Aspira Health, LLC v. Virtual OfficeWare (DE), LLC

• Court: Superior Court of Delaware
• Decided: November 14, 2022
• Docket: S22C-05-015 RHR
• Status: Published

Opinion

SUPERIOR COURT OF THE STATE OF DELAWARE

Sussex County Courthouse ROBERT H. ROBINSON, JR. 1 The Circle, Suite 2 JUDGE Georgetown, DE 19947 Telephone: (302) 856-5264

Submitted: August 11, 2022 Decided: November 14, 2022

Sean A. Meluney, Esquire Periann Doko, Esquire William M. Alleman, Jr., Esquire Kent & McBride, P.C. Meluney Alleman & Spence, LLC 405 Silverside Road, Suite 202 1143 Savannah Road, Suite 3-A Wilmington, DE 19809 Lewes, DE 19958 Attorney for Defendant Attorneys for Plaintiff

Joshua G. Ferguson, Esquire Freeman Mathis & Gary, LLP 1600 Market Street, Suite 1210 Philadelphia, PA 19103 Attorney pro hac vice for Defendant

Re: Aspira Health, LLC v. Virtual OfficeWare (DE), LLC; d/b/a Virtual OfficeWare Healthcare Solutions C.A. No.: S22C-05-015 RHR

Dear Counsel:

Defendant, Virtual OfficeWare (DE), LLC’s (“VOW”), filed a Motion to

Dismiss for Lack of Venue pursuant to Superior Court Civil Rule 12(b)(3) (the

“Motion”) arguing that a forum selection clause allegedly incorporated into an

agreement between the parties requires that any litigation be conducted in a

Massachusetts court. For the following reasons, VOW’s Motion is DENIED. A. Background

VOW is a Delaware limited liability company based in Pittsburgh,

Pennsylvania that provides medical billing and revenue cycle management services

to its clients.1 Plaintiff, Aspira Health, LLC (“Aspira”), is a Delaware limited

liability company that provides healthcare services to its patients and is

headquartered in Lewes, Delaware.2 Relevant to this litigation is a non-party

software provider located in Watertown, Massachusetts, Athenahealth, Inc.

(“Athena”).3 Athena authorized VOW to utilize its software platform, athenaNet, in

its ordinary course of business to provide services to its clients.4

VOW entered into four contracts, titled “service proposals,” with Aspira

between September 10, 2020 and October 5, 2021.5 The service proposals define the

work that VOW would complete for Aspira and the fee obligations.6 Unfortunately,

the four service proposals are very brief and do not contain many terms and

conditions that one would expect to find in business contracts.

The first service proposal, dated September 10, 2020 (the “First Contract”),

consists of four pages, and is signed by representatives of VOW and Aspira. The

1 Pl. Compl. ¶ 14 (D.I. 1) (hereinafter “Compl.”). 2 Compl. ¶¶ 2, 13. 3 Opp’n to Def.’s Mot. to Dismiss ¶¶ 4-5 (D.I. 15) (hereinafter “Pl.’s Opp’n”); Compl. Ex. 1. 4 Pl.’s Opp’n ¶¶ 4-5; Compl. Ex. 1. 5 Compl. ¶¶ 22-33. 6 Id. 2 title page includes the following statement: “This proposal upon acceptance by

Aspira Health LLC will become effective as a binding agreement and form part of

the Athena Services Agreement.” However, the First Contract does not define what

constitutes the “Athena Services Agreement” and there are no references to any other

documents in the First Contract.

Notwithstanding, several documents are apparently attached to the First

Contract. First, there is an Addendum A titled “Athena Services Agreement—

Managed Entity” that is executed by VOW and Aspira, but not Athena, even though

there is a signature block for Athena.7 Addendum A does not explicitly reference the

First Contract, although there are references to a “Master Agreement” dated March

25, 2020 between VOW and Athena and an “Athena ‘Proposal’ #Q-69930-1.”

Neither of these referenced documents have been provided and it is not clear how

they relate to the First Contract, if at all. Second, there is an Addendum B titled

“Terms and Conditions of Athena Services.” Addendum B defines the parties

(Aspira, VOW, and Athena) and includes fourteen sections of terms and conditions,

and an Exhibit A.8 Section 12 of Addendum B (“Section 12”) contains the forum

selection language that is the basis of VOW’s Motion. 9

7 The document explicitly states the agreement will become binding upon the countersignature by Athena. It is not clear at this point in the proceedings whether Athena signed this document. 8 Compl. Ex. 1. 9 See id. Section 12 reads as follows: Choice of Law; Forum.

3 In early 2022, Aspira suspected that VOW was mismanaging Aspira’s

accounts by failing to collect revenues, improperly coding claims, and erroneously

credentialing or completely failing to credential Aspira’s doctors.10 According to the

Complaint, Aspira’s investigation revealed that VOW had failed to collect hundreds

of thousands of dollars from Aspira patients, unilaterally wrote-off outstanding

accounts receivable claims, and did not provide any coding audits as required under

the First Contract.11

On March 15, 2022, Aspira alerted VOW that it was terminating the parties’

contracts. Significantly, the termination letter from Aspira referenced Section 3 of

the Addendum B.12 Aspira later filed its Complaint with this court on May 9, 2022.13

The Complaint alleges that VOW breached each of the four contracts and was

negligent by failing to properly work and collect on Aspira’s accounts.14

Additionally, Aspira claims VOW made material misrepresentations and omissions

to induce Aspira into entering subsequent service contracts.15 VOW filed this Motion

This Services Agreement and any Dispute, including any conduct related to this Services Agreement following termination hereof will be governed exclusively by the laws of the Commonwealth of Massachusetts, without regard to its conflicts with law principles. The Federal District Court for the District of Massachusetts will be the exclusive venue for any resolution of any Dispute. The Parties hereby submit to and consent irrevocably to the jurisdiction of such courts for these purposes. The Parties hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of any Dispute. 10 Compl. ¶ 4. 11 Compl. ¶ 6. 12 Def.’s Mot. to Dismiss for Lack of Venue Ex. 1. 13 See Compl. 14 Id. ¶ 1. 15 Id. ¶ 62. 4 on July 8, 2022.16

B. The Parties’ Contentions

VOW contends that all the terms and conditions found in Addendum B,

including Section 12, are incorporated by reference into the First Contract and are

enforceable against the parties.17 VOW asserts that Section 12 is a binding forum

selection clause for any disputes between the parties.18 Additionally, VOW claims

that Aspira acknowledged that all of the terms and conditions in Addendum B were

binding on the parties because it referenced Section 3 of Addendum B in its notice

to terminate services on March 15, 2022.19

Aspira contends Section 12 applies only to disputes that arise between Aspira

and Athena.20 Aspira maintains that Addendum B governs Aspira’s use of Athena’s

software platform and that VOW is an agent of Aspira.21 Aspira argues that Athena

is not a party to the instant dispute and, therefore, the forum selection clause does

not apply to the claims in its Complaint.22 Also, Aspira points out that even if the

venue provision is found to be part of the First Contract, the second, third, and fourth

16 See Def.’s Mot. to Dismiss for Lack of Venue (hereinafter “Def.’s MTD”). 17 Id. at 4-5. 18 Def.’s MTD at 2. 19 Id. at 5. 20 Pl.’s Opp’n ¶¶ 1-2. 21 Id. ¶ 4. 22 Id. ¶¶ 1,4. 5 service proposals (the bases of the breach of contract claims in counts II through IV

of the Complaint) between VOW and Aspira are silent as to venue.

C. Standard of Review

Superior Court Civil Rule 12(b)(3) governs a motion to dismiss for improper

venue.23 When ruling on a motion to dismiss, the court is not to resolve issues of

material fact or decide the merits of the case but should rather test the sufficiency of

the complaint.24 In its review, the court is to assume as true all the well-pleaded facts

in the complaint and view those facts and all inferences drawn from them in the light

most favorable to the plaintiff.25 The court should “give effect to the terms of private

agreements to resolve disputes in a designated judicial forum out of respect for the

parties’ contractual designation.”26 The court can “grant a dismissal motion before

commencement of discovery on the basis of affidavits and documentary evidence if

the plaintiff cannot make out a prima facie case in support of its position.”27 In doing

so, the court “is not shackled to the plaintiff’s complaint and is permitted to consider

extrinsic evidence.”28

23 Loveman v. Nusmile, Inc., 2009 WL 847655, at *2 (Del. Super. Ct. Mar. 31, 2009). 24 Id. (citing Belfint, Lyons, and Shuman v. Potts Welding & Boiler Repair, Co., Inc., 2006 WL 2788188, at *2 (Del. Super. Ct. Aug. 28, 2006)). 25 Id. (citing Anglo American Sec. Fund, L.P. v. S.R. Global Intern. Fund, L.P., 829 A.2d 143, 148- 49 (Del. Ch. Aug. 4, 2003)). 26 Id. (quoting Halpern Eye Assoc., P.A. v. E.A. Crowell & Assoc., Inc., 2007 WL 3231617, at *1 (Del. Com. Pl. Sept. 18, 2007) (citation omitted)). 27 Id. (citing Simon v. Navellier Series Fund, 2000 WL 1597890, at *4 (Del. Ch. Oct. 19, 2000)). 28 Id. (quoting Halpern Eye Assoc., 2007 WL 3231617, at *1 (Del. Com. Pl. Sept. 18, 2007) (citation and internal quotations omitted)). 6 D. Discussion

I note at the outset that the service proposals and the various attachments are

confusing and poorly drafted. Considering the amount of money that is covered by

the service proposals, one would think that the parties would have created clearer

and more comprehensive contracts. The four service proposals are not much more

than a sales pitch with only cursory terms. To further complicate matters, the four

service proposals and the attachments to them have different headings, contain

conflicting language, and reference or incorporate documents that either do not exist

or are not attached.

Delaware courts typically “give effect to the terms of private agreements to

resolve disputes in a designated judicial forum out of respect for the parties’

contractual designation.”29 Notwithstanding, this court has also held “absent clear

language, a court will not interpret a forum selection clause to indicate the parties

intended to make jurisdiction exclusive.”30 In other words, where a forum selection

clause is not clear in its attempt to establish an exclusive jurisdiction, the court will

not attempt to surmise terms in the contract by reading them any way other than

29 Loveman, 2009 WL 847655 at *3 (Del. Super. Ct. Mar. 31, 2009) (quoting Prestancia Mgmt. Grp., Inc. v. Virginia Heritage Found., II LLC, 2005 WL 1364616, at *7 (Del. Ch. May 27, 2005)). 30 Eisenbud v. Omintech Corp. Sol., Inc., 1996 WL 162245, at *1 (Del. Ch. Mar. 21, 1996) (citations omitted). 7 through the court’s objective lens.31 The various proposals, contracts, and

addendums in the present matter are more confusing than clear.

VOW asks me to dismiss the Complaint based on language in an addendum

that is not explicitly referenced in the First Contract, or any of the other service

proposals. While it is “axiomatic that a contract may incorporate by reference

provisions contained in some other instrument,” that incorporation will only be

recognized if the parties “expressed an ‘explicit manifestation of intent’ to

incorporate one document into another.”32 Here, I can find no such explicit intent.

Section 12 is contained in Addendum B, which in turn is attached to the first of four

service proposals between Aspira and VOW. None of the four service proposals

mention venue, and there is only a passing reference on the title page of the First

Contract that it is part of a general “Athena Services Agreement,” without any

further explanation or clarification.

Other aspects of the documents add to the uncertainty of what the parties

intended. For example, it does not appear that Athena executed any of the

documents, even though several of the documents contain signature lines for Athena.

It is not clear what the relationship is between Athena and VOW. Addendum B that

31 See id. (illustrating where this court held that the plain language in the forum selection clause did not exclusively restrict the forum to a single jurisdiction for the parties to resolve their disputes). 32 McDonald’s Corp. v. Easterbrook, 2021 WL 351967, at *4 (Del. Ch. Feb. 2, 2021) (citations omitted). 8 contains the venue provision appears to govern the relationship between VOW, who

uses Athena software, and Athena. Athena is located in Massachusetts, so the venue

clause would appear to be for the benefit of Athena, a non-party to this litigation.

Also, the various exhibits to the Complaint reference other documents and

attachments that have not been submitted to this court and may not exist.

Again, the function of the court at this stage is to determine whether Aspira

has established a prima facie case in support of its position. Drawing all reasonable

inferences in favor of Aspira through the well-pleaded facts in its Complaint, I find

it has done so. Aspira asserts—and VOW does not dispute—that the four service

proposals have been fully executed. Aspira pleads facts that VOW—not Athena—

was in breach of those contracts, was negligent in performing its obligations under

the contracts, and misrepresented and fraudulently induced Aspira into assenting to

subsequent service contracts. Aspira claims it was injured by VOW’s alleged breach,

negligence, misrepresentation, and fraudulent concealment. Taking all of this into

consideration, I find that VOW has not met its burden to warrant dismissal of this

action for lack of venue. Therefore, VOW’s Motion to Dismiss is DENIED.

IT IS SO ORDERED.

Sincerely,

/s/ Robert H. Robinson, Jr. Judge

cc: All counsel of record (by File & ServeXpress) 9