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

United States District Court, D. Minnesota

May 6, 2015

St. Jude Medical S.C., Inc., Plaintiff,
Neal J. Hanson and Biotronik, Inc., Defendants.

Edward F. Fox, Jessica L. Klander, Jonathan C. Marquet, Kevin P. Hickey, Bassford Remele, PA, Minneapolis, Minnesota, for Plaintiff.

Andrew J. Pieper, Eric A. Bartsch, Margaret E. Dalton, Stoel Rives LLP, Minneapolis, Minnesota, Todd A. Hanchett, Stoel Rives LLP, Portland, Oregon, for Defendants.


RICHARD H. KYLE, District Judge.


Plaintiff St. Jude Medical S.C., Inc. ("SJM") alleges in this action that its former employee, Defendant Neal Hanson, breached his contract and duty of loyalty. SJM also alleges that Defendant Biotronik, Inc. ("Biotronik") tortiously interfered with SJM's contract with Hanson. SJM also claims it is entitled to the imposition of a constructive trust as a result of Hanson's and Biotronik's actions. Defendants now move for summary judgment, which, for the reasons explained below, will be granted in part and denied in part.


The following facts are recited in the light most favorable to SJM.

Hanson began working for SJM, a medical-device company, in Kansas City in 2009. (Klander Decl., Ex. 1, 61.) Through his work he became friends with Dr. Yarlagadda, a doctor working at Olathe Medical Center ("OMC") who did substantial business with SJM's Cardiac Rhythm Management (CRM) devices. (Id., Ex. 1, 66; id., Ex. 5, 34, 76-77.) Hanson moved to Wichita, Kansas, for a new position with SJM in 2011. (Id., Ex. 4, 30.)

The following year, a competing medical-device company, Medtronic, offered Hanson a job back in Kansas City. (Id., Ex. 1, 118.) Hanson accepted the offer and informed his boss, Gray Fleming, that he would be resigning from SJM. (Id., Ex. 1, 119.) After unsuccessfully trying to convince Hanson to stay in Wichita, Fleming offered him a position with SJM in Kansas City in an attempt to keep him at SJM. (Id., Ex. 4, 53-54.) Hanson accepted that offer. (Id., Ex. 4, 55-56.)

Hanson signed a contract with SJM on October 29, 2012, titled "Amendment No.

2 to Employment Agreement" ("Amendment 2"). (Dalton Decl., Ex. 13.) The contract provided for a three-year term, running until October 27, 2015. (Id., Ex. 13, 1.) It further provided that "[i]n order to perform the duties hereunder, [Hanson] agrees to relocate to the Kansas City area within ninety (90) days of the effective date of this Amendment. As consideration for entering into this Amendment, [SJM] will assist with the costs of [Hanson's] relocation...." (Id., Ex. 13, 2.)

Fleming and Hanson never explicitly discussed the timeline for Hanson's transition from Wichita to Kansas City, although Fleming estimated it would take 6-8 months. (Klander Decl., Ex. 4, 72-73.) Hanson (and his wife) bought a house in Kansas City (more quickly than expected)-they moved to Kansas City in December 2012, receiving $42, 007.82 in relocation expenses from SJM (id., Exs. 11, 64)-but Hanson reassured Fleming that he "still plann[ed] on a slow transition here in Wichita... I have no intention to see the hard work WE have put in here just disappear" (id., Ex. 64) (capitalized in original). Fleming testified it was clear that Hanson thought it was important to "responsibly and appropriately transition the business in Wichita" and he would be "accountable to the business." (Id., Ex. 4, 64, 73.)

On January 1, 2013, Fleming changed positions at SJM (id., Ex. 4, 93) and was replaced by Butch Peltz (id., Ex. 3, 57). Peltz and Hanson talked sometime between mid-January and mid-February about Hanson's move to Kansas City. (Id., Ex. 3, 89.) Peltz reassured Hanson he would eventually work in Kansas City, but asked him to continue helping in Wichita until SJM hired his replacement, to which Hanson "was very agreeable." (Id., Ex. 3, 90.) But after searching for a replacement for Hanson in Wichita, Peltz decided he wanted to keep Hanson in the role. (Id., Ex. 3, 73-78, 86.) In late February, Peltz asked Hanson if he was interested in the Wichita position, and Hanson said he was.[1] (Id., Ex. 3, 110, 114, 124.) The two had ongoing discussions about Hanson's future with SJM in Wichita between late February and March.[2] (Id., Ex. 3, 176.)

During this time, Hanson received a call from Bob Koop, an independent representative for Defendant Biotronik, another medical device company. (Id., Ex. 2, 27.) Koop contacted Hanson to recruit him to work at Biotronik in Kansas City. (Id., Ex. 2, 31.) The two met for dinner on January 28, 2013, in Wichita. (Klander Decl., Ex. 2, 37, 42-43.) The next day, Koop emailed Hanson to thank him for meeting and to encourage him to "take the next step and call Dr. Yarlagadda." (Id., Ex. 13.) Over the next month, Hanson sent Koop his SJM employment documents, including a copy of his original contract to work with SJM in Wichita (id., Ex. 20) and a copy of Amendment 2 (id., Ex. 18). On March 5, Koop filled out a Biotronik Hiring Justification Form for Hanson, listing OMC as a potential account. (Id., Ex. 55.) But the next week, Ramon Carrasquillo, Biotronik's Director of Field Organization, told Hanson that Biotronik ...

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