NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ________________

Nos. 22-1994 and 22-2083 ________________

DAVID KIVETT

v.

NEOLPHARMA, INC.; CEDIPROF, INC.; NEOLPHARMA INTERNATIONAL, S.A. DE C.V.

Neolpharma, Inc., Appellant in No. 22-1994

David Kivett, Appellant in No. 22-2083 _____________

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil No. 2-20-cv-00664) District Judge: Honorable Joshua D. Wolson ________________

Submitted Pursuant to Third Circuit L.A.R. 34.1(a) on October 3, 2023

Before: SHWARTZ, MATEY, and SCIRICA, Circuit Judges.

(Filed: December 19, 2023) ________________

OPINION * ________________

* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. SCIRICA, Circuit Judge

Before us are an appeal and cross-appeal 1 from a judgment following a bench trial.

Appellee David Kivett proceeded against Appellant Neolpharma, Inc., alleging

Neolpharma breached its contract with him when it failed to pay him a commission for

new business he generated for Neolpharma’s related entity Cediprof. The District Court

issued findings of fact and conclusions of law, determined that Neolpharma breached the

contract, and awarded Kivett damages. For reasons that follow, we will affirm.

I.

Cediprof is a pharmaceutical company, and Neolpharma is the sole manufacturer

of Cediprof’s pharmaceutical products. The companies are owned by the same family,

share offices, and largely have the same executive management.

On April 29, 2013, Kivett and Neolpharma entered into a Representation

Agreement, under which Kivett would serve as Neolpharma’s independent representative

to find new business opportunities. Neolpharma cancelled this agreement on November

29, 2018, and, in December 2018, entered into a modified Representation Agreement

with Kivett (the “Second Representation Agreement”). Both agreements provide that

Kivett would receive a commission for the completion of any “Business Transaction

between Neolpharma and a client directly related with [his] services.” Appx. 204, 211;

1 Kivett filed a cross-appeal but did not raise any new issues in his submissions to this Court. He has thus waived all claims on cross-appeal. See Laborers’ Int’l Union of N. Am., AFL-CIO v. Foster Wheeler Energy Corp.,

(3d Cir. 1994); Fed. R. App. P. 28.1(c)(2).

2 Appx. 6–7. Both agreements also provide that Kivett would earn commission on

business deals executed while the agreements were in effect and up to 36 months after

their termination.

Kivett relied on his industry connections to develop new business opportunities for

Neolpharma. He arranged meetings between Neolpharma and potential clients interested

in Neolpharma or Cediprof products and services and scheduled site visits, but did not

participate in negotiations with prospective clients.

In mid-August, 2013, Kivett contacted Michael Block at the Lannett Company

about potential business with Neolpharma. No Neolpharma or Cediprof representative

had previously contacted Lannett. Although no deal resulted from this initial outreach,

Kivett remained in contact with Block. In July 2018, Kivett reached out to Block to

arrange a meeting with Neolpharma representative Edwin Placeres respecting several

products Lannett considered outsourcing. On August 20, 2018, Kivett contacted Block

and proposed Neolpharma manufacture the drug Levothyroxine for Lannett. At the end

of August 2018, Kivett arranged a meeting between Block and Placeres about

Levothyroxine and other potential business, but the meeting did not result in a deal.

After the August 2018 meeting, Lannett representatives traveled to Puerto Rico to audit

Neolpharma’s facility. Kivett met with Lannett representatives in Puerto Rico, but he did

not participate in any negotiations or pricing discussions with Lannett.

On July 3, 2019, Cediprof and Lannett entered into an agreement (the “Main

Lannett Agreement”) for Cediprof to manufacture certain Lannett products. The

agreement was made between Lannett, Cediprof, and their respective “Affiliates,”

3 defined as “any other person or legal entity directly or indirectly controlling or controlled

by or under direct or indirect common control with such [p]arty.” Appx. 219. The Main

Lannett Agreement further specifies that “control” means “the power to direct the

management and policies of such person or legal entity directly or indirectly, whether

through the ownership of voting securities, by contract or otherwise.” Appx. 219-20.

The same day, Lannett and Cediprof also entered into a Distribution Agreement to

begin distributing pharmaceutical products, including Levothyroxine. This agreement

was similarly made between Lannett, Cediprof, and their respective “Affiliates” and had

an effective date of August 1, 2022. Finally, Lannett and Cediprof entered into an

Interim Distribution Agreement, effective on the date of termination of the existing

distribution agreement between Cediprof and its then-current products distributor through

July 31, 2022. This agreement was also made between Lannett, Cediprof, and their

respective “Affiliates.”

On August 1, 2020, Neolpharma began manufacturing Levothyroxine for Lannett

under the Interim Distribution Agreement. Lannett would submit purchase orders to

Neolpharma for Levothyroxine, and Neolpharma’s net sales of Levothyroxine to Lannett

from August 2020 to October 2021 were $15,662,747.88.

Kivett learned about the deal through a Lannett press release and subsequently

emailed Marco Monrouzeau, the Chief Financial Officer and Vice President of

Administrators at Cediprof and Neolpharma, an invoice for his services. Monrouzeau

responded, explaining the proposed Lannett business Kivett procured for Neolpharma

was not the business that ultimately materialized. Kivett never received a commission for

4 the Lannett transaction. Kivett brought suit.

The matter proceeded to a bench trial, and the district court issued findings of fact

and conclusions of law. Applying Pennsylvania law, the court found the Second

Representation Agreement governed any commission that Kivett could receive because it

was in effect when the Lannett Agreements were made. Although Neolpharma was not a

signatory to the Lannett Agreements, the court concluded that it was a party to the

agreements as Cediprof’s “Affiliate.” 2 Accordingly, the court found Neolpharma’s

manufacturing work for Lannett qualified as a Business Transaction under the Second

Representation Agreement, for which Kivett could be entitled to a commission if the deal

was “directly related with the services [he] provided.” Kivett v. Neolpharma, Inc., No.

2:20-CV-0664-JDW,

, at *4–5 (E.D. Pa. Apr. 21, 2022).

Because the Second Representation Agreement did not define the phrase “directly

related,” the court interpreted it to mean “there had to be an uninterrupted connection

from [] Kivett’s efforts on behalf of Neolpharma to the Lannett Agreements.” Id. at *5.

The court found that the evidence demonstrated the Lannett Agreements resulted directly

from Kivett’s efforts. Kivett was the first Neolpharma representative to contact Lannett

and remained in contact with Lannett for several years. He proposed that Neolpharma

could make Levothyroxine for Lannett and arranged a meeting between Neolpharma and

Lannett in August 2018. In July 2019, Cediprof and Lannett executed the Lannett

Agreements, which planned for Cediprof and its “Affiliates,” including Neolpharma, to

2 Neither party challenges on appeal that Neolpharma qualifies as Cediprof’s “Affiliate.”

5 manufacture Levothyroxine for Lannett. This “unbroken chain of causality” made the

Lannett Agreements directly related to Kivett’s business-generating efforts. Id. at *5.

The court also noted that the Second Representation Agreement’s provision

providing Kivett commission on any business deal executed up to three years after

Neolpharma terminated the Second Representation Agreement reflected the parties’

expectation that it might take time for a deal to result from Kivett’s efforts. The

approximately eleven-month gap between Lannett’s visit to Neolpharma’s facilities and

the execution of the Lannett Agreements was within the timeframe contemplated by

Kivett and Neolpharma.

Lastly, the court concluded that defendants offered no credible evidence of

intervening circumstances that broke the causal chain between Kivett’s efforts and the

Lannett Agreements. Monrouzeau testified that Cediprof had sent requests for proposals

and that Lannett was one of the companies that responded, but the court found his

testimony not credible. Moreover, there was no documentary record evidence supporting

Monrouzeau’s assertion that Cediprof engaged in requests for proposals or that multiple

companies bid for the opportunity. Accordingly, the court found Kivett was entitled to a

commission for the Lannett transaction and awarded him $469,882.41 based on the

combined calculation of actual and projected net sales of Levothyroxine to Lannett.

II.

On appeal from a bench trial, 3 we review the district court’s findings of fact for

3 The district court had jurisdiction over the matter under

(a)(1). We have jurisdiction under

.

6 clear error and its conclusions of law de novo. VICI Racing, LLC v. T-Mobile USA, Inc.,

, 282–83 (3d Cir. 2014) (citing McCutcheon v. Am.'s Servicing Co.,

(3d Cir. 2009)). For mixed questions of law and fact, “we apply the clearly

erroneous standard except that the District Court's choice and interpretation of legal

precepts remain subject to plenary review.” Gordon v. Lewistown Hosp.,

(3d Cir. 2005). “To the extent that the District Court's conclusions rested on

credibility determinations, our review is particularly deferential.” Travelers Cas.

& Sur. Co. v. Ins. Co. of N. Am.,

, 156–57 (3d Cir. 2010) (citing Anderson v.

Bessemer City,

(1985)).

Neolpharma asserts it is appealing a factual finding, arguing the court “clearly

erred . . . in finding an unbroken chain of causality” between Kivett’s efforts and the

Lannett deal. Yet Neolpharma does not actually contest any of the court’s factual

findings. Neolpharma instead appeals a conclusion of law: the court’s finding that

Kivett’s efforts satisfied the “directly related” language of the Second Representation

Agreement, entitling him to commission.

Under either standard, the record before us supports the court’s conclusion. The

Second Representation Agreement between Kivett and Neolpharma provides that Kivett

would sell Neolpharma’s services and receive a commission for the completion of any

“Business Transaction between Neolpharma and a client directly related with [his]

services[,]” and that any such commission would be paid if the transaction was executed

during the term of the agreement or within thirty-six months after Neolpharma terminated

the agreement. Appx. 211.

7 Here, Kivett first contacted Lannett in 2013, remained in contact with Lannett, and

then proposed a series of potential business opportunities for Lannett with Neolpharma in

August 2018, including the manufacture of Levothyroxine. Prior to then, Kivett arranged

for a tour of Neolpharma’s facility and meeting between the companies’ representatives,

during which the parties discussed Levothyroxine. Kivett did not participate in these

negotiations, and although the 2018 meetings did not result in an immediate deal,

Cediprof and Lannett entered into the Lannett Agreements for the manufacture of

Levothyroxine in July 2019. These facts indicate that there was an “unbroken chain of

causality” between Kivett’s efforts and the Lannett Agreements such that their execution

“resulted directly” from his actions.

Neolpharma contends there were intervening events that broke this causal chain,

such as the eleven-month gap between the 2018 meetings facilitated by Kivett and the

execution of the Lannett Agreements in 2019 and Neolpharma’s purported requests for

proposal.

Neolpharma predicates its arguments on common-law discussions of commissions

for finders or brokers but fails to discuss whether Kivett’s actions satisfied the language

of the Second Representation Agreement. To the extent that Neolpharma challenges the

court’s definition of “directly related” by insisting that the phrase requires the relevant

series of events occur without delay, its preferred construction differs only slightly from

the court’s, and conflicts with the business relationship between the parties. See John F.

Harkins Co., Inc. v. Waldinger Corp.,

(3d Cir. 1986) (explaining that

interpretation of contract language is reviewed under the clearly erroneous standard).

8 Neolpharma urges that Kivett took no action in the eleven-month period between his

services and the execution of the Lannett Agreements, but Kivett was not required to

perform services beyond introducing potential clients to receive commission under the

Second Representation Agreement. The court’s interpretation of the phrase “directly

related” was not clearly erroneous, and Kivett’s performance satisfied the contract’s

terms. See

Neolpharma’s argument that its requests for proposals broke the causal chain is

also unavailing. The court found Monrouzeau’s testimony respecting the requests for

proposals—the only such evidence in the record—not credible. We will not disturb the

court’s credibility determination, which was bolstered by an absence of documentary

record evidence to support Monrouzeau’s testimony. See Travelers Cas. & Sur. Co., 609

F.3d at 156–57.

III.

Accordingly, we will affirm.

9