scriptfleet-inc-a-florida-corporation-fka-network-express-inc-v-in ( 2014 )

Pursuant to Ind.Appellate Rule 65(D),
this Memorandum Decision shall not be
regarded as precedent or cited before
any court except for the purpose of
establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEYS FOR APPELLANT: ATTORNEY FOR APPELLEE:
GLENN L. DUNCAN KEVIN E. STEELE
LISA GILKEY SCHOETZOW Burke Costanza & Carberry LLP
Thorne Grodnik, LLP Valparaiso, Indiana
Elkhart, Indiana
Apr 01 2014, 8:43 am
IN THE
COURT OF APPEALS OF INDIANA
SCRIPTFLEET, INC., a Florida Corporation )
f/k/a Network Express, Inc., )
)
Appellant-Plaintiff, )
)
vs. ) No. 64A05-1308-PL-393
)
IN TOUCH PHARMACEUTICALS, INC., )
an Indiana Corporation as successor in )
interest to MHP Pharmacy, LLC, an Indiana )
Limited Liability Company d/b/a Freedom )
Pharmacy, )
)
Appellee-Defendant. )
APPEAL FROM THE PORTER SUPERIOR COURT
The Honorable William E. Alexa, Judge
Cause No. 64D02-1103-PL-2706
April 1, 2014
MEMORANDUM DECISION - NOT FOR PUBLICATION
ROBB, Judge
Case Summary and Issue
Scriptfleet, Inc. (“Scriptfleet”) appeals the trial court’s entry of summary judgment in
favor of In Touch Pharmaceuticals, Inc. (“In Touch”), which concluded that In Touch was
not contractually obligated to Scriptfleet. Scriptfleet raises one issue on appeal: whether the
trial court erred when it determined no contractual obligation could exist between Scriptfleet
and In Touch because In Touch was not a party to the original contract. Concluding the trial
court’s entry of summary judgment was erroneous as a matter of law, we reverse and remand
for further proceedings.1
Facts and Procedural History
In May 2006, MHP Pharmacy, LLC d/b/a Freedom Pharmacy (“MHP”) entered into
an exclusivity agreement with Scriptfleet whereby the two agreed that Scriptfleet would be
MHP’s exclusive courier for all delivery locations within a 250 mile radius of Indianapolis
(the “MHP/Scriptfleet Agreement”). The MHP/Scriptfleet Agreement had an initial term of
three years, commencing April 10, 2006 and expiring April 9, 2009, with automatic renewals
for one year increments after the initial term. It also provided that it “shall [be] binding upon
and inures to the benefit of any and all successors, trustees, assigns, agents and other
successors-in-interest of the parties to this Agreement.” Appellant’s Appendix at 12.
1
Scriptfleet attempted to raise a second issue: whether In Touch breached any contractual obligation
to Scriptfleet. However, that issue was not decided by the trial court on summary judgment, and Scriptfleet did
not file a cross-motion for summary judgment. Further, because we remand for the trial court to make a
determination as to whether In Touch owed a contractual obligation, consideration of Scriptfleet’s proposed
second issue would be premature.
2
On June 2, 2010, In Touch purchased the membership units of MHP, but MHP
continued to exist as a separate legal entity.2 As part of its purchase of MHP, In Touch
agreed to undertake the liabilities and obligations of MHP that existed under the
MHP/Scriptfleet Agreement.3 On July 23, 2010, contracts between MHP and the facilities it
serviced began to be transferred from MHP to In Touch. By October 26, 2010, over thirty of
those contracts were transferred to In Touch, and MHP’s remaining contracts with other
facilities were canceled.4 Rather than using Scriptfleet as courier for the contracts formerly
owned by MHP, In Touch used its own drivers to deliver to facilities that were within the
territory covered under the MHP/Scriptfleet Agreement.
On March 28, 2011, Scriptfleet filed its complaint alleging breach of contract by In
Touch. In Touch filed its answer on May 12, 2011. In Touch filed its motion for summary
judgment on March 6, 2013, and Scriptfleet filed its response on April 8, 2013. The trial
court granted In Touch’s motion for summary judgment on July 11, 2013, concluding In
Touch was not bound by the MHP/Scriptfleet Agreement. Specifically, the trial court
reasoned that In Touch could not be bound by the MHP/Scriptfleet Agreement because it was
not a party to the original contract.
2
The record does not contain a copy of the membership purchase agreement between MHP and In
Touch, and it is not entirely clear whether In Touch purchased all—or a controlling share—of MHP’s
membership units.
3
In Touch admitted in an interrogatory to assuming the liabilities and obligations of MHP under the
MHP/Scriptfleet Agreement, but the specifics of In Touch’s agreement to do so are unknown.
4
The facts regarding the transfer of contracts between MHP and In Touch are unknown (e.g. whether
consideration was given). Scriptfleet alleges the service contracts transferred were MHP’s “only assets.”
Reply Brief of Appellant at 3. Thus, it is also unclear to what extent MHP currently exists—other than on
paper. Finally, we note Scriptfleet seems to argue both that In Touch is directly liable and liable under a theory
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Discussion and Decision
I. Standard of Review
When reviewing a trial court’s entry of summary judgment, we apply the same
standard as the trial court. Manley v. Sherer, 992 N.E.2d 670, 673 (Ind. 2013). Summary
judgment is appropriate where there is no genuine issue of material fact and the moving party
is entitled to judgment as a matter of law. Ind. Trial Rule 56(C). Whether a contract exists is
a question of law. Conwell v. Gray Loon Outdoor Mktg. Grp., Inc., 906 N.E.2d 805, 813
(Ind. 2009).
II. Contractual Obligation
The trial court entered summary judgment in favor of In Touch after concluding In
Touch owed no contractual obligation to Scriptfleet. The trial court recognized the
MHP/Scriptfleet Agreement provided that it “shall [be] binding upon and inures to the
benefit of any and all successors, trustees, assigns, agents and other successors-in-interest of
the parties to this Agreement.” Appellant’s App. at 12. However, the trial court stated that
section “violates basic contractual requirements.” Id. at 114. It went on to say: “At no point
was In Touch included in the offer, acceptance, consideration, or meeting of the minds of the
contractual agreement between Scriptfleet and MHP, and as such, cannot be bound by it
despite any contract term to the contrary.” Id. at 115.
As a matter of law, the trial court is incorrect. True, “[t]he basic requirements for a
contract are offer, acceptance, consideration, and a meeting of the minds of the contracting
of piercing the corporate veil between a subsidiary and parent company; however, MHP was not named as a
defendant, and Scriptfleet’s complaint does not propose a theory of liability via veil piercing.
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parties.” Conwell, 906 N.E.2d at 812-13. This is not to say, however, that parties
uninvolved in a contract’s initial formation may not be bound by a valid contract under
certain circumstances. For example, the doctrines of assignment and delegation allow for a
party to benefit from or be bound by a contract despite the party’s lack of involvement in the
original contract’s formation. Kuntz v. EVI, LLC, 999 N.E.2d 425, 429 n.5 (Ind. Ct. App.
2013) (“Indiana common law allows for the assignment of contractual rights absent an
expression of contrary intent by the parties.”); Buckeye Ag-Center, Inc. v. Babchuk, 533
N.E.2d 179, 180 (Ind. Ct. App. 1989) (“The general rule is that absent a provision to the
contrary a party may delegate its duties under a contract.”), trans. denied. Mergers and share
exchanges result in the adoption of liabilities and contractual obligations. Rodriguez v. Tech
Credit Union Corp., 824 N.E.2d 442, 447 (Ind. Ct. App. 2005) (“[F]ollowing a merger, the
surviving corporation succeeds to all the rights, powers, liabilities and obligations of the
merging corporation.”). And under certain circumstances, the purchase of assets from one
corporation by another may result in the assumption of debts and liabilities of the seller.
Winkler v. V.G. Reed & Sons, Inc., 638 N.E.2d 1228, 1233 (Ind. 1994).
Given the facts of this case are not particularly clear with regard to In Touch’s
purchase of MHP, the transfer of assets from MHP to In Touch, and In Touch’s agreement to
undertake MHP’s obligations under the MHP/Scriptfleet Agreement, we believe remand to
the trial court is most appropriate at this stage. We therefore leave it to the trial court to hash
out the facts and determine what, if any, contractual obligation In Touch owed to Scriptfleet.
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Conclusion
Concluding the trial court’s entry of summary judgment was based upon an incorrect
application of contract law, we reverse and remand.
Reversed and remanded.
BARNES, J., and BROWN, J., concur.
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