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Matrix Health Group v. Sowersby

United States District Court, S.D. Florida

October 7, 2019

MATRIX HEALTH GROUP d/b/a BioMatrix, Plaintiff,



         THIS MATTER comes before the Court upon the parties' cross-motions for summary judgment [ECF Nos. 66 & 69].[1] In its Amended Complaint (“Am. Compl.”) [ECF No. 41], the Plaintiff, Matrix Health Group (“BioMatrix”), asserts eight claims: Breach of Contract against John Sowersby (Count I); Misappropriation of Trade Secrets under the Defend Trade Secrets Act, 18 U.S.C. § 1836, against both Sowersby and InfuCare (together, the “Defendants”) (Count II); Violation of Florida's Uniform Trade Secret Act (“FUTSA”) against the Defendants (Count III); Tortious Interference with Contract against InfuCare (Count IV); Breach of the Duty of Loyalty against Sowersby (Count V); Tortious Interference with Business Relationships against Sowersby (Count VI); Civil Conspiracy to Commit Tortious Interference with Business Relationships against the Defendants (Count VII); and Unjust Enrichment against the Defendants (Count VIII).

         Although the Defendants claim that they have moved for summary judgment “on all claims contained in the Amended Complaint, ” see Def. MSJ at 2, they have included briefing and argument only as to Counts I-V. See generally Def. MSJ. Accordingly, the Court hereby summarily DENIES their Motion as to Counts VI-VIII. See Singh v. U.S. Atty. Gen., 561 F.3d 1275, 1278 (11th Cir. 2009) (“[S]imply stating that an issue exists, without further argument or discussion, ” is not sufficient to preserve a party's right to contest that issue). For their part, BioMatrix seeks summary judgment only as to Counts I-V of the Amended Complaint. See generally Pl. MSJ.

         The Court held a hearing on May 20, 2019, at which the parties presented their oral arguments. For the reasons set out below, the Court hereby DENIES both motions for summary judgment.

         THE FACTS[2]

         BioMatrix provides Intravenous Immunoglobulin Therapy (“IVIG”), a type of blood infusion treatment for patients with certain medical conditions. Pl. Statement of Material Facts (“Pl. SMF”) [ECF No. 67 ¶ 1]. BioMatrix “maintains” information with respect to “which patients are eligible for certain products based on their particular insurance plans and which patients are eligible for certain insurance benefits . . . and which plans provide the most profitability for BioMatrix.” Id. ¶ 2. BioMatrix also employs “sales representatives”-like Sowersby-to “maintain and support” its patients by answering their questions and coordinating with their nurses and treating physicians. Id. ¶ 6. BioMatrix hired Sowersby in July 2014 and assigned him to manage its central and north Florida regions. Id. ¶ 7.[3] The parties disagree over Sowersby's precise role at BioMatrix. But it suffices to say here that he was tasked with developing relationships with physicians whom, BioMatrix hoped, would later refer their patients to BioMatrix for IVIG treatment. Id. ¶¶ 15-18.

         When he was hired, Sowersby signed, among other documents, an “Offer of Employment and Employment Contract, ” an “Employment Code of Conduct Agreement, ” and an “Employee Handbook Receipt and Acknowledgement.” Id. ¶¶ 10-12. While the parties quibble over the legal effect of these documents, they do not dispute that Sowersby signed them.

         In March of 2018, an InfuCare representative contacted Sowersby about leaving BioMatrix and joining InfuCare. Pl. SMF ¶ 29. By April 4, 2018, InfuCare had offered Sowersby a job. Id. ¶ 31. On April 14, 2018, Sowersby signed and returned to InfuCare the offer letter he had received ten days earlier. Id. ¶ 32. Although InfuCare admits that Sowersby began to discuss transferring patients from BioMatrix to InfuCare prior to notifying BioMatrix of his intent to resign, the parties fiercely dispute whether Sowersby caused the patients to switch over; whether, instead, the patients' treating physician caused the switch; or whether the patients themselves made an independent decision to leave BioMatrix for InfuCare. Id. ¶¶ 37-51. On this point, however, Sowersby's testimony is clear: he hoped to have “as many patients as possible” follow him from BioMatrix to InfuCare. Id. ¶ 52. The parties agree that, in the end, six patients Sowersby had worked with at BioMatrix transferred from BioMatrix to InfuCare. Id. ¶ 63.

         Sowersby's employment with InfuCare began on May 1, 2018. Defendants' Statement of Material Facts (“Def. SMF”) [ECF No. 77 ¶ 30]. On May 11, 2018, after receiving a cease and desist letter from BioMatrix's legal counsel, InfuCare's owner, Deven Patel, sent Sowersby an email, in which he “acknowledge[d]” Sowersby's “restrictive covenant” with BioMatrix. Pl. SMF ¶ 61. BioMatrix contends that, although InfuCare knew of Sowersby's “restrictive covenant” before that e-mail, it nevertheless “allowed Sowersby to continue breaching [his] restrictions.” Def. SMF ¶ 31.

         BioMatrix now seeks to recover (1) the $131, 278 in “gross profit loss” it says it suffered in 2018 as a result of the loss of the six patients to InfuCare; and (2) an additional $1, 650, 105 that, it claims, will constitute its future lost profits over the next nine years (beginning in 2019). Def. SMF ¶ 44.

         THE LAW

         Summary judgment is appropriate where there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Fed.R.Civ.P. 56(a). In determining whether to grant summary judgment, the Court must consider “particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.” Fed.R.Civ.P. 56(c). “By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original). An issue of fact is “material” if it might affect the outcome of the case under the governing law. Id. at 248. A dispute about a material fact is “genuine” if the evidence could lead a reasonable factfinder to rule for the non-moving party. Id.

         At summary judgment, the moving party has the burden of proving the absence of a genuine issue of material fact, and all factual inferences are drawn in favor of the non-moving party. See e.g., Allen v. Tyson Foods Inc., 121 F.3d 642, 646 (11th Cir. 1997). Once the moving party satisfies its initial burden, the burden shifts to the non-moving party to come forward with evidence that a genuine issue of material fact precludes summary judgment. See Bailey v. Allgas, Inc., 284 F.3d 1237, 1243 (11th Cir. 2002); Fed.R.Civ.P. 56(e). “If reasonable minds could differ on the inferences arising from undisputed facts, then a court should deny summary judgment.” Miranda v. B & B Cash Grocery Store, Inc., 975 F.2d 1518, 1534 (11th Cir. 1992). Notably, assessments of credibility-no less than the weighing of evidence-are fact questions not susceptible of disposition at summary judgment. Strickland v. Norfolk S. Ry. Co., 692 F.3d 1151, 1154 (11th Cir. 2012). The Court must analyze the record as a whole-and not just the evidence the parties have singled out for consideration. See Clinkscales v. Chevron U.S.A., Inc., 831 F.2d 1565, 1570 (11th Cir. 1987). If there are any genuine issues of material fact, the Court must deny summary judgment and proceed to trial. Whelan v. Royal Caribbean Cruises Ltd., No. 1:12-CV-22481, 2013 WL 5583970, at *2 (S.D. Fla. Aug. 14, 2013) (citing Envtl. Def. Fund v. Marsh, 651 F.2d 983, 991 (5th Cir. 1981)).


         1. The Declaration of Dr. Raam Sambandam

          The Defendants attached to their Motion for Summary Judgment a declaration from Dr. Raam Sambandam, the physician who treated the six patients at issue here. See Dr. Sambandam Decl. [ECF No. 70-10]. In its Response to the Defendants' MSJ, BioMatrix asks the Court not to consider this declaration because the Defendants failed to disclose Dr. Sambandam as a witness in the Initial Disclosures they filed under Federal Rule of Civil Procedure 26. Pl. Resp. MSJ at 3-5.

         But the Federal Rules of Civil Procedure make clear that “[i]f a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless.” Fed.R.Civ.P. 37(c)(1) (emphasis added). And the Rules' Committee Notes explain that “[l]imiting the automatic sanction to violations ‘without substantial justification,' coupled with the exception for violations that are ‘harmless,' is needed to avoid unduly harsh penalties in a variety of situations: e.g., the inadvertent omission from a Rule 26(a)(1)(A) disclosure of the name of a potential witness known to all parties . . . .” Fed.R.Civ.P. 37(c)(1) advisory committee's note to 1993 amendment (emphasis added). This exception is, of course, consistent with the purpose behind Rule 26's disclosure requirement: to provide the parties with an adequate opportunity to conduct discovery on relevant sources of information about which they would otherwise (and unfairly) remain ignorant. See Fed. R. Civ. P. 26(e) (requiring that a “party who has made a disclosure under Rule 26(a) . . . supplement or correct its disclosure” only if “the party learns that in some material respect the disclosure or response is incomplete or incorrect, and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing”) (emphasis added).

         Unsurprisingly, then, courts in this Circuit routinely hold that a party's failure to disclose a witness is “harmless” for purposes of Rule 37(c)(1) where, as here, the opposing party knew of the undisclosed witness. See Brown v. Chertoff, No. 406CV002, 2009 WL 50163, at *4-5 (S.D. Ga. Jan. 7, 2009) aff'd sub nom. Brown v. Napolitano, 380 Fed.Appx. 832 (11th Cir. 2010) (denying motion in limine where the plaintiff “was aware of the identities of [non-disclosed witnesses] during discovery and could have sought to depose them had he chose to do so”); Wajcman v. Inv. Corp. of Palm Beach, No. 07-80912-CIV, 2009 WL 465071, at *5 (S.D. Fla. Feb. 23, 2009) (denying motion in limine where party was well aware of non-disclosed witness' existence and significance); Burden v. City of Opa Locka, No. 11-22018-CIV, 2012 WL 4764592, at *8 (S.D. Fla. Oct. 7, 2012) (plaintiffs were unable to demonstrate that the failure to provide them with [non- disclosed witness's declaration] was not harmless because the witness was referenced in the plaintiffs' own complaint); Wolfe v. Sec'y, Dep't of Corr., No. 5:10-CV-663-OC-PRL, 2012 WL 6740732, at *1 (M.D. Fla. Dec. 30, 2012) (“The Court agrees that the identity of [non-disclosed witness] was made known to Plaintiff during the discovery process, and thus, his testimony will be permitted. [Non-disclosed witness] was identified . . . during the deposition of Defendant's medical expert.”); Cardinal Health, Inc. v. Delivery Specialists, Inc., No. 10-20555-CIV-UNGARO, 2011 WL 845915, at *5 (S.D. Fla. Mar. 8, 2011) (denying motion to strike declaration submitted in support of summary judgment where party should have known of undisclosed witness' existence prior to the filing of the opposing party's summary judgment motion in light of the witness' identification during discovery).

         There is no question that Dr. Sambandam-and the relevant information he possessed- was “made known to [BioMatrix] during the discovery process.” To begin with, both Dr. Sambandam's name and his role in the events that precipitated this lawsuit were referenced dozens of times during Sowersby's deposition. See generally Sowersby Dep. [ECF No. 68-1 & 68-2]. Indeed, Sowersby testified about meeting with Dr. Sambandam just before he left BioMatrix- and specifically testified that, at this meeting, the two discussed the possibility that Dr. Sambandam might begin sending his patients to Sowersby at InfuCare. Sowersby Dep. 116:2-19 [ECF No. 68-1 at 30]. Dr. Sambandam was also a focal point of the deposition of BioMatrix's own 30(b)(6) witness, Jordan ...

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