Court Opinion

ID: 39725
Source: CourtListenerOpinion
Date Created: 2010-04-25 20:34:27+00
Date Added: 2024-06-11T12:35:12.968805
License: Public Domain

United States Court of Appeals
                                                                         Fifth Circuit
                                                                      F I L E D
                   UNITED STATES COURT OF APPEALS
                        For the Fifth Circuit                         October 20, 2005

                                                                  Charles R. Fulbruge III
                                                                          Clerk
                              No. 04-10532

                       MILLBROOK CORPORATION,

                                Plaintiff-Counter-Defendant-Appellee,

                                    VERSUS

               MEDICAL FINANCIAL SERVICES INC.; ET AL,

                                                                  Defendants,

                 DOUGLAS E. KASSAB and LAURA KLEIN,

                                                   Defendants-Appellants,

         EXIGENT MANAGEMENT COMPANY, INC. d/b/a CLINISOFT,

                                Defendant-Counter-Claimant-Appellant,

             Appeal from the United States District Court
         For the Northern District of Texas, Dallas Division
                             (3:01-CV-01343)

Before GARWOOD, SMITH, and DeMOSS, Circuit Judges.

PER CURIAM:*

     Defendants-Appellants     Exigent       Management   Co.,    Inc.     d/b/a

Clinisoft    (“Clinisoft”)    and    Douglas    Kassab    and    Laura     Klein

(collectively, “Appellants”) appeal the district court’s orders and

     *
      Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
entry    of   judgment      in   favor     of     Plaintiff-Appellee       Millbrook

Corporation (“Millbrook”) following a jury trial. Clinisoft argues

the court erred in: (1) denying judgment as a matter of law on

Millbrook’s quasi-contract claims in light of an express contract

between the parties; (2) denying judgment as a matter of law on

Millbrook’s fraud claim; and (3) denying Clinisoft a new trial on

its counterclaims.          The dispute arises out of a contract between

the parties for the resale of computer software licenses and

Clinisoft’s delinquency for invoices on the sale of annual upgrades

or renewals for the software.            We AFFIRM.

       Millbrook designed and marketed computer software for medical

service providers and sold its software through a network of

resellers. Clinisoft entered negotiations with Millbrook to become

a reseller, and the parties entered an agreement on September 10,

1997 (the “Agreement”) that provided for a nonexclusive right to

market licenses for the software to end users.                     The Agreement’s

term    was   one   year,    renewable        automatically,      unless   either   a

condition for termination was met or either party opted out of

renewal at the end of a term.            On June 7, 2001, Millbrook notified

Clinisoft     of    its   intent   to    terminate        based   upon   Clinisoft’s

nonpayment of amounts owing under the Agreement and to cease

provision of annual software upgrades to end users.                        Millbrook

notified Clinisoft of its timeliness with payments on licenses but

continuing     delinquency       on     the     upgrade    accounts.       Clinisoft

responded that the owing amounts were not for renewals sold, but

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rather for renewals billed by Millbrook prior to the annual date

relevant to each affected end user.                On July 2, 2001, Millbrook

notified Clinisoft of the termination of the Agreement for cause,

effective June 30, 2001.

     Millbrook       filed    its     complaint         in    state       court       against

Clinisoft, alleging breach of contract and unjust enrichment and

claiming damages related to unpaid invoices totaling $114,114.70.

Millbrook    also     claimed    Appellants       committed         fraud        by   falsely

categorizing       certain   licenses      for    use        in   order     to    obtain     a

discounted price, offered by Millbrook for licensees requiring only

partial use of the software’s capacity, and by submitting a false

order form on behalf of a nonexistent customer in order to obtain

the discounted price.           Upon removal, Millbrook supplemented its

complaint in federal court with claims of fraud and conspiracy to

commit fraud and additional quasi-contractual claims, including

quantum     meruit    and    breach      of     implied       promise.            Clinisoft

counterclaimed,       alleging      that      Millbrook’s         termination          of   the

Agreement    constituted        breach     of    contract         and     that    Millbrook

tortiously      interfered      with     Clinisoft’s          prospective             business

relationships by notifying Clinisoft’s customers of the contract

termination.

      On cross motions for partial summary judgment, a magistrate

judge recommended dismissal of Millbrook’s breach of contract claim

because   the      magistrate    concluded        the    plain       language          of   the

Agreement    did     not   create    a   procedure       by       which    Clinisoft        was

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required to order or pay for upgrades.             The magistrate also

recommended the denial of Clinisoft’s motion for summary judgment

on its breach of contract claim related to termination.                 The

district court accepted the magistrate’s recommendations.              The

remaining claims and counterclaims proceeded to jury trial. At the

conclusion of the evidence, the court granted Millbrook’s motion

for judgment as a matter of law as to Clinisoft’s cause of action

for tortious interference with contracts.

     The   remaining   claims   were   submitted   to   the   jury,   which

returned a verdict for Millbrook on its quasi-contract claims and

awarded damages in the amount of $114,114.70.             The jury also

returned a verdict in favor of Millbrook on the fraud claim, but

found no damages on that cause of action, and in favor of Millbrook

with respect to Clinisoft’s counterclaims for breach of contract

and tortious interference with prospective business relations.

Finally, the jury returned a verdict in favor of Clinisoft on

Millbrook’s conspiracy to commit fraud claim.

     After trial, Clinisoft moved for judgment as a matter of law

and/or new trial on all claims, and the court denied the motion.

This appeal timely followed. This Court reviews de novo a district

court’s denial of a motion for judgment as a matter of law.             DP

Solutions v. Rollins, 353 F.3d 421, 427 (5th Cir. 2003). “Judgment

as a matter of law is proper after a party has been fully heard by

the jury on a given issue, and there is no legally sufficient

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evidentiary basis for a reasonable jury to have found for that

party with respect to that issue.”        Id. (internal quotation marks

omitted).   “The decision to grant or deny a motion for new trial is

within the discretion of the trial court and will not be disturbed

absent an abuse of discretion or a misapprehension of the law.”

Prytania Park Hotel, Ltd. v. Gen. Star Indem. Co., 179 F.3d 169,

173 (5th Cir. 1999).

     Clinisoft argues Texas law, applicable by virtue of the

Agreement’s choice of law provision, precludes Millbrook from

stating a valid quasi-contract claim because the parties’ dispute

is governed by a valid express contract.           See U.S. Quest, Ltd. v.

Kimmons, 228 F.3d 399, 406 (5th Cir. 2000); see also Truly v.

Austin, 744 S.W.2d 934, 936 (Tex. 1988).             Clinisoft argues the

quasi-contract claim is based on precisely the same subject matter

as that covered by the express agreement between the parties.

Accordingly, Clinisoft argues it is entitled to judgment as a

matter of law on Millbrook’s quasi-contract claims.

     As to the fraud claim, Clinisoft argues that the evidence

failed to establish the materiality of the statements at issue,

that the evidence of reliance was insufficient, and that the jury’s

verdict assessing no damages on the fraud claim precludes, as a

matter of law, the satisfaction of the requisite injury element.

     With   respect   to   the   denial   of   a   motion   for   new   trial,

Clinisoft argues the district court abused its discretion because

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the   jury’s   verdict    is    the    result   of    passion   and    prejudice,

attributable to the court’s presentation of overlapping claims, the

quasi-contract and fraud claims, that prevented the jury from

adequately distinguishing between two or more mutually exclusive

theories of liability.         See Imperial Premium Fin., Inc. v. Khoury,

129 F.3d 347, 354 (5th Cir. 1997).

      After thorough review of the briefs, the oral arguments of the

parties, and review of relevant portions of the record, we conclude

the   district   court    did    not   abuse    its   discretion      in    denying

Clinisoft’s motion for new trial.            We AFFIRM the district court’s

denial of Clinisoft’s motion for judgment as a matter of law on the

quasi-contract claims and fraud claim and the district court’s

entry   of   judgment    for    Millbrook    for     essentially      the   reasons

provided by the district court.

AFFIRMED.

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