Companions & Homemakers, Inc. v. A&B Home Care Solutions, LLC

Companions & Homemakers, Inc. v. A&B Home Care Solutions, LLC dba Northwest Homecare

No. HHDCV176075627S

Superior Court of Connecticut, Judicial District of Hartford, Hartford

January 7, 2020

UNPUBLISHED OPINION

Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Shapiro, Robert B., J.T.R.

MEMORANDUM OF DECISION

ROBERT B. SHAPIRO JUDGE TRIAL REFEREE

In this commercial dispute between home care providers, evidence was presented to the court at a bench trial on fourteen days in May, June, and July 2019. Thereafter, in lieu of oral argument, pursuant to an agreed briefing schedule, the parties submitted post-trial memoranda, including replies which were filed on November 12, 2019. After consideration the court issues this memorandum of decision.

I Background

The court summarizes below the plaintiff’s allegations. In the amended substitute complaint (#202) (complaint), the plaintiff, Companions And Homemakers, Inc. (Companions) alleges that it is the largest provider of Medicaid funded eldercare services in Connecticut through the Connecticut Home Care Program for Elders (CHCPE), and the defendant, A&B Home Care Solutions, LLC, d/b/a Northwest Homecare (A&B), is the third largest provider of such services. Companions invests in the recruitment and development of a homecare workforce to provide these services and expends resources to make a true "match" between a client’s needs and an employee caregiver’s skill, experience, personality, interests and expertise and on developing the relationship between the client and caregiver. The matches and caregivers are its primary business assets.

Beginning in 2016 and continuing into 2017, the Connecticut Department of Social Services (DSS) mandated changes to the entire billing and timekeeping system (Electronic Visit Verification system or EVV) utilized by Medicaid homecare providers, with a final date of compliance of January 1, 2017. Companions, A&B, and other homecare providers believed that they would be unable to implement EVV system within the short deadline. A&B joined Companions in presenting a petition to DSS seeking a declaratory ruling as to the mandatory use of EVV. When the petition was not acted on by DSS, Companions and other providers, including A&B, joined to commence suit in November 2016 to challenge EVV’s validity.

Companions contends that A&B falsely represented to Companions that it had a uniform interest in the outcome of the suit and that, in reality, A&B had been working to implement EVV to prepare to divert clients and caregivers away from Companions and to itself. While A&B privately took steps to implement the new procedures, it again confirmed to Companions that it could not comply or use the procedures on the January 1, 2017 mandatory use date or any time soon thereafter, and that it fully supported Companions in the suit. Companions alleges that A&B intentionally misled the Companions as to its ability to comply so that the plaintiff, and not A&B, would be threatened with removal from the Medicaid program and A&B could capture the plaintiff’s caregiver-client matches for itself

Companions also alleges that, in December 2016, Companions gave written notice to A&B as to the existence of restrictive covenants between the plaintiff and its employees. Companions alleges that A&B’s president, Aron Galinovsky, told Companions that A&B would not interfere with the plaintiff’s agreements or take any caregiver-client match away from the plaintiff so that Companions would remain engaged in the suit, with the aim of achieving Companions’ permanent removal from the Medicaid program. After DSS informed Companions on January 3, 2017 that it would be removed from the Medicaid program on February 2, 2017, and contrary to its agreement to forego such activities, A&B began interfering with Companions’ agreements with its employees, by soliciting and hiring the plaintiff’s caregivers to exploit the matches between them and the plaintiff’s clients. In addition, A&B retained private counsel and directed plaintiff’s caregivers to speak with that counsel in order to break their agreements with Companions.

Companions claims that it has suffered damages as a result of A&B’s conduct, including the loss of employees, client business, and damage to the relationship and goodwill Companions has with its clients and vendors.

The complaint sets forth two counts: Count One, tortious interference with contractual relations, and Count Two, violation of the Connecticut Unfair Trade Practices Act (CUTPA).

Additional references to the factual background are discussed below.

II Discussion

In a case tried to the court, "[t]he ... judge, as the trier of facts, is the sole arbiter of the credibility of witnesses and the weight to be given to their testimony." (Internal quotation marks omitted.) Taylor v. Commissioner of Correction, 324 Conn. 631, 637, 153 A.3d 1264 (2017). "[I]t is well established that it is the exclusive province of the trier of fact to make determinations of credibility, crediting some, all, or none of a given witness’ testimony." (Internal quotation marks omitted.) Gonzalez v. State Elections Enforcement Commission, 145 Conn.App. 458, 475, 77 A.3d 790, cert. denied, 310 Conn. 954, 81 A.3d 1181 (2013).

"It is well settled that the trier of fact can disbelieve any or all of the evidence proffered ... and can construe such evidence in a manner different from the parties’ assertions." State v. DeJesus, 236 Conn. 189, 201, 672 A.2d 488 (1996). The trier is not bound by the uncontradicted testimony of any witness. See Mather v. Griffin Hospital, 207 Conn. 125, 145, 540 A.2d 666 (1988). "Testimony that goes uncontradicted does not thereby become admitted or undisputed; [citation omitted] nor does the strength of a witness’s belief raise it to that level." Stanton v. Grigley, 177 Conn. 558, 563, 418 A.2d 923 (1979).

A

Tortious Interference (Count One)

A&B argues that Companions has not proved that A&B’s conduct was either tortious or malicious, and that Companions has not proved its damages claim.

"A claim for tortious interference with contractual relations requires the plaintiff to establish (1) the existence of a contractual or beneficial relationship, (2) the defendants’ knowledge of that relationship, (3) the defendants’ intent to interfere with the relationship, (4) the interference was tortious, and (5) a loss suffered by the plaintiff that was caused by the defendants’ tortious conduct." (Internal quotation marks omitted.) Landmark Inv. Grp., LLC v. CALCO Const. & Dev. Co., 318 Conn. 847, 864, 124 A.3d 847 (2015).

Concerning tortious interference, the Supreme Court has stated that "not every act that disturbs a contract or business expectancy is actionable ..." (Internal quotation marks omitted.) Daley v. Aetna Life & Casualty Co., 249 Conn. 766, 805, 734 A.2d 112 (1999). The Supreme Court "has long recognized a cause of action for tortious interference with contract rights or other business relations." Blake v. Levy, 191 Conn. 257, 260, 464 A.2d 52 (1983). "[F]or a plaintiff successfully to prosecute such an action it must prove that the defendant’s conduct was in fact tortious. This element may be satisfied by proof that the defendant was guilty of fraud, misrepresentation, intimidation or molestation ... or that the defendant acted maliciously." (Citations omitted; internal quotation marks omitted.) Id., 261.

"The plaintiff in a tortious interference claim must demonstrate malice on the part of the defendant, not in the sense of ill will, but intentional interference without justification." (Internal quotation marks omitted.) Daley v. Aetna Life & Casualty Co., supra, 249 Conn. 806.

The court makes the following findings and credits the following evidence, except as noted. DSS operates the CHCPE program, which provides in-home assistance to Connecticut residents over the age of 65 who are at risk of nursing home placement or meet other criteria. Through CHCPE, and pursuant to a contract with DSS called a Provider Enrollment Agreement, Companions is the largest provider of Medicaid and state-funded homecare services in Connecticut. In 2016, it had approximately 1, 400 CHCPE clients. A&B is a competitor of Companions and also has a provider agreement with DSS. A&B purchased Northwest Homecare, Inc. in February 2016 and actively sought to expand its Medicaid business in Litchfield County. Provider agencies like Companions and A&B provide non-medical personal, homemaking, and companion care to clients. Caregivers are employees of provider agencies.

DSS contracts with various access agencies which assist DSS in operating the CHCPE by assessing clients’ functional status, developing individualized plans of care, arranging for that care to be provided by a provider agency, and monitoring ongoing care. Typically, a care manager at an access agency will offer a client a choice of provider agencies to meet the client’s needs.

Companions requires its caregivers to execute a confidentiality, nonsolicitation and noncompetition agreement (noncompete) when they are hired, which provides that a caregiver may not work privately for a client they are matched with through Companions during the course of provision of services and for a period of six months after either the caregiver or the client leaves Companions. A caregiver may work for other providers while working for Companions or A&B. See Exhibit 2.

The matches made between clients and caregivers are significant business assets for both Companions and A&B. A&B’s Employee Handbook reflects this as it contains a non-solicitation clause prohibiting A&B’s caregivers from soliciting and accepting business on behalf of any other company for any A&B client within twelve...