Curtis v. Cerner Corp.

Decision Date24 August 2020
Docket NumberCivil Action No. 7:19-cv-00417
Parties Catherine S. CURTIS, Plaintiff, v. CERNER CORPORATION; Quammen Health Care Consultants, Inc. ; and Siemens Medical Solutions USA, Inc., Defendants.
CourtU.S. District Court — Southern District of Texas

Matthew John McGowan, Randall A. Pulman, Thomas Rice, Pulman Cappuccio Pullen Benson Jones LLP, San Antonio, TX, for Plaintiff.

John Lewis, Jr., Shook Hardy Bacon LLP, Houston, TX, Michael B. Barnett, Pro Hac Vice, Shook, Hardy & Bacon, LLP, Kansas City, MO, for Defendant Cerner Corporation.

Heriberto Rene Montalvo, Kenneth E. Broughton, Jr., Reed Smith LLP, Lloyd Andrew Lim, Balch & Bingham, LLP, Houston, TX, Jonah D. Mitchell, Scott David Baker, Pro Hac Vice, Reed Smith LLP, San Francisco, CA, for Defendant Siemens Medical Solutions USA, Inc.

Quammen Health Care Consultants, Inc., Orlando, FL, pro se.

OPINION AND ORDER

Micaela Alvarez, United States District Judge

The Court now considers "Defendant Cerner Corporation's Motion to Dismiss and Memorandum in Support"1 and "Defendant Siemens Medical Solutions USA, Inc.’s Motion to Dismiss and/or Strike, and Brief in Support"2 and Plaintiff Catherine S. Curtis's response.3 After considering the motions, record, and relevant authorities, the Court GRANTS IN PART and DENIES IN PART Defendantsmotions to dismiss.

I. BACKGROUND AND PROCEDURAL HISTORY

This case originated as an adversary proceeding in bankruptcy.4 Plaintiff Catherine S. Curtis is a bankruptcy trustee "duly appointed by the Court" upon the bankruptcy case's initiation5 and now stands in the shoes of the Debtor.6 On behalf of Bay Area Regional Medical Center, LLC—the debtor in bankruptcy—and the debtor's estate, the trustee-plaintiff is pursuing 14 claims against Defendants seeking to recover millions of dollars.7 Plaintiff's claims arise out of allegedly failed healthcare software implementation at a hospital.

The following are allegations from Plaintiff's complaint. Bay Area Regional Medical Center, LLC (Debtor) opened a hospital facility in Webster, a suburb of Houston, in Harris County, Texas, in "July/August 2014."8 Leading up to the facility's opening, Debtor wanted to implement healthcare software. Defendant Siemens Medical Solutions USA, Inc. (Siemens) offered Debtor a "comprehensive suite of computer software" called Soarian that was intended to integrate billing and clinical operations all-in-one.9 Siemens recommended Debtor also hire Quammen Health Care Consultants, Inc. (Quammen) to implement Soarian at the facility and tailor the software to Debtor's specific needs.10 In September 2013, Debtor took the offer and executed two master services agreements with Siemens and Quammen respectively to implement Soarian.11 Soarian implementation typically takes 10 months.12 However, "[t]he wheels fell off Soarian's functionality and Quammen's implementation while the ink on the Siemens MSA and Quammen MSA was still wet. It was, in short, a debacle from the word go."13 Quammen did not report to begin Soarian implementation until April 2014, condensing the usual 10-month process into a "four-month frenzy."14 Siemens failed to exercise oversight.15 As a result of the implementation stumbles, Debtor paid an additional approximately $2.2 million "in remediation-related revenue that Debtor was forced to pay because by that point Debtor was effectively a hostage of Siemens and Quammen" to fix the implementation, 16 followed by a further at least $11 million as Debtor paid for remediation between 2014 and 2016.17 When Debtor opened the hospital facility in 2014, Soarian malfunctioned until Debtor closed the facility and discharged patients in 2018, resulting in insurance billing losses (resulting from, for example, missing revenue codes, prices, and payer identification) of approximately $82 million when insurance claims expired.18 Debtor incurred further losses of physician turnover, loss of patient goodwill, and overextension of credit and consequently reduced creditworthiness.19 Defendant Cerner Corporation (Cerner) assumed Siemens’ contract in 2015 or 2016 but perpetuated the Soarian failures.20

Plaintiff brings causes of action for:

1. Breach of Contract (against all defendants)
2. Breach of Express Warranties (against all defendants)
3. Breach of Implied Warranties (against all defendants)
4. Negligence (against all defendants)
5. Fraud (against all defendants)
6. Fraudulent Inducement (against Siemens & Quammen)
7. Negligent Misrepresentation (against all defendants)
8. Negligent Hiring (against all defendants)
9. Unjust Enrichment (against all defendants)
10. Avoidance of Fraudulent Transfer under 11 U.S.C. § 544 and the Texas Uniform Fraudulent Transfer Act ( Tex. Bus. & Com. Code § 24.005(a)(2) ) (against Siemens and Cerner)
11. Avoidance of Fraudulent Transfer under 11 U.S.C. § 544 and the Texas Uniform Fraudulent Transfer Act ( Tex. Bus. & Com. Code § 24.006(a) ) (against Siemens and Cerner)
12. Avoidance of Fraudulent Transfer under 11 U.S.C. § 548(a)(1)(B) (against Cerner)
13. Recovery of Fraudulent Transfers under 11 U.S.C. § 550 (against Siemens and Cerner)
14. Recovery of Attorney's Fees and Costs (against all defendants).21

Plaintiff seeks damages, restitution, recovery/avoidance of fraudulent transfers, court costs and attorneys’ fees, and interest.22

This Court held in April 2020 that, given the weight of factors favoring withdrawal of the reference of this case to Bankruptcy Court, such as the non-bankruptcy-related nature of most of Plaintiff's claims, the case and all proceedings should be placed in this Court.23 Now in this Court, Defendants Cerner's and Siemens's motions to dismiss are ripe for consideration.

II. DISCUSSION
a. Preliminary Issues

Though the parties initially numbered their paragraphs in their first briefs before this Court,24 all parties have since inexplicably abandoned the practice.25 The Court notes that the parties’ briefs lack numbered paragraphs entirely, hindering the Court's reference to specific arguments. As a threshold matter, the Court cautions all parties that future submissions should consistently number each paragraph to properly comply with the Federal Rules of Civil Procedure.26

Although Plaintiff's process server attested that Quammen has been appropriately served under Federal Rule of Bankruptcy Procedure 7004,27 mail to Quammen's registered agent has been returned undeliverable since this Court's order for initial conference.28 The Florida Department of State, Division of Corporations’ website for Quammen indicates that Quammen's registered agent changed effective June 3 or 4, 2020.29 The Court ORDERS the Clerk of the Court to update Quammen's address to the following to avoid further undeliverable mail:

Quammen Health Care Consultants, Inc.? United States Corporation Agents, Inc.5575 S Semoran Blvd, Suite 36Orlando FL 32822

Quammen has so far failed to appear in Bankruptcy Court or in this Court.

The final preliminary issue is that, at the end of Plaintiff's response brief is a short paragraph contending that, "[i]n the event the Court agrees that the Motions should be granted in whole or in part, the Court should deny the request for dismissal and grant the Trustee leave to amend the Complaint."30 This is improper. First, requests to the Court must be made by motion, not in a response brief.31 Furthermore, the Court recently dealt with a near-identical request and held that cursory requests for leave to amend would be denied.32 The Court's holding is now the same. Plaintiff's bare bones request to amend is DENIED .33

b. Jurisdiction

This Court must satisfy its jurisdiction.34 The Court has jurisdiction under 28 U.S.C. §§ 1334(a) and 157.35

c. Legal Standard for the Motions to Dismiss

The Court uses federal pleading standards to determine the sufficiency of a complaint.36 Under Federal Rule of Civil Procedure 12(b)(6), to avoid dismissal, the complaint "must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ "37 The Court accepts all well-pleaded facts as true (even if doubtful or suspect38 ) and views those facts in the light most favorable to the plaintiff (because a Rule 12(b)(6) motion is viewed with disfavor39 ), but will not strain to find inferences favorable to the plaintiff.40 A plaintiff need not plead detailed factual allegations, but must plead more than " ‘naked assertion[s] devoid of ‘further factual enhancement’ " or "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements" to survive a motion to dismiss.41 Courts first disregard any conclusory allegations or legal conclusions42 as not entitled to the assumption of truth,43 and then undertake the "context-specific" task, drawing on judicial experience and common sense, of determining whether the remaining well-pled allegations give rise to entitlement to relief.44 "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."45 Courts have "jettisoned the [earlier] minimum notice pleading requirement"46 and the complaint must plead facts that "nudge" the claims "across the line from conceivable to plausible."47 The complaint must plead every material point necessary to sustain recovery; dismissal is proper if the complaint lacks a requisite allegation.48 However, the standard is only "to determine whether the plaintiff has stated a legally cognizable claim that is plausible, not to evaluate the plaintiff's likelihood of success." 49

The Court is limited to assessing only the complaint, its proper attachments, documents incorporated into the complaint by reference, and matters of which the Court may take judicial notice.50 Because the focus is on the pleadings, "if, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as...

To continue reading

Request your trial
10 cases
  • Ramirez v. Allstate Vehicle & Prop. Ins. Co.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • September 29, 2020
    ...Tex. 2011) (Harmon, J.)).239 Dkt. No. 2.240 Dkt. No. 12.241 Dkt. No. 2.242 Dkt. No. 1-2.243 Curtis v. Cerner Corp. , No. 7:19-CV-00417, 621 B.R. 141, 156 n.32 (S.D. Tex. Aug. 24, 2020) (Alvarez, J.) (citing VTX Commc'ns, LLC v. AT&T Inc. , No. 7:19-cv-269, 2020 WL 918670, at *5–6 (S.D. Tex.......
  • AHBP LLC v. The Lynd Co.
    • United States
    • United States District Courts. 5th Circuit. Western District of Texas
    • November 18, 2022
    ...detailed factual allegations[.]'” Innova Hosp., 892 F.3d at 728-29 (citing Twombly, 550 U.S. at 555); see also Curtis v. Cerner Corp., 621 B.R. 141, 161 (S.D. Tex. 2020) (“To require such formulaic pleading would militate against the simplicity and brevity of statement which the rules conte......
  • AHBP LLC v. The Lynd Co.
    • United States
    • United States District Courts. 5th Circuit. Western District of Texas
    • January 9, 2023
    ...detailed factual allegations[.]'” Innova Hosp., 892 F.3d at 728-29 (citing Twombly, 550 U.S. at 555); see also Curtis v. Cerner Corp., 621 B.R. 141, 161 (S.D. Tex. 2020) (“To require such formulaic pleading would militate against the simplicity and brevity of statement which the rules conte......
  • Gates v. RAC Acceptance Tex., LLC (In re Gates)
    • United States
    • United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Western District of Texas
    • November 5, 2020
    ...may recover "reasonable attorney's fees and expenses incurred in prosecuting a § 362(k) action." In re Reed , 616 B.R. at 83 (citing 621 B.R. 141 Young v. Repine (In re Repine) , 536 F.3d 512, 522 (5th Cir. 2008) ). The Court concludes that Gates is entitled to reasonable and necessary atto......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT