$3.22 million verdict; Defendants find they are bound by customer agreement

Action: Verdict

Date: Feb. 13, 2025

Date of incident: Dec. 30, 2016

Nature of claim: Breach of contract and interference with contract

Injuries alleged: Damages for breach of customer supply agreement and damages and punitive damages for intentional interference with the customer supply agreement.

Amount: $3.22 million ($321,540 in breach of contract damages against Creativasc Medical, Brookhaven Vascular and Brookhaven Merger; $400,000.00 in damages against Diaxamed for intentional interference with contract; and $2.5 million in punitive damages against Diaxamed)

Name of case: Sealevel Systems, Inc. v. CreatiVasc Medical, Inc., Diaxamed, LLC, successor in interest to Brookhaven Vascular, Inc., successor in interest to Brookhaven Merger Corp. successor in interest to CreatiVasc Medical, Inc.

Case number: 2022-CP-23-01310

Court: Greenville County Common Pleas Court

Tried before: Jury

Judge: Perry H. Gravely

Attorneys: Wesley D Few, of Wesley D. Few LLC, Greenville (for the plaintiff); Kirby Shealy, of Adams and Reese, Columbia (for the defendants)

Insurance carrier: Markel American Insurance Co.

The plaintiff entered into a customer supply agreement Oct. 28, 2014 with defendant Creativasc Medical. The agreement involved the Hemoaccess Valve System to treat patients on dialysis. On Feb. 5, 2015, the defendant Brookhaven took over Creativasc, in a transaction valued at $23.95 million. Documents of Merger executed Feb. 5, 2015, and filed with the S.C. secretary of state stated all “material contracts” were disclosed in Schedule 4.08, including all contracts “to purchase total requirements of any product or service from a third party,” such as the customer service agreement.

On Feb. 18, 2015, ATEX Technologies entered into its supply agreement with Creativasc.

Defendant Diaxamed and ATEX are each owned by Brian McMurray. When Brookhaven took over Creativasc, McMurray became a Brookhaven board adviser. From 2014 to 2016, Sealevel’s engineers contributed at least 2,386 hours to the project.

In December 2016, McMurray formed Diaxamed to take over Creativasc and Brookhaven. Diaxamed structured the acquisition such to take all assets and liabilities of Creativasc, except the customer service agreement, of which it claimed to have no knowledge. In 2017, representatives of the former Creativasc went dark and Sealevel inquired continuously about the status of the agreement. Unknown to Sealevel and not disclosed by the Creativasc CEO, McMurray terminated him on March 30, 2017, and reminded him of his nondisparagement obligations and post-employment restrictions.

Representatives of the defendants either remained silent, were evasive or both as to what had happened to Creativasc, asserting in June 2017 no contract existed. At trial, the defendants acknowledged the customer supply agreement and admitted it had never been terminated, but they later argued it was unenforceable.

Upon taking over Creativasc, on Jan. 6, 2017, Diaxamed required the Creativasc CEO to sign a so-called asset protection agreement, including a nondisparagement provision. At trial, the defendants alleged their attorneys’ structuring of the buyout by Diaxamed created a “heads-we-win, tails-you-lose” situation and further that since the transaction was legal, they were not subject to liability to Sealevel, despite knowing the agreement would be breached by Diaxamed’s shutting down of Creativasc. McMurray and other also testified they had no knowledge of the agreement.