Medlink Health Solutions, LLC v. Maddox Defense, Inc.

District Court, S.D. California·Decided September 12, 2024·No. 3:22-cv-01306·Unknown

Opinion

1 UNITED STATES DISTRICT COURT 2 SOUTHERN DISTRICT OF CALIFORNIA 3 MEDLINK HEALTH SOLUTIONS, Case No.: 22-cv-1306-AGS-DEB LLC, 4 ORDER: Plaintiff, 5 (1) GRANTING BATCHELOR v. SUMMARY JUDGMENT (ECF 71); 6 (2) GRANTING IN PART MOTIONS MADDOX DEFENSE INC., et al., 7 TO SEAL (ECF 69, 78, 83); AND Defendants. (3) DENYING REQUEST FOR 8 JUDICIAL NOTICE (ECF 71-5) 9 10 This summary-judgment motion turns on whether the parties’ mutual release is valid. 11 BACKGROUND 12 In a separate lawsuit in Texas, disposable-gown manufacturer Wildcat PPE, LLC, 13 sued several of the parties to the present litigation, including now-plaintiff Medlink Health 14 Solutions, LLC, and now-defendant ECT Medical, LLC. (ECF 77-1, at 3.) In the Texas 15 case, “Medlink and ECT entered into a Confidential Settlement Agreement,” including a 16 mutual release of claims. (Id.) Medlink specifically agreed to “release[] and discharge[] 17 ECT, [ECT’s Vice President] Elgin Tracy, . . . [and their] attorneys including but not 18 limited to Charles Batchelor . . . from any and all claims” that “Medlink has or may have” 19 against them. (Id. at 5; ECF 70-2, at 5.) 20 Later, Medlink alleged that it was fraudulently induced into signing that release. 21 Deeming the release void, Medlink brought this suit against ECT, Tracy, Batchelor, and 22 others. 23 DISCUSSION 24 MOTION FOR SUMMARY JUDGMENT 25 Batchelor moves for summary judgment on the ground that “all of Medlink’s claims 26 against [him] are barred by [the] release.” (ECF 70, at 15.) No one disputes that Batchelor, 27 as a named intended beneficiary, has standing to enforce the contract. Summary judgment 28 is proper when the record, taken in the light most favorable to the nonmoving party, 1 demonstrates that “there is no genuine dispute as to any material fact and the movant is 2 entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). 3 “Settlement and release is an affirmative defense,” In re Cellular 101, Inc., 539 F.3d 4 1150, 1155 (9th Cir. 2008), and “the burden is always on the party advancing an affirmative 5 defense to establish its validity,” Calise v. Meta Platforms, Inc., 103 F.4th 732, 738 n.1 6 (9th Cir. 2024). “When the party moving for summary judgment would bear the burden of 7 proof at trial, it must come forward with evidence which would entitle it to a directed 8 verdict if the evidence went uncontroverted at trial.” C.A.R. Transp. Brokerage Co. v. 9 Darden Restaurants, Inc., 213 F.3d 474, 480 (9th Cir. 2000) (cleaned up). Only when the 10 moving party satisfies this high standard does “the burden then move[] to the opposing 11 party, who must present significant probative evidence tending to support its claim or 12 defense.” Intel Corp. v. Hartford Acc. & Indem., 952 F.2d 1551, 1558 (9th Cir. 1991) 13 (cleaned up). 14 Medlink argues that Batchelor failed to meet his initial burden because he did not 15 “provide any admissible evidence to support” his motion. (ECF 77, at 6.) In addition, 16 Medlink contends the release was “procured through . . . fraudulent misrepresentation” and 17 is therefore “voidable.” (Id.) 18 A. Authentication 19 As a threshold issue, Medlink insists that the release is not properly authenticated 20 because “the only person who has submitted a declaration in support” of it is “Batchelor’s 21 attorney,” who lacks “personal knowledge” of the document. (ECF 77, at 6.) Ultimately, 22 this issue is moot, as Batchelor has since cured any authentication problems. “A document 23 can be authenticated [through personal knowledge] by a witness who wrote it, signed it, 24 used it, or saw others do so.” Orr v. Bank of Am., NT & SA, 285 F.3d 764, 774 n.8 (9th Cir. 25 2002). According to a declaration attached to his reply, Batchelor was “personally involved 26 in the negotiation, drafting, and execution” of the release, and he “has personal knowledge” 27 of its contents. (ECF 82-1, at 2.) Because this declaration remedies any authentication 28 defects, the release is properly before the Court. See Mountain W. Holding Co. v. Montana, 1 691 F. App’x 326, 329 (9th Cir. 2017) (affirming “court’s decision to consider” an expert 2 report at summary judgment, although “the report was authenticated after it was filed”). 3 B. Validity of the Release 4 Turning to the merits, the issue of the release’s validity is governed by Texas law. 5 In a diversity case like this, the Court “must apply the choice-of-law rules of the state in 6 which it sits”—here, California. See Abogados v. AT&T, Inc., 223 F.3d 932, 934 (9th Cir. 7 2000). “Under California choice-of-law rules, Texas law governs whether the [release] is 8 enforceable because the [release’s] choice-of-law clause adopts Texas law.” Peleg v. 9 Neiman Marcus Grp., 140 Cal. Rptr. 3d 38, 69 (Ct. App. 2012); (see ECF 70-2, at 9–10 10 (“Governing Law and Venue” provision)). 11 Under Texas law, Batchelor has satisfied his initial burden of establishing the 12 affirmative defense of settlement and release. A “release that is valid on its face and has 13 not been set aside is a complete bar to any later action based on matters covered by the 14 release.” Phan v. Addison Spectrum, L.P., 244 S.W.3d 892, 895 (Tex. App. 2008). Medlink 15 does not dispute that the executed agreement here, which discharges Batchelor from “any 16 and all claims” (ECF 70-2, at 5), is valid on its face and covers the present suit. (See 17 generally ECF 77.) If this evidence is left uncontroverted, it would support summary 18 judgment for the defense. See Rodriguez v. Ginsburg, No. 05-17-01266-CV, 2019 WL 19 4010770, at *6 (Tex. App. Aug. 26, 2019) (finding defendant’s “evidence proves the 20 release” when “summary judgment evidence included an executed copy of the settlement 21 agreement containing a release,” plaintiff did “not dispute that he signed the settlement 22 agreement,” and “[t]he broad language of the release shows that it was intended to address” 23 the claims at issue); Kennedy v. Harber, No. 05-17-01217-CV, 2018 WL 3738091, at *4 24 (Tex. App. Aug. 7, 2018) (same). 25 The burden therefore shifts to Medlink to show that the release was procured through 26 fraudulent inducement. Specifically, Medlink must establish the following elements 27 relating to the release: (1) “a material representation was made,” (2) “the representation 28 was false,” (3) “the speaker knew the statement was false when made,” (4) “the statement 1 was made to induce reliance,” (5) “it did induce reliance,” (6) “the reliance was justifiable,” 2 and (7) Medlink “suffered injury as a result.” See Williams v. Dardenne, 345 S.W.3d 118, 3 125 (Tex. App. 2011). 4 The fraudulent-inducement case stumbles early, as Medlink’s evidence on the 5 second element—a false representation—is wanting. According to Medlink, ECT falsely 6 warranted in the release that it had “not facilitated the purchase or sale of any gowns by a 7 DLA prime contractor under Defense Logistics Agency Solicitation No. SPE1C120R0138 8 using Wildcat PPE, LLC.” (ECF 77, at 3; see also ECF 70-2, at 3.) In Medlink’s view, this 9 warranty is directly contradicted by the later deposition testimony of manufacturer Wildcat 10 in a different lawsuit.

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Medlink Health Solutions, LLC v. Maddox Defense, Inc., (S.D. Cal. 2024).

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