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Global Lab Partners, LLC v. Directmed DX, LLC

United States District Court, N.D. Florida, Pensacola Division

February 14, 2018

GLOBAL LAB PARTNERS, LLC, et al., Plaintiffs,
DIRECTMED DX, LLC, et al., Defendants.



         Pending before the Court is Plaintiffs' Emergency Petition for a Temporary Restraining Order (“TRO”), ECF No. 4. On consideration, the Court finds that the motion is due to be denied, but it will be converted into a motion for a preliminary injunction, and a hearing will be scheduled.


         The record reflects that “DHTX was formed for the primary purpose of marketing and processing medical tests for urinary tract infections, drug screening, and anatomic pathology through Cedar Creek Labs, LLC, a facility wholly owned by DHTX.”[1] ECF No. 4-4, ¶ 8. Plaintiff GLP bought a 50% interest in DHTX from Defendant Dividend Health LLC in December 2016. “DHTX was to operate a medical lab licensed in Texas under the name Cedar Creek Labs” to perform the testing of urinary tract specimens provided by caregivers and other labs. ECF No. 4-4, ¶4. GLP and Dividend Health signed a Membership Interest Purchase Agreement in December 2016 which contains a noncompetition agreement and identifies Escambia County, Florida, as the agreed venue and Florida law as controlling.[2]Plaintiff GLG purchased a 5% interest in DHTX in March 2017 (2.5% from each GLP and Dividend Health). DHTX is owned by Dividend Health LLC, which in turn is wholly owned by Defendant Ty Bruggemann. Bruggemann also owns a separate LLC, DirectMed DX LLC, which is managed by Dividend Health.

         In the accompanying affidavit of James “Woody” Dillard, GLP's representative, Dillard states that in July 2017, he discovered that no profits were being generated by DHTX, despite reports by Bruggemann that there were “brisk orders for testing.” Dillard states he was forced to personally guaranty loans to DHTX in an amount exceeding $1 million. He sent a letter to Bruggemann on November 2, 2017, requesting copies of accounts and ledgers of DHTX, which were never entirely furnished. Dillard also states that he learned in January 2018, after comparing expenses to investments, that a sizeable amount of collections from operations were unaccounted for.

         In addition, Dillard and Eni de la Osa, a representative of Plaintiff GLG, both state by affidavit that prior to GLG's purchase of its interest in DHTX in March 2017, Bruggemann represented to them that he was in the process of negotiating a contract between DHTX and Cirrus DX, Inc. (“Cirrus”), for a unique device that is “capable of changing the way patient care is delivered by doctors around the world.” ECF No. 4-4, ¶6. Through this anticipated contract with Cirrus, DHTX would be responsible for marketing the medical tests and providing financing as well as a lab facility known as Cedar Creek Labs, and both DHTX and Cirrus would own the equipment necessary to process the lab results. Eni de la Osa stated that the contract with Cirrus was vital to GLG's decision to participate in DHTX.

         GLP and GLG learned on January 18, 2018, that Bruggemann had instead negotiated a separate contract with Cirrus for the benefit of his solely owned LLC, DirectMed. Dillard asserts that because of DirectMed's nonperformance on the Cirrus contract, it is in danger of being cancelled. Dillard states that when Bruggemann was confronted with his knowledge of this, Bruggemann agreed to transfer ownership of DirectMed to DHTX and to the Cedar Creek Lab facility. But according to Dillard, this transfer never occurred. He does not state when he learned this, however. The record shows that Bruggemann sent an email dated February 1, 2018, titled “DirectMed Ownership Transfer, ” in which Bruggemann provided estimates for immediate and long-term capital operating needs and indicated a willingness to “work together to make this happen throughout 2018.” ECF No. 4-5. The email outlines a proposed plan that offers a “preliminary structure and concept, ” listing various additional capital investments needed and salary requests over a two-year period. It also states, “[i]n the meantime, we will work together to bring Cedar Creek Labs fully operational while folding in the ownership of DirectMed into DHTX.” The email closes with a request for a response so the appropriate documents could be prepared to consummate the deal. Dillard characterizes this email as “a list of demands.” ECF No. 4-4, ¶ 12.

         Dillard states that he learned on February 9, 2018 that Bruggemann had failed to file the required organizational documents with the Secretary of the State of Texas to evidence his membership interest in DHTX and Cedar Creek Labs and that Cedar Creek Labs did not have an assignment of the necessary license under the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”) to operate under CLIA. Dillard and Eni de la Osa also each state that state that their investment is in jeopardy; that as of February 9, 2018, Bruggemann was threatening to shut down DHTX; and that Bruggemann has the ability to do so under the DHTX Company Agreement.

         As a result, Plaintiffs filed this emergency request for a TRO. Although no complaint has yet been filed, the affidavits indicate that GLP and GLG seek to remove Bruggemann from overseeing DHTX's operations. The motion represents that Bruggemann's Cirrus contract is a breach of the noncompete agreement between GLP and DirectMed, that Bruggemann has interfered with DHTX's negotiations of a contract with Cirrus, and that Bruggemann failed to file corporate records and denied Plaintiffs access to DHTX's books and records, contrary to the Membership Interest Purchase Agreement. Plaintiffs request an order enjoining Defendants from violating the noncompetition agreement or taking any action to jeopardize Plaintiffs' interests in DHTX by transferring assets; ordering Defendants to provide Plaintiffs with reasonable access to DHTX financial records pursuant to the Membership Interest Purchase Agreement; and requiring Defendants to pay all costs and attorney's fees of the action.


         The Federal Rules of Civil Procedure provides that an ex parte TRO may issue only if (1) “specific facts in an affidavit or a verified complaint clearly show that immediate and irreparable injury, loss, or damage will result to the movant before the adverse party can be heard in opposition, ” and (2) “the movant's attorney certifies in writing any efforts made to give notice and the reasons why it should not be required.” Fed.R.Civ.P. 65(b). Also, the court may issue a TRO “only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.” Fed.R.Civ.P. 65(c). The following elements must be shown to obtain a TRO:

(1) a substantial likelihood of success on the merits;
(2) irreparable harm to the moving party if the TRO is not issued;
(3) the threatened injury outweighs any harm to the nonmoving party if the ...

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