750 F.2d 1516 (11th Cir. 1985), 82-6085, Pesaplastic, C.A. v. Cincinnati Milacron Co.

Docket Nº:82-6085, 83-5418.
Citation:750 F.2d 1516
Party Name:PESAPLASTIC, C.A., Plaintiff-Appellee, v. CINCINNATI MILACRON CO., Defendant-Appellee, Tedruth Plastics Corp., Defendant-Appellant.
Case Date:January 24, 1985
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit
 
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Page 1516

750 F.2d 1516 (11th Cir. 1985)

PESAPLASTIC, C.A., Plaintiff-Appellee,

v.

CINCINNATI MILACRON CO., Defendant-Appellee,

Tedruth Plastics Corp., Defendant-Appellant.

Nos. 82-6085, 83-5418.

United States Court of Appeals, Eleventh Circuit

January 24, 1985

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[Copyrighted Material Omitted]

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Fleming, O'Bryan & Fleming, Paul R. Regensdorf, Fort Lauderdale, Fla., Carton, Nary, Witt & Arvanitis, Douglas M. Calhoun, Asbury Park, N.J., Gregory P. Borgognoni, Miami, Fla., for Tedruth Plastics Corp.

Blackwell, Walker, Gray, Powers, Flick & Hoehl, James E. Tribble, John R. Hoehl, Miami, Fla., for Cincinnati Millacron Co.

Heller & Lloyd, Henry M. Lloyd, Washington, D.C., Friedman, Britton, Cohen, Kaufman, Zinkow, Benson & Schantz, Miami, Fla., for Pesaplastic, C.A.

Appeals from the United States District Court for the Southern District of Florida.

Before FAY and VANCE, Circuit Judges, and MacMAHON [*], District Judge.

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FAY, Circuit Judge:

Tedruth Plastics Corporation ("Tedruth") appeals from an adverse decision in a diversity case whereby Tedruth was found liable to Pesaplastic, C.A. ("Pesaplastic") for misrepresentation and breach of warranties in connection with the sale of a mold used to manufacture plastic pallets. Tedruth and co-defendant Cincinnati Milacron Company ("Milacron") were held jointly and severally liable for compensatory damages, and punitive damages were also assessed against Tedruth. Tedruth raises numerous issues on appeal, including jurisdiction, venue, the trial court's failure to admit an unexecuted contract into evidence, jury instructions, the jury verdict form, proof of damages, and the court's award of a judgment of contribution in favor of Milacron. We conclude that the jury's verdict was adequately supported by the evidence presented, and finding no reversible error on the part of the trial court, we therefore affirm.

FACTS

Pesaplastic is a Venezuelan corporation which was formed in 1976 with a venturous eye toward the manufacture and distribution of large plastic products in South America. Milacron is an Ohio corporation engaged in the manufacture and sale of large injection molding machines. Milacron's principal place of business is in Cincinnati, but it also maintains a Latin American Sales and Service Office in North Miami Beach, Florida.

In 1976, negotiations began between Pesaplastic and Milacron's regional sales manager in Miami, Carlos Helfenstein, concerning Pesaplastic's desire to purchase the machinery and molds required for the manufacture of plastic pallets. Helfenstein informed Pesaplastic that Milacron manufactured an injection molding machine suitable for Pesaplastic's needs. In addition, Helfenstein located a New Jersey corporation, Tedruth, which had available the type mold used in the Milacron machine for the manufacture of plastic pallets. The mold in question, a "metric mold," was built by the Japan Tool & Die Company in 1974, and had been used by Tedruth in its own manufacturing operations. Helfenstein, however, informed Pesaplastic by telex that the Tedruth mold was "brand new." 1

On June 1, 1977, in Cincinnati, Pesaplastic and Milacron executed a written contract whereby Pesaplastic agreed to purchase from Milacron a 3,000 ton plastic injection molding machine. Immediately thereafter, Helfenstein and the representatives of Pesaplastic flew to New Jersey to meet with representatives of Tedruth. The arrangements for this meeting had been made exclusively by Helfenstein. During the course of these negotiations, Tedruth submitted for Pesaplastic's consideration a list of price quotations and a proposed contract for the sale of the mold. The representatives of Pesaplastic thereafter left New Jersey and returned to Venezuela to consider Tedruth's offer.

In August, 1977, Pesaplastic decided to purchase the metric mold and a letter of credit was drawn in favor of Tedruth for $378,000; an amount equal to that specified in the proposed contract. Tedruth subsequently shipped the mold to Milacron's Ohio plant where it was to be debugged for use in the Milacron injection molding machine. According to expert testimony elicited at trial, the debugging process is an important procedure in the mold design and production industry. (T. at 1364). The purpose is to discover beforehand any problems which might exist and to correct them. Id. For reasons which are unclear, this debugging process never took place. Milacron claims that Pesaplastic cancelled the test. Pesaplastic, on the other hand, claims that it was Milacron who made the cancellation when a technician from Tedruth

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failed to show up to assist in the process. In any event, the critical debugging process was never undertaken and the equipment was shipped untested to Venezuela.

Delivery of the equipment to Pesaplastic was supposed to have been made by March 8, 1978. Actual delivery, however, was not made until the fall of that year. After the equipment arrived in Venezuela, technicians from both Milacron and Tedruth traveled to South America to assemble the machinery and supervise start-up. When the technicians arrived, they found that Pesaplastic's production plant was far from being completed. The walls and roof were not yet in place and there was no electricity or water. In addition, the injection molding machine and the metric mold were found sitting in the open and exposed to the elements. Despite these conditions, the technicians performed as much of the set-up as was possible. Electricity was eventually available, but the technicians decided not to risk damaging the equipment by starting it up without the water necessary to keep the equipment cooled.

After the American technicians left Venezuela, Pesaplastic decided to start the machinery anyway and it proceeded to manufacture approximately 1,200 plastic pallets. During this initial production period, a number of the component parts of the mold, including temperature controllers and injection nozzles, ceased to properly function. In addition, molten plastic was inadvertently injected into the electrical cavity of the mold, after which production was halted altogether. Although water eventually became available, Pesaplastic was unable to sustain production for any significant period of time. Various problems sporadically arose with both the mold and the injection molding machine.

During 1979, Pesaplastic twice requested additional technical assistance from Tedruth. Tedruth responded to the first telex by arranging for a former employee to send supplemental operating information to Pesaplastic. As to the second telex, Tedruth replied by asking Pesaplastic to call first to see if the problem was one that could be resolved over the phone. In the meantime, however, Pesaplastic managed to get production started again and the requested phone call was never made.

Despite resumed production, and as a result of having suffered financial losses due to down time and repairs, Pesaplastic filed a diversity suit in the United States against both Milacron and Tedruth. After this suit was filed, Pesaplastic continued to experience breakdowns of both the Milacron machine and the Tedruth mold. Pesaplastic repeatedly tried on its own to repair the highly technical equipment but was unsuccessful. Finally, while their law suit was pending in the federal court, Pesaplastic was forced to go out of business.

COURSE OF PROCEEDINGS

Pesaplastic's diversity suit against Milacron and Tedruth was filed October 4, 1979, in the United States District Court for the Southern District of Florida. The complaint essentially alleges fraud, breach of contract and warranties, negligence, and breach of fiduciary responsibility. In response to Pesaplastic's complaint, defendant Tedruth filed motions to dismiss on the basis of lack of personal jurisdiction, improper venue, and insufficiency of service of process. These motions were denied and answers were filed by Tedruth and Milacron in February of 1980. 2 Among other things, both defendants asserted contributory negligence as a defense.

Jury trial commenced on May 24, 1982. At the conclusion of the three-week trial, the jury rendered a verdict in favor of Pesaplastic and against both Milacron and Tedruth. The percentage of negligence attributed to each party by the jury was: Pesaplastic--41%; Milacron--16%; Tedruth-

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--43%. Pesaplastic was awarded compensatory damages against both defendant corporations jointly and severally in the amount of $1,500,000. Punitive damages were also assessed against Tedruth in the sum of $1,250,000.

A notice of appeal was subsequently filed by both Milacron and Tedruth. Shortly thereafter, Pesaplastic and Milacron entered into a settlement agreement whereby Milacron paid Pesaplastic $1,215,817.31 as a complete satisfaction of the compensatory damages portion of Pesaplastic's judgment. Milacron then filed a motion for a judgment of contribution against Tedruth. That motion was granted and resulted in a final judgment being entered in favor of Milacron and against Tedruth for the sum of $889,370.36. A notice of appeal from the judgment of contribution was also filed by Tedruth.

JURISDICTION

Of primary importance in the disposition of this case is the issue of jurisdiction. The district court found...

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