        IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

LCPS Acquisition, LLC d/b/a           )
Omnicare of Chandler,                 )
            Plaintiff,                )
                                      )       C.A. No. N19C-07-195 CEB
v.                                    )
                                      )
Allegiant Healthcare West, LLC d/b/a )
Allegiant Healthcare of Mesa;         )
AllegiantHealthcare of Phoenix, LLC )
d/b/aAllegiant Healthcare of Phoenix; )
and Allegiant Healthcare East, LLC )
d/b/a Springdale Village,             )
                                      )
            Defendants.               )

                              Submitted: July 2, 2020
                              Decided: July 24, 2020

               Upon Consideration of Plaintiff’s Motion to Dismiss
                          the Fraud Counterclaims
                                 GRANTED

                                      ORDER

      Before the Court is a motion filed by LCPS Acquisition, LLC d/b/a Omnicare

of Chandler (“Plaintiff”) to dismiss counterclaims filed by Allegiant Healthcare of

Mesa, Allegiant Healthcare of Phoenix and Allegiant Healthcare East, LLC d/b/a

Springdale Village (“Defendants”).1 The Court makes the following findings:



1
  Plaintiff’s Complaint says it is owed $671,859.39 (including interest) for providing
consulting services related to the Allegiant Mesa Pharmacy Agreement; $307,043.56
(including interest) for the Springdale Agreement and Allegiant Phoenix owes
Plaintiff $567,553.88 (including interest).
        1.     Plaintiff provides pharmaceutical goods and consulting services to a

variety of customers. As briefly as can be stated, Plaintiff and Defendants entered

into several contracts for the provision of these goods and services and invoice

Defendants for compensation. Plaintiff filed a breach of contract claim alleging that

it abided by the terms of the contract, but that Defendants did not pay as agreed and

Defendant has defaulted on the contracts.

        2.     Defendants have answered and counterclaimed. The counterclaims

allege common law fraud and breach of contract by Plaintiff. Plaintiff moves to

dismiss the fraud counterclaims, arguing that the fraud allegations fail to meet the

“particularity requirement” of D.R.C.P. Rule 9(b).

        3.     Rule 9(b) makes a specific demand on a complaint, one that is not found

with respect to other “general allegations.” While the rest of the complaint is

sufficient if it is a “a short and plain statement of the claim showing that the pleader

is entitled to relief,”2 “In all averments of fraud, negligence or mistake, the

circumstances constituting fraud, negligence or mistake shall be stated with

particularity.”3

        4.     The counterclaims here come in six counts: three allege breach of

contract on behalf of each of the three named Defendants. The other three counts



2
    D.R.C.P. Rule 8(a)(1).
3
    D.R.C.P. Rule 9(b).
                                           2
allege common law fraud, again on behalf of each of the three Defendants. The three

common law fraud claims are substantially identical, save for the specific amount

allegedly lost by reason of Defendant’s alleged fraud. If one fails under Rule 9(b),

they all do as they are substantially the same in their specificity.

      5.     Reviewing these three pairs of complaints is telling. For example,

Counterclaim II alleges breach of contract in that instead of billing Defendant

according to the contract, Plaintiff “submitted deceitful, wrongful, and fraudulent

bills.”4 Further, it is alleged that Plaintiff’s “failure to adhere to the agreed upon

contract terms caused [Defendant] to be charged $56,254.71 in unjustified costs in

just an 8 month period.”5

      6.     Counterclaim I alleging common law fraud, seeks the same $56,254.71,

alleging that the loss was caused by Plaintiff’s “inaccurate, deceptive and

unconscionable billing practices.”6      Other paragraphs claim that the “payment

amount were fraudulently determined” and that Plaintiff intended to “deceive,

damage and mislead” Defendant, all without further explanation. 7 So the allegation

is that the Plaintiff breached the contract through “deceitful, wrongful, and

fraudulent” conduct and committed fraud through “inaccurate, deceptive and



4
  Counterclaim II ¶14 D.I.
5
  Counterclaim II ¶15 D.I.
6
  Counterclaim I, ¶7, D.I.
7
  Counterclaim I, ¶¶4, 9.
                                           3
unconscionable” conduct. It is difficult to imagine what words in Roget’s Thesaurus

were not hauled out and added to this mix and which category they would fit – fraud

or breach of contract. Obviously, while the terms are certainly colorful, they are

generic and do not describe the fraud with anything like the particularity required by

Rule 9(b).

      7.     Further cementing the Court’s view that the fraud counterclaims fail

under the heightened pleading standard of Rule 9(b) is the recent decision of Judge

Wharton, who just recently dismissed the counterclaims in another case brought by

an Omnicare entity against a customer who responded with allegations of fraud and

breach of contract.8 In granting the motion to dismiss the fraud counterclaim, Judge

Wharton noted there was no allegation of tortious conduct that is separate and apart

from the damages the defendant suffered under its breach of contract claims. The

same is equally true here.

      8.     Defendants’ breach of contract counterclaims set forth all Defendant

needs to be made whole as a result of Plaintiff’s allegedly wrongful conduct. The

fraud counts add nothing to Defendants’ claim or their damages. There is no

particularity in these claims, save for some choice adjectives that do not describe a




8
  Med World Acquisition Corp. d/b/a Omnicare of Plainview v. Friedwald Center
for Rehabilitation and Nursing, LLC, C.A. No. N19C-06-028 FWW (Super. Ct. July
16, 2020)
                                        4
time, place, or content of the allegedly false statements or the specific damages

caused.

      In light of the foregoing, Plaintiff’s Motion to Dismiss the Fraud

Counterclaims is GRANTED.

      IT IS SO ORDERED.




                                                 Judge Charles E. Butler




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