Bolson Material International, Inc. v. 3D Systems Corporation

Filing 158

Order and Decision granting Defendant Village Plastics Co. and Counterclaim Plaintiff 3D Systems' Motion for summary judgment (Related Doc # 115 ), 116 ). Judge John R. Adams on 9/19/17.(K,C)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

BOLSON MATERIALS,
INTERNATIONAL, INC.,
Plaintiff,
vs.
3D SYSTEMS CORPORATION, et al.,
Defendants.

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CASE NO. 5:14CV01441

JUDGE JOHN R. ADAMS

ORDER AND DECISION
(Resolving Docs. 115 and 116)

This matter is before the Court on a motion for summary judgment filed by
Defendants/Counterclaim Plaintiffs, Village Plastics Co. (“Village Plastics”) and 3D Systems
Corporation (“3D Systems”). Docs. 115 and 116. Defendants have moved for judgment as a
matter of law on the Amended Complaint filed by Plaintiff Bolson Materials International, Inc.
(“Bolson”), along with the Defendants’ Counterclaim. The Court finds that no genuine issues of
material fact exist as to Bolson’s claims or Defendants’ Counterclaim. As such, for the following
reasons, Village Plastics and 3D Systems are entitled to judgment as a matter of law, and their
motion for summary judgment is GRANTED.
I.

FACTS AND PROCEDURAL HISTORY
“All parties in this action are involved in the field of three dimensional printing, commonly

referred to as ‘3D printing.’” Doc. 26 at 2. A 3D printing machine utilizes a plastic filament or
metal wire unwound from a coil that is melted and deposited in layers to form a three-dimensional
object. Doc. 26 at 2. Bolson is a Canadian materials company that “develops and provides

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materials and applications for 3D printing. Bolson’s primary product is the sale of filament on
vacuum sealed spools to be inserted…” after-market into cassettes used in rapid prototyping
machines for 3D printing. Doc. 26 at 2.

Village Plastics is a manufacturer of thermoplastic

welding rods and filament for use in plastic fabricating and 3D printing. Doc. 26 at 3. 3D Systems
provides 3D printing goods and services and acquired Village Plastics after Village Plastics and
Bolson executed the contract at issue.
On February 4, 2008, Bolson and Village Plastics executed a Non-Disclosure and NonCompete Agreement (at times “Non-Compete Agreement”). Doc. 43-1. The agreement provided:

This Agreement shall govern the conditions of disclosure by [Bolson] to
[Village Plastics] of certain “Confidential Information” including but not
limited to material specifications, dimensional specifications, supplier
details, data, trade secrets and intellectual property relating to the production
of:
Filaments for use in Fused Deposition Method (FDM) type prototyping
machines.
** *
That [Village Plastics] shall not directly or indirectly acquire any interest in,
or design, create, manufacture, sell or otherwise deal with any FDM filament,
based upon or derived from the information, except as may be expressly
agreed to in writing by [Bolson].
FOR GOOD CONSIDERATION, the Undersigned jointly and severally
covenant and agree not to compete with the business of [Bolson] and its
lawful successors and assigns. The term “not compete” as used herein shall
mean that [Village Plastics] shall only sell filaments that can be used in FDM
type protoyping machines where:
1. The [Village Plastics] customer is not an existing [Bolson]
customer AND
2. The [Village Plastics] customer is using the product “in-house”
AND
3. The [Village Plastics] customer is not reselling the filament
** *
Doc. 43-1.

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In 2012, Bolson alleged that Village Plastics supplied contaminated filament. Doc. 26. In
November of 2013, the parties entered into a settlement and release agreement to resolve these
allegations. Doc. 26. At the time of the release, Bolson had an outstanding account balance with
Village Plastics, and as part of the agreement, Village Plastics provided a credit that reduced the
account balance. Docs. 26 and 43. However, it is undisputed that Bolson’s account remains
outstanding.
In June of 2014, Bolson filed a Complaint alleging a breach of the Non-Compete
Agreement. Bolson later amended the Complaint, making claims for breach of the Non-Compete
Agreement prior to the execution of the release agreement, breach of the Non-Compete Agreement
after the execution of the release agreement, breach of implied covenant of good faith and fair
dealing under the Non-Compete Agreement, breach of implied covenant of good faith and fair
dealing under the release agreement, promissory estoppel, tortious interference with business
relations, fraud, declaratory judgment, breach of contract asserting a claim for contaminated
filament, breach of contract in delaying filament orders, breach of express warranty under R.C.
1302.26, breach of implied warranty under R.C. 1302.27, and breach of implied warranty of fitness
for a particular purpose under R.C. 1302.28. Village Plastics filed a Counterclaim alleging breach
of the release agreement, “breach of contract – action on account,” unjust enrichment, and
declaratory judgment.
The parties then stipulated to the dismissal of certain counts, and Village Plastics filed a
motion for partial summary judgment as to the scope of the release agreement. The Court granted
the motion in part, leaving breach of the Non-Compete Agreement before and after the execution
of the release as the only remaining claims in this case.

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Village Plastics has filed a motion for summary judgment on these two remaining claims
and on its Counterclaim. After reviewing the evidence in a light most favorable to Bolson, the
Court finds that there are no genuine issues of material fact remaining. Village Plastics is entitled
to summary judgment on Bolson’s breach of contract claims and on the Counterclaim.

II.

LEGAL STANDARD OF REVIEW
A party seeking summary judgment must show “that 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). A
fact is material if it is one that might affect the outcome of the suit under governing law. Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Determination of whether a factual issue is
“genuine” requires consideration of the applicable evidentiary burdens. Id. At 252. Further, on
summary judgment, the inferences to be drawn from underlying facts must be viewed “in the light
most favorable to the party opposing the motion.” U.S. v. Diebold, Inc., 369 U.S. 654, 655 (1962).
The pivotal question in deciding a motion for summary judgment is whether a reasonable fact
finder could make a finding in favor of either party. See Anderson 477 U.S. at 250 (“The inquiry
performed is the threshold inquiry of determining whether there is the need for a trial – whether,
in other words, there are any genuine factual issues that properly can be resolved only by a finder
of fact because they may reasonably be resolved in favor of either party.”).
The initial burden of showing the absence of any “genuine issue” belongs to the moving
party. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has satisfied its
burden of proof, the burden then shifts to the nonmoving party. The nonmoving party may not
simply rely on its pleadings, but must “produce evidence that results in a conflict of material fact
to be resolved by a jury” or other fact-finder at trial. Cox v. Kentucky Dep’t of Transp., 53 F.3d

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146, 150 (6th Cir. 1995). A party opposing summary judgment must show that there are facts
genuinely in dispute and must do so by citing to the record. Fed.R.Civ.P. 56(c)(1)(a).
III.

LEGAL ANALYSIS
A. Breach of the Non-Compete Agreement
Bolson alleges that Village Plastics breached the Non-Compete Agreement, before and

after the execution of the release, by selling any filament to third parties. Village Plastics argues
that it was permitted to sell filament under certain conditions set forth in the agreement. The
company argues that it followed the conditions and did not violate the Non-Compete Agreement.
“To establish a breach of contract claim, a plaintiff must prove (1) the existence of a
contract, which requires an offer, acceptance, and consideration; (2) performance by the plaintiff;
(3) breach by the defendant; and (4) damage or loss to the plaintiff.” Kirkland v. St. Elizabeth
Hosp. Med. Ctr., 34 Fed. Appx. 174, 178 (6th Cir. 2002) (citing Nilavar v. Osborn, 127 Ohio
App.3d 1, 711 N.E.2d 726, 732 (1998)).

“Under Ohio law, courts are required to give

unambiguous contract provisions their plain meaning.”

Books A Million, Inc. v. H & N

Enterprises, Inc., 140 F. Supp. 2d 846, 853 (S.D. Ohio 2001) (citing Winningham v. North
American Resources Corp., 42 F.3d 981, 985 (6th Cir.1994)). To resolve a contract dispute, the
Court looks to the “plain and ordinary meaning of the language used in the contract unless another
meaning is clearly apparent from the contents of the agreement.” Triad Realty, L.L.C. v. SVG
Mgmt., L.L.C., 2014 WL 2156775 at *3, 2014 – Ohio - 2157.
“A contract provision is ambiguous if it is reasonably susceptible to two or more
interpretations.” Books A Million, Inc., 140 F. Supp. 2d at 853–54 (citing United States Fidelity
and Guaranty Co. v. St. Elizabeth Medical Center, 129 Ohio App.3d 45, 716 N.E.2d 1201, 1208

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(1998); United Telephone Co. v. Williams Excavating, Inc., 125 Ohio App.3d 135, 153 (1997)).
“If a contract is clear and unambiguous, then its interpretation is a matter of law and there is no
issue of fact to be determined.” State ex rel. Parsons v. Fleming, 68 Ohio St.3d 509, 628 N.E.2d
1377, 1379 (1994). It is well settled, however, “that ambiguities in an integrated contract justify
the use of parol evidence for their resolution.” Clarke v. Hartley, 7 Ohio App.3d 147, 454 N.E.2d
1322, 1326 n. 3 (1982).
If a court determines that a contract provision is ambiguous, then it “may use
traditional methods of contract interpretation to resolve the ambiguity,
including drawing inferences and presumptions and introducing extrinsic
evidence.” Boyer, 986 F.2d at 1005.
Courts may not, however, use extrinsic evidence to create an ambiguity.
Rather, the ambiguity must be patent; that is, apparent on the face of the
contract. In Local 783, Allied Industrial Workers v. General Electric Co., 471
F.2d 751 (6th Cir.), cert. denied, 414 U.S. 822, 94 S.Ct. 120, 38 L.Ed.2d 55
(1973), we wrote that “[o]nly when the court has determined that the contract
is ambiguous is a construction of the clause necessary. After a finding of
ambiguity has been made, ‘[extrinsic evidence] is admissible to aid in its
interpretation.’ ” Id. at 757 (quoting Tennessee Consol. Coal Co. v. United
Mine Workers, 416 F.2d 1192, 1198 (6th Cir.1969), cert. denied, 397 U.S.
964, 90 S.Ct. 999, 25 L.Ed.2d 256 (1970)).
Schachner v. Blue Cross and Blue Shield of Ohio, 77 F.3d 889, 893 (6th Cir. 1996) [emphasis
added].

Here, the plain language of the Non-Compete Agreement allows Bolson to sell some form
of filament under three specific conditions:

1. The Village Plastics’ customer is not an existing Bolson
customer AND
2. The Village Plastics customer is using the product “in-house”
AND
3. The Village Plastics customer is not reselling the filament
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Bolson argues that the term “fused deposition method” is ambiguous and points to extrinsic
evidence of the development of 3D printing technology and ultimately concludes that Village
Plastics is prohibited from selling any type of filament. However, the plain language of the
agreement explicitly allows Village Plastics to sells some type of filament with three specific
restrictions. Doc. 43-1 (“The term ‘not compete’ as used herein shall mean that [Village Plastics]
shall only sell filaments that can be used in FDM type protoyping machines where…”). Thus, the
Court need not move to the issue of what type of filament Village Plastics is permitted to sell,
because Bolson has not demonstrated any evidence that Village Plastics is selling filament in
violation of the three conditions set forth above.
While it appears undisputed that Village Plastics is selling some type of filament to third
parties, there is no evidence in the record as to whether the filaments are being resold or whether
they are being used in-house. Instead, Bolson provides information from third-party websites to
argue that the companies are “re-sellers.” While this may be true, the Non-Compete Agreement
provides that the third party “is not reselling the filament.”
Bolson has provided no evidence that the filament sold to these third parties is being resold to other customers. Simply because the third party sells after-market products does not mean
that the company is re-selling Village Plastics’ filament. Bolson asks this Court to speculate that
the volume and type of product sold to each company necessarily means the company is then
reselling it to consumers. The Court is not permitted to speculate. There is no evidence in the
record that the particular filament provided by Village Plastics was being resold by third parties.
Bolson argues in their brief that the Non-Compete Agreement prohibited Village Plastics
from selling to customers who are deemed “re-sellers.” This is not what the plain language of the

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agreement provides. Instead, the Non-Compete Agreement focuses on whether the third party is
“reselling the filament” and not on whether the third party generally considered an after-market
“re-seller.” Thus, Bolson has not maintained its burden of pointing to evidence that the filament
was being re-sold. This is not a question of fact for a jury to decide, but rather, an essential element
of the claim, and Bolson was required to produce some evidence to create an issue of fact as to
each element of its breach of contract claim. Without this evidence, the Court will not speculate,
and Village Plastics is entitled to judgment as a matter of law.
B. Village Plastics’ Counterclaim
Village Plastics has asserted a counterclaim for $48,637.83, plus interest and costs, since
January 21, 2014. Doc. 43. Bolson does not dispute that it owes the money on account but argues
that it is uncertain about whether the money is owed to Village Plastics or 3D Systems. The record
confirms that 3D Systems acquired Village Plastics and its receivables, and therefore, 3D Systems
owns the account. Since the parties agree that the money is owed, the Court finds there is no
genuine issue of material fact remaining, and Village Plastics is entitled to summary judgment on
its Counterclaim.
Having found a breach of contract in Bolson’s failure to pay its account pursuant to the
release agreement, the counterclaim for unjust enrichment must necessarily be dismissed as an
alternative claim. Further, having found that Bolson has failed to demonstrate an issue of fact as
to Village Plastics’ violation of the Non-Compete Agreement, the Court declines to reach the issue
of enforceability as requested by Village Plastics’ counterclaim for declaratory relief.

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IV.

CONCLUSION
Reviewing the facts in a light most favorable to Bolson, no genuine dispute of material fact

exists on any claim against Village Plastics and 3D Systems. Therefore, the Defendants are entitled
to judgment as a matter of law, and their motion for summary judgment is GRANTED.
Furthermore, there are no genuine issues of material fact as to the Counterclaim; and thus, the
Defendants are entitled to judgment as a matter of law on their affirmative claims. Defendants’
motion for summary judgment on their Counterclaim is GRANTED.
IT IS SO ORDERED.
Dated: 09/19/2017

/s/John R. Adams
JOHN R. ADAMS
UNITED STATES DISTRICT JUDGE

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