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General Healthcare Resources, LLC v. Occuvax, LLC

United States District Court, E.D. Pennsylvania

July 29, 2019

OCCUVAX, LLC, Defendant.




         Currently before the Court is Plaintiffs Motion to Dismiss two of Defendant's counterclaims against Plaintiff. Plaintiff argues the gist of the action doctrine and economic loss doctrine bar Count II (negligence) and Count III (negligent supervision) contained in Defendant's Counterclaim from proceeding. For the reasons set forth below, Defendant's counterclaims alleging negligence and negligent supervision/hiring will be dismissed.


         Plaintiff, General Healthcare Resources, LLC ("GHR"), alleges three causes of action against Defendant, OccuVAX, LLC ("OccuVAX"): 1) breach of contract, 2) Quantum Meruit/unjust enrichment, and 3) account stated. These counts stem from the two parties' business and contractual relationship under their "Master Service Agreement" contract. ECF No. 3 at 7-9. OccuVAX, in its Answer, denies all three counts, while bringing forth counterclaims alleging breach of contract, negligence, and negligent hiring/supervision (Counterclaims I, II, and III, respectively) against GHR. ECF No. 16 at 11-17.

         GHR is a healthcare staffing agency that provides clients with professional staffing services. ECF No. 3 at ¶ 3. OccuVAX sets up on-site vaccination clinics for its customers and provides the licensed healthcare professionals required to administer vaccines. Id. at ¶ 4. GHR and OccuVAX entered into a contract (the "Master Service Agreement") for GHR to "identify and provide AGENCY PROFESSIONALS who are qualified" to administer vaccines at flu vaccination clinics set up by OccuVAX. ECF No. 16, Ex. A. "GHR employed, hired, contracted with, supervised, controlled and/or managed the individuals designed to administer flu vaccines pursuant to the Master Service Agreement." ECF No. 16 at 11, ¶ 10. OccuVAX claims it provided GHR with advance notice of all clinics that needed to be staffed in accordance with the terms of the Master Service Agreement. Id. at 11, ¶ 14.

         In its Counterclaim, OccuVAX first alleges that GHR failed to staff scheduled clinics with healthcare professionals in violation of the Master Service Agreement, despite having advanced notice of the scheduled clinics. Id. at 11, ¶ 16. OccuVAX alleges that this breach of contract resulted in the rescheduling and cancellation of clinics and caused OccuVAX to lose customers.[1] Id. at 12, ¶¶ 21-24.

         Second, OccuVAX alleges that GHR was negligent when it failed to exercise reasonable care in the performance of the Master Service Agreement. Id. at 15, ¶ 34. Specifically, OccuVAX alleges that GHR failed to maintain an accurate staffing schedule for OccuVAX's clinics, ignored communication from OccuVAX regarding staffing of clinics, and failed to adequately communicate about its alleged inability to staff clinics. Id. at 15, ¶¶ 36-38. OccuVAX asserts that, as a result of GHR's alleged negligence, it sustained damages totaling $2, 902, 448.00 for lost business, $178, 841.00 for additional costs it incurred in attempts to staff clinics that GHR allegedly failed to staff, and the cost of vaccines and supplies that were not used due to the cancellation of clinics caused by GHR's alleged negligence. Id. at 16, ¶ 43.

         Third, OccuVAX alleges negligent hiring/supervision against GHR because its customers reported that nurses provided by GHR failed to exercise reasonable care in the administration of vaccines during clinics. Id. at 17, ¶¶ 44, 46. Specifically, OccuVAX alleges that the GHR-provided nurses and medical professionals failed to wear gloves, acted unprofessionally, failed to comply with training programs, administered flu vaccines without swabbing the arm with alcohol, administered expired flu shots, and were generally unprepared. Id. at 17, ¶ 47. OccuVAX states it reported this allegedly negligent and unprofessional behavior to GHR but GHR continued to staff OccuVAX's clinics with the same nurses. Id. at 18, ¶ 51. OccuVAX claims the allegedly negligent hiring/supervision by GHR caused it to lose business and incur additional costs associated with cancelled/rescheduled clinics in the same amount as stated for Counterclaim II. Id. at 19, ¶¶ 53-54.


         When reviewing a motion to dismiss, the Court "accept[s] as true all allegations in plaintiffs complaint as well as all reasonable inferences that can be drawn from them, and [the court] construes them in a light most favorable to the non-movant." Tatis v. Allied Interstate, LLC, 882 F.3d 422, 426 (3d Cir. 2018) (quoting Sheridan v. NGK Metals Corp., 609 F.3d 239, 262 n.27 (3d Cir. 2010)). "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.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "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. (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955)). "The plausibility determination is 'a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'" Connelly v. Lane Const. Corp., 809 F.3d 780, 786-87 (3d Cir. 2016) (quoting Iqbal, 556 U.S. at 679).

         Finally, courts reviewing the sufficiency of a complaint must engage in a three-step process. First, the court "must 'take note of the elements [the] plaintiff must plead to state a claim.'" Id. at 787 (alterations in original) (quoting Iqbal, 556 U.S. at 675). "Second, [the court] should identify allegations that, 'because they are no more than conclusions, are not entitled to the assumption of truth.'" Id. (quoting Iqbal, 556 U.S. at 679). Third, '"[w]hen there are well-pleaded factual allegations, [the] court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief" Id. (alterations in original) (quoting Iqbal, 556 U.S. at 679).


         "Under Pennsylvania law, the gist of the action and economic loss doctrines are 'designed to maintain the conceptual distinction between breach of contract claims and torts claims.'" Battle Born Munitions, Inc. v. Dick's Sporting Goods, Inc., No. 18-1418, 2019 WL 1978429, at *5 (W.D. Pa. May 3, 2019) (quoting KBZ Communication Inc. v. CBE Technologies LLC, 634 Fed.Appx. 908, 910-11 (3d Cir. 2015) (further citations omitted)). The gist of the action doctrine generally precludes plaintiffs from re-casting ordinary breach of contract claims as tort claims. KBZ Communications Inc. v. CBE Technologies LLC,634 Fed.Appx. 908, 909 (3d Cir. 2015) (citing eToll, Inc. v. Elias/Savion Adver., Inc.,811 A.2d 10, 14 (Pa. Super. Ct. 2002)). The distinction between tort and contract claims exists due to the different sources of tort and contract duties. Id. at 910. Tort duties arise as a matter of social policy, while contract ...

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