8:22-cv-00036-JFB-SMB Doc # 1 Filed: 02/01/22 Page 1 of 10 - Page ID # 1
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NEBRASKA
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`THINK AKSARBEN PHARMACY, LLC, and
`THINK AKSARBEN SPECIALTY
`PHARMACY, LLC,
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`v.
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`HY-VEE, INC.,
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`Plaintiffs,
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`Defendant.
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`Case No. 8:22-cv-00036
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`COMPLAINT
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`JURY TRIAL DEMANDED
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`Plaintiffs Think Aksarben Pharmacy, LLC and Think Aksarben Specialty Pharmacy, LLC
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`(collectively, “Think”), for their Complaint against Defendant Hy-Vee, Inc. (“Hy-Vee”), state and
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`allege as follows:
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`INTRODUCTION
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`1.
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`Hy-Vee contracted with Think to purchase pharmacy assets and inventory from a
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`retail pharmacy and specialty pharmacy owned and operated by Think located at 7100 West Center
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`Road, Omaha, Nebraska 68106.
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`2.
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`Think and Hy-Vee executed a Purchase Agreement dated August 24, 2021, as
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`amended by the First Amendment to the Purchase Agreement dated September 13, 2021
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`(collectively, the “Agreement”).
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`3.
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`During the time period that the parties were finalizing the Agreement and
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`correspondence regarding payment under the Agreement and despite the high level of security
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`measures Think has in place to protect its electronic systems, a sophisticated fraudster was able to
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`infiltrate the email account of Think’s Chief Financial Officer.
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`4.
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`As a result of this email network intrusion, and unbeknownst to Think, certain wire
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`instructions that were sent to Hy-Vee relating to payment to a third party were compromised.
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`5.
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`Contrary to reasonable and expected standards, Hy-Vee neglected to verify the wire
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`instructions by phone and subsequently wired the payment under the Agreement to the incorrect
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`recipient, a fraudster.
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`6.
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`Think fulfilled all its obligations under the Agreement. However, Hy-Vee is in
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`breach of the Agreement by refusing to pay to Think the full Purchase Price under the Agreement
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`and by failing to act in good faith and follow reasonable standards of care. Moreover, because
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`Hy-Vee has received the benefit of assets and inventory pursuant to the Agreement, for which
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`Hy-Vee has not paid, Hy-Vee is being unjustly and inequitably enriched at Think’s expense.
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`7.
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`Think brings this action to recover for the losses suffered because of Hy-Vee’s
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`breach of contract, breach of implied covenant of good faith and fair dealing, unjust enrichment,
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`and negligence.
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`THE PARTIES
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`8.
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`Think Aksarben Pharmacy is a limited liability company existing under Nebraska
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`law. Its sole member is located at 7100 West Center Road, Omaha, Nebraska 68106. Think
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`Aksarben, LLC is the sole member of Think Aksarben Pharmacy. Think Aksarben, LLC is owned
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`by Think Nebraska, LLC and Think ACO, LLC. Think Nebraska, LLC is owned by Goodlife
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`Solutions, Inc., a Nebraska Corporation, and Transforming Healthcare LLC. Transforming
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`Healthcare, LLC’s sole member is Clarkson Regional Health Services, Inc., a Nebraska
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`Corporation. Think ACO, LLC’s sole member is Think Aksarben, LLC. As a result, no member
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`of Think Aksarben Pharmacy is a citizen of Iowa.
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`9.
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`Think Aksarben Specialty Pharmacy is a limited liability company existing under
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`Nebraska law. Its sole member is located at 7100 West Center Road, Omaha, Nebraska 68106.
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`Think Aksarben Specialty Pharmacy’s sole member is also Think Aksarben, LLC, which has the
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`ownership as set forth in paragraph 8. As a result, no member of Think Aksarben Specialty
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`Pharmacy is a citizen of Iowa.
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`10.
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`Hy-Vee is incorporated in the State of Iowa. Its principal place of business is
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`located at 5820 Westown Parkway, West Des Moines, Iowa 50266.
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`JURISDICTION AND VENUE
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`11.
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`This Court has subject-matter
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`jurisdiction over
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`this action pursuant
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`to
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`28 U.S.C. § 1332 because Think is a citizen of a different state (Nebraska) than Defendant (Iowa)
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`and the matter in controversy exceeds $75,000, with the amount of damages sought by Think well
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`in excess of that amount.
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`12.
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`This Court has personal jurisdiction over Hy-Vee by virtue of Hy-Vee’s contacts
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`with Nebraska, including, but not limited to, the following:
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`a.
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`b.
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`c.
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`Hy-Vee conducts business in Nebraska by way of its store locations.
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`Hy-Vee markets its products and services throughout the Midwest,
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`including to Nebraska residents.
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`Hy-Vee engaged in a business transaction with Think (both of whom are
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`Nebraska limited liability companies) concerning pharmacy assets and
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`inventory located at a retail pharmacy and specialty pharmacy in Nebraska.
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`13.
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`Venue in this Court is proper pursuant to 28 U.S.C. § 1391 because the events and
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`omissions giving rise to this action occurred in this district.
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`14.
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`Pursuant to the Agreement’s choice-of-law provision, this action is governed by
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`Iowa law.
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`FACTUAL BACKGROUND
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`15.
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`Think and Hy-Vee executed a Purchase Agreement dated August 24, 2021, as
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`amended by the First Amendment to the Purchase Agreement dated September 13, 2021
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`(collectively, the “Agreement”).
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`16.
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`Hy-Vee contracted with Think to purchase pharmacy assets and inventory used in
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`the operation of a retail pharmacy and specialty pharmacy owned and operated by Think located
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`at 7100 West Center Road, Omaha, Nebraska 68106.
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`17.
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`The Agreement provides that:
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`Subject to the terms and provisions of this Agreement, on the Date of Closing, Buyer, or
`its nominee, agrees to purchase, and Seller agrees to sell, all of Seller’s right, title, and
`interest in and to all of the Assets and Inventory free and clear of all liens and
`encumbrances. Payment shall be made in the form of a corporate check or by federal funds
`to be wired to a bank account designated by Seller.
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`18.
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`The Agreement provides that “[w]ithin five (5) days of the Closing Date, Buyer
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`shall pay to the Seller, as and for the total purchase price for the Assets and restrictive covenants
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`described in Section 7.” (emphasis added).
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`19.
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`Hy-Vee elected to pay a large portion of the Purchase Price (as defined in the
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`Agreement) directly to a third party, which held liens on pharmacy assets and inventory that was
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`being purchased pursuant to the Agreement, for the benefit of Think. Rather than get wiring
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`information directly from the third party it was paying, Hy-Vee requested that Think obtain the
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`wire information and then pass it on to Hy-Vee. Hy-Vee had never wired money to this third party
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`before.
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`20.
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`On or about September 22, 2021, Think Chief Financial Officer’s email was hacked
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`(despite the stringent security measures Think has in place) and, unbeknownst to Think, the wire
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`instructions that had been provided by the third party were compromised by fraudsters. As a result,
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`the wire instructions purportedly sent by Think’s Chief Financial Officer were not the correct wire
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`instructions for the third party. Think and its Chief Financial Officer were unaware of any
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`alteration to the wire instructions when the email was sent to Hy-Vee.
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`21.
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`On September 24, 2021, Hy-Vee wired $2,277,115.99 to an incorrect recipient, a
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`fraudster.
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`22.
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`Hy-Vee failed to follow well-established and ordinary practices and standards of
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`care in connection with the verification of wire instructions. Hy-Vee did not call to orally verify
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`the wire instructions. Instead, Hy-Vee chose to send a “test” wire to the altered wire instructions
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`to confirm they were accurate.
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`23.
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`Hy-Vee’s failure to comply with the reasonable practices and standards of care only
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`perpetrated the scam further and made it easier for the fraudsters to obtain the money, as they were
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`able to confirm the fraudulent wire instructions. When dealing with fraudulent wire instructions,
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`as the parties were here, Hy-Vee’s policy of sending a test wire is useless in detecting a fraudulent
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`wire situation.
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`24.
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`As a result of Hy-Vee’s failure to orally verify the wire instructions, requiring a call
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`to the recipient of the funds to confirm the wiring instructions, the funds were never delivered nor
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`placed into possession of Think or the intended third party for the benefit of Think; rather, the
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`funds were wired to fraudsters.
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`25. Working with the banks, Hy-Vee has been able to recover approximately $881,000
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`of the funds sent by Hy-Vee to the fraudulent bank account, which have been paid to Think.
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`Interestingly, prior to wiring those funds, Hy-Vee did require oral verification of the wire
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`instructions. However, Think has yet to receive $1,397,115.00 of the Purchase Price due and
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`owing from Hy-Vee pursuant to the Agreement.
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`26.
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`The pharmacy assets and inventory transferred to Hy-Vee pursuant to the
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`Agreement. However, because the third party did not receive the wire from Hy-Vee to pay off the
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`liens on pharmacy assets and inventory, liens remained on the assets and inventory. This forced
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`Think to continue paying the third party for all the amounts owed, despite the fact those assets had
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`transferred to Hy-Vee and were within Hy-Vee’s possession and control pursuant to the
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`Agreement.
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`27.
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`Think ultimately paid the remainder of the amounts due and owing to the third party
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`on the pharmacy assets and inventory (which had already been transferred to Hy-Vee’s possession)
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`and the liens were released. However, Hy-Vee has not paid Think for these pharmacy assets and
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`inventory.
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`28.
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`Therefore, not only did Hy-Vee fail to pay the entire purchase price to Think
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`pursuant to the Agreement, Hy-Vee’s actions have caused Think to be further out of pocket as
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`Think was required to pay off liens to a third party for assets and inventory that transferred to
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`Hy-Vee pursuant to the Agreement.
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`29.
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`Upon information and belief, Hy-Vee is using the pharmacy assets and inventory
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`transferred to it pursuant to the Agreement for its benefit, without having paid Think for these
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`assets and inventory, which Hy-Vee now holds free and clear.
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`30.
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`Hy-Vee is retaining the benefit of inventory and pharmacy assets without
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`compensating Think. Consequently, Hy-Vee has failed to provide the benefit of the full Purchase
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`Price to Think, in violation of the terms of the Agreement.
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`31.
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`As a result of Hy-Vee’s actions described herein, Think has been damaged in the
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`amount of at least $1,397,115.99.
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`COUNT I: BREACH OF CONTRACT
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`32.
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`Think incorporates by reference the preceding paragraphs.
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`33.
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`Think fully performed under the Agreement, including agreeing to sell all its rights,
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`title and interest in and to all of the assets and inventory free and clear of all liens and
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`encumbrances.
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`34.
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`Pursuant to the Agreement, Hy-Vee was required to pay the Purchase Price to the
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`Seller—Think.
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`35.
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`Hy-Vee has breached the contract by failing to pay at least $1,397,115.99 of the
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`Purchase Price to Think.
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`36.
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`As a result of Hy-Vee’s failure to remit payments when due, Hy-Vee is in breach
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`of the Agreement.
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`37. Moreover, implied in the Agreement was Hy-Vee’s obligation to perform under the
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`Agreement in accordance with ordinary standards of care. As a result, Hy-Vee had an obligation
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`to call and verify wire instructions before wiring the funds to a third party because doing so is the
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`reasonable level of care in these circumstances—especially when dealing with an unfamiliar party
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`and/or unfamiliar wiring instructions. Hy-Vee was dealing with both here.
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`38.
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`Therefore, Hy-Vee also breached the Agreement by not taking ordinary and
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`reasonable care in verification of wire instructions before sending a substantial wire to a third
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`party.
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`39.
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`As a result of the foregoing breaches, Think has been damaged in the amount of
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`$1,397,115.99 plus interest and attorney fees incurred in attempting to address this issue with
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`Hy-Vee and in bringing this litigation.
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`COUNT II: BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR
`DEALING
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`40.
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`Think incorporates by reference the preceding paragraphs.
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`41.
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`The Agreement, like every contract, contained an implied covenant of good faith
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`and fair dealing. Alta Vista Properties, LLC v. Mauer Vision Ctr., PC, 855 N.W.2d 722, 730 (Iowa
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`2014). As a result, Hy-Vee was required to act in good faith in carrying out its obligations under
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`the Agreement.
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`42.
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`To act in good faith, Hy-Vee had an obligation to call and verify wire instructions
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`before wiring the funds.
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`43.
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`Hy-Vee breached the implied covenant of good faith and fair dealing by failing to
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`call and verify wire instructions and by failing to fully compensate Think for the full Purchase
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`Price under the Agreement.
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`44.
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`As a result of the foregoing breach, Think has been damaged in the amount of
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`$1,397,115.99 plus interest and attorney fees in attempting to address this issue with Hy-Vee and
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`in bringing this litigation.
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`COUNT III: UNJUST ENRICHMENT
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`Think incorporates by reference the preceding paragraphs.
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`Hy-Vee has received and retained everything to which it was entitled under the
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`45.
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`46.
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`Agreement, including the possession of pharmacy assets free and clear from any liens or other
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`encumbrances.
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`47.
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`Hy-Vee, upon information and belief, is utilizing the pharmacy assets and inventory
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`for its own benefit.
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`48.
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`Hy-Vee benefitted through its unjust conduct by failing to place funds in the
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`possession of Think or the third party previously holding liens on the assets and inventory yet
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`continuing to utilize the inventory and pharmacy assets under the Agreement.
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`49.
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`Ultimately, Think paid the third party for the assets and inventory that transferred
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`to Hy-Vee under the Agreement, causing the liens to be released. As a result of Think’s payment
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`to the third party, Hy-Vee now holds the pharmacy assets and inventory free and clear of any
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`encumbrances.
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`50.
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`Hy-Vee, however, has failed to compensate Think for these pharmacy assets and
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`inventory.
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`51.
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`52.
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`53.
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`It is inequitable for Hy-Vee to retain these benefits.
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`Think does not have an adequate remedy at law.
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`As a result of Hy-Vee’s conduct, the amount of its unjust enrichment from the
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`receipt and use of Think’s pharmacy assets and inventory without payment should be disgorged in
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`an amount to be proven at trial.
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`COUNT IV: NEGLIGENCE
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`Think incorporates by reference the preceding paragraphs.
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`Hy-Vee owed Think a duty of ordinary care when it elected to pay a portion of the
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`54.
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`55.
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`Purchase Price to a third party rather than to Think directly.
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`56.
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`Hy-Vee breached its duty of care by failing to take the steps that an ordinary prudent
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`person would take (and which is customary practice) to orally verify wire instructions.
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`57.
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`Hy-Vee’s failure in verifying the wire instructions by phone caused a fraudster to
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`obtain funds that were intended to be applied for the benefit of Think.
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`58.
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`Other than the $881,000 that has been recovered by Hy-Vee, Think has not received
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`the benefit of those funds, and because Think continued to pay liens on inventory transferred to
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`Hy-Vee, Think has been damaged by Hy-Vee’s negligence in the amount of $1,397,115.99 plus
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`interest and attorney fees in attempting to address this issue with Hy-Vee and bringing this
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`litigation.
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`PRAYER FOR RELIEF
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`WHEREFORE, Think respectfully requests that the Court enter its judgment on Counts I
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`through IV of the Complaint, granting Think a monetary judgment against Hy-Vee in the amount
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`of $1,397,115.99 plus interest and attorney fees incurred in attempting to address this issue with
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`Hy-Vee and the necessity of bringing this litigation, and for such other and further legal or
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`equitable relief that may be available and appropriate.
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`Think hereby demands a jury trial on all issues so triable.
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`Dated: February 1, 2022
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`By /s/ Victoria H. Buter
`Victoria H. Buter, NE #23841
`Todd C. Kinney, NE #21960
`KUTAK ROCK LLP
`The Omaha Building
`1650 Farnam Street
`Omaha, NE 68102-2103
`Telephone: (402) 346-6000
`Facsimile: (402) 346-1148
`vicki.buter@kutakrock.com
`todd.kinney@kutakrock.com
`ATTORNEYS FOR PLAINTIFF
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