IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
`
`ACCUITY DELIVERY SYSTEMS, LLC,
`ACCUITY DELIVERY SYSTEMS
`HOLDINGS, LLC, AND FH ACCUITY
`PURCHASER, LLC,
`
`Plaintiffs,
`
`v.
`
`KODE HEALTH, INC., BRIAN DESSOY
`AND BRADLEY SAWDON,
`
`Defendants.
`
` C.A. No. 2022-0996-LWW
`
`DEFENDANTS’ ANSWER AND VERIFIED COUNTERCLAIMS
`
`Defendants Kode Health, Inc. (“Kode”), Brian Dessoy (“Dessoy”) and
`
`Bradley Sawdon
`
`(“Sawdon” and with Kode and Dessoy, collectively,
`
`“Defendants”), by and through its undersigned counsel, responds to the Verified
`
`Complaint (“Complaint”) filed by Plaintiffs Accuity Delivery Systems, LLC
`
`(“Accuity”), Accuity Delivery Systems Holdings, LLC (“Accuity Holdings”), and
`
`FH Accuity Purchaser, LLC (“Accuity Purchaser” and with Accuity and Accuity
`
`Holdings, collectively, “Plaintiffs”) and state as follows. Unless expressly admitted,
`
`all allegations in the Complaint are denied, including, without limitation, the
`
`headings, sub-headings, and footnotes contained in the Complaint. Pursuant to
`
`Court of Chancery Rule 8(d), allegations contained in the Complaint to which no
`
`EFiled: Dec 19 2022 04:13PM EST
`Transaction ID 68662764
`Case No. 2022-0996-LWW
`
`

`

`responsive pleading is required shall be deemed denied. Defendants reserve the right
`
`to amend or supplement this Answer to the Complaint.
`
`NATURE OF THE ACTION
`
`Accuity, among other things, provides medical documentation review
`1.
`and coding services to hospitals and physicians.
`RESPONSE: Defendants are without knowledge or information sufficient to
`
`form a belief as to the truth of the allegations contained in this paragraph.
`
`This is an action to enforce restrictive covenants executed by
`2.
`Defendants Dessoy and Sawdon, under which they agreed, including through
`affiliates such as Kode, to refrain from engaging in any business similar to, or
`soliciting customers from, Accuity.
`RESPONSE: The allegations contained in this paragraph contain Plaintiffs’
`
`characterization of this action, to which no response is required. To the extent that a
`
`response is required, Defendants deny the allegations in this Paragraph.
`
`Despite such restrictions, after and, on information and belief, before
`3.
`terminating their employment with Accuity, Dessoy and Sawdon formed and
`continue to operate Kode, which primarily provides medical documentation review
`and coding services to hospitals and physicians. As such, Dessoy and Sawdon,
`directly and indirectly through Kode, are violating and intend to continue to violate
`their obligations to Plaintiffs.
`RESPONSE: The allegations contained in this Paragraph state a conclusion
`
`of law, to which no response is required. To the extent that a response is required,
`
`Defendants deny the allegations in this Paragraph.
`
`This action further seeks to prevent Kode’s continued tortious
`4.
`interference with Dessoy and Sawdon’s restrictive covenants or to benefit
`inequitably from their breaches of such covenants.
`
`2
`
`

`

`RESPONSE: The allegations contained in this Paragraph contain Plaintiffs’
`
`characterization of this action, to which no response is required. To the extent that a
`
`response is required, Defendants deny the allegations in this Paragraph.
`
`THE PARTIES
`
`Accuity is a Nevada LLC with a principal place of business at 10000
`5.
`Midlantic Drive, Suite 400W, Mount Laurel, New Jersey.
`RESPONSE: Defendants are without knowledge or information sufficient to
`
`form a belief as to the truth of the allegations contained in this paragraph.
`
`Accuity Holdings is a Delaware LLC with a principal place of business
`6.
`at 10000 Midlantic Drive, Suite 400W, Mount Laurel, New Jersey. Accuity is wholly
`owned by Accuity Holdings.
`RESPONSE: Defendants are without knowledge or information sufficient to
`
`form a belief as to the truth of the allegations contained in this paragraph.
`
`Accuity Purchaser is a Delaware LLC with a principal place of business
`7.
`at 10000 Midlantic Drive, Suite 400W, Mount Laurel, New Jersey. Accuity
`Holdings is wholly owned by Accuity Purchaser.
`RESPONSE: Defendants are without knowledge or information sufficient to
`
`form a belief as to the truth of the allegations contained in this paragraph.
`
`Kode is a Delaware corporation with a principal place of business
`8.
`located at 675 E 16th Street, Suite 220, Holland, Michigan.
`RESPONSE: Defendants admit the allegations of this Paragraph.
`
`Dessoy is an individual who resides, on information and belief, at 5840
`9.
`E. Onyx Avenue, Paradise Valley, Arizona. Dessoy is, on information and belief, an
`owner and an officer of Kode.
`RESPONSE: Defendants admit the allegations of this Paragraph.
`
`3
`
`

`

`Sawdon is an individual who resides at 6174 146th Ave., Holland,
`10.
`Michigan. Sawdon is, on information and belief, an owner and the president of Kode.
`RESPONSE: Defendants admit the allegations of this Paragraph.
`
`JURISDICTION
`
`The Court has subject matter jurisdiction over this action because
`11.
`Plaintiffs are seeking equitable relief, including a permanent injunction. 10 Del. C.
`§ 341.
`
`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`The Court has personal jurisdiction over Kode because it is an entity
`12.
`incorporated under the laws of the State of Delaware.
`RESPONSE: Defendant admits that it is incorporated under the laws of the
`
`State of Delaware. The remaining allegations in this Paragraph state a conclusion
`
`of law to which no response is required. To the extent a response is required, the
`
`remaining allegations in this paragraph are denied.
`
`The Court has personal jurisdiction over Sawdon and Dessoy pursuant
`13.
`to 10 Del. C. § 3104.
`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the Defendants deny the allegations in this Paragraph.
`
`The Court also has jurisdiction over Sawdon and Dessoy because the
`14.
`agreements they signed, which are described at length in the Verified Complaint
`below, contain valid forum selection clauses.
`
`4
`
`

`

`RESPONSE: This Paragraph of the Complaint refers to a document, the
`
`terms and contents of which speak for themselves. Defendants respectfully refer to
`
`that document for the true and correct contents therein and denies any allegations in
`
`this Paragraph inconsistent therewith.
`
`FACTUAL BACKGROUND
`
`Prior to September 25, 2020, both Dessoy and Sawdon were employed
`15.
`by Accuity and held ownership interests in Accuity Holdings.
`RESPONSE: Defendants deny the allegations of this Paragraph, except it is
`
`admitted that prior to September 25, 2020, Dessoy and Sawdon were employed by
`
`Accuity and held profits interests in Accuity Holdings.
`
`16. As of September 25, 2020, Accuity Purchaser and Accuity Holdings
`entered into the “Membership Interest Purchase Agreement” (the “Purchase
`Agreement”) by which Accuity Purchaser acquired, through a series of transactions,
`membership interests in Accuity Holdings, including those held by “Rollover
`Participants.” Each of Dessoy and Sawdon subsequently executed a “Direct Member
`Sales Agreement” (the “Sales Agreement”) and a “Redemption and Distribution
`Agreement” (the “Rollover Agreement”) pursuant to which, in general terms, each
`obtained substantial consideration for his existing equity interest, most of which each
`received in cash and the remainder of which was “rolled into” membership interests
`in the newly reorganized entity, Accuity Parent Holdings, LLC (“Accuity Parent”).
`Each of Dessoy and Sawdon also executed an employment agreement with Accuity
`that promised them positions of substantial responsibility and commensurate
`substantial compensation.
`RESPONSE: This Paragraph of the Complaint refers to documents, the terms
`
`and contents of which speak for themselves. Defendants respectfully refer to those
`
`documents for the true and correct contents therein and deny any allegations in this
`
`Paragraph inconsistent therewith.
`
`5
`
`

`

`Specifically, Sawdon received several million dollars in pretax
`17.
`proceeds from the transaction, a significant portion of which was rolled over into his
`new equity interests in Accuity Parent. Dessoy received well over $1 million in
`pretax proceeds from the transaction, a significant portion of which was rolled over
`into his new equity interests in Accuity Parent.
`RESPONSE: This Paragraph of the Complaint refers to a document, the
`
`terms and contents of which speak for themselves. Defendants respectfully refer to
`
`that document for the true and correct contents therein and deny any allegations in
`
`this Paragraph inconsistent therewith.
`
`Pursuant to his new employment agreement, Sawdon became the Chief
`18.
`Growth Officer of Accuity with a salary of $275,000 and a target bonus of 50% of
`his salary for a total target compensation for 2021 of $413,000. In addition, he had
`the opportunity to earn 7.25% of the Management Incentive Plan.
`RESPONSE: This Paragraph of the Complaint refers to a document, the
`
`terms and contents of which speak for themselves. Defendants respectfully refer to
`
`that document for the true and correct contents therein and deny any allegations in
`
`this Paragraph inconsistent therewith.
`
`Pursuant to his new employment agreement, Dessoy became Accuity’s
`19.
`General Manager, Revenue Cycle Operations, at a salary of $280,000 and a 2021
`target bonus of 10% of his salary for a total target compensation for 2021 of
`$308,000. In addition, he had the opportunity to earn 1% of the Management
`Incentive Plan, which was increased to 2% in 2021.
`RESPONSE: This Paragraph of the Complaint refers to a document, the
`
`terms and contents of which speak for themselves. Defendants respectfully refer to
`
`that document for the true and correct contents therein and deny any allegations in
`
`this Paragraph inconsistent therewith.
`
`6
`
`

`

`The Rollover Agreement required each of Dessoy and Sawdon to enter
`20.
`into transaction-based restrictive covenant agreements with Accuity Purchaser (the
`“Transaction Covenants”). Each agreed to the Transaction Covenants.
`RESPONSE: This Paragraph of the Complaint refers to documents, the
`
`terms and contents of which speak for themselves. Defendants respectfully refer to
`
`those documents for the true and correct contents therein and deny any allegations
`
`in this Paragraph inconsistent therewith.
`
`Pursuant to Section 1(a) of the Transaction Covenants, for a period of
`21.
`five years (defined as the “Restricted Period”) after the closing of the Sales
`Agreement, “anywhere in North America” (defined as the “Restricted Area”),
`Dessoy and Sawdon agreed “not to (and to cause its controlled Affiliates not to),…
`directly or indirectly, Participate In any Restricted Business in any capacity….”
`RESPONSE: This Paragraph of the Complaint refers to a document, the
`
`terms and contents of which speak for themselves. Defendants respectfully refer to
`
`that document for the true and correct contents therein and deny any allegations in
`
`this Paragraph inconsistent therewith.
`
`Section 3 of the Transaction Covenants defines “Restricted Business”
`22.
`as “any Person or business conducted in the Restricted Area that is engaged in or
`competes, directly or indirectly, with the Business.” The Transaction Covenants
`further define “Business” to “mean[] (x) the business of providing revenue integrity
`solutions, medical
`record and/or quality
`review, clinical documentation
`improvement services or consultation, and physician education related to clinical
`documentation or medical coding, in each case, for hospitals, hospital outpatient
`clinics and ambulatory surgery centers and (y) any other business conducted or
`services performed or provided by the Company as of the Closing Date.”
`RESPONSE: This Paragraph of the Complaint refers to a document, the
`
`terms and contents of which speak for themselves. Defendants respectfully refer to
`
`7
`
`

`

`that document for the true and correct contents therein and deny any allegations in
`
`this Paragraph inconsistent therewith.
`
`Pursuant to Section 1(b) the Transaction Covenants, during the
`23.
`Restricted Period, Dessoy and Sawdon also agreed “not to (and to cause its
`controlled Affiliates not to), anywhere in the Restricted Area, directly or indirectly,
`(x) induce or attempt to induce any customer, supplier, licensor or other business
`relation of the Business to cease doing business with, or reduce its business with, the
`Company or (y) in any way intentionally interfere with the relationship between any
`such customer, supplier, distributor, licensee, licensor or other business relation of
`the Business.”
`RESPONSE: This Paragraph of the Complaint refers to a document, the
`
`terms and contents of which speak for themselves. Defendants respectfully refer to
`
`that document for the true and correct contents therein and deny any allegations in
`
`this Paragraph inconsistent therewith.
`
`Pursuant to Section 1(c) of the Transaction Covenants, during the
`24.
`Restricted Period, Dessoy and Sawdon also agreed “not to (and to cause its
`controlled Affiliates not to), anywhere in the Restricted Area, directly or indirectly
`(x) solicit, induce or attempt to solicit or induce any Restricted Employee to leave
`the employ or service of the Company or in any way intentionally interfere with the
`relationship between the Company, on the one hand, and any Restricted Employee,
`on the other hand or (y) hire any Restricted Employee.” The Transaction Covenants
`allowed certain general solicitations (in other words, mass media job postings) “not
`targeted towards a particular Restricted Employee… provided, that no Restricted
`Employee who responds to such general solicitation may be hired without the prior
`written consent of Purchaser.”
`RESPONSE: This Paragraph of the Complaint refers to a document, the
`
`terms and contents of which speak for themselves. Defendants respectfully refer to
`
`that document for the true and correct contents therein and deny any allegations in
`
`this Paragraph inconsistent therewith.
`
`8
`
`

`

`25.
`
`Pursuant to Section 4 of the Transaction Covenants:
`The Parties further agree that the Restricted
`Party’s expertise in the business of the Company is of a
`special, unique, unusual, extraordinary, and intellectual
`character, which gives the Restricted Party’s expertise a
`peculiar value. Consequently, the Restricted Party
`acknowledges and agrees that Purchaser and its Affiliates
`will suffer irreparable harm from a breach of Section 1 or
`Section 2 by the Restricted Party and that money
`damages or the remedy at law available to Purchaser for
`breach of the Restricted Party’s obligations under this
`Agreement will not be a reasonable or adequate remedy
`for any such breach. Therefore, in addition to any other
`rights or remedies that Purchaser may have at law or in
`equity, in the event of a breach or threatened breach of
`this Agreement, Purchaser shall be entitled to (i) specific
`performance and/or temporary and permanent injunctive
`relief in any proceeding that may be brought to enforce
`any provision of this Agreement, injunctive or other
`equitable relief from a court of competent jurisdiction in
`order to enforce, or prevent any violations of, the
`provisions hereof, in each case, without (a) the necessity
`of proof of actual damages or adequacy of remedies at
`law or (b) being required to post bond or other security. .
`. . The prevailing party in any Proceeding arising out of
`this Agreement shall be entitled to recover from the non-
`prevailing party such prevailing party’s reasonable and
`documented out-of-pocket fees costs and expenses
`incurred in connection with such Proceeding.
`RESPONSE: This Paragraph of the Complaint refers to a document, the
`
`terms and contents of which speak for themselves. Defendants respectfully refer to
`
`that document for the true and correct contents therein and deny any allegations in
`
`this Paragraph inconsistent therewith.
`
`The Transaction Covenants incorporate the Delaware choice of law and
`26.
`forum selection clause in the Purchase Agreement. Each of Dessoy and Sawdon
`agreed that the exclusive venue for a dispute under the Transaction Covenants would
`be the federal or state courts located in Delaware.
`
`9
`
`

`

`RESPONSE: This Paragraph of the Complaint refers to a document, the
`
`terms and contents of which speak for themselves. Defendants respectfully refer to
`
`that document for the true and correct contents therein and deny any allegations in
`
`this Paragraph inconsistent therewith.
`
`27. On or about September 25, 2020, Dessoy and Sawdon began their post-
`transaction employment with Accuity.
`RESPONSE: Defendants admit the allegations of this Paragraph.
`
`28. During their employment with Accuity, both Dessoy and Sawdon had
`access to Accuity’s confidential information, including, but not limited to, customer
`lists and contact information, employee and consultant information and names,
`proprietary medical coding software, and market research.
`RESPONSE: Defendants deny the allegations of this Paragraph, except it is
`
`admitted that Dessoy and Sawdon had access to Accuity’s information.
`
`29. On May 18, 2021, Sawdon resigned from Accuity.
`RESPONSE: Defendants deny the allegations of this Paragraph, except it is
`
`admitted that May 18, 2021, was Sawdon’s last day of employment at Accuity.
`
`30. On December 8, 2021, Dessoy resigned from Accuity.
`RESPONSE: Defendants deny the allegations of this Paragraph, except it is
`
`admitted that December 8, 2021, was Dessoy’s last day of employment at Accuity.
`
`31. On information and belief, on or about July 16, 2021, Dessoy and
`Sawdon formed Kode by causing to be filed incorporation documents in the State of
`Delaware.
`
`10
`
`

`

`RESPONSE: Defendants deny the allegations of this Paragraph, except it is
`
`admitted that on or about July 16, 2021, Sawdon caused Kode’s certificate of
`
`incorporation to be filed with the Delaware Secretary of State.
`
`32. On information and belief, Dessoy and Sawdon began working together
`regarding Kode while they were still employed with Accuity.
`RESPONSE: Defendants deny the allegations of this Paragraph.
`
`Since its formation, Kode, through Dessoy and Sawdon, has been aware
`33.
`of the Transaction Covenants.
`RESPONSE: This Paragraph of the Complaint refers to a document, the
`
`terms and contents of which speak for themselves. Defendants respectfully refer to
`
`that document for the true and correct contents therein and deny any allegations in
`
`this Paragraph inconsistent therewith.
`
`34. Kode provides medical coding services for hospitals and physicians.
`RESPONSE: Defendants deny the allegations of this Paragraph, except it is
`
`admitted that Kode is a technology platform creating a labor marketplace that
`
`connects health systems and medical groups to medical coders.
`
`35. Kode describes itself as “a one-stop shop for all of your coding needs.”
`RESPONSE: Defendants deny the allegations of this Paragraph, except it is
`
`admitted that while Kode’s web site may have had the quote in this Paragraph on its
`
`website, Kode describes itself as a technology platform creating a labor marketplace
`
`that connects health systems and medical groups with medical coders.
`
`36. Kode provides similar services to, and directly competes with, Accuity.
`
`11
`
`

`

`RESPONSE: Defendants deny the allegations of this Paragraph.
`
`37. Kode has solicited Accuity’s clients. For example, on October 10, 2022,
`Accuity was informed by one of its largest clients that Sawdon had contacted it to
`solicit business on behalf of Kode. This is not the first nor will it be the last of
`Accuity’s clients that Sawdon and Dessoy, on behalf of Kode, have and likely will
`solicit in violation of the Transaction Covenants.
`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`38. Upon information and belief, Kode also has solicited Accuity's coders;
`again, in violation of the Transaction Covenants.
`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`39. On information and belief, Dessoy and Sawdon have utilized on behalf
`of Kode Accuity’s confidential information including such things as client lists,
`preferences and historical activity with Accuity.
`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`40. On information and belief, Dessoy and Sawdon have used Accuity’s
`confidential information to advance both the interests of Kode as well as their own
`personal interests.
`
`12
`
`

`

`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`COUNT I: BREACH OF CONTRACT/TRANSACTION COVENANTS
`(Dessoy and Sawdon)
`Plaintiffs repeat and reallege, as if set forth fully herein, the allegations
`41.
`of each and every other paragraph of this Verified Complaint.
`RESPONSE: Defendants incorporate all responses set forth above as if fully
`
`set forth herein.
`
`42. Dessoy and Sawdon each entered into the Rollover Agreement, which
`included the Transaction Covenants, with Accuity Purchaser and Accuity Holdings.
`RESPONSE: This Paragraph of the Complaint refers to documents, the terms
`
`and contents of which speak for themselves. Defendants respectfully refer to those
`
`documents for the true and correct contents therein and deny any allegations in this
`
`Paragraph inconsistent therewith.
`
`The Rollover Agreement and Transaction Covenants are legally
`43.
`binding contracts.
`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`44. Accuity is a third-party beneficiary of the Transaction Covenants.
`
`13
`
`

`

`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`45. Dessoy and Sawdon breached the Rollover Agreement and Transaction
`Covenants by, among other things: (1) forming and leading Kode, a company that is
`substantially similar to, and directly competes with, Accuity; and (2) soliciting
`Accuity customers and/or coders.
`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`46. As a result of such breach, Accuity Purchaser, Accuity Holdings and
`Accuity have suffered, and continue to suffer, irreparable harm.
`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`Pursuant to the Transaction Covenants, Accuity Purchaser, Accuity
`47.
`Holdings and Accuity are entitled to equitable relief requiring Dessoy and Sawdon
`specifically to perform and adhere to the terms of the Transaction Covenants.
`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`Pursuant to the Transaction Covenants, Accuity Purchaser, Accuity
`48.
`Holdings and Accuity are entitled to injunctive relief preventing Dessoy and Sawdon
`from: (1) operating Kode in a manner that violates the Transaction Covenants; and
`(2) soliciting Accuity’s customers and/or coders.
`
`14
`
`

`

`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`Pursuant to the Transaction Covenants, Accuity Purchaser, Accuity
`49.
`Holdings and Accuity are entitled to damages, including, but not limited to, any lost
`revenues or profits as well as their attorney’s fees, which they have incurred as a
`result of Dessoy and Sawdon’s breach of the Transaction Covenants.
`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`COUNT II: TORTIOUS INTERFERENCE
`(Kode)
`Plaintiffs repeat and reallege, as if set forth fully herein, the allegations
`50.
`of each and every other paragraph of this Verified Complaint.
`RESPONSE: Defendants incorporate all responses set forth above as if fully
`
`set forth herein.
`
`51. Dessoy and Sawdon each entered into the Rollover Agreement, which
`included the Transaction Covenants, with Accuity Purchaser and Accuity Holdings.
`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`The Rollover Agreements and Transaction Covenants are legally
`52.
`binding contracts.
`
`15
`
`

`

`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`53. Kode was aware of the Transaction Covenants.
`RESPONSE: This Paragraph of the Complaint refers to a document, the
`
`terms and contents of which speak for themselves. Defendants respectfully refer to
`
`that document for the true and correct contents therein and deny any allegations in
`
`this Paragraph inconsistent therewith.
`
`54. Kode improperly induced Dessoy and Sawdon to breach the
`Transaction Covenants.
`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`55. Accuity Purchaser, Accuity Holdings and Accuity have been damaged
`by Dessoy and Sawdon’s breaches of the Transaction Covenants.
`RESPONSE: Defendants are without knowledge or information sufficient to
`
`form a belief as to the truth of the allegations contained in this paragraph.
`
`56. Kode has profited from Dessoy and Sawdon’s breaches of the
`Transaction Covenants.
`RESPONSE: Defendants deny the allegations of this Paragraph.
`
`57. Kode has been unjustly enriched by Dessoy and Sawdon’s breaches of
`the Transaction Covenants.
`RESPONSE: Defendants deny the allegations of this Paragraph.
`
`16
`
`

`

`58. Accuity Purchaser, Accuity Holdings and Accuity are entitled to
`injunctive relief to prevent Kode from continuing to profit and benefit through
`Dessoy’s and Sawdon’s breaches of the Transaction Covenants and its continued
`and future interference with the Transaction Covenants.
`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`59. Accuity Purchaser, Accuity Holdings and Accuity are entitled to
`damages and other relief, including the disgorgement of profits Kode has received
`as a result of Dessoy and Sawdon’s breaches of the Transaction Covenants.
`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`60. Accuity Purchaser, Accuity Holdings and Accuity are entitled to the
`formation of a constructive trust, for their benefit, to hold the profits Kode has
`received as a result of Dessoy and Sawdon’s breaches of the Transaction Covenants.
`RESPONSE: The allegations in this Paragraph of the Complaint state a
`
`conclusion of law to which no response is required. To the extent a response is
`
`required, the allegations in this Paragraph are denied.
`
`COUNT III: TORTIOUS INTERFERENCE WITH CONTRACT
`(Kode)
`
`Plaintiffs repeat and reallege, as if set forth fully herein, the allegations
`61.
`of each and every other paragraph of this Verified Complaint.
`RESPONSE: Defendants incorporate all responses set forth above as if fully
`
`set forth herein.
`
`17
`
`

`

`62. Kode knew of Accuity’s contracts with, among other customers, one of
`its significant customers, and intentionally interfered, without justification, to cause
`or induce termination of Accuity’s business relationship with that significant
`customer, as well as its other clients, customers, and coders.
`RESPONSE: Defendants deny the allegations of this Paragraph.
`
`63. Kode has solicited other of the Accuity’s clients, customers and coders.
`RESPONSE: Defendants deny the allegations of this Paragraph, except it is
`
`admitted that certain of Kode’s clients were, to Kode’s knowledge, also clients of
`
`Accuity who, to Kode’s knowledge, have not terminated their engagements with
`
`Accuity.
`
`Plaintiffs have been damaged by the intentional interference by Kode
`64.
`with its business relationships with Accuity’s clients, customers and consultants.
`RESPONSE: Defendants are without knowledge or information sufficient to
`
`form a belief as to the truth of the allegations contained in this paragraph.
`
`18
`
`

`

`AFFIRMATIVE DEFENSES
`
`By setting forth these affirmative defenses, Defendants do not assume the
`
`burden of proving any fact, issue, or element of a cause of action where such burden
`
`properly belongs to Plaintiff. Nothing stated herein is intended to or shall be
`
`construed as an admission that any particular issue or subject matter is relevant to
`
`Plaintiffs’ allegations. Defendants reserve the right to assert other defenses or claims
`
`when and if they become appropriate and/or available in this action.
`
`FIRST AFFIRMATIVE DEFENSE
`
`The Complaint fails to state a claim for which relief can be granted.
`
`SECOND AFFIRMATIVE DEFENSE
`
`The claims alleged in the Complaint are barred, in whole or in part, by the
`
`doctrine of waiver, laches or estoppel.
`
`THIRD AFFIRMATIVE DEFENSE
`
`This action is barred, in whole or in part, to the extent Plaintiffs would be
`
`unjustly enriched if allowed to recover under the Complaint.
`
`FOURTH AFFIRMATIVE DEFENSE
`
`Plaintiffs have failed to mitigate its damages, to the extent that it has any.
`
`19
`
`

`

`VERIFIED COUNTERCLAIMS
`
`Defendants/Counterclaim-Plaintiffs, Kode Health, Inc. (“Kode”), Brian
`
`Dessoy (“Dessoy”) and Bradley Sawdon (“Sawdon” and with Kode and Dessoy,
`
`collectively, “Counterclaim Plaintiffs”), by and through their undersigned counsel,
`
`for their Verified Counterclaims against Accuity Delivery Systems LLC, Accuity
`
`Delivery Systems Holdings, LLC and FH ADS Purchaser, LLC (collectively,
`
`“Accuity”), allege, upon knowledge with respect to their acts and upon information
`
`and belief as to other matters, as follows:
`
`NATURE OF THE COUNTERCLAIMS
`
`1.
`
`A business cannot knowingly assert baseless claims in a lawsuit for the
`
`purpose of disrupting another company’s business. That would be using the judicial
`
`process and this Court to commit tortious interference. But that is what the baseless
`
`claims asserted in the Complaint have done here. Although Accuity has known of
`
`Kode and its business since no later than November 2021, Accuity waited until it
`
`learned that Kode was on the cusp of closing its next round of funding to assert Kode
`
`was competing with Accuity in violation of contractual restrictions. The bare bones
`
`Complaint and Accuity’s failure to seek any interim relief shows that Accuity was
`
`more interested in the damage the Complaint would cause Kode’s impending
`
`financing transaction than protecting its contractual rights.
`
`20
`
`

`

`2.
`
`And it did cause damage. Kode’s financing was signed but being closed
`
`in two tranches. The first tranche, consisting of over $12 million, had been funded
`
`by the time Kode learned of the filing of the Complaint. As a responsible
`
`commercial actor, Kode immediately informed the parties to the financing of the
`
`filing of the Complaint. In turn, the major participant in the first tranche asked for
`
`its money back. And when the major participant asked for its money back, the