Nutrimatix Inc. v. Xymogen, Inc.

NUTRIMATIX INC., Plaintiff/ Counter Defendant, v. XYMOGEN, INC., Defendant/ Counter Claimant.

Case No. 6:15-cv-790-Orl-37GJK

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA ORLANDO DIVISION

January 27, 2017

ORDER

This cause is before the Court on the following:

1. Defendant's Daubert Motion and Motion in Limine to Exclude and Strike the Testimony and Report of Richard Rampell (Doc. 47), filed June 28, 2016;

2. Plaintiff's Opposition to Defendant's Daubert Motion and Motion in Limine to Exclude Expert Testimony (Doc. 51), filed July 8, 2016;

3. Plaintiff's Motion for Partial Summary Judgment on Defendant's Affirmative Defenses, and Incorporated Statement of Material Facts and Memorandum of Law (Doc. 40), filed June 24, 2016;

4. Defendant's Response in Opposition to Plaintiff's Motion for Partial Summary Judgment on Defendant's Affirmative Defenses (Doc. 50), filed July 8, 2016;

5. Plaintiff's Reply in Support of Motion for Partial Summary Judgment on Defendant's Affirmative Defenses (Doc. 55), filed July 22, 2016; 6. Defendant's Motion for Summary Judgment and Memorandum of Law in Support (Doc. 43), filed June 24, 2016;

7. Plaintiff's Opposition to Defendant's Motion for Summary Judgment (Doc. 56), filed July 22, 2016; and

8. Defendant's Reply to Plaintiff's Opposition to Defendant's Motion for Summary Judgment (Doc. 58), filed August 5, 2016.

OVERVIEW

This action arises from the alleged breach of a contract for the sale of powdered nutritional supplements for runners. Currently pending are motions for summary judgment by both parties and Defendant's motion to exclude Plaintiff's damages expert, Richard Rampell ("Rampell"). (See Docs. 40, 43, 47.) Though brevity is the soul of wit,¹ the expanse of disagreement between the parties necessitates a thorough summary of the facts underlying the instant dispute. To provide context for the details that follow, the Court begins with a brief overview of the facts.²

Early in 2014, Plaintiff Nutrimatix Inc. ("Nutrimatix") formulated a business plan to place promotional electrolyte sticks ("Electrolyte Sticks") in post-race meal boxes at the October 2014 Marine Corps Marathon ("MCM") held in Washington D.C. Nutrimatix intended to use the Electrolyte Sticks to drive traffic to a mobile fitness application("Fitness App"), where users could purchase one of eight customized nutritional supplements ("Custom Supplements") based on their nutritional needs.

Nutrimatix ordered the Electrolyte Sticks and Custom Supplements from Defendant Xymogen, Inc. ("Xymogen")—a manufacturer of vitamins and nutritional supplements, with its global headquarters in Orlando, Florida. The purchase orders specified expected delivery dates for the Electrolyte Sticks and Custom Supplements. Due to problems that arose during production, Xymogen was unable deliver the Electrolyte Sticks by the specified due dates or in time for the MCM. Instead, Xymogen delivered a portion of the original Electrolyte Stick order on December 9, 2014—in time for Nutrimatix to place the product in meal boxes at the Walt Disney World Marathon Weekend ("Disney Marathon") in January of 2015. By that time, Xymogen had delivered six of the eight Custom Supplement orders to Nutrimatix. But after receiving and verifying a customer complaint about the taste of one formula, Nutrimatix discontinued sales and brought suit against Xymogen for breach of contract and breach of warranty. In turn, Xymogen countersued for non-acceptance, non-payment, and wrongful rejection of the remaining Electrolyte Sticks and Custom Supplements.

On June 24, 2016, the parties each moved for summary judgment and to exclude the opposing party's expert witnesses ("Daubert Motions"). As intimated at the final pretrial conference ("PTC"), the profuse disagreements between the parties have complicated the Court's task in resolving the pending motions. Thus, at the PTC, the Court heard oral argument on the pending motions and issued rulings on a portion of the Daubert Motions. In addition, on January 4, 2017, the Court held an evidentiary hearing on Xymogen's motion to exclude the Rampell's damages testimony. The instantOrder memorializes the Court's rulings on these motions.

BACKGROUND

I. The Parties

Nutrimatix's chief executive officer ("CEO") Sergio Radovcic ("Radovcic") formed the company on March 11, 2014, with the goal of using a proprietary Fitness App to sell Custom Supplements to runners based on their nutritional needs. (Doc. 57, ¶¶ 2, 6.) Formulated by pharmacist Paul Sullivan ("Sullivan"), the Custom Supplements included the Male Basic formula, the Female Basic formula, the Male Inflammation formula, the Female Inflammation formula, the Male Sport formula, the Female Sport formula, the Male Total formula, and the Female Total formula. (See Doc. 57, ¶ 37; Doc. 1-1, p. 4.) To promote the Fitness App and garner sales, Radovcic intended to place free Electrolyte Sticks in post-race meal packages during the fall 2014 racing season, in conjunction with his preexisting company Fitful.³ (See Doc. 57, ¶¶ 4, 6, 14; see also Doc. 57-5, p. 1.)

To this end, and in light of his prior business relationship with Xymogen,⁴ Sullivan introduced Radovcic to Xymogen's executive vice president, Daniel Gulick ("Gulick"), on April 6, 2014 via e-mail. (Doc. 57, ¶ 5; see also Doc. 57-1, p. 2.) Due to Nutrimatix's mid-to-late summer launch targets, Sullivan advised Radovcic and Gulick to begin production discussions as soon as possible. (Doc. 57-1, p. 2.)

Four days later, Radovcic and Gulick met in person in Scottsdale, Arizona, where Radovcic explained his business plan to Gulick. (Doc. 57, ¶ 6; see also Doc. 56-1, p. 21; Doc. 43-9, ¶¶ 5, 9.) During the meeting, Gulick indicated that Xymogen could make Nutrimatix's products. (Doc. 57, ¶ 6.) Thereafter, the two arranged for Radovcic to tour Xymogen's Orlando facility on April 23, 2014. (See Doc. 56-1, p. 20; Doc. 57, ¶ 7.) During the tour, Xymogen's representatives—including CEO Brian Blackburn—confirmed that they could make the stick packs. (Doc. 57, ¶ 7.) Radovcic subsequently chose to use Xymogen as Nutrimatix's manufacturer. (Id.)

II. Purchase Orders

Following the tour, Radovcic began coordinating with Xymogen on the stick pack order. (Id.) In the interim, Xymogen sent Radovcic sample sticks of "the base Nutrimatix custom formula." (Doc. 57, ¶ 11.) Though Radovcic approved these samples, he also expressed some concerns—namely that: (1) "some fairly large particles" remained present in the mixture when diluted"; and (2) that the sample "seemed rather sweet" when mixed with eight ounces of water. (Doc. 57, ¶ 11; Doc. 57-5.) In the same e-mail, Radovcic told Gulick that he was "looking forward to getting the electrolyte samples and getting [them] ordered to meet [their] October race schedule." (Doc. 57-5, p. 1.) Radovcic also reminded Gulick that he intended to: (1) use 100,000 Electrolyte Sticks in race meals to promote Nutrimatix; and (2) launch the Fitness App at the same time. (Id.; Doc. 57, ¶ 11.)

On July 29, 2014, Nutrimatix sent Xymogen a purchase order for 150,000 orange-flavored Electrolyte Sticks at a total cost of $18,915 (Doc. 57-7 ("First Electrolyte Order"); see also Doc. 57, ¶ 13; Doc. 43-9, ¶ 23.) The First ElectrolyteOrder contained a due date of September 12, 2014. (Id.) Around this time, Gulick informed Radovcic: (1) that Xymogen had a maximum twelve-week production timeframe, beginning from the time Nutrimatix placed its order; and (2) that the Nutrimatix order would probably be finished within eight to nine weeks. (Doc. 57, ¶ 13.) Based on these representations, Radovcic assumed that Xymogen was already working within its twelve-week timeframe, as it had already finalized the formulas pending his tasting and approval, completed samples of the product, and begun creating labels for the stick packs. (Id.)

On this understanding, Nutrimatix e-mailed a purchase order for the Custom Supplements ("Custom Supplement Order") to Xymogen on August 11, 2014. (See Doc. 57-8 ("August 11 E-mail Chain") (documenting a chain of e-mails exchanged between Gulick and Radovcic on August 11, 2014); see also Doc. 57, ¶ 14.) Radovcic attached the Custom Supplement Order and the First Electrolyte Order to the August 11 E-mail, stating that he would wire a fifty-percent deposit on each Order the following day. (Doc. 57-8, p. 2.) Radovcic also asked Gulick to "confirm on [his] end that this [was] fine." (Id.) Gulick's response read: "Sergio all is good . . . wire the funds and let [sic] start rolling." (Id.)

Radovcic then sent Gulick an amended version of the Custom Supplement Order to reflect a pricing formula that Sullivan had discussed with Gulick. (Id. at 1.) As amended, the Custom Supplement Order requested 50,400 units of each formula at a total price of $107,911.44; it also contained an October 31, 2014 due date. (Doc. 57-8, p. 1.) In the August 11 E-mail Chain, Radovcic stressed that the "entire company depend[ed] on having the product ready as soon as humanly possible" and that heneeded to have "the electrolyte sticks to Fiftful for insertion into food boxes for promotion or . . . risk missing the big marathon season." (Id. at 3.) Radovcic also indicated the same sense of urgency with respect to the "regular sticks for Nutrimatix boxes"—i.e., the Custom Supplements. (Id.) Gulick did not object to due dates reflected in the purchase orders. (Doc. 57, ¶ 14.)

The next day, Nutrimatix wired a $63,412 deposit to Xymogen—$9,457 for the First Electrolyte Order and $53,955 for the Custom Supplement Order. (Doc. 57, ¶ 15; Doc. 57-9.)

III. Formal Quotes

Over the next two weeks, Radovcic received and approved taste test samples for each of the Custom Supplements. (Doc. 57, ¶ 16.) Once approved, Radovcic signed custom formula quotes for each Custom Supplement on August 20, 2014. (Doc. 57, ¶ 17; Doc. 57-11 ("Quotes").) The Quotes signed by Radovcic did not contain the quantity of product that Nutrimatix had ordered. (Doc. 57, ¶ 17.)...