MacGregor v. MiMedx Grp., Inc.

GAVIN MACGREGOR, Plaintiff, v. MIMEDX GROUP, INC., Defendant.

No. 1:19-cv-01189-PJK-GJF

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO

May 18, 2021

MEMORANDUM OPINION AND ORDER

THIS MATTER is before the court on Defendant MiMedx Group, Inc.'s (MiMedx's) Motion for Summary Judgment filed January 29, 2021 (ECF No. 63) and Plaintiff Gavin MacGregor's Motion for Partial Summary Judgment filed January 29, 2021 (ECF No. 64).¹ Having reviewed the parties' submissions and the relevant law, the court will deny Defendant's Motion for Summary Judgment and will grant in part and deny in part Plaintiff's Motion for Partial Summary Judgment.

Background

This case primarily concerns Mr. MacGregor's hiring by Defendant MiMedx. Except as otherwise indicated, the following facts are undisputed. MiMedx is abiopharmaceutical company that sells wound care products. In June 2019, Mr. MacGregor began interviewing for an account executive position within MiMedx's sales department. MiMedx was seeking to fill a position left vacant after the resignation of account executive Sara Kaplan. The position primarily involved selling a MiMedx product called "EpiFix."

Mr. MacGregor had a series of interviews with Regional Sales Manager, Todd Serrano and National Director of Sales, Training and Development, William Lenz. During the interviews, Mr. MacGregor, Mr. Serrano, and Mr. Lenz discussed Mr. MacGregor's qualifications for the position, as well as compensation under MiMedx's base salary plus commission plan. Under the plan, Mr. MacGregor would be paid a base salary of $95,000 per year and would earn an initial commission of ten percent of sales. After a number of months, the commission would be ten percent of sales over $20,000 per month. Mr. Serrano and Mr. Lenz identified the University of New Mexico Hospital (UNMH), as an existing account Mr. MacGregor would take over if hired. UNMH was Ms. Kaplan's most profitable account in 2018 and 2019. Mr. MacGregor alleges that Mr. Serrano and Mr. Lenz also identified other accounts he would take over if hired and that they showed him the UNMH sales history for the prior four quarters (April 1, 2018 through March 31, 2019) during one of his interviews. During that period, MiMedx's sales to UNMH exceeded $1,500,000 — over $100,000 each month, on average.

At the time of Mr. MacGregor's interviews, however, MiMedx's sales to UNMH had dropped significantly. MiMedx's May 2019 sales to UNMH were just over $11,000and MiMedx made no sales to UNMH in June 2019. Mr. Lenz and Mr. Serrano were aware of these sales figures at the time of Mr. MacGregor's interview but did not share them with Mr. MacGregor on the basis that the figures were confidential.

Mr. MacGregor was offered the position on June 24, 2019. He accepted the position the following day. His offer letter and MiMedx's policies brochure both stated that they replaced and superseded any prior representations made by MiMedx. Mr. MacGregor started at MiMedx on July 8, 2019.

Approximately two months later, Mr. MacGregor visited UNMH with Mr. Serrano. They met with a charge nurse who told them about reimbursement issues UNMH had experienced with EpiFix. After hearing this, Mr. MacGregor became upset over what he considered MiMedx's mismanagement of the UNMH account. Following the meetings, Mr. MacGregor and Mr. Serrano had a heated discussion in which Mr. MacGregor expressed dissatisfaction with the company's management of the UNMH account and with the impression of the account he was given during his interview and onboarding process. The next day, Mr. MacGregor called a colleague to discuss the meeting and his conversation with Mr. Serrano. He shared his frustrations regarding the UNMH account and told the colleague that he felt like punching Mr. Serrano in the face during their conversation at UNMH. The colleague reported this statement to Mr. Serrano. Mr. Serrano informed Mr. Lenz, who reported the statement to MiMedx's HR department. HR investigated the incident and substantiated the allegations. MiMedx terminated Mr. MacGregor's employment on September 16, 2019.

In December 2019, Mr. MacGregor filed an action in New Mexico state court, alleging intentional and negligent misrepresentation, prima facie tort, retaliatory discharge, and a variety of contractual claims against MiMedx. MiMedx removed the action to this court, where the parties stipulated to the dismissal of all but the intentional and negligent misrepresentation claims. ECF No. 60.

Both parties now move for summary judgment. MiMedx seeks summary judgment on Mr. MacGregor's remaining claims. It identifies six reasons why Mr. MacGregor's misrepresentation claims fail as a matter of law: (1) MiMedx was under no duty to disclose confidential sales figures during Mr. MacGregor's interview; (2) the alleged misrepresentations related to predictions of future events rather than facts; (3) Mr. MacGregor could not have reasonably relied on the representations; (4) MiMedx provided Mr. MacGregor with all information material to his decision to take the job; (5) Mr. MacGregor's offer letter and acknowledgment of MiMedx's policies prohibit reliance on representations not contained in those documents; and (6) Mr. MacGregor's claims are barred by the New Mexico Worker's Compensation Act. MiMedx also argues that there is no evidence that MiMedx acted with an intent to deceive Mr. MacGregor.

Mr. MacGregor seeks partial summary judgment solely on the issue of MiMedx's liability for intentional and/or negligent misrepresentation based on its failure to inform him of the May and June 2019 UNMH sales figures during his interviews.

Discussion

Summary judgment is warranted when "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). Once the movant has met this burden, the burden shifts to the nonmovant to "set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). The court views the evidence in the light most favorable to the nonmovant. See SEC v. Thompson, 732 F.3d 1151, 1156-57 (10th Cir. 2013). In ruling on a summary judgment motion, the court may decline to grant all the relief requested and instead enter an order identifying material facts not genuinely in dispute. Fed R. Civ. P. 56(g). Those facts are treated as established in the case. Id.

A. Negligent Misrepresentation

Negligent misrepresentation requires (1) a materially misleading statement, (2) that the speaker had no reasonable ground for believing was true, (3) on which the speaker intends the listener to rely, (4) on which the listener justifiably did rely, and (5) the listener suffered harm as a result of his reliance. Saylor v. Valles, 63 P.3d 1152, 1158 (N.M. Ct. App. 2002); Eckhardt v. Charter Hosp. of Albuquerque, Inc., 953 P.2d 722, 733-34 (N.M. Ct. App. 1997). "In New Mexico, misrepresentation can be by either commission or omission." Encinias v. Whitener Law Firm, P.A., 310 P.3d 611, 619 (N.M. 2013) (quotation omitted).

To be liable for negligent misrepresentation, the defendant must have breached aduty of disclosure owed to the plaintiff. Ruiz v. Garcia, 850 P.2d 972, 977 (N.M. 1993). Whether a duty of disclosure exists is a question of law for a court to decide. R.A. Peck, Inc. v. Liberty Fed. Sav. Bank, 766 P.2d 928, 932 (N.M. Ct. App. 1988).

Mr. MacGregor contends that it is undisputed that MiMedx discussed the UNMH sales history from April 1, 2018 to March 31, 2019 with him during his interview. He points to paragraph 6 of MiMedx's answer, in which it stated "Defendant admits it identified [UNMH] as an existing account that Plaintiff would be assigned if he was hired, and discussed with Plaintiff the UNMH sales history for the last four quarters." ECF No. 5 at 2. MiMedx responds that it has presented evidence showing a dispute as to whether specific sales history was discussed with Mr. MacGregor, including Mr. Serrano and Mr. Lenz's deposition testimony stating that they did not share sales history for any account. ECF No. 72 at 8. However, admissions in an answer are binding, even if the admitting party later claims the existence of a factual dispute based on evidence produced at summary judgment. Grynberg v. Bar S Servs., Inc., 527 F. App'x 736, 739 (10th Cir. 2013) (unpublished) (citing Missouri Hous. Dev. Comm'n v. Brice, 919 F.2d 1306, 1314 (8th Cir. 1990)). MiMedx is bound by the admission in its answer. There is therefore no factual dispute as to whether MiMedx discussed with Mr. MacGregor the UNMH sales history for the four quarters prior to his interview.

Given that established fact, the court next considers whether MiMedx's sharing of that information triggered a duty to disclose the recent dramatic drop in UNMH sales.

While a duty of disclosure typically arises as the result of a special relationshipbetween the parties, see R.A. Peck, 766 P.2d at 933, it can also arise based on the context in which a statement is made. Under New Mexico law, a party to a business transaction is under a duty to disclose all material facts basic to the transaction if he knows the other party is mistaken as to those facts and, based on objective circumstances, would reasonably expect disclosure of those facts. Azar v. Prudential Ins. Co. of Am., 68 P.3d 909, 928 (N.M. Ct. App. 2003). Moreover, "[t]o reveal some information on a subject triggers the duty to reveal all known material facts." Wirth v. Commercial Res., Inc., 630 P.2d 292, 297 (N.M. Ct. App. 1981).

Here, the parties were discussing a potential business transaction, i.e., an employment relationship. While that context alone does not trigger a blanket duty to disclose sales figures relevant to compensation, MiMedx took the additional step of affirmatively sharing some recent UNMH sales figures during the interview. And it is undisputed that, at the time they showed Mr. MacGregor the figures, Mr....