Co-Diagnostics v. Hukui Technology

2025 UT App 74
CourtCourt of Appeals of Utah
DecidedMay 22, 2025
DocketCase No. 20231131-CA
StatusPublished
Cited by1 cases

This text of 2025 UT App 74 (Co-Diagnostics v. Hukui Technology) is published on Counsel Stack Legal Research, covering Court of Appeals of Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Co-Diagnostics v. Hukui Technology, 2025 UT App 74 (Utah Ct. App. 2025).

Opinion

2025 UT App 74

THE UTAH COURT OF APPEALS

CO-DIAGNOSTICS INC., Appellee, v. HUKUI TECHNOLOGY INC., HUKUI TECH INC., AND HUKUI BIO CO. LTD., Appellants.

Opinion No. 20231131-CA Filed May 22, 2025

Third District Court, Salt Lake Department The Honorable Adam T. Mow No. 210902131

John D. van Loben Sels, Heidi G. Goebel, and Amberly Page, Attorneys for Appellants Mark O. Morris and Benjamin J. Mills, Attorneys for Appellee

JUDGE RYAN M. HARRIS authored this Opinion, in which JUDGES DAVID N. MORTENSEN and RYAN D. TENNEY concurred.

HARRIS, Judge:

¶1 HuKui Technology Inc., HuKui Tech Inc., and HuKui Bio Co. Ltd. (collectively, HuKui) filed counterclaims against Co- Diagnostics Inc. (CoDx), asserting chiefly that CoDx had breached a binding contract and intentionally interfered with its economic relations, but raising alternative claims of promissory estoppel and unjust enrichment. The district court dismissed all of HuKui’s claims on summary judgment, and HuKui appeals. We affirm the dismissal of HuKui’s claim for intentional interference with economic relations, but we conclude that the existence of genuine issues of material fact precludes dismissal, at this procedural stage, of HuKui’s remaining claims, and on that basis we reverse Co-Diagnostics v. HuKui Technology

the district court’s order dismissing those claims and remand the case for further proceedings.

BACKGROUND 1

¶2 HuKui provides “total solution and value-added services to global medical devices customers” and claims to have a “competitive edge” related to its “ability [to] shorten the time to market for product sales.” CoDx is a company that “is in the business of producing a variety of medical devices, including certain COVID-19 test kits.” Although some of their respective board members were apparently acquainted, the two companies had never done business together prior to 2020.

¶3 In early 2020, during the emergence of the COVID-19 pandemic, CoDx and HuKui began to discuss ways in which they might work together to market CoDx’s test kits, and on March 1, 2020, CoDx issued signed “Letters of Authorization” that authorized HuKui to “sell and distribute” CoDx’s kits. Under this arrangement, CoDx would sell the kits to HuKui at a price of $6 per unit, and HuKui would be free to then re-sell the kits to third parties for whatever price it could negotiate.

¶4 After obtaining authorization from CoDx, HuKui began attempts to market CoDx’s kits, and it believed that, under the terms of the parties’ arrangement, it could sell the kits to anyone, regardless of whether the buyer was an end user of the product or was merely another distributor who would, in turn, re-sell the kits. Indeed, the Letters of Authorization themselves contained no

1. When reviewing a district court’s order granting summary judgment, we “recite the facts in the light most favorable to the non-moving party.” Burton v. Chen, 2023 UT 14, ¶ 5 n.2, 532 P.3d 1005 (cleaned up). Accordingly, we recite the facts in this opinion in the light most favorable to HuKui, recognizing that many of the facts recited here are contested by CoDx.

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limits on the identity of persons or entities to whom HuKui was authorized to market the kits. Many (if not all) of HuKui’s customers were apparently other distributors, and some of them inquired—apparently due to pandemic-related urgency involving getting the kits to the ultimate users as fast as possible— about whether they could just buy the kits directly from CoDx and thereby obtain them faster.

¶5 To discuss this and other issues, the parties held a conference call on March 23, 2020. According to minutes of the meeting taken by another of CoDx’s authorized distributors, CoDx indicated that it could “accommodate” having orders placed directly with CoDx “if the order size/model make sense,” and it stated that, if such orders were placed by a distributor’s clients, the clients could “pay to [CoDx] at Distributor’s price” and then CoDx would “remit[] commission back to Distributors.” When asked what price should be “quote[d]” to customers who wanted to order from CoDx directly, CoDx stated that the distributors should “quote $7/kit to wholesale.” The question was then raised as to how CoDx would “protect[] the [d]istributors” by not allowing “customers [to] directly cut the [d]istribution chain,” and one of the distributors suggested that it could provide CoDx with “a customer list” so that CoDx could “recognize” which customers were referred by which distributor. CoDx responded that it could “do that to affirm and . . . recognize” the distributors’ customers, and it stated that it would “do [its] best” to protect HuKui and similarly situated distributors.

¶6 A few weeks after this meeting, HuKui entered into a “Customer Referral Agreement” with another distribution company (Sub-Distributor). The agreement specified that “HuKui will provide” CoDx’s COVID-19 test kits to Sub-Distributor for a “flat fee of” $8 per kit, and then Sub-Distributor would be free to re-sell the kits to end users for whatever price it could negotiate.

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¶7 CoDx later got wind of HuKui’s arrangement with Sub- Distributor, and it objected, offering its view that, under the terms of the contract exemplified by the Letters of Authorization, HuKui was authorized to sell the kits only to end users and not to “sub- distributors” who would themselves sell to end users; CoDx claimed that doing so would violate an internal policy—aimed at preserving “product traceability”—against the use of more than one level of distributors. CoDx apparently also believed, at least for a time, that federal regulations prohibited the sale of its test kits to sub-distributors, although CoDx later acknowledged that this belief was mistaken and that no such regulation existed. HuKui denied that CoDx had previously informed it of any such policy or regulation, and it contested any assertion that the Letters of Authorization prohibited sales of the kits to sub-distributors. In any event, CoDx informed HuKui that any sales by HuKui to Sub- Distributor would place HuKui “in violation of [the] agreement” between the two companies. But CoDx also stated that “the way to fix” the problem was for HuKui’s sub-distributors to “order from [CoDx] directly and [CoDx] will figure out a way to compensate [HuKui] for making the connection.” CoDx reiterated that it would “do everything in [its] power to protect” HuKui in that situation, and it represented that if CoDx became aware “that a client [had] been brought by a distributor and the client attempts to go around the distributor,” it would “refuse to sell to the client unless they work[ed] through the distributor.”

¶8 Based on these representations, as well as the agreement it thought had been reached regarding these issues during the March 23 meeting, HuKui passed along to CoDx the contact information for Sub-Distributor so that Sub-Distributor could order test kits directly from CoDx. HuKui believed that it would receive a commission—or some other type of compensation—for establishing the connection between Sub-Distributor and CoDx.

¶9 A few weeks after that, however, CoDx terminated its business relationship with HuKui, telling HuKui that it was “to

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no longer represent” CoDx. In the termination email, CoDx explained that HuKui had “represented [itself] as a distributor” but that it was actually just a “middle man” whose contacts were all sub-distributors rather than end users.

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2025 UT App 74, Counsel Stack Legal Research, https://law.counselstack.com/opinion/co-diagnostics-v-hukui-technology-utahctapp-2025.