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St. Jude Medical S.C., Inc. v. Tormey

United States District Court, Eighth Circuit

June 26, 2013

ST. JUDE MEDICAL S.C., INC., Plaintiff,
v.
THOMAS M. TORMEY, JR., Defendant and Counterclaim Plaintiff, TORMEDCO, INC., Counterclaim Plaintiff.

Carrie L. Hund, Edward F. Fox, and Peter L. Gregory, Bassford Remele, PA, Counsel for Plaintiff.

Dwight G. Rabuse, Erin E. Neils, and Joshua P. Brotemarkle, Rabuse Law Firm, P.A., Counsel for Defendant and Counterclaim Plaintiff Thomas M. Tormey, Jr. and Counterclaim Plaintiff Tormedco, Inc.

MEMORANDUM OF LAW & ORDER

MICHAEL J. DAVIS, Chief District Judge.

I. Introduction

This matter is before the Court on Plaintiff St. Jude Medical S.C., Inc.'s renewed motion for summary judgment [Docket No. 135] and motion to exclude testimony of Stephen Larson and Stephen Donelli [Docket No. 127]. The Court heard oral argument on April 19, 2013. For the reasons that follow, the Court grants in part and denies in part Plaintiff's renewed motion for summary judgment and grants in part and denies in part Plaintiff's motion to exclude.

II. BACKGROUND

A. Brief Factual Background

The facts of this case are laid out in detail in the Court's January 26, 2012 Order on summary judgment. [Docket No. 47] Briefly, this case arises out of Defendant Thomas Tormey's employment as a sales representative for Plaintiff St. Jude Medical S.C., Inc. ("St. Jude"). St. Jude and Tormey entered into several employment-related agreements in 2001. In May 2004, St. Jude terminated Tormey's employment for failure to meet sales quotas. Tormey maintains that following his termination, St. Jude's Vice President proposed a walkaway deal where Tormey agreed not to pursue litigation against St. Jude and St. Jude would waive repayment of a $650, 000 loan issued to Tormey. St. Jude denies that such an agreement was ever struck and maintains that Tormey remained obligated to repay the $650, 000 loan.

B. Procedural Background

After unsuccessful negotiations with Tormey, St. Jude filed this suit in Minnesota state court against Tormey and Tormedco, seeking to recover $650, 000 plus statutory interest. Tormey removed the case to this Court, and he has asserted several counterclaims based on his allegations that St. Jude failed to abide by its obligations as set out in the various agreements.

St. Jude moved for summary judgment to enforce the Promissory Note and for dismissal of Tormey's counterclaims before the close of discovery. On January 26, 2012, the Court denied St. Jude's motion because genuine issues of material fact existed.

St. Jude renewed its motion for summary judgment in February 2013 following the close of discovery. St. Jude again moved for summary judgment to enforce the Promissory Note and for dismissal of Tormey's counterclaims. At that time, St. Jude also moved to exclude two experts retained by Tormey.

III. SUMMARY JUDGMENT MOTION

A. Summary Judgment Standard

Summary judgment is appropriate if, viewing all facts in the light most favorable to the non-moving party, there is no genuine dispute as to any material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett , 477 U.S. 317, 322-23 (1986). The party seeking summary judgment bears the burden of showing that there is no genuine dispute as to any material fact. Id. at 323. Summary judgment is only appropriate when "there is no dispute of fact and where there exists only one conclusion." Crawford v. Runyon , 37 F.3d 1338, 1341 (8th Cir. 1994) (citation omitted).

"Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248 (1986). Factual disputes that are irrelevant or unnecessary will not be counted. Id . "[I]n ruling on a motion for summary judgment, the nonmoving party's evidence is to be believed, and all justifiable inferences are to be drawn in [that party's] favor.'" Hunt v. Cromartie , 526 U.S. 541, 552 (1999).

B. Tormey's Counterclaims[1]

St. Jude has renewed its motion for summary judgment on Tormey's counterclaims. St. Jude argues that Tormey's counterclaims are untimely and that the counterclaims based on St. Jude's alleged contract breaches cannot succeed on the merits.

1. Timeliness

St. Jude terminated the Representative Agreement on May 17, 2004, and Tormey and Tormedco asserted their counterclaims in February 2011. Absent an application of estoppel or equitable tolling, the counterclaims relating to the Representative Agreement would be barred by the two-year limitation period in the Representative Agreement and by Minnesota's six-year limitation period. See Minn. Stat. ยง 541.05 subdiv. 1(1), (6); Henning Nelson Const. Co. v. Fireman's Fund Am. Life Ins. Co. , 383 N.W.2d 645, 650 (Minn. 1986); Singelman v. St. Francis Med. Ctr. , 777 N.W.2d 540, 543 (Minn.Ct.App. 2010).

Tormey argues that estoppel applies here because he reached an oral settlement agreement with St. Jude that provided that both parties would "walk away" from possible claims after St. Jude terminated the Representative Agreement. The Court previously determined that because St. Jude denies that the parties ever reached such a settlement, there remains a genuine issue of material fact as to this issue. [Docket No. 47] St. Jude continues to deny that the parties reached an oral settlement agreement and therefore a genuine issue of material fact remains as to this issue.

St. Jude previously contended and continues to contend that estoppel and equitable tolling should not apply because Tormey's claimed reliance on any alleged promise that St. Jude made not to collect on the Loan Agreement was not reasonable. The Court previously determined that while Tormey may have a difficult time proving reasonable reliance, "[w]hether a party's reliance is reasonable is ordinarily a fact question for the jury unless the record reflects a complete failure of proof." Hoyt Props., Inc. v. Production Resource Group, L.L.C. , 736 N.W.2d 313, at 321 (Minn. 2007) (emphasis added). The Court previously determined that it could not dismiss the counterclaims as untimely because St. Jude had not shown that there is a complete failure of proof in this case.

St. Jude maintains in its renewed motion for summary judgment that Tormey's reliance is unreasonable and that discovery establishes this unreasonableness. At least some of the evidence that St. Jude relies on (i.e., the notices of imputed income), however, was previously before the Court when it initially denied summary judgment. The additional evidence now before the Court includes: (1) Tormey's deposition testimony that he was offered and accepted a "walk away agreement" that ended his relationship with St. Jude; (2) testimony from St. Jude President Jim Gantz that he recalls having a telephone conversation with Tormey after sending his termination letter but does not remember the substance of the conversation; and (3) testimony from Tormey's accountant Steven Brown regarding conversations with Tormey regarding the forgiveness of the loan. The evidence ...


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