Paradigm Biodevices, Inc. v. Viscogliosi Bros., LLC
842 F. Supp. 2d 661
S.D.N.Y.2012Background
- Paradigm BioDevices, a MA distributor, entered into a distribution agreement with Surgicraft, a UK company later acquired by Centinel Spine, Inc.
- A change of control at Surgicraft led to termination of the distribution agreement and a proposed termination payment to Paradigm.
- Paradigm obtained a UK judgment for the termination payment and had it domesticated in Massachusetts.
- Plaintiff asserts claims for tortious interference, fraudulent transfer, veil piercing, Massachusetts Chapter 93A violations, and successor liability against Centinel and related entities and individuals.
- The court dismissed some claims at the November 9, 2011 hearing, left the fraudulent transfer claim viable against Centinel, and allowed the 93A claim to proceed against Centinel and John Viscogliosi; it denied a prejudgment attachment against Centinel.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Fraudulent transfer claim viability | Paradigm asserts all defendants aided the transfer; Centinel is the transferee. | Only Centinel was the actual transferee; others were not liable as aiding parties. | Fraudulent transfer actionable only against Centinel; other defendants dismissed. |
| 93A viability against defendants | Defendants engaged in unfair or deceptive practices in MA conduct. | No sufficient commercial relationship or MA-focused conduct by all defendants. | Chapter 93A claim sustained against Centinel and John Viscogliosi; others dismissed. |
| Location of conduct for 93A §11 | Tort/transfer-related acts occurred in Massachusetts; site supports MA §11 applicability. | Conduct lacked MA nexus for some defendants. | Massachusetts center of gravity analysis supports MA §11 applicability to Centinel and John Viscogliosi. |
Key Cases Cited
- AngioDynamics, Inc. v. Biolitec, Inc., 2011 WL 3157312 (D. Mass. 2011) (addressed fraudulent transfer and Chapter 93A interplay in MA)
- Uncle Henry’s Inc. v. Plaut Consulting Co., 399 F.3d 33 (1st Cir. 2005) (commercial relationship requirement for Chapter 93A)
- In re Sharp Int’l Corp., 403 F.3d 43 (2d Cir. 2005) ( UFCA/constructive vs actual fraud; pleading standards)
- Lily Transp. Corp. v. Royal Institutional Servs., Inc., 832 N.E.2d 666 (Mass. App. Ct. 2005) ( Mass. 93A center of gravity discussion)
- Milliken & Co. v. Duro Textiles, LLC, 887 N.E.2d 244 (Mass. 2008) (commercial relationship requirement under 93A)