RONNIE L. WHITE, UNITED STATES DISTRICT JUDGE.
This matter is before the Court on Primary Care's Motion for Summary Judgment (ECF No. 83) and Defendant Express Scripts, Inc.'s Motion for Partial Summary Judgment (ECF No. 85). These matters are fully briefed and ready for disposition.
Express Scripts is a pharmacy benefit manager ("PBM") that contracts with third-party payors and health plan administrators—such as insurers, HMOs, and employers—to facilitate the delivery of prescription drugs to members of health plans and their beneficiaries. Express Scripts maintains a network of retail pharmacies that agree to fill prescriptions for health plan members in accordance with the provisions set forth in Express Scripts' retail pharmacy contracts. Primary Care Pharmacy, LLC ("Primary Care") was a member of this retail network beginning in December 2014. Primary Care and Express Scripts' relationship was governed by an agreement consisting of a Provider Agreement and a Provider Manual (collectively, the "Contract"). Under the Contract, Primary Care would purchase pharmaceutical supplies and then bill Express Scripts for the supplies Primary Care purchased and provided to members of Express Scripts' client health plans.
On May 11, 2016, Express Scripts requested pedigree information for certain purchases to ensure the products could be traced back to their manufacturers. Express Scripts received no response to this letter. On May 26, 2016, Express Scripts sent a letter explaining the Total Discrepancy Amount, affording Primary Care the opportunity to contest it, and notifying Primary Care that Express Scripts would recoup the discrepancy amount pursuant to its rights under the Contract if Primary Care did not dispute the amount. On June 29, 2016, Primary Care responded through counsel that Express Scripts should have credited the materials received from the allegedly authorized suppliers for the minority portion of the Total Discrepancy Amount and attaching various documents. On July 15 and July 18, 2016, Express Scripts replied to Primary Care's letter, stated that the Total Discrepancy Amount stood, and recouped the amount. Express Scripts exercised its right to terminate the Contract, effective August 12, 2016.
Primary Care brought this action seeking payment from Express Scripts for an amount it alleges is due under the Contract with Express Scripts. Primary Care brought claims for Breach of Contract (Count One), Unjust Enrichment (Count Two), Breach of the Implied Covenant of Good Faith and Fair Dealing (Count Three). (Complaint, ECF No. 1).
Express Scripts filed a Counterclaim, seeking to recover amounts "due to discrepancies identified in a field audit." (ECF No. 21, Counterclaim, ¶2). Express Scripts brought claims for Breach of Contract (Count I) and Unjust Enrichment (Count II). (ECF No. 21, Counterclaim).
The Court may grant a motion for summary judgment if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Citrate, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011). The substantive law determines which facts are critical and which are irrelevant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Only disputes over facts that might affect the outcome will properly preclude summary judgment. Id. Summary judgment is not proper if the evidence is such that a reasonable
A moving party always bears the burden of informing the Court of the basis of its motion. Celotex Corp., 477 U.S. at 323, 106 S.Ct. 2548. Once the moving party discharges this burden, the nonmoving party must set forth specific facts demonstrating that there is a dispute as to a genuine issue of material fact, not the "mere existence of some alleged factual dispute." Fed. R. Civ. P. 56(e); Anderson, 477 U.S. at 248, 106 S.Ct. 2505. The non-moving party may not rest upon mere allegations or denials of his pleading. Id.
In passing on a motion for summary judgment, the Court must view the facts in the light most favorable to the nonmoving party, and all justifiable inferences are to be drawn in his favor. Celotex Corp., 477 U.S. at 331, 106 S.Ct. 2548. The Court's function is not to weigh the evidence but to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249, 106 S.Ct. 2505. "`Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge.'" Torgerson, 643 F.3d at 1042 (quoting Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000)).
To state a claim for breach of contract under Missouri law, Primary Care "must establish the existence of a valid contract, the rights of plaintiff and obligations of defendant under the contract, a breach by defendant, and damages resulting from the breach." Gillis v. Principia Corp., 832 F.3d 865, 871 (8th Cir. 2016) (citing Lucero v. Curators of Univ. of Mo., 400 S.W.3d 1, 5 (Mo. Ct. App. 2013)).
Express Scripts asserts it is entitled to summary judgment on Primary Care's Breach of Contract claim because Primary Care cannot establish its own performance under the Contract or any breach by Express Scripts. Express Scripts argues that Primary Care did not perform the following obligations under the Contract: (1) failed to maintain required records; (2) contacted Express Scripts' clients' members without Express Scripts' consent; (3) failed to operate as a retail pharmacy as required; (4) falsely represented that it purchased from authorized and reputable suppliers; and (5) billed improper claims to Express Scripts in violation of the Contract.
Express Scripts further claims that Primary Care cannot establish any breach of the Contract by Express Scripts. Express Scripts maintains it had the contractual right to initiate and conduct the Purchase Verification, as well as the right to exercise its "sole discretion" to recoup the Total Discrepancy Amount. For the majority—$328,035.66—of the Total Discrepancy Amount, neither Primary Care nor its suppliers provided any supporting documentation. Because Primary Care failed to provide any documentation to substantiate that amount, Express Scripts asserts it was entitled to exercise its discretion to reverse and recoup that amount. For the remainder of the Total Discrepancy Amount attributable to claims for products purchased from unauthorized suppliers—$192,07.17—Express Scripts also claims it acted under its rights under the Contract. Thus, Express Scripts claims that it properly exercised its "sole discretion" to recoup amounts paid to it and Primary Care cannot show any breach by Express Scripts in exercising its rights.
Likewise, the Contract nor the case law support Primary Care's position that Express Scripts is barred from raising certain arguments about Primary Care's contractual non-performance. Primary Care
Regarding several breaches, Primary Care further argues that Express Scripts "still cannot meet its burden on a motion for summary judgment based upon these breaches because they raise a genuine dispute of material fact" in that "the determination as to whether a breach is material is a question of fact." (ECF No. 99 at 12). Express Scripts, however, is not required to show the materiality of Primary Care's breaches. Rather, it is Primary Care's burden to show that it performed. Pepsi Midamerica v. Harris, 232 S.W.3d 648, 654 (Mo. Ct. App. 2007) (citing Brockman v. Soltysiak, 49 S.W.3d 740, 745 (Mo. Ct. App. 2001) ("in order to recover on a claim of breach of contract, a party... must show their own substantial compliance with the terms of the contract"). The Court holds that Primary Care has not shown it performed its obligations under the Contract and Express Scripts has shown it performed in accordance with the Contract. Therefore, Primary Care failed to meet its burden for its breach of contract claim and the Court denies Primary Care's Motion for Summary Judgment and grants Express Scripts' Motion for Summary Judgment on this basis.
In Missouri, to plead a cause of action for unjust enrichment, a plaintiff must allege: "(1) a benefit conferred by a plaintiff on a defendant; (2) the defendant's appreciation of the fact of the benefit; and (3) the acceptance and retention of the benefit by the defendant under the circumstances in which retention without payment would be inequitable." Doug Volz v. Provider Plus, Inc., Jeff Serafin, No. 4:15CV0256 TCM, 2015 WL 3621113, at *3 (E.D. Mo. June 9, 2015) (citing Rental Co., LLC v. Carter Group, Inc., 399 S.W.3d 63, 67 (Mo. Ct App. 2013)).
Unjust enrichment is "an equitable remedy based on the concept of a quasi-contract," Reyner v. Crawford, 334 S.W.3d 168, 174 (Mo. Ct. App. 2011), and a plaintiff may not "recover under both an express contract and unjust enrichment," Chem Gro of Houghton, Inc. v. Lewis Cnty. Rural Elec. Coop. Ass'n, No. 2:11CV93 JCH, 2012 WL 1025001, at *3 (E.D. Mo. Mar. 26, 2012) (unpublished) (citing Banner Iron Works, Inc. v. Amax Zinc Co., 621 F.2d 883, 889 (8th Cir.1980)); Dubinsky v. Mermart, LLC, 2009 WL 1011503 *5 (E.D. Mo. Apr. 15, 2009) (plaintiffs could not bring alternative unjust enrichment claim when that claim explicitly requested relief based on breach of contract); see also Affordable Communities of Mo. v. Fed. Nat'l Mortg. Ass'n, 714 F.3d 1069, 1077 (8th Cir. 2013) (finding district court had not erred in dismissing unjust enrichment claim after first finding that resolution of case depended on interpretation of express contract); 32nd Street Surgery Ctr., LLC v. Right Choice Managed Care, 820 F.3d 950, 955-56 (8th Cir. 2016). Rather, if a "plaintiff has entered into an
The Court holds that the resolution of this case depends on the district court's interpretation of the Contract and, therefore, equitable relief is unavailable. Affordable Communities of Missouri v. Fed. Nat. Mortg. Ass'n, 714 F.3d 1069, 1077 (8th Cir. 2013). Because this case is governed by the Contract Primary Care had with Express Scripts, the Court holds that Primary Care's unjust enrichment claim fails as a matter of law. 32nd St. Surgery Ctr., LLC v. Right Choice Managed Care, 820 F.3d 950, 955-56 (8th Cir. 2016) (citing Lowe v. Hill, 430 S.W.3d 346, 349 (Mo.Ct.App.2014) ("Missouri law does not allow a plaintiff to maintain an action for either of these quasi-contract remedies when an express contract governs the subject matter for which recovery is sought."); Burrus v. HBE Corp., 211 S.W.3d 613, 619 (Mo. Ct. App. 2006) (since plaintiff's relationship with defendant was governed by an enforceable contract, his sole avenue of recovery must also lie on that contract).
In addition, Primary Care only cites to paragraphs 4, 5, and 9 of its statement of uncontroverted material facts to supports its claim that it conferred a benefit onto Express Scripts. See ECF No. 86 at 10-11; ECF No. 88, ¶¶4, 5, 9.
"`Missouri law implies a covenant of good faith and fair dealing in every contract.'" O'Shaughnessy v. Cypress Media, L.L.C., 208 F.Supp.3d 1064, 1072 (W.D. Mo. 2016) (quoting Koger v. Hartford Life Ins. Co., 28 S.W.3d 405, 412 (Mo. Ct. App. 2000)). "A party breaches the covenant of good faith and fair dealing if it exercises a judgment conferred by the express terms of the agreement in a manner that evades the spirit of the agreement and denies [the other party] the expected benefit of the agreement." Glenn v. HealthLink HMO, Inc., 360 S.W.3d 866, 877 (Mo. Ct. App. 2012); CitiMortgage, Inc. v. Chicago Bancorp, Inc., 808 F.3d 747,
Primary Care argues that "Express Scripts was not permitted to recoup in the manner in which it did in this case under the terms of the Parties' contract...." (ECF No. 99 at 14-15). However, Primary Care fails to support this claim with any admissible evidence or argument supported by law.
As previously discussed, Express Scripts demonstrates that the express terms of the Contract govern and permit the actions taken by Express Scripts. See SUMF, ¶11 (Primary Care agreed to provide Express Scripts with "any and all information and documents requested relating to a Covered Service," including "[w]holesaler and supplier invoices, proof of invoice payment, and pedigrees."). Because Express Scripts' actions were permitted under the Contract, the Court grants Express Scripts' motion for summary judgment on Primary Care's claim for breach of the implied covenant of good faith and fair dealing as a matter of law. Therefore, the Court grants Express Scripts' motion for summary judgment on Primary Care's claim for breach of the implied covenant of good faith and fair dealing and denies Primary Care's request for summary judgment on this claim.
Express Scripts argues it is entitled to $135,601.32 on its breach of contract claim against Primary Care. (ECF No. 87 at 23-24). The $135,601.32 consists of the Remaining Audit Discrepancy ($6,454.10) and the Unrecovered Reversals Amount ($140,378.17), offset by the amount Express Scripts recovered through escheatment ($11,230.95). Express Scripts claims Primary Care breached the Contract by submitting invalid claims to Express Scripts, which Express Scripts paid, and by not refunding the amounts paid by Express Scripts after Primary Care reversed the invalid claims.
Regarding the Remaining Audit Discrepancy, Express Scripts asserts it conducted its routine audit and identified the Audit Discrepancy of $12,225.39. Express Scripts states it considered Primary Care's appeal and upheld the Audit Discrepancy under its purported Contract rights. Express Scripts then recovered a portion of the Audit Discrepancy but has not recovered the remaining portion. Express Scripts argues that Primary Care is in breach of the Contract by failing to repay this Remaining Audit Discrepancy in the amount of $6,454.10. Likewise, as for the Unrecovered Reversals Amount, Primary Care admits it submitted reversals for hundreds of claims to Express Scripts, totaling $140,378.17. Express Scripts argues Primary Care breached its obligations under the Contract by failing to repay Express Scripts for the Unrecovered Reversals Amount. Thus, adding together the Remaining Audit Discrepancy ($6,454.10) plus the Remaining Audit Discrepancy (140,378.17), minus the $11,230.95 for escheatment, Express Scripts is owed a total of $135,601.32 from Primary Care.
Primary Care maintains it has provided "irrefutable proof that it returned $94,016.53 to Express Scripts" in the form of pharmacy reversals. (ECF No. 99 at 15 (citing Primary Care's SUMF, ¶¶35-37)). Express Scripts states that Primary Care
Accordingly,
See ECF No. 86 at 10-11; ECF No. 88, ¶¶4, 5, 9 (citations omitted).