Steady State Imaging, LLC v. General Electric Company

Background

Steady State and General Electric Company entered into an asset purchase agreement concerning commercialization of SWIFT, a magnetic resonance imaging technology. The agreement required GE to create a research and development program to test and evaluate SWIFT. It also required GE to create a product-introduction program if GE decided, in its sole discretion, that such a program was appropriate. GE never commercialized SWIFT and instead studied another technology, RUFIS.

Steady State asserted claims involving the asset purchase agreement, the implied duty of good faith and fair dealing, a later oral agreement to commercialize SWIFT, and promissory estoppel. The court previously dismissed the good-faith claim and granted summary judgment to GE on the asset-purchase-agreement claim. The oral-contract and promissory-estoppel claims proceeded to a jury trial.

The jury found that GE made a clear and definite promise to commercialize SWIFT in a Silent Brain application, intended Steady State to rely on that promise, and that Steady State reasonably relied on it and suffered a disadvantage. The jury awarded $10 million. The court then determined that enforcing GE’s promise was necessary to prevent injustice and entered judgment for Steady State.

GE’s renewed motion for judgment as a matter of law

A renewed motion for judgment as a matter of law asks the court to overturn a jury verdict when the evidence could not legally support a reasonable jury’s decision. GE argued that the written asset purchase agreement barred promissory estoppel, that the alleged oral promises conflicted with the agreement, and that Steady State had not proved a clear promise or reasonable reliance.

The court rejected GE’s arguments. It explained that the agreement did not say GE would never commercialize SWIFT; instead, it gave GE discretion to decide whether commercialization was appropriate. The court therefore concluded that the agreement did not completely contradict GE’s later promises. The court also found that the trial evidence supported the jury’s conclusion that GE made definite and substantial promises to commercialize SWIFT and that Steady State reasonably relied on them.

The court denied GE’s renewed motion for judgment as a matter of law.

Steady State’s motion to amend the judgment for interest

Steady State asked to add prejudgment interest under Minnesota law and postjudgment interest under federal law. The court held that Steady State could receive interest, but rejected some of Steady State’s calculations.

For preverdict prejudgment interest, the court used GE’s April 2019 written settlement offer of $250,000 rather than GE’s later verbal $10 million offer. The court held that the verbal offer could not supersede the earlier written offer under the applicable Minnesota statute. It awarded $51,369.87 in preverdict prejudgment interest.

The court also awarded $275,379.99 in postverdict prejudgment interest. It held that GE’s liability attached when the jury returned its special verdict, even though the court later ruled on the remaining promissory-estoppel element and entered judgment.

For postjudgment interest, the parties agreed that the applicable rate was 3.01 percent. Applying that rate to the court’s total money-damages figure of $10,326,749.80, the court awarded $851.60 per day from entry of the money judgment until the judgment is satisfied, with annual compounding as provided by federal law.

The court granted in part Steady State’s motion to amend the judgment.

GE’s motion to stay enforcement

GE asked the court to stay execution of the judgment while its post-trial motion and any appeal were pending. GE offered to post a supersedeas bond, which is a bond intended to secure payment while enforcement is paused.

Steady State agreed to a stay but argued that the bond should cover the judgment and added interest. The court found that a $10 million bond was sufficient because it was satisfied that GE would have the funds to pay the ultimate judgment.

The court granted GE’s motion to stay execution of the judgment and approved a $10 million supersedeas bond.