Healthcare Company Sued Over Software Contractual Dispute

Streamline Healthcare Solutions, LLC (Streamline) filed suit last Friday against Chrysalis Health, Inc (Chrysalis) in the Southern District of Florida. This suit follows allegations that Chrysalis acted illegally when they repudiated a software agreement with the plaintiff, breached a standing contract when attempting revocation, and continually evaded its contractual payment obligations.

The plaintiff, Streamline, is a company who “provides a web-based enterprise software for healthcare organizations through its SmartCare application series.” The aforementioned agreement between the two parties began in December of 2020. One detail of the agreement was that Chrysalis would license Streamline’s enterprise software and Streamline would implement its SmartCare Core application into Chrysalis facilities, providing maintenance and support when needed. The agreement includes that Chrysalis would compensate Streamline for its services by paying an amount totaling $1.3 million. The payments were set to occur periodically throughout a designated time frame. They also agreed to pay Streamline annual subscription fees, which totaled $251,089.

Any payment discrepancies on behalf of Chrysalis required notice from Chrysalis to Streamline within 15 days of the initial invoice date, the complaint said. Chrysalis did not dispute any of the third, fourth, or sixth payments within that time frame, yet failed to pay the invoices on time. The contract does not provide room for either party to terminate it out of inconvenience. In the event that the contract was defaulted, Chrysalis would not be relieved of any outstanding payment obligations.

In May, Chrysalis provided notice to Streamline of their intention to terminate the agreement and that they would be “demanding a refund for the fees paid to Streamline.” In the letter, they expressed that the “functionality that we expected was either not present in the system or would require additional programming, configuration, or customization.”

Streamline responded to this action by informing Chrysalis that the termination, delay, and payment refusal constituted breaches of their agreement. They are citing counts of contract breach and account stated. Streamline is seeking favorable judgement by the court on their behalf, an award of all damages incurred with 1.5% monthly interest, and any other relief deemed necessary and proper by the court.

The plaintiff is represented by Bondurant, Mixson and Elmore.