United States District Court, E.D. Texas, Sherman Division
MEMORANDUM OPINION AND ORDER
L. MAZZANT UNITED STATES DISTRICT JUDGE
before the Court is Defendants' Motion for Partial
Summary Judgment as to Plaintiff's Fraud Claims,
Equitable Estoppel Claims, and All Remaining Claims Against
the Fillmore Entities (Dkt. #221). After reviewing the
relevant pleadings, the Court grants in part and denies in
part Defendants' motion.
in 2008, Tech Pharmacy Services, LLC (“Tech
Pharmacy”) engaged in discussions with Golden Gate
National Senior Care LLC d/b/a Golden LivingCenters
(“GLC”) about providing its remote packaging and
dispensing system to GLC facilities. During negotiations,
Tech Pharmacy and GLC entered into two non-disclosure
agreements (“NDAs”), one in 2008 and another in
2009, to facilitate discussions between the parties and allow
GLC to access Tech Pharmacy's virtual data room. On March
11, 2010, GLC sent a letter of intent to Tech Pharmacy,
expressing interest in purchasing 85% of the company for $15
million. Two weeks later, Tech Pharmacy sent a
counter-proposal, offering the sale of 45% of the company for
$25 million. The next day, GLC contacted Tech Pharmacy and
stated that it was ceasing discussions and terminating any
pilot programs. In October 2012, GLC publicly launched its
own pharmacy named Alixa Rx LLC (“Alixa”).
November 2, 2015, Tech Pharmacy filed suit against Alixa and
GLC, alleging patent infringement. On January 22, 2016, Tech
Pharmacy amended its complaint to add state law claims of
fraud, breach of contract, trade secret misappropriation, and
equitable estoppel to the original patent infringement
claims. On September, 1, 2016, Plaintiff further amended its
complaint to add Fillmore Capital Partners LLC, Fillmore
Strategic Management LLC, and Fillmore Strategic Investors
LLC (collectively, the “Fillmore Defendants, ”
with Alixa and GLC, “Defendants”) to the state
causes of action (Dkt. #83).
March 31, 2017, Defendants filed their motion for partial
summary judgment (Dkt. #221). On April 21, 2017, Tech
Pharmacy filed its response (Dkt. #246). On April 28, 2017,
Defendants filed their reply (Dkt. #252). On May 4, 2017,
Tech Pharmacy filed its sur-reply (Dkt. #256).
purpose of summary judgment is to isolate and dispose of
factually unsupported claims or defenses. Celotex Corp.
v. Catrett, 477 U.S. 317, 323-24 (1986). Summary
judgment is proper under Rule 56(a) of the Federal Rules of
Civil Procedure “if the movant shows 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 dispute about a material fact is genuine when
“the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Anderson
v. Liberty Lobby Inc., 477 U.S. 242, 248 (1986).
Substantive law identifies which facts are material.
Id. The trial court “must resolve all
reasonable doubts in favor of the party opposing the motion
for summary judgment.” Casey Enters., Inc. v. Am.
Hardware Mut. Ins. Co., 655 F.2d 598, 602 (5th Cir.
party seeking summary judgment bears the initial burden of
informing the court of its motion and identifying
“depositions, documents, electronically stored
information, affidavits or declarations, stipulations
(including those made for purposes of the motion only),
admissions, interrogatory answers, or other materials”
that demonstrate the absence of a genuine issue of material
fact. Fed.R.Civ.P. 56(c)(1)(A); Celotex, 477 U.S. at
323. If the movant bears the burden of proof on a claim or
defense for which it is moving for summary judgment, it must
come forward with evidence that establishes “beyond
peradventure all of the essential elements of the
claim or defense.” Fontenot v. Upjohn Co., 780
F.2d 1190, 1194 (5th Cir. 1986). Where the nonmovant bears
the burden of proof, the movant may discharge the burden by
showing that there is an absence of evidence to support the
nonmovant's case. Celotex, 477 U.S. at 325;
Byers v. Dall. Morning News, Inc., 209 F.3d 419, 424
(5th Cir. 2000). Once the movant has carried its burden, the
nonmovant must “respond to the motion for summary
judgment by setting forth particular facts indicating there
is a genuine issue for trial.” Byers, 209 F.3d
at 424 (citing Anderson, 477 U.S. at 248-49). A
nonmovant must present affirmative evidence to defeat a
properly supported motion for summary judgment.
Anderson, 477 U.S. at 257. Mere denials of material
facts, unsworn allegations, or arguments and assertions in
briefs or legal memoranda will not suffice to carry this
burden. Rather, the Court requires ‘“significant
probative evidence'” from the nonmovant to dismiss
a request for summary judgment. In re Mun. Bond Reporting
Antitrust Litig., 672 F.2d 436, 440 (5th Cir. 1982)
(quoting Ferguson v. Nat'l Broad. Co., 584 F.2d
111, 114 (5th Cir. 1978)). The Court must consider all of the
evidence but “refrain from making any credibility
determinations or weighing the evidence.” Turner v.
Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir.
move for summary judgment, arguing a lack of genuine issues
of material fact concerning: (1) whether Defendants as a
whole committed fraud by acquiring Tech Pharmacy's
confidential information in violation of an NDA; (2) whether
the Fillmore Defendants are liable for fraud,
misappropriation of trade secrets, and breach of contract;
(3) whether Tech Pharmacy can rely on equitable estoppel as
an affirmative defense. The Court will address each of these
contend Tech Pharmacy cannot sustain a fraud claim since the
undisputed evidence shows it was not actually deceived.
Defendants assert that Tech Pharmacy knew GLC was considering
forming its own pharmacy and exploring other business
ventures besides its relationship with Tech Pharmacy. Because
Tech Pharmacy was aware of these facts, Defendants assert
that they did not make any false misrepresentations that Tech
Pharmacy acted upon, relied upon, and was subsequently
Pharmacy's fraud claim involves whether Defendants
fraudulently induced Tech Pharmacy to enter into the 2009
NDA. Tech Pharmacy contends Defendants misrepresented that
they would not use Tech Pharmacy's confidential
information accessed under the 2009 NDA to start their own
pharmacy. To succeed in its fraud claim, Tech Pharmacy must
show (1) Defendants made material misrepresentation; (2) such
misrepresentation was made falsely or recklessly without any
knowledge of its truth; (3) Defendants intended Tech Pharmacy
to act upon the misrepresentation; (4) Tech Pharmacy acted in
reliance on the misrepresentation; and (5) suffered injury.
Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of
Am., 341 S.W.3d 323, 337 (Tex. 2011) (citation omitted).
A representation is material if “a reasonable person
would attach importance to [it] and would be induced to act
on the information in determining his choice of actions in
the transaction in question.” Id. (quoting
Smith v. KNC Optical, Inc., ...