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LOW T CENTER, LLC,
Plaintiff and Counter-
BECKMAN COULTER, INC.,
Defendant and Counter- DALLAS COUNTY, TEXAS
Claimant,
HERKARE HOLDINGS, LLC, 191ST JUDICIAL DISTRICT
Third-Party Defendant.
BECKMAN COULTER, INC.’S ORIGINAL
LOW T CENTER, LLC AND HERKARE HOLDINGS, LLC
TO THE HONORABLE JUDGE OF SAID COURT:
Defendant/Counter-Claimant Beckman Cou
nt Low T Center, LLC
ndant HerKare Holdings, LLC (“
would respectfully show the following:
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ISCOVERY ONTROL LAN AND ANGE OF AMAGES
BCI respectfully requests that the discovery in this case be conducted under
Level 3. BCI seeks monetary relief over $1,000,000.00. BCI seeks maximum damages of
s’ fees, and costs to be determined at trial.
EQUEST FOR ISCLOSURE
Pursuant to TRCP 194, Low T is requested to disclose the information or material
described in Rule 194.2 within 30 days of service of this request, and HerKare is requested to
disclose the information or material described in Rule 194.2 within 50 days of service of this
URISDICTION AND
This Court has personal jurisdiction over Low T and HerKare because they are
Texas companies doing business, in part, in Texas, with business offices and an agent for service
of process in Texas. Additionally, to the extent necessary, the Texas long-arm statute authorizes
personal jurisdiction over Low T and HerKare, and such jurisdiction is consistent with
constitutional due process requirements. Both Low T and HerKare, directly or through
intermediaries, have conducted and do conduct substantial business in this forum, including
activities related to the contract with BCI in which Low T and HerKare have purposefully and
voluntarily placed products and/or services into the stream of commerce with the expectation
that they will be purchased by consumers in this forum, and have regularly solicited business and
engaged in other persistent courses of conduct which has derived substantial revenue from goods
The Court has subject matter jurisdiction in this case, with the amount in
controversy exceeding the minimum jurisdictional limits of this Court. Venue is proper in Dallas
County, Texas, pursuant to Section 15.062 of the Texas Civil Practice and Remedies Code.
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BCI’s claim against HerKare arises out of the same transaction, occurrence, or series of
transactions or occurrences as Low T’s original claims against BCI and BCI’s counterclaim
against Low T. Additionally, as related to such claims, both Low T and HerKare, directly or
through intermediaries, sell and offer to sell produc
The Parties
BCI, a Delaware corporation, is a global company that designs, manufactures,
rents, and sells products—such as laboratory equipment, supplies, and reagents—that simplify,
automate, and innovate complex biomedical testing—such as molecular diagnostics.
On information and belief, Counter-Defendant Low T is a Texas limited liability
company with its principle place of business at 1920 E. State Highway 114, Southlake, TX
76092. Low T is involved in the diagnosis and treatment of low testosterone in men, and is
On information and belief, Third-Party Defendant HerKare is a Texas limited
liability company its principle place of business at 1920 E. State Highway 114, Southlake, TX
76092. HerKare is involved in the diagnosis and treatment of hormone imbalance in women,
BCI operates in the medical device and diagnostic industry. Like many other
vendors in this industry, BCI primarily works with hospitals and other clinical laboratories,
providing its customers with diagnostic testing laboratory equipment, supplies, and related
While BCI offers its diagnostic equipment/systems, as well as its reagents and
supplies, for outright purchase, a common arrangement—for BCI, as well as within the
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industry—is for BCI to rent/lease its diagnostic equipment under what is known as a “reagent
rental agreement.”
Reagent rental agreements are common contractual arrangements for BCI and
other vendors in the industry because medical equipment can be a sizeable up-front capital
expenditure that many laboratories do not want (or cannot afford) to undertake. Reagent rental
agreements provide an attractive alternative. Reagent rental contracts combine equipment rental,
equipment service, and supply costs whereby the laboratory commits to purchasing a set
minimum amount of reagents and supplies based on set prices for reagents and supplies on a
monthly or yearly basis over a set period of time. In other words, under a typical reagent rental
agreement a customer does not make separate payments for the equipment rental; instead, the
costs of the equipment—rental costs and any re s—are built into the set
pricing of the reagent and supply purchase obligations, and spread over the length of the
contract, making the equipment more affordable.
Another option for laboratories is a “dry lease,” in which the contractual
arrangement between BCI and the laboratory involves just the lease/rental of the laboratory
equipment, without any reagent and supply purchase arrangement or equipment service support
package.
The business relationship between BCI and Low T began in September 2012. In
and around this period of time, as well as in subsequent months, multiple Low T site facility
contracts with BCI for the rental of laboratory equipment, which
included the purchase of reagents and supplies. These were reagent rental agreements, requiring
a minimum annual purchase commitment of reagents and supplies for the rented equipment over
a set period of time.
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The purpose of these agreements was for Low T to rent a certain type of
laboratory equipment from BCI—the Access 2 Immunoassay System (the “Access 2”)—at
various Low T locations and for BCI to provide reagents, supplies, and service for the Access 2
at each of these Low T sites. The Access 2, with reagents and supplies, would be used by these
The Access 2 is a state-of-the-art immunoassay system analyzer developed by
BCI. The Access 2 uses reagents and assays, along with other consumable supplies, when
conducting diagnostic tests. The listed price for the Access 2, without any discounts or other
arrangements, is approximately $150,000.
In or around May 2013, Mike Sisk
communicated to BCI the desire to have a master agreement in place between BCI and Low T
instead of individual contracts for each Low T location. The purpose of this master agreement
was to allow new Low T sites to quickly establish a business relationship with BCI, consistent
On July 1, 2013, Low T and BCI entered into such an agreement (the “Master
Pricing Agreement,” attached hereto as Exhibit A). As with the earlier individual Low T site
location agreements, the contractual arrangement entered into was a reagent rental agreement:
the terms of the Master Pricing Agreement involved Low T renting the Access 2 equipment at
certain Low T locations for a set period of time and involved a required minimum annual
purchase commitment of reagents and supplies by Low T for each the Access 2 units being
rented.
Specifically, under the Master Pricing Agreement, each Eligible Member (i.e., a
specific Low T or HerKare site) entered into a five-year (60 month) agreement for the lease of an
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Access 2 equipment with a Minimum Annual Reagent Commitment of $38,611.40 for each
Access 2 acquired. (Master Pricing Agreement § 2 (“Term of Agreement”), Counterpet. Ex. A at
at § 4(A) (“Products”), Counterpet. Ex. A at 16; at § 4(B) (“Minimum Reagent
Purchase Commitments”), Counterpet. Ex. A at 16; Master Pricing Agreement Exhibits B & C,
The Master Pricing Agreement included a BCI service support plan for the Access
2 units over the agreement’s five-year period, which included BCI providing services such as
installation of the Access 2 at each Low T site, training to Low T employees, performance-
enhancing software upgrades, preventative maintenance, on-site service, and troubleshooting
support. (See, e.g., Master Pricing Agreement Exhibits D-F, Counterpet. Ex. A at 26-28; at
§4 (C) (“Software Upgrade”), Counterpet. Ex. A, at 16; at § 4(E) (“Trai
Multiple Low T sites were included as part of Master Pricing Agreement when
entered into on July 1, 2013, and the Master Pricing Agreement allowed for additional Low T
location sites and Eligible Members to be added to the agreement by an “Exhibit H” amendment.
(Master Pricing Agreement Exhibit A, Counterpet. Ex. A at 23; at § 3 (“Eligible Members”),
Counterpet. Ex. A at 16; at § 5(1.3) (“Definitions, Eligible Member”), Counterpet. Ex. A at
The Master Pricing Agreement is governed by and, to be construed in accordance
with, California state law, without reference to the conflict of law provisions. (Master Pricing
Agreement § 5(14.0) (“Governing La
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On September 30, 2013, the first HerKare as an Eligible
Member to the Master Pricing Agreement. ( Fourth Amendment to the Master Pricing
Agreement, attached hereto as Exhibit B.)
By the beginning of 2015, approximately 55 Low T locations and 6 HerKare
the Master Pricing Agreement.
On or around January 19, 2015, the Low T and HerKare Quality Assurance
Program Manager, Osvaldo Ocon, told Max Phillips, BCI’s Director of Integrated Delivery
Networks, that Ocon had been informed that Low T would be phasing out BCI Access 2 systems
In a letter dated January 20, 2015, Osvaldo Ocon informed BCI that Low T had
closed, or would be closing by the end of the month, nine Low T sites, located in Arizona,
California, Illinois, and Nevada. The letter requested BCI’s accommodation in the return and
credit of the Access 2 analyzers from
On January 29, 2015, legal counsel for Low T, David Moraine, contacted BCI by
email to inform BCI that it should retrieve their Access 2 systems from the closing or closed
centers. Per Moraine’s email, Low T asserted that it would have no duty to preserve, safeguard,
or otherwise protect the Access 2 systems if BCI did not retrieve them by February 27, 2015.
In or around early February 2015, Mike Sisk contacted BCI to discuss (a) the
return schedule for Access 2 analyzers from Low T sites, and (b) whether HerKare and BCI
On March 30, 2015, Osvaldo Ocon contacted BCI to request that BCI begin the
remaining Access 2 analyzers from Low T sites.
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Low T and HerKare currently have outstanding invoices totaling at least
$5,845,145.65, pursuant to the amount owed under the Master Pricing Agreement, for which BCI
has not received payment. The Master Pricing Agreement requires Low T and HerKare to “pay
in full by the Due Date any invoice issued by BCI,” with “Due Date” defined as thirty days after
the date of the invoice. More than thirty days have passed since the date of the invoice, and
payment is, therefore, past due.
AUSES OF
Starting in or around January and February 2015, Low T breached and/or
repudiated for all Low T Eligible Member site locations that had entered into the Master Pricing
Agreement.
The Master Pricing Agreement is a valid and enforceable contract between BCI
and Low T, requiring each Low T Eligible Member site
Agreement, for a period of no less than five years, to rent the Access 2 equipment and to
purchase the requisite amount of reagents and supplies necessary in order to satisfy its Minimum
Annual Reagent Commitment of $38,611.40.
Low T and Mike Sisk were well aware of the Master Pricing Agreement being a
reagent rental agreement for a five-year period when entering into this contract. This type of
agreement is a common industry agreement be
Under the Master Pricing Agreement, Access 2 systems were not to be returned
prior to the expiration of the five year reagent rental agreement period. ( Master Pricing
Agreement § 5(6.1) (“Return Goods Policy”), Counterpet. Ex. A at 19; Returned Material
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Authorization (RMA) Policy, attached hereto as Exhibit C (“BCI will not issue an RMA for
instruments and accessories covered by an unexpired lease or reagent rental type agreement.”).)
Under the Master Pricing Agreement, Low T was responsible for risk of loss on
the rented Access 2 systems until they were returned to BCI. ( Master Pricing Agreement
Low T never disputed or challenged the agreement’s five year requirement for the
lease of the Access 2 systems and the annual reagent minimum commitment until early 2015,
when Low T refused to pay the invoices issued for the nine Low T Eligible Member location
sites that returned their Access 2 systems, prio
communicated to BCI its denial of Low T’s contractual obligations and duties under the Master
Pricing Agreement, including but not limited to some of the following actions: Low T
communicated to BCI its denial of Low T’s risk of loss or damages obligations under the Master
Pricing Agreement for any unreturned Access 2 systems; Low T demanded BCI remove its
Access 2 systems from Low T Eligible Member site locations that had entered into the Master
Pricing Agreement; and Low T informed BCI that it would no longer be using BCI’s Access 2
systems for Low T locations.
Low T’s conduct showed a fixed intention to abandon, renounce, and refuse to
perform the Master Pricing Agreement for Low T Eligible Member site locations.
Low T’s actions in unilaterally terminating the Master Pricing Agreement prior to
the completion of the agreed upon five year term constituted a breach and/or repudiation of the
Master Pricing Agreement.
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As a result of this breach, BCI suffered actual damages, including but not limited
to the remaining purchase obligations to satisfy the Minimum Annual Reagent Commitment for
each Access 2 equipment (which includes loss of rental income for the remaining contract period
for each Access 2 equipment), as well as decontamination and retrieval costs for the returned
Access 2 systems. BCI has provided invoices to Low T for these amounts, and those invoices
HerKare and Low T share common ownership, share the same address for their
principle place of business, share employees, and voluntarily engaged in a course of dealing
under the same Master Pricing Agreement.
As a result of Low T’s actions in unilaterally terminating the Master Pricing
Agreement for the more-than-50 Low T site locations prior to the completion of the agreed upon
five year term and Low T’s refusal to cure said breach(es) and/or repudiation(s), BCI terminated
the Master Pricing Agreement for cause as to the remaining six Eligible Members, which were
the HerKare locations, pursuant to the terms of the Master Pricing Agreement. (
Pricing Agreement § 5(5.1) (“Termination for Cause”), Ex. A at 19.)
BCI’s for-cause termination as to the six HerKare locations did not affect
HerKare’s contractual obligations that existed prior to termination, which included, inter alia, the
five-year Access 2 rental obligation, as paid for through the Minimum Annual Reagent
Commitment of $38,611.40. ( Master Pricing Agreement § 5(5.2) (“Effect of Termination on
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As of this date, HerKare has refused to pay outstanding invoices for the
ster Pricing Agreement, which
constitutes an ongoing breach of the contractual obligations HerKare still owes under the Master
Pricing Agreement.
As a result of this breach, BCI suffered actual damages, including but not limited
to the remaining purchase obligations to satisfy the Minimum Annual Reagent Commitment for
each Access 2 equipment (which includes loss of rental income for the remaining contract period
for each Access 2 equipment), as well as decontamination and retrieval costs for the returned
Access 2 systems.
In the alternative to BCI’s breach of contract counterclaims against Low T and
HerKare, BCI asserts promissory estoppel counterclaims against Low T and HerKare.
Low T and HerKare made written promises to BCI to rent an Access 2 system for
five years through the purchase of the requisite amount of reagents and supplies necessary in
order to satisfy its Minimum Annual Reagent Commitment of $38,611.40.
Low T and HerKare should have reasonably expected their promises to induce
Low T’s and HerKare’s promise did actually induce BCI into definite and
substantial action, such as providing Low T and HerKare locations with rental and service rates
spread over a five-year agreement. BCI supplied these locations with, including but not limited
to (i) the rental of equipment, (ii) the purchase of reagents, (iii) the purchase of supplies, (iv)
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both initial and follow-up training, and (v) supplemental services to try to help these locations
run their labs in a more efficient and scientifically rigorous manner.
In relying on the plain language of the Master Pricing Agreement, BCI reasonably
promises—including but not limited to Low T’s
and HerKare’s promises to remain customers for the full five-year term
benefits to Low T and HerKare, with BCI incurring detriments and expenses to itself in the
It would be unjust to allow Low T and HerKare to repudiate their obligations if
for some reason the Master Pricing Agreement or the at-issue portions of the agreement are later
determined to be nonbinding, when it was the understanding of BCI, Low T, and HerKare when
entering into the Master Pricing Agreement and acting under the agreement that the agreement
As such, BCI is entitled to monetary relief for reliance damages, unjust
enrichment, restitution damages, and/or expectation damages in an amount to be determined at
trial to compensate BCI for the past-incurred losses and expenses, as well as the lost future
RAYER FOR ELIEF
WHEREFORE, Plaintiff respectfully requests that this Court enter judgment in its
Award BCI monetary relief in the amount of actual damages BCI suffered as a
es of the Master Pricing Agreement;
In the alternative, award BCI proper reliance, unjust enrichment, expectation, and
restitution damages as recognized by Texas law under promissory estoppel;
Award BCI costs of court and attorneys’ fees pursuant to Chapter 38 of the Texas
Civil Practice and Remedies and Section 5(15.0) of the Master Pricing
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Agreement, including any appeals to the Court of Appeals and/or the Supreme
Award BCI prejudgment and post judgment interest as allowed by law and the
contracts at issue; and
Award BCI any and all other relief to which it may be justly entitled as allowed
by law and within the jurisdictional limits of this Court.
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December 9, 2015 Respectfully Submitted,
/s/ Michelle Hartmann
Michelle Hartmann
State Bar No. 24032402
mhartmann@sidley.com
State Bar No. 24058791
(214) 981-3400 (Facsimile)
ATTORNEYS FOR DEFENDANT AND
COUNTER-CLAIMANT BECKMAN COULTER,
LLC, INC.
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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 servic
through the state’s electronic filing manager on the 9th day of December, 2015, with a courtesy
copy to the same via email:
60 Village Lane, Suite 110
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LOW T CENTER, LLC, Plaintiff and Counter- BECKMAN COULTER, INC., Defendant and Counter- DALLAS COUNTY, TEXAS Claimant, HERKARE HOLDINGS, LLC, 191ST JUDICIAL DISTRICT Third-Party Defendant. BECKMAN COULTER, INC.’S ORIGINAL LOW T CENTER, LLC AND HERKARE HOLDINGS, LLC TO THE HONORABLE JUDGE OF SAID COURT: Defendant/Counter-Claimant Beckman Cou nt Low T Center, LLC ndant HerKare Holdings, LLC (“ would respectfully show the following: C.’S ORIGINAL COUNTERCLAIM AND THIRD-PARTY PETITION Page 1 ISCOVERY ONTROL LAN AND ANGE OF AMAGES BCI respectfully requests that the discovery in this case be conducted under Level 3. BCI seeks monetary relief over $1,000,000.00. BCI seeks maximum damages of s’ fees, and costs to be determined at trial. EQUEST FOR ISCLOSURE Pursuant to TRCP 194, Low T is requested to disclose the information or material described in Rule 194.2 within 30 days of service of this request, and HerKare is requested to disclose the information or material described in Rule 194.2 within 50 days of service of this URISDICTION AND This Court has personal jurisdiction over Low T and HerKare because they are Texas companies doing business, in part, in Texas, with business offices and an agent for service of process in Texas. Additionally, to the extent necessary, the Texas long-arm statute authorizes personal jurisdiction over Low T and HerKare, and such jurisdiction is consistent with constitutional due process requirements. Both Low T and HerKare, directly or through intermediaries, have conducted and do conduct substantial business in this forum, including activities related to the contract with BCI in which Low T and HerKare have purposefully and voluntarily placed products and/or services into the stream of commerce with the expectation that they will be purchased by consumers in this forum, and have regularly solicited business and engaged in other persistent courses of conduct which has derived substantial revenue from goods The Court has subject matter jurisdiction in this case, with the amount in controversy exceeding the minimum jurisdictional limits of this Court. Venue is proper in Dallas County, Texas, pursuant to Section 15.062 of the Texas Civil Practice and Remedies Code. C.’S ORIGINAL COUNTERCLAIM AND THIRD-PARTY PETITION Page 2 BCI’s claim against HerKare arises out of the same transaction, occurrence, or series of transactions or occurrences as Low T’s original claims against BCI and BCI’s counterclaim against Low T. Additionally, as related to such claims, both Low T and HerKare, directly or through intermediaries, sell and offer to sell produc The Parties BCI, a Delaware corporation, is a global company that designs, manufactures, rents, and sells products—such as laboratory equipment, supplies, and reagents—that simplify, automate, and innovate complex biomedical testing—such as molecular diagnostics. On information and belief, Counter-Defendant Low T is a Texas limited liability company with its principle place of business at 1920 E. State Highway 114, Southlake, TX 76092. Low T is involved in the diagnosis and treatment of low testosterone in men, and is On information and belief, Third-Party Defendant HerKare is a Texas limited liability company its principle place of business at 1920 E. State Highway 114, Southlake, TX 76092. HerKare is involved in the diagnosis and treatment of hormone imbalance in women, BCI operates in the medical device and diagnostic industry. Like many other vendors in this industry, BCI primarily works with hospitals and other clinical laboratories, providing its customers with diagnostic testing laboratory equipment, supplies, and related While BCI offers its diagnostic equipment/systems, as well as its reagents and supplies, for outright purchase, a common arrangement—for BCI, as well as within the C.’S ORIGINAL COUNTERCLAIM AND THIRD-PARTY PETITION Page 3 industry—is for BCI to rent/lease its diagnostic equipment under what is known as a “reagent rental agreement.” Reagent rental agreements are common contractual arrangements for BCI and other vendors in the industry because medical equipment can be a sizeable up-front capital expenditure that many laboratories do not want (or cannot afford) to undertake. Reagent rental agreements provide an attractive alternative. Reagent rental contracts combine equipment rental, equipment service, and supply costs whereby the laboratory commits to purchasing a set minimum amount of reagents and supplies based on set prices for reagents and supplies on a monthly or yearly basis over a set period of time. In other words, under a typical reagent rental agreement a customer does not make separate payments for the equipment rental; instead, the costs of the equipment—rental costs and any re s—are built into the set pricing of the reagent and supply purchase obligations, and spread over the length of the contract, making the equipment more affordable. Another option for laboratories is a “dry lease,” in which the contractual arrangement between BCI and the laboratory involves just the lease/rental of the laboratory equipment, without any reagent and supply purchase arrangement or equipment service support package. The business relationship between BCI and Low T began in September 2012. In and around this period of time, as well as in subsequent months, multiple Low T site facility contracts with BCI for the rental of laboratory equipment, which included the purchase of reagents and supplies. These were reagent rental agreements, requiring a minimum annual purchase commitment of reagents and supplies for the rented equipment over a set period of time. C.’S ORIGINAL COUNTERCLAIM AND THIRD-PARTY PETITION Page 4 The purpose of these agreements was for Low T to rent a certain type of laboratory equipment from BCI—the Access 2 Immunoassay System (the “Access 2”)—at various Low T locations and for BCI to provide reagents, supplies, and service for the Access 2 at each of these Low T sites. The Access 2, with reagents and supplies, would be used by these The Access 2 is a state-of-the-art immunoassay system analyzer developed by BCI. The Access 2 uses reagents and assays, along with other consumable supplies, when conducting diagnostic tests. The listed price for the Access 2, without any discounts or other arrangements, is approximately $150,000. In or around May 2013, Mike Sisk communicated to BCI the desire to have a master agreement in place between BCI and Low T instead of individual contracts for each Low T location. The purpose of this master agreement was to allow new Low T sites to quickly establish a business relationship with BCI, consistent On July 1, 2013, Low T and BCI entered into such an agreement (the “Master Pricing Agreement,” attached hereto as Exhibit A). As with the earlier individual Low T site location agreements, the contractual arrangement entered into was a reagent rental agreement: the terms of the Master Pricing Agreement involved Low T renting the Access 2 equipment at certain Low T locations for a set period of time and involved a required minimum annual purchase commitment of reagents and supplies by Low T for each the Access 2 units being rented. Specifically, under the Master Pricing Agreement, each Eligible Member (i.e., a specific Low T or HerKare site) entered into a five-year (60 month) agreement for the lease of an C.’S ORIGINAL COUNTERCLAIM AND THIRD-PARTY PETITION Page 5 Access 2 equipment with a Minimum Annual Reagent Commitment of $38,611.40 for each Access 2 acquired. (Master Pricing Agreement § 2 (“Term of Agreement”), Counterpet. Ex. A at at § 4(A) (“Products”), Counterpet. Ex. A at 16; at § 4(B) (“Minimum Reagent Purchase Commitments”), Counterpet. Ex. A at 16; Master Pricing Agreement Exhibits B & C, The Master Pricing Agreement included a BCI service support plan for the Access 2 units over the agreement’s five-year period, which included BCI providing services such as installation of the Access 2 at each Low T site, training to Low T employees, performance- enhancing software upgrades, preventative maintenance, on-site service, and troubleshooting support. (See, e.g., Master Pricing Agreement Exhibits D-F, Counterpet. Ex. A at 26-28; at §4 (C) (“Software Upgrade”), Counterpet. Ex. A, at 16; at § 4(E) (“Trai Multiple Low T sites were included as part of Master Pricing Agreement when entered into on July 1, 2013, and the Master Pricing Agreement allowed for additional Low T location sites and Eligible Members to be added to the agreement by an “Exhibit H” amendment. (Master Pricing Agreement Exhibit A, Counterpet. Ex. A at 23; at § 3 (“Eligible Members”), Counterpet. Ex. A at 16; at § 5(1.3) (“Definitions, Eligible Member”), Counterpet. Ex. A at The Master Pricing Agreement is governed by and, to be construed in accordance with, California state law, without reference to the conflict of law provisions. (Master Pricing Agreement § 5(14.0) (“Governing La C.’S ORIGINAL COUNTERCLAIM AND THIRD-PARTY PETITION Page 6 On September 30, 2013, the first HerKare as an Eligible Member to the Master Pricing Agreement. ( Fourth Amendment to the Master Pricing Agreement, attached hereto as Exhibit B.) By the beginning of 2015, approximately 55 Low T locations and 6 HerKare the Master Pricing Agreement. On or around January 19, 2015, the Low T and HerKare Quality Assurance Program Manager, Osvaldo Ocon, told Max Phillips, BCI’s Director of Integrated Delivery Networks, that Ocon had been informed that Low T would be phasing out BCI Access 2 systems In a letter dated January 20, 2015, Osvaldo Ocon informed BCI that Low T had closed, or would be closing by the end of the month, nine Low T sites, located in Arizona, California, Illinois, and Nevada. The letter requested BCI’s accommodation in the return and credit of the Access 2 analyzers from On January 29, 2015, legal counsel for Low T, David Moraine, contacted BCI by email to inform BCI that it should retrieve their Access 2 systems from the closing or closed centers. Per Moraine’s email, Low T asserted that it would have no duty to preserve, safeguard, or otherwise protect the Access 2 systems if BCI did not retrieve them by February 27, 2015. In or around early February 2015, Mike Sisk contacted BCI to discuss (a) the return schedule for Access 2 analyzers from Low T sites, and (b) whether HerKare and BCI On March 30, 2015, Osvaldo Ocon contacted BCI to request that BCI begin the remaining Access 2 analyzers from Low T sites. C.’S ORIGINAL COUNTERCLAIM AND THIRD-PARTY PETITION Page 7 Low T and HerKare currently have outstanding invoices totaling at least $5,845,145.65, pursuant to the amount owed under the Master Pricing Agreement, for which BCI has not received payment. The Master Pricing Agreement requires Low T and HerKare to “pay in full by the Due Date any invoice issued by BCI,” with “Due Date” defined as thirty days after the date of the invoice. More than thirty days have passed since the date of the invoice, and payment is, therefore, past due. AUSES OF Starting in or around January and February 2015, Low T breached and/or repudiated for all Low T Eligible Member site locations that had entered into the Master Pricing Agreement. The Master Pricing Agreement is a valid and enforceable contract between BCI and Low T, requiring each Low T Eligible Member site Agreement, for a period of no less than five years, to rent the Access 2 equipment and to purchase the requisite amount of reagents and supplies necessary in order to satisfy its Minimum Annual Reagent Commitment of $38,611.40. Low T and Mike Sisk were well aware of the Master Pricing Agreement being a reagent rental agreement for a five-year period when entering into this contract. This type of agreement is a common industry agreement be Under the Master Pricing Agreement, Access 2 systems were not to be returned prior to the expiration of the five year reagent rental agreement period. ( Master Pricing Agreement § 5(6.1) (“Return Goods Policy”), Counterpet. Ex. A at 19; Returned Material C.’S ORIGINAL COUNTERCLAIM AND THIRD-PARTY PETITION Page 8 Authorization (RMA) Policy, attached hereto as Exhibit C (“BCI will not issue an RMA for instruments and accessories covered by an unexpired lease or reagent rental type agreement.”).) Under the Master Pricing Agreement, Low T was responsible for risk of loss on the rented Access 2 systems until they were returned to BCI. ( Master Pricing Agreement Low T never disputed or challenged the agreement’s five year requirement for the lease of the Access 2 systems and the annual reagent minimum commitment until early 2015, when Low T refused to pay the invoices issued for the nine Low T Eligible Member location sites that returned their Access 2 systems, prio communicated to BCI its denial of Low T’s contractual obligations and duties under the Master Pricing Agreement, including but not limited to some of the following actions: Low T communicated to BCI its denial of Low T’s risk of loss or damages obligations under the Master Pricing Agreement for any unreturned Access 2 systems; Low T demanded BCI remove its Access 2 systems from Low T Eligible Member site locations that had entered into the Master Pricing Agreement; and Low T informed BCI that it would no longer be using BCI’s Access 2 systems for Low T locations. Low T’s conduct showed a fixed intention to abandon, renounce, and refuse to perform the Master Pricing Agreement for Low T Eligible Member site locations. Low T’s actions in unilaterally terminating the Master Pricing Agreement prior to the completion of the agreed upon five year term constituted a breach and/or repudiation of the Master Pricing Agreement. C.’S ORIGINAL COUNTERCLAIM AND THIRD-PARTY PETITION Page 9 As a result of this breach, BCI suffered actual damages, including but not limited to the remaining purchase obligations to satisfy the Minimum Annual Reagent Commitment for each Access 2 equipment (which includes loss of rental income for the remaining contract period for each Access 2 equipment), as well as decontamination and retrieval costs for the returned Access 2 systems. BCI has provided invoices to Low T for these amounts, and those invoices HerKare and Low T share common ownership, share the same address for their principle place of business, share employees, and voluntarily engaged in a course of dealing under the same Master Pricing Agreement. As a result of Low T’s actions in unilaterally terminating the Master Pricing Agreement for the more-than-50 Low T site locations prior to the completion of the agreed upon five year term and Low T’s refusal to cure said breach(es) and/or repudiation(s), BCI terminated the Master Pricing Agreement for cause as to the remaining six Eligible Members, which were the HerKare locations, pursuant to the terms of the Master Pricing Agreement. ( Pricing Agreement § 5(5.1) (“Termination for Cause”), Ex. A at 19.) BCI’s for-cause termination as to the six HerKare locations did not affect HerKare’s contractual obligations that existed prior to termination, which included, inter alia, the five-year Access 2 rental obligation, as paid for through the Minimum Annual Reagent Commitment of $38,611.40. ( Master Pricing Agreement § 5(5.2) (“Effect of Termination on C.’S ORIGINAL COUNTERCLAIM AND THIRD-PARTY PETITION Page 10 As of this date, HerKare has refused to pay outstanding invoices for the ster Pricing Agreement, which constitutes an ongoing breach of the contractual obligations HerKare still owes under the Master Pricing Agreement. As a result of this breach, BCI suffered actual damages, including but not limited to the remaining purchase obligations to satisfy the Minimum Annual Reagent Commitment for each Access 2 equipment (which includes loss of rental income for the remaining contract period for each Access 2 equipment), as well as decontamination and retrieval costs for the returned Access 2 systems. In the alternative to BCI’s breach of contract counterclaims against Low T and HerKare, BCI asserts promissory estoppel counterclaims against Low T and HerKare. Low T and HerKare made written promises to BCI to rent an Access 2 system for five years through the purchase of the requisite amount of reagents and supplies necessary in order to satisfy its Minimum Annual Reagent Commitment of $38,611.40. Low T and HerKare should have reasonably expected their promises to induce Low T’s and HerKare’s promise did actually induce BCI into definite and substantial action, such as providing Low T and HerKare locations with rental and service rates spread over a five-year agreement. BCI supplied these locations with, including but not limited to (i) the rental of equipment, (ii) the purchase of reagents, (iii) the purchase of supplies, (iv) C.’S ORIGINAL COUNTERCLAIM AND THIRD-PARTY PETITION Page 11 both initial and follow-up training, and (v) supplemental services to try to help these locations run their labs in a more efficient and scientifically rigorous manner. In relying on the plain language of the Master Pricing Agreement, BCI reasonably promises—including but not limited to Low T’s and HerKare’s promises to remain customers for the full five-year term benefits to Low T and HerKare, with BCI incurring detriments and expenses to itself in the It would be unjust to allow Low T and HerKare to repudiate their obligations if for some reason the Master Pricing Agreement or the at-issue portions of the agreement are later determined to be nonbinding, when it was the understanding of BCI, Low T, and HerKare when entering into the Master Pricing Agreement and acting under the agreement that the agreement As such, BCI is entitled to monetary relief for reliance damages, unjust enrichment, restitution damages, and/or expectation damages in an amount to be determined at trial to compensate BCI for the past-incurred losses and expenses, as well as the lost future RAYER FOR ELIEF WHEREFORE, Plaintiff respectfully requests that this Court enter judgment in its Award BCI monetary relief in the amount of actual damages BCI suffered as a es of the Master Pricing Agreement; In the alternative, award BCI proper reliance, unjust enrichment, expectation, and restitution damages as recognized by Texas law under promissory estoppel; Award BCI costs of court and attorneys’ fees pursuant to Chapter 38 of the Texas Civil Practice and Remedies and Section 5(15.0) of the Master Pricing C.’S ORIGINAL COUNTERCLAIM AND THIRD-PARTY PETITION Page 12 Agreement, including any appeals to the Court of Appeals and/or the Supreme Award BCI prejudgment and post judgment interest as allowed by law and the contracts at issue; and Award BCI any and all other relief to which it may be justly entitled as allowed by law and within the jurisdictional limits of this Court. C.’S ORIGINAL COUNTERCLAIM AND THIRD-PARTY PETITION Page 13 December 9, 2015 Respectfully Submitted, /s/ Michelle Hartmann Michelle Hartmann State Bar No. 24032402 mhartmann@sidley.com State Bar No. 24058791 (214) 981-3400 (Facsimile) ATTORNEYS FOR DEFENDANT AND COUNTER-CLAIMANT BECKMAN COULTER, LLC, INC. C.’S ORIGINAL COUNTERCLAIM AND THIRD-PARTY PETITION Page 14 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 servic through the state’s electronic filing manager on the 9th day of December, 2015, with a courtesy copy to the same via email: 60 Village Lane, Suite 110 C.’S ORIGINAL COUNTERCLAIM AND THIRD-PARTY PETITION Page 15 EXHIBIT A BECKMAN COULTER, INC.'S ORIGINAL Page 15 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 16 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 17 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 18 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 19 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 20 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 21 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 22 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 23 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 24 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 25 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 26 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 27 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 28 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 29 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 30 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 31 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 32 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 33 COUNTERCLAIM AND THIRD-PARTY PETITION EXHIBIT BECKMAN COULTER, INC.'S ORIGINAL Page 34 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 35 COUNTERCLAIM AND THIRD-PARTY PETITION BECKMAN COULTER, INC.'S ORIGINAL Page 36 COUNTERCLAIM AND THIRD-PARTY PETITION EXHIBIT BECKMAN COULTER, INC.'S ORIGINAL Page 37 COUNTERCLAIM AND THIRD-PARTY PETITION