Orthofix, Inc. v. Hollands

CourtDistrict Court, M.D. Tennessee
DecidedJuly 1, 2025
Docket3:24-cv-01464
StatusUnknown

This text of Orthofix, Inc. v. Hollands (Orthofix, Inc. v. Hollands) is published on Counsel Stack Legal Research, covering District Court, M.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Orthofix, Inc. v. Hollands, (M.D. Tenn. 2025).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION

ORTHOFIX US LLC, ) ) Plaintiff, ) ) v. ) Case No. 3:24-cv-01464 ) Judge Aleta A. Trauger NIKI HOLLANDS and MODERN ) HEALTH SOLUTIONS LLC, ) ) Defendants. ) )

MEMORANDUM Defendant Niki Hollands has filed a Motion for Partial Dismissal (Doc. No. 21), which, for the reasons set forth herein, will be granted. I. PROCEDURAL HISTORY The Second Amended Complaint (“SAC”) (Doc. No. 20) is the operative pleading. Plaintiff Orthofix US LLC (“Orthofix”) brings claims against two defendants: Niki Hollands and Modern Health Solutions LLC (“MHS”). The SAC alleges breach of contract claims against both defendants, (SAC ¶¶ 47–59 (Counts I & II)), which are not at issue. At issue are two claims against Hollands: intentional misrepresentation (id. ¶¶ 60–67 (Count III)) and fraudulent inducement (id. ¶¶ 68–75 (Count IV)). Orthofix seeks compensatory and punitive damages and costs. (Id. at 17.) The plaintiff has attached four exhibits to the SAC, including the contract at issue in this case: the Independent Sales Representative Agreement (the “ISRA”) (SAC at 18–45).1

1 “When ruling on a motion to dismiss, courts ‘may consider exhibits attached to the complaint . . . so long as they are referred to in the complaint and are central to the claims contained Hollands has filed a Motion for Partial Dismissal (Doc. No. 21), under Fed. R. Civ. P. 12(b)(6), seeking dismissal of Counts III (intentional misrepresentation) and IV (fraudulent inducement) of the SAC, with an accompanying Memorandum (Doc. No. 22), to which Orthofix has filed a Response (Doc. No. 32) and in further support of which Hollands has filed a Reply

(Doc. No. 33). An Agreed Confidentiality and Protective Order (Doc. No. 36) is in place. II. FACTS Orthofix makes medical devices used in spinal surgeries that it markets to surgeons through representatives—some of whom are independent contractors and some of whom are employees. (SAC ¶¶ 7–9.) Orthofix is a Delaware limited liability company whose sole member is a Delaware corporation with its principal place of business in Texas. (Id. ¶ 2.) Hollands is a citizen of Tennessee and MHS is a Tennessee limited liability company whose sole member is Hollands.2 (Id. ¶¶ 3–4.) Orthofix employed Hollands as a representative until 2022, when MHS entered into an exclusive sales representative agreement—the ISRA—with Orthofix to market some of Orthofix’s products in East and Middle Tennessee. (Id. ¶¶ 11–15.) The ISRA imposed two relevant requirements on MHS. First, it required MHS and those working for it to abide by non-compete

and non-solicitation provisions, which extended for one year beyond the ISRA’s termination. (ISRA § VI(B), (C).) Second, it mandated that MHS require its owner and employees to execute non-competition and non-solicitation agreements before working for MHS on behalf of Orthofix and to name Orthofix as a third-party beneficiary of those agreements. (Id. ¶ VI(D).) The SAC alleges that, despite MHS’s agreement to market Orthofix’s products exclusively, in 2024 it began to market a competitor’s products and then terminated the ISRA. (SAC ¶¶ 28–

therein.’” Mitchell v. City of Benton Harbor, 137 F.4th 420, 445 (6th Cir. 2025) (quoting Gavitt v. Born, 835 F.3d 623, 640 (6th Cir. 2016)). 2 The court has diversity jurisdiction under 28 U.S.C. § 1332(a). 38.) In so doing, the SAC alleges, the defendants violated the ISRA’s non-solicitation and non- compete provisions. (Id. ¶¶ 39–41.) The SAC alleges that Orthofix lost hundreds of thousands of dollars of sales as a result. (Id. ¶¶ 40–41.) As to Hollands, the SAC alleges that, when she negotiated and signed the ISRA on behalf

of MHS, she misrepresented her intention, as MHS’s owner, to comply with, and ensure MHS’s compliance with, the ISRA’s non-compete and non-solicitation provisions. (Id. ¶ 63.) Furthermore, the SAC alleges that, “[i]f Hollands caused MHS to not subject her to the requisite non-compete agreement,” then the defendants misrepresented their intention to require all MHS sales representatives to sign the separate non-compete and non-solicitation agreements. (Id. ¶ 64; see also id ¶ 39.) Hollands’ alleged misrepresentations about her intent, as MHS’s owner, to abide by the ISRA, are the grounds for both the intentional misrepresentation and fraudulent inducement claims against Hollands, which she moves to dismiss. Indeed, the two claims rely on similar allegations. (Compare SAC ¶¶ 61–67 (intentional misrepresentation), with id. ¶¶ 69–75 (fraudulent inducement).)3

3 The court pauses for a moment to mention an oddity in the SAC. It alleges both (1) that Hollands violated a non-compete and non-solicitation agreement she signed and (2) that, if in fact she never did sign such an agreement, she misrepresented that she would. Count II, for breach of contract, alleges “upon information and belief, . . . that MHS complied with its contractual obligation to require Hollands to enter into such an agreement.” (SAC ¶ 57.) But Counts III and IV rely, in part, on the conditional allegation that if Hollands caused MHS not to require her to execute the required non-compete and non-solicitation agreement, then she is liable for intentional misrepresentation and fraudulent inducement. (Id. ¶¶ 64, 70–71.) That is, to support its breach of contract claim, Orthofix presumes that Hollands violated a contract “it has not seen . . . [but] has no reason to believe . . . was not executed.” (Id.; see also id. ¶ 58 (“Assuming she signed the contract . . . Hollands is breaching . . . .”).) And then it bases two other claims, in part, on the presumption that such a contract was not executed. (Id. ¶¶ 64, 70–73.) In its Response brief, the plaintiff seemingly disavows its allegation that Hollands executed a separate non-compete and non-solicitation agreement. (Doc. No. 32 at 6 (“By Hollands’ own admission, she ‘did not sign any noncompete agreement.’” (quoting Doc. No. 22 at 2)).) Because neither of the claims Hollands seeks to dismiss relies exclusively on the contention that “if Hollands caused MHS to not subject her to the requisite non-compete agreement, [then] she and MHS knew that their material III. LEGAL STANDARD A. Rule 12(b)(6) “Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A Rule 12(b)(6) motion to

dismiss tests the legal sufficiency of the complaint. RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th Cir. 1996). Such a motion is properly granted if the plaintiff has “fail[ed] to state a claim upon which relief can be granted.” Marvaso v. Sanchez, 971 F.3d 599, 605 (6th Cir. 2020) (quoting Fed. R. Civ. P. 12(b)(6)). To survive a motion to dismiss, a complaint must allege facts that, if accepted as true, are sufficient to state a claim for relief that is plausible on its face. Twombly, 550 U.S. at 555–57.

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Orthofix, Inc. v. Hollands, Counsel Stack Legal Research, https://law.counselstack.com/opinion/orthofix-inc-v-hollands-tnmd-2025.