NuLife Ventures sued by medical device supplier Avacen
NuLife Ventures is an MLM company that markets, among other things, “hydrogen water” devices.
Avacen is a medical device manufacturer and former supplier to NuLife Ventures.
On July 29th, Avacen sued NuLife Ventures for breaches of their reseller agreement.
Avacen manufacture two products; Avacen 100 and Avacen Pro.
As explained by Avacen;
the Medical Devices are unique, patented, FDA-cleared, Class II, OTC, dry heat therapy devices, intended to assist in pain relief relating to arthritis, muscle spasms, and joint pain among other condition.
Avacen claims it entered into a reseller agreement with NuLife Ventures in January 2019.
As per the terms of the agreement;
NuLife agreed to purchase “1500 Products” from AVACEN within the first six (6) months of the contract, or make $1.5 million in purchases.
NuLife also agreed to purchase “4500 Products” from AVACEN within the following six (6) months, or make $4.5 Million dollars in purchases.
Avacen claims NuLife Ventures failed to adhere to their obligations as per the agreement. Specifically, as of June 1st, 2020, NuLife Ventures had only purchased “approximately 1938 products” during the first twelve months of the agreement.
This prompted Avacen to initiate a termination clause on June 1st, 2020.
Said termination clause included a provision prohibiting NuLife Ventures from further marketing and selling Avacen’s products.
Avacen gave NuLife Ventures forty-five days to remedy their breach.
On June 2nd, two days after it had been provided notice, NuLife Ventures advised Avacen it wasn’t going to purchase any more products.
As per the termination clause, NuLife Ventures is prohibited from marketing and selling Avacen’s products.
As noted by Avacen in their lawsuit;
NuLife continues to depict AVACEN’s trade name and Medical Devices throughout its website and on the Internet, thereby confusing the public by leading it to believe that AVACEN is associated with NuLife and has endorsed its commercial practices.
At the time of publication I can confirm NuLife continue to market Avacen’s products on their website.
NuLife also continues to market itself as an “Avacen Global Partner”:
Avacen confronted NuLife Ventures on July 17th, demanding
NuLife to cease its conduct; otherwise, it will immediately file suit and seek an injunction.
NuLife Ventures continued to violate the reseller agreement, prompting Avacen to file suit on July 29th.
As part of their lawsuit Avacen has filed for a Temporary Restraining Order.
On August 15th NuLife Ventures responded to Avacen’s TRO motion.
NuLife Ventures claims
- the Californian court has no personal jurisdiction over it;
- arbitration as part of parallel proceedings in Tennessee State Court should take precedent (NuLife filed suit against Avacen in June 2020); and
- Avacen’s claims are “misrepresentations of fact”.
I don’t have access to the Tennessee state filings so I can’t comment on NuLife Ventures’ case.
With respect to Avacen misrepresenting the facts, NuLife Ventures claims its “actual purchase numbers exceeded the Agreement’s minimum requirements.”
AVACEN’S claim that NuLife breached the Agreement is unfounded and absurd.
Throughout the initial 12 months of the Agreement NuLife consistently purchased as much product as AVACEN informed it could produce.
In fact, the demand from NuLife was so great that AVACEN, through its CEO Thomas Muehlbauer, repeatedly reported delays in fulfillment of NuLife’s purchase orders.
In an effort to help AVACEN increase its production capabilities, NuLife loaned AVACEN the sum of $300,000 in mid-2019.
The Agreement was not materially breached by NuLife. AVACEN thus possessed no right to unilaterally terminate the Agreement.
A hearing on Avacen’s TRO motion was held on August 20th. A written decision remains pending.
Update 9th September 2020 – Avacen has been denied a TRO against NuLife Ventures.
Update 23rd September 2020 – Avacen has dropped its lawsuit against NuLife Ventures.
Update 4th March 2021 – Thomas Muehlbauer from Avacen has informed us in the comments below that after dropping their lawsuit, Avacen pursued their case against NuLife via arbitration.
After we filed for arbitration NuLife filed numerous legal actions in which AVACEN prevailed in 100% of them.
As I understand it arbitration proceedings between the two parties is still playing out.