UNITED STATES COURT OF APPEALS February 6, 2024 Christopher M. Wolpert FOR THE TENTH CIRCUIT Clerk of Court _________________________________

ORP SURGICAL, LLC, a Colorado limited liability company; LEE PETRIDES,

Plaintiffs - Appellees/Cross- Appellants,

v. Nos. 22-1430; 22-1455

HOWMEDICA OSTEONICS CORP., a New Jersey corporation,

Defendant - Appellant/Cross- Appellee. _________________________________

Appeal from the United States District Court for the District of Colorado (D.C. No. 1:20-CV-01450-RBJ) _________________________________

Marcy G. Glenn (Maureen R. Witt and Nicholas W. Katz, Holland & Hart LLP, Denver, Colorado, and Michael D. Wexler, Seyfarth Shaw LLP, Chicago, Illinois, with her on the briefs) of Holland & Hart LLP, Denver, Colorado, for Defendant - Appellant/Cross-Appellee.

Todd E. Mair (Christopher P. Carrington with him on the briefs) of Richards Carrington, LLC, Denver, Colorado, for Plaintiffs - Appellees/Cross- Appellants. _________________________________

Before PHILLIPS, KELLY, and ROSSMAN, Circuit Judges. _________________________________

PHILLIPS, Circuit Judge. _________________________________ Appellate Case: 22-1430 Document: 010110995568 Date Filed: 02/06/2024 Page: 2

This litigation arises from the breakdown of a profitable business

relationship that ended with a cohort of disgruntled employees jumping ship

from one company to the other. At a bench trial, two corporations engaged in

the medical-device-sales industry levied claims and crossclaims against each

other for breach of their two sales agreements, governed by New Jersey law.

After trial, the district court entered judgment for ORP Surgical, LLC (ORP),

and awarded damages, attorneys’ fees, sanctions, and costs against Howmedica

Osteonics Corp., referred to throughout this litigation by the name of its parent

company, Stryker.

Before this court, Stryker challenges the district court’s rulings that

Stryker breached the sales agreements and that ORP did not. Stryker also

contests the attorneys’ fees award, arguing that the district court misconstrued

New Jersey law as requiring Stryker to indemnify ORP. On cross-appeal, ORP

challenges the court’s awarding mere nominal damages—not compensatory

damages—for Stryker’s breach of the non-solicitation/non-diversion provision

under one of the agreements.

We affirm in part and reverse in part. As to the judgment entered for ORP

on the breach-of-contract claims and all crossclaims and the award of nominal

damages, we affirm. As to the attorneys’ fees awarded under the

indemnification provision, we reverse. We therefore vacate the attorneys’ fees

award and remand for further proceedings consistent with this opinion.

2 Appellate Case: 22-1430 Document: 010110995568 Date Filed: 02/06/2024 Page: 3

BACKGROUND

I. Factual Background

Stryker makes medical devices and sells them to hospital surgeons. ORP

is a Colorado-based company that sells medical devices throughout the region.

Lee Petrides is the sole Manager of ORP and a named plaintiff in this litigation.

In the early 2000s, ORP and Stryker entered into a successful business

relationship in which ORP sold Stryker’s products in the Colorado region on

commission. Though Stryker also sold some products in the region through its

own sales subsidiary, Summit Surgical, a substantial portion of the regional

sales were carried out by ORP sales representatives (“ORP reps” or “th

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