CVS sued by former local pharmacy owners for breach of contract for withholding $1 million in funds from the sale

GRETNA – The owners of a pair of Baton Rouge pharmacies are suing a nationwide pharmacy corporation they claim breached a contract to purchase them.

C’s Discount Pharmacy Inc. and Ciolino Pharmacy Inc. filed suit against Louisiana CVS Pharmacy LLC in the 24th Judicial District Court on April 1. C’s Discount Pharmacy Inc. and Ciolino Pharmacy Inc. claim they sold two Baton Rouge pharmacy locations to CVS for an upfront payment on March 30, 2012 as well as $1 million in “holdback” funds that would be held for any existing liabilities until a year after the sale on March 30, 2013. The plaintiff alleges that a year after the sale an employee of the defendant sent a letter notifying them they would not be paying back the $1 million due to alleged violations of a non-compete clause. C’s Discount Pharmacy Inc. and Ciolino Pharmacy Inc. assert the letter did not include any specific facts surrounding the alleged breach of contract.

The plaintiffs claim they sent four separate affidavits to the defendant asking them to provide proof of the breach of contract. C’s Discount Pharmacy Inc. and Ciolino Pharmacy Inc. allege that they have never received sufficient proof from CVS that they breached the contract and that they believe the dispute is related to the defection of their former customers to other pharmacies over which they had no control. In addition, the plaintiffs argue the five-year non-compete clause in the contract breaches state law limiting non-compete clauses to two years.

The defendant is accused of breach of contract.

The plaintiffs seek to strike the non-compete clause from the contract and the return of their “holdback” funds of $1 million.

C’s Discount Pharmacy Inc. and Ciolino Pharmacy Inc. are represented by attorney Gregory S. LaCour of Harahan.

The case has been assigned to Division H Judge Glenn B. Ansardi.

Case no.  725-426.