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Central Alabama Diagnostics LLC v. Toshiba American Medical Systems Inc

United States District Court, N.D. Alabama, Southern Division

February 12, 2018

CENTRAL ALABAMA DIAGNOSTICS, LLC Plaintiff,
v.
TOSHIBA AMERICAN MEDICAL SYSTEMS, INC., Defendant.

          MEMORANDUM OPINION

          KARON OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE

         In the fabled movie The Princess Bride, Inigo Montoya and the giant Fezzik implore Miracle Max to return life to Westley, the story's hero, so he can save Buttercup, the heroine, from marriage to evil Prince Humperdinck. Before doing so, Miracle Max explains the difference between “mostly dead” and “all dead”:

Miracle Max [looking at Westley]: He probably owes you money huh? I'll ask him.
Inigo Montoya: He's dead. He can't talk.
Miracle Max: Whoo-hoo-hoo, look who knows so much. It just so happens that your friend here is only mostly dead. There's a big difference between mostly dead and all dead. Mostly dead is slightly alive. With all dead, well, with all dead there's usually only one thing you can do.
Inigo Montoya: What's that?
Miracle Max: Go through his clothes and look for loose change.

         THE PRINCESS BRIDE (20th Century Fox 1987). Unfortunately for the parties (and the court), Miracle Max did not explain the difference between a mostly “new” MRI system and a mostly “old” MRI system.[1]

         Plaintiff Central Alabama Diagnostics, LLC (“CAD”) contends that Defendant Toshiba American Medical Systems, Inc. represented and promised that it could deliver a new MRI with a new magnet and electronics along with some limited refurbished accessories (the “mostly new MRI”). Toshiba, however, delivered a mostly old MRI, which, in CAD's view, is as useful as all dead.

         Toshiba, on the other hand, says that it never promised to deliver a mostly new MRI. Instead, Toshiba's argument runs, its promise allowed it to deliver a refurbished MRI that could contain any combination of used components and perhaps with some new ones. The issues are whether Toshiba misled CAD into believing it would provide a mostly new MRI and whether Toshiba promised to deliver a mostly new MRI rather than a mostly old MRI, like it delivered.

         The matter comes before the court on CAD's and Toshiba's cross motions for summary judgment (docs. 103, 106). In addition to the breach of contract claims, which include Toshiba's counterclaim premised on CAD's failure to accept and pay for the delivered MRI, Toshiba moves for summary judgment on CAD's claims of fraud by suppression, promissory fraud, and promissory estoppel. CAD, which asks for various damages and rescission of the contract, moves for summary judgment on the breach of contract claims only.

         For the reasons stated in this Memorandum Opinion and on the record at the court's December 11, 2017, motion hearing (doc.133), the court will GRANT Toshiba's motion for summary judgment as to CAD's promissory fraud and promissory estoppel claims. But the court will DENY Toshiba's motion for summary judgment as to the suppression and breach of contract claims. The court will likewise DENY CAD's motion for partial summary judgment on the breach of contract claims.

         STANDARD OF REVIEW

         Summary judgment is an integral part of the Federal Rules of Civil Procedure. Summary judgment allows a trial court to decide cases when no genuine issues of material fact are present and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56. When a district court reviews a motion for summary judgment, it must determine two things: (1) whether any genuine issues of material fact exist; and if not, (2) whether the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).

         The moving party “always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, ' which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (quoting Fed.R.Civ.P. 56). The moving party can meet this burden by offering evidence showing no dispute of material fact or by showing that the non-moving party's evidence fails to prove an essential element of its case on which it bears the ultimate burden of proof. Id. at 322-23.

         Once the moving party meets its burden of showing the district court that no genuine issues of material fact exist, the burden then shifts to the non-moving party “to demonstrate that there is indeed a material issue of fact that precludes summary judgment.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). In reviewing the evidence submitted, the court must “view the evidence presented through the prism of the substantive evidentiary burden, ” to determine whether the nonmoving party presented sufficient evidence on which a jury could reasonably find for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254 (1986); Cottle v. Storer Commc'n, Inc., 849 F.2d 570, 575 (11th Cir. 1988).

         The court must refrain from weighing the evidence and making credibility determinations, because these decisions fall to the province of the jury. See Anderson, 477 U.S. at 255; Stewart v. Booker T. Washington Ins. Co., 232 F.3d 844, 848 (11th Cir. 2000); Graham v. State Farm Mut. Ins. Co., 193 F.3d 1274, 1282 (11th Cir. 1999). Furthermore, all evidence and inferences drawn from the underlying facts must be viewed in the light most favorable to the non-moving party. Graham, 193 F.3d at 1282.

         The filing of cross motions for summary judgment does not affect the applicable Rule 56 standard. See, e.g., United States v. Oakley, 744 F.2d 1553, at 1555-56 (11th Cir. 1984). The Eleventh Circuit has noted that “[c]ross motions for summary judgment will not, in themselves, warrant the court in granting summary judgment unless one of the parties is entitled to judgment as a matter of law on facts that are not genuinely disputed.” Id. at 1555. So, just because both sides assert that no genuine issues of material fact exist does not mean the court must accept their word.

         FACTS

         The court and the parties agreed generally on the critical facts involved in this case at the December 11, 2017, motion hearing. (Doc. 133 at 3-6).

         Briefly stated, Toshiba sells both new and refurbished MRI systems. CAD's investors hired MedWorks, a medical imaging equipment dealer, to procure MRI systems for CAD. In November 2014 or early December 2014 in an effort to provide CAD with a new MRI at a competitive price, Toshiba brought to the table a plan to sell an MRI with a new magnet and accompanying electronics, but refurbished accessories, such as coils, table pads, and positioners, that is, a mostly new MRI. The mostly new MRI would be new in the most important respects, including the new magnet, and, Toshiba hoped, priced competitively.

         Two months later, CAD agreed to purchase from Toshiba an MRI detailed in an offer (the “Quotation”) dated February 26, 2015. After reviewing it with ...


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