United States District Court, E.D. Michigan, Southern Division
AND ORDER GRANTING IN PART AND DENYING IN PART
PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT  AND GRANTING
IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR
SUMMARY JUDGMENT 
STEPHEN J. MURPHY, III United States District Judge
February 7, 2017, Plaintiff Intuitive Surgical Operations,
Inc. ("Intuitive") filed a two-count complaint
against Defendant Midbrook, LLC ("Midbrook"). Based
upon successor-liability and breach-of-contract theories,
Intuitive claimed that Midbrook owed monetary payment and
attorney's fees pursuant to a loan agreement. The parties
each filed a motion for summary judgment. The Court closely
reviewed the briefs and finds that a hearing is unnecessary.
For the reasons stated below, the Court will grant in part
and deny in part Plaintiff's motion for summary judgment,
and grant in part and deny in part Defendant's motion for
Inc. ("MINC") produced washer products. Intuitive
was interested in an ultrasonic medical device washer
product. MINC did not have the money to produce it. Intuitive
loaned MINC $583, 120 pursuant to a loan agreement
("Loan") dated December 30, 2013. The loan required
MINC to repay Intuitive the full amount plus interest within
2014, MINC experienced financial hardship. Two banks sought
to protect their interests; MINC and the banks stipulated to
placing MINC into a receivership. The receiver's
responsibilities included marketing and selling MINC's
assets and liabilities.
December 18, 2014, Defendant Midbrook-known as MDBRK at the
time- entered into an $872, 000 Asset Purchase Agreement
("APA") with the receiver. Midbrook purchased some
of MINC's assets, but excluded assets related to
MINC's medical division. Midbrook and the receiver
completed the deal at a closing the next day.
included provisions related to Midbrook's purchase of
assets and assumption of liabilities. Midbrook purchased the
following "Business Assets": (1) all of MINC's
tangible personal property; (2) $175, 000 in cash, other cash
equivalents, and receivables; (3) all intangible property
used in the Business; (4) certain naming rights; and (5)
"all other assets" of MINC "that exist as of
the Closing excluding those . . . described in Exhibit J
hereto and/or otherwise excluded" by the APA. ECF 21-6,
PgID 165-67 (referencing clauses 1.1.1-1.1.3,
1.1.5-1.1.6). The APA thus covered certain tangible
personal property, id. at 180, and certain
intangible business properties, id. at 181. The
APA's assets provisions excluded certain medical assets
associated with a list of products, including the product
developed with the money from Intuitive's Loan.
Id. at 183.
also assumed liabilities under the APA. First, it assumed all
"leases, contracts, agreement, and commitments"
related to a postage machine and two Xerox copiers.
Id. at 166, 182.
Midbrook disclaimed liability for any of MINC's other
liabilities "except only for" the
following set of liabilities:
1.3(a)-"those trade payables and other liabilities
specifically identified on Exhibit F," and
1.3(c)-"any executory obligations of [MINC's]
continued performance arising in the ordinary course of
business under any contracts and commitments that become
performable or payable on or after the Closing Date[.]"
Id. at 167. Exhibit F, however, did not identify any
specific liabilities. Id. at 184.
the terms of the Loan, MINC owed payment no later than
December 30, 2014. When MINC failed to repay the loan,
Intuitive on June 17, 2016 obtained a default judgment
against MINC in the United States District Court for the
Northern District of California. After receiving the default
judgment against MINC, Intuitive sued Midbrook and alleged
that Midbrook assumed MINC's payment obligations for the
Loan either as a successor to MINC or pursuant to provision
1.3(c) of the APA. The parties filed cross-motions for
summary judgment, which the Court addresses now.
judgment is warranted "if the movant shows 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 fact is "material" for purposes of summary
judgment if proof of that fact would establish or refute an
essential element of the cause of action or defense.
Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.
1984). A dispute over material facts is "genuine"
"if 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). To
show that a fact is, or is not, genuinely disputed, both
parties are required to either "cite to particular
parts of materials in the record" or "show that
the materials cited do not establish the absence or presence
of a genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact." Fed.R.Civ.P.
considering cross-motions for summary judgment, a court
"must evaluate each motion on its own merits and view
all facts and inferences in the light most favorable to the
nonmoving party." Westfield Ins. Co. v. Tech Dry,
Inc., 336 F.3d 503, 506 (6th Cir. 2003).
Plaintiff's Motion for Summary Judgment
moved for summary judgment only for its breach-of-contract
claim. See ECF 21, PgID 139. The Court applies
Michigan Law because of the APA's choice-of-law
provision. ECF 21-6, PgID 175. See DP Precise, LLC v.
Phoenix Ins. Co., No. 13-cv-12397, 2014 WL 12572733, at
*4 (E.D. Mich. Mar. 31, 2014).
interpretation seeks "to give effect to the parties'
intention at the time they entered into the contract."
Innovation Venture v. Liquid Mfg., 499 Mich. 491,
507 (2016) (quotation marks omitted). "Absent an
ambiguity or internal inconsistency, contractual
interpretation begins and ends with the actual words of the
written agreement." Id. (quoting Universal
Underwriters Ins. Co. v. Kneeland, 464 Mich. 491, 496
(2001)). Courts examine "the language of the contract
according to its plain and ordinary meaning."
Miller-Davis Co. v. Ahrens Const., Inc., 495 Mich.
161, 174 (2014).
examination should consider the contract "as a whole,
'giving harmonious effect, if possible, to each word and
phrase.'" Superior Comm'cns v. City of
Riverview, 881 F.3d 432, 438 (6th Cir. 2018) (citing
Wilkie v. Auto-Owners Ins. Co., 469 Mich. 41, 50
n.11 (2003)). Further, courts "avoid an interpretation
that would render any portion of the contract nugatory."
Miller-Davis, 495 Mich. at 174. Summary judgment is
appropriate if the contract is clear and unambiguous.
Superior Comm'cns, 881 F.3d at 438 (citing
City of Grosse Pointe Park v. Mich. Mun. Liab. &
Prop. Pool, 473 Mich. 188, 198 (2005)).
contends that a single sentence in the "Liabilities
Assumed" section of the APA provides evidence that
Midbrook assumed liability for the Loan. Defendant responds
that-taken as a whole-the contract precludes Plaintiff's
interpretation. Defendant further argues that the Loan is not
an executory obligation and is not of MINC's continued
resolve the dispute, the Court must answer two questions.
First, does the APA include liabilities unrelated to the
Business? Second, if so, is the Loan a qualifying liability?
APA Covers Liabilities Unrelated to the Business.
1.3(c) and the APA as a whole indicate that Midbrook assumed
even those ...