United States District Court, D. Maryland
L. Russell, III, United States District Judge
MATTER is before the Court on Plaintiff DT Consultants,
LLC's (“DT”) Motion for Partial Summary
Judgment on Liability (ECF No. 4) and Defendants Howmedica
Osteonics Corp. (“Howmedica”) and Stryker
Corporation's (“Stryker”) Cross-Motion for
Summary Judgment (ECF No. 18). The Motions are ripe for
disposition, and no hearing is necessary. See Local
Rule 105.6 (D.Md. 2016). For the reasons outlined below, the
Court will grant in part and deny in part DT's Motion and
DT is a
consulting and information services company that licenses and
sublicenses orthopedic databases and other medical
intellectual properties to medical device companies and
healthcare providers. (Compl. ¶ 2, ECF No. 1). In
September 2011, DT entered into a Database License Agreement
with Duke University. (Id. ¶ 7). The agreement
permitted DT to sublicense an orthopaedic database and its
underlying data (the “Database”) that Duke and
Dr. James Nunley, II, the Chief of Duke's Department of
Orthopaedic Surgery developed. (Id. ¶¶ 7,
11; Pl.'s Mot. Partial Summ. J. [“Pl.'s
Mot.”] Ex. 1 [“Sublicense”] at App. A, ECF
October 2012, DT entered into a Database Sublicense Agreement
(the “Sublicense” or “Agreement”)
with Howmedica's predecessor-in-interest, Small Bone
Innovations, Inc. (“SBI”). (Mitchell Decl. ¶
4, ECF No. 18-3; Compl. ¶ 8). The Sublicense granted SBI
permission to use the Database. (Compl. ¶ 9). The
Sublicense provides that its term “shall be in
perpetuity.” (Sublicense § 6.1). In exchange for
the Sublicense, SBI agreed to pay DT a $300, 000.00 upfront
cash royalty. (Id. § 4.1). SBI also agreed to
pay a $36, 000.00 annual “Update Royalty”
“so long as” SBI: (1) “shall receive in any
calendar year during the term of th[e] [Sublicense] the
written commitment or agreement” from Dr. Nunley or a
“qualified colleague” to Update the Database
during that calendar year; and (2) “shall receive
during that calendar year an Update of the Database”
from Dr. Nunley or a “qualified colleague.”
(Id.; Mitchell Decl. ¶ 16). The terms of the
Sublicense dictate that SBI would pay the $36, 000.00 Update
Royalty in four quarterly $9, 000.00 installments (the
“Quarterly Payments”) from April 1, 2013 to
January 1, 2017. (Sublicense § 4.1). Starting on January
1, 2017, and for all subsequent years, SBI and DT agreed that
the Quarterly Payment amount would increase by five percent
compounded annually. (Id.).
August 2014, Defendants purchased certain assets from SBI.
(Mitchell Decl. ¶ 5). As part of the asset purchase,
Defendants entered into Bill of Sale and Assignment and
Assumption Agreement (the “Assignment Agreement”)
with SBI, under which Howmedica assumed SBI's rights and
obligations under the Sublicense. (Defs.' Opp'n
Pl.'s Mot. Partial Summ. J. & Cross-Mot. Summ. J.
[“Defs.' Opp'n & Cross-Mot.”] Ex. B
[“Assignment Agreement”], ECF No. 18-3; Mitchell
Decl. ¶ 5). Defendants then paid the required Quarterly
Payments on July 22, August 18, and November 16, 2015, and
February 23, July 11, and October 17, 2016. (Pl.'s Reply
Ex. B at 2-9 [“Reicher Decl.”] ¶ 25, ECF No.
December 28, 2016, DT received a termination notice from
Defendants. (Pl.'s Mot. Ex. 2 [“Termination
Letter”], ECF No. 4-2). In the letter, titled
“Termination of Duke Database Sublicense Agreement,
” Howmedica states that it “hereby provides
notice that it is terminating the Agreement” as of the
date of the letter. (Id.). On January 6, 2017, DT
sent Defendants a response indicating that their attempt to
terminate the Sublicense was “wrongful, ”
“in breach of the Agreement, ” and “of no
force and effect.” (Jan. 6, 2017 Letter at 2, ECF No.
4-3). DT also demanded that Howmedica “comply with the
terms and conditions of the Agreement for its stated term and
promptly retract its stated ‘Termination' of the
Agreement.” (Id.). On February 8, 2017,
Defendants responded, asserting that under Maryland law
“contract[s] with a perpetual term do not last forever;
rather such a contract is interpreted as contemplating
performance for a reasonable time” and “are
terminable at will by either party.” (Feb. 8, 2017
Letter at 1, ECF No. 4-4).
January 6, 2017, Dr. Nunley sent Defendants a letter to
“serve as the written commitment” to update the
Database in 2017. (Pl.'s Reply Ex. B at 75-76
[“Nunley Letter”] at 1, ECF No. 28-2; Pl.'s
Reply Ex. B at 11-15 [“Nunley Decl.”]
¶¶ 24-25, ECF No. 28-2). Despite sending DT a
termination notice in December 2016, Howmedica remitted the
first 2017 Quarterly Payment on January 19, 2017. (Reicher
Decl. ¶ 34 n.1). Howmedica did not, however, make the
second Quarterly Payment in April 2017. (See id.
¶ 34). Nevertheless, on July 5, 2017, DT sent Howmedica
the 2017 Second Quarter Database Update. (Pl.'s Reply Ex.
B at 78 [“2017 Update”]; Nunley Decl. ¶ 26).
On July 12, 2017, Howmedica rejected DT's attempt to
deliver the Database Update. (Albu Decl. Ex. A, ECF No.
on June 20, 2017, Howmedica provided DT with written
correspondence stating that it “terminated the
Sublicense on December 28, 2016” and that it “no
longer desires to receive any annual written commitment or
agreement to update the database under the Sublicense.”
(Defs.' Opp'n & Cross-Mot. Ex. 1 at 72-73
[“June 20, 2017 Letter”], ECF No. 18-3).
21, 2017, DT sued Howmedica and Stryker. (ECF No. 1). In its
two-count Complaint, DT alleges: Breach of Contract (Breach
of the Agreement) (Count I); and Breach of Contract
(Contractual Indemnification) (Count II). (Compl.
¶¶ 26-36). DT seeks money damages and
attorney's fees and costs. (Id. ¶¶
same day DT filed suit, it filed a Motion for Partial Summary
Judgment on Liability. (ECF No. 4). Defendants filed their
Opposition and Cross-Motion for Summary Judgment on August
14, 2017. (ECF No. 18). DT filed its combined Reply in
support of its Motion and Opposition to Defendants'
Cross-Motion on September 19, 2017. (ECF No. 28). On October
10, 2017, Defendants filed a Reply in support of their
Cross-Motion. (ECF No. 35).
Standards of Review
reviewing a motion for summary judgment, the Court views the
facts in a light most favorable to the nonmovant, drawing all
justifiable inferences in that party's favor. Ricci
v. DeStefano, 557 U.S. 557, 586 (2009); Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (citing
Adickes v. S.H. Kress & Co., 398 U.S. 144,
158-59 (1970)). Summary judgment is proper when the movant
demonstrates, through “particular parts of materials in
the record, including depositions, documents, electronically
stored information, affidavits or declarations, stipulations
. . . admissions, interrogatory answers, or other materials,
” that “there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” Fed.R.Civ.P. 56(a), (c)(1)(A).
Significantly, a party must be able to present the materials
it cites in “a form that would be admissible in
evidence, ” Fed.R.Civ.P. 56(c)(2), and supporting
affidavits and declarations “must be made on personal
knowledge” and “set out facts that would be
admissible in evidence, ” Fed.R.Civ.P. 56(c)(4).
motion for summary judgment is properly made and supported,
the burden shifts to the nonmovant to identify evidence
showing there is genuine dispute of material fact. See
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 586-87 (1986). The nonmovant cannot create a
genuine dispute of material fact “through mere
speculation or the building of one inference upon
another.” Beale v. Hardy, 769 F.2d 213, 214
(4th Cir. 1985) (citation omitted).
“material fact” is one that might affect the
outcome of a party's case. Anderson, 477 U.S. at
248; see also JKC Holding Co. v. Wash. Sports Ventures,
Inc., 264 F.3d 459, 465 (4th Cir. 2001) (citing
Hooven-Lewis v. Caldera, 249 F.3d 259, 265 (4th Cir.
2001)). Whether a fact is considered to be
“material” is determined by the substantive law,
and “[o]nly disputes over facts that might affect the
outcome of the suit under the governing law will properly
preclude the entry of summary judgment.”
Anderson, 477 U.S. at 248; accord
Hooven-Lewis, 249 F.3d at 265. A “genuine”
dispute concerning a “material” fact arises when
the evidence is sufficient to allow a reasonable jury to
return a verdict in the nonmoving party's favor.
Anderson, 477 U.S. at 248. If the nonmovant has
failed to make a sufficient showing on an essential element
of her case where she has the burden of proof, “there
can be ‘no genuine [dispute] as to any material
fact,' since a complete failure of proof concerning an
essential element of the nonmoving party's case
necessarily renders all other facts immaterial.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
Cross-Motion for Summary Judgment
the parties have filed cross-motions for summary judgment,
the court must “review each motion separately on its
own merits to ‘determine whether either of the parties
deserves judgment as a matter of law.'”
Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir.
2003) (quoting Philip Morris Inc. v. Harshbarger,
122 F.3d 58, 62 n.4 (1st Cir. 1997)). Moreover, “[w]hen
considering each individual motion, the court must take care
to ‘resolve all factual disputes and any competing,
rational inferences in the light most favorable' to the
party opposing that motion.” Id. (quoting
Wightman v. Springfield Terminal Ry. Co., 100 F.3d
228, 230 (1st Cir. 1996)). This Court, however, must also
abide by its affirmative obligation to prevent factually
unsupported claims and defenses from going to trial.
Drewitt v. Pratt, 999 F.2d 774, 778-79 (4th Cir.
1993). If the evidence presented by the nonmovant is merely
colorable, or is not significantly probative, summary
judgment must be granted. Anderson, 477 U.S. at
Breach of Contract
Maryland law,  to establish a breach of contract claim,
the plaintiff must allege: (1) “that the defendant owed
the plaintiff a contractual obligation”; and (2)
“that the defendant breached that obligation.”
Palermino v. Ocwen Loan Servicing, LLC, No.
TDC-14-0522, 2015 WL 6531003, at *4 ...