Orthophoenix LLC v. Stryker Corporation et al

Filing 299

MEMORANDUM OPINION re 274 motion to enforce settlement agreement. Signed by Judge Leonard P. Stark on 3/28/17. This order has been emailed to local counsel. (ntl) (Main Document 299 unsealed and replaced on 3/30/2017) (etg). Modified on 3/30/2017 (etg).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
ORTHOPHOENIX, LLC,
Plaintiff,
v.
STRYKER CORPORATION, et al.,

C.A. No. 13-1628-LPS
UNSEALED
03/30/17

Defendants.
STRYKER CORPORATION,
Counterclaim-Plaintiff,
v.
ORTHOPHOENIX, LLC, IP NAVIGATION
. GROUP, LLC, and MEDTRONIC, INC.,
Counterclaim-Defendants.
John W. Shaw, SHAW KELLER LLP, Wilmington, DE
Edward R. Reines and Michele Gauger, WEIL, GOTSHAL & MANGES LLP, Redwood Shores,
CA
Attorneys for Medtronic, Inc.

Richard D. Kirk, Stephen B. Brauerman, Vanessa R. Tiradentes, and Sara E. Bussiere,
BAYARD, P.A., Wilmington, DE
Marc A. Fenster, Adam Hoffman, Amir A. Naini, and Jacob Buczko, RUSS, AUGUST &
KABAT, Los Angeles, CA
Attorneys for Orthophoenix, LLC.

MEMORANDUM OPINION
March 28, 2017
Wilmington, Delaware

~~9,~.

STARK, U.S. District Judge:

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Presently before the Court is Medtronic, Inc.'s

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("Medtronic''Y~otiontoenforce the

parties' settlement agreement. (D .I. 2 74) Counterclaim co-defendants Medtronic and
Orthophoenix, LLC ("Orthophoenix") dispute whether Orthophoenix agreed to pay Medtronic' s
legal fees as part of the settlement agreement in this case. Under the terms of the parties'
Stipulation of Dismissal (D.I. 272) 1, the Court has jurisdiction to enforce their settlement
agreement.

I.

BACKGROUND2
A.

The Orthophoenix/Medtronic Patent Purchase Agreement

. In April 2013, Medtronic assigned patents to Orthophoenix. The parties signed a Patent
Purchase Agreement setting forth the terms of the sale. (See D.I. 276-4, -5, -6) The Purchase
Agreement includes an indemnity provision, which-provides that, in the event of a third-party
claim against Medtronic, Orthophoenix would "provide counsel to Medtronic to defend such
claim and ... pay for the reasonable legal expenses of such counsel and such claim," unless the
claim arose from Medtronic's own actions. (D.I.276-4 at§ 4.14) A license agreement
accompanying the Purchase Agreement also requires Orthophoenix to "defend, indemnify and
hold Medtronic harmless from any claim, damage, or liability, including attorneys' fees, relating
to [Orthophoenix's] enforcement or defense of any of the Patents." (D.I. 276-7 at§ 3.5)

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The Court's dismissal order, drafted by the parties, states in pertinent part:
"Orthophoenix LLC and IP Navigation Group LLC acknowledged a_ contractual obligation to·
indemnify Medtronic Inc. for its costs, expenses and attorneys' fees incurred in this matter."
(D.I. 272 at 1)
2

This background is taken from the parties' briefing on the motion.
1

. B.

Medtronic's Pursuit of Indemnification in this Lawsuit
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.. In October 20 3; Orthophoenix filed

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alawsuit alleging that Defendant Stryker ...

Corporation ("Stryker") infringed the patents Medtronic assigned. Stryker answered with
antitrust counterclaims against Orthophoenix and Medtronic. 3 (See D.I. 24 at ifif 118-138)
In September 2014, Orthophoenix moved to bifurcate and stay discovery of the antitrust

claims. (See D.I. 41) Meanwhile, the patent case proceeded. Although Medtronic was not a
party to the patent case, Stryker sought discovery from Medtronic. (See D .I. 281-1) In January
2015, Medtronic called Orthophoenix's litigation counsel to verify that Orthophoenix would
indemnify Medtronic. for the fees Medtronic incurred in responding to Stryker' s discovery
requests. (See id.) Orthophoenix's litigation counsel responded that Orthophoenix would not
indemnify Medtronic, because the fees arose from Orthophoenix's patent case against Stryker,
and the Purchase Agreement's indemnity provision covered only fees "arising directly from or in
connection with a third party claim against Medtronic." (D.l. 281-2 (emphasis added))
Orthophoenix' s counsel contended that only the antitrust counterclaim in which Medtronic was
named as a co-defendant could be considered a claim against Medtronic, and that, as a result,
Orthophoenix was not responsible for costs Medtronic incurred as a result of Orthophoenix' s
patent case against Stryker. (See id.) 4

3

Stryker also named as a co-defendant IP Navigation Group, LLC ("IPNav"), a company
related to Orthophoenix.
4

Medtronic did not respond to Orthophoenix' s litigation counsel, but Medtronic' s inside
counsel later sought indemnification directly from Marathon Patent Group, Orthophoenix's
parent company. (See D.I. 276-8 at 2, 36; D.I. 281-3 a:t 2)
2

c.

The· Stryker/Orthophoenix/Medtronic SettleJllent Agreement

In early 2016, the parties began to negotiate a settlement. In the. days before they signed a

final agreement, Orthophoenix and Medtronic discussed whether and ·how Medtronic would be
reimbursed for the legal fees it incurred during the litigation. On April 27, Medtronic emailed
Marathon Patent Group,

Orthophoenix~s

parent company, regarding the relevant provisions of

the draft agreement. 5 In the email, Medtronic discussed its expectations regarding
reimbursement:
You'll note we did not include iri our draft a date for the payment
to Medtronic reimbursing its fees and costs. We think it would be
appropriate to set such a date, but it doesn't have to be in the main
agreement. I'd suggest we agree in a separate letter that the
reimbursement payment will be made within 30 days of Medtronic
providing a final statement. You have statements-for past fees and
expenses. Given the heavy discovery requirements of the last
several weeks, we will have additional statements to submit to you.
Certainly, if you can pay any of the past statements earlier,
Medtronic would appreciate it, but it is willing to complete the
agreement with Stryker and then submit a final statement to you so
long as ·there is an agreement that Medtronic' s fees and costs will
indeed be reimbursed fully.
(D.I. 276-11 at 2)
Five days later, Medtronic emailed Marathon to confirm the logistics of the
reimbursement. Medtronic wrote that it "need[ed] to confirm a date for reimbursement of
Medtronic' s fees and costs incurred in relation to Ortho' s litigation," and asked Marathon to
propose one. (D.I. 276-12 at 3) Marathon responded by proposing that it would reimburse

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1n its brief, Orthophoenix makes much of the fact that Medtronic approached Marathon
and Marathon's CEO, Doug Croxall, rather than speaking with the members of Orthophoenix's
outside litigation team who had participated in the parties' earlier discussions of indemnification
under the Patent Purchase Agreement. Orthophoenix does not, however, allege that Medtronic
misled Marathon's CEO regarding the parties' earlier discussions.
3

Medtronicten days after Stryker sent the settlement payment.. (See id. at 2; see als.o D.I. 276-10
· at 6) Marathon also requested "full detail of all invoices." (D.I. 276-12 at 2) Medtronic
· responded that Marathon "should have invoices from earlier in the case" and promised that future
invoices would "be [at] that same level of detail." (Id.) Medtronic also confirmed that "ten days
works for Medtronic for the reimbursement of its fees and costs." (Id.)
On May 4, Medtronic asked Marathon to confirm that Marathon had received copies of
invoices for Medtronic's legal fees for the month of April. (See D.I. 276-13 at 2; see also D.I.
276-14) Marathon responded by asking Medtronic how the new invoices related to earlier
invoices, and whether additional invoices were forthcoming. · Marathon wrote:
Can you send any additional invoices? So to be clear it is this
invoice plus the email from the other day? I am just trying to get
all the invoices from MedTronic and want to make sure we have all
of them.
(D.I. 276-13 at 2)
The next day, Medtronic sent Marathon a compilation of all of the invoices for which it
sought reimbursement. (See D.I. 276-16 at 2) Medtronic stated that, per the earlier discussion
regarding the timing of the payment, Medtronic expected Marathon to pay the invoiced amount
within ten days of the date Marathon received Stryker's settlement payment. (See id.) Medtronic
also explained that it expected Marathon to pay any additional legal expenses incurred during the
settlement process, and would forward the associated invoices when they became available. (See
·id.) Marathon did not object.

On May 9, the parties signed a Settlement Agreement and License Agreement
("Settlement Agreement"). (See D.I. 276-15) Section 2.7 states:

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[B]y contract, the Orthophoenix Parties and IP Navigation Parties
. have agreed to indemnify and will reimburse the Medtronic Parties
for all fees and expenses incurred with regard to the Subject
Litigations and the Medtronic Parties will not pay their own fees,
costs and expenses.
(D.I. 276-1 at§ 2.7) Exhibit C to the Settlement Agreement indicates that through this provision,

"Orthophoenix LLC and IP Navigation Group LLC acknowledged a contractual obligation to
indemnify Medtronic Inc. for its costs, expenses and attorneys' fees incurred in this matter." (Id.
at 43) The language of this Exhibit Clater was included in the Court's dismissal order, which
was drafted by the parties, without objection from any party. (SeeD.I. 272 at 1)

D.

Communications Following Settlement

On May 11, Medtronic contacted Marathon to ascertain whether Stryker had wired its
settlem~nt

payment to Marathon, and sought confirmation that Marathon would pay the legal fees

outlined in Medtronic' s May 5 email within ten days of Marathon's receipt of Stryker' s payment.
(See D.l. 276-16 at 2) Marathon responded that Stryker's wire was "pending as of this morning,"

and then sent an immediate follow-up email asking whether Medtronic had sent "all invoices."
(Id.; D.l. 276-2 at 4) Medtronic clarified the.total amount of existing invoices, noting that a few

additional invoices would arrive later. (See D.I. 276-2 at 3-4) Medtronic concluded that the
invoices to date summed to about $563,000, then reiterated its question about when Marathon
would send the payment. (See D.l. 276-2 at 3) Marathon responded that it would do so "within
ten days as discussed and already agreed to." (Id.) Later that day, Marathon asked Medtronic
where Marathon should direct any questions regarding the invoices. (See D.I. 276-17 at 2)
Medtronic responded that Marathon should contact Medtronic' s outside counsel, with whom
Marathon was already in contact, with questions. (See id.)

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On May 23, Medtronic asked Marathon to "send [Medtronic] confirmation of the
payment" (D.I. 276-18) The following day, one ofMedtronic's outside attorneys, Ed Reines,
called Marathon's CEO, Doug Croxall, for more information regarding the payment. (See D.I.
276

at~

1) Reines testifies that Croxall told him that payment would be made "that day" or "the

next day," and that Marathon would wire the money to the Medtronic account listed in the
Medtronic/Orthophoenix Purchase Agreement. (Id. at if~ 1-2) Reines stated that Medtronic
preferred that Marathon use a different account, and sent Croxall alternative account information
via ema,il. (See D.I. 276-2 at 2)
A few hours later, Croxall forward Reines a letter indicating that Marathon no longer
intended to send the payment. (See D.I. 276-19) The letter, signed by Marathon's outside
counsel, stated that outside counsel did not believe Orthophoenix was required to reimburse
Medtronic for any of its expenses, pursuant to the terms of the parties' earlier Patent Purchase
Agreement. (See id. at 4) The letter stated that, in order "[t]o facilitate Orthophoenix' review of
Medtronic' s indemnification request, [Medtronic should] identify which of the expenses relates
to investigation and defense arising from Stryker' s antitrust claim against Medtronic." (Id.)

E.

The Present Motion

On June 9, 2016, Medtronic filed the instant Motion to Enforce the Parties' Settlement
Agreement. (D.I. 274) Medtronic argues that the Settlement Agreement requires Orthophoenix
to pay all of the fees and expenses Medtronic incurred in connection with this case, plus interest.
Orthophoenix responds that the Settlement Agreement does not require Orthophoenix to pay
Medtronic's legal expenses, but instead simply confirms Orthophoenix's obligations to

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reimburse any amounts due under the Medtronic/Orthophoenix Patent Purchase Agreement. The
Court heard oral argument on the pending motion on September 26, 2016. (See DJ. 295 ("Tr."))

II.

LEGALSTANDARDS
A district court has jurisdiction to enforce a settlement agreement in a case pending before

it. See Hobbs & Co. v. Am. Inv'rs Mgmt., Inc., 576 F.2d29, 33 & n.7 (3d Cir. 1978). Motions
for the enforcement of settlement. agreements resemble motions for summary judgment,. and
courts employ a similar standard ofreview. See Tiernan v. Devoe, 923 F.2d 1024, 1031-32 (3d
Cir. 1991). Accordingly, a court must treat all of the non-movant's assertions as true, and, "when
these assertions conflict with those of the movant, the former must receive the benefit of the
doubt." Id. at 1032. Summary judgment is appropriate only if "there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P.
56(a). Where material facts are in dispute, the Court should hold an evidentiary hearing before
enforcing the settlement agreement. See Tiernan, 923 F .2d at 1031.

III.

DISCUSSION
Orthophoenix cites a number of reasons it contends it is not obligated to pay Medtronic' s

legal fees.· As discussed below, all are meritless. Medtronic is entitled to receive all of its legal
fees, plus interest.

A.

. The Settlement Agreement is Enforceable against Orthophoenix

Orthophoenix argues that the Settlement Agreement is not an enforceable contract
between Medtronic and Orthophoenix but, instead, "was an agreement be.tween those parties, on
one hand and Stryker on the other." (D.I. 280 at 9; see also D.l. 276-1) According to
Orthophoenix, Medtronic provided Orthophoenix no consideration in exchange for the

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purportedly expanded indemnification obligations Orthophoenix undertook under the Settlement
· Agreement. Medtronic responds that its commitments under the Settlement Agreement,
including releasing claims against Stryker and making various representations regarding the
parties' rights to the disputed patents, constitute adequate consideration.
"Absent fraud or unconscionability, the adequacy of consideration is not a proper subject
for judicial scrutiny." Underbrinkv. Warrior Energy Servs. Corp., 2008 WL2262316, at *10
(Del. Ch. May 30, 2008). 6 Orthophoenix alleges neither fraud nor unconscionability in this case.
Instead, Orthophoenix argues that Medtronic' s acquiescence was immaterial to the settlement
because Medtronic merely relinquished unasserted claims and acknowledged undisputed legal
relationships between Medtronic and Orthophoenix. (See D.I. 280 at 7-10) Essentially,
Orthophoenix argues that Medtronic' s participation in the Settlement Agreement was only
nominal, and urges. the Court to infer from this that Orthophoenix did not make any binding
commitments to Medtronic.
The factual circumstances do not support Orthophoenix's view that Medtronic's
commitments under the

Settl~ment

Agreement were unimportant or valueless. It is undisputed

that Stryker' s willingness to sign the Settlement Agreement hinged on Medtronic' s participation,
which indicates that Stryker perceived some value in obtaining Medtro'nic' s assurances and
release of future claims. (See D.I. 282 at 6) The record also includes independent evidence that
Stryker took those concerns seriously: Stryker filed a Motion to Dismiss this case (unresolved at
the time of the settlement), which alleged that Orthophoenix lacked standing to sue because

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The Settlement Agreement contains a choice of law provision, providing that it is to be
"construed under the law of the State of Delaware." (D.I. 276-1 at§ 6.8) Neither party disputes
that Delaware law should apply. (See D.I. 275 at 12-13; D.I. 280 at 7)
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Medtronic retained rights to the patent-in-suit. (See D.I. 91 at 1)7 This suggests that Stryker
believed Medtronic might assert a claim under the patents-in-suit against Stryker. Taken together
with Medtronic's waiver ofrights to pursue attorneys' fees and costs from Stryker (see D.l. 272
at 2), the undisputed facts establish that Medtronic' s participation in the Settlement Agreement
was valuable to Stryker, and constituted part of the consideration that Stryker accepted in
exchange for its obligations under the Settlement Agreement.
Given that Medtronic contributed valuable consideration to the settlement, the Court will
not accept Orthophoenix' s invitation to dissect the Settlement Agreement in order to ascertain
whether Medtronic' s participation is "suffieient" inducement to justify Orthophoenix' s
commitment to indemnify Medtronic for its legal fees. Nor will the Court speculate as to
whether Orthophoenix could have obtaine<;l the same settlement terms without Medtronic's
participation. Complex, multi-party litigation often gives rise to settlement agreements that
include multilateral exchanges of value, and it is not for the Court to evaluate each individual
exchange. As such, Orthophoenix' s contractual commitments to Medtronic must be enforced.

B.

The Settlement Agreement Obliges
Orthophoenix to Pay Medtronic's Legal Fees

The·portion ofthe Settlement Agreement pertaining to Orthophoenix's reimbursement of
Medtronic's fees and expenses states that "by contract, the Orthophoenix Parties and IP
Navigation Parties have agreed to indemnify and will_reimburse the Medtronic Parties for all fees

and expenses incurred with regard to the Subject Litigations and the Medtronic Parties will not
pay their own fees, costs and expenses." (D.1. 276-1 at§ 2.7) (emphasis added) Medtronic

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0rthophoenix at no point characterized the motion as frivolous. ·(Tr. at 50-51)
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contends that the words "all" and "will not pay" indicate that Orthophoenix agreed to reimburse
every fee and expense Medtronic incurred as a result of this case. Orthophoenix contends,
instead, that the words "by contract" merely acknowledge Orthophoenix' s Patent Purchase
Agreement with Medtronic, and require· Orthophoenix to reimburse only those fees that would be
due under that Patent Purchase Agreement.
Considering both the language of the agreement itself and extrinsic evidence related to its
formation, there is no genuine dispute that Medtr'onic's interpretation is the correct one. First,
the Settlement Agreement explicitly states that Orthophoenix must reimburse "all" of
Medtronic' s foes and expenses. Second, the term "by contract" most naturally reads as an
expression of the parties' intent to create a binding obligation through the Settlement Agreement,
and as clarificp.tion that the Settlement Agreement (as opposed·to some statutory or equitable
requirement) defines the scope of that obligation. Finally, because elsewhere in the Settlement
Agreement the parties referred to the Patent Purchase Agreement by name, their use of the
general term "contract" in the disputed provision indicates that they did not mean there to refer to
the Patent Purchase Agreement. (See, e.g., D.I. 276-1 at§ 5.4(D))
The extrinsic evidence is consistent with this interpretation. The parties' discussions
while drafting the Settlement Agreement demonstrate both that Medtronic believed that the
agreement would require Orthophoenix to reimburse all of its fees, and that Orthophoenix should
have been aware ofMedtronic's expectations. In an email on April 27, Medtronic sent Marathon
a "redlined" version of the draft SettlementAgreement, which highlighted Medtronic's proposed
changes and comments, including the language regarding reimbursement.· (See D.I. 281-4 at 7-8)
In a follow-up email later in the day, Medtronic again confirmed that it expected to be

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reimbursed for its expenses, explaining that it was flexible regarding the timing of the
reimbursement, "so long as there is an agreement that Medtronic' s fees and costs will indeed be
reimbursed fully." (D.I. 276-11 at 2) In the same email, Medtronic referred to the past invoices
that it expected to be reimbursed, as well as its expectation that Orthophoenix would pay the
costs associated with recent discovery efforts. (See id.) Since the antitrust action was stayed at
the time, the referenced recent discovery effort could only reasonably be understood to be related
to the patent case. Medtronic was seeking an agreement that those costs would be "fully"
reimbursed. (Id.)
Orthophoenix contends that even if Medtronic' s interpretation of the parties' agreements
is correct, Medtronic is not entitled to recovery at this time because Medtronic did not satisfy the
conditions precedent to having its counsel ofchoice paid for by Orthophoenix. (See D.l. 280 at
4-5) (citing D.I. 281'if2, Exs. A & B; D.I. 276 Ex. F) In Orthophoenix's view, the Patent
Purchase Agreement required Medtronic to request indemnification, and thereafter provided
Orthphoenix the opportunity to designate counsel to represent Medtronic. (See D.I. 280 at 4-5,
13) Further, according to Orthophoenix, here Orthophoenix advised Medtron!c that it would
select Russ, August & Kabat- Orthophoenix's litigation counsel-to represent Medtronic. (See
id.) By retaining a different firm, Orthophoenix continues, Medtronic waived its opportunity to

have its legal fees and costs covered by Orthophoenix. The Court disagrees. First, even were
Orthophoenix' s view correct, the parties' subsequent execution of the Settlement Agreement - by
which Orthophoenix unambiguously agreed to pay Medtronic's legal fees and costs - would
render the prior conduct irrelevant. Second, it appears, as Medtronic argues, that potential
conflicts of interest would have made it (at best) inadvisable for·the same firm to represent both

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entities. (See D.I. 282 at 6 n.3; Tr.. at 33-J5)
Thus, the Court determines that the only reasonable interpretation of the Settlement
Agreement obliges Orthophoenix to pay all of Medtronic' s fees and expenses related to this
litigation. 8

C.

Orthophoenix is Not Entitled to Reformation

Orthophoe1:J.ix argues that, even assuming that the Settlement Agreement is enforceable
and requires full reimbursement of Medtronic' s fees, the Court should reform the contract on the
grounds of unilateral mistake. 9 Under the doctrine of unilateral mistake, a Court may reform a
contract if one party was mistaken as to the meaning of a contractual provision, and the other
party knew of the mistake.but remained silent. See Cerberus, 794 A.2d at 1151. Under this
alternative, Orthophoenix alleges that it was mistaken about the meaning of the indemnification
provisions of the Settlement Agreement.
Even taking as true Orthophoenix' s representation about its own confusion, Orthophoenix
has not alleged facts that support Orthophoenix' s assertion that Medtronic knew of
Orthophoenix' s mistake. As outlined above, Medtronic made clear during the drafting process
that Medtronic believed that the Settlement Agreement would require Orthophoenix to reimburse

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Because the Court finds that the Settlement Agreement governs Orthophoenix' s
reimbursement obligation, the Court need not reach the question, addressed in Orthophoenix's
brief, of what obligation the Patent Purchase Agreement would (instead) impose.
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0rthophoenix also argues that the doctrine of mutual mistake applies in this case. Under
the doctrine of mutual mistake, a Court may reform a contract if the parties to the contract were
both mistaken as to the meaning of the contract. See Cerberus Int'!, Ltd. v. Apollo Mgmt., L.P.,
794 A.2d 11~1, 1151 (Del. 2002). Here, Medtronic correctly understood that the Settlement
Agreement requires Orthophoenix to pay all of Medtronic' s legal fees, making the doctrine of
mutual mistake inapplicable.

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all of Medtronic's attorneys' fees. In addition to stating so in its correspondence, Medtronic
identified for Orthophoenix which invoices it expected Orthophoenix to pay pursuant to the
terms of the Settlement Agreement and forwarded copies for Orthophoenix's review. (See, e.g.,
D.I. 276-11 at 2; D.I. 276-16) Orthophoenix did not question or object to Medtronic's
representations about what reimbursement Medtronic would receive. To the contrary,
Orthophoenix' s parent, Marathon, was reaffirming that it would pay Medtronic' s fees and costs
just hours before Orthophoenix backed out of its agreement. (See D.I. 276 at ifif 1-2) Given this,
there is no reason to believe that Medtronic was aware of Orthophoenix' s objectively
unreasonable view that Medtronic did not expect Orthophoenix to pay all of its legal fees. As
such, there is no genuine dispute of material fact that Orthophoenix is not entitled to reformation
of the Settlement Agreement based on unilateral mistake. 10

D.

Medtronic is Entitled to Receive All of Its Legal Fees

The Settlement Agreement requires Orthophoenix to pay "all" ofMedtronic's legal fees.
The undisputed evidence shows that Orthophoenix was aware of the approximate amount in
question prior to signing the Settlement Agreement. (See D.I. 276-16 at 2) Although the total
amount was not finalized at the time the Settlement Agreement was signed, Medtronic advised
Orthophoenix of the type of expenses that would be invoiced in the future and Orthophoenix was
aware of the rates charged by Medtronic's attorneys. (Id.) Orthophoenix did not object based on

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°Nor does the record permit a reasonable factfinder to agree with Orthophoenix's
contention that Medtronic somehow "managed to sneak the word 'all' into § 2. 7" of the
Settlement Agreement. (D.I. 280 at 2) (emphasis added) There is no basis to find that
Orthophoenix's experienced counsel, nor the "extremely sophisticated licensing experts" at
Orthophoenix and Marathon (D.I. 282 at 1), were fooled by some nefarious action taken by
Medtronic.
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the information it had before it, does not allege facts suggesting that it could not have fairly
anticipated the final total, and does not argue that any of Medtronic' s fees or expenses were
incurred in bad faith. (See Tr. at 60, 64-65) For these reasons, the Court will not rewrite the
contract to reduce Orthophoenix's obligation to reflect an extrinsic standard of "reasonableness."

E.

Medtronic is Entitled to Interest

Medtronic requests prejudgment interest at a rate of 6% running from May 21, 2016 on
$563,q00.49 and from May 23, 2016 on $9,429.50. (See D.I. 275 at 12) Orthophoenix contends
that prejudgment interest should only apply to "readily ascertainable" sums and that the expenses
here were not "readily ascertainable" because they represent all legal fees, not the reasonable fees
associated only with work subject to indemnification under the Purchase Agreement. (See D.I.
294 at 1)
Having already rejected Orthophoenix's position and concluded that Orthophoenix is
obligated by the Settlement Agreement to pay all of Medtronic' s expenses, the Court agrees that
an award prejudgment interest is warranted here. "In Delaware, prejudgment interest is awarded
as a matter ofright. Such interest is to be computed from the date payment is due." Esprit

Health, LLCv. Univ. ofDelaware, 2015 WL 9305644, at *1 (D. Del. Dec. 21, 2015) (quoting
Citadel Holding Corp. v. Raven, 603 A.2d 818, 826 (Del. 1992)). Some courts have limited
awards of prejudgment interest to only "those cases in which the amount of damages owed by the
defendant is so readily ascertainable ... that the defendant could have opted to simply pay the
plaintiff immediately, rather than force him or her to obtain judicial relief through litigation."

Lum v. Nationwide Mut. Ins. Co., 1982 WL 1585, at *5 (Del. Super. Ct. Apr. 27, 1982). Here,
Orthophoenix could have done just that: paid the invoiced bills ten days after receiving the

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settlement payment from Stryker, as it had agreed to do. Instead, Orthophoenix repudiated its
obligation to reimburse Medtronic. (See D.l. 276-19) The Court determines that prejudgment
interest should begin to run on the date of that repudiation, May 24, 2016, on the total amount
invoiced to Orthophoenix as of that date, $572,429.99. (See D.I. 276-2 at 3; D.I. 293 at 2) As
Orthophoenix does not dispute that the Delaware legal rate, defined in 6 Del. C. § 230l(a), is the
appropriate interest rate here (see D.l. 294), the Court will use that rate. See Esprit Health, 2015
WL 9305644, at *2. Medtronic represents that the Delaware legal rate applicable here is 6%.

(See D.l. 280 at 13; D.I. 293 at 2)
. The Court also finds that Medtronic is entitled to post-judgment interest. In the Third
Circuit, "post-judgment interest begins to run on a judgment awarding attorney's fees where that
judgment fixes the amount owed to the prevailing party." Eaves v. Cty. ofCape·May, 239 F.3d
527, 534 (3d Cir. 2001). Thus, the Court will award post-judgment interest to Medtronic,
running from the date of its order.

V.

CONCLUSION
For the reasons discussed above, the Court will grant in full Medtronic' s Motion to

Enforce the Settlement Agreement. An appropriate Order follows.

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