United States District Court, D. Minnesota
Matthew D. Spohn, Esq., Norton Rose Fulbright U.S. LLP, counsel for Plaintiff.
Jon R. Russell, Esq., and Michael D. Hutchens, Esq., Meagher & Geer, PLLP, counsel for Defendant.
MEMORANDUM OPINION AND ORDER
DONOVAN W. FRANK, District Judge.
This matter is before the Court on Defendant Devicix, LLC's ("Devicix" or "Defendant") Motion to Dismiss (Doc. No. 6). For the reasons set forth below, the Court denies the motion.
Plaintiff OrthoAccel Technologies, Inc. ("OrthoAccel" or "Plaintiff") is a medical device company "currently engaged in the development, manufacturing, and marketing of products" relating to dental care and orthodontic treatment, and with its principal place of business in Texas. (Doc. No. 1, Compl. ¶¶ 2, 6.) Devicix is a Minnesota company that provides engineering services to medical device companies. ( See Doc. No. 8 at 2.)
Plaintiff alleges that it developed and sold AcceleDent, which was the "first FDA-cleared clinical approach to safely accelerate orthodontic tooth movement" and that it planned to develop and release a new device, the AcceleDent Aura. (Compl. ¶¶ 7, 8.) Plaintiff alleges that in order to develop AcceleDent Aura, it requested a quote from several design firms, including Defendant. ( Id. ¶ 9.) According to Plaintiff, Defendant responded to the request and detailed its qualifications, capabilities, and expertise. ( Id. ¶¶ 10, 11.) In September 2011, Plaintiff then contracted with Defendant to develop and design AcceleDent Aura. ( Id. ¶ 12.)
The contract between OrthoAccel and Devicix for the AcceleDent Aura ("the Contract") included provisions relating to the applicable specifications for the product. ( See id. ¶¶ 14-16.) For example, the Contract included provisions relating to product life and the batteries, among others. ( Id. ¶ 59.) Plaintiff alleges that Defendant promised to design the product in accordance with these specifications. ( See, e.g., id. ¶ 37.) According to Plaintiff, however, despite Defendant's representations about its capabilities, Defendant's design process "was plagued by setbacks." ( Id. ¶ 18.) Plaintiff alleges that at a meeting in September 2012, Devicix's CEO, Mr. DeLange, assured Plaintiff that it would fix the issues and would "get it right." ( Id. ¶ 19.) Plaintiff alleges that relying upon Devicix's representations, expertise, and design-testing, it released the AcceleDent Aura product. ( Id. ¶ 20.)
Plaintiff further alleges that it began receiving consumer complaints about the design and functioning of the AcceleDent product and that it confirmed those problems when it investigated the complaints. ( Id. ¶¶ 21, 22.) According to Plaintiff, it notified Devicix of these issues, and Devicix then demanded additional payment to remedy the issues; this only resulted in additional problems and defects. ( Id. ¶¶ 23-25.) Overall, Plaintiff alleges that Defendant's poor quality work resulted in defects that included battery failure, and ultimately unit inoperability, and that the design was outside of the required specifications. ( Id. ¶ 26.)
Plaintiff asserts that in August 2014 when it contacted Defendant about its failure to properly perform its design work, Defendant denied all responsibility and blamed Plaintiff. ( Id. ¶¶ 28, 38.) Plaintiff states that it then hired a different firm to correct Defendant's deficiencies. ( Id. ¶ 29.) Plaintiff alleges that it suffered damages in a number of ways as a result of Defendant's failure to properly perform its work. ( Id. ¶ 30.)
In its Complaint, Plaintiff asserts seven claims against Defendant: (1) Fraud in the Inducement; (2) Negligent Misrepresentation and Omission; (3) Negligent Performance of Professional Services/Professional Liability; (4) Breach of Contract; (5) Breach of Warranty; (6) Fraud; and (7) Unjust Enrichment. ( Id. ¶¶ 31-90.)
Defendant seeks dismissal pursuant to Rules 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure for the following four claims: Fraud in the Inducement; Negligent Misrepresentation and ...