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Tecna Peru, S.A.C. v. Unisert Multiwall Systems, Inc.

United States District Court, S.D. Texas, Houston Division

June 28, 2017

TECNA PERU, S.A.C., Plaintiff,
v.
UNISERT MULTIWALL SYSTEMS, INC., Defendant.

          MEMORANDUM AND ORDER

          Hon. Keith P. Ellison United States District Judge

         Before the Court is Defendant Unisert Multiwall Systems, Inc.'s Renewed Rule 50(a) Motion for Judgment as a Matter of Law or, Alternatively, Rule 50(b) Motion for New Trial (the “Motion”).

         I. BACKGROUND

         Unisert Multiwall Systems, Inc. (“Unisert”) is an American company that designs, fabricates, installs, and repairs multiwall pipeline systems. In 2007, Plaintiff Tecna Peru, S.A.C. (“Tecna”), a company based in South America, recognized an application for Unisert's technology and offered to act as Unisert's agent in Colombia, Peru, and Ecuador. Unisert was amenable to the offer and, pursuant to an agency agreement dated Feb. 2, 2007 (Pl. Ex. 16, the “Agency Agreement”), appointed Tecna to act as its exclusive agent in those countries. The Agency Agreement lacked specificity-it was only a half-page in length-but the parties seem to agree on the general thrust of their respective obligations: Tecna agreed to market Unisert's products and services, and, in exchange, Unisert agreed to pay Tecna 10% of the gross amount received under each contract that Unisert secured as a result of Tecna's marketing. (See Pl. Ex.16.) In other words, Tecna was to receive a 10% commission on each deal that it sourced for Unisert.

         Even prior to the execution of the Agency Agreement, Tecna had begun marketing Unisert's services and found a potentially willing customer, Consorcio Terminales (“CT”). Tecna told Unisert that a $200, 000 “propina, ” the Spanish word for “tip, ” would need to be added to the total amount of the bid price for the potential contract with CT, and Unisert agreed to include the so-called propina in the bid. Unisert's bid was successful, and the company executed a contract with CT (“Contract 1”) on July 2, 2007. (Pl. Ex. 19.) Unisert subsequently paid Tecna a 10% commission in connection with this contract, but subtracted $10, 000 from the payment to compensate for damage that occurred to Unisert's property.

         Tecna continued marketing Unisert's services in the two years that followed. It was around this time, however, that the parties' relationship soured. Unisert's CEO, Roger Tierling, testified that he heard in August of 2009 that Tecna had pocketed a substantial portion of the “propina” instead of paying the full $200, 000 to CT.[1] Tierling then arranged a meeting with Tecna's CEO, Alberto Padilla, to discuss the issue.

         The contents of their conversation was a subject of dispute at trial. Tierling testified that he expressly “fired” Padilla and terminated the Agency Agreement; Padilla testified that Tierling was upset and expressed his displeasure, but that the Agency Agreement was never terminated. In any event, Tecna continued marketing Unisert's services, and Unisert secured three additional contracts in the region in the three years that followed the purported termination.

         Unisert secured a second contract with Consorcio Terminales on August 24, 2009 (“Contract 2”), (Pl. Ex. 25, ) and Padilla asked Tierling via email to send the commission payment schedule for the contract. (Pl. Ex. 26.) Tierling responded that Tecna's commissions would be “credited against the $140, 000 owed Unisert, ” and that Tecna would “[t]hen . . . receive commissions as usual.” (Pl. Ex. 26.) Padilla responded that Tecna did not owe Unisert a penny, and subsequently emailed Tierling several more times asking if Unisert had received any payments from CT and for a commission payment schedule. (See Pl. Exs. 26-30.) Padilla eventually sent a spreadsheet to Tierling reflecting the amount that Unisert would ultimately owe Tecna on Contract 2 (10% of the gross amount of the underlying contract). (Pl. Ex. 31.) Padilla stated that, if Tierling did not agree with the amount of the ultimate commission, Tierling should provide a chart showing the amount Unisert believed it would owe Tecna, and they could settle the dispute in court. (Pl. Ex. 31.) Tierling did not respond, and Unisert never made any payment to Tecna in connection with Contract 2.

         Tecna provided evidence that Unisert nonetheless continued to otherwise correspond with Padilla (see, e.g., Pl. Ex. 34), and that Padilla continued to market Unisert's services. Unisert entered into a contract with Vopak Peru on June 23, 2010 (“Contract 3”), and an additional contract with Consorcio Terminales on September 5, 2012 (“Contract 4”). Unisert concedes that it did not pay Tecna a commission in connection with Contracts 3 or 4.

         Tecna brought suit to recover damages for Unisert's alleged breach of the Agency Agreement on March 26, 2014, and the case went to trial in October of 2016. There was no dispute at trial that (i) the Agency Agreement was a valid contract; (ii) Tecna had tendered performance;[2] and (iii) that Unisert had failed to pay Tecna 10% of the gross amount of Contracts 1, 2, 3, or 4.[3] In other words, there was no dispute that Tecna had failed to fully comply with the Agency Agreement. The only disputed elements of Tecna's breach of contract claim were the extent to which Tecna performed, and, by extension, the damages that Tecna sustained as a result. Unisert also contended that its failure to perform was excused, asserting two affirmative defenses: prior material breach, and statute of limitations.

         The Court submitted these issues to the jury.[4] The jury rejected Unisert's affirmative defenses, and found that Unisert's procurement of all four contracts was the result of Tecna's marketing efforts. (Dkt. 101.) The jury further found that Tecna was therefore entitled to recover $456, 447.35, $267, 410.82, and $115, 932.03 for Unisert's failure to pay a commission on Contracts 2, 3, and 4, respectively. (Dkt. 101.) These amounts are equal to 10% of the gross amount of each contract. The jury awarded Tecna no damages arising out of Unisert's $10, 000 underpayment on Contract 1. (Dkt. 101.)

         Defendant now moves for judgment as a matter of law under Rule 50(b) or, alternatively, for a new trial under Rule 59.

         II. LEGAL STANDARD

         A. Rule 50 Motion for Judgment as a Matter of Law

         Under Federal Rule of Civil Procedure 50, a motion for judgment as a matter of law may be granted if a trial 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). “The decision to grant a directed verdict . . . is not a matter of discretion, but a conclusion of law based upon a finding that there is insufficient evidence to create a fact question for the jury.” Omnitech Int'l v. Clorox Co., 11 F.3d 1316, 1323 (5th Cir. 1994) (omitting internal citations and quotation). There is no legally sufficient evidentiary basis when “the facts and inferences point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict.” Rubinstein v. Adm'rs of the Tulane Educ. Fund, 218 F.3d 392, 401 (5th Cir. 2000) (internal quotations omitted).

         In evaluating such a motion, the court is to view the entire trial record in the light most favorable to the non-movant and draw all inferences in its favor, without making credibility determinations or weighing the evidence. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150; Becker v. PaineWebber, Inc., 962 F.2d 524, 526 (5th Cir. 1992). The court must “give credence to . . . that ‘evidence supporting the moving party that is uncontradicted and unimpeached, at least to the extent that that evidence comes from disinterested witnesses.'” Wallace v. Methodist Hospital Sys., 271 F.3d 212, 219 (5th Cir. 2001) (quoting Reeves, 530 U.S. at 151.). Finally, “there must be more than a mere scintilla of evidence in the record to render the grant of JMOL inappropriate.” Wallace, 271 F.3d at 219.

         B. Rule 59 Motion for New Trial

         Federal Rule of Civil Procedure 59 states that a court may, on motion, grant a new trial after a jury trial “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). A court therefore may grant a new trial if it finds that the verdict is against the weight of the evidence, the damages awarded are excessive, the trial was unfair, or prejudicial error was committed in its course. Smith v. Transworld Drilling Co., 773 F.2d 610, 613 (5th Cir. 1985).

         Courts are to decide whether to grant a new trial based on their assessment of the fairness of the trial and the reliability of the jury's verdict. Seidman v. Am. Airlines, Inc., 923 F.2d 1134, 1140 (5th Cir. 1991). This decision lies within the discretion of the court. Shows v. Jamison Bedding, Inc., 671 F.2d 927, 930 (5th Cir. 1982). In determining whether to grant a motion for new trial, the court must view the evidence in the light most favorable to the jury's verdict, and the verdict must be affirmed unless the evidence points so strongly and overwhelmingly in favor of the other party that the Court believes that reasonable persons could not arrive at a contrary conclusion. Dawson v. Wal-Mart Stores, Inc., 978 F.2d 205, 208 (5th Cir. 1992). When a party moves for a new trial on evidentiary grounds, a new trial should not be granted unless “the verdict is against the great weight of the evidence.” Pryor v. Trane Co., 138 F.3d 1024, 1026 (5th Cir. 1998).

         III. ...


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