Plante & Moran, PLLC v. Andover Healthcare, Inc.

PLANTE & MORAN, PLLC, Plaintiff, v. ANDOVER HEALTHCARE, INC., Defendant.

Civil Action No. 17-10093-DJC

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

November 13, 2018

MEMORANDUM AND ORDER

CASPER, J.

I. Introduction

Plaintiff Plante & Moran, PLLC ("PM") has filed this lawsuit against Defendant Andover Healthcare, Inc. ("Andover"), alleging breach of contract (Count I), breach of implied contract (Count II), breach of oral contract (Count III), unjust enrichment (Count IV), account stated (Count V) and quantum meruit (Count VI). D. 1. Following this Court's order partially allowing PM's motion to dismiss, D. 29, Andover's surviving counterclaims include breach of contract (Count I) and unfair and deceptive acts in violation of Mass. Gen. L. c. 93A, §§ 2, 11 ("Chapter 93A") (Count IV). D. 5 at 6-9. PM now moves for summary judgment as to Counts I-IV, Count VI and Andover's counterclaims. D. 30. Andover moves to strike PM's supporting affidavits. D. 37-3; D. 37-4. For the reasons stated below, the Court ALLOWS IN PART and DENIES IN PART PM's summary judgment motion, D. 30, and DENIES Andover's motions to strike, D. 37-3; D. 37-4.

II. Standard of Review

A. Summary Judgment

"Summary judgment is properly granted if the movant can demonstrate that 'there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law.'" Miranda-Rivera v. Toledo-Dávila, 813 F.3d 64, 69 (1st Cir. 2016) (quoting Fed. R. Civ. P. 56(a)). "A genuine issue is one that can 'be resolved in favor of either party' and a material fact is one which 'has the potential of affecting the outcome of the case.'" Gerald v. Univ. of P.R., 707 F.3d 7, 16 (1st Cir. 2013) (quoting Pérez-Cordero v. Wal-Mart P.R., Inc., 656 F.3d 19, 25 (1st Cir. 2011)). If the movant meets its burden, the non-moving party "must, with respect to each issue on which she would bear the burden of proof at trial, demonstrate that a trier of fact could reasonably resolve that issue in her favor." Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 5 (1st Cir. 2010). "Neither party may rely on conclusory allegations or unsubstantiated denials, but must identify specific facts derived from the pleadings, depositions, answers to interrogatories, admissions and affidavits to demonstrate either the existence or absence of an issue of fact." Magee v. United States, 121 F.3d 1, 3 (1st Cir. 1997). In conducting this inquiry, the Court "view[s] the record in the light most favorable to the nonmovant, drawing reasonable inferences in his favor." Noonan v. Staples, Inc., 556 F.3d 20, 25 (1st Cir. 2009).

B. Motions to Strike Affidavits

Under Rule 56(c), "[a]n affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated." Fed. R. Civ. P. 56(c)(4). The "requisite personal knowledge must concern facts as opposed to conclusions, assumptions, or surmise." Perez v. Volvo Car Corp., 247 F.3d 303, 316 (1st Cir. 2001). At summary judgment, the Court "may take into account any material that would be admissible or usable at trial," and"inadmissible evidence may not be considered." Horta v. Sullivan, 4 F.3d 2, 8 (1st Cir. 1993). "A motion to strike is the appropriate means of objecting to the use of affidavit evidence on a motion for summary judgment" and if the Court finds only certain portions of an affidavit inadmissible, the Court will disregard only those portions and consider the rest of it. Facey v. Dickhaut, 91 F. Supp. 3d 12, 19-20 (D. Mass. 2014).

III. Factual Background

The following facts are drawn primarily from the parties' statements of material facts, D. 32; D. 37-1, and are undisputed unless otherwise noted.

Andover manufactures medical products, such as cohesive elastic bandages. D. 37-2 at 6-8. PM is a consulting firm based in Michigan. D. 1 ¶ 1. Andover and PM entered into three written contracts between late July 2015 and December 2015. D. 32 ¶¶ 1-53; D. 33-2; D. 33-6; D. 33-9. The first contract, signed August 5, 2015, was a flat fee agreement and is not at issue here. D. 32 ¶ 7; see D. 1 ¶¶ 54-89; D. 5 ¶¶ 10-12, 15-16. This contract was entered into by Thomas Murphy, founder and president of Andover, and Phillip C. Brown, a partner at PM, D. 32 ¶ 3; D. 35 ¶¶ 2-4; D. 37-1 ¶ 2; D. 37-2 at 10, and provided that Andover would pay PM $35,000 for a three-day period of consulting services, plus expenses. D. 32 ¶¶ 4-5. See D. 33-3. PM billed Andover the $35,000 on August 17, 2015, D. 33-4, which Andover paid. D. 32 ¶¶ 6, 8.

A. The Second Contract

On September 11, 2015, the parties entered into a second contract, under which PM agreed to perform initial support services related to Andover's Master Validation Plan ("MVP"), including "deploying, training, coaching and performing validation of manufacturing and test equipment and processes," D. 33-6 at 5. D. 32 ¶¶ 10-11; D. 37-1 ¶ 1. The second contract, like the first, was signed by Murphy on Andover's behalf and Brown on PM's behalf. D. 32 ¶¶ 12-13; D. 35 ¶¶ 5-6; D. 37-1 ¶ 2. The second contract "was for six weeks of work," D. 32 ¶ 14; D. 37-1¶ 3; D. 33-6 at 10, and states that the "core project team will consist of two team members participating in six visits to Andover Healthcare." D. 33-6 at 10. The contract page titled "Project Fees" breaks down "[e]stimated fees" as follows:

Estimated fees are $100,000 for six weeks. Expenses will be billed at cost. Estimated fees are based on the following average hourly rates:

Partner/Principal: $415

Manager: $190

Senior Consultant: $175

Id. On the next line of the same page, the contract states that "[a]fter the initial six weeks of work, Andover Healthcare and Plante Moran will determine whether additional support is needed for validation, and to what extent," to be "billed at the same rates noted above." Id. The same provision states that "[i]nvoices will be rendered as services are provided and are due when received. In the event an invoice is not paid timely, a late charge in the amount of 1.25% per month will be added, beginning 30 days after the date of the invoice." Id. Additionally, paragraph five of the contract addendum, labeled "Fee Quotes," states that "PM will endeavor to advise Andover Healthcare in the event" that unforeseen circumstances occur requiring PM to reschedule its work and impose additional fees, in accordance with the hourly rates provided and costs incurred, "however it is acknowledged that the exact impact on the Fee Quote may not be determinable until the conclusion of the engagement." D. 33-6 at 12.

After the six-week period specified in the second contract, the parties communicated about the services PM was providing. D. 32 ¶ 20; D. 37-1 ¶ 13; D. 33-6 at 10. PM contends that Andover then requested additional support for the MVP, relying upon an affidavit by William Morrison, Andover's Director of Operations and Quality at the time, in which Morrison asserts that he authorized PM to "devote additional time and resources to tasks included within the scope of the Second Contract," D. 34 ¶ 13. D. 32 ¶¶ 20-21, 25. Andover agrees that "[a]t the conclusion of theSecond Contract, the parties agreed to continue the work."¹ D. 37-1 ¶ 15; Cf. D. 37-1 ¶¶ 12-14. Andover contends, however—and PM does not dispute—that Brown, Murphy and other Andover employees spoke on a conference call in late October 2015, after the six week period, during which Brown failed to provide Andover with PM's fees up to that point. D. 37-1 ¶ 13. According to Brown's deposition, however, he did provide an estimate of the "hours that were expended, the rate for those hours, and travel that had been expended up to that point." D. 37-2 at 61. PM "maintains a billing system" by which each PM employee must log their time, which they are able to do remotely, and PM can access this system at any time. D. 37-1 ¶¶ 9-11.

Additionally, during the period covered by the second contract—the six weeks from mid-September to late October 2015—Murphy and Morrison requested services from PM outside the parameters of the second contract ("Initial Supplemental Services"). D. 32 ¶ 26. Andover contends that "there is considerable factual dispute about the amount of this work and about whether other work was inside or outside the scope of the Contracts," D. 37 at 9, relying upon Murphy's deposition testimony, in which he states that Morrison was not authorized to request such work on Andover's behalf, D. 37-2 at 21-34, and that certain tasks specified by PM as "additional services," see D. 32 ¶¶ 26(e)-(i), were actually "within the scope of the work" of the contract itself, D. 37-2 at 27-31.

The Initial Supplemental Services required an additional forty hours of work by PM. D. 32 ¶ 27. PM's work on the second contract, including the Initial Supplemental Services and the work conducted between October 25 and December 5, amounted to a total of over 600 hours ofprofessional time. D. 32 ¶ 19; D. 35-1 at 5-6. Andover submits Murphy's affidavit here, in which he denies giving Morrison any actual authority to direct PM's work beyond the scope of any contract. See D. 37-2 at 22-27, 31. On February 9, 2016, PM provided Andover with an invoice associated with the second contract, including the Initial Supplemental Services, totaling $206,292.67, including $179,860.00 for professional services and $26,432.67 for expenses. D. 32 ¶ 29; D. 33-8; D. 37-1 ¶ 20. Andover has not paid any portion of this invoice. D. 32 ¶ 31.

B. The Third Contract

About a month after the second contract's six-week term expired, on December 4, 2015, the parties entered into a third contract for services connected with implementing the MVP and training Andover personnel. See D. 32 ¶ 32; D. 37-1 ¶ 15. Murphy negotiated the contract with Brown and authorized Morrison to sign it on Andover's behalf. D. 32 ¶¶ 33-35; D. 37-1 ¶¶ 15-19. The third contract...