It is so nice to win on appeal, overturning a stunning loss at trial, having the Court adopt your reasoning in its decision. Except when you concede issues that come back to bite you. The defendant in Western Dermatology Consultants, P.C. v. VitalWorks, Inc. had this happen in, what I will call “The Good, The Not-So-Bad and The Ugly.”
Plaintiff was a New Mexico doctor’s office which bought practice management software from Defendant, which had its headquarters in Connecticut. They sued for a variety of causes of action arising out of the software sale. They won several hundreds of thousands of dollars in damages and attorney fees. On appeal, the court was convinced that the contract claim was barred by the Uniform Commercial Code (UCC) because both the UCC and the contract at issue required a pre-lawsuit notice to the defendant. There was no written notice provided. Accordingly, the court of appeal found for the defendant on the contract claim. Then, analyzing the remainder of the claims, the court of appeal held that, as the defendant had argued, New Mexico law actually applied, and all the remaining claims were barred. What a great result!
On further appeal to the Connecticut Supreme Court, the judgment of the court of appeal was affirmed on all counts. The Supreme Court agreed with the defendant that New Mexico law applied.
In adopting the New Mexico choice of law, the Supreme Court held that the plaintiff got another chance to see if under New Mexico law, their unfair trade practices claim could prevail. Darn. It was a great, complete appellate win, except the plaintiff gets another shot at unfair trade practices. Oh, well.
Takeaways – (1) choice of law is an often under-utilized tool in defeating claims, pay attention and (2) be careful in your arguments, you might win and have an unintended consequence. Overall, a great win for the defendant, a gut-wrenching loss to the plaintiff.