Court of Appeals of Missouri, Western District, Second Division
STATE OF MISSOURI, OFFICE OF ADMINISTRATION, et al., Appellants-Respondents,
PHARMACY CORPORATION OF AMERICA, d/b/a PHARMERICA, et al., Respondents-Appellants.
from the Circuit Court of Cole County, Missouri The Honorable
Daniel R. Green, Judge.
Before: Lisa White Hardwick, Presiding Judge, and Thomas H.
Newton and Mark D. Pfeiffer, Judges.
D. Pfeiffer, Judge.
State of Missouri, Office of Administration
("State") appeals the partial summary judgment of
the Circuit Court of Cole County, Missouri ("circuit
court"), for Pharmacy Corporation of America
("PharMerica"), on the State's breach of
contract claim. Conversely, PharMerica cross-appeals the
circuit court's partial summary judgment in favor of the
State. We affirm.
and Procedural Background
material facts are not in dispute.
21, 2009, the State issued a Request for Proposal
("RFP") seeking a pharmacy vendor to provide
services and pharmaceuticals for the residents of the
Missouri Veterans Homes. The RFP provided that the
"original contract period" would extend from the
Date of Award through June 30, 2010 ("Year 1"). The
RFP also provided that the State could, in its sole
discretion, renew the contract on a yearly basis for up to
four more years thereafter ("Year 2," "Year
3," "Year 4," and "Year 5").
2, 2009, PharMerica submitted a bid in response to the
State's RFP. PharMerica is the second largest
institutional pharmacy company in America with nearly $2
billion in annual revenues. PharMerica's bid provided per
resident, per month pricing for the "original contract
period" and "each potential renewal period" at
the same rate, $425, for all five years. On August 13, 2009,
the State awarded the contract to PharMerica, sending it a
Notice of Award. The Notice provided that the original
contract period was from September 1, 2009, to June 30, 2010.
PharMerica and the State fully performed for the original
contract period. During that time, however, in a meeting on
February 18, 2010, PharMerica communicated to the State that
it was "losing money" and claimed it would not
perform past Year 1. In a letter dated May 6, 2010,
PharMerica indicated to the State that "If the state
elects to renew the contract, PharMerica does not intend to
enter into a renewal agreement" after the expiration of
the original contract period on June 30, 2010. The State
responded in a letter of May 11, 2010, stating PharMerica
"does not have an option to decline the renewal"
and that any refusal to honor the renewal provisions of the
contract "will be viewed and acted upon by the State of
Missouri as a material breach of PharMerica's contractual
obligations" and further expressed in a letter of June
23, 2010, that "[a]ny actions by PharMerica after June
30, 2010, that are not consistent with the terms of the
contract will be considered a breach and the state will refer
the matter [to] the Missouri Attorney General's Office
for appropriate legal remedies." On June 7, 2010, the
State issued a Notice of Contract Renewal for Year 2, for the
period from July 1, 2010 through June 30, 2011. PharMerica
issued an ultimatum in early July that it would not perform
past July 31, 2010, at the contracted price, and would not
provide a ninety-day transition period (as called for in the
contract) for the State to get a replacement contractor.
State then replaced PharMerica with the second-place bidder
from the initial RFP- Interlock-at a cost higher than
PharMerica's contract price. The last date PharMerica
provided pharmacy services to Missouri Veterans Homes was
July 31, 2010.
acted as the State's contractor for the remaining eleven
months of Year 2 and for all of Years 3, 4, and 5. The State
did not communicate again with PharMerica until serving a
demand letter on January 21, 2015, claiming PharMerica was
liable for breaching Years 2-5 of the contract and
quantifying its alleged damages. On June 11, 2015, the State
sued PharMerica for breach of contract. Following depositions
and written discovery, the parties both filed motions for
summary judgment. The circuit court granted the State's
motion for summary judgment as to Year 2, and granted
PharMerica's motion for summary judgment as to Years 3
appeal and cross-appeal timely follow.
Missouri Supreme Court explained the standard of review for
the grant of summary judgment in Goerlitz v. City of
The trial court makes its decision to grant summary judgment
based on the pleadings, record submitted, and the law;
therefore this Court need not defer to the trial court's
determination and reviews the grant of summary judgment
de novo. ITT Commercial Fin. Corp. v.
Mid-America Marine Supply Corp., 854 S.W.2d 371, 376
(Mo. banc 1993); Rule 74.04. In reviewing the decision to
grant summary judgment, this Court applies the same criteria
as the trial court in determining whether summary judgment
was proper. Id. Summary judgment is only proper if
the moving party establishes that there is no genuine issue
as to the material facts and that the movant is entitled to
judgment as a matter of law. Id. The facts contained
in affidavits or otherwise in support of a party's motion
are accepted "as true unless contradicted by the
non-moving party's response to the summary judgment
motion." Id. Only genuine disputes as to
material facts preclude summary judgment. Id. at
378. A material fact in the context of summary judgment is
one from which the right to judgment flows. Id.
A defending party . . . may establish a right to summary
judgment by demonstrating: (1) facts negating any one of the
elements of the non-movant's claim; (2) "that the
non-movant, after an adequate period for discovery, has not
been able and will not be able to produce sufficient evidence
to allow the trier of fact to find the existence of any
one" of the elements of the non-movant's claim; or
(3) "that there is no genuine dispute as to the
existence of facts necessary to support movant's properly
pleaded affirmative defense." Id. at 381. Each
of these three methods individually "establishes the
right to judgment as a matter of law." Id.
333 S.W.3d 450, 452-53 (Mo. banc 2011); Ditto, Inc. v.
Davids, 457 S.W.3d 1, 8-9 (Mo. App. W.D. 2014).
appeal, the State asserts that the grant of partial summary
judgment was erroneous because the State exercised its option
to extend the contract for a second year and PharMerica's
conduct made it "not only useless but impossible"
to continue to exercise its option to extend the contract
each year thereafter. In its cross-appeal, PharMerica
contends that the grant of partial summary judgment was
erroneous because the State failed to meet its burden to
establish that PharMerica's affirmative defenses failed
as a matter of law. The parties' arguments will be
analyzed in chronological order in the context of the
is no dispute that the parties both fully performed during
the "original term" of the contract.