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Equipoise PM LLC v. International Truck and Engine Corp.

February 19, 2008

EQUIPOISE PM LLC AND JOHN PRICE, PLAINTIFF,
v.
INTERNATIONAL TRUCK AND ENGINE CORP., A DELAWARE CORPORATION, K. NEAL INTERNATIONAL TRUCKS F/K/A JOHN PRICE INTERNATIONAL TRUCK, INC., A DELAWARE CORPORATION, KNEAL HOLDINGS, INC., A MARYLAND CORPORATION, PAUL KOVACH, PAUL GRZEMSKI, AND LARRY WAKE, DEFENDANTS.
INTERNATIONAL TRUCK AND ENGINE CORPORATION AND J. PRICE INTERNATIONAL, INC., N/K/A K. NEAL INTERNATIONAL TRUCKS, INC., DEFENDANTS-COUNTERPLAINTIFFS AND THIRD-PARTY PLAINTIFFS
v.
EQUIPOISE PM LLC, PLAINTIFF- COUNTERDEFENDANT, AND JOHN PRICE, THIRD-PARTY DEFENDANTS.



Judge Ronald A. Guzman

Magistrate Judge Arlander Keys

DEFENDANTS' INITIAL MOTION FOR ENTRY OF JUDGMENT AS A MATTER OF LAW

Defendants International Truck & Engine Corporation and J. Price International, Inc., n/k/a K. Neal International Trucks, Inc., Paul Kovach, Paul Grzemski, and Larry Wake (collectively "International" or "Defendants") move pursuant to Rule 50(a)(1) of the Federal Rules of Civil Procedure for judgment as a matter of law on the basis that Plaintiffs have failed to carry their burden of proof as to every element of their claims against Defendants. Pursuant to this Court's instruction in open court on February 15, 2008, Defendants reserve and do not waive any and all ground for judgment as a matter of law to be raised in a subsequent motion. Defendants assert the limited claims below, on the basis that, if granted, the need to present certain testimony or argument will be obviated, and will accelerate the progress of this trial.

I. STANDARD FOR ENTRY OF JUDGMENT AS A MATTER OF LAW

Rule 50 of the Federal Rules of Civil Procedure provides for the entry of judgment as a matter of law against a party on each issue or claim for which that party has failed to carry its burden of proof at trial. Fed. R. Civ. P. 50(a)(1). "The standard governing a Rule 50 motion mirrors that employed in evaluating a summary judgment motion except that the two motions are made at different times during the proceedings before the district court." Winters v. Fru-Con Inc., 498 F.3d 734, 746 (7th Cir. 2007) (quoting Appelbaum v. Milwaukee Metro. Sewerage Dist., 340 F.2d 573, 578 (7th Cir. 2003) (citing Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000)).

If "the non-movant presents insufficient evidence upon which a reasonable person could properly base a verdict in his favor, judgment as a matter of law for the movant is appropriate. Moreover, a mere scintilla of evidence will not prevent a directed verdict." James v. Milwaukee County, 956 F.2d 696, 698 (7th Cir. 1992) (Internal citations omitted). Therefore, judgment as a matter of law should be granted when "a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue." FruCon Inc., 498 F.3d at 746; May v. Libby, Nos. 05-1473 & 05-1647, 2007 U.S. App. LEXIS 27796, *5 (7th Cir. Nov. 30, 2007).

II. PLAINTIFFS HAVE FAILED TO CARRY THEIR BURDEN OF PROOF

Plaintiffs Equipoise PM LLC ("Equipoise") and John Price ("Price") have failed to adequately substantiate certain issues and claims, and therefore, this Court should find for Defendants on the issues raised below as a matter of law.

A. Punitive Damages Should Not Be Charged Or Argued To The Jury

"The preliminary question of whether the facts justify the imposition of punitive damages in a particular case is a question of law." Cornell v. Langland, 109 Ill. App. 3d 472, 474, 440 N.E.2d 985, 987 (1st Dist. 1982) (citing Kelsay v. Motorola, Inc., 74 Ill. 2d 172, 384 N.E.2d 353, 359 (1978)). "Illinois courts do not favor punitive damages and insist that plaintiffs must establish not only simple fraud but gross fraud, breach of trust, or other extraordinary or exceptional circumstances clearly showing malice or willfulness." Europlast, Ltd. v. Oak Switch Systems, Inc., 10 F.3d 1266, 1276 (7th Cir. 1993) (citing AMPAT/Midwest, Inc. v. Illinois Tool Works, Inc., 896 F.2d 1035, 1043 (7th Cir. 1990)). Illinois courts do not favor punitive damages because of their penal nature, and "courts must be cautious in seeing that they are not improperly or unwisely awarded." Id. (citing Deal v. Byford, 127 Ill. 2d 192, 537 N.E.2d 267, 272 (1989)).

i. Plaintiffs Have Waived Any Right To Punitive Damages

Plaintiffs, with the exception of their proposed jury instructions, have not discussed, argued, or even mentioned punitive damages, or any evidence that would support punitive damages, to the Court or the jury. Nor have Plaintiffs discussed, argued, or even mentioned any predicate conduct of Defendants that could reasonably support a claim for punitive damages, i.e. "showing malice or willfulness." When a plaintiff fails to assert a claim for punitive damages during its case in chief, it is prejudicial to then submit the issue of punitive damages to the jury. See Brewer v. Wal-Mart Stores, Inc., 87 F.3d 203, 209 (7th Cir. 1996).

In Brewer, the plaintiff initially alleged in its complaint for malicious prosecution that the defendant's conduct was malicious and warranted the imposition of punitive damages. Apart from the court's findings of multiple problems with plaintiff's presentation of its case, the jury never heard anything about punitive damages until after the evidence was closed. Id. at 208. The court found the reasonable implication of the lack of any mention of punitive damages by the plaintiff to the jury was that the issue of punitive damages had been withdrawn. The court held that the realistic view of plaintiff's conduct was that the defendant was prejudiced in all phases of the trial, from its opening to its closing, including particularly the witnesses called and their examinations. Id. at 209. Consequently, "punitive damages were alleged and then by plaintiff's conduct abandoned, withdrawn, or waived." Id. Additionally, the court held that the "sequence of things might even suggest to the jury the possibility that it was the judge who, after hearing the evidence, had added the punitive damages issue with the implication that punitive damages were justified." Id. at 208. Accordingly, the Seventh Circuit vacated the award of punitive damages. Id. at 209.

This case is analogous. Plaintiffs' counsel has not argued for, discussed, or even mentioned punitive damages, or any evidence that would support punitive damages, in its opening, direct, or cross-examinations of the witnesses in its case in chief. Consequently, Defendants' counsel has not argued, discussed, or rebutted any testimony relevant to punitive damages in the opening statement or in any examination of the witnesses. If Plaintiffs' counsel does not raise the issue, it is unreasonable to expect Defendants' counsel to be the party to voluntarily discuss the matter which "could only be detrimental" to the Defendants. Id. At this late stage of the trial proceedings, it would be unfairly prejudicial to the Defendants to have the jury instructed, and asked to deliberate, on punitive damages for the very reasons articulated in Brewer.

ii. Defendants' Conduct Does Not Warrant Punitive Damages As A Matter Of Law

As mentioned above, the initial determination of whether the facts of a particular case justify the imposition of punitive damages is one of law. Europlast, 10 F.3d at 1276. Illinois courts do not favor punitive damages and insist that plaintiffs must establish not only simple fraud but gross fraud, breach of trust, or other extraordinary or exceptional circumstances clearly showing malice or willfulness." Id.*fn1 Because of punitive damages' penal nature, such damages "are not favored in the law, and courts must be cautious in seeing that they are not improperly or unwisely awarded." Roboserve, Inc. v. Kato Kagaku Co., Ltd., 78 F.3d 266, 276 (7th Cir. 1996). "To justify punitive damages, the allegedly outrageous conduct must 'involve some element of outrage similar to that found in a crime.'" Id. (citing Restatement (Second) of Torts § 908, comment b (1979)). "Without some evidence . clearly indicating malice or willfulness . under Illinois law the question of punitive damages is not even submitted to the jury." Id.

Plaintiffs have not presented any evidence of conduct by any Defendant in this case that can appropriately be classified as so "outrageous" as to be "similar to that found in a crime." If Defendants are found culpable of any tortious conduct, it is only tortious, as there is no legally sufficient basis for a reasonable ...


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