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Avra Surgical, Inc. v. Dualis Medtech Gmbh

United States District Court, S.D. New York

May 27, 2014

AVRA SURGICAL, INC., Plaintiff,
v.
DUALIS MEDTECH GmbH and THOMAS SCHMID, as Managing Director, Defendants.

Jared B. Stamell, Andrew R. Goldenberg, Stamell & Schager, LLP, New York, NY, for the Plaintiff.

Jonathan Wallace, Law Offices of Imke Ratschko, New York, NY, for the Defendants.

OPINION AND ORDER

DENISE COTE, District Judge.

This case concerns a dispute arising out of a contract negotiated between the plaintiff and defendants on one side, and a third party on the other side. Plaintiff's counsel, Jared B. Stamell ("Stamell"), has taken the position that he negotiated the contract on behalf of both plaintiff and defendants. Stamell now represents plaintiff, against defendants, in this dispute involving the same contract.

Defendants have moved to disqualify Stamell arguing, inter alia, that he is barred from litigating this case due to his conflict of interest. For the following reasons, the disqualification request is granted.

BACKGROUND

The following facts are taken from the allegations in the complaint, from judicially noticeable materials, or from the affidavits submitted with Stamell's opposition papers. These facts are assumed to be true for purposes of the present motion only.

Dualis MedTech GmbH ("Dualis") is based in Germany and owns technology with potential applications in medical devices. HeartWare International Inc. ("HeartWare") is based in Massachusets and is a manufacturer of heart assist devices. AVRA Surgical, Inc. ("Avra") had relationships with both Dualis and HeartWare.

In early 2011, Avra's Chairman, Barry F. Cohen ("Cohen"), put the companies in touch, believing that HeartWare could take advantage of Dualis's technology. In March 2011, HeartWare agreed to enter into a collaboration agreement with Avra to license Dualis technology and to employ Dualis to integrate its technology with HeartWare's products. ("Agreement"). Thus, the Agreement involved Avra and Dualis on one side, and HeartWare on the other side.

Stamell was Avra's general counsel. Thomas Schmid ("Schmid"), the Managing Director of Dualis, agreed that Stamell should negotiate the Agreement on behalf of both Avra and Dualis because Dualis had no lawyers or experience in the United States.

Negotiations between Avra/Dualis and HeartWare over the Agreement lasted until January 2012. Over the course of these neogiations, Stamell worked closely with both Cohen and Schmid, communicating with them by email, telephone, and in-person. Cohen and Schmid together instructed Stamell on how to proceed.

In January 2012, the Agreement was completed and signed by all parties. By mid-2013, however, the relationship between Avra and Dualis had broken down.

On or around October 2013, Avra filed this suit against Dualis and Schmid in New York state court, contending that Dualis and Schmid had violated the terms of the Agreement and that Avra was entitled to 50% of Dualis's revenues from the Agreement. Avra was represented by Stamell. Dualis and Schmid removed the suit to this Court on November 5.

Two other actions are relevant for present purposes. On October 10, 2013, Stamell's law firm filed suit against Dualis and Schmid in New York state court, seeking outstanding legal fees from the negotiation of the Agreement. On February 19, 2014, Stamell's law firm sued Dualis in Massachusetts state ...


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