ALLENTOWN – A Pennsylvania laboratory testing company has hit back at breach of contract allegations from a Missouri-based health care marketing firm, which claimed the defendant owes it nearly $1.4 million – countering instead that the plaintiffs are the ones responsible for the severance of the parties’ agreement.
GF Industries of Missouri, LLC of St. Louis, Mo. first filed suit in the U.S. District Court for the Eastern District of Pennsylvania on Jan. 18 versus Lehigh Valley Genomics, LLC, of Bethlehem.
“On or about May 1, 2021, GFIM and LVG entered into a Development and Marketing Services Agreement. Pursuant to the agreement, GFIM provided business development services to LVG. The agreement, at paragraph 4(a), entitled GFIM to $100,000 each month during the first three months of the initial term of the agreement, which was one year. Paragraph 4(b) provides that the parties would consider modification of this initially stated compensation based upon GFIM’s performance,” the suit said.
“Subsequent to entering into the Agreement, LVG’s Lisa Jackson, whom the agreement designated as the person to receive notices on LVG’s behalf pursuant to the agreement, and Karen Avery, LVG’s director of billing, promised GFIM’s principal, Lee Binion, that LVG would pay GFIM a bonus in addition to the $100,000 monthly payment, if GFIM brought in accounts in excess of 75 each month for LVG. For the first three months after entering into the agreement, in reliance on these promises, GFIM significantly exceeded the parties’ business development targets. As of June, 2021, Ms. Avery calculated the bonus due to GFIM at $325,000. GFIM also exceeded its targets in subsequent months. In total, GFIM earned $444,000 in bonuses. Despite these promises, LVG to date paid GFIM only $100,000 of the bonuses GFIM earned.”
The suit added that besides failing to pay GFIM the agreed-upon bonuses, beginning in or about August 2021, LVG, by and through Ms. Jackson, “began sabotaging GFIM’s efforts pursuant to the agreement, by refusing to provide supplies for tests, refusing to provide test and lab results and other support to the providers that GFIM had brought to LVG, and making false and disparaging statements about Mr. Binion and GFIM to these providers.”
The suit also alleged that Ms. Jackson and LVG’s corporate counsel, Robert Dunn, “engaged in a pattern of harassment toward Mr. Binion by being verbally abusive toward him on telephone calls, instructing other LVG personnel not to assist him and threatening them with termination if they did so, and demanding to be copied on all communications involving Mr. Binion for no legitimate business purpose.”
“Mr. Dunn and Ms. Jackson made a number of comments that demonstrate that LVG’s pattern of harassment, refusal to pay GFIM the agreed upon bonuses, and ultimate termination of GFIM were all motivated by racial animus. After learning that Mr. Binion is African-American, Ms. Jackson told Dr. Jasen Chi, a physician in Little Rock, Arkansas who was considering contracting with LVG, that LVG would not pay GFIM the bonuses LVG had promised GFIM because people of Mr. Binion’s color ‘didn’t make that kind of money,” per the suit.
“Ms. Jackson also made disparaging comments to Dr. Chi regarding Sylvester Williams, another service provider, who is African-American, to the effect that he was a ‘dumb Black guy’ and had no business running a laboratory operation. In a conversation with Mr. Binion, Ms. Jackson told Mr. Binion that ‘you speak pretty well. I am surprised.’ Shortly before LVG terminated its contract with LVG, Mr. Dunn told another contractor, Jason Bennett, who is Caucasian and was performing similar services to GFIM that LVG ‘needed more people like [him] and less people like’ Mr. Binion.
The suit also explained what allegedly happened subsequent to the agreement’s termination.
“LVG terminated the agreement effective as of Nov. 1, 2021. At the time of the termination, LVG’s representative claimed that the termination was for unspecified ‘business needs’ and that LVG would no longer pay a business development representative $100,000 a month or more. Mr. Binion later learned that shortly after this statement, LVG retained another business development representative, who is Caucasian and whom LFIG outperformed during the term of the Agreement, at $160,000 per month,” the suit stated.
“If LVG had allowed GFIM to perform its services under the agreement unhindered, GFIM would have earned compensation during the last six months of the agreement’s initial term equal to or greater than the compensation GFIM earned during the initial six months, and likely into successive renewal terms. LVG’s racially-motivated termination of GFIM deprived GFIM of the opportunity to earn this income. In so doing, LVG violated GFIM’s and Mr. Binion’s entitlement to equal rights under the law within the meaning of 42 U.S.C. Section 1981. In light of the foregoing, LVG owes GFIM no less than $1,388,000.”
UPDATE
LVG filed an answer to the complaint along with an accompanying counter-claim on March 23, arguing that it did not commit breach of contract in the initial agreement reached between the parties.
“The complaint fails to state a claim upon which relief can be granted. GFIM’s claims are barred, in whole or in part, because LVG has not breached any obligation or duty owed to plaintiff under the terms of the parties’ May 1, 2021 agreement which exclusively controls the obligations owed by and to each party. GFIM’s claims are barred, in whole or in part, because LVG’s decision to terminate the May 1, 2021 agreement was based on non-discriminatory reasons. GFIM has suffered no damages as a result of any act, omission or other conduct of LVG,” according to their answer, in part.
“Commencing in or about August 2021, GFIM failed to provide, on many occasions, the required patient and health care provider information corresponding to the placed order. On Nov. 4, 2021, pursuant to paragraph 7(f) of the agreement, LVG provided a 15-day notice of termination to GFIM. LVG terminated the agreement with GFIM on Nov. 19, 2021. LVG made multiple requests for GFIM to provide missing patient and health care provider information prior to and subsequent to the Nov.19, 2021 termination. To date, GFIM has failed to comply with those requests.”
In its accompanying counter-claims, LVG levied counts of breach of contract and legal fees against GFIM.
For opposing counts of breach of contract, unjust enrichment and violation of 42 U.S.C. Section 1981, the plaintiff is seeking compensatory damages in an amount to be proven at trial, together with interest, costs of suit and such other and further relief as the Court may deem just.
The plaintiff is represented by Francis X. Taney of Taney Legal, in Cherry Hill, N.J.
The defendant is represented by Shareda P. Coleman and Robert J. McCully of Shook Hardy & Bacon, in Philadelphia and Kansas City, Mo.
U.S. District Court for the Eastern District of Pennsylvania case 5:22-cv-00227
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com