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Arthrotek, Inc. v. Medi Peth Medical Lab

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY


January 27, 1999

ARTHROTEK, INC.
PLAINTIFF,
V
MEDI PETH MEDICAL LAB, INC.,
DEFENDANT.

The opinion of the court was delivered by: Joel A. Pisano United States Magistrate Judge

OPINION

Before the Court is plaintiff's motion for summary judgment. Defendant filed opposition, and the Court decides the motion on the papers pursuant to Federal Rule of Civil Procedure 78. For the reasons set forth below, plaintiff's motion for summary judgment is granted. *fn1

BACKGROUND

Plaintiff alleges that it had a straightforward agreement with defendant for the provision of medical equipment. Plaintiff further alleges that it delivered the equipment, but defendant refuses to pay. The facts are that simple.

Plaintiff filed suit on April 13, 1998, and defendant answered on June 8, 1998. After reviewing defendant's answer, plaintiff filed its motion for summary judgment on August 12, 1998. After several extensions were granted by Judge Walls's chambers, defendant ultimately filed opposition to plaintiff's motion on September 15, 1998. Plaintiff filed a short letter brief in reply on September 18, 1998. Finally, on January 20, 1999, the parties consented to the exercise of jurisdiction by the undersigned.

Attached to plaintiff's brief in support of the motion for summary judgment is a certification by Joel P. Pratt, president of plaintiff Arthrotek, Inc. Therein, Pratt asserts that during spring 1996 plaintiff and defendant reached an agreement concerning two IES Systems (Pratt Cert. ¶ 3). The goods were to be paid for by defendant and delivered by plaintiff to Lackland Airforce Base in Texas (Pratt Cert. ¶ 3). Pratt further certifies that on or about May 17, 1996, plaintiff delivered the two systems to their intended destination in Texas (Pratt Cert. ¶ 3). Repeatedly, plaintiff claims to have invoiced defendant and made written demands for payment, but defendant refuses to pay (Pratt Cert. ¶¶ 7-11). The parties' alleged agreement calls for a service charge of 1.5% per month for any amount outstanding past thirty days (Pratt Cert. ¶ 6). As a result, defendant allegedly now owes the original amount from the contract, $89,167, plus $31,367.21 in service charges through July 1, 1998, together with interest and costs (Pratt Cert. ¶ 11).

Interestingly, defendant does not dispute any of the above allegations. Although defendant's opposition brief sets forth black- letter law of summary judgment, the papers are devoid of any factual allegations and do not refute in any way plaintiff's version of the parties' agreement.

DISCUSSION

Summary judgment is governed by the standard of Federal Rule of Civil Procedure 56(c), which states, in relevant part, that [t]he judgment sought shall be rendered forthwith if 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 a judgment as a matter of law. Fed. R. Civ. P. 56(c).

A fact is material if it might affect the outcome of the lawsuit under the governing substantive law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).

Procedurally, and regardless of who bears the burden of proof at trial, the movant bears the burden of showing that there are no genuine issues of material fact. See Countryside Oil Co. v. Travelers Ins. Co., 928 F. Supp. 474, 480 (D.N.J. 1995) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). The Third Circuit has emphasized that a stringent standard is imposed when a plaintiff moves for summary judgment. See National State Bank v. Federal Reserve Bank, 979 F.2d 1579, 1582 (3d Cir. 1992). Specifically, "where the movant bears the burden of proof at trial and the motion does not establish the absence of a genuine factual issue, the district court should deny summary judgment even if no opposing evidentiary matter is presented." Resolution Trust Co. v. Gill, 960 F.2d 336, 340 (3d Cir. 1992).

In Gill, the Court of Appeals for the Third Circuit examined a case in which the government, moving for summary judgment before the district court, sought an order stating that it was entitled to certain funds on deposit with First Federal Savings and Loan Association of Pittsburgh. See Gill, 960 F.2d at 340. The government argued before the district court that it was entitled to those funds because it had properly served a notice of levy prior to the account holder's withdrawing the monies. See id. at 338-40. The non-moving party did not oppose the government's motion for summary judgment. See id. The district court observed that the account holder had put forth no evidence that the levy was not made before she withdrew the funds. See id. at 340. Unsurprisingly, the district court then held that the government--the moving party--was entitled to summary judgment. See id.

The Third Circuit reversed, holding that summary judgment is not appropriate simply because the non-moving party puts forward no evidence. See id. at 342. The Court observed that the district court did not find unmistakably that the levy preceded the closing of the accounts or the issuance of the checks, facts that would need to be firmly established under the relevant administrative levy statute. See id. Rather, the district court only found that the levy preceded the account holder's receipt of the checks. See id. Therefore, summary judgment for the moving party was not appropriate. See id.

Likewise, the Third Circuit reached a similar conclusion in National State Bank v. Federal Reserve Bank, 979 F.2d 1579 (3d Cir. 1992). There, plaintiff below sought summary judgment, claiming that defendant Federal Reserve Bank of New York had breached its duty of ordinary care. See id. at 1583. The case involved a check kiting scheme in which National State Bank, the depositor bank, (1) received a check by an account holder, (2) waited the customary several days to see if it would be dishonored by the payor bank (where the funds backing the check were allegedly located), and (3) then made the funds available for withdrawal by the account holder. See id. at 1580-81. The problem was that, for some reason, the defendant never forwarded the checks to the payor bank, who thus never had an opportunity to inform plaintiff that there were insufficient funds to cover the check. See id. After the payor bank went bankrupt and closed shop, plaintiff sued the Federal Reserve Bank of New York and eventually sought summary judgment, claiming that there was no genuine issue of material fact as to defendant's negligence. See id. at 1581-82.

The Third Circuit held that the district court should not have granted plaintiff's motion for summary judgment because the movant's principal evidence showing that defendant breached its duty of care was simply an unsubstantiated affidavit from an assistant vice president of the plaintiff bank. See id. at 1582. The Court held that her affidavit lacked any supporting factual evidence for her contention that the Federal Reserve Bank of New York lost the checks. See id. There was no evidence in the record as to who lost the checks; therefore, summary judgment for plaintiff was inappropriate. See id. at 1583.

In the case at bar, plaintiff's complaint sounds in breach of contract and unjust enrichment. Plaintiff claims that defendant breached the parties' agreement, which provided for delivery of the two IES systems in exchange for $89,167 (Compl. ¶¶ 16-19). Plaintiff also claims that it is owed by defendant on a book account (Compl. ¶¶ 20-21). Finally, plaintiff claims that defendant has been unjustly enriched by its failure to pay plaintiff for the IES systems (Compl. ¶¶ 22-27).

The Court has diversity jurisdiction over this case pursuant to 28 U.S.C. § 1331, and therefore, state law provides the rule of decision. In determining which state's law to apply, the Court applies the choice of law rules of the forum state. See Kaufman v. Provident Life & Cas. Ins. Co., 828 F. Supp. 275, 282 n.10 (D.N.J. 1992). Accordingly, New Jersey choice of law rules will apply. As explained by Kaufman, New Jersey follows the Restatement (Second) of Conflict of Laws § 188 (1971) in deciding which state's law applies. See id.

Of course, there is no need to engage in a choice of law analysis if there is no conflict among the candidate laws of the various states. *fn2 See Gilbert Spruance Co. v. Pennsylvania Mfrs. Assoc. Ins. Co., 134 N.J. 96, 102 (1993). Plaintiff's first count of the complaint alleges that defendant "breached the agreement between the parties by failing to pay . . . ." Black-letter law of breach of contract requires an agreement and a material violation of that agreement by one of the parties. This is certainly true under the law of all fifty states, including of course Indiana, New Jersey, and Texas. Thus under any of those states' case law concerning contracts, plaintiff herein must show that there was an agreement for the supply of equipment and that defendant failed to pay. The Pratt Certification clearly spells out the facts necessary to support a right of action based on breach of contract. Therein, Pratt asserts that (1) the parties entered into an agreement in spring 1996 (Pratt Cert. ¶ 3); (2) under the terms of the agreement plaintiff delivered the IES systems on May 17, 1996 (Pratt Cert. ¶ 4); (3) plaintiff repeatedly invoiced defendant and demanded payment for the agreed upon price of $89,167 (Pratt Cert. ¶¶ 5-11); and (4) defendant still owes $89,167, in addition to mounting service charges.

Defendant disputes none of this. Indeed, plaintiff's motion is essentially unopposed, as defendant's opposition brief offers a statement of facts devoted to details of the procedural history. Defendant does not point the Court to the existence of a single genuine issue of material fact relating to the breach of contract; furthermore, defendant offers no legal basis upon which the Court could deny plaintiff's motion for summary judgment. There is simply no genuine issue of material fact that would operate to preclude this Court from granting summary judgment.

It is important to note that the Court understands Third Circuit case law concerning what must necessarily be shown before a court may grant summary judgment for a plaintiff. In that respect, this matter is not similar to Resolution Trust Co. v. Gill, in which a factual dispute concerning sequence of events made it improper for the district court to grant summary judgment. See Gill, 960 F. Supp. at 341-42. As required by the standard set in that case, the matter before this Court evidences no genuine issue of material fact. Likewise, the situation before the Court does not resemble the scenario presented to the Third Circuit in National Savings Bank v. Federal Reserve Bank. Recall that the Third Circuit reversed the district court's grant of summary judgment for plaintiff because there was no supporting factual evidence underlying plaintiff's belief that the Federal Reserve Bank lost the relevant check. See National Sav. Bank, 979 F.2d at 1582-83. Rather, the Court highlighted that any number of contributing factors (other than defendant's negligence) could have resulted in the loss of the check. See id. The matter before this Court, on the other hand, is fairly straightforward. Defendant breached the parties' agreement; plaintiff is therefore owed $89,167.

In summary, there is no choice of law question as to which state's law applies to the breach of contract issue. It is clear under any state's law that the Pratt Certification provides a firm basis upon which to conclude that defendant breached its agreement to pay for medical equipment provided by plaintiff. Defendant does not dispute plaintiff's factual or legal allegations. No genuine issue of material facts exists, and therefore, summary judgment for plaintiff is appropriate. *fn3

CONCLUSION

Pursuant to the parties' agreement, defendant owes plaintiff $89,167 for equipment that was shipped to Lackland Airforce Base in Texas. On this point, there exists no genuine issue of material fact. Therefore, plaintiff's motion for summary judgment is granted. An appropriate order follows.

Orig: Clerk

cc: Hon. William H. Walls

All parties

File

ORDER GRANTING SUMMARY JUDGMENT

Before the Court is plaintiff's motion for summary judgment. Defendant filed opposition, and the Court decides the motion on the papers pursuant to Federal Rule of Civil Procedure 78. For the reasons set forth in the attached opinion,

IT IS on this 27th day of January 1999

ORDERED that plaintiff's motion for summary judgment is GRANTED.

JOEL A. PISANO UNITED STATES MAGISTRATE JUDGE

Orig: Clerk

cc: Hon. William H. Walls

All parties

File


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