Kettering Adventist Healthcare v. Jade Designs, LLC

677 F.Supp.3d 735

KETTERING ADVENTIST HEALTHCARE, Plaintiff, v. JADE DESIGNS, LLC, d/b/a Fully Promoted, et al., Defendants

Case No. 3:21-cv-136

United States District Court, S.D. Ohio, Western Division

Signed June 13, 2023

Eric Wade Richardson, Wesley Abrams, Daniel Paul Shinkle, Vorys Sater Seymour & Pease LLP, Cincinnati, OH, Jacob D. Mahle, Cincinnati, OH, for Plaintiff.

Timothy D. Johnson, Smith Jadin Johnson PLLC, Columbus, OH, Chirlin Alyssa E, Pro Hac Vice, Christopher M. Drake, Pro Hac Vice, Smith Jadin Johnson PLLC, Denver, CO, Ryan M. Watson, Pro Hac Vice, Denver, CO, for Defendants.

ENTRY AND ORDER GRANTING, IN PART, AND DENYING, IN PART, PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND GRANTING, IN PART, AND DENYING, IN PART, DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

THOMAS M. ROSE, UNITED STATES DISTRICT JUDGE

Kettering Adventist Healthcare ("Plaintiff") brought the instant Complaint (Doc. No. 1) (the "Complaint") against Jade Design, LLC, d/b/a Fully Promoted ("Fully Promoted") and Jennifer Snyder ("Snyder") (collectively, "Defendants"), alleging several causes of action, relating to Plaintiff's attempts to purchase suitable masks from Defendants for use in its hospitals. Presently before the Court are Plaintiff's Motion for Summary Judgment (Doc. No. 35) and Defendants' Motion for Judgment (Doc. No. 36).

For the reasons discussed below, the Court GRANTS, IN PART, AND DENIES, IN PART, Plaintiff's Motion for Summary Judgment and GRANTS, IN PART, AND DENIES, IN PART, Defendants' Motion for Summary Judgment.

I. BACKGROUND

The events giving rise to this matter take place during the height of the initial waves of the COVID-19 pandemic from mid-2020 to early 2021. Plaintiff is a healthcare system headquartered in Dayton, Ohio that operates hospitals and physician practices throughout the area. (Doc. No. 35-1 at PageID 337.) Like many healthcare systems throughout the area, Plaintiff needed personal protective equipment ("PPE") for use in its various hospitals. (Id.)

Fully Promoted typically sells branded apparel and promotional equipment, such as water bottles and pens. (Doc. No. 35-2 at PageID 348-49.) Snyder owns 50% of Fully Promoted and works for the business full-time. (Id. at PageID 347.) However, in March 2020, Snyder decided to foray into the world of mask procurement in response to the need for masks among medical personnel. (Id. at PageID 351.)

In an effort to secure PPE for Plaintiff, Trisha Gillum, the Executive Director of Supply Chain and Materials Distribution for Plaintiff, reached out to Defendants. (Doc. No. 35-1 at PageID 337.) In March of 2020, Plaintiff placed an order with Defendants for 30,000 N95 masks. (Id. at PageID 338.) Plaintiff later increased the quantity of masks it needed to 330,000 N95 masks. (Doc. No. 35-2 at PageID 407.) Snyder understood Plaintiff's main request to be for 3M-made N95 masks. (Id. at PageID 359.) Ultimately, Defendants were unable to fulfill the order, and Plaintiff received a refund of the amount it had paid to Defendants. (Id. at PageID 425-27.) On August 26, 2020, while arranging the refund of Plaintiff's March 2020 payment, Snyder emailed Gillum, "[o]ur corporate office has been able to acquire the 3M 1860's so if the need arises again in the future please let me know." (Id. at PageID 426.)

A few months later, in December 2020, Plaintiff again reached out to Defendants as a result of the resurgence in the COVID-19 pandemic. (Doc. No. 35-1 at PageID 338.) Plaintiff agreed to purchase 300,000 3M-made N95 masks for $1,180,000. (Id.; Doc. No. 35-2 at PageID 366-68.) On December 10, 2020, Defendants emailed Plaintiff an order confirmation reflecting an order of 300,000 "3M 1860 N95 Particulate Respirator/Surgical Masks," for a price of $1,185,000. (Doc. No. 35-2 at PageID 379; 36-1 at PageID 497.) On December 22, 2020, Plaintiff issued a "Purchase Order Modified" form to Defendants for 300,000 "Mask N95 3M" for a cost of $1,185,000 to be delivered on December 27, 2020. (Doc. Nos. 35-2 at PageID 381-83; 36-2.) Plaintiff subsequently wired the funds for the masks. (Doc. No. 35-1 at PageID 338.)

On January 13, 2021, Plaintiff contacted Defendants, informing them that Plaintiff had "facilities reaching out with concern[s] that the 3M mask[s] we have are counterfeit" and requesting verification that the masks were not counterfeit. (Doc. No. 35-2 at PageID 429.) In response, Snyder reached out to Mike DeMeo ("DeMeo"), a fellow franchisee whom Snyder worked with to obtain the masks. (Doc. No. 35-2 at PageID 370, 433-77.)

Around January 14, 2021, Plaintiff took the step of submitting information about the masks to 3M's COVID-19 Fraud Response Team. (Doc. Nos. 33 at PageID 296; 33-3 at PageID 309-11; 35-1 at PageID 338.) As part of this process, Plaintiff submitted, and 3M reviewed, pictures of the masks, the boxes the masks arrived in, and the documents accompanying the shipment. (Doc. Nos. 33 at PageID 296; 33-2.) The masks were reviewed by 3M's COVID-19 Fraud Response Team, which is overseen by Cassie Jacobson ("Jacobson"), the Director of the Fraud Hotline and Application Engineering at 3M. (Doc. No. 33 at PageID 295-96.) After completing a review of the masks, 3M concluded the masks were counterfeit products and advised Plaintiff not to use them. (Doc. No. 33 at PageID 296.)

On February 8, 2021, Plaintiff demanded a full refund of the $1,185,000 paid to Defendants for the masks and an additional $18,064 that Plaintiff expected to incur in fit testing employees with new masks. (Doc. No. 46-1 at PageID 921-22.)

Plaintiff filed its Complaint on May 3, 2021. (Doc. No. 1.) The Complaint alleges six counts: breach of contract, fraud and fraud in the inducement, negligent misrepresentation, conversion, replevin, and unjust enrichment. (Id. at PageID 13-19.) On March 1, 2023, the Parties filed their respective motions. (Doc. Nos. 35, 36.) On March 22, 2023, the Parties filed their respective responses (Doc. Nos. 40, 41), and on April 21, 2023 both Parties filed their replies (Doc. Nos. 44, 45.) Plaintiff was granted leave to file a sur-reply on June 12, 2023 (Doc. No. 52) and Plaintiff filed its sur-reply on June 12, 2023 (Doc. No. 53). The motions are fully briefed and ripe for decision.

II. STANDARD OF REVIEW

Rule 56 of the Federal Rules of Civil Procedure provides that "[a] party may move for summary judgment, identifying each claim or defense--or the part of each claim or defense--on which summary judgment is sought" and that "[t]he court shall grant summary judgment 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). The party seeking summary judgment has the initial burden of informing the court of the basis for its motion and identifying those portions of the pleadings, depositions, answers to interrogatories, affidavits or sworn declarations, and admissions on file, that it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see also Fed. R. Civ. P. 56(a), (c). The burden then shifts to the non-moving party, which "must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In opposing summary judgment, the nonmoving party cannot rest on its pleadings or merely reassert its previous allegations. Id. at 248-49, 106 S.Ct. 2505. It also is not sufficient to "simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The nonmoving party must "go beyond the [unverified] pleadings" and present some type of evidentiary material in support of its position. Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548.

A party's failure "to properly address another party's assertion of fact as required by Rule 56(c)" can result in the court "consider[ing] the fact undisputed for purposes of the motion." Fed. R. Civ. P. 56(e). Additionally, "[a] district court is not . . . obligated to wade through and search the entire record for some specific facts that might support the nonmoving party's claim." InterRoyal Corp. v. Sponseller, 889 F.2d 108, 111 (6th Cir. 1989). "The court need consider only the cited materials, but it may consider other materials in the record." Fed. R. Civ. P. 56(c)(3).

In ruling on a motion for summary judgment, it is not the judge's function to make credibility determinations, "weigh the evidence[,] and determine the truth of the matter, but to determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 249, 255, 106 S.Ct. 2505. In determining whether a genuine issue of material fact exists, the court must assume as true the evidence of the nonmoving party and draw all reasonable inferences in that party's favor. Id. at 255, 106 S.Ct. 2505; Matsushita, 475 U.S. at 587, 106 S.Ct. 1348; Tolan v. Cotton, 572 U.S. 650, 660, 134 S.Ct. 1861, 188 L.Ed.2d 895 (2014). However, the "mere existence of a scintilla of evidence in support of the" nonmoving party is not sufficient to avoid summary judgment. Anderson, 477 U.S. at 252, 106 S.Ct. 2505. "There must be evidence on which the jury could reasonably find for the plaintiff." Id. The inquiry, therefore, "asks whether reasonable jurors could find by a preponderance of the evidence that the" nonmoving party is entitled to a verdict. Id.

As judgment is sought on claims brought under Ohio law, this Court must apply the law of Ohio, as interpreted by the Supreme Court of Ohio. Northland Ins. Co. v. Guardsman Prods. Inc., 141 F.3d 612, 617 (6th Cir. 1998). Specifically, this Court must apply the substantive law of Ohio "in accordance with the then-controlling decision of the highest court of the State." Imperial Hotels Corp. v. Dore, 257 F.3d 615, 620 (6th Cir. 2001...