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Selective Med Components, Inc. v. Somaticare

March 15, 2007

SELECTIVE MED COMPONENTS, INC., PLAINTIFF,
v.
SOMATICARE, INC. DBA NATIONAL ACCESS MEDICAL, DEFENDANT.



The opinion of the court was delivered by: Judge Smith

Magistrate Judge Kemp

OPINION AND ORDER

This matter is before the Court on Plaintiff Selective Med Components, Inc.'s Motion for Summary Judgment (Doc. 42). Defendant has failed to respond to Plaintiff's Motion. For the reasons that follow, the Court GRANTS Plaintiff's Motion for Summary Judgment.

I. BACKGROUND

Plaintiff Selective Med Components, Inc. is an Ohio corporation that manufactures and sells disposable adhesive electrodes and related products for use by the medical industry for diagnostic and electro-stimulation purposes. Defendant Somaticare is a Texas limited liability company that buys medical products for resale to its customers. Mr. Malcolm, who was originally named as a defendant, but dismissed for lack of personal jurisdiction, is the president and sole member of Somaticare and is a resident of Texas.

In January 2002, the President of Selective Med Components, Richard Fisher, contacted Mr. Malcolm to inquire about Somaticare's interest in purchasing medical products from Selective Med Components. Somaticare did not make any product purchases at that time. Later, in June 2002, another representative from Selective Med Components in Denver, Colorado contacted Somaticare about Somaticare's interest in purchasing medical products from Selective Med Components. As a result of this contact, Somaticare placed one or two orders for Selective Med Components products through Selective Med Components' Denver, Colorado representative.

Somaticare had no further contact with Selective Med Components until April 2003, when Kevin Faulkner, a sales representative independent of Selective Med Components, contacted Somaticare about purchasing Selective Med Components electrodes. In order to facilitate the purchase of Selective Med Components products, Mr. Faulkner arranged for Somaticare to submit a credit application to Selective Med Components and arranged for a guaranty, which Mr. Malcolm signed. As a result of the contact by Mr. Faulkner, Somaticare began placing orders for Selective Med Components products on credit through Mr. Faulkner's office in Chattanooga, Tennessee. Mr. Faulkner would then place the order with Selective Med Components in Ohio. Somaticare received invoices and made payments to Selective Med Components in Ohio.

In December 2003, Somaticare began placing orders directly with Selective Med Components in Ohio. At some point after credit was extended to Somaticare and Somaticare purchased products from Selective Med Components on credit, Somaticare fell behind in its payments on this line of credit. In April 2004, Somaticare ceased purchasing Selective Med Components products because it had been receiving complaints from its customers that Selective Med Components' electrodes were falling apart or failed to function properly. By April 2004, Somaticare owed $121,682.99 to Selective Med Components, of which $27,751.24 was past due. Because of this failure to pay sums past due, Selective Med Components claims that Somaticare is in breach of its agreement with Selective Med Components.

Consequently, on April 28, 2004, Selective Med Components filed suit against Somaticare and Mr. Malcolm, as guarantor of the credit line, in the Knox County, Ohio Court of Common Pleas for judgment in the amount of $121,682.99, pre-judgment interest at the rate of 10 percent per annum, and costs and post-judgment interest at the rate of 10 percent per annum until the judgment is fully paid. On June 21, 2004, Defendants removed the action to this Court on the basis of diversity jurisdiction. Defendants then moved to dismiss the case for lack of personal jurisdiction, or alternatively, for transfer of venue which was granted in part and denied in part, dismissing Mr. Malcolm from the case, but retaining jurisdiction over Somaticare..

Plaintiff moved for summary judgment on July 6, 2006. Defendant has failed to respond. In fact, Defendant's previous counsel withdrew from the case and it does not appear that Somaticare is currently represented. However, it does appear from the Court's docket that Defendant Somaticare was properly served with a copy of Plaintiff's Motion for Summary Judgment. Therefore, in light of Plaintiff's failure to respond, the Court's reliance on the facts offered by the movant is proper and sufficient. Guarino v. Brookfield Township Trustees, 980 F.2d 399 (6th Cir. 1992).*fn1

II. SUMMARY JUDGMENT STANDARD

The standard governing summary judgment is set forth in Fed. R. Civ. P. 56(c), which provides:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

Summary judgment will not lie if the dispute about a material fact is genuine; "that is, 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). Summary judgment is appropriate, however, if the opposing party fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial. Celotex Corp. v. ...


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