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AMERICORP FINANCIAL v. ST. JOSEPH'S HOSPITAL

December 12, 2001

AMERICORP FINANCIAL, INC., PLAINTIFF,
V.
ST. JOSEPH'S HOSPITAL HEALTH CENTER, DEFENDANT.



The opinion of the court was delivered by: Munson, Senior District Judge.

  MEMORANDUM-DECISION AND ORDER

FACTS

On October 15, 1998, defendant St. Joseph's Hospital Health Center ("St.Joseph's") entered into a Fee for Service Agreement ("the Agreement") with Computer Motion, Inc. ("CMI"). Pursuant to the Agreement, CMI provided St. Joseph's with endoscopic surgical equipment and St. Joseph's agreed to purchase a certain number of "disposables" per month for use with the equipment. Paragraph 11 of the Agreement allowed CMI to assign the Agreement to a third party for financing purposes, subject to St. Joseph's rights under the Agreement.

St. Joseph's and CMI also executed a Renewal/Conversion Addendum ("Attachment A"). Attachment A applied to the Agreement and allowed St. Joseph's, under certain circumstances, to return the equipment and have no further financial obligations to CMI.

On June 19, 1998, CMI and plaintiff Americorp Financial, Inc. ("Americorp") executed a Vendor Program Agreement accompanied by Schedule A — Assignment of Rights, Title, and Interest ("the Assignment"). The Assignment was executed in accordance with Paragraph 11 of the Agreement and it assigned all rights to payment under the Agreement to Americorp. Following execution of the Assignment, St. Joseph's performed its payment obligations to Americorp for a period of many months.

In March 2001, St. Joseph's ceased making payments under the Agreement. Upon demand for payment, St. Joseph's informed Americorp that it had discontinued performance under the Agreement pursuant to Attachment A. Attachment A provides:

Should St. Joseph's Hospital discontinue offering endoscopic procedures applicable to the use of AESOP at the end of the first 24 month payment period of this Fee for Service Agreement, or should your Equipment not perform to the standards of its proper labeling, St. Joseph's Hospital may return the Equipment and have no further financial obligations for this Fee for Service Agreement, whatsoever.

On August 13, 2001, Americorp filed suit alleging that St. Joseph's refusal to continue to pay under the Agreement is an egregious breach of the contract.

Currently before this court is Defendants' motion to dismiss the complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure on the ground that it fails to state a claim upon which relief can be granted. Plaintiff has entered opposition to this motion.

DISCUSSION

1. Rule 12(b)(6) Standard

A dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure is a dismissal on the merits of the action, a determination that the facts alleged in the complaint fail to state a claim upon which relief may be granted. See Teltronics Services, Inc. v. LM Ericsson Telecommunications, Inc., 642 F.2d 31, 34 (2d Cir. 1981). Such a dismissal is appropriate where "it appears beyond doubt that the plaintiff can prove no set of facts in support of [its] claim which would entitle [it] to relief." Harris v. City of New York, 186 F.3d 243, 247 (2d Cir. 1999). Therefore, the issue before the court on such a motion "is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." King v. Simpson, 189 F.3d 284, 287 (2d Cir. 1999). "The task of the court in ruling on a Rule 12(b)(6) motion is merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof." Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir. 1998) (internal quotations omitted). Accordingly, in order to decide a Rule 12(b)(6) motion, the court must accept as true all of the allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in a light most favorable to the non-moving party. See Harris, 186 F.3d at 247. However, a "complaint which consists of conclusory allegations unsupported by factual assertions fails even the liberal standard of Rule 12(b)(6)." De Jesus v. Sears, Roebuck & Co., 87 F.3d 65, 70 (2d Cir. 1996) (internal quotations omitted).

When deciding a Rule 12(b)(6) motion, the court generally limits itself to the facts stated in the complaint, documents attached to the complaint as exhibits, or documents incorporated by reference in the complaint. See Dangler v. New York City Off Track Betting Corp., 193 F.3d 130, 138 (2d Cir. 1999). If the court looks to additional materials, the motion should be converted into a motion for summary judgment. See Hayden v. County of Nassau, 180 F.3d 42, 54 (2d Cir. 1999). However, where the court simply refers to supplementary materials, but does not rely to them or use them as a basis for its decision, the ...


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