Regarding the lawsuit between American HealthChoice and the manufacturer of the first OmniBody Scan camera, we did not prevail in court.
History: American HealthChoice filed a lawsuit against the original OmniBody Scan manufacturer. We contracted for a microbolometer camera that was able to be sold to the medical community. Since the manufacturer failed to get us a camera that worked, even after one year of paying for software development and FDA approval, we filed a lawsuit. We had paid nearly $50,000 in invoices but the manufacturer never supplied us with supporting documentation to justify the payments. We began to question the integrity of the manufacturer on this issue and we were correct in our concerns. Since our contract required us to purchase cameras on a Quarterly basis, and we never had a working camera or documents confirming FDA testing, we stopped purchasing cameras. In essence, the deal fell apart.
The outcome of the lawsuit and legal maneuvering is accordingly:
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We sued the manufacturer since we were very clear, at the signing of the contract, that the cameras had to be FDA approved and working. The law is very clear in this. We cannot offer this device for sale without FDA clearance.
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The manufacturer filed a counterclaim for $300,000, alleging that we had to purchase the cameras regardless of FDA approval.
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In the early stages of the trial, the manufacturer won a partial summary judgment, ruling that the cameras did not have to be FDA approved for us to resell them.
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We believe that was an error by the Court.
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At the time of the hearing on this, our attorney did not understand the FDA laws.
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We asked the Court to reverse this summary judgment. He did not.
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At trial, the Court ruled against us, and for the Defendant, requiring us to pay to the manufacturer $51,000, the remaining amount on the invoices for software development.
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On the Defendant's counterclaim of $300,000, the Court ruled against them and awarded them nothing.
Summary: I believe the Judge thought this was a equitable solution that allowed him not to have to reverse himself.
We will appeal this decision and get a new day in court. The law is clear as it relates to the sale of medical devices. We will bring more witnesses next time and subpoena the documents to prove the manufacturer's invoices were not valid.
