . . . . [Conduent] shall pay CYC for CYC's commercially reasonable costs, [f]ees and expenses for the Transition Assistance services to be performed by CYC and its Third Party Service Providers.

(Id.).

         The agreement also was fully integrated. It provided that “[t]his Agreement . . . constitutes the entire agreement between the Parties . . . [and] [e]ach Party hereby acknowledges that it has not entered into this Agreement in reliance upon any representation made by the other Party not set forth in this Agreement.” (ECF No. 23 at p. 9).

         As the original agreement approached its termination date, CYC sought to negotiate new terms. (ECF No. 7 at ¶ 9). Unable to reach an agreement, however, Conduent decided against renewal, triggering the agreement's transition provisions and setting the contract to lapse in December 2016. (Id. at ¶ 10). Conduent soon discovered that CYC had never transitioned data as complicated as its own, that CYC lacked the necessary “infrastructure, coding, personnel, and other resources” to do so, and that it would cost millions of dollars for CYC to create the tools to fulfill its contractual obligations. (Id. at ¶ 69). Faced with a transition bill between $2.9 million and $3.7 million, Conduent asked CYC instead for a “data dump, ” but CYC told Conduent that even a data dump would “require thousands of hours of coding, increased staff, and increased resources” and cost $3.7 million. (Id. at ¶ 73).

         CYC filed suit against Conduent in September 2017 for breach of contract and declaratory relief. (ECF No. 2). After Conduent answered and filed a counter-claim, (ECF No. 7), CYC filed its motion to dismiss, (ECF No. 23).

         Standard of Review

         To survive a motion to dismiss, the factual allegations of a complaint “must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted). “To satisfy this standard, a plaintiff need not ‘forecast' evidence sufficient to prove the elements of the claim. However, the complaint must allege sufficient facts to establish those elements.” Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citation omitted). “Thus, while a plaintiff does not need to demonstrate in a complaint that the right to relief is ‘probable,' the complaint must advance the plaintiff's claim ‘across the line from conceivable to plausible.'” Id. (quoting Twombly, 550 U.S. at 570). And the plaintiff typically must do so by relying solely on facts asserted within the four corners of his complaint. Zak v. Chelsea Therapeutics Intern., Ltd., 780 F.3d 597, 606-07 (4th Cir. 2015).

         Analysis

         CYC's motion to dismiss raises two disputes: (1) whether Maryland or Delaware law applies to Conduent's tort claim; and (2) whether under applicable law Conduent has sufficiently stated a claim for negligent misrepresentation. Because under both Maryland and Delaware law Conduent has failed to state a plausible ...


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