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Sheffer v. Healthcare Services Group, Inc.

United States District Court, W.D. Virginia, Roanoke Division

October 18, 2019




         Matthew Brady Sheffer, a former employee of Healthcare Services Group, Inc. ("HCSG"), filed this diversity action against HCSG and Avante Group, Inc. ("Avante"), asserting claims of fraudulent inducement, fraudulent concealment, breach of contract, and tortious interference with contract. The case is presently before the court on the defendants' partial motions to dismiss. For the reasons set forth below, the motions will be granted.


         The following factual allegations, taken from the plaintiffs amended complaint, are accepted as true for purposes of the pending motions. See Erickson v. Pardus. 551 U.S. 89, 94 (2007) ("[W]hen ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint.").

         Sheffer resides in Botetourt County, Virginia. In 2014, he began working as a sales director for HCSG, a Pennsylvania corporation based in Bensalem, Pennsylvania. Sheffer's employment contract "called for [him] to receive a two percent commission based on gross profit margin on any contract that [he] brokered for HCSG." Am. Compl. ¶ 11, ECF No. 42. Sheffer alleges that "HCSG led [him] to believe, at the time of contracting, that his commission structure was fixed at 2 percent." Id. ¶ 13. Sheffer accepted the position based on the favorable commission structure. Id. ¶ 35.

         On or about February 1, 2017, Sheffer secured a contract between HCSG and Avante that was worth approximately $22 million dollars.[1] Id. ¶ 16. Shortly thereafter, Sheffer discovered that three buildings included in the scope of the original contract had been "wrongly withheld from the contract, depriving the contract of certain profits and affecting . . . Sheffer's commissions." Id. ¶ 18.

         On or about April 20, 2017, HCSG's Chief Revenue Officer, Mike McBryan, notified Sheffer and other sales directors that the company was changing the sales directors' commission structure. Although HCSG had "attempted to change [the] commission structure" in previous years, the modifications "were generally not implemented against [the plaintiff] until the HCSG-Avante contract." Id. ¶¶ 38-39. In May of 2017, Sheffer inquired about his commission on the contract with Avante. McBryan and Donnie Warren, HCSG's Vice President of Sales, advised Sheffer that "he would not be receiving commissions based on 2 percent gross profit, but rather the '2017 commission structure' would be applied." Id. ¶ 43. McBryan and Warren also informed Sheffer that "certain commissions had not been earned due to Avante being in arrear[s]." Id. ¶ 23.

         Over the course of the following year, Sheffer "protested the 'new' commission structure being applied against him," since he had relied on the promised two percent commission in accepting employment with HCSG. Id. ¶ 44. However, the plaintiffs efforts proved unsuccessful. Sheffer ultimately left HCSG on September 21, 2018, "due to HCSG's conduct." Id. ¶ 10.

         Procedural History

         Sheffer filed the instant action against HCSG and Avante on January 28, 2019. The defendants moved to dismiss certain counts of the complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure. On June 17, 2019, the court held a hearing on the defendants' motions. At the conclusion of the hearing, the court took the motions under advisement and granted in part the plaintiffs request for leave to file an amended complaint.

         On June 27, 2019, Sheffer filed an amended complaint against the defendants, in which he asserts the following claims: fraud in the inducement against HCSG (Count I); fraudulent concealment against HCSG (Count II); breach of contract against HCSG (Count III); and tortious interference with contract against Avante (Count IV). HCSG has moved to dismiss the fraud claims asserted in Counts I and II, and Avante has moved to dismiss the tortious interference claim asserted in Count IV. The motions have been fully briefed and are now ripe for review.

         Standard of Review

         Rule 12(b)(6) permits a party to move for dismissal of a complaint for failure to state a claim upon which relief can be granted. When deciding a motion to dismiss under this rule, the court must accept as true all well-pleaded allegations and draw all reasonable factual inferences in the plaintiffs favor. Erickson, 551 U.S. at 94. "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citation and quotation marks omitted). To survive dismissal, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face, '" meaning that it must ...

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