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XY, LLC v. Trans OVA Genetics, LC

United States District Court, D. Colorado

September 15, 2014

XY, LLC, Plaintiff/Counterclaim Defendant,
v.
TRANS OVA GENETICS, LC, Defendant/Counterclaim Plaintiff,
v.
INGURAN, LLC, Third Party Defendant.

ORDER GRANTING IN PART DEFENDANT'S EARLY MOTION FOR PARTIAL SUMMARY JUDGMENT

WILLIAM J. MARTÍNEZ, District Judge.

Plaintiff XY, LLC ("Plaintiff") brings this action for patent infringement, breach of contract, and related claims against Defendant Trans Ova Genetics, LC ("Defendant"). (Second Am. Compl. ("SAC") (ECF No. 113).) This matter is before the Court on Defendant's Early Motion for Partial Summary Judgment ("Motion") as to Plaintiff's claims for breach of contract and a declaratory judgment. (ECF No. 51.) For the reasons set forth below, the Motion is granted in part and denied in part.

I. BACKGROUND

The relevant undisputed facts are as follows. This case arises out of a Commercial License Agreement ("Agreement") that the parties entered into on April 16, 2004, under which Plaintiff licensed its patented sex-selection technology to Defendant for use in the animal breeding industry, subject to a variety of conditions. (Movant's Statement of Material Facts ("MSMF") (ECF No. 51 at 2-5) ¶ 1; ECF No. 51-1.) Among other limitations and requirements, the Agreement included limits on the customers to whom Defendant could sell sex-selected animal semen. (ECF No. 50 at 3-8.) In the event of certain breaches of these limitations and requirements by Defendant, the Agreement provided for termination in writing by Plaintiff. ( Id. at 10.)

On November 20, 2007, Plaintiff delivered a letter to Defendant asserting that Defendant had breached the Agreement in various ways and declaring the agreement terminated (the "Termination Letter"). (MSMF ¶ 6; ECF No. 50-1.) On December 12, 2007, Defendant delivered a letter to Plaintiff indicating that it disagreed with Plaintiff's assertion of breach and termination of the Agreement. (MSMF ¶ 8.) Over the course of multiple years, the parties negotiated but failed to resolve the dispute. ( Id. ¶¶ 9-10.) During this time, Defendant made royalty payments to Plaintiff pursuant to the Agreement, but Plaintiff has declined all such payments. ( Id. ¶ 11.)

Plaintiff filed its original complaint against Defendant in the District Court for the Western District of Texas on March 5, 2012, bringing claims for patent infringement. (MSMF ¶ 14; ECF No. 4.) Pursuant to an arbitration provision in the Agreement, Plaintiff asserted its breach of contract claims in an arbitration proceeding filed on March 6, 2012, and sought a declaration that the Termination Letter effectively ended the Agreement. (MSMF ¶ 12.) The parties subsequently agreed to consolidate the claims in arbitration with those in the District Court case, without waiver of any claim or defense, and Plaintiff filed an Amended Complaint adding the contract claim and declaratory judgment claim to the District Court case. ( Id. ¶ 15; ECF No. 15.) The action was transferred to this Court on April 4, 2013. (ECF No. 1.)

Defendant filed the instant Motion on September 6, 2013, arguing that the breach of contract and declaratory judgment claims were time-barred. (ECF No. 51.) Plaintiff filed a Response (ECF No. 75), and Defendant a Reply (ECF No. 88). Plaintiff subsequently filed a Second Amended Complaint (ECF No. 113), which amended Plaintiff's complaint in ways irrelevant to the instant Motion. Thus, the Motion is ripe for disposition.

II. LEGAL STANDARD

Summary judgment is appropriate only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem Coal Co., Inc., 41 F.3d 567, 569 (10th Cir. 1994). Whether there is a genuine dispute as to a material fact depends upon whether the evidence presents a sufficient disagreement to require submission to a jury or conversely, is so one-sided that one party must prevail as a matter of law. Anderson v. Liberty Lobby, 477 U.S. 242, 248-49 (1986); Stone v. Autoliv ASP, Inc., 210 F.3d 1132 (10th Cir. 2000); Carey v. U.S. Postal Serv., 812 F.2d 621, 623 (10th Cir. 1987).

A fact is "material" if it pertains to an element of a claim or defense; a factual dispute is "genuine" if the evidence is so contradictory that if the matter went to trial, a reasonable party could return a verdict for either party. Anderson, 477 U.S. at 248. The Court must resolve factual ambiguities against the moving party, thus favoring the right to a trial. Houston v. Nat'l Gen. Ins. Co., 817 F.2d 83, 85 (10th Cir. 1987).

III. ANALYSIS

Defendant challenges two of Plaintiff's claims on statute of limitations grounds, namely Count XII for a declaratory judgment that the Agreement was terminated (the "Declaratory Judgment Claim"), and Count XIV for breach of contract (the "Breach of Contract Claim"). (ECF Nos. 51 & 53.) Defendant argues that both claims are untimely under Colorado's three year statute of limitations for a breach of contract, because both claims accrued on or before November 20, 2007 when Plaintiff sent Defendant the Termination Letter. (ECF No. 53 at 3-7.) Plaintiff raises distinct arguments as to each challenged claim. ( See ECF No. 75.) Accordingly, the Court will discuss each claim in turn.

A. Breach of Contract

Defendant argues in its Motion that Plaintiff's Breach of Contract Claim is time-barred because it necessarily accrued at some point prior to the date Plaintiff sent the Termination Letter, on November 20, 2007. (ECF Nos. 51 & 53.) The parties agree that Colorado law applies to the challenged claims, and that the Colorado statute of limitations for breach of contract is three years from the date of accrual. Colo. Rev. Stat. § 13-80-101(1)(a). The parties also agree that a breach of contract claim in Colorado "accrues on the date the breach is discovered or should have been discovered by the exercise of ...


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