Edward S. Sledge IV Receives Winning Verdict in Favor of Central Alabama Diagnostics

January 11, 2019 09:08 PM

On Friday, December 14, 2018, IADC member Edward S. Sledge IV first-chaired a team of Bradley lawyers to jury’s verdict in its favor on its commercial claims for fraud in the inducement by suppression and breach of contract, and in its favor against the breach of contract counterclaim of Canon America Medical Systems f/k/a Toshiba America Medical Systems (“Toshiba”). The jury’s verdict was received after an over two week federal jury trial in the Middle District of Alabama, and after just over a couple of hours of deliberations as to liability and entitlement to damages (Phase I). The jury also found that Central Alabama Diagnostics was entitled to punitive damages resulting from Toshiba’s misconduct. The case settled confidentially before the jury returned a verdict on Phase II, the amount of damages to which Central Alabama Diagnostics would have been entitled.

This total victory culminated over three years litigation arising out of the negotiation, sale, and delivery of magnetic resonance imaging system (“MRI system”) sold by Toshiba and purchased by Central Alabama Diagnostics. Central Alabama Diagnostics planned to install the Toshiba MRI system at its new facility in Prattville, Alabama to treat patients in central Alabama.

Central Alabama Diagnostics presented conclusive evidence to the jury that Toshiba fraudulently induced it into purchasing a mostly new MRI system (with a new “magnet”, the main component of a new MRI system) and suppressed the material fact that it could not deliver that mostly new MRI system. Instead Toshiba delivered a used MRI system (with a used magnet).  The jury found, by clear and convincing evidence, that Central Alabama Diagnostics was entitled to punitive damages on the fraud claim by finding that Toshiba consciously or deliberately acted toward Central Alabama Diagnostics with oppression, fraud, wantonness, or malice.

Central Alabama Diagnostics also presented conclusive evidence that Toshiba could not—and did not—provide a mostly new MRI system (with a new magnet), in breach of a contract between Toshiba and Central Alabama Diagnostics.  In turn, the jury rejected Toshiba’s position that it delivered what it promised to Central Alabama Diagnostics, and that Central Alabama Diagnostics breached the contract by refusing to accept and pay for the MRI system it delivered. 

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