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Missouri Court of Appeals Western District 50 Plus Pharmacy v. Choice Pharmacy Systems, LLC

Court of Appeals of Missouri, Western District, First Division

March 31, 2015

MISSOURI COURT OF APPEALS WESTERN DISTRICT 50 PLUS PHARMACY, et al., Respondents,
v.
CHOICE PHARMACY SYSTEMS, LLC, et al., Appellants

Appeal from the Circuit Court of Jackson County, Missouri. The Honorable Kenneth R. Garrett, III, Judge.

George E. Kapke, Lee's Summit, MO, Attorney for Respondents.

Eric E. Packel, Latrice N. McDowell, and Jon R. Dedon, Kansas City, MO, Attorneys for Appellants.

Before Division I: Cynthia L. Martin, Presiding Judge, and Thomas H. Newton and Mark D. Pfeiffer, Judges. Cynthia L. Martin, Presiding Judge, and Thomas H. Newton, Judge, concur.

OPINION

Mark D. Pfeiffer, Judge.

Page 458

Choice Pharmacy Systems, LLC; Choice Pharmacy Services, LLC d/b/a Partners Pharmacy; and Kathy Kopp (collectively, " Buyers" ) appeal the ruling of the Circuit Court of Jackson County, Missouri (" trial court" ), denying their Motion to Compel Arbitration in the underlying litigation against Buyers filed by 50 Plus Pharmacy, Inc. and Kathy Browne (collectively, " Sellers" ). We affirm.

Factual and Procedural Background

On September 21, 2011, Sellers entered into an asset purchase agreement (" APA" ) with Buyers whereby Buyers purchased assets of a pharmacy business that served long-term care facilities. Pursuant to the APA, Buyers paid Sellers $6,150,000 cash for the pharmacy business with an additional $500,000 to be held in escrow and paid over three years to either Sellers, Buyers, or both, depending upon the number of patients being serviced by Buyers on the first, second, and third anniversaries of the sale. The APA specifically provides:

This Agreement shall be governed by and construed in accordance with the Laws of the State of Missouri without regard to the rules of conflict of laws of the State of Missouri or any other jurisdiction. Each of the Parties hereto irrevocably and unconditionally consents to submit to the jurisdiction of the federal or state courts of or located within the

Page 459

State of Missouri for any litigation arising out of or relating to this Agreement and the transactions contemplated thereby (and agrees not to commence any litigation relating thereto except in such courts), waives any objection to the laying of venue of any such litigation therein, and agrees not to plead or claim that such litigation has been brought in an inconvenient forum.

(Emphasis added.) The APA incorporates by reference three separate agreements: an Employment Consulting Agreement (consulting by Seller/Consultant Kathy Browne), a Restrictive Covenant Agreement (i.e., non-competition by Sellers), and an Indemnity Escrow Agreement (" Escrow Agreement" ). Of these three agreements, none contemplates arbitration except for the Escrow Agreement. And unlike any other agreement between the parties, the Escrow Agreement involves a third-party professional escrow agent located in the State of New Jersey. In the Escrow Agreement, the parties contemplate a process whereby Buyers would file a Buyer's Certificate detailing the number of patients that were being serviced on certain anniversary dates (which could lead to an escrow distribution) and/or a Claim Notice in which Buyers could assert a claim against Sellers (which would impact escrow distribution). Sellers were entitled to dispute any such Claim Notice by filing a Notice of Dispute. Specifically, the Escrow Agreement provided:

Claim Notice and Notice of Dispute. In the event the Buyer shall have a claim against the Selling Parties under the Purchase Agreement, the Buyer shall deliver (i) a written notice setting forth, to the extent then known, the amount, nature and basis of such claim (a " Claim Notice" ) to the Seller and (ii) a copy of the Claim Notice to the Escrow Agent. If the Seller objects to the claim set forth in such Claim Notice, or if the Seller objects to the information set forth in the Buyer's Certificate, the Seller shall, within 30 days from the date of its receipt of such Claim Notice or Buyer's Certificate, as the case may be, send a written notice (a " Notice of Dispute" ) to the Buyer and the Escrow Agent setting forth, in reasonable detail, the nature of and basis for any such objection. Any amounts requested by the Buyer in any Claim Notice with respect to any claim shall not preclude the Buyer from requesting further amounts in subsequent Claim Notices with respect to such claim.

And in the event the parties could not resolve escrow claims set forth in the Notice of Dispute, the ...


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