Siemens Medical Sys. v. Nuclear Cardiology Sys.

• Decision Date: 03 October 1996
• Docket Number: Civil Action No. 94-B-2534.
• Citation: 945 F.Supp. 1421
• Parties: SIEMENS MEDICAL SYSTEMS, INC., Plaintiff, v. NUCLEAR CARDIOLOGY SYSTEMS, INC., doing business as N C Systems, Inc., Defendant.
• Court: U.S. District Court — District of Colorado

945 F.Supp. 1421

SIEMENS MEDICAL SYSTEMS, INC., Plaintiff, v. NUCLEAR CARDIOLOGY SYSTEMS, INC., doing business as N C Systems, Inc., Defendant.

Civil Action No. 94-B-2534.

United States District Court, D. Colorado.

October 3, 1996.

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Michael J. Dommermuth, McGloin, Davenport, Severson and Snow, P.C., Denver, CO, for Plaintiff.

Joel C. Maguire, Martin & Mehaffy, Boulder, CO, for Defendant.

MEMORANDUM OPINION & ORDER

BABCOCK, District Judge.

In this diversity action, plaintiff, Siemens Medical Systems, Inc. (Siemens), moves for summary judgment on its claim that defendant, N C Systems, Inc. (NCS), breached a contract between the two parties. Further, Siemens moves for summary judgment on NCS's counterclaims for breach of contract and intentional interference with contractual relations. The motion is adequately briefed and oral arguments would not materially aid its resolution. After consideration of the motion and the briefs, I conclude that Siemens' motion for summary judgment should be granted in part and denied in part.

I.

The following facts are undisputed, unless otherwise noted. Siemens is a Delaware corporation with its principal place of business in New Jersey. Siemens manufactures and sells medical equipment and related products and services. NCS is a Colorado corporation with its principal place of business in Colorado. NCS provides turnkey facilities for nuclear cardiology, including consultation, license and training applications, hardware, software and service. (PTO Stip. ¶¶ 1-3.)

In January 1992, Siemens and NCS entered into a contract (the January Agreement) under which NCS agreed to purchase from Siemens six new nuclear gamma cameras of the sort used in detecting cardiovascular diseases for a price of $162,371.00 each. (PTO Stip. ¶ 4; Pltf.Ex. 2.) In August or September of 1992, Siemens contacted NCS regarding an opportunity to purchase two nuclear cameras for a discounted price of $145,000.00 each. (Pltf.Br. ¶ 5; Def.Br. p. 2.) NCS alleges that Siemens promised orally that the two discounted systems were "new systems being returned to Siemens." NCS states that it understood the systems to be "demos" or "loaners" that Siemens had never sold and were not used otherwise. (Def.Br. p. 2; Def.Ex. 2(39-40).) Siemens claims NCS understood that the discounted systems were used. (Pltf.Br. ¶ 5; Pltf.Ex. 5(90-94).) Both parties agree that the discounted systems were to be counted against the parties' obligations under the January Agreement. (Pltf.Bf. ¶ 6; Def.Br. p. 2.)

NCS then entered into a contract with Cardiovascular Associates (CVA) to sell CVA a "mobile unit" that would incorporate in it a new Siemens nuclear gamma camera. (Pltf.Ex. 8.) NCS designated the CVA mobile unit as the destination for one of the previously installed Siemens systems. (PTO Stip. ¶¶ 5-8.) Siemens shipped a used camera to Colorado, the fabrication site for the mobile unit. (PTO Stip. ¶ 9.) After approximately one month, NCS shipped the completed mobile unit, including the used camera, to CVA in Tennessee. (PTO Stip. ¶ 10.)

CVA rejected the mobile unit upon discovery that the camera was not new. (PTO Stip. ¶ 12.) NCS contends that CVA rejected the mobile unit because of false statements made by Siemens about the condition and capabilities of the camera. (C.C. ¶¶ 15-17.) CVA subsequently contracted directly with Siemens for a new camera. (Def.Ex. 51.) In addition, CVA sued NCS in United States District Court, Eastern District of Tennessee for damages arising from NCS's alleged breach of contract. That court granted CVA partial summary judgment on its claim for breach of contract against NCS. Subsequently, NCS and CVA settled the case, and it was dismissed with prejudice.

Siemens filed this action on November 7, 1994. In its only outstanding claim for relief, Siemens alleges that NCS breached its contract with Siemens by refusing to pay for the nuclear camera system, including the camera and related equipment. (Compl. ¶¶ 8, 18-21.) NCS counterclaims for breach of contract and for intentional interference with its contractual relations with CVA. Siemens moves for summary judgment on its claim for breach of contract and on both of NCS's counterclaims. NCS argues that genuine issues of material fact exist whether Siemens was bound contractually to deliver a new camera to NCS and whether Siemens intentionally interfered with NCS's contractual relations with CVA. I agree with NCS in part, and I will deny Siemens' motion as to its breach of contract claim and NCS's counterclaim. However, the doctrine of issue preclusion bars NCS's counterclaim for intentional interference with contractual relations.

II. SUMMARY JUDGMENT STANDARD

The very purpose of a summary judgment motion is to assess whether trial is necessary. White v. York Int'l Corp., 45 F.3d 357, 360 (10th Cir.1995). Fed.R.Civ.P. 56 provides that summary judgment shall be granted if the pleadings, depositions, answers to interrogatories, admissions, or affidavits show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The nonmoving party has the burden of showing that there are issues of material fact to be determined. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). A party seeking summary judgment bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, interrogatories, and admissions on file together with affidavits, if any, that it believes demonstrate the absence of genuine issues for trial. Celotex, 477 U.S. at 323, 106 S.Ct. at 2552-53; Mares v. ConAgra Poultry Co., Inc., 971 F.2d 492, 494 (10th Cir.1992). Once a properly supported summary judgment motion is made, the opposing party may not rest on the allegations contained in his complaint, but must respond with specific facts showing the existence of a genuine factual issue to be tried. Otteson v. U.S., 622 F.2d 516, 519 (10th Cir.1980); Fed.R.Civ.P. 56(e). These specific facts may be shown "by any of the kinds of evidentiary materials listed in Rule 56(c), except the pleadings themselves." Celotex, 477 U.S. at 324, 106 S.Ct. at 2553.

If a reasonable juror could not return a verdict for the nonmoving party, summary judgment is proper and there is no need for a trial. Celotex, 477 U.S. at 323, 106 S.Ct. at 2552-53. When the moving party is the plaintiff, the operative inquiry is whether, based on all documents submitted, reasonable jurors must find by a preponderance of the evidence that the plaintiff is entitled to a verdict. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986). However, summary judgment should not enter if, viewing the evidence in a light most favorable to the nonmoving party and drawing all reasonable inferences in that party's favor, a reasonable jury could return a verdict for that party. Anderson v. Liberty Lobby, Inc., 477 U.S. at 250-52, 106 S.Ct. at 2511-12; Mares, 971 F.2d at 494. Unsupported allegations without "any significant probative evidence tending to support the complaint" are insufficient, see White, 45 F.3d at 360 (internal quote and citation omitted), as are conclusory assertions that factual disputes exist. Anderson, 477 U.S. at 247-48, 106 S.Ct. at 2509-10.

CHOICE OF LAW

In a diversity action, district courts use the choice of law rules of the forum state. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Looking first to the law of this forum state, Colorado has adopted Colo.Rev.Stat. § 4-1-105 (1992), which is the choice of law provision for the Uniform Commercial Code. Further, Colorado courts apply the Restatement (Second) of Conflict of Laws (1971) for tort actions. First Nat'l Bank v. Rostek, 182 Colo. 437, 448, 514 P.2d 314, 320 (1973).

Section 105(1) states:

Except as provided hereafter in this section, when a transaction bears a reasonable relation to this state and also to another state or nation, the parties may agree that the law either of this state or of such other state or nation shall govern their rights and duties. Failing such agreement, this title applies to transactions bearing an appropriate relation to this state.

Here, the January Agreement includes a choice of law provision, stating that the "rights and obligations of the parties under this agreement shall be governed by the law of the State of New Jersey." (Pltf.Ex. 2.) Moreover, because Siemens' principal place of business is in New Jersey, the transaction in question bears a "reasonable relation" to that state. Colo.Rev.Stat. § 4-1-105. Consequently, I conclude that the parties' choice of law controls, and New Jersey law governs the breach of contract claim by Siemens and the breach of contract counterclaim by NCS.

NCS's counterclaim for intentional interference with contractual relations, however, must be analyzed under the Restatement as a tort. Restatement § 145 addresses tort actions:

(1) The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties....

(2) Contacts to be taken into account ... include:

(a) the place where the injury occurred,

(b) the place where the conduct causing the injury occurred,

(c) the domicil, residence, nationality, place of incorporation and place of business of the parties, and

(d) the place where the relationship, if any, between the parties is centered.

These contacts are to be evaluated according to their relative importance with respect to the particular issue.

Here, the activities that relate to NCS's counterclaim of intentional interference with contractual relations occurred predominantly in Tennessee. Thus, I...