Nelson Radiology Associates, L.L.C. v. Integrity Medical Systems, Inc.

16 So. 3d 1197, 2008 La.App. 4 Cir. 0443, 2009 La. App. LEXIS 1460, 2009 WL 2357007
CourtLouisiana Court of Appeal
DecidedJuly 29, 2009
Docket2008-CA-0443
StatusPublished
Cited by4 cases

This text of 16 So. 3d 1197 (Nelson Radiology Associates, L.L.C. v. Integrity Medical Systems, Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nelson Radiology Associates, L.L.C. v. Integrity Medical Systems, Inc., 16 So. 3d 1197, 2008 La.App. 4 Cir. 0443, 2009 La. App. LEXIS 1460, 2009 WL 2357007 (La. Ct. App. 2009).

Opinion

JAMES F. McKAY III, Judge.

|2Integrity Medical Systems Inc., appeals the judgment of the trial court in favor of Nelson Radiology Associates, L.L.C. and Dr. Ava Nelson, awarding the sum of Fifty-Three Thousand Eight Hundred Twenty-Eight Dollars and Twenty-Eight Cents ($53,828.28) plus court costs and attorney’s fees in the sum of Twenty-Six Thousand One Hundred Twenty-Seven Dollars and Thirty-three Cents ($26,-127.33).

FACTS AND PROCEDURAL HISTORY

Dr. Ava Nelson is a radiologist who has practiced in hospitals and community based practices for many years. In September of 1999, she began the process of opening her own outpatient imaging center at 1029 South Dorgenois Street, where she intended to offer mammograms, x-rays, ultrasounds, and bone densitometry studies. The business would be known as Nelson *1201 Radiology Associates, L.L.C. (“Nelson Radiology”). The imaging center required four essential pieces of medical equipment: an x-ray machine, an ultrasound, a bone densitometer, and a mammogram unit. In November of 1999, Dr. Nelson ^contacted Mr. David Denholtz, the president and sole owner of Integrity Medical Services (“Integrity”), the purpose of acquiring medical equipment for Nelson Radiology. Integrity is in the business of buying and selling new and refurbished medical equipment. Generally, Integrity acquires the used equipment, refurbishes the same, arranges transportation, installs equipment, and services the limited warranties. Based on Dr. Nelson’s representations, Integrity sent her a proposal on November 18, 1999, offering refurbished equipment, without installation. Dr. Nelson accepted the offer to purchase the mammography unit and the bone densitometer.

On November 26, 1999, Dr. Nelson signed an invoice finalizing the deal between herself and Integrity whereby she agreed to purchase a Lunar bone densi-tometer (“densitometer”) for $27,500 and a Bennett Contour mammography (“mammography unit”) unit for $18,500 less a $2,300 good customer discount. The invoice provided that the equipment was to be shipped free on board (F.O.B.) Fort Meyers, Florida. The equipment purchased included 90 day warranties.

After seeking advice from Mr. Denholtz, Dr. Nelson financed the purchases through a leasing company HPSC, Inc. (“HPSC”), located in Boston, MA. Dr. Nelson entered into a lease purchase agreement for the two units with HPSC. Integrity sold the machines to HPSC which in turn leased them to Dr. Nelson for a term of 36 months at a rental rate of $1,405 per month. 1 Pursuant to this agreement, Dr. Nelson was given an option of purchasing the equipment for fair Rmarket value at the end of the lease term. Based on this lease purchase agreement, HPSC paid Integrity in full on January 12, 2000. In turn, Integrity purchased a used mammography unit which arrived at its warehouse for refurbishing on January 14, 2000. As a company policy, for each piece of refurbished equipment, Integrity completes a service worksheet. Integrity’s service worksheet on this unit indicated that the four cable mounts checked out good, the tests were “OK”, the focal spots were good, and the x-ray tube had exposure. The compression paddles were broken so they were replaced from stock. Two side paddles were touched up. The unit was cleaned, checked, calibrated and ready for delivery on January 29, 2000.

At Dr. Nelson’s behest, Integrity arranged for the shipping of the units to Dr. Nelson’s clinic in New Orleans from their Fort Meyers warehouse. 2 The mammography unit was delivered on February 2, 2000. The densitometer was mistakenly shipped to Seattle, Washington. Due to this shipping error the parties agreed to a replacement unit with the cost of installation included. The unit was delivered on March 13, 2000. There is no mention of any shipping damage on the bill of laden.

Dr. Nelson asserts that there were problems with the mammography unit which was delivered on February 2, 2000. She complains that the unit was damaged, not properly refurbished by Integrity, and improperly packaged thereby rendering *1202 the unit unusable for the purpose for which it was intended. The alleged ^damages were noticed only after March 9, 2000, when John Mills of Performance Medical came to the office to install the unit. Mr. Mills observed that there were parts missing and that he would be unable to install the unit until the missing parts were replaced. As noted in the trial court’s reasons for judgment, Mr. Mills sent a descriptive list of damaged parts to Integrity; the unit was missing a frame nut plate, a frame spacer, a cover, a wall adapter plate, a wall bracket assembly and a broken plug. More notable, the trial court determined that Mr. Mills did not report the following damaged parts: an x-ray tube, a broken cable, cracked compression paddles, a bent column, and dust in the machine. Upon receiving Mr. Mill’s list, Integrity sent an urgent request to Bennett Mammography Parts Order Department requesting the missing parts. Parts began to arrive at the clinic on March 13, 2000, with the last parts arriving on April 25, 2000. Mr. Mills did not attempt to install the missing parts and power up the unit until May 2, 2000, three months after the unit was delivered. At that time Mr. Mills informed Integrity that the unit was making noise, there was a broken cable on the unit and two compression paddles were cracked. Integrity ordered a replacement x-ray tube at its cost and shipped it to Dr. Nelson on May 30, 2000 and she received it on June 2, 2000. By June 1, 2000, Dr. Nelson made a decision to move the clinic office and did in fact relocate the office to Chef Menteur Highway on July 1, 2000.

On June 4, 2000, Integrity requested that the unit be inspected by Mr. Louis Rodriguez of Tri-State Medical, a company that installs new and used x-ray equipment. Upon inspection, Mr. Rodriguez noticed that the equipment wasj^damaged. He testified that the column was already bolted to the wall but it appeared that the installation was not finished. The column moved, but the compression bars did not, likely due to a broken cable. The column cover and the column itself were the only things upright. The column itself was bent. The main generator was in the room, but still sitting on the side. Some of the boxes were still sealed. Based on Mr. Rodriguez’s report, Integrity suggested that Dr. Nelson return the mammography unit at her cost. Dr. Nelson rejected this offer. On August 4, 2000, Tri-State removed the unit to their warehouse for storage. It remained in their warehouse for over four years until Dr. Nelson discarded the unit at Dr. Nelson’s direction.

Allegedly, as a result of the tardiness in delivery of the missing parts, Dr. Nelson determined that it was necessary to rent a mammography unit from another company. 3

On December 26, 2000, Dr. Nelson filed a petition for damages against Integrity seeking to recover the return of the purchase price of the equipment, repair costs, costs incident to the sale, lost business and profits, general damages, attorney’s fees, and court costs. Dr. Nelson asserts that Integrity acted in bad faith and knew that the equipment was defective.

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16 So. 3d 1197, 2008 La.App. 4 Cir. 0443, 2009 La. App. LEXIS 1460, 2009 WL 2357007, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nelson-radiology-associates-llc-v-integrity-medical-systems-inc-lactapp-2009.