Preview
FILED
DALLAS COUNTY
11/17/2015 2:38:15 PM
FELICIA PITRE
DISTRICT CLERK
No. DC-15-08587
§
LOW T CENTER, LLC, § IN THE DISTRICT COURT OF
§
Plaintiff, §
§
v. § DALLAS COUNTY, TEXAS
§
BECKMAN COULTER, INC., §
§
Defendant. § 191ST JUDICIAL DISTRICT
BECKMAN COULTER, INC.’S
ANSWER AND DEFENSES, SPECIAL EXCEPTIONS, AND MOTION
FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION
TO THE HONORABLE JUDGE OF SAID COURT:
Beckman Coulter, Inc. (“BCI”) hereby files its (i) Answer and Defenses to Plaintiff’s
First Amended Petition; (ii) Special Exceptions to Plaintiff’s First Amended Petition; and (iii)
Motion for Partial Dismissal of Plaintiff’s First Amended Petition.
I. BCI’S ORIGINAL ANSWER AND DEFENSES
A. General Denial
1. Pursuant to Texas Rule of Civil Procedure (“TRCP”) 92, BCI generally denies
each and every allegation asserted in Plaintiff Low T’s First Amended Petition, and demands
strict proof thereof by a preponderance of the evidence.
B. Defenses & Affirmative Defenses
2. BCI pleads the following defenses. By pleading these defenses, BCI does not
assume the burden of proof on any defenses for which it would not otherwise have the burden of
proof under Texas law.
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3. Barred by Plain Language. Defendant alleges that Defendant is not liable in
whole or in part to Plaintiff because its claims are barred by the plain language of the parties’
contract.
4. Failure to Perform Conditions Precedent. Defendant further alleges that
Defendant is not liable in whole or in part to Plaintiff because of a failure to perform conditions
precedent.
5. Set off / Offset. Defendant further alleges that Defendant is not liable in whole or
in part to Plaintiff because any amounts allegedly owed to Plaintiff must be set off or offset by
the amounts Plaintiff owes to Defendant.
6. Failure to Mitigate Damages. Defendant further alleges that Defendant is not
liable in whole or in part to Plaintiff because of Plaintiff’s failure to mitigate damages.
7. Material Breach. Defendant further alleges that Defendant is not liable in whole
or in part to Plaintiff because Plaintiff’s claims are barred because it has materially breached the
contracts under which they seek to recover.
8. Repudiation. Defendant further alleges that Defendant is not liable in whole or in
part to Plaintiff because of Plaintiff’s repudiation.
9. Estoppel. Defendant further alleges that Defendant is not liable in whole or in
part to Plaintiff because of estoppel.
10. Ratification. Defendant further alleges that Defendant is not liable in whole or in
part to Plaintiff because its claims are barred because Plaintiff has ratified or otherwise consented
to the actions upon which their claims are based.
11. Unclean Hands. Defendant further alleges that Defendant is not liable in whole
or in part to Plaintiff because its claims are barred by the doctrine of unclean hands.
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12. Laches. Defendant further alleges that Defendant is not liable in whole or in part
to Plaintiff because its claims are barred by the doctrine of laches.
13. Waiver. Defendant further alleges that Defendant is not liable in whole or in part
to Plaintiff because its claims are barred by the doctrine of waiver.
14. Truth of Statement / No Misrepresentation. Defendant further alleges that
Defendant is not liable in whole or in part to Plaintiff because its claims are barred by the truth of
Defendant’s statements and no misrepresentation.
15. No Reliance. Defendant further alleges that Defendant is not liable in whole or in
part to Plaintiff because its claims are barred by Plaintiff’s lack of actual and justifiable reliance
on any alleged misrepresentations.
16. Knowledge of Facts. Defendant further alleges that Defendant is not liable in
whole or in part to Plaintiff because its claims are barred by Plaintiff’s knowledge of facts.
17. At-Fault. Defendant further alleges that Defendant is not liable in whole or in
part to Plaintiff because its claims are barred by Plaintiff being at-fault.
II. BCI’S SPECIAL EXCEPTIONS TO PLAINTIFF’S FIRST AMENDED PETITION
18. Low T’s First Amended Petition contains causes of action for (i) breach of duty of
good faith and fair dealing; (ii) breach of contract; and (iii) “fraud and fraudulent inducement.”
The First Amended Petition also requests declaratory relief.
19. Pursuant to TRCP 91, BCI specially excepts to Low T’s First Amended Petition
because it fails to provide sufficient facts and fair notice regarding Low T’s (i) breach of duty of
good faith and fair dealing claim(s); (ii) breach of contract claim(s); (iii) fraud and/or fraudulent
inducement claim(s); and (iv) requested declaratory relief. Also pursuant to TRCP 91, as well as
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TRCP 47, BCI specially excepts to the First Amended Petition not stating the maximum amount
of relief claimed.
A. Legal Standard
20. A plaintiff is required to give the defendant “sufficient . . . fair notice of the claim
involved.” TEX. R. CIV. P. 47(a). When a plaintiff fails to do so, a defendant may use a special
exception to challenge the sufficiency of a pleading. Baylor Univ. v. Sonnichsen, 221 S.W.3d
632, 635 (Tex. 2007). A special exception should “point out the particular pleading excepted
to,” as well as “the defect, omission, obscurity, duplicity, generality, or other insufficiency in the
allegations.” TEX. R. CIV. P. 91.
21. Trial courts have broad discretion to grant special exceptions. Sonnichsen, 221
S.W.3d at 635; see also Gatten v. McCarley, 391 S.W.3d 669, 673 (Tex. App.—Dallas 2013, no
pet.) (noting that the trial court’s granting of a special exception is only overturned for abuse of
discretion). “If a pleading does not state a cause of action, the trial court does not err in
dismissing the entire case.” Gatten, 391 S.W.3d at 674 (citing Pack v. Crossroads, Inc.,
53 S.W.3d 492, 507 (Tex. App.—Fort Worth 2001, pet. denied); Cole v. Hall, 864 S.W.2d 563,
566 (Tex. App.—Dallas 1993. writ dism’d w.o.j.)). While a trial court must typically allow the
pleader an opportunity to amend after it sustains special exceptions, no such requirement exists if
“the pleading defect is of a type that amendment cannot cure.” Sonnichsen, 221 S.W.3d at 635;
see, e.g., id. (“Because [Plaintiff] could not have corrected this problem by repleading, the trial
court did not abuse its discretion by sustaining [Defendant’s] special exceptions and dismissing
this breach of contract claim.”).
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B. Arguments & Authorities
1. Low T’s Breach of Duty of Good Faith
and Fair Dealing Claim(s)
22. Plaintiff’s First Amended Petition pleads insufficient, general facts to allege its
breach of duty of good faith and fair dealing claim(s), with the First Amended Petition failing to
either adequately allege or provide BCI with fair notice regarding this claim from the single
paragraph1 in the First Amended Petition’s section on this claim or any other paragraphs. 2 (See
Pl.’s 1st Am. Pet. ¶ 22[a]; see generally id. ¶¶ 8-20.)
23. Low T makes the bald assertion that the contract between BCI and Low T—
presumably referring to the July 1, 2013 agreement, including its amendments, between BCI and
Low T (the “Master Pricing Agreement,” attached hereto as Exhibit 1)—was an exclusive
dealing contract. (See Pl.’s 1st Am. Pet. ¶ 12.). Neither Paragraph 22(a) nor any other paragraph
in the First Amended Petition, however, provides any reference to contract provisions or other
non-conclusory allegations supporting this conclusion.
24. For example, the First Amended Petition fails to identify any contract provision in
the Master Pricing Agreement that has been breached. The First Amended Petition also fails to
identify any specific instances or actions taken by BCI (i) prohibiting Low T from renting
laboratory equipment for diagnostic purposes from vendors other than BCI; (ii) prohibiting Low
T from buying reagents or supplies from other vendors to be used with the rented Access 2 or
1
Plaintiff’s First Amended Petition contains two different paragraphs erroneously labeled as the twenty-second
paragraph—the first pertaining to its breach of duty of good faith and fair dealing cause of action and the second
pertaining to its breach of contract cause of action. To limit confusion, BCI’s Special Exceptions shall hereafter
refer to these two paragraphs as “Paragraph 22[a]” and “Paragraph 22[b].”
2
Plaintiff’s First Amended Petition fails to specify which, if any, of the “Facts” paragraphs should be incorporated
into the stated causes of action. For Plaintiff’s benefit, BCI’s Special Exceptions will assume Plaintiff intended to
incorporate all “Facts” paragraphs into each of their causes of action.
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with other vendors laboratory equipment; or (iii) prohibiting Low T from using third-party
services to provide diagnostic testing for Low T.
25. The First Amended Petition also contains allegations that appear to contradict the
First Amended Petition’s conclusory and general allegation that BCI “required [Low T] to
refrain from dealing with competitors, and to purchase all supplies and reagents over the
following five years from [BCI].” Specifically, Paragraph 22[a] alleges that, because of BCI’s
alleged failure to provide supplies or equipment service, Low T allegedly incurred extra costs
“outsourcing laboratory testing, purchasing replacement equipment, and . . . [having] to contract
[with companies other than BCI] at higher rates.” (See Pl.’s 1st Am. Pet. ¶ 22[a].).
26. Additionally, under California law—the law applicable to the Master Pricing
Agreement, per section V.14.0 (“Governing Law”), Ex. A at 27—for a claim of breach of
implied duty of good faith and fair dealing to not be duplicative of a breach of contract claim, the
plaintiff must allege “that the defendant acted in bad faith to frustrate the benefits of the alleged
contract.” Davis v. Capitol Records, LLC, No. 12-CV-1602 YGR, 2013 WL 1701746, at *4
(N.D. Cal. Apr. 18, 2013). Plaintiff’s First Amended Petition, however, offers no allegations
whatsoever that BCI acted in bad faith, nor does it provide any detail regarding how BCI acted in
bad faith to frustrate the benefits of the contract, in Paragraph 22[a] or elsewhere. While Low T
contends BCI was acting in “bad faith” when BCI sent Low T an invoice for $5,845,145.68 on
October 29, 2015, (see Pl.’s 1st Am. Pet. ¶ 20), this invoice was following the plain language of
the contract, and not frustrating the terms, purpose, or benefits of the contract.
27. Because the First Amended Petition offers no fair notice of the nature of any such
duty of good faith and fair dealing or its breach, as well as failing to adequately allege a viable
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claim for any such breach, BCI specially excepts to Paragraph 22[a], and any other paragraph
that Plaintiff contends relates to this claim in Plaintiff’s First Amended Petition.
28. BCI requests the Court sustain BCI’s special exception and dismiss the good faith
and fair dealing claim unless Low T can (a) allege sufficiently specific facts showing how the
Master Pricing Agreement was an exclusive dealing contract, (b) allege sufficiently specific facts
showing that BCI took actions to prevent Low T from obtaining diagnostic equipment, reagents
or supplies, or diagnostic services from other vendors or provides, and (c) allege sufficiently
specific facts showing how BCI acted in bad faith to frustrate the benefits of the contract.
2. Low T’s Breach of Contract Claim(s)
29. Plaintiff’s First Amended Petition pleads insufficient, general facts to allege its
breach of contract claim(s), as contained in the petition’s second Paragraph 22 (“Paragraph
22[b]”)3 or any other paragraphs. (See Pl.’s 1st Am. Pet. ¶ 22[b]; see generally id. ¶¶ 8-20.)
30. The First Amended Petition’s breach of contract section contains the following
single and conclusory support:
“Defendant has materially and substantively breached its contractual obligations.
Plaintiff sues for breach of contract, and recovery of its actual, economic, and
consequential damages caused by the Defendant’s breach. Plaintiff further sues to
recover its reasonable and necessary attorneys fees pursuant to Chapter 38 of the Texas
Civil Practice and Remedies Code.” (Pl.’s 1st Am. Pet. ¶ 22[b].)
31. The Court is forced to comb through the First Amended Petition for support,
which is improper. Even then, the support is lacking. In the First Amended Petition’s “FACTS”
section, Low T, at best, alleges only that Low T and BCI entered into an agreement. Yet the
First Amended Petition offers no fair notice for any breach claims because it fails to allege basic
details regarding what provision(s) of the Master Pricing Agreement, if any, BCI allegedly
3
See supra note 1.
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violated; when, if ever, BCI allegedly violated such provisions; how, if at all, BCI allegedly
violated such provisions; and what damages, if any, Low T allegedly suffered as a result of all
the purported instances of breach.
32. For example, Paragraph 16 alleges that at some unidentified point in time after
BCI sent an invoice to Low T, a third-party distributor “notified [Low T] that [BCI] was refusing
to permit [a third-party distributor] to distribute supplies to [Low T], or service the remaining
equipment in the field, at any other Low T Center location, thus materially threatening the
business of Plaintiff, and breaching the agreement.” (Pl.’s 1st Am. Pet. ¶ 16.) The First
Amended Petition, however, fails to offer any specific reference to the contract provision(s) at
issue, how that provision was breached, and how BCI is involved in the alleged breach. The
First Amended Petition also fails to offer any concrete allegations regarding the damages this
alleged breach caused, merely offering the bald assertion that the alleged actions of BCI, as told
to Low T by a third-party, was “materially threatening the business of [Low T].” (Pl.’s 1st Am.
Pet. ¶ 16.) Lastly, Paragraph 16 fails to offer such basic allegations regarding whether any Low
T locations were even requesting supplies or the servicing of equipment from BCI at this point in
time regarding this alleged occurrence of breach. In other words, the claimed breach of contract
in Paragraph 16 fails to offer BCI any notice of when such an alleged breach occurred, which
provisions of the contract it involved, and what (if anything) Low T was deprived of.
33. An additional allegation of breach is contained in Paragraph 17 of the First
Amended Petition. Paragraph 17 contends that additional actions by BCI “further materially
breached the parties’ agreement,” (Pl.’s 1st Am. Pet. ¶ 17.), but it is wholly unclear whether
Plaintiff Low T is claiming this alleged material breach is a part of the previously alleged breach
or a separate alleged instance of breach. Additionally, like Paragraph 16, Paragraph 17 fails to
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offer any basic details regarding the timeline for when this alleged breach occurred, what
contract provisions were involved, and which Low T site locations were affected by the alleged
breach and how.
34. A final allegation of breach is outlined in Paragraphs 18 and 19 of the First
Amended Petition. These paragraphs suffer from the same malady—they still fail to allege basic
details regarding the contract provisions at issue and which, if any, Low T locations were
affected by this alleged breach.
35. Additionally, the First Amended Petition further clouds these deficient and overly
general breach of contract allegations by simultaneously alleging that the agreement between
BCI and Low T was illegal, with vague allegations that BCI and the agreement between BCI and
Low T violates unspecified antitrust laws. See, e.g., Pl.’s 1st Am. Pet. ¶ 11-12, 20 (mis-
describing the basic operation of a reagent rental agreement in an apparent attempt to label the
agreement between Low T and BCI as an illegal tying arrangement).
36. Plaintiff’s First Amended Petition also states the bald assertion that Low T
suffered consequential damages, (see Pl.’s 1st Am. Pet. ¶ 22[b].), without providing specific
allegations regarding these damages are, as required by TRCP 56.
37. Because Low T offers no fair notice of the nature of any such breaches, and in
particular provides no support for the basis of its consequential damages, BCI specially excepts
to paragraph 22[b] and any other paragraph that Plaintiff contends relates to the breach of
contract cause of action in Plaintiff’s First Amended Petition.
38. BCI requests the Court sustain BCI’s special exception and require Low T to
provide sufficient allegations regarding what provisions in the Master Pricing Agreement Low T
is claiming BCI breached, how and when BCI allegedly breached these provisions, and how
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Low T suffered damages as a result of BCI’s alleged breach, with basic detail as required to
sufficiently allege a breach of contract claim and additional detail as required by TRCP 56 as to
Low T’s request for consequential damages. Additionally, BCI requests the Court require BCI to
provide sufficient, coherent allegations regarding how its contract-illegality allegations
correspond with its breach of contract allegations.
3. Low T’s Fraud and/or Fraudulent Inducement Claim(s)
39. Plaintiff’s First Amended Petition pleads insufficient, general facts to allege its
fraud and/or fraudulent inducement claim, with the First Amended Petition failing to provide
BCI with fair notice regarding its claim(s) from the single paragraph in the First Amended
Petition’s section on this claim or any other paragraphs. (See Pl.’s 1st Am. Pet. ¶ 21; see
generally id. ¶¶ 8-20.)
40. Low T alleges that BCI “fraudulently induced [Low T] to enter into the
agreements by making representations and warranties that it knew to be false or grossly
inflated.” (Pl.’s 1st Am. Pet. ¶ 23.) The basis for Low T’s claim appears to rest on (i) Low T’s
allegations that BCI “represented and warranted that the [lease medical laboratory] equipment
would enable [Low T] to run certain tests, at a certain cost per test,” as well as (ii) Low T’s
allegations that as Low T “utilized the [BCI] equipment, that it became clear that the
representations and warranties made by [BCI] regarding the cost of reagents and supplies were
false [and] [t]he true cost of reagents and supplies were, per test performed on the [BCI]
equipment, substantially more than what [BCI] disclosed.” (Pl.’s 1st Am. Pet. ¶¶ 11, 14.)
41. Low T, however, provides no additional detail on the representations and
warranties made by BCI that were allegedly “false or grossly inflated”—such as when and where
they were made and by whom, how they were false or grossly inflated, and the specific content
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of the representations and warranties (such as how many alleged representations occurred, were
they in writing or oral, what was the context, etc.).
42. Because Low T offers no fair notice of the nature of any such offense, BCI
specially excepts to paragraph 23, and any other paragraph that Plaintiff contends relates to this
claim, in Plaintiff’s First Amended Petition.
43. BCI requests the Court sustain BCI’s special exception and require Low T to
allege sufficient facts to show what statements or representations were made by BCI to Low T,
when such statements or representations were made, to whom were statements or representations
made, how any such statements or representations were false, and how Low T actually and
justifiably relied on such statements.
4. Low T’s Request for Declaratory Relief
44. Plaintiff’s First Amended Petition pleads insufficient, general facts in requesting
declaratory relief for declaratory judgments regarding whether the agreement between BCI and
Low T violates California antitrust law and Texas antitrust law. (Pl.’s 1st Am. Pet. ¶¶ 23-26.)
45. Despite vague, conclusory references alleging contract illegality, the First
Amended Petition provides no specific allegations in support of establishing contract illegality
under either California or Texas antitrust law. It is difficult to name specific deficiencies within
this request, because the request itself is wholly deficient. The First Amended Petition cites
provisions and language that potentially implicate multiple different types of antitrust claims and
theories, without providing further detail on what specific antitrust theories Low T believes the
agreement between itself and BCI violated and providing no specific allegations in support.
46. Essentially, Low T’s First Amended Petition is seeking relief that may potentially
be granted to a party upon successfully proving an antitrust claim, but yet Low T does not appear
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to wish to actually have to prove an antitrust claim. (See Pl.’s 1st Am. Pet. ¶ 23 (“Plaintiff does
not assert a claim for affirmative relief under the antitrust laws of the United States, the State of
California, or the State of Texas, and does not seek damages in relation to same.”).)
47. BCI specially excepts to paragraph 23 because Low T offers no fair notice of
(i) whether Low T will be attempting to offer any proof or evidence to support any alleged
antitrust violations in support of its requested declaratory relief; (ii) what type of antitrust claims
or theories Low T may or may not be pursuing in support of its requested declaratory relief, or
(iii) any specific allegations in support of any antitrust claims or theories that Low T may or may
not be pursuing in support of its requested declaratory relief
48. BCI requests the Court sustain BCI’s special exception and deny Low T’s
requested declaratory relief, unless Low T can provide specific, sufficient allegations in support
of the particular Texas and California antitrust claims or theories that Low T wishes to bring in
support for its requested declaratory relief.
5. Failure to State Maximum Amount
49. BCI specially excepts to the First Amended Petition as a whole because it fails to
state the maximum amount of damages sought, as required by TRCP 47.
C. Special Exceptions Prayer for Relief
50. BCI respectfully requests that the Court sustain these special exceptions to (i) the
breach of contract claim(s), (ii) the breach of duty of good faith and fair dealing claim(s), (iii) the
fraud and/or fraudulent inducement claim(s), (iv) the requested declaratory relief, and (v) the
failure to state the maximum amount of damages sought, and the Court order Low T to re-plead
within ten (10) days of the Court’s Order, or otherwise dismiss Low T’s claims with prejudice.
In addition, BCI respectfully requests any other relief to which it is justly entitled.
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III. BCI’S MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION
51. Pursuant to TRCP 91a, BCI moves to dismiss Plaintiff’s First Amended Petition’s
cause of action based on fraud and/or fraudulent inducement as having no basis in law or fact.
A. Legal Standard
52. “While not identical, [TRCP] 91a is analogous to [Federal Rule of Civil
Procedure (“FRCP”)] 12(b)(6),” and Texas courts have looked to case law interpreting FRCP
12(b)(6) as being instructive. See GoDaddy.com, LLC v. Toups, 429 S.W.3d 752, 754 (Tex.
App.—Beaumont 2014, pet. denied); see also Wooley v. Schaffer, 447 S.W.3d 71, 76 (Tex.
App.—Houston [14th Dist.] 2014, pet. filed). “For a complaint to survive a Federal Rule
12(b)(6) motion to dismiss, it must contain ‘enough facts to state a claim to relief that is plausible
on its face.’” Wooley, 447 S.W.3d at 76 (quoting GoDaddy.com, LLC, 429 S.W.3d at 754).
53. “A claim has facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Davis v. Motiva Enterprises, L.L.C., 09-14-00434-CV, 2015 WL 1535694, at *4 (Tex.
App.—Beaumont Apr. 2, 2015, pet. denied) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009)). When considering a Rule 91a motion to dismiss, courts “‘must construe the pleadings
liberally in favor of the plaintiff, look to the pleader’s intent, and accept as true the factual
allegations in the pleadings to determine if the cause of action has a basis in law or fact.’”
Chambers v. Tex. Dep’t of Transp., 05-13-01537-CV, 2015 WL 1756087, at *2 (Tex. App.—
Dallas Apr. 17, 2015, no pet. h.) (quoting Wooley, 447 S.W.3d at 76). But “[t]hreadbare recitals
of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”
Davis, 09-14-00434-CV, 2015 WL 1535694, at *4 (quoting Iqbal, 556 U.S. at 678).
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54. “[T]he court must award the prevailing party on the motion all costs and
reasonable and necessary attorney fees incurred with respect to the challenged cause of action in
the trial court.” TEX. R. CIV. P. 91a.7.
B. Arguments and Authorities
55. Low T’s fraud and/or fraudulent inducement claim(s) fail both because Low T
fails to adequately allege facts upon which relief can be relief can be stated, and the claim(s)
itself fails as a matter of law.
1. Low T Fails to Adequately Allege Facts
Upon Which Relief Can Be Stated
56. The allegations for Low T’s fraud and/or fraudulent inducement claim(s) in the
First Amended Petition suffer some of the same or similar deficiencies as Low T’s others claims,
as discussed in BCI’s Special Exceptions, see supra ¶¶ 39-43.
57. Specifically, in Paragraph 11 Low T alleges that, “[BCI], as part of the sales
process, represented that it had engaged in studies which enabled it to make representations
regarding the ‘cost per test’ for certain testosterone and PSA specific tests sought to be
performed utilizing [BCI’s] equipment [the rented Access 2 analyzer], and [BCI] made
representations and warranties to Plaintiff regarding the cost of each such test sought to be
performed using the Access 2 Analyzer.” (Pl.’s 1st Am. Pet. ¶ 11.)
58. The First Amended Petition, however, fails to provide any specific allegations
regarding who at BCI made these alleged representations, as well as when and where such
alleged representations occurred. The First Amended Petition also fails to allege what
specifically was the false representation and how that representation was false.
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59. The lack of basic foundational allegations regarding the “who,” “what,” “when,”
and “where” should, at the very least, result in the fraud and/or fraudulent inducement claims
being dismissed with leave to amend, with BCI being given no fair notice regarding these claims.
60. These fraud claims also suffer further deficiencies. In attempting to provide
allegations regarding the “what” of its fraud and/or fraudulent inducement claim, the First
Amended Petition offers merely conclusory allegations. For example, Low T alleges that “[BCI]
knew or had reason to know that the information it provided to Low T during the sales process
was false and/or materially inaccurate,” (Pl.’s 1st Am. Pet. ¶ 21), but Low T fails to allege any
factual basis for this conclusion, with no further detail regarding why BCI “knew or had reason
to know.”
61. Because the First Amended Petition’s fraud and/or fraudulent inducement claims
rest on general, insufficient factual allegations, the Court should dismiss this/these claim/claims
as being factually deficient.
2. The First Amended Petition’s Fraud and/or Fraudulent
Inducement Claim(s) Fail as a Matter of Law
62. Low T’s fraud and/or fraudulent inducement claim(s) also should be dismissed
because they fail as a matter of law, under both Texas and California law.4
63. In referring to these alleged misrepresentations about studies regarding “cost per
test,” Low T alleges that, “In order to induce [Low T], [BCI] made an affirmation of fact or
promise relating to goods and services offered to [Low T], particularly as same related to
locations, availability, and cost, and affirmations of fact or promise became a part of the basis of
4
Because the First Amended Petition fails to provide basic factual allegations regarding when such alleged
misrepresentations occurred (and does not mention under which state law it is bringing its fraud and/or fraudulent
inducement claim(s)), BCI addresses both Texas and California law.
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the bargain, and the goods and services sold by [BCI] failed to comply with the promises or
affirmations of fact made to the plaintiff.” (Pl.’s 1st Am. Pet. ¶ 21)
64. But as can be seen by the plain language of the contract, the agreement between
Low T and BCI explicitly negates and disclaims any such tests as being a guarantee or warranty
by BCI to Low T. (See Master Pricing Agreement V-6.2, Ex. A at 25-26 (“[T]he accuracy and
completeness of such tests and the results thereof are not guaranteed and are not to be construed
as a warranty, either express or implied. BCI assumes no obligation or liability for the advice
given or the results obtained, all such advice being given and accepted at the sole risk of
Customer and its customers.”).) The agreement also contains a “merger clause” stating that the
agreement constitutes the entire understanding and agreement between BCI and Low T and
“supersedes all prior or contemporaneous negotiations, agreements and understandings, whether
oral, in writing, or established by the court of dealings of the parties, concerning the subject
matter hereof, including, but not limited to, all prior agreements between BCI and Customer.”
(Master Pricing Agreement V-18.0, Ex. A at 28.)
65. As such, any alleged fraud or fraudulent inducement claim fails as a matter of
law, because Low T cannot prove justifiable reliance on any alleged misrepresentation. See
Miller Global Properties, LLC v. Marriott Int’l, Inc., 418 S.W.3d 342, 350 (Tex. App.—Dallas
2013, pet. denied) (“When a party signs a contract that directly contradicts alleged
misrepresentations and affirmatively disclaims any promises or representations other than those
made in the contract, the party cannot justifiably rely on alleged extra-contractual
misrepresentations as a matter of law.” (distinguishing Italian Cowboy Partners, Ltd. v.
Prudential Ins. Co. of Am., 341 S.W.3d 323 (Tex. 2011), and collecting cases)); Riverisland Cold
Storage, Inc. v. Fresno-Madera Prod. Credit Assn., 55 Cal. 4th 1169, 1183 (Cal. 2013)
BECKMAN COULTER, INC.’S ANSWER, SPECIAL
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(explaining that “promissory fraud, like all forms of fraud, requires a showing of justifiable
reliance on the defendant’s misrepresentation”).
66. Under similar facts in Miller Global, the Dallas Court of Appeals determined that
the contract between the parties disproved reliance on the alleged misrepresentations as a matter
of law because of an “as-is sale” clause in the agreement, which “specifically ‘negate[d] and
disclaim[ed]’ any previous ‘representations, warranties, promises, covenants, agreement or
guaranties of any kind.’” Miller Global, 418 S.W.3d at 344, 349. As stated by the court, “An
‘as-is’ provision, freely negotiated by similarly sophisticated parties as part of the bargain in an
arm’s length transaction, generally should be given effect.” Id. at 349 (citing Prudential Ins. Co.
of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156, 162 (Tex. 1995)).
67. Ultimately, if Low T believes that BCI guaranteed or warranted a certain cost per
test and that “became a part of the basis of the bargain,” (Pl.’s 1st Am. Pet. ¶ 21), Low T is
merely stating a breach of contract claim.5 And if Low T believes that BCI somehow allegedly
made other representations regarding these studies and the predicted cost per test for Low T’s
actual tests would be, then Low T was well informed by the explicit terms of the contract that
such studies were not guarantees or warranties. As stated by the Miller Global court, a “party
that enters into a written contract while relying on a contrary oral agreement does so at its peril
and is not rewarded with a claim for fraudulent inducement.” 418 S.W.3d at 348 (citing DRC
Parts & Accessories, L.L.C. v. VM Motori, S.P.A., 112 S.W.3d 854, 858 (Tex. App.—Houston
[14th Dist.] 2003, pet. denied) (en banc)). Thus, even when accepting the First Amended
5
With such a breach of contract claim failing as a matter of law based on the plain language of the agreement. See
Sun Oil Co. v. Madeley, 626 S.W.2d 726, 728 (Tex. 1981) (“The courts will enforce an unambiguous instrument as
written; and, in the ordinary case, the courts will enforce an unambiguous instrument as written; and, in the ordinary
case, the writing alone will be deemed to express the intention of the parties.”).
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Petition’s conclusory statements as true, Low T’s fraud and/or fraudulent inducement claims fail
as a matter of law.
C. Motion to Dismiss Prayer for Relief
68. BCI respectfully requests that Low T’s “fraud or fraudulent inducement” cause of
action in its First Amended Petition be dismissed with prejudice pursuant to TRCP 91a. In the
alternative, BCI requests the Court dismiss Low T’s fraudulent or fraudulent inducement claims,
with leave to amend. BCI also requests, pursuant to TRCP 91a.7, that the Court award BCI all
costs and reasonable attorneys’ fees incurred with respect to the challenged cause of action.
BECKMAN COULTER, INC.’S ANSWER, SPECIAL
EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF
PLAINTIFF’S FIRST AMENDED PETITION Page 18
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November 17, 2015 Respectfully Submitted,
/s/ Michelle Hartmann
Michelle Hartmann
State Bar No. 24032402
mhartmann@sidley.com
Casey A. Burton
State Bar No. 24058791
casey.burton@sidley.com
SIDLEY AUSTIN LLP
2001 Ross Avenue, Suite 3600
Dallas, Texas 75201
(214) 981-3300 (Telephone)
(214) 981-3400 (Facsimile)
ATTORNEYS FOR DEFENDANT BECKMAN
COULTER, INC.
BECKMAN COULTER, INC.’S ANSWER, SPECIAL
EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF
PLAINTIFF’S FIRST AMENDED PETITION Page 19
ACTIVE 210944895v.1
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document was served on the
following electronically by transmission to an electronic filing service provider for service
through the state’s electronic filing manager on the 17th day of November, 2015, with a courtesy
copy to the same via email:
David J. Moraine
Moraine & Associates, P.L.L.C.
60 Village Lane, Suite 110
Colleyville, Texas 76034
service@texcourts.com
/s/ Michelle Hartmann
Michelle Hartmann
BECKMAN COULTER, INC.’S ANSWER, SPECIAL
EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF
PLAINTIFF’S FIRST AMENDED PETITION Page 20
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EXHIBIT A
Beckman Coulter, Inc.'s Answer, Special Page 21
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 22
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 23
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 24
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 25
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 26
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 27
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 28
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 29
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 30
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 31
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 32
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 33
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 34
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 35
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 36
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 37
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 38
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 39
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Beckman Coulter, Inc.'s Answer, Special Page 40
Exceptions, and Moton for Partial Dismissal of
Plaintiff's First Amended Petition
Preview
FILED DALLAS COUNTY 11/17/2015 2:38:15 PM FELICIA PITRE DISTRICT CLERK No. DC-15-08587 § LOW T CENTER, LLC, § IN THE DISTRICT COURT OF § Plaintiff, § § v. § DALLAS COUNTY, TEXAS § BECKMAN COULTER, INC., § § Defendant. § 191ST JUDICIAL DISTRICT BECKMAN COULTER, INC.’S ANSWER AND DEFENSES, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION TO THE HONORABLE JUDGE OF SAID COURT: Beckman Coulter, Inc. (“BCI”) hereby files its (i) Answer and Defenses to Plaintiff’s First Amended Petition; (ii) Special Exceptions to Plaintiff’s First Amended Petition; and (iii) Motion for Partial Dismissal of Plaintiff’s First Amended Petition. I. BCI’S ORIGINAL ANSWER AND DEFENSES A. General Denial 1. Pursuant to Texas Rule of Civil Procedure (“TRCP”) 92, BCI generally denies each and every allegation asserted in Plaintiff Low T’s First Amended Petition, and demands strict proof thereof by a preponderance of the evidence. B. Defenses & Affirmative Defenses 2. BCI pleads the following defenses. By pleading these defenses, BCI does not assume the burden of proof on any defenses for which it would not otherwise have the burden of proof under Texas law. BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 1 ACTIVE 210944895v.1 3. Barred by Plain Language. Defendant alleges that Defendant is not liable in whole or in part to Plaintiff because its claims are barred by the plain language of the parties’ contract. 4. Failure to Perform Conditions Precedent. Defendant further alleges that Defendant is not liable in whole or in part to Plaintiff because of a failure to perform conditions precedent. 5. Set off / Offset. Defendant further alleges that Defendant is not liable in whole or in part to Plaintiff because any amounts allegedly owed to Plaintiff must be set off or offset by the amounts Plaintiff owes to Defendant. 6. Failure to Mitigate Damages. Defendant further alleges that Defendant is not liable in whole or in part to Plaintiff because of Plaintiff’s failure to mitigate damages. 7. Material Breach. Defendant further alleges that Defendant is not liable in whole or in part to Plaintiff because Plaintiff’s claims are barred because it has materially breached the contracts under which they seek to recover. 8. Repudiation. Defendant further alleges that Defendant is not liable in whole or in part to Plaintiff because of Plaintiff’s repudiation. 9. Estoppel. Defendant further alleges that Defendant is not liable in whole or in part to Plaintiff because of estoppel. 10. Ratification. Defendant further alleges that Defendant is not liable in whole or in part to Plaintiff because its claims are barred because Plaintiff has ratified or otherwise consented to the actions upon which their claims are based. 11. Unclean Hands. Defendant further alleges that Defendant is not liable in whole or in part to Plaintiff because its claims are barred by the doctrine of unclean hands. BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 2 ACTIVE 210944895v.1 12. Laches. Defendant further alleges that Defendant is not liable in whole or in part to Plaintiff because its claims are barred by the doctrine of laches. 13. Waiver. Defendant further alleges that Defendant is not liable in whole or in part to Plaintiff because its claims are barred by the doctrine of waiver. 14. Truth of Statement / No Misrepresentation. Defendant further alleges that Defendant is not liable in whole or in part to Plaintiff because its claims are barred by the truth of Defendant’s statements and no misrepresentation. 15. No Reliance. Defendant further alleges that Defendant is not liable in whole or in part to Plaintiff because its claims are barred by Plaintiff’s lack of actual and justifiable reliance on any alleged misrepresentations. 16. Knowledge of Facts. Defendant further alleges that Defendant is not liable in whole or in part to Plaintiff because its claims are barred by Plaintiff’s knowledge of facts. 17. At-Fault. Defendant further alleges that Defendant is not liable in whole or in part to Plaintiff because its claims are barred by Plaintiff being at-fault. II. BCI’S SPECIAL EXCEPTIONS TO PLAINTIFF’S FIRST AMENDED PETITION 18. Low T’s First Amended Petition contains causes of action for (i) breach of duty of good faith and fair dealing; (ii) breach of contract; and (iii) “fraud and fraudulent inducement.” The First Amended Petition also requests declaratory relief. 19. Pursuant to TRCP 91, BCI specially excepts to Low T’s First Amended Petition because it fails to provide sufficient facts and fair notice regarding Low T’s (i) breach of duty of good faith and fair dealing claim(s); (ii) breach of contract claim(s); (iii) fraud and/or fraudulent inducement claim(s); and (iv) requested declaratory relief. Also pursuant to TRCP 91, as well as BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 3 ACTIVE 210944895v.1 TRCP 47, BCI specially excepts to the First Amended Petition not stating the maximum amount of relief claimed. A. Legal Standard 20. A plaintiff is required to give the defendant “sufficient . . . fair notice of the claim involved.” TEX. R. CIV. P. 47(a). When a plaintiff fails to do so, a defendant may use a special exception to challenge the sufficiency of a pleading. Baylor Univ. v. Sonnichsen, 221 S.W.3d 632, 635 (Tex. 2007). A special exception should “point out the particular pleading excepted to,” as well as “the defect, omission, obscurity, duplicity, generality, or other insufficiency in the allegations.” TEX. R. CIV. P. 91. 21. Trial courts have broad discretion to grant special exceptions. Sonnichsen, 221 S.W.3d at 635; see also Gatten v. McCarley, 391 S.W.3d 669, 673 (Tex. App.—Dallas 2013, no pet.) (noting that the trial court’s granting of a special exception is only overturned for abuse of discretion). “If a pleading does not state a cause of action, the trial court does not err in dismissing the entire case.” Gatten, 391 S.W.3d at 674 (citing Pack v. Crossroads, Inc., 53 S.W.3d 492, 507 (Tex. App.—Fort Worth 2001, pet. denied); Cole v. Hall, 864 S.W.2d 563, 566 (Tex. App.—Dallas 1993. writ dism’d w.o.j.)). While a trial court must typically allow the pleader an opportunity to amend after it sustains special exceptions, no such requirement exists if “the pleading defect is of a type that amendment cannot cure.” Sonnichsen, 221 S.W.3d at 635; see, e.g., id. (“Because [Plaintiff] could not have corrected this problem by repleading, the trial court did not abuse its discretion by sustaining [Defendant’s] special exceptions and dismissing this breach of contract claim.”). BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 4 ACTIVE 210944895v.1 B. Arguments & Authorities 1. Low T’s Breach of Duty of Good Faith and Fair Dealing Claim(s) 22. Plaintiff’s First Amended Petition pleads insufficient, general facts to allege its breach of duty of good faith and fair dealing claim(s), with the First Amended Petition failing to either adequately allege or provide BCI with fair notice regarding this claim from the single paragraph1 in the First Amended Petition’s section on this claim or any other paragraphs. 2 (See Pl.’s 1st Am. Pet. ¶ 22[a]; see generally id. ¶¶ 8-20.) 23. Low T makes the bald assertion that the contract between BCI and Low T— presumably referring to the July 1, 2013 agreement, including its amendments, between BCI and Low T (the “Master Pricing Agreement,” attached hereto as Exhibit 1)—was an exclusive dealing contract. (See Pl.’s 1st Am. Pet. ¶ 12.). Neither Paragraph 22(a) nor any other paragraph in the First Amended Petition, however, provides any reference to contract provisions or other non-conclusory allegations supporting this conclusion. 24. For example, the First Amended Petition fails to identify any contract provision in the Master Pricing Agreement that has been breached. The First Amended Petition also fails to identify any specific instances or actions taken by BCI (i) prohibiting Low T from renting laboratory equipment for diagnostic purposes from vendors other than BCI; (ii) prohibiting Low T from buying reagents or supplies from other vendors to be used with the rented Access 2 or 1 Plaintiff’s First Amended Petition contains two different paragraphs erroneously labeled as the twenty-second paragraph—the first pertaining to its breach of duty of good faith and fair dealing cause of action and the second pertaining to its breach of contract cause of action. To limit confusion, BCI’s Special Exceptions shall hereafter refer to these two paragraphs as “Paragraph 22[a]” and “Paragraph 22[b].” 2 Plaintiff’s First Amended Petition fails to specify which, if any, of the “Facts” paragraphs should be incorporated into the stated causes of action. For Plaintiff’s benefit, BCI’s Special Exceptions will assume Plaintiff intended to incorporate all “Facts” paragraphs into each of their causes of action. BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 5 ACTIVE 210944895v.1 with other vendors laboratory equipment; or (iii) prohibiting Low T from using third-party services to provide diagnostic testing for Low T. 25. The First Amended Petition also contains allegations that appear to contradict the First Amended Petition’s conclusory and general allegation that BCI “required [Low T] to refrain from dealing with competitors, and to purchase all supplies and reagents over the following five years from [BCI].” Specifically, Paragraph 22[a] alleges that, because of BCI’s alleged failure to provide supplies or equipment service, Low T allegedly incurred extra costs “outsourcing laboratory testing, purchasing replacement equipment, and . . . [having] to contract [with companies other than BCI] at higher rates.” (See Pl.’s 1st Am. Pet. ¶ 22[a].). 26. Additionally, under California law—the law applicable to the Master Pricing Agreement, per section V.14.0 (“Governing Law”), Ex. A at 27—for a claim of breach of implied duty of good faith and fair dealing to not be duplicative of a breach of contract claim, the plaintiff must allege “that the defendant acted in bad faith to frustrate the benefits of the alleged contract.” Davis v. Capitol Records, LLC, No. 12-CV-1602 YGR, 2013 WL 1701746, at *4 (N.D. Cal. Apr. 18, 2013). Plaintiff’s First Amended Petition, however, offers no allegations whatsoever that BCI acted in bad faith, nor does it provide any detail regarding how BCI acted in bad faith to frustrate the benefits of the contract, in Paragraph 22[a] or elsewhere. While Low T contends BCI was acting in “bad faith” when BCI sent Low T an invoice for $5,845,145.68 on October 29, 2015, (see Pl.’s 1st Am. Pet. ¶ 20), this invoice was following the plain language of the contract, and not frustrating the terms, purpose, or benefits of the contract. 27. Because the First Amended Petition offers no fair notice of the nature of any such duty of good faith and fair dealing or its breach, as well as failing to adequately allege a viable BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 6 ACTIVE 210944895v.1 claim for any such breach, BCI specially excepts to Paragraph 22[a], and any other paragraph that Plaintiff contends relates to this claim in Plaintiff’s First Amended Petition. 28. BCI requests the Court sustain BCI’s special exception and dismiss the good faith and fair dealing claim unless Low T can (a) allege sufficiently specific facts showing how the Master Pricing Agreement was an exclusive dealing contract, (b) allege sufficiently specific facts showing that BCI took actions to prevent Low T from obtaining diagnostic equipment, reagents or supplies, or diagnostic services from other vendors or provides, and (c) allege sufficiently specific facts showing how BCI acted in bad faith to frustrate the benefits of the contract. 2. Low T’s Breach of Contract Claim(s) 29. Plaintiff’s First Amended Petition pleads insufficient, general facts to allege its breach of contract claim(s), as contained in the petition’s second Paragraph 22 (“Paragraph 22[b]”)3 or any other paragraphs. (See Pl.’s 1st Am. Pet. ¶ 22[b]; see generally id. ¶¶ 8-20.) 30. The First Amended Petition’s breach of contract section contains the following single and conclusory support: “Defendant has materially and substantively breached its contractual obligations. Plaintiff sues for breach of contract, and recovery of its actual, economic, and consequential damages caused by the Defendant’s breach. Plaintiff further sues to recover its reasonable and necessary attorneys fees pursuant to Chapter 38 of the Texas Civil Practice and Remedies Code.” (Pl.’s 1st Am. Pet. ¶ 22[b].) 31. The Court is forced to comb through the First Amended Petition for support, which is improper. Even then, the support is lacking. In the First Amended Petition’s “FACTS” section, Low T, at best, alleges only that Low T and BCI entered into an agreement. Yet the First Amended Petition offers no fair notice for any breach claims because it fails to allege basic details regarding what provision(s) of the Master Pricing Agreement, if any, BCI allegedly 3 See supra note 1. BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 7 ACTIVE 210944895v.1 violated; when, if ever, BCI allegedly violated such provisions; how, if at all, BCI allegedly violated such provisions; and what damages, if any, Low T allegedly suffered as a result of all the purported instances of breach. 32. For example, Paragraph 16 alleges that at some unidentified point in time after BCI sent an invoice to Low T, a third-party distributor “notified [Low T] that [BCI] was refusing to permit [a third-party distributor] to distribute supplies to [Low T], or service the remaining equipment in the field, at any other Low T Center location, thus materially threatening the business of Plaintiff, and breaching the agreement.” (Pl.’s 1st Am. Pet. ¶ 16.) The First Amended Petition, however, fails to offer any specific reference to the contract provision(s) at issue, how that provision was breached, and how BCI is involved in the alleged breach. The First Amended Petition also fails to offer any concrete allegations regarding the damages this alleged breach caused, merely offering the bald assertion that the alleged actions of BCI, as told to Low T by a third-party, was “materially threatening the business of [Low T].” (Pl.’s 1st Am. Pet. ¶ 16.) Lastly, Paragraph 16 fails to offer such basic allegations regarding whether any Low T locations were even requesting supplies or the servicing of equipment from BCI at this point in time regarding this alleged occurrence of breach. In other words, the claimed breach of contract in Paragraph 16 fails to offer BCI any notice of when such an alleged breach occurred, which provisions of the contract it involved, and what (if anything) Low T was deprived of. 33. An additional allegation of breach is contained in Paragraph 17 of the First Amended Petition. Paragraph 17 contends that additional actions by BCI “further materially breached the parties’ agreement,” (Pl.’s 1st Am. Pet. ¶ 17.), but it is wholly unclear whether Plaintiff Low T is claiming this alleged material breach is a part of the previously alleged breach or a separate alleged instance of breach. Additionally, like Paragraph 16, Paragraph 17 fails to BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 8 ACTIVE 210944895v.1 offer any basic details regarding the timeline for when this alleged breach occurred, what contract provisions were involved, and which Low T site locations were affected by the alleged breach and how. 34. A final allegation of breach is outlined in Paragraphs 18 and 19 of the First Amended Petition. These paragraphs suffer from the same malady—they still fail to allege basic details regarding the contract provisions at issue and which, if any, Low T locations were affected by this alleged breach. 35. Additionally, the First Amended Petition further clouds these deficient and overly general breach of contract allegations by simultaneously alleging that the agreement between BCI and Low T was illegal, with vague allegations that BCI and the agreement between BCI and Low T violates unspecified antitrust laws. See, e.g., Pl.’s 1st Am. Pet. ¶ 11-12, 20 (mis- describing the basic operation of a reagent rental agreement in an apparent attempt to label the agreement between Low T and BCI as an illegal tying arrangement). 36. Plaintiff’s First Amended Petition also states the bald assertion that Low T suffered consequential damages, (see Pl.’s 1st Am. Pet. ¶ 22[b].), without providing specific allegations regarding these damages are, as required by TRCP 56. 37. Because Low T offers no fair notice of the nature of any such breaches, and in particular provides no support for the basis of its consequential damages, BCI specially excepts to paragraph 22[b] and any other paragraph that Plaintiff contends relates to the breach of contract cause of action in Plaintiff’s First Amended Petition. 38. BCI requests the Court sustain BCI’s special exception and require Low T to provide sufficient allegations regarding what provisions in the Master Pricing Agreement Low T is claiming BCI breached, how and when BCI allegedly breached these provisions, and how BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 9 ACTIVE 210944895v.1 Low T suffered damages as a result of BCI’s alleged breach, with basic detail as required to sufficiently allege a breach of contract claim and additional detail as required by TRCP 56 as to Low T’s request for consequential damages. Additionally, BCI requests the Court require BCI to provide sufficient, coherent allegations regarding how its contract-illegality allegations correspond with its breach of contract allegations. 3. Low T’s Fraud and/or Fraudulent Inducement Claim(s) 39. Plaintiff’s First Amended Petition pleads insufficient, general facts to allege its fraud and/or fraudulent inducement claim, with the First Amended Petition failing to provide BCI with fair notice regarding its claim(s) from the single paragraph in the First Amended Petition’s section on this claim or any other paragraphs. (See Pl.’s 1st Am. Pet. ¶ 21; see generally id. ¶¶ 8-20.) 40. Low T alleges that BCI “fraudulently induced [Low T] to enter into the agreements by making representations and warranties that it knew to be false or grossly inflated.” (Pl.’s 1st Am. Pet. ¶ 23.) The basis for Low T’s claim appears to rest on (i) Low T’s allegations that BCI “represented and warranted that the [lease medical laboratory] equipment would enable [Low T] to run certain tests, at a certain cost per test,” as well as (ii) Low T’s allegations that as Low T “utilized the [BCI] equipment, that it became clear that the representations and warranties made by [BCI] regarding the cost of reagents and supplies were false [and] [t]he true cost of reagents and supplies were, per test performed on the [BCI] equipment, substantially more than what [BCI] disclosed.” (Pl.’s 1st Am. Pet. ¶¶ 11, 14.) 41. Low T, however, provides no additional detail on the representations and warranties made by BCI that were allegedly “false or grossly inflated”—such as when and where they were made and by whom, how they were false or grossly inflated, and the specific content BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 10 ACTIVE 210944895v.1 of the representations and warranties (such as how many alleged representations occurred, were they in writing or oral, what was the context, etc.). 42. Because Low T offers no fair notice of the nature of any such offense, BCI specially excepts to paragraph 23, and any other paragraph that Plaintiff contends relates to this claim, in Plaintiff’s First Amended Petition. 43. BCI requests the Court sustain BCI’s special exception and require Low T to allege sufficient facts to show what statements or representations were made by BCI to Low T, when such statements or representations were made, to whom were statements or representations made, how any such statements or representations were false, and how Low T actually and justifiably relied on such statements. 4. Low T’s Request for Declaratory Relief 44. Plaintiff’s First Amended Petition pleads insufficient, general facts in requesting declaratory relief for declaratory judgments regarding whether the agreement between BCI and Low T violates California antitrust law and Texas antitrust law. (Pl.’s 1st Am. Pet. ¶¶ 23-26.) 45. Despite vague, conclusory references alleging contract illegality, the First Amended Petition provides no specific allegations in support of establishing contract illegality under either California or Texas antitrust law. It is difficult to name specific deficiencies within this request, because the request itself is wholly deficient. The First Amended Petition cites provisions and language that potentially implicate multiple different types of antitrust claims and theories, without providing further detail on what specific antitrust theories Low T believes the agreement between itself and BCI violated and providing no specific allegations in support. 46. Essentially, Low T’s First Amended Petition is seeking relief that may potentially be granted to a party upon successfully proving an antitrust claim, but yet Low T does not appear BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 11 ACTIVE 210944895v.1 to wish to actually have to prove an antitrust claim. (See Pl.’s 1st Am. Pet. ¶ 23 (“Plaintiff does not assert a claim for affirmative relief under the antitrust laws of the United States, the State of California, or the State of Texas, and does not seek damages in relation to same.”).) 47. BCI specially excepts to paragraph 23 because Low T offers no fair notice of (i) whether Low T will be attempting to offer any proof or evidence to support any alleged antitrust violations in support of its requested declaratory relief; (ii) what type of antitrust claims or theories Low T may or may not be pursuing in support of its requested declaratory relief, or (iii) any specific allegations in support of any antitrust claims or theories that Low T may or may not be pursuing in support of its requested declaratory relief 48. BCI requests the Court sustain BCI’s special exception and deny Low T’s requested declaratory relief, unless Low T can provide specific, sufficient allegations in support of the particular Texas and California antitrust claims or theories that Low T wishes to bring in support for its requested declaratory relief. 5. Failure to State Maximum Amount 49. BCI specially excepts to the First Amended Petition as a whole because it fails to state the maximum amount of damages sought, as required by TRCP 47. C. Special Exceptions Prayer for Relief 50. BCI respectfully requests that the Court sustain these special exceptions to (i) the breach of contract claim(s), (ii) the breach of duty of good faith and fair dealing claim(s), (iii) the fraud and/or fraudulent inducement claim(s), (iv) the requested declaratory relief, and (v) the failure to state the maximum amount of damages sought, and the Court order Low T to re-plead within ten (10) days of the Court’s Order, or otherwise dismiss Low T’s claims with prejudice. In addition, BCI respectfully requests any other relief to which it is justly entitled. BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 12 ACTIVE 210944895v.1 III. BCI’S MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION 51. Pursuant to TRCP 91a, BCI moves to dismiss Plaintiff’s First Amended Petition’s cause of action based on fraud and/or fraudulent inducement as having no basis in law or fact. A. Legal Standard 52. “While not identical, [TRCP] 91a is analogous to [Federal Rule of Civil Procedure (“FRCP”)] 12(b)(6),” and Texas courts have looked to case law interpreting FRCP 12(b)(6) as being instructive. See GoDaddy.com, LLC v. Toups, 429 S.W.3d 752, 754 (Tex. App.—Beaumont 2014, pet. denied); see also Wooley v. Schaffer, 447 S.W.3d 71, 76 (Tex. App.—Houston [14th Dist.] 2014, pet. filed). “For a complaint to survive a Federal Rule 12(b)(6) motion to dismiss, it must contain ‘enough facts to state a claim to relief that is plausible on its face.’” Wooley, 447 S.W.3d at 76 (quoting GoDaddy.com, LLC, 429 S.W.3d at 754). 53. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Davis v. Motiva Enterprises, L.L.C., 09-14-00434-CV, 2015 WL 1535694, at *4 (Tex. App.—Beaumont Apr. 2, 2015, pet. denied) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). When considering a Rule 91a motion to dismiss, courts “‘must construe the pleadings liberally in favor of the plaintiff, look to the pleader’s intent, and accept as true the factual allegations in the pleadings to determine if the cause of action has a basis in law or fact.’” Chambers v. Tex. Dep’t of Transp., 05-13-01537-CV, 2015 WL 1756087, at *2 (Tex. App.— Dallas Apr. 17, 2015, no pet. h.) (quoting Wooley, 447 S.W.3d at 76). But “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Davis, 09-14-00434-CV, 2015 WL 1535694, at *4 (quoting Iqbal, 556 U.S. at 678). BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 13 ACTIVE 210944895v.1 54. “[T]he court must award the prevailing party on the motion all costs and reasonable and necessary attorney fees incurred with respect to the challenged cause of action in the trial court.” TEX. R. CIV. P. 91a.7. B. Arguments and Authorities 55. Low T’s fraud and/or fraudulent inducement claim(s) fail both because Low T fails to adequately allege facts upon which relief can be relief can be stated, and the claim(s) itself fails as a matter of law. 1. Low T Fails to Adequately Allege Facts Upon Which Relief Can Be Stated 56. The allegations for Low T’s fraud and/or fraudulent inducement claim(s) in the First Amended Petition suffer some of the same or similar deficiencies as Low T’s others claims, as discussed in BCI’s Special Exceptions, see supra ¶¶ 39-43. 57. Specifically, in Paragraph 11 Low T alleges that, “[BCI], as part of the sales process, represented that it had engaged in studies which enabled it to make representations regarding the ‘cost per test’ for certain testosterone and PSA specific tests sought to be performed utilizing [BCI’s] equipment [the rented Access 2 analyzer], and [BCI] made representations and warranties to Plaintiff regarding the cost of each such test sought to be performed using the Access 2 Analyzer.” (Pl.’s 1st Am. Pet. ¶ 11.) 58. The First Amended Petition, however, fails to provide any specific allegations regarding who at BCI made these alleged representations, as well as when and where such alleged representations occurred. The First Amended Petition also fails to allege what specifically was the false representation and how that representation was false. BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 14 ACTIVE 210944895v.1 59. The lack of basic foundational allegations regarding the “who,” “what,” “when,” and “where” should, at the very least, result in the fraud and/or fraudulent inducement claims being dismissed with leave to amend, with BCI being given no fair notice regarding these claims. 60. These fraud claims also suffer further deficiencies. In attempting to provide allegations regarding the “what” of its fraud and/or fraudulent inducement claim, the First Amended Petition offers merely conclusory allegations. For example, Low T alleges that “[BCI] knew or had reason to know that the information it provided to Low T during the sales process was false and/or materially inaccurate,” (Pl.’s 1st Am. Pet. ¶ 21), but Low T fails to allege any factual basis for this conclusion, with no further detail regarding why BCI “knew or had reason to know.” 61. Because the First Amended Petition’s fraud and/or fraudulent inducement claims rest on general, insufficient factual allegations, the Court should dismiss this/these claim/claims as being factually deficient. 2. The First Amended Petition’s Fraud and/or Fraudulent Inducement Claim(s) Fail as a Matter of Law 62. Low T’s fraud and/or fraudulent inducement claim(s) also should be dismissed because they fail as a matter of law, under both Texas and California law.4 63. In referring to these alleged misrepresentations about studies regarding “cost per test,” Low T alleges that, “In order to induce [Low T], [BCI] made an affirmation of fact or promise relating to goods and services offered to [Low T], particularly as same related to locations, availability, and cost, and affirmations of fact or promise became a part of the basis of 4 Because the First Amended Petition fails to provide basic factual allegations regarding when such alleged misrepresentations occurred (and does not mention under which state law it is bringing its fraud and/or fraudulent inducement claim(s)), BCI addresses both Texas and California law. BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 15 ACTIVE 210944895v.1 the bargain, and the goods and services sold by [BCI] failed to comply with the promises or affirmations of fact made to the plaintiff.” (Pl.’s 1st Am. Pet. ¶ 21) 64. But as can be seen by the plain language of the contract, the agreement between Low T and BCI explicitly negates and disclaims any such tests as being a guarantee or warranty by BCI to Low T. (See Master Pricing Agreement V-6.2, Ex. A at 25-26 (“[T]he accuracy and completeness of such tests and the results thereof are not guaranteed and are not to be construed as a warranty, either express or implied. BCI assumes no obligation or liability for the advice given or the results obtained, all such advice being given and accepted at the sole risk of Customer and its customers.”).) The agreement also contains a “merger clause” stating that the agreement constitutes the entire understanding and agreement between BCI and Low T and “supersedes all prior or contemporaneous negotiations, agreements and understandings, whether oral, in writing, or established by the court of dealings of the parties, concerning the subject matter hereof, including, but not limited to, all prior agreements between BCI and Customer.” (Master Pricing Agreement V-18.0, Ex. A at 28.) 65. As such, any alleged fraud or fraudulent inducement claim fails as a matter of law, because Low T cannot prove justifiable reliance on any alleged misrepresentation. See Miller Global Properties, LLC v. Marriott Int’l, Inc., 418 S.W.3d 342, 350 (Tex. App.—Dallas 2013, pet. denied) (“When a party signs a contract that directly contradicts alleged misrepresentations and affirmatively disclaims any promises or representations other than those made in the contract, the party cannot justifiably rely on alleged extra-contractual misrepresentations as a matter of law.” (distinguishing Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323 (Tex. 2011), and collecting cases)); Riverisland Cold Storage, Inc. v. Fresno-Madera Prod. Credit Assn., 55 Cal. 4th 1169, 1183 (Cal. 2013) BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 16 ACTIVE 210944895v.1 (explaining that “promissory fraud, like all forms of fraud, requires a showing of justifiable reliance on the defendant’s misrepresentation”). 66. Under similar facts in Miller Global, the Dallas Court of Appeals determined that the contract between the parties disproved reliance on the alleged misrepresentations as a matter of law because of an “as-is sale” clause in the agreement, which “specifically ‘negate[d] and disclaim[ed]’ any previous ‘representations, warranties, promises, covenants, agreement or guaranties of any kind.’” Miller Global, 418 S.W.3d at 344, 349. As stated by the court, “An ‘as-is’ provision, freely negotiated by similarly sophisticated parties as part of the bargain in an arm’s length transaction, generally should be given effect.” Id. at 349 (citing Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156, 162 (Tex. 1995)). 67. Ultimately, if Low T believes that BCI guaranteed or warranted a certain cost per test and that “became a part of the basis of the bargain,” (Pl.’s 1st Am. Pet. ¶ 21), Low T is merely stating a breach of contract claim.5 And if Low T believes that BCI somehow allegedly made other representations regarding these studies and the predicted cost per test for Low T’s actual tests would be, then Low T was well informed by the explicit terms of the contract that such studies were not guarantees or warranties. As stated by the Miller Global court, a “party that enters into a written contract while relying on a contrary oral agreement does so at its peril and is not rewarded with a claim for fraudulent inducement.” 418 S.W.3d at 348 (citing DRC Parts & Accessories, L.L.C. v. VM Motori, S.P.A., 112 S.W.3d 854, 858 (Tex. App.—Houston [14th Dist.] 2003, pet. denied) (en banc)). Thus, even when accepting the First Amended 5 With such a breach of contract claim failing as a matter of law based on the plain language of the agreement. See Sun Oil Co. v. Madeley, 626 S.W.2d 726, 728 (Tex. 1981) (“The courts will enforce an unambiguous instrument as written; and, in the ordinary case, the courts will enforce an unambiguous instrument as written; and, in the ordinary case, the writing alone will be deemed to express the intention of the parties.”). BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 17 ACTIVE 210944895v.1 Petition’s conclusory statements as true, Low T’s fraud and/or fraudulent inducement claims fail as a matter of law. C. Motion to Dismiss Prayer for Relief 68. BCI respectfully requests that Low T’s “fraud or fraudulent inducement” cause of action in its First Amended Petition be dismissed with prejudice pursuant to TRCP 91a. In the alternative, BCI requests the Court dismiss Low T’s fraudulent or fraudulent inducement claims, with leave to amend. BCI also requests, pursuant to TRCP 91a.7, that the Court award BCI all costs and reasonable attorneys’ fees incurred with respect to the challenged cause of action. BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 18 ACTIVE 210944895v.1 November 17, 2015 Respectfully Submitted, /s/ Michelle Hartmann Michelle Hartmann State Bar No. 24032402 mhartmann@sidley.com Casey A. Burton State Bar No. 24058791 casey.burton@sidley.com SIDLEY AUSTIN LLP 2001 Ross Avenue, Suite 3600 Dallas, Texas 75201 (214) 981-3300 (Telephone) (214) 981-3400 (Facsimile) ATTORNEYS FOR DEFENDANT BECKMAN COULTER, INC. BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 19 ACTIVE 210944895v.1 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing document was served on the following electronically by transmission to an electronic filing service provider for service through the state’s electronic filing manager on the 17th day of November, 2015, with a courtesy copy to the same via email: David J. Moraine Moraine & Associates, P.L.L.C. 60 Village Lane, Suite 110 Colleyville, Texas 76034 service@texcourts.com /s/ Michelle Hartmann Michelle Hartmann BECKMAN COULTER, INC.’S ANSWER, SPECIAL EXCEPTIONS, AND MOTION FOR PARTIAL DISMISSAL OF PLAINTIFF’S FIRST AMENDED PETITION Page 20 ACTIVE 210944895v.1 EXHIBIT A Beckman Coulter, Inc.'s Answer, Special Page 21 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 22 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 23 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 24 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 25 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 26 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 27 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 28 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 29 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 30 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 31 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 32 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 33 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 34 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 35 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 36 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 37 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 38 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 39 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition Beckman Coulter, Inc.'s Answer, Special Page 40 Exceptions, and Moton for Partial Dismissal of Plaintiff's First Amended Petition