Contract

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7^th Circuit Court of Appeals

Case Name: Charles Hess v. Biomet, Inc.

Case No.: 23-1555

Officials: Rovner, Scudder, and Pryor, Circuit Judges.

Focus: Contract

Zimmer Biomet, a medical-device manufacturer was sued by former sales distributors arising from a compensation agreement that guaranteed the distributors long-term commissions on all sales made within their distributorship territories after retirement. As Zimmer Biomet expanded and acquired competitors, disagreements emerged over which product categories were covered by the distributorship agreement and thus subject to the long-term commission agreement.

The district court found the agreement ambiguous and sent the case to trial. The jury returned a mixed verdict, determining that Biomet owed long-term commissions on some products but not others. Biomet appealed the denials of its motions for summary judgment and judgment as a matter of law, while the distributors cross-appealed the dismissal of two counts of their complaint.

The appellate court agreed that the distributorship agreement was ambiguous regarding the specific categories of products it covered. It also found that the trial record supported the jury’s verdict in favor of the distributors on their Indiana breach-of-contract claim. The court rejected Biomet’s argument that the agreement unambiguously limited long-term commissions to reconstructive products, finding that the agreement did not provide clear guidance on which product categories were covered. The court also upheld the dismissal of two counts in the distributors’ complaint, concluding that they either lacked a contractual basis or were duplicative of another count.

Affirmed.

Decided 06/25/24

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