A quarterly summary and brief analysis of significant decisions issued by the Massachusetts Superior Court Business Litigation Session. A service of O’Connor, Carnathan and Mack LLC.		  

December
2006

Volume 3
Number 3
Page 4
 

Summarizing opinions from July 1, 2006 through
Sept. 30, 2006


Merger with Subsidiary of Direct Competitor Held Not to Constitute an Assignment of Licensing Agreement
 

 
 


 


 



 


 

 

 

 


 
     

O  T  H  E  R      D  E  C  I  S  I  O  N  S  :

Pharmetrics, Inc. v. Source Healthcare Analytics, Inc., 2006 Mass. Super. LEXIS 491
(Aug. 25, 2006) (van Gestel, J.).
     

Pharmetrics, Inc. and Source Healthcare Analytics, Inc. (“SHAI”) were parties to a licensing agreement pursuant to which Pharmetrics received use of confidential and proprietary data regarding pharmacy, hospital and physician claims for prescription drug products. The licensing agreement contained a specific prohibition on assignment of the licensing agreement without the express permission of SHAI. Included in this provision was the following language:

LICENSEE may transfer or assign this Agreement, without consent of [plaintiff], to any entity which acquires LICENSEE or all or substantially all of the stock or assets of LICENSEE; provided under no circumstances may LICENSEE assign this Agreement, in whole or in part, without written consent from [plaintiff], to IMS Health Incorporated, . . . including any of their related subsidiaries.
 






 

 

 

 


 

 

Id. at *5.

IMS Health Incorporated (“IMS”) and a short list of other expressly named companies were SHAI’s primary and direct competitors.

IMS acquired Pharmetrics by merging it into a wholly owned subsidiary. Despite the apparently plain prohibition on a transfer of the SHAI licensing agreement to IMS or any subsidiary, the Court applied Georgia law to conclude that a merger was not an assignment, and therefore the prohibition did not apply. It held that no assignment had occurred, and that SHAI breached the licensing agreement by cancelling it after the merger. To our eyes, this decision incorrectly isolates the word “assign” from the full statement of what the licensing agreement prohibited, and allows precisely the outcome that the drafters intended the agreement to bar.


 


 


 



 

 

 

 

 


 


 
 
     
     
 


Court Rejects Myriad Claims Asserted in Effort to Avoid Liability on Promissory Note
 

 

 
 

 

 

 

 

 


 


 

Bateman v. Republic Fin. Corp., 2006 Mass. Super. LEXIS 366
(Aug. 2, 2006 ) (van Gestel, J.).
     

Plaintiff was a retired lawyer who invested in residential real estate development in Weston in the 1980s and 1990s. When a project to develop six lots in a subdivision struggled financially in the early 1990s, plain-tiff signed a $1.68 million promissory note as part of a restructuring arrangement. He received 100 shares of Weston Realty Corporation, one of the entities in the venture in connection with the restructuring.

Bateman is a relatively long opinion as the Court wades through the Plaintiff’s myriad contentions, none of which appeared to the Court to have any merit. In particular, the Court did not believe

 

 

 

 

 

 

 
that certain of the purported claims – “recoupment” and “failure of consideration” – were claims at all, but were actually affirmative defenses. The Court held that the Plaintiffs’ claims for alleged mismanagement of the partnership and negligent misrepresentation by certain defendants were time barred. The Court rejected the M.G.L. ch. 93A claim as inapplicable to an intra-partnership dispute. The Bateman opinion is a lot of reading for relatively mundane points of law, but it might be a useful citation for the proposition that an affirmative defense cannot be asserted as a freestanding claim. 
 

 

 

 

 


 

 


 
 
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