Contract: Medical clinic sues over unpaid invoice

Where a medical clinic sued over an unpaid invoice, the defendant’s motion to dismiss was denied. The clinic plausibly alleged the defendant knowingly and falsely represented that it would provide, and assume the cost of providing, medical services for two people during their 30-day stay at the clinic, but failed to do so.

Background

NeuroCytonix Inc. alleges that Six Kind LLC  knowingly and falsely represented that it would provide, and assume the cost of providing, medical services for two people during their 30-day stay at plaintiff’s clinic, but failed to do so. Defendant has filed a motion to dismiss.

Impossibility

Defendant argues that its alleged contractual duty never arose because, based on the allegations in the second amended complaint, by the time plaintiff paid defendant for its services, Mr. Draper’s 30-day treatment period had already begun, and it was thus impossible for defendant to pre-enroll Mr. Draper and Ms. Garraway, which it was required to do to ensure proper coverage.

Only in “relatively rare circumstances where facts sufficient to rule on an affirmative defense are alleged in the complaint” may a defendant raise—and the court consider—an affirmative defense at the motion to dismiss stage. Here, even assuming defendant has shown a prima facie case of impossibility at this stage, defendant has not shown that plaintiff’s potential responses to the impossibility defense raised by defendant are foreclosed by the second amended complaint.

For example, the allegations do not foreclose the argument that defendant expressly agreed to assume the risk of performance. Accordingly, defendant’s motion will be denied as to the breach of contract claim.

Fraudulent inducement

Defendant argues that, based on the allegations in the second amended complaint, plaintiff knew or should have known that it paid defendant too late for defendant to secure third-party services. Thus, defendant argues, plaintiff has not plausibly alleged reliance on a misrepresentation.

The court is unconvinced. Plaintiff has alleged that they were induced to pay defendant by a promise of coverage that defendant could not provide and did not provide. Accordingly, defendant’s motion will be denied as to the fraudulent inducement claim.

Attorneys’ fees

“Virginia follows the ‘American Rule,’ which provides that generally, absent a specific contractual or statutory provision to the contrary, attorney’s fees are not recoverable by a prevailing litigant from the losing litigant.” One exception to this general rule is that “fees are proper if the trial court, exercising its discretion in a fraud case, awards equitable relief, and further determines that the circumstances surrounding fraudulent acts and the nature of the relief granted compel an award of attorney’s fees.”

Because plaintiff seeks damages and because specified equitable relief is not sought here, attorney’s fees are not recoverable under the second amended complaint. Thus, the motion will be granted as to attorney’s fees.

Defendant’s motion to dismiss granted in part, denied in part.

NeuroCytonix Inc. v. Six Kind LLC, Case No. 1:24-cv-265, Aug. 29, 2025. EDVA at Alexandria (Alston). VLW 025-3-354. 11 pp.