Surgical Instrument Mfrs., Inc. v. Atlas Spine, Inc., 4:14 CV 1281 JMB
| Decision Date | 15 October 2015 |
| Docket Number | No. 4:14 CV 1281 JMB,4:14 CV 1281 JMB |
| Parties | SURGICAL INSTRUMENT MANUFACTURERS, INC., Plaintiff, v. ATLAS SPINE, INC., Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
This matter is before the Court on Plaintiff Surgical Instrument Manufacturers, Inc.'s ("SIM") Motion for Summary Judgment. (ECF No. 20) Defendant Atlas Spine, Inc. filed a Memorandum in Opposition (ECF No. 25) and SIM filed a Reply (ECF No. 28) thereto. All matters are pending before the undersigned United States Magistrate Judge, with the consent of the parties, pursuant to 28 U.S.C. § 636(c). For the reasons set forth below, the motion will be granted.
The present matter stems from a contract dispute between SIM and Atlas Spine. As its name indicates, SIM manufactures surgical instruments. SIM and Atlas Spine entered into an Agreement governing the terms under which SIM would manufacture and deliver surgical instruments and other products to Atlas Spine, and Atlas Spine would pay SIM for the products ordered. Atlas Spine ordered products from SIM by conveying orders via e-mail, and SIM would send invoices to Atlas Spine. The present dispute involves Atlas Spine's orders in November and December 2013. SIM contends that it delivered all of the required products(except for three invoices), and Atlas Spine failed to pay amounts due under the invoices. SIM filed a Complaint requesting relief in the form of monetary damages in the amount of $190,848.83 for breach of contract (Count I), action on account (Count II), and in the alternative, quantum meruit in the amount of $187,624.40, the price of the products delivered (Count III).
SIM filed a summary judgment motion requesting the Court to enter judgment for breach of contract and action on account totaling $237,666.67. This amount reflects $190, 848.83 owed in principal plus $46,711.94 in prejudgment interest accrued through July 22, 2015. Additionally SIM seeks prejudgment interest accruing until judgment is entered at a per diem rate of $94.12 after July 22, 2015,1 plus attorney's fees and costs, as provided under the Agreement, and post-judgment interest at the contractual rate of 18% per annum. In the alternative, if the Court does not grant summary judgment for breach of contract and action on account, SIM prays for relief in quantum meruit for the price of the products delivered to Atlas Spine, totaling $187, 624.40.
In response, Atlas Spine argues that a genuine issue of material fact exists regarding the amount of monies due and owing to SIM. Atlas Spine contends that SIM did not fully perform its obligations due to certain nonconforming goods which were either returned to SIM or were scraped. Specifically, Atlas Spine claims that it should not be required to pay $3,224.43 for thirty-eight units of non-conforming products listed on invoice # 140353 (item #10671), # 140359 (item #10672), and # 140536 (item # 70413 and #70422). Atlas Spine argues that these particular products were scrapped due to non-conformity and invoice # 140186 (item #10756)because the products were returned to SIM.2 Therefore, Atlas Spine contends that the amount that is owed to SIM is unliquidated. Atlas Spine did not raise any issue regarding liquidated damages in its briefing to the Court. Rather, Atlas Spine raised the issue for the first time at oral argument. In particular, Atlas Spine argued that prejudgment interest was not appropriate in this case because, allegedly, all of SIM's claims in this matter are unliquidated.
Viewing all facts and drawing all reasonable inferences in the light most favorable to the nonmoving party, the Court sets forth the following facts:
A. Background
On April 23, 2012, SIM and Atlas Spine entered into an Agreement governing the terms under which SIM would manufacture and deliver surgical instruments and other products to Atlas Spine, and Atlas Spine would pay SIM for the products ordered. (ECF No. 22-2 at 1, Walter Aff. at ¶ 7) SIM is a Missouri corporation with its principal place of business in St. Louis, Missouri. Atlas Spine is a Florida corporation with its principal place of business in Jupiter, FL. (ECF No. 1 at ¶¶ 1, 3)
B. April 23, 2012, Agreement
Both SIM and Atlas Spine signed the April 23, 2012, Agreement. The Agreement setsout the terms under which Atlas Spine would procure services and/or materials from SIM. (ECF Nos. 22-2/ 25-2) The Agreement provides that Atlas Spine is to pay SIM for the products covered by each invoice within thirty days after the date of each of the invoices. (ECF Nos. 22-1 at ¶ 22, 22-2/22-5 at ¶ 3) The Agreement contemplated the possibility that Atlas Spine might reject some goods. The Inspection of Goods; Rejection of Goods and Revocation of Acceptance paragraph provides as follows:
Notwithstanding any prior inspection or payments, all Goods will be subject to final inspection and acceptance at Buyer's location within 30 days after delivery, Buyer shall notify Seller within 30 days after delivery of any apparent defective material or workmanship or non-conformity of any Goods to the product specifications.... If Buyer fails to so notify Seller, Buyer will be deemed to have accepted the Goods. Buyer will have the right to reject Goods only in the event that Goods are defective in material and workmanship, or otherwise not in conformity with the specifications or the requirements set forth in the Purchase Order and Order Acknowledgement, Buyer will not be required to pay for any rejected.... Buyer will return all rejected Goods to Seller at Seller's expense. Rejected Goods must be accompanied by a written explanation of failure.
(ECF Nos. 22-2/22-5 at ¶ 17) The Agreement also provides that SIM may refuse to make further shipments of products to Atlas Spine should a balance remain outstanding for more than 30 days after Atlas Spine's receipt of an invoice. (Id. at ¶ 3; ECF No. 22-1 at ¶ 18) The Agreement specifically states that "[n]o waiver, alteration, modification of or in addition to the terms and conditions contained herein shall be binding unless agreed to in writing by a duly authorized representative of both Parties." (ECF Nos. 22-2/25-2 at ¶ 29)
Pursuant to the terms of the Agreement, the obligations on the invoices bear interest of 1.5% per month or 0.0493% per diem. (ECF Nos. 22-1 at ¶ 27, 22-2 at ¶¶ 2-3/25-2 at ¶¶ 2-3)
Pursuant to the terms of the Agreement, Atlas Spine is obligated to pay costs of collection including attorney's fees. SIM has retained counsel to represent SIM in collection ofthe outstanding obligations owed under the invoices pursuant to the Agreement.
C. Purchase Orders
Under the Agreement, Atlas Spine conveyed purchase orders to SIM via electronic mail. Atlas Spine was allowed to order goods on credit. (ECF Nos. 22-1 at ¶ 10, 22-22 at 14) Upon receipt of a purchase order, SIM agreed to manufacture and deliver the products ordered by sending Atlas Spine an electronic mail message that included an Order Acknowledgement, along with SIM's Standard Terms and Conditions of Sale on Credit ("Terms and Conditions"). (ECF Nos. 22-1 at ¶¶ 11-12, 22-22 at 14-15, 22-7 at 4-9) SIM also sent invoices to Atlas Spine for the price of the products ordered. (ECF Nos. 22-8; 22-11, 22-14, 22-17, 22-20) SIM's Terms and Conditions provide that all payments are due net thirty days from receipt of products and invoice, and that SIM reserves the right to refuse to make further shipments should there be any balance outstanding for more than thirty days after Atlas Spine's receipt of an invoice. (ECF No. 22-7 at 5) The present dispute relates to purchase orders from Atlas Spine in November and December 2013. Atlas Spine has not paid SIM for the products listed in the affected purchase orders and invoices. (ECF Nos. 22-1 at ¶ 14, 22-3, 22-22 at 55)
Atlas Spine accepted delivery of the SIM products listed on the invoices and never properly rejected any of the SIM products under the invoices pursuant to the Agreement. (ECF No. 22-1 at ¶¶ 20-21) SIM delivered all the products listed on the invoices except for the products listed on invoice #141118 dated May 30, 2014, # 141119 dated May 30, 2014, and # 141248 dated June 18, 2014, because of Atlas Spines's nonpayment for other products previously delivered. (ECF No. 22-1 at ¶ 19) The non-payments at issue relate to five purchase orders. (ECF No. 22-1 at 5-8)
Atlas Spine submitted Purchase Order 13-11-012 on November 6, 2013. (ECF Nos. 22-1 at ¶ 18, 22-6-7) SIM manufactured the products ordered and delivered the products to Atlas Spine. SIM conveyed invoice # 140224 (January 22, 2014) to Atlas Spine, and this invoice remains unpaid. (ECF Nos. 22-1 at ¶¶ 40, 42, 22-8) Atlas Spine admits that Purchase Order 13-12-012 was conveyed to SIM; that SIM conveyed an Order Acknowledgement and Terms and Conditions to Atlas Spine; that the products listed on the purchase order were manufactured by SIM and delivered to Atlas Spine; and that Atlas Spine has not paid for the products. (ECF No. 26 at ¶¶ 22-26)
Atlas Spine submitted Purchase Order 13-11-013 on November 7, 2013. (ECF No. 22-9) On November 8, 2013, SIM conveyed an Order Acknowledgement and Terms and Conditions to Atlas Spine. (ECF Nos. 22-1 at ¶ 45, 22-10) The products listed on invoice # 140186 dated January 17, 2014, invoice # 140204 dated January 20, 2014, invoice # 140221 dated January 21, 2014, and invoice # 140251 dated January 24, 2014, were manufactured by SIM and delivered to Atlas Spine. (ECF Nos 22-1 at ¶¶47-48) SIM specifically manufactured for Atlas Spine the products listed on invoice # 141118 dated May 30, 2014, invoice # 141119 dated May 30, 2014, and invoice # 141248 dated June 18, 2014, but the products were not delivered to Atlas Spine, due to previous non-payments and the outstanding balance owed on Atlas Spine's account in the amount of $38,348.98. (Id at ¶¶ 49, 52) Atlas Spine admits that Purchase Order...
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