CERx Pharmacy Partners, LP v. Provider Meds, LP (In re Providerx of Grapevine, LLC)
| Decision Date | 02 August 2013 |
| Docket Number | Adversary No. 13–03015–BJH.,Bankruptcy No. 12–38039–BJH. |
| Citation | 498 B.R. 118 |
| Parties | In re PROVIDERX OF GRAPEVINE, LLC, Debtor. CERx Pharmacy Partners, LP, Plaintiff, v. Provider Meds, LP, et al., Defendants, v. Cary Lorimer and Stewart Stephens, Third Party Defendants. |
| Court | U.S. Bankruptcy Court — Northern District of Texas |
OPINION TEXT STARTS HERE
Holland N. O'Neil, Virgil Ochoa, James C. Scott, William G. Whitehill, Gardere Wynne Sewell LLP, Dallas, TX, for Plaintiff.
Kevin S. Wiley, Jr., Law Offices of Kevin S. Wiley Jr., Dallas, TX, for Third Party Defendants.
Before the Court are Defendants' Partial Motion for Summary Judgment [Dkt. No. 53] and brief in support (“Defendants' Brief”) [Dkt. No. 54] filed by ProvideRx of Grapevine, LLC, Provider Meds, LP (“PM”), Provider Technologies, Inc. (“PT”), OnSite RX of Phoenix, LLC, W PA Onsite RX, LLC, ProvideRx of Midland, LLC, ProvideRx of Waco, LLC, ProvideRx of San Antonio, and Reef Gillum as trustee of the Gillum Family Master Heritage Trust (collectively, the “Defendants”) 1, Plaintiff's Motion for Partial Summary Judgment [Dkt. No. 66] and brief in support (“Plaintiff's Brief”) [Dkt. No. 67] filed by CERx Pharmacy Partners, LP (“CERx”), and the responses and replies related thereto.
A hearing on the motions for summary judgment was held before this Court on June 17, 2013. At the conclusion of the hearing, this Court orally granted CERx's request for entry of a judgment against the Gillum Family Master Heritage Trust (“GFMHT”) 2 for $10,301,130.81, plus interestat a rate of $4,739.36 per day since March 31, 2013, for sums GFMHT owes CERx under various continuing, unconditional, and unlimited payment guaranties GFMHT executed in favor of CERx covering PM's debts to CERx. The Court also orally granted CERx's request for a judgment in this amount against PT, as PM's general partner, for the debts owed to CERx by PM. Accordingly, on June 26, 2013, this Court entered a Partial Summary Judgment [Dkt. No. 100] reflecting these rulings. The Court also requested supplemental briefing from the parties on several remaining issues at the conclusion of the hearing. By agreement of the parties, the last of these supplemental briefs was submitted on July 3, 2013, and the motions are now ripe for ruling.
The primary issue remaining before this Court is whether the language in the loan and security documents entered into by and among the various parties was sufficient to grant CERx a security interest in all of PM's intellectual property assets owned immediately prior to a December 13, 2012 foreclosure sale (collectively, the “IP Assets”). For the reasons detailed below, this Court concludes that (1) the loan documents are unambiguous and, as a matter of law, PM did grant CERx a security interest in all of its IP Assets; (2) although CERx's security interest attached to PM's IP Assets, the collateral description contained in the UCC–1 financing statement filed by CERx with the Texas Secretary of State was insufficient to perfect CERx's security interest in PM's IP Assets, other than the Patent Applications (defined on p. 17); (3) pursuant to its Notice of Disposition of Collateral, CERx only foreclosed upon PM's Patent Applications; (4) thus, as of its bankruptcy petition date, PM held title to all of its IP Assets, other than the foreclosed-upon Patent Applications, subject to CERx's unperfected security interest; and (5) because CERx failed to perfects its non-Patent Application security interests, such interests were unperfected when PM filed its bankruptcy case and are subject to avoidance pursuant to 11 U.S.C. § 544(a)(1).
Accordingly, as set forth in more detail below, Plaintiff's Motion for Partial Summary Judgment is granted with respect to the Patent Applications, and denied with respect to the remainder of PM's IP Assets. Defendant's Partial Motion for Summary Judgment is denied with respect to the Patent Applications, but granted in all other respects.
I. SUMMARY JUDGMENT STANDARD
In deciding a motion for summary judgment, a court must determine whether the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56, as made applicable by Fed. R. Bankr.P. 7056. In deciding whether a fact issue has been raised, the facts and inferences to be drawn from the evidence must be viewed in the light most favorable to the non-moving party. Berquist v. Washington Mut. Bank, 500 F.3d 344, 349 (5th Cir.2007). A court's role at the summary judgment stage is not to weigh the evidence or determine the truth of the matter, but rather to determine only whether a genuine issue of material fact exists for trial. Peel & Co., Inc. v. The Rug Market, 238 F.3d 391, 394 (5th Cir.2001) () ( citing Reeves v. Sanderson Plumbing Prods, Inc., 530 U.S. 133, 135, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000)); see also U.S. v. An Article of Food Consisting of 345/50–Pound Bags, 622 F.2d 768, 773 (5th Cir.1980) (). While courts must consider the evidence with all reasonable inferences in the light most favorable to the non-movant, the nonmoving party must come forward with specific facts showing that there is a genuine issue for trial. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A genuine issue of material fact exists “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Pylant v. Hartford Life and Acc. Ins. Co., 497 F.3d 536, 538 (5th Cir.2007) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).
After the movant has presented a properly supported motion for summary judgment, the burden then shifts to the nonmoving party to show with “significant probative evidence” that there exists a genuine issue of material fact. Hamilton v. Segue Software Inc., 232 F.3d 473, 477 (5th Cir.2000) (internal citation omitted). However, where “the burden at trial [as to the material fact at issue] rests on the non-movant, the movant must merely demonstrate an absence of evidentiary support in the record for the non-movant's case.” Miss. River Basin Alliance v. Westphal, 230 F.3d 170, 174 (5th Cir.2000) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).
On cross-motions for summary judgment, the court must review each party's motion independently, and view the evidence and inferences in the light most favorable to the nonmoving party. Taylor v. Gregg, 36 F.3d 453, 455 (5th Cir.1994).
II. OBJECTIONS TO THE SUMMARY JUDGMENT RECORD3A. CERx's Objections to the Affidavit of Reef Gillum, D.O.
CERx objects to and requests that this Court strike all of paragraphs 3 and 7, and portions of paragraph 4, of Dr. Reef Gillum's affidavit [Dkt. No. 54–1] on the grounds that the specified statements are unsupported conclusions and/or not based upon facts. Objections to Affidavit of Reef Gillum, D.O. [Dkt. No. 64] at ¶¶ 1–3. The first sentence of paragraph 3, “[o]ur contention is that the Source [Code] is the property of OnSite RX, Inc.”, and all of paragraph 7, “[i]n short Defendants submit that ...”, are worded so that they do not reflect statements based upon Dr. Gillum's personal knowledge. The second sentence of paragraph 3 and the third sentence of paragraph 4 of Dr. Gillum's affidavit state his opinion as to the ultimate legal issue before this Court. In these sections, Dr. Gillum testifies as to the alleged scope of the security interests granted to CERx pursuant to the May 6 Loan Documents and which assets were allegedly the subject of CERx's December 2012 foreclosure sale.
“Under Fed.R.Evid. 701, a lay opinion must be based on personal perception, must be one that a normal person would form from those perceptions, and must be helpful to the jury.” U.S. v. Riddle, 103 F.3d 423, 428 (5th Cir.1997) (internal quotation marks and citation omitted). A lay witness may not give an opinion that requires “scientific, technical, or other specialized knowledge within the scope of Rule 702.” Fed.R.Evid. 701(c). It is also generally prohibited for a lay witness to interpret statutes and to give legal opinions. See U.S. v. Griffin, 324 F.3d 330, 347–48 (5th Cir.2003). For example, in Riddle, the Fifth Circuit held that it was improper for a lay witness in a bank fraud prosecution to explain provisions of the banking regulations, to express his opinion on “prudent” banking practices, and to “draw on his specialized knowledge as a bank examiner” in giving his opinions about the defendant's actions. Riddle, 103 F.3d at 428–29;see also U.S. v. El–Mezain, 664 F.3d 467, 511–12 (5th Cir.2011) (). Here, Dr. Gillum is not a lawyer and has no specialized training or knowledge of the law that would permit him to so testify in accordance with Fed.R.Evid. 701(c). Accordingly, CERx's objection is sustained and the above-referenced portions of Dr. Gillum's affidavit are stricken from the summary judgment record.
B. The Defendants' Objection to Plaintiff's Summary Judgment Evidence
The Defendants object to CERx exhibits 89 [CERx App. 815], 94 [ Id. at 678–682], 95 [ Id. at 683–684], 116 [ Id. at 731–736], 117 [ Id. at 737–743], 118 [ Id. at 827–828], 128 [ Id. at 793–796], 129 [ Id. at 797–804], and 130 [ Id. at 1185–1186] as inadmissible hearsay. See Defendants' Objection to Plaintiff's Summary Judgment Evidence [Dkt. No. 86] at p. 2...
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