EM Med., LLC v. Stimwave LLC

• Decision Date: 15 June 2021
• Docket Number: No. ED 108965,ED 108965
• Citation: 626 S.W.3d 899
• Court: Missouri Court of Appeals
• Parties: EM MEDICAL, LLC, Respondent, v. STIMWAVE LLC, Appellant, and Andrea Berry, et al., Defendants.

626 S.W.3d 899

EM MEDICAL, LLC, Respondent,

v. STIMWAVE LLC, Appellant,andAndrea Berry, et al., Defendants.

No. ED 108965

Missouri Court of Appeals, Eastern District, DIVISION ONE.

Filed: June 15, 2021

FOR APPELLANT: Aaron E. Schwartz, 8182 Maryland Ave., 15^th Floor, St. Louis, MO 63105.

FOR RESPONDENT: Allen P. Press, Bruce R. Bartlett, 168 N. Meramec Ave., Ste. 150, St. Louis, Mo 63105, Matthew B. Vianello, 225 S. Central Ave., Ste. 550, Clayton, MO 63105.

ROBERT M. CLAYTON III, Judge

Stimwave LLC ("Stimwave") appeals the trial court's denial of its motion to compel arbitration of claims between EM Medical, LLC ("EM Medical") and Stimwave in the underlying suit in this case.¹ We affirm.

I. BACKGROUND

This case arises out of a business relationship between EM Medical, a company with its principal place of business in St. Louis, County, Missouri, and Stimwave, a company with its principal place of business in Florida. During the course of the parties’ business relationship, EM Medical solicited orders for Stimwave's medical products, and Stimwave made payments to EM Medical. The parties’ business relationship began in January 2016 and ended in June 2018.

It is undisputed EM Medical and Stimwave's business relationship was based on an agreement; however, the parties dispute the type of agreement they had. Specifically, EM Medical alleges in its final amended petition² that the parties’ business relationship was based on a verbal agreement. In contrast, Stimwave contends in its motion to compel arbitration that the parties’ relationship was based on a written agreement which Stimwave presented to EM Medical in January 2016 ("Proposed January 2016 Agreement" or "Proposed Agreement"). The Proposed January 2016 Agreement is attached as an exhibit to Stimwave's motion to compel arbitration.

A. The Proposed January 2016 Agreement

The Proposed January 2016 Agreement, with exhibits, is seventeen pages long and contains more than fifty paragraphs and subparagraphs of contractual provisions. Paragraph 4 and Exhibit C of the Proposed January 2016 Agreement collectively provide Stimwave would pay EM Medical commissions for purchase orders solicited by EM Medical under certain circumstances, with a commission rate of 25% or 20% depending on the particular calendar year. Another one of the provisions of the Proposed Agreement, subparagraph 17.4, provides in relevant part that any dispute, controversy or claim between the parties which cannot be resolved through direct negotiations "shall be settled by binding arbitration."

Additionally, the first paragraph of the Proposed January 2016 Agreement states in relevant part: "[This agreement] is effective as of the date signed below ... by and between Stimwave ... and [EM Medical] for the purpose of defining the rights and duties of the parties in connection with the representation by [EM Medical] of certain [Stimwave] products." There are four areas on the Proposed January 2016 Agreement where there is a place for both Stimwave and EM Medical to sign: (1) on page eleven after subparagraph 17.9 and before any of the exhibits to the Proposed Agreement; (2) on page fourteen at the bottom of Exhibit B (which is titled "Territory and Exclusivity"); (3) on page fifteen at the bottom of Exhibit C (which is titled "Schedule of Commission"); and (4) on page seventeen at the bottom of Exhibit E (which is titled "Quota") (collectively "four signature areas on the Proposed Agreement"). Moreover, before each of the four signature areas on the Proposed Agreement, there are the words, "AGREED TO AND ACCEPTED BY:" in bold letters.

Stimwave never signed any of the four signature areas on the Proposed Agreement. EM Medical signed all of the four signature areas on the Proposed Agreement and dated its signature on page eleven (with a date of January 19, 2016). However, EM Medical did not deliver a signed copy of the Proposed Agreement to Stimwave at any time during the course of the parties’ business relationship. Furthermore, Stimwave admits in its motion to compel arbitration that "Stimwave believed, until February of 2020 [during discovery in the instant case], that EM Medical had not executed [the Proposed January 2016 Agreement]."

B. Evidence of Further Negotiations and Business Between the Parties

Approximately one year after the parties’ business relationship began, EM Medical drafted a new version of the Proposed Agreement which was dated December 4, 2016 ("EM Medical's December 2016 Proposal" or "EM Medical's Proposal"). EM Medical's December 2016 Proposal was signed by EM Medical on January 1, 2017 and was delivered to Stimwave sometime in early 2017. Stimwave did not sign EM Medical's Proposal but instead made changes to it and returned a revised document to EM Medical. The parties did not subsequently reach a written agreement executed by both parties but continued in business together until the termination of the parties’ business relationship.

C. The Termination of the Parties’ Business Relationship and Initial Relevant Procedural Posture

The parties’ business relationship ended on June 25, 2018, when Stimwave wrote a letter to EM Medical terminating their relationship. Stimwave's June 25, 2018 letter requested EM Medical to "cease activities in the representation of Stimwave products" and also stated, "[a]s a point of reference, [Stimwave] is not in possession of an executed agreement."

EM Medical filed its initial petition against Stimwave and underlying defendants Andrea Berry, Kaitlin Brenzel, and Ingrid Flaspohler (collectively "Defendants") on March 6, 2019. Subsequently, EM Medical filed its first amended petition against Defendants on July 22, 2019.

EM Medical then filed a motion for partial summary judgment on its July 2019 first amended petition, along with a statement of undisputed facts and accompanying sworn affidavit of Michael Reid.

According to Reid's affidavit, he was a member and manager of EM Medical who worked extensively with Stimwave and its customers, and the parties’ relationship began in January 2016 and ended in June 2018. Reid's affidavit also alleged:

Under the parties’ agreement, EM Medical solicited orders for Stimwave's products from medical providers, and provided training and support to physicians as to the use of the products, including the provision of a clinical specialist to assist physicians with cases and patients. For its part, Stimwave agreed to pay EM Medical a 25% commission for orders placed by medical providers it solicited.

The trial court subsequently denied EM Medical's motion for partial summary judgment.

EM Medical filed a second amended petition against Defendants on October 21, 2019, and a final amended petition against Defendants on October 30, 2019. EM Medical's final amended petition raises eight counts against Defendants consisting of, (1) EM Medical's claim alleging Stimwave owed EM Medical money and damages for unpaid commissions earned by EM Medical before the parties’ business relationship was terminated (Count I)³ ; (2) EM Medical's breach of contract claims against underlying defendants Andrea Berry, Kaitlin Brenzel, and Ingrid Flaspohler (Counts II, III, and IV); (3) EM Medical's claims relating to Stimwave's alleged tortious interference with alleged employment agreements entered into between EM Medical and underlying defendants Andrea Berry, Kaitlin Brenzel, and Ingrid Flaspohler (Counts V, VI, and VII); and (4) EM Medical's claim relating to Stimwave's termination of the parties’ alleged franchise relationship (Count VIII).

On November 25, 2019, Stimwave filed a responsive pleading. In this pleading, inter alia , Stimwave admitted it had an agreement with EM Medical; Stimwave denied it was obligated to pay commissions to EM Medical; and Stimwave raised a counterclaim against EM Medical alleging EM Medical failed to promptly return approximately $148,130 of Stimwave's medical equipment inventory after the parties’ business relationship had ceased.

D. Stimwave's Motion to Compel Arbitration and Other Procedural Posture Immediately Preceding the Instant Appeal

On March 6, 2020, Stimwave filed a motion to compel arbitration of the claims between EM Medical and Stimwave in the underlying suit in this case based upon the arbitration provision in the Proposed January 2016 Agreement. As previously stated, Stimwave admits in its motion to compel arbitration that "Stimwave believed, until February of 2020 [during discovery in the instant case], that EM Medical had not executed [the Proposed January 2016 Agreement]." Six documents are attached in support of Stimwave's motion: Exhibits A, B, C, D, E, and F.

Exhibit A to the motion to compel is Stimwave's June 25, 2018 letter to EM Medical terminating their relationship discussed above in Section I.C. of this opinion. Exhibit B is a September 14, 2018 letter from Stimwave's attorney to EM Medical's attorney stating in relevant part:

... [I]f you are in possession of a fully executed agreement between Stimwave and EM Medical, please kindly forward it to us for review. It is our further understanding that no agreement exists between Stimwave and EM Medical; therefore, neither ‘commissions’ are owed by Stimwave to EM Medical nor has Stimwave provided a notice of termination that would subject it to additional financial obligations to EM Medical.

Exhibit C is a copy of the Proposed January 2016 Agreement discussed above in Section I.A. of this opinion. And Exhibits D, E, and F, respectively, are EM Medical's answers to Stimwave's interrogatories; EM Medical's responses to Stimwave's document requests; and a certificate of service regarding discovery.

On March 9, 2020, EM Medical filed its motion in opposition to Stimwave's motion to compel arbitration. EM Medical's motion in opposition alleges there is no valid written agreement between the parties providing for arbitration; the parties did not agree to arbitrate disputes; and the parties entered into negotiations after Stimwave presented EM Medical with...