Rochester Drug Cooperative Inc v. Goodheart Pharmacy Inc
16-4271
| 3rd Cir. | Nov 22, 2017Background
- RDC, a New York pharmaceutical distributor, extended credit and sold goods to GoodHeart Pharmacy of Philadelphia; GoodHeart is owned by Obioma and Damien Agoucha (Appellants).
- Parties executed a written credit agreement (with a New York choice-of-law clause) and a promissory note; payments were late or partial and GoodHeart accrued substantial unpaid balances.
- RDC sued GoodHeart and the Agouchas in April 2016 for breach of contract, account stated, unjust enrichment (alternative), and breach of guaranty; RDC sought contract damages and attorneys’ fees.
- District Court granted RDC summary judgment, denied Defendants’ partial summary judgment (which sought limitation of liability to $50,000 and raised a usury defense), and entered joint-and-several judgment for $155,599.06; RDC’s fee amount remained to be fixed.
- The Agouchas appealed pro se raising claims about reliance on RDC statements, an alleged verbal payment agreement, settlement efforts, and lack of personal liability; the Third Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RDC is entitled to summary judgment on amounts due under the credit agreement and promissory note | RDC: written contracts, invoices, and accounting show enforceable obligations and defaults | Defendants: challenged amounts and claimed liability should be limited to $50,000 credit application amount | Held: RDC entitled to judgment; undisputed defaults and documentary record established indebtedness |
| Whether the Agouchas are personally liable as guarantors | RDC: credit application/agreement names Agouchas as guarantors; plain language binds them | Agouchas: claimed they signed only on behalf of GoodHeart and lacked personal liability | Held: Agouchas’ declarations insufficient; court enforced guaranty language and held them personally liable |
| Whether the agreement’s delinquent-interest rate is usurious under New York law | Defendants argued interest provision was usurious | RDC relied on contract; no competent evidence by Defendants to establish usury | Held: Defendants failed to establish usury; summary judgment for RDC on contract claims upheld |
| Whether Defendants raised viable factual defenses (oral modification, fraud, settlement efforts) to preclude summary judgment | Defendants claimed verbal installment agreement, settlement negotiations, and alleged misrepresentations | Court: defendants offered no competent evidence, raised many arguments first on appeal (waived), and did not meet required proof for fraud | Held: Defenses were waived or unsupported; summary judgment affirmed |
Key Cases Cited
- Daniels v. Sch. Dist. of Phila., 776 F.3d 181 (3d Cir.) (standard of plenary review for summary judgment)
- Mylan Pharms., Inc. v. Warner Chilcott Pub. Ltd. Co., 838 F.3d 421 (3d Cir.) (summary judgment standards and viewing inferences for nonmovant)
- Computerized Radiological Servs. v. Syntex Corp., 786 F.2d 72 (2d Cir.) (elements and clear-and-convincing standard for fraud claims under New York law)
- Ray Haluch Gravel Co. v. Cent. Pension Fund, 134 S. Ct. 773 (Sup. Ct.) (merits decision is final for §1291 even if attorney’s fees remain to be determined)
- Simbraw v. United States, 367 F.2d 373 (3d Cir.) (corporations must be represented by counsel on appeal)