and the consent decree, PDC filed a motion for an accounting and for enforcement of the consent decree. PDC claims that it is entitled to commissions not only for the continued sales of pacemakers and lenses, but also for any new products that are manufactured by defendants and their parent companies. Specifically, PDC demands commissions for sales of a new product (known as "Healon") that is used in connection with intraocular lenses. (Ophthalmics had begun marketing this product in 1987.) PDC also lays claim to commissions for all products sold by Ophthalmics' parent companies (Pharmacia AB and Pharmacia, Inc.) and Intermedics' parent companies (Sulzer Brothers, Inc. and Sulzer Brothers Limited).
PDC moved for summary judgment in its favor. The court referred that motion to Magistrate Judge Joan H. Lefkow. In a report and recommendation dated June 18, 1990, Magistrate Judge Lefkow recommended that the court deny PDC's motion for summary judgment. The court adopted the report and recommendation on September 6, 1990. PDC filed a motion to reconsider. Two weeks later, defendants filed a joint motion for summary judgment. The court referred both motions to Magistrate Judge Lefkow. The magistrate judge issued her report on March 28, 1991, recommending that PDC's motion to reconsider be granted in part and denied in part, and that defendant's motion for summary judgment be granted in part and denied in part. With respect to PDC's claim that the Wisconsin Agreement covers all products sold by defendants (and not simply pacemakers and lenses), the magistrate recommended that the court grant PDC's motion to reconsider. The magistrate judge recommended denying defendants' motion for summary judgment on this issue. In regard to PDC's remaining claim -- i.e., that it is entitled to commissions for products sold by the parent companies of defendants -- the magistrate judge recommended that the court deny PDC's motion to reconsider and grant defendants' motion for summary judgment.
PDC, Intermedics, and Ophthalmics have each filed objections to the magistrate judge's report and recommendation.
I. PDC's Objections
In support of its claim for additional commissions, PDC relies heavily on the language of the Wisconsin Agreement, which states that PDC is entitled to commissions on "all products" of defendants, "their affiliates, subsidiaries and successors that exist now or may be created in the future." Wisconsin Agreement, para. 1. PDC argues that Sulzer Brothers, Inc. and Sulzer Brothers Limited are "affiliates" of Intermedics and, for this reason, Intermedics is liable for commissions on their products. As for its claim against Ophthalmics, PDC contends that Pharmacia AB and Pharmacia, Inc. are also affiliates within the meaning of the Wisconsin Agreement.
The magistrate judge rejected PDC's interpretation of the Wisconsin Agreement, finding that the parties never intended the agreement to govern the type of claims made by PDC here. The magistrate judge gleaned the intent of the parties from the facts and circumstances surrounding their contractual relationship, as reflected in the sales representative agreements, the Wisconsin Agreement, and the consent decree.
PDC's first two objections relate to the use of extrinsic evidence for purposes of determining the legal effect of the Wisconsin Agreement. PDC takes the position that it is error for the court to consider anything other than the plain meaning of the contract itself. However, this is the same argument PDC raised previously. PDC has not provided any new legal or factual matters which require reconsideration of the court's prior order. When, as in this case, the language of the contract is capable of more than one meaning in light of the surrounding circumstances, it is not improper to consider such circumstances as an aid in interpretation. Sun Oil Co. v. Madeley, 626 S.W.2d 726, 731 (Tex. 1981).
Accordingly, PDC's first two objections are overruled.
PDC's remaining objections go to the magistrate judge's interpretation of the Wisconsin Agreement. Along this line, PDC argues that the language of the Wisconsin Agreement is broad enough to encompass its claims for commissions on products sold by the parent companies of defendants. Again, PDC does not provide any compelling, new arguments to persuade the court to reconsider its prior order. The primary focus of the Wisconsin Agreement was to sever the existing sales relationship between PDC and Martiny. As the magistrate judge pointed out in both of her reports, there is nothing to suggest that the parties intended for commissions to be paid on products sold by parent companies. Such an expansive interpretation cannot be extracted from the Wisconsin Agreement or the circumstances surrounding its execution. Therefore, the court overrules PDC's remaining objections. To the extent PDC seeks commissions for products sold by defendants' parent companies, PDC's motion to reconsider is denied. Defendants' motion for summary judgment is granted with respect to this issue.
II. Defendants' Objections
Magistrate Judge Lefkow found that there was an issue of fact as to whether the Wisconsin Agreement applied to the sale of every product sold by defendants or just to pacemakers and intraocular lenses. Intermedics and Ophthalmics object to this finding.
In her initial report (which was adopted by the court), the magistrate judge determined that the Wisconsin Agreement only applied to the sale of pacemakers and lenses. However, PDC subsequently submitted new evidence in support of its claim. This evidence indicates that Intermedics' subsidiaries manufactured various medical products (such as catheters and orthopedic devices), and that PDC was authorized to sell these products. The discussions concerning the newly developed products were contemporaneous with the Wisconsin Agreement. Since the Wisconsin Agreement gave PDC the right to sell "all products" manufactured by defendants and their subsidiaries, the magistrate judge correctly concluded that the type of products encompassed by the Wisconsin Agreement remains in dispute. An issue of fact concerning the meaning of the terms "all products" precludes the entry of summary judgment in favor of defendants. With regard to this issue, PDC's motion to reconsider is granted and defendants' motion for summary judgment is denied.
For the foregoing reasons, the court adopts the magistrate judge's report and recommendation in its entirety. PDC's motion to reconsider is granted in part and denied in part. Defendants' joint motion for summary judgment is also granted in part and denied in part.
IT IS SO ORDERED.