Value Health Sols. Inc. v. Pharm. Rsch. Assocs., 2025 NCBC 34.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION COUNTY OF WAKE 18-CVS-12318
VALUE HEALTH SOLUTIONS INC. and NEIL RAJA,
Plaintiffs,
v. ORDER AND OPINION ON PLAINTIFFS’ MOTION TO STRIKE AND DEFENDANTS’ MOTION FOR PHARMACEUTICAL PARTIAL SUMMARY JUDGMENT RESEARCH ASSOCIATES, INC. and PRA HEALTH SCIENCES, INC.,
Defendants.
THIS MATTER is before the Court on Plaintiffs Value Health Solutions Inc.
(“VHS”) and Neil Raja’s (collectively, “Plaintiffs”) Motion to Strike Defendants’
Statute of Limitations Defense Under Rule 12(f) and/or Rule 12(c) (“Motion to Strike,”
ECF No. 214), and Defendants Pharmaceutical Research Associates, Inc. and PRA
Health Sciences, Inc.’s (collectively, “PRA” or “Defendants”) Motion for Summary
Judgment and Partial Summary Judgment Pursuant to Rule 56(b) (“Motion for
Summary Judgment,” ECF No. 218, and together with the Motion to Strike, the
“Motions”).
THE COURT, having considered the Motions, the briefs and submissions of
the parties, the arguments of counsel, and all appropriate matters of record,
CONCLUDES that the Motion to Strike should be DENIED and the Motion for Summary Judgment should be GRANTED in part and DENIED in part, for the
reasons set forth below.
Guidry Law Firm PLLC, by David Glen Guidry, for Plaintiffs.
Parker Poe Adams & Bernstein LLP, by John Moye and Jack K. Belk, for Defendants.
Davis, Judge.
FACTUAL AND PROCEDURAL BACKGROUND
1. As the Court has summarized on several prior occasions, this lawsuit
involves a dispute between the parties in connection with PRA’s acquisition of VHS
(the “Acquisition”) and its proprietary software (“PSO”). 1 The Plaintiffs in this action
are VHS and its founder, Raja. Value Health Sols., Inc. v. Pharm. Rsch. Assocs., 2024
NCBC LEXIS 140, at *2 (N.C. Super. Ct. Nov. 6, 2024).
2. Plaintiffs filed their original Complaint on 5 October 2018. (ECF No.
5.) Since that time, this case has followed a lengthy and procedurally complicated
path, which is more thoroughly summarized in prior opinions of this Court and the
North Carolina Supreme Court. See Value Health Sols., Inc. v. Pharm. Rsch. Assocs.,
385 N.C. 250 (2023); Value Health Sols., 2024 NCBC LEXIS 140, at *2–3; Value
Health Sols., Inc. v. Pharm. Rsch. Assocs., 2021 NCBC LEXIS 37, at *2–4 (N.C. Super.
Ct. Apr. 5, 2021); Value Health Sols., Inc. v. Pharm. Rsch. Assocs., 2020 NCBC LEXIS
65, at *1–14 (N.C. Super. Ct. May 22, 2020).
1 Over the course of this litigation, both this Court and our Supreme Court have at various
points referred to this proprietary software as the “Solutions.” In this Opinion, however, the Court will instead refer to it as “PSO” as the parties do in their briefs. 3. On 22 May 2020 and 6 April 2021, the Court entered Orders
dismissing certain claims asserted by Plaintiffs and ultimately granting summary
judgment as to all of Plaintiffs’ remaining claims. See Value Health Sols., 2020
NCBC LEXIS 65, at *37–39; Value Health Sols., 2021 NCBC LEXIS 37, at *83–84.
4. On 23 October 2021, Plaintiffs appealed this Court’s rulings to the North
Carolina Supreme Court. (ECF No. 153.)
5. On 21 September 2023, the Supreme Court affirmed all but one of this
Court’s rulings. Specifically, the Supreme Court reversed this Court’s entry of
summary judgment against Plaintiffs on the issue of PRA’s alleged breaches of
Sections 2.6(a)(iv)–(vii) and 2.6(b) of the parties’ Asset Purchase Agreement (“APA,”
ECF No. 201.1) (the “Remanded Claim”) and remanded that claim for further
proceedings. See Value Health Sols., 385 N.C. at 282–83.
6. Section 2.6(a) of the APA provides for a series of seven “Milestones,”
each of which corresponds to PRA’s completion of either (i) a particular phase of its
efforts to fully integrate PSO into its existing internal systems (the “Internal
Development Milestones”) in the aftermath of the Acquisition; or (ii) “External Sales”
of PSO to third parties at various defined dollar amounts (the “External Sales
Milestones”). Upon the completion of each Milestone, PRA was required to pay VHS
a specified amount in accordance with the terms of that Milestone. (APA § 2.6(a).)
7. Section 2.6(a) of the APA reads as follows:
(a) Milestones. As additional consideration for the transactions contemplated hereby, and subject to the terms of this Section 2.6, [PRA] shall make (or [PRA Health Sciences] shall make on [PRA’s] behalf) the following payments (each, a “Contingent Payment”): i. upon completion of the integration of the parties’ Salesforce™ environments set forth on Schedule 2.6(a)(i), [PRA] shall issue to [VHS] (or as otherwise directed by [VHS’s] Representative), within thirty (30) days after such completion, that number of shares of PRA Common Stock equal in value to Three Hundred Thirty-Three Thousand U.S. Dollars ($333,000.00), based on the Fair Market Value as of the date of issuance of such shares; provided, however, that completion occurs within the first consecutive eighteen (18) months from the Effective Time (the “Integration Period”);
ii. upon completion of the key product enhancements set forth on Schedule 2.6(a)(ii), [PRA] shall issue to [VHS] (or as otherwise directed by [VHS’s] Representative), within thirty (30) days after such completion, that number of shares of PRA Common Stock equal in value to Three Hundred Thirty-Three Thousand U.S. Dollars ($333,000.00), based on the Fair Market Value as of the date of issuance of such shares; provided, however, that completion occurs within the Integration Period;
iii. upon completion of the migration of the clinical trial management systems studies of [PRA] and its Affiliates into ClinTrial Max as set forth on Schedule 2.6(a)(iii), [PRA] shall issue to [VHS] (or as otherwise directed by [VHS’s] Representative), within thirty (30) days after such completion, that number of shares of PRA Common Stock equal in value to Three Hundred Thirty-Three Thousand U.S. Dollars ($333,000.00), based on the Fair Market Value as of the date of issuance of such shares; provided, however, that completion occurs within the Integration Period;
iv. upon the achievement of aggregate External Sales equal to Twenty[-]Five Million U.S. Dollars ($25,000,000), [PRA] shall make, within thirty (30) days following the date on which [PRA] files its next quarterly report with the United States Securities and Exchange Commission (the “SEC”) after such achievement, a cash payment of Two Million Five Hundred Thousand U.S. Dollars ($2,500,000.00) to [VHS] (or as otherwise directed by [VHS’s] Representative) (the “First Milestone Payment”); provided, however, that such achievement occurs prior to the second (2nd) anniversary of the Closing Date (the “First Milestone Period”); v. upon the achievement of aggregate External Sales equal to Fifty Million U.S. Dollars ($50,000,000.00), [PRA] shall make, within thirty (30) days following the date on which [PRA] files its next quarterly report with the SEC after achievement, a cash payment of Five Million U.S. Dollars ($5,000,000.00) to [VHS] (or as otherwise directed by [VHS’s] Representative) (the “Second Milestone Payment”); provided, however, that such achievement occurs prior to the third (3rd) anniversary of the Closing Date (the “Second Milestone Period”);
vi. upon the achievement of aggregate External Sales equal to Seventy[-]Five Million U.S. Dollars ($75,000,000.00), [PRA] shall make, within thirty (30) days following the date on which [PRA] files its next quarterly report with the SEC after achievement, a cash payment of Seven Million Five Hundred Thousand U.S. Dollars ($7,500,000.00) to [VHS] (or as otherwise directed by [VHS’s] Representative) (the “Third Milestone Payment”); provided, however, that such achievement occurs prior to the fourth (4th) anniversary of the Closing Date (the “Third Milestone Period”); and
vii. for four (4) consecutive calendar years following the achievement of aggregate External Sales equal to Seventy- Five Million U.S. Dollars ($75,000,000.00) (the “Major Milestone”, and the date on which the Major Milestone is achieved, the “Major Milestone Date”), [PRA] shall make, within thirty (30) days following the date on which [PRA] files its next quarterly report with the SEC after each of the four (4) anniversaries of the Major Milestone Date, a per annum royalty payment to [VHS] (or as otherwise directed by [VHS’s] Representative) equal to one percent (1%) of the aggregate amount of External Sales made during the applicable calendar year (such payments, the “Royalty Payments”). For the avoidance of doubt, any such Royalty Payments shall be made regardless of whether the First Milestone Payment, the Second Milestone Payment and/or the Third Milestone Payment have previously been made[.]
(APA §§ 2.6(a)(i)–(vii).) 8. Section 2.6(b) of the APA provides that each of the seven Milestones in
Section 2.6(a) are independent and may not be conditioned upon one another. This
provision reads as follows:
[PRA’s] obligation to pay the Contingent Payments to [VHS] (or as otherwise directed by [VHS’s] Representative) in accordance with Section 2.6(a) is an independent obligation of [PRA] and is not otherwise conditioned or contingent upon the satisfaction of any conditions precedent to any preceding or subsequent Contingent Payment and the obligation to pay a Contingent Payment to [VHS] (or as otherwise directed by [VHS’s] Representative) shall not obligate [PRA] to pay any preceding or subsequent Contingent Payment. For the avoidance of doubt and by way of example, if the conditions precedent to the payment of the First Milestone Payment for the First Milestone Period are not satisfied, but the conditions precedent to the payment of the Second Milestone Payment for the Second Milestone Period are satisfied, then [PRA] would be obligated to pay such Second Milestone Payment for the Second Milestone Period for which the corresponding conditions precedent have been satisfied, and not the First Milestone Payment for the First Milestone Period.
(APA § 2.6(b).)
9. On 26 October 2023, this Court entered a Supplemental Case
Management Order, (“Suppl. CMO,” ECF No. 166), which set forth parameters for
additional discovery on certain issues identified by the Supreme Court with respect
to the Remanded Claim. The Supplemental CMO also required the parties to seek
leave of Court prior to filing any new motions for summary judgment. (Suppl. CMO
¶ (IV)(B)(4).)
10. After nearly a year of supplemental discovery, Defendants filed a
motion seeking such authorization on 14 October 2024, (“Motion for Leave,” ECF No.
199), in which they sought the Court’s permission to file a motion for summary judgment on three discrete issues. 2 The Court subsequently entered an Order
granting the Motion for Leave on 27 January 2025. (ECF No. 211.)
11. On 24 February 2025, Plaintiffs filed the Motion to Strike, which
requests that the Court enter an order striking Defendants’ affirmative defense based
on the statute of limitations, which—as discussed in more detail below—serves as
one of the bases for Defendants’ Motion for Summary Judgment.
12. Defendants filed the Motion for Summary Judgment on 10 March 2025.
13. First, Defendants seek partial summary judgment on the issue of
whether the statute of limitations bars Plaintiffs from asserting that PRA breached
Section 2.6(b) of the APA by improperly conditioning completion of “External Sales”
of PSO upon satisfaction of one or more of the APA’s Internal Development
Milestones.
14. Second, Defendants argue that they are entitled to summary judgment
on the issue of whether an agreement signed between PRA and a third-party, Takeda
Pharmaceuticals (“Takeda”)—the Takeda Master Services Agreement (“Takeda
MSA,” ECF No. 221.6)—constituted an “External Sale” under the APA.
15. Third, Defendants seek summary judgment on the issue of whether
PRA’s internal use of PSO to perform clinical trial services for its customers
constitutes an “External Sale” under the APA.
2 One of these issues was based on Defendants’ contention that a portion of Plaintiffs’ claim
for breach of Section 2.6(b) was barred by the statute of limitations. 16. Both Motions have now been fully briefed and came on for a hearing on
24 June 2025 at which all parties were represented by counsel. The Motions are now
ripe for resolution.
LEGAL STANDARD
17. It is well established that “[s]ummary judgment is proper ‘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 any party is entitled to a judgment as a matter of law.’” Morrell v. Hardin
Creek, Inc., 371 N.C. 672, 680 (2018) (quoting N.C. R. Civ. P. 56(c)). “[A] genuine
issue is one which can be maintained by substantial evidence.” Kessing v. Nat’l
Mortg. Corp., 278 N.C. 523, 534 (1971). “Substantial evidence is such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion and
means more than a scintilla or a permissible inference.” Daughtridge v. Tanager
Land, LLC, 373 N.C. 182, 187 (2019) (cleaned up).
18. On a motion for summary judgment, “[t]he evidence must be considered
‘in a light most favorable to the non-moving party.’” McCutchen v. McCutchen, 360
N.C. 280, 286 (2006) (quoting Howerton v. Arai Helmet, Ltd., 358 N.C. 440, 470
(2004)). “[T]he party moving for summary judgment ultimately has the burden of
establishing the lack of any triable issue of fact.” Pembee Mfg. Corp. v. Cape Fear
Constr. Co., 313 N.C. 488, 491 (1985).
19. The party moving for summary judgment may satisfy its burden by
proving that “an essential element of the opposing party’s claim does not exist, cannot be proven at trial, or would be barred by an affirmative defense, . . . or by showing
through discovery that the opposing party cannot produce evidence to support an
essential element of [the] claim[.]” Dobson v. Harris, 352 N.C. 77, 83 (2000). “If the
moving party satisfies its burden of proof, then the burden shifts to the non-moving
party to ‘set forth specific facts showing that there is a genuine issue for trial.’” Lowe
v. Bradford, 305 N.C. 366, 369–70 (1982) (quoting N.C. R. Civ. P. 56(e)). If the
nonmoving party does not satisfy its burden, then “summary judgment, if
appropriate, shall be entered against [the nonmovant].” United Cmty. Bank (Ga.) v.
Wolfe, 369 N.C. 555, 558 (2017) (quoting N.C. R. Civ. P. 56(e)).
20. Rule 12(f) provides that a court “may order stricken from any pleading
any insufficient defense[.]” N.C. R. Civ. P. 12(f). The purpose of the Rule is to “avoid
expenditure of time and resources before trial by removing spurious issues, whether
introduced by original or amended complaint.” Estrada v. Jaques, 70 N.C. App. 627,
642 (1984). Ultimately, a motion to strike “is addressed to the sound discretion of the
trial court[.]” Broughton v. McClatchy Newspapers, Inc., 161 N.C. App. 20, 25 (2003).
ANALYSIS
I. Statute of Limitations
21. Defendants contend that Plaintiffs’ claim for breach of Section 2.6(b) of
the APA is barred, in part, by the applicable statute of limitations.
22. As an initial matter, Plaintiffs argue that Defendants’ invocation of the
statute of limitations as an affirmative defense should be stricken on the ground that
the defense was not pled with the requisite specificity. See N.C. R. Civ. P. 8(c) (pleadings of affirmative defenses must contain “a short and plain statement of any
matter constituting an avoidance or affirmative defense sufficiently particular to give
the court and the parties notice of the transactions, occurrences, or series of
transactions or occurrences, intended to be proved”).
23. A Rule 12(f) motion to strike tests “the legal sufficiency of an affirmative
defense,” and “the requirements for pleading a defense are no more stringent than
the requirements for pleading a claim for relief.” Lineage Logistics, LLC v. Primus
Builders, Inc., 2024 NCBC LEXIS 31, at **9 (N.C. Super. Ct. Feb. 23, 2024) (cleaned
up).
24. Defendants first asserted the statute of limitations defense in their
Answer filed on 2 December 2019 by stating: “Some or all of Plaintiffs’ claims are
barred by the statute of limitations, including Plaintiffs’ fraud-based claims.” (ECF
No. 76, at 15.)
25. Plaintiffs argue that this statement—by itself—did not provide them
with sufficient notice of Defendants’ intent to raise the statute of limitations because
it is “a single, conclusory sentence, devoid of facts.” (Pls.’ Br. Supp. Mot. Strike, at 4,
ECF No. 215.)
26. Although the better practice would have been for Defendants to provide
more detail in their affirmative defense as to how specifically the statute of
limitations affected Plaintiffs’ claims, we note that our Court of Appeals has held
(albeit in an unpublished opinion) that a similarly succinct articulation of a statute
of limitations defense satisfied North Carolina’s notice pleading standard. See Babb v. Graham, 2005 N.C. App. LEXIS 1219, at *22 (2005) (unpublished). In Babb, the
Court of Appeals determined that the bare assertions that “‘the application of the
Statute of Limitations . . . would serve as a bar to any of’ the claims against
[defendant]” and that “any other claims against [defendant] were ‘barred by the
applicable’ statutes of limitations” sufficed to “put the parties on notice that the
timing of the potential claims was an issue.” Id.
27. Moreover, under the circumstances presented in this case, the Court is
unable to find that Plaintiffs will be unfairly prejudiced if Defendants are allowed to
pursue this defense. After all, Plaintiffs have been on notice of this defense for over
five years. 3 During those years, Plaintiffs never put Defendants on notice of their
contention that the defense had been insufficiently pled so as to give Defendants an
opportunity to seek leave of court to amend their pleading to provide more specificity.
28. For these reasons, Plaintiffs’ Motion to Strike is DENIED, and the
Court now turns to the merits of Defendants’ summary judgment argument on this
issue. 4
29. The relevant limitations period for a breach of contract claim is three
years. Sparrow Sys. v. Priv. Diagnostic Clinic, PLLC, 2014 NCBC LEXIS 70, at *31
(N.C. Super. Ct. Dec. 24, 2014) (“In general, an action for breach of contract must be
3 Additionally, the issue was fully briefed before the Supreme Court, although the Supreme
Court ultimately opted not to rule on that issue.
4 For these same reasons, Plaintiffs’ request for judgment on the pleadings on this issue
pursuant to Rule 12(c) is also DENIED. brought within three years from the time of the accrual of the cause of action.”
(cleaned up)); see also N.C.G.S. § 1-52(1).
30. “[The] statute of limitations does not begin to run until the plaintiff has
actual or constructive notice of the defendants’ wrongful acts.” Trail Creek Invs. LLC
v. Warren Oil Holding Co., 2023 NCBC LEXIS 70, at **25 (N.C. Super. Ct. May 9,
2023).
31. Defendants contend that Raja first learned of Defendants’ efforts to
improperly condition the External Sales Milestones (instead of immediately seeking
to pursue External Sales of PSO following the Acquisition) through a conversation he
had with PRA’s Chief Executive Officer, Colin Shannon, back in June 2015.
32. Raja testified that, during this conversation, Shannon told him: “Neil,
let’s just focus on getting [PSO] internally done, you know, smoke tested, and then
we will go sell it, just focus on that.” (2019 VHS Dep., at 79, ECF No. 201.11.)
33. According to Raja, this comment “made [it] clear” that Shannon
“want[ed] . . . to focus internally” and “to stop external sales [of PSO] until [PRA went]
live with [PSO].” (Raja Dep., at 294, ECF No. 221.1.)
34. In explaining his comments, Shannon testified that he was aware of
“substantial gaps” in PSO’s initial capabilities and believed that PRA needed PSO to
be fully integrated into PRA’s own systems “first so that [PRA] could then take it to
market.” (Shannon Dep., at 93, ECF No. 221.3.)5
5 When asked whether he thought “it was reasonable for [Raja] to believe [that] he could start
selling VHS’s software solutions from the moment he joined PRA[,]” Shannon testified that “[i]t would have been very foolhardy for him to ever think that. [PRA] could have been sued. 35. Raja testified that he was “shocked” at the news of this “bombshell” from
Shannon, which he interpreted to mean that “[external] sales milestones [could not]
be pursued until [the] internal milestones [were] done[.]” (2019 VHS Dep., at 79,
175.) Nevertheless, Raja continued to believe that External Sales of PSO were
achievable and that PSO was an “essential” component to PRA’s upcoming
transaction with Takeda. (See Pls.’ Resp. Defs.’ Mot. Summ. J., Ex. U, ECF No.
125.22; Shannon Dep., at 110–13, ECF No. 229.2; Raja Dep., at 345–48, ECF No.
229.4; Jones-Herzog Dep., at 188–96, ECF No. 229.5.) Likewise, Raja testified that
he felt PRA was cooperating with him during this time period by actively making
efforts to amend the APA’s milestones. (Raja Dep., at 334–40, 345–48, ECF No.
229.4.)
36. The Court is of the view that to the extent Shannon’s June 2015
comments to Raja were sufficient to give rise to a claim for breach of PRA’s obligations
under Section 2.6(b) at that time, the claim would be based on a theory of anticipatory
repudiation.
37. The parties disagree over whether North Carolina law or Delaware law
should govern the Court’s analysis on the statute of limitations issue. Plaintiffs
assert that because Delaware’s substantive laws apply to the breach of contract
claim, 6 the laws of that state should also govern the issue of determining when
[PRA’s] reputational damage would have been enormous if [it] installed something that [did] not meet the needs [of its customers].” (Shannon Dep., at 109.)
6 Section 8.7 of the APA provides that the agreement “shall be governed by and construed
and enforced in accordance with the internal laws of the State of Delaware without giving effect to the principles of conflicts of law thereof.” (APA § 8.7.) Plaintiffs’ cause of action accrued for purposes of the statute of limitations.
Defendants, conversely, assert that because the statute of limitations is properly
characterized as procedural rather than substantive, North Carolina law should
apply to that issue.
38. However, the Court need not address the choice-of-law issue because the
laws of North Carolina and Delaware are essentially identical concerning
anticipatory repudiation.
39. North Carolina courts define anticipatory repudiation as follows:
Repudiation is a positive statement by one party to the other party indicating that he will not or cannot substantially perform his contractual duties. When a party repudiates his obligations under the contract before the time for performance under the terms of the contract, the issue of anticipatory breach or breach by anticipatory repudiation arises. One effect of the anticipatory breach is to discharge the non- repudiating party from his remaining duties to render performance under the contract.
Profile Invs. No. 25, LLC v. Ammons E. Corp., 207 N.C. App. 232, 236 (2010) (cleaned
40. Our Court of Appeals has provided further illustration regarding the
applicability of this doctrine.
[E]ven a distinct, unequivocal, and absolute refusal to perform is not a breach unless it is treated as such by the adverse party. Upon repudiation, the non-repudiating party may at once treat it as a breach of the entire contract and bring his action accordingly. Thus, breach by repudiation depends not only upon the statements and actions of the allegedly repudiating party but also upon the response of the non- repudiating party.
Id. at 237 (cleaned up). 41. Similarly, the Delaware Court of Chancery has stated the following
regarding the anticipatory repudiation of a contract:
A repudiation of a contract is an outright refusal by a party to perform a contract or its conditions. Repudiation may be accomplished through words or conduct. A party may repudiate an obligation through statements when its language, reasonably interpreted, indicates that it will not or cannot perform; alternatively, a party may repudiate through a voluntary and affirmative act rendering performance apparently or actually impossible. In any event, repudiation must be positive and unconditional. An attempt to renegotiate terms will not constitute repudiation absent an unqualified refusal to perform unless the non- repudiating party accedes.
A party confronted with repudiation may respond by (i) electing to treat the contract as terminated by breach, (ii) by lobbying the repudiating party to perform, or (iii) by ignoring the repudiation. Although perhaps counterintuitive, whether repudiation amounts to a present breach is predicated on the promisee’s response. Unless the non-repudiating party relies upon the repudiation or notifies the promisor that it considers the repudiation final, the promisor may retract his repudiation, thereby returning the parties to the status quo ante. Once the promisee relies on the repudiation--e.g., by filing suit for damages or by engaging in a substitute transaction--or notifies the promisor it regards the [repudiation] as final, effective retraction is no longer possible.
West Willow-Bay Ct., LLC v. Robino-Bay Ct. Plaza, LLC, 2009 Del. Ch. LEXIS 23, at
*14–15 (Del. Ch. Feb. 23, 2009) (cleaned up).
42. But even assuming that Shannon’s statements to Raja constituted the
type of “unequivocal” and “absolute” refusal to perform sufficient to invoke the
anticipatory repudiation doctrine, it is clear that Plaintiffs elected not to treat
Shannon’s statements as an anticipatory repudiation of the APA and instead
continued to both perform under—and seek amendments to—the agreement.
43. Thus, regardless of whether North Carolina or Delaware law applies,
Plaintiffs’ failure to treat Shannon’s statements as an unconditional breach precludes a finding of anticipatory repudiation. See Profile Invs. No. 25, LLC, 207 N.C. App. at
237 (“[E]ven a distinct, unequivocal, and absolute refusal to perform is not a breach
unless it is treated as such by the adverse party.” (cleaned up)); West Willow-Bay Ct.,
LLC, 2009 Del. Ch. LEXIS 23, at *15 (“[W]hether repudiation amounts to a present
breach is predicated on the promisee’s response.”).
44. Therefore, the Court is unable to conclude as a matter of law that
Plaintiffs’ claim accrued in June 2015 as a result of Shannon’s comments.
45. Instead, the Court finds that significant questions of fact remain as to
the date upon which Plaintiffs’ claim for breach of Section 2.6(b) accrued for statute
of limitations purposes. See Chisum v. Campagna, 376 N.C. 680, 699–702 (2021)
(affirming trial court’s submission to jury of question as to when statute of limitations
began to run).
46. Accordingly, PRA’s Motion for Summary Judgment based on the statute
of limitations is DENIED. 7
II. Takeda MSA as an External Sale Under the APA
47. In connection with Plaintiffs’ appeal to the Supreme Court in this case,
the parties debated whether the MSA between PRA and Takeda constituted an
“External Sale” under the APA (such that PRA was required to credit the transaction
towards the APA’s External Sales Milestones).
48. The APA defines an “External Sale” as follows:
7 In light of the Court’s ruling, it need not address Plaintiffs’ alternative arguments regarding
the applicability of equitable tolling or the prevention doctrine to defeat summary judgment based upon Defendants’ statute of limitations defense. “External Sale” means the sale of one or more licenses to [PSO] by [PRA] or one of its Affiliates to a third party which is not (i) an Affiliate of [PRA] or (ii) using such license(s) in connection with providing services to [PRA] and/or any of its Affiliates.
(APA, Ex. A.)
49. Section 7.02(b) of the Takeda MSA states as follows:
(b) License to PRA[] Owned Technology During the Term. As of the Commencement Date and for the remainder of the Term, PRA[] hereby grants Takeda, Takeda Affiliates and their respective Personnel and third party service providers the right to access and use PRA[] Owned Technology used in supporting or providing the Services for purposes of receipt and use of the Services in the conduct of Takeda’s and Takeda Affiliates’ business. For the avoidance of doubt, the foregoing right is granted under all PRA[] Owned IP and includes the right to use all the configuration capabilities offered by the PRA[] Owned Technology.[8]
(Takeda MSA § 7.02(b).)
8 The Takeda MSA defines “PRA[] Owned Technology” as follows:
“PRA[] Owned Technology” means (i) all confidential or proprietary processes, procedures, methodologies, standard operating procedures, software, templates, programs and other protectable materials that are used generally by PRA[] in PRA[]’s business, but excluding any that are specifically created for or resulting from a Study or relate to a Study Drug or any other Takeda Product or that otherwise constitute or are based on Takeda Owned IP, regardless of whether such materials or any portion thereof are used in connection with PRA[]’s performance under this Agreement or the applicable Site Agreement, and (ii) derivative works, modifications and enhancements to any of the foregoing, but excluding any that are specifically created for or resulting from a Study or a Study Drug or any other Takeda Product or that otherwise constitute or are based on Takeda Owned IP, regardless of whether such materials or any portion thereof are used in connection with PRA[]’s performance under this Agreement or the applicable Site Agreement; and (iii) any form of delivery for (i) or (ii) received as part of the Services, such as via Cloud Computing.
(Takeda MSA, Ex. 1, at 8.) 50. PRA is listed as the licensor of PSO in Exhibit 18 to the Takeda MSA.
(Takeda MSA, Ex. 18.)
51. In its opinion, the Supreme Court stated the following with respect to
how to apply the APA’s definition of “External Sale” to the Takeda MSA:
The Takeda MSA closely mirrors the APA definition of “External Sale.” As part of a bundle including the use of the software and providing services to Takeda, and in exchange for a price of approximately $491 million over a term of years, PRA transferred a license to Takeda; Takeda is neither an affiliate of PRA nor providing a service to PRA.
Defendants appear to be arguing that they have excluded the transaction with Takeda from the APA definition of “External Sale” by simply bundling the transfer of the license as part of a service package and by not including an invoice line item of the license. This interpretation is unreasonable and produces an absurd result. Manti Holdings, LLC, 261 A.3d at 1208.
Moreover, defendants could have contracted around the issue of a line- item requirement if such a carve out was truly an intended part of the bargain. In the APA, defendants excluded from the realm of “External Sale” “(i) an Affiliate of [PRA] or (ii) using such licenses in connection with providing services to [PRA] and/or any of its Affiliates.” (Emphasis added.) The parties could have included a third carve out: “(iii) license bundled within a software as a service agreement in connection with PRA providing services to a third-party.” See Winshall v. Viacom Int’l, Inc., 76 A.3d 808, 816 (Del. 2013) (quoting Aspen Advisors LLC v. United Artists Theatre Co., 861 A.2d 1251, 1260 (Del. 2004). Defendants did not do so. Furthermore, defendants’ own expert witness, Bryan Haas, testified that “software as a service is not always a license. Sometimes it’s just that you have access to use [it].” It seems that a license did not necessarily have to be issued to provide this service to Takeda. Nevertheless, PRA issued a license to Takeda and called it a license in the MSA.
To be sure, this Court is not suggesting that if PRA were to simply refuse to use the term “license” for a transfer of software that it would be excluded from the definition of “External Sale.” Instead, what this Court is saying is that, here, in this circumstance, the Takeda MSA specifically included, for a price, the transfer of a license to use the “PRA[ ] Owned Technology.” What is unknown is whether the Takeda MSA was drafted such that Takeda was required to pay consideration to acquire and use a license of the [PSO]. Therefore, defendants’ failure to pay for the transfer of the license to Takeda under the MSA, as required by the APA, may be a breach of contract.
We hold that the Takeda contract could be an “External Sale.” This Court remands this issue to the trial court to determine whether the Takeda MSA was drafted such that Takeda was required to pay consideration to acquire and use a license of the [PSO] . . . . On remand the trial court may find there is a need for additional discovery to determine if there are other external contracts that include transfer of licenses to the [PSO], either in effect, or that were specifically termed as such and which required consideration in exchange for the [PSO].
Value Health Sols., Inc., 385 N.C. at 273–74.
52. Pursuant to the Supreme Court’s directive, this Court, on remand,
allowed the parties to take supplemental discovery on the following topic:
Whether the Takeda MSA was drafted such that Takeda was required to pay consideration to acquire and use a license of [PSO], thereby rendering the Takeda contract an “External Sale,” along with any potentially recoverable damages arising therefrom. Relatedly, whether PRA has executed any other customer contracts that include the transfer of licenses to [PSO], either in effect, or that were specifically termed as such, and which required the payment of consideration in exchange for [PSO], whether such payment was specifically termed a payment wholly or partially in exchange for [PSO] or effectively served as such a payment albeit not so specifically termed, along with any potentially recoverable damages arising therefrom.
(Suppl. CMO § (IV)(A)(5)(b).)
53. The supplemental discovery conducted by the parties included, without
limitation, the deposition of a Takeda representative, Elizabeth Lyskanowski, and
the production of various “Statements of Work” (“SOWs”) detailing specific tasks that
PRA performed for Takeda pursuant to the Takeda MSA. 9
9Although the Takeda MSA was the only Takeda-specific document referenced by the Supreme Court in its opinion, the MSA provided that “each clinical trial or study that Takeda 54. The Court’s review of the above-referenced testimony and the
documents of record have failed to reveal any evidence whatsoever suggesting that
the “MSA was drafted such that Takeda was required to pay consideration to acquire
and use a license of [PSO].” Value Health Sols., Inc., 385 N.C. at 274.
55. There are only two isolated references to PSO within the hundreds of
pages that comprise the SOWs, and those references do not appear in connection with
any form of payment or consideration by Takeda to PRA. (ECF No. 221.18, at 36–
37.)
56. Lyskanowski’s deposition testimony further confirms that there was
never any intention by either Takeda or PRA for consideration to be paid in exchange
for a license in PSO. (See, e.g., Lyskanowki Dep., at 38, 69–70, ECF No. 201.6,
Lyskanowski Dep., at 36, 69–71, 74, ECF No. 221.7.)
57. In response to Defendants’ Motion for Summary Judgment, Plaintiffs
did not offer any evidence to the contrary. Indeed, at the 24 June hearing on the
Motions, Plaintiffs’ counsel conceded that there is no evidence showing that Takeda
was required to pay consideration in exchange for a license to acquire and use PSO.
58. For these reasons, the Court GRANTS summary judgment for PRA on
the issue of whether the Takeda MSA constitutes an External Sale under the APA.
sought to have PRA perform—including the tasks to be performed and the cost associated with each particular task—would be defined in a separate” SOW. (Defs.’ Br. Supp. Mot. Summ. J. and Partial Summ. J. Pursuant Rule 56(B), at 6, ECF No. 219.) III. PRA’s Internal Use of PSO as External Sales
59. Finally, PRA seeks summary judgment in its favor on the issue of
whether PRA’s purely internal use of PSO constituted an External Sale under the
APA. Specifically, PRA seeks clarification in the form of a ruling from the Court that
no External Sales occurred as defined in the APA in situations where PRA itself used
PSO to conduct in-house clinical research for customers—that is, contracts that did
not include a transfer of a license for PSO by PRA to the customer.
60. In its opinion, the Supreme Court made clear that in order for an
External Sale to have occurred under the APA, a contract between PRA and its
customer must have included a transfer of a license for the customer to use PSO.
61. As Plaintiffs’ counsel concedes, under circumstances where no license
was conveyed, the Supreme Court’s definition of External Sale would not be satisfied.
62. Accordingly, summary judgment is GRANTED as to the issue of
whether these in-house clinical trials constituted External Sales under the APA.
CONCLUSION
THEREFORE, it is ORDERED as follows:
i. Plaintiffs’ Motion to Strike is DENIED.
ii. Defendants’ Motion for Summary Judgment is GRANTED as to the following
issues:
a. Whether the Takeda MSA constitutes an External Sale under the APA;
and b. Whether PRA’s internal use of PSO for in-house clinical trials
constituted an External Sale under the APA in the absence of a transfer
of a license for PSO to the customer.
iii. Defendants’ Motion for Summary Judgment is DENIED as to the following
issue:
a. Whether the statute of limitations serves to bar any portion of Plaintiffs’
claim for breach of Section 2.6(b) regarding PRA’s allegedly improper
conditioning of the External Sales upon the completion of the APA’s
Internal Development Milestones.
SO ORDERED, this the 23rd day of July, 2025.
/s/ Mark A. Davis Mark A. Davis Special Superior Court Judge for Complex Business Cases