United States District Court, S.D. California
EMBOTELLADORA ELECTROPURA S.A. de C.V., an El Salvador corporation, Plaintiff,
ACCUTEK PACKAGING EQUIPMENT COMPANY, INC., a California corporation; and DOES 1 through 25, inclusive, Defendant.
ORDER: 1) DENYING DEFENDANT'S MOTION FOR JUDGMENT
AS A MATTER OF LAW 2) GRANTING IN PART AND DENYING IN PART
DEFENDANT'S MOTION FOR NEW TRIAL 3) STRIKING THE
DECLARATIONS OF TODD PETERS AND OMOTUNDE OGUNGBE [ECF NOS.
111 & 130]
Gonzalo P. Curiel United States District Judge.
before the Court are two motions filed by Defendant Accutek
Packaging Equipment Company, Inc. (“Accutek”):
Motion for Judgment as Matter of Law under Federal Rule of
Civil Procedure (“Rule”) 50(b), filed on November
5, 2018, and Motion for New Trial, filed on December 9, 2018.
ECF No. 111 and 130. Both motions have been fully briefed. On
April 25, 2019, the Court took both motions under submission.
ECF No. 140. Upon consideration of the moving papers and the
applicable law, and for the reasons set forth below, the
Court DENIES Defendant's Motion for
Judgment as Matter of Law and GRANTS in part
Defendant's Motion for New Trial.
case concerns the sale of an allegedly defective Biner
Ellison water bottling machine (the “Monoblock”)
by Defendant Accutek to Plaintiff Electropura. Defendant
Accutek is a developer and manufacturer of complete packaging
solutions, and offers a wide variety of filling machines,
capping machines, labeling machines, and complete packaging
systems. Dkt. No. 30-1 at 2. Electropura is a bottled water
company with water bottling facilities in El Salvador.
the Monoblock's alleged deficiencies and defects,
Electropura brought seven claims against Accutek: (1)
fraudulent misrepresentation and conspiracy to defraud; (2)
fraudulent concealment and conspiracy to defraud; (3)
negligent misrepresentation; (4) breach of written contract;
(5) breach of express warranty; (6) breach of implied
warranty; and (7) restitution and unjust enrichment.
close of discovery, Accutek moved for partial summary
judgment to enforce the limitation on liability provision
contained within the purchase agreement executed with
Electropura. Upon consideration of the moving papers, the
Court decided that the limitation on liability provision was
enforceable and limited damages to no more than the purchase
price of the equipment unless Plaintiff was found liable for
fraud or misrepresentation.
Court conducted a seven-day trial from October 28 to November
7, 2018. At the close of Electropura's case-in-chief on
November 5, Accutek moved orally for judgment as a matter of
law pursuant to Rule 50(a) on the basis that
Electropura's fraud claims fail as a matter of law and
that the lack of fraud required dismissal of
Electropura's unjust enrichment cause of action. ECF No.
111. The Court requested that the motion be briefed in
writing and deferred ruling on the motion until after the
completion of jury deliberations and the issuance of the
jury's special verdicts. That same day, Accutek filed a
written Motion for Judgment as a Matter of Law as to the
fraud causes of action (first, second and third) and the
unjust enrichment cause of action (seventh). ECF No. 111.
November 9, 2018, the jury returned a verdict in favor of
Electropura on the first cause of action for intentional
misrepresentation and in favor of Accutek on all other
claims. As a result of the jury's special verdict on
Electropura's claim for intentional misrepresentation,
the jury awarded Electropura nothing for “lost past
earnings, ” $72, 000 for “lost past profits,
” and $210, 825.00 for “other past loss”
for a total of $282, 285 in compensatory damages. ECF No.
118, pg. 3. After the jury verdict in favor of Electropura, a
punitive damages phase of trial was held and, following
deliberations, the jury awarded Electropura an additional
$525, 000 in punitive damages. There was no motion for
judgement as a matter of law made as to the punitive damages
December 9, 2018, Accutek moved for a new trial on the
grounds that (1) Electropura's claim of intentional
misrepresentation failed as a matter of law; and (2) that
Electropura failed to present sufficient evidence to justify
the jury's punitive damages award. ECF No. 130.
Electropura filed an opposition to the motion on December 26,
2018. ECF No. 134. Accutek's reply followed on January 4,
2019. ECF No. 135. In adherence with this Court's
briefing schedule, ECF No. 125, Electropura also filed an
opposition to the motion for judgment as a matter of law on
December 3, 2018. ECF No. 126. Accutek filed a reply on
December 5, 2018. ECF No. 129.
Factual Background []
Perla, the head of production for Electropura, testified at
trial regarding, among other things, the history of
Electropura, its use and satisfaction with a Biner Ellison
bottling machine purchased in 2005 and the decision to buy a
new bottling machine to grow the Electropura business. Trial
Tr. at 4-7 (Oct. 29, 2018). In the fall of 2012, Orlando
Perla researched machines by country of origin and
capabilities and decided on purchasing an American-made
machine with the capacity of bottling 8-9, 000 bottles per
hour. He contacted Nick Bird with Accutek, the producer of
Biner Ellison machines, to inquire about the purchase,
installation, and maintenance of Accutek's highspeed
water bottling equipment. Id. at 8-9. Following this
contact, Nick Bird responded by email and provided catalog
information on Accutek's bottling equipment line.
Id. The catalog displayed bottling machines which
featured filling valves made with 316 stainless steel and a
rotary rinsing turret made with stainless steel. Id.
at 17-18. Orlando Perla testified that he notified Accutek
that these were important features for Electropura.
October 9, 2012, Joe Quezada, Defendant's sales
representative, emailed Orlando Perla and provided a link to
Accutek's website. Id. at 18. On the website,
Mr. Perla reviewed information regarding Accutek's
Monoblock bottling systems which claimed “Biner Ellison
manufactures Monoblock machines to simplify your high-speed
bottling line by combining the bottle rinser filler and
capper in a single space saving machine. Each Monoblock
machine is specifically designed to suit product demands,
space constraints, and the production environment in order to
optimize output and produce the best product possible.”
Id. at 21. From this, Mr. Perla understood that
Defendant manufactured its Monoblock systems. Id.
website also described the Monoblock as featuring a sanitary
stainless steel constructed frame which was very important
and necessary to Orlando Perla. Id. at 23. In
addition, the equipment guidelines from Accutek's web
site stated that Accutek machinery is designed and
manufactured in the USA with over 80 percent of the Accutek
parts and products being manufactured in the USA by
American-owned companies. Id. at 25. Mr. Perla
testified that this information was also very important that
he would not have purchased the subject machine if he had
known that it was made in China and not the United States.
those negotiations, Electropura told Defendants that it
required equipment capable of “filling 680
milliliter-sized bottles at the rate of not less than 7, 200
bottles per hour (“BPH”), 380 milliliter-sized
bottles at the rate of not less than 6, 200 BPH and 1, 300
milliliter-sized bottles at the rate of not less than 5, 000
BPH, ” and asked Defendants “for their advice and
recommendations as to which of Defendants' several
different models of high speed water bottling
equipment” would meet those specifications.
Electropura's Complaint ¶ 20. In response
to Plaintiff's inquiry, Defendant than recommended the
“Monoblock rinse, fill, and capping system” as
best suited to satisfy Plaintiff's purpose. Id.
¶ 21 (internal citations omitted). At about that same
time, Defendant also presented a promotional sales brochure
to Electropura that described the “MB Series mono block
- rinse/fill cap systems” as having the following
qualities and capabilities: “Up to 19, 000 container
per hour* high speed synchronized rinse, fall, cap system,
” and “fully automated CCP system.”
Id. Ultimately, Defendant specifically recommended
that Electropura purchase the “Biner Ellison Monoblock
Systems 24 head washer 24 head filler 8 head capper with
accessories and parts system” (the
“Monoblock”) as the best match for
Electropura's needs. Id. ¶ 22 (internal
December 10, 2012 Defendants provided Electropura with Quote
No. 52113 for a 24 head, 24 filler, and 8 capper Monoblock,
along with related parts and accessories. Trial Tr. at 30
(Oct. 29, 2018). The Monoblock Quote was written on
Accutek's letterhead, and included the name of the sales
representative, Joe L. Quezada, who prepared the report, and
described the Monoblock features in detail. ECF No. 1-2,
Exhibit 2 at 13. Notably, the Monoblock Quote stated that the
machine was “capable of Speeds of up to 11000 BPH
(bottles per hour), ” Trial Tr. at 30 (Oct. 29, 2018),
ECF No. 1-2 at 15, and that many of its parts were made of
stainless steel. Trial Tr. at 31-32 (Oct. 29, 2019). Orlando
Perla testified that Accutek represented that all bottle
contact parts on the machine were made with food grade
stainless steel or food grade plastic. Orlando Perla shared
the information he had developed with his brothers and a
decision was made to purchase the Biner Ellison machine.
Id. at 31-33.
December 2012 and August 2013, the parties worked out the
details of the transaction including where the machine would
be installed, how much space was available and whether the
system would fit at the Electropura plant. Id. at
35-37. At the request of Joe Quezada, Orlando Perla provided
Accutek an autoCAD with the layout of the available space at
the Electropura plant for the Monoblock so that it could be
reviewed by Accutek's engineering department.
Id. at 35-37, 39-40. Afterwards, Quezada did not
inform Mr. Perla that the available space was too small to
achieve the represented production speeds for the machine.
Id. at 36-37. Mr. Perla told Quezada
“that's what I have. If it doesn't work, it
doesn't work.” Id. at 36, 40-41. Quezada
reported to Mr. Perla that according to his engineer
“yeah, it will work.” Id. Based upon
Quezada's representation, Mr. Perla agreed to proceed
with the purchase of the Monoblock. Id. at 36-37.
reliance upon those representations, Electropura purchased
the Monoblock for $370, 408.46. To finance the purchase of
the Monoblock, Electropura obtained a loan with a principal
of $1, 450, 000, at interest, and allocated $375, 000 to the
purchase of the Monoblock machine. ECF No. 127 at 33-34.
Thereafter, Electropura incurred additional costs in the
shipment and delivery of the Monoblock to El Salvador,
amounting to $49, 982.14, and installation of the system,
$15, 893.97. ECF No. 1 ¶ 27.
after the Monoblock was delivered and installed at
Electropura's facility in El Salvador, Electropura
discovered, on or about December 2013, that the Monoblock was
not functioning “in accordance with the
representations, specifications, promises, and assurances
made by Accutek.” Id. ¶ 28. The
Monoblock's actual production hovered at 1, 200 BPH for
1, 300 milliliter-sized bottles, 1, 800 BPH for 680
milliliter-sized bottles, and 2, 400 BPH for 380
milliliter-sized bottles, id., far below
Electropura's previously-stated business needs. According
to Orlando Perla, the Monoblock was never able to achieve a
capacity in excess of 4, 000 BPH for bottles of any size.
Trial Tr. at 61 (Oct. 29, 2018).
addition, Electropura asserted that the Monoblock did not
work properly; that “key components of the Monoblock
quickly oxidized and therefore became unsanitary for bottled
water use”; and that “many of the Monoblock's
key components contained latent but inherent defects in
materials and workmanship” making the machine
“essentially unfit and unsuitable for its intended
purposes.” ECF No. 1 ¶ 28. Trial Tr. at
61-65 (Oct. 29, 2018).
Judgment as a Matter of Law Under Rule 50
Federal Rule of Civil Procedure Rule 50, a court may enter
judgment as a matter of law once “a party has been
fully heard on an issue” and “the court finds
that a reasonable jury would not have a legally sufficient
evidentiary basis to find for the party on that issue.”
Fed.R.Civ.P. 50(a)(1). In other words, the jury verdict
should be overturned and judgment as a matter of law entered
“if the evidence, construed in the light most favorable
to the nonmoving party, permits only one reasonable
conclusion, and that conclusion is contrary to the jury's
verdict.” Pavao v. Pagay, 307 F.3d 915, 918
(9th Cir. 2002). The “jury's verdict must be upheld
if it is supported by substantial evidence, which is evidence
adequate to support the jury's conclusion, even if it
also possible to draw a contrary conclusion.”
Id. Moreover, a motion for judgment as a matter of
law should be granted “only if the verdict is against
the great weight of the evidence, or it is quite clear that
the jury has reached a seriously erroneous result.”
McEuin v. Crown Equip. Corp., 328 F.3d
1028, 1036 (9th Cir. 2003), as amended on denial of
reh'g and reh'g en banc (June 17, 2003).
evaluating a motion for judgment as a matter of law, a court
does not make credibility determinations or weigh the
evidence. See Reeves v. Sanderson Plumbing Prods.,
Inc., 530 U.S. 133 (2000); see also EEOC v. Go Daddy
Software, Inc., 581 F.3d 951, 961 (9th Cir. 2009).
“Credibility determinations, the weighing of evidence,
and the drawing of legitimate inferences from the facts are
jury functions, not those of a judge.” Id.
Instead, the court “must draw all reasonable inferences
in favor of the nonmoving party.” Id. That is,
“the court should give credence to the evidence
favoring the nonmovant as well as ‘that evidence
supporting the moving party that is uncontradicted and
unimpeached, at least to the extent that that evidence comes
from disinterested witnesses.'” Id. at
151, 120 S.Ct. 2097 (internal citation omitted).
New Trial Under Rule 59
Federal Rule of Civil Procedure 59(a), a new trial may be
granted on all or some of the issues “for any reason
for which a new trial has heretofore been granted in an
action at law in federal court.” Fed.R.Civ.P.
59(a)(1)(A). Because “Rule 59 does not specify the
grounds on which a motion for a new trial may be granted,
” the court is bound by historically recognized
grounds. Zhang v. Am. Gem Seafoods, Inc., 339 F.3d
1020, 1035 (9th Cir. 2003). These grounds include verdicts
contrary to the weight of the evidence, a verdict based on
false or perjurious evidence, damages that are excessive, and
trials that were not fair to the moving party. Molski v.
M.J. Cable, Inc., 481 F.3d 724, 729 (9th Cir. 2007);
see also Passatino v. Johnson & Johnson Consumer
Prods., 212 F.3d 493, 510 n.15 (9th Cir. 2000)
(“The trial court may grant a new trial only if the
verdict is contrary to the clear weight of the evidence, is
based upon false or perjurious evidence, or to prevent a
miscarriage of justice.”). Erroneous evidentiary
rulings and errors in jury ...