Bell v. Sorin CRM USA, Inc.

Filing 76

OPINION AND ORDER denying 69 Motion for Summary Judgment by Chief Judge Marcia S. Krieger on 2/19/19. (dkals, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Chief Judge Marcia S. Krieger
Civil Action No. 17-cv-01807-MSK-STV
BRIANNA LEIGH BELL,
Plaintiff,
v.
SORIN CRM USA, INC.,
Defendant.
______________________________________________________________________________
OPINION AND ORDER DENYING MOTION FOR SUMMARY JUDGMENT
______________________________________________________________________________
THIS MATTER comes before the Court pursuant to the Defendant’s (“Sorin”) Motion
for Summary Judgment (# 69), Ms. Bell’s response (# 70), and Sorin’s reply (# 73).
JURISDICTION
The Court exercises jurisdiction pursuant to 28 U.S.C.§ 1332.
FACTS
The Court briefly summarizes the pertinent facts here, reciting undisputed facts and
construing the disputed facts most favorably to the non-movant. As necessary in the analysis,
further elaboration will be provided.
Ms. Bell is an independent sales representative who contracted with device manufacturers
to sell medical devices products to doctors and hospitals. In 2014, Ms. Bell entered into a
contract with Sorin by which she would market Sorin’s cardiac devices to physicians. The
agreement described Ms. Bell’s “non-exclusive territory” that listed numerous doctors, hospitals,
and medical practices in the Los Angeles area. Ms. Bell marketed the devices to doctors, who

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would select among competing manufacturer’s devices, to implant in their patients. However,
the ability of a doctor to use a chosen device depended on whether the hospital, where that doctor
would perform the surgery, also had a contractual arrangement with the device’s manufacturer.
If, for example, a doctor wished to use a Sorin device but the hospital involved did not have a
contract with Sorin, Ms. Bell might have to sell the device at a reduced price or might be unable
to sell it at all. Ms. Bell contends that she understood – an understanding that Sorin fostered –
that Sorin had preexisting contractual relationships with all hospitals in her designated territory,
and thus, that she would be able to market devices to doctors who had privileges at those
hospitals. However, Sorin had no or only limited contracts with the hospitals in Ms. Bell’s
territory, thus Ms. Bell’s ability to sell Sorin’s devices was substantially limited.
Based on these facts, Ms. Bell asserts three claims (all of which are based on Delaware
law): (i) fraud in the inducement, in that Sorin induced her to enter into the sales agreement
based on fraudulent representations about its contracts with the hospitals in her territory; (ii)
promissory estoppel, based on essentially the same facts; and (iii) breach of contract, in that
Sorin breached the its promise, reflected by the contract, that she would have access to the
hospitals listed as being in her territory.
Sorin moves (# 69) for summary judgment on all three of Ms. Bell’s claims, arguing that:
(i) as to the fraudulent inducement claim, Ms. Bell cannot show that she justifiably relied upon
Sorin’s representations that it had contracts with the hospitals in her territory, (ii) as to the
promissory estoppel claim, she similarly cannot establish the element of justifiable reliance; and
(iii) as to the breach of contract claim, she cannot show that Sorin breached any of the terms of
its contract with her.

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ANALYSIS
A. Standard of review
Rule 56 of the Federal Rules of Civil Procedure facilitates the entry of a judgment only if
no trial is necessary. See White v. York Intern. Corp., 45 F.3d 357, 360 (10th Cir. 1995).
Summary adjudication is authorized when there is no genuine dispute as to any material fact and
a party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). Substantive law governs
what facts are material and what issues must be determined. It also specifies the elements that
must be proved for a given claim or defense, sets the standard of proof and identifies the party
with the burden of proof. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986);
Kaiser-Francis Oil Co. v. Producer=s Gas Co., 870 F.2d 563, 565 (10th Cir. 1989). A factual
dispute is Agenuine@ and summary judgment is precluded if the evidence presented in support of
and opposition to the motion is so contradictory that, if presented at trial, a judgment could enter
for either party. See Anderson, 477 U.S. at 248. When considering a summary judgment
motion, a court views all evidence in the light most favorable to the non-moving party, thereby
favoring the right to a trial. See Garrett v. Hewlett Packard Co., 305 F.3d 1210, 1213 (10th Cir.
2002).
If the movant has the burden of proof on a claim or defense, the movant must establish
every element of its claim or defense by sufficient, competent evidence. See Fed. R. Civ. P.
56(c)(1)(A). Once the moving party has met its burden, to avoid summary judgment the
responding party must present sufficient, competent, contradictory evidence to establish a
genuine factual dispute. See Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th
Cir. 1991); Perry v. Woodward, 199 F.3d 1126, 1131 (10th Cir. 1999). If there is a genuine
dispute as to a material fact, a trial is required. If there is no genuine dispute as to any material

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fact, no trial is required. The court then applies the law to the undisputed facts and enters
judgment.
If the moving party does not have the burden of proof at trial, it must point to an absence
of sufficient evidence to establish the claim or defense that the non-movant is obligated to prove.
If the respondent comes forward with sufficient competent evidence to establish a prima facie
claim or defense, a trial is required. If the respondent fails to produce sufficient competent
evidence to establish its claim or defense, then the movant is entitled to judgment as a matter of
law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
B. Fraudulent inducement
Under Delaware law, a party who is fraudulently induced to enter into a contract may
either seek to rescind the contract and restore the status quo ante, or may sue to recover
expectancy damages. E.I. DuPont de Nemours & Co. v. Florida Evergreen Foliage, 744 A.2d
457, 465 (Del. 1999). To establish a claim for fraudulent inducement, the plaintiff must show:
(i) the defendant made a false representation or omission of fact, (ii) the defendant knew of the
falsity of that representation or the misleading effect of the omission; (iii) the defendant acted
with the intent to induce the plaintiff’s reliance upon the misleading representation or omission;
(iv) the plaintiff reasonably relied upon the misleading representation or omission; and (v) the
plaintiff suffered injury as a result. Id., cited in AgroFresh, Inc. v. MirTech, Inc., 257 F.Supp.3d
643, 662 (D.Del. 2017).
Here, Sorin does not challenge that Ms. Bell can come forward with facts showing that it
represented to her that it had “all necessary contracts with the hospitals” listed as part of her
territory and that “there was no issue impeding . . . the physicians [Ms. Bell dealt with] from
immediately purchasing and implanting Sorin devices at the hospitals listed” in her contract with

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Sorin. Nor does it challenge whether Ms. Bell can adduce facts showing that these
representations were false.1 But Sorin contends that Ms. Bell could not rely upon its
misrepresentations because she “was fully aware that Sorin did not have . . . contracts in place in
the relevant territory, or, at a minimum, [she] could have easily discovered that the type of access
she envisioned was not in place had she conducted a reasonable inquiry.”
Sorin relies primarily on a May 3, 2014 e-mail exchange between Ms. Bell and Aamir
Mahmood, Sorin’s Western Area Director. This exchange took place after Ms. Bell had already
signed a contract with Sorin, but before Sorin had countersigned it. In the exchange, Ms. Bell
asked Mr. Mahmood about “applicable pricing” for the devices. In response, Mr. Mahmood
stated “as for pricing, we aren’t doing business in your accounts, so we don’t have pricing. We
can work together to determine what it will take and get it done. If you let me know where we
need to be I can have our pricing and contract folks get to work on it.”2 Sorin thus argues that,

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For the first time in its reply brief, Sorin briefly argues that, based on Ms. Bell’s response
brief, Ms. Bell’s claims are limited to a promise by Sorin of a “seamless and immediate
transition.” Sorin goes on to argue that such a promise is “mere puffery,” that is, not a false or
misleading assertion of fact. The Court does not consider arguments raised for the first time in
reply briefs. See generally Anderson v. Spirit Aerosystems Holdings, Inc., 827 F.3d 1229, 1236
n. 2 (10th Cir. 2016). This is particularly so insofar as Sorin’s initial brief acknowledged the
statements Ms. Bell alleged to be fraudulent, and thus, there was no reason for Ms. Bell’s
response brief to re-assert them.
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Sorin also refers to a statement in the e-mail that Mr. Mahmood was attaching “the Good
Sam info,” which Sorin describes as “a slide deck outlining the bidding process through which
Sorin would attempt to secure a two-year contract to sell Sorin [ ] devices at Good Samaritan
Hospital,” one of the hospitals listed as being within Ms. Bell’s territory. (In other words, Sorin
argues that the “Good Sam info” further advised Ms. Bell that Sorin did not currently have a
contract with one of the hospitals listed as part of her territory.) Sorin does not cite to any
evidence in the record that explains how the “Good Sam info” attached to Mr. Mahmood’s email demonstrates the absence of an access agreement that would have precluded Ms. Bell’s
reliance upon any prior misrepresentations. All this evidence shows is that a contract was being
negotiated, not that there was none in place. The Good Sam proposal could have been an
addition or modification to an existing agreement. Thus, the Court does not consider that
argument.
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by informing Ms. Bell that it wasn’t “doing business” in her accounts, that she should have
understood that it did not have contracts with hospitals in her territory. Even if this statement
was made, however, it was made after Ms. Bell signed the contract manifesting her reliance upon
prior representations about having hospital access. Although the timing of this disclosure to Ms.
Bell and her reactions thereto might ultimately be persuasive to the finder of fact on the issue of
justifiable reliance, the Court cannot say that, as a matter of law, a defendant’s disclaimer of a
false representation after the plaintiff had already relied upon it entitles the defendant to
summary judgment.
Sorin also cites to the affidavit of John McKenzie, a doctor who frequently purchased
devices from Ms. Bell and who “assist[e]d Ms. Bell in screening potential employment
opportunities” in 2014, including employment with Sorin. Dr. McKenzie states that he had
personal conversations with Mr. Mahmood about the volume of devices that Dr. McKenzie and
his colleagues would be purchasing and inquired whether Sorin would have “access to the
appropriate hospitals.” Mr. Mahmood insisted that Dr. McKenzie and his colleagues “could
immediately start implanting Sorin products at each and every hospital where we had privileges,”
and that “everything was in place.” Dr. McKenzie related Mr. Mahmood’s statements to Ms.
Bell, and although he informed her that “she needed to perform her own ‘due diligence’ to assure
the necessary contractual access was in place,” he believed that there were “no barriers to Ms.
Bell and I immediately beginning to work at these hospitals once she agreed to become a Sorin
sales representative.” Sorin relies upon Dr. McKenzie advising Ms. Bell to “perform her own
due diligence” as defeating any claim by Ms. Bell that her reliance on Sorin’s misrepresentations
was justified.
Under Delaware law, when a representation of fact is made as to a matter on which the

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parties have different levels of access to information, the person receiving that information is
entitled to rely on the truthfulness of the representation and is not required to seek out evidence
of its falsity, even if there are means available to do so. See S.C. Johnson & Son, Inc. v.
Dowbrands, Inc., 111 Fed.Appx. 100, 108 (3d Cir. 2004), citing Craft v. Bariglio, 1984 WL
8207 (Del.Ch. Mar.1, 1984); accord Restatement (Second), Torts § 540 (“The recipient of a
fraudulent misrepresentation of fact is justified in relying upon its truth, although he might have
ascertained the falsity of the representation had he made an investigation”).3 There can be no
real argument that Ms. Bell and Sorin had different levels of access to information about Sorin’s
alleged contracts with the hospitals: Sorin knew no such contracts existed, Ms. Bell could only

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Sorin cites various authorities for the proposition that reliance is not justified when the
falsity of the representation is “obvious” or where “a cursory examination of investigation”
would have revealed it as such. Citing, e.g. Davis v. 24 Hour Fitness Worldwide, Inc,., 75
F.Supp.3d 635, 640-41 (D.Del. 2014), citing Restatement (Second), Torts § 541 (“The recipient
of a fraudulent misrepresentation is not justified in relying upon its truth if he knows that it is
false or its falsity is obvious to him”). As explained in the comments to the Restatement, “the
rule stated in this Section applies only when the recipient of the misrepresentation is capable of
appreciating its falsity at the time by the use of his senses.” Sorin’s contention that Ms. Bell
could have learned that Sorin did not have contracts with a given hospital simply by contacting
the hospitals in question and asking about their contractual relationship with Sorin requires her to
do far more than a “cursory examination” (much less one using only her senses).
Davis is not to the contrary. There, Davis, a board member of the defendant corporation,
reached a deal with the board about his compensation. He later reduced that agreement to
writing and, in doing so, “alter[ed] key provisions,” including advancing the due date of a
substantial cash payment to himself. Davis submitted the revised agreement to the defendants’
counsel, who “recognized that [the revised agreement] specified a cash payment to be settled in
2012, rather than 2013” as agreed upon, but “nevertheless signed [it].” Ultimately, the defendant
repudiated the agreement and Davis sued, prompting the defendant to assert counterclaims
sounding in fraud. See Davis v. 24 Hours Fitness Worldwide, Inc., 2014 WL 4955502 (D.Del.
2014) (prior case). Granting summary judgment to Davis on the fraud counterclaims, the court
found that “even before” the defendant signed the agreement, “it had sufficient information to
place it on notice of [Davis’] misconduct,” and that, therefore, the defendant could not
demonstrate justifiable reliance. The obviousness of the false representation in Davis – which
the court found was already known to the defendant before it acted – is distinguishable from the
situation here, where there is no allegation that Ms. Bell knew that Sorin had lied about its
contracts with the hospitals in her territory before she signed the agreement.
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know that fact by deciding she should investigate, by determining who at a particular hospital
would know that information, by seeking out that person, and by inquiring. Because such a
disparity in the availability of knowledge existed, Ms. Bell was entitled to assume the truth of
Sorin’s representations without being obligated to conduct her own investigation. Dr.
McKenzie’s suggestion that she do her own “due diligence” does not alter this analysis. First,
the Court has some doubt that Sorin can rely on the fact that a third party (whom Sorin was also
deceiving) might have advised Ms. Bell to proceed cautiously. But even assuming it can, the
record does not reflect that Ms. Bell conducted her own investigation, rather than rely upon
Sorin’s representations. Compare S.C. Johnson, 111 Fed.Appx. at 108 (plaintiff “specifically
agreed to rely only upon its own due diligence rather than relying upon any information it
received from Defendants”), citing Omar Oil & Gas Co. v. Mackenzie Oil Co., 138 A. 392, 397
(Del. 1926) (plaintiff “will not be prevented from availing himself of false representations of the
seller, unless he makes an investigation on his own account and it is of such character as to fully
acquaint him with the essential facts”). In the absence of an actual investigation, Ms. Bell may
simply rely on Sorin’s statements.
Sorin’s reply brief adds an additional factual argument not previously presented with
regard to this claim - that in April 2014, Ms. Bell acknowledged to Mr. Mahmood that she knew
that Sorin currently had “zero percent market share” and that she would be “launching [the]
brand in the Los Angeles market.”
Putting aside the fact that Sorin did not properly raise this factual argument4 in its
opening brief, the Court also notes that its characterization of Ms. Bell’s e-mail is slightly

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Sorin’s opening brief references this e-mail only in discussion of Ms. Bell’s breach of
contract claim.
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overstated. The e-mail in question, bearing the subject line “CONTRACT DRAFT
REVISIONS” is a lengthy list of modifications Ms. Bell was proposing to a draft contract that
Sorin had provided her. Among items on that list, lacking any other context, are the words
“Sweat equity, zero percent market share, launching a brand:” followed by what appear to be
more cryptic statements by Ms. Bell: “No legacy change outs. ** Contract penetrations. Loss of
approx. ~42k a month (for non-MRI, silicone brady leads[ . . . .])” Neither side has tendered
evidence explaining the meaning of the “zero percent market share” comment, and in the
absence of such explanation, the Court declines to assume the statement means what Sorin
contends. It is clear that the phrase was not intended by Ms. Bell to be incorporated as a term in
the parties’ contract. Whether it was an acknowledgement of fact known and understood by Ms.
Bell, a repetition of a statement made to her by Mr. Mahmood, a conceptual way of describing
what Sorin expected of her, or something else, the Court cannot say. There is a genuine dispute
as to the meaning of this unexplained document.
Accordingly, the Court denies Sorin’s motion for summary judgment on Ms. Bell’s
fraudulent inducement claim.
C. Promissory estoppel
The Court devotes little attention to the promissory estoppel claim. Both sides
acknowledge that the analysis of the promissory estoppel claim duplicate the analysis of the
fraudulent inducement claim, and both sides simply refer the Court back to the same arguments
previously discussed. Accordingly, for the reasons stated above, the Court denies Sorin’s motion
for summary judgment as to Ms. Bell’s promissory estoppel claim.

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D. Breach of contract
Under Delaware law, a party asserting a claim for breach of contract must show: (i) the
existence of a contractual obligation, (ii) a breach of that obligation by the defendants, and (iii)
resultant damage to the plaintiff. Greenstar, LLC v. Heller, 934 F.Supp.2d 672, 686 (D.Del.
2013). Sorin argues that the language of its agreement with Ms. Bell, specifically concerning the
listing of her territory, “unambiguous[ly] does not obligate [it] to secure or maintain contractual
access to” the hospitals listed therein. Therefore, the issue before the Court is whether the
parties’ contract creates any contractual duty on the part of Sorin to provide access to the
hospitals listed in Schedule 3.01. (Sorin does not argue, and the Court does not reach, the
question of whether there is evidence that Sorin may have breached any such duty.)
The interpretation of a contract is a matter of law for the court to determine. RhonePoulenc Basic Chemicals Co. v. American Motorists Ins. Co., 616 A.2d 1192, 1195 (Del. 1992).
The Court’s fundamental obligation is to ascertain the parties’ intentions, which it attempts to do
by looking to the four corners of the document and interpreting its terms consistently with the
agreement’s overall scheme or plan. GMC Capital Investments, LLC v. Athenian Venture
Partners I, L.P., 36 A.3d 776, 779-80 (Del. 2012). Here, the contract’s clear purpose is set forth
in its “Engagement” clause, which states that “[Sorin] engages [Ms. Bell] as an independent sales
representative to solicit orders for [Sorin’s] products within the non-exclusive territory (as
defined in [Schedule] 3.01).” Schedule 3.01, defining Ms. Bell’s territory, states that her “nonexclusive territory shall consist of the following non-exclusive Accounts in the Los Angeles
metropolitan area,” then lists numerous practices, individual doctors, and hospitals. Section
10.01 of the contract requires Ms. Bell to “use her best efforts to promote the acceptance and sale

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of” Sorin’s products and Section 5.01 of the contract makes clear that Ms. Bell’s sole
compensation will be commission-based, in the form of a percentage of her sales.
The Court previously determined (# 45) that the language in Schedule 3.01 was
ambiguous as to what party had the burden of ensuring that Sorin had contractual access to
hospitals. Although Sorin extensively argues that it did not have the obligation, the Court finds
those arguments unpersuasive and incorporates its prior ruling here.
Because the contract is ambiguous, the Court turns to extrinsic evidence of the parties’
intentions. The undisputed evidence is that the existence of a contract between Sorin and a given
hospital is a fundamental requirement before Sorin and Ms. Bell could sell any devices to doctors
that practice at that hospital. Thus, for Sorin’s contract with Ms. Bell to fulfill its essential
purpose – Ms. Bell soliciting orders for Sorin from the hospitals listed -- it was necessary for
someone ensure that Sorin had contractual agreements with the hospitals. It is not necessary for
the Court to determine whether the duty to ensure access to the hospitals in Ms. Bell’s territory
belonged exclusively to Sorin or whether Sorin and Ms. Bell jointly shared that responsibility.
Sorin is entitled to summary judgment on Ms. Bell’s breach of contract claim only if Ms. Bell
had the sole responsibility for creating contractual relations with the hospitals in her territory.5
So long as Sorin had some degree of contractual obligation, Ms. Bell’s claim for breach of
contract must proceed to trial.

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Sorin appears to contemplate another possibility: that “no term of the [parties] agreement
could possibly obligate either Sorin or Bell to secure and maintain contractual access to the
hospitals” – in other words, that neither party had any contractual obligation to secure access. As
noted above, the Court rejects this argument because it would render the contract a nullity.
Without access, there can be no sales, and the very purpose of the parties’ contract was to
facilitate the making of sales that would benefit both Sorin and Ms. Bell.
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The record reflects that, at least in practice, both Ms. Bell and Sorin were involved to
some degree in facilitating access – Sorin concedes as much in its motion, stating that the parties
engaged in “joint efforts to gain access to the Adventist Health system.” And, as the Court noted
in its prior Opinion, Section 10.11 of Ms. Bell’s contract with Sorin prevented her from entering
into any contracts without Sorin’s permission. This evidence permits the Court to conclude that,
at a minimum, the contract between Sorin and Ms. Bell imposed some duties6 on Sorin to ensure
that it (and by extension, Ms. Bell) had access to the hospitals listed in Schedule 3.01.
Accordingly, the Court denies Sorin’s motion for summary judgment directed at the
breach of contract claim.

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Because Sorin has not argued that Ms. Bell cannot prove that it breached whatever
contractual obligations it may have, this Court need not specifically delineate now what those
obligations are. Sorin’s brief appears to assume that, if it is found to have any such duties, those
duties would require it to “guarantee continuous access to the hospitals,” yet hospitals can and do
grant, deny, or modify access freely. This, Sorin argues, leads to an “absurd result.” The result
is indeed absurd, but only because of its premise: that the contractual duty is for Sorin to
“guarantee continuous access.” The contract’s obligations flow from its purpose – to have Ms.
Bell sell as many Sorin devices as possible to the listed hospitals – and thus, the duties Sorin
would have under the contract would likely be to make reasonable, diligent, good faith efforts to
create and maintain access to those hospitals. If circumstances outside Sorin’s control caused a
hospital to suddenly withhold access, the Court would be hard pressed to conclude that Sorin was
in breach of the contract.
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CONCLUSION
For the foregoing reasons, Sorin’s Motion for Summary Judgment (# 69) is DENIED.
The parties shall jointly file a proposed Final Pretrial Order as set forth in the Trial Preparation
Order (# 30) within 30 days, following which a Pretrial Conference will be set.
Dated this 19th day of February, 2019.
BY THE COURT:

Marcia S. Krieger
Chief United States District Judge

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