Vertex Surgical, Inc. v. Paradigm Biodevices, Inc.

648 F. Supp. 2d 184, 2009 U.S. Dist. LEXIS 8147, 2009 WL 73804
CourtDistrict Court, D. Massachusetts
DecidedJanuary 9, 2009
DocketCivil Action 07-10134-DPW
StatusPublished
Cited by1 cases

This text of 648 F. Supp. 2d 184 (Vertex Surgical, Inc. v. Paradigm Biodevices, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Vertex Surgical, Inc. v. Paradigm Biodevices, Inc., 648 F. Supp. 2d 184, 2009 U.S. Dist. LEXIS 8147, 2009 WL 73804 (D. Mass. 2009).

Opinion

MEMORANDUM AND ORDER

DOUGLAS P. WOODLOCK, District Judge.

This contract dispute arose from an arrangement to market and sell surgical devices for spine operations. The Defendant, Paradigm Biodevices, Inc. (“Paradigm”), manufactures and distributes surgical devices in the Unites States. In December 2004, Paradigm entered into an agreement with the Plaintiff, Vertex Surgical, Inc. (“Vertex”), pursuant to which Vertex would sell Paradigm’s devices to surgeons in Alabama, Georgia and eastern Tennessee. Paradigm notified Vertex in May 2006 that it was terminating the agreement, and thereafter stopped paying commissions, giving rise to this diversity suit under 28 U.S.C. § 1332. The matter is before me on the Plaintiffs Motion for Partial Summary Judgment.

I. BACKGROUND

Paradigm is a Massachusetts corporation that manufactures and distributes surgical products, including a set of products used in spinal surgeries. Vertex, a Georgia corporation, sells medical equipment as a sales representative. Vertex, which has two employees, engages independent sales representatives to sell products on behalf of Vertex.

On December 14, 2004, Paradigm and Vertex entered into an Independent Agent Agreement (“Agreement”), which appointed Vertex as a sales agent with the exclusive right to sell certain Paradigm medical devices — STALIF and Quickdraw Bone Harvester (“Quickdraw”) — in Georgia, Alabama, and eastern Tennessee. STALIF is a mechanical spinal fixation system manufactured by an English company and distributed by Paradigm in the United States. Quickdraw, manufactured by Paradigm, is a disposable bone harvester for spinal fusion procedures. Under the Agreement, Paradigm was to pay Vertex commissions on the sale of STALIF and Quickdraw in Vertex’s region. The Agreement had a one-year term, but would renew automatically for additional one-year terms unless either party terminated the arrangement. The Agreement also had an integration clause, stating that the “Agreement contains the entire agreement and understanding between the parties respecting the subject matter hereof, and supersedes all prior and collateral agreements and understandings.”

The Agreement provided that sales quotas would be assigned to Vertex “within 60 days of execution & 60 days prior to each subsequent calandar [sic] year.” Paradigm sent Vertex its initial sales quota via email on February 4, 2005, within the sixty-day deadline. The email, sent by Paradigm’s president Michael O’Neill to Vertex’s president Sean Bitting, stated: “Attached is the quota for you [sic] area for the first half of '05.” Vertex alleges that no quotas were in place after the first half of 2005. Paradigm contends that quotas were assigned during the course of the contractual relationship, and that Vertex failed to perform its obligations to meet the sales quotas for its territory.

On January 12, 2006, Paradigm delivered a letter to Vertex notifying it that Paradigm was reducing Vertex’s territorial responsibilities. The parties dispute whether the letter in fact identified the actual changes to those territorial responsibilities. On May 5, 2006, the parties modified the Agreement through emails; *186 under this modification, Vertex relinquished part of its sales territory, and Paradigm agreed to pay Vertex sales commissions on its remaining territories until November 5, 2006. Nonetheless, on May 18, 2006, Paradigm notified Vertex by letter that it was terminating their Agreement, effective immediately. Paradigm apparently made no further payments to Vertex after May 18.

Vertex filed this lawsuit asserting three counts: breach of contract (Count I); violation of the Georgia Wholesale Distribution Act (Count II); and violation of the Massachusetts unfair trade practices statute, Mass. Gen. Laws ch. 93A, § 1 et seq (Count III). Through the motion currently before me, Vertex moves for summary judgment as to Counts I and II.

II. STANDARD OF REVIEW

Summary judgment is appropriate “where no genuine issue of material facts exists and the movant is entitled to judgment as a matter of law.” Jasty v. Wright Med. Tech., Inc., 528 F.3d 28, 35 (1st Cir.2008) (citing Fed.R.Civ.P. 56(c)). “A ‘genuine’ issue is one that could be resolved in favor of either party, and a ‘material fact’ is one that has the potential of affecting the outcome of the case.” Calero-Cerezo v. U.S. Dep’t of Justice, 355 F.3d 6, 19 (1st Cir.2004) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). The moving party, Vertex, has the burden to demonstrate that the evidence does not support the nonmoving party’s ease. Napier v. F/V DEESIE, Inc., 454 F.3d 61, 66 (1st Cir.2006). The court must construe the facts “in the light most favorable to the party opposing the motion.” Coffin v. Bowater Inc., 501 F.3d 80, 85 (1st Cir.2007).

III. ANALYSIS

The parties dispute whether there exist genuine issues of material facts, which would preclude this Court from issuing summary judgment on either Count I for breach of contract or Count II for violation of the Georgia Wholesale Distribution Act. I find issues of material fact. More fundamentally, I find that the parties’ contractual choice of law provision bars Count II’s invocation of the Georgia Wholesale Distribution Act. Consequently, I will deny the motion for partial summary judgment.

A. Breach of contract

In its Complaint, Vertex identifies three actions by Paradigm that breached the parties’ contract: Paradigm withdrew part of Vertex’s designated territory in January 2006; Paradigm improperly terminated the Agreement in May 2006; and Paradigm failed to pay the commissions due to Vertex under the Agreement. Vertex argues that the parties have no genuine material disputes regarding these actions, but instead only contest their legal implications for the contract. Paradigm contends that whether these actions constitute a breach of contract is a question that involves factual disputes that cannot be resolved on summary judgment.

The parties agree that under the Agreement’s choice of law provision, Massachusetts law governs the terms of the Agreement. Under Massachusetts law, the interpretation of the contract “is ordinarily a question of law for the court.” Teragram Corp. v. Marketwatch.com, Inc., 444 F.3d 1, 9 (1st Cir.2006) (internal quotations omitted).

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Related

Vertex Surgical, Inc. v. Paradigm Biodevices, Inc.
648 F. Supp. 2d 226 (D. Massachusetts, 2009)

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Bluebook (online)
648 F. Supp. 2d 184, 2009 U.S. Dist. LEXIS 8147, 2009 WL 73804, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vertex-surgical-inc-v-paradigm-biodevices-inc-mad-2009.