Envolve Pharmacy Solutions, Inc. v. Rite Aid Hdqtrs. Corp.
N19C-12-214 PRW CCLD
Del. Super. Ct.Mar 8, 2021Background
- Plaintiffs (the Centene Entities, including Envolve) allege Rite Aid submitted inflated "Usual & Customary" (U&C) prices on claims by reporting sticker prices while offering lower Rx Savings Card (RSC) discounts to actual customers, causing overpayments under 2003 and 2013 contracts.
- Plaintiffs asserted six counts: fraud (all plaintiffs), breach of contract (Envolve and certain non-Envolve plaintiffs), and unjust enrichment (all plaintiffs).
- The court previously dismissed the fraud claim as duplicative of breach-of-contract damages, dismissed certain third‑party beneficiary contract claims, and dismissed Envolve’s unjust enrichment claim because it was contract-bound.
- Centene moved for partial reargument under Superior Court Civil Rule 59 to reinstate fraud (Count 1) for all plaintiffs and Envolve’s unjust enrichment (Count 6) for the period after the 2013 contract allegedly terminated in March 2016.
- Rite Aid opposed, arguing the alleged misconduct arose from contractual obligations and that Centene had not pled any independent tort duties or post‑contract bases for relief.
- The court denied reargument: plaintiffs failed Rule 59’s heavy burden, did not plead fraud arising independently of contract for non‑Envolve plaintiffs, and failed to plead a plausible post‑March 2016 non‑contract basis for Envolve’s claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether fraud claim survives where damages duplicate breach-of-contract | Fraud is pleaded with particularity and should survive because damages are independent or apply to non-contracting plaintiffs | Fraud is duplicative of contract damages; where duty is contractual, tort claim fails | Court: Dismissed fraud as duplicative; no independent damages pleaded |
| Whether non‑Envolve (non‑contracting) plaintiffs can maintain fraud claims | Non‑Envolve plaintiffs were not parties to the contracts, so economic‑loss rule shouldn’t bar fraud claims | Allegations still rest on contractual obligations and the economic‑loss principle bars tort recovery tied to contract performance | Court: Denied reargument; non‑Envolve fraud fails—no independent tort duty pled |
| Whether Envolve can pursue fraud and unjust enrichment for post‑March 2016 period after alleged contract termination | Envolve seeks relief for April 2016–2019, arguing contract termination freed it to assert extra‑contractual claims | Rite Aid: Plaintiffs allege only contract‑rooted duties; no alternative source of Rite Aid’s billing obligations post‑2016 | Court: Denied reargument; complaint failed to plead termination or any independent post‑2016 duty, so no plausible basis for recovery |
| Whether Rule 59 reargument is warranted | Centene: Court overlooked controlling precedent and misapplied economic‑loss principles to permit fraud/unjust enrichment claims | Rite Aid: Issues were previously briefed; reargument is improper rehashing; no overlooked controlling law | Court: Denied — Rule 59 requires showing an overlooked controlling precedent or manifest error, which was not shown |
Key Cases Cited
- Ramon v. Ramon, 963 A.2d 128 (Del. 2008) (motion for reargument is proper device to seek reconsideration of trial court findings)
- Hessler, Inc. v. Farrell, 260 A.2d 701 (Del. 1969) (Rule 59 motions aim to afford trial court opportunity to correct errors)
- Litton Fin. Printing Div. v. N.L.R.B., 501 U.S. 190 (1991) (an expired contract releases parties from contractual obligations except fixed but unsatisfied obligations)
- Vinton v. Grayson, 189 A.3d 695 (Del. Super. Ct. 2018) (standard for dismissal under Rule 12(b)(6): consider well‑pled allegations and whether recovery is conceivable)