Michael L. Schwartz, et al. v. Diagnostix Network Alliance, et al.

This case involves an agreement between a distributor of medical tests and a healthcare consultant. The agreement provided that the consultant would earn a commission on sales of the medical test that he solicited on behalf of the distributor. After several months, the distributor terminated the agreement. The consultant filed a lawsuit against the distributor. The consultant alleged that the distributor breached its duty of good faith under the contract by terminating the agreement in order to avoid paying commissions and by failing to provide an adequate sales force to assist the consultant in making sales. The consultant alleged that the distributor breached a separate verbal contract for the development of marketing materials. The consultant also alleged that the distributor fraudulently misrepresented its intent to compensate the consultant for his efforts in soliciting orders for the medical test. The trial court dismissed the consultant’s fraud claim and granted summary judgment to the distributor on each of the remaining claims.  We affirm the judgment of the trial court with respect to the consultant’s breach of good faith and fraud and misrepresentation claims. However, we find that the trial court erred in granting summary judgment on the consultant’s claim that the distributor breached a separate verbal contract. We also vacate and remand the trial court’s award of attorney’s fees for reconsideration after issues related to the verbal contract are resolved.