In re Joy Global Inc. F/K/A Harnischfeger Indus. Inc. Debtor. Joy Global Inc. F/K/A Harnischfeger I

• Decision Date: 21 September 2010
• Docket Number: Civ. No. 01-039-LPS
• Citation: 739 F.Supp.2d 711
• Parties: In Re: JOY GLOBAL, INC. f/k/a Harnischfeger Industries, Inc. Debtor. Joy Global, Inc. f/k/a Harnischfeger Industries, Inc. Plaintiff, v. Wisconsin Department of Workforce Development, Defendant.
• Court: U.S. District Court — District of Delaware

739 F.Supp.2d 711

In Re: JOY GLOBAL, INC. f/k/a Harnischfeger Industries, Inc. Debtor.
Joy Global, Inc. f/k/a Harnischfeger Industries, Inc. Plaintiff,
v.
Wisconsin Department of Workforce Development, Defendant.

Civ. No. 01-039-LPS.

United States District Court,
D. Delaware.

Sept. 21, 2010.

739 F.Supp.2d 713

Bruce Grohsgal, Pachulski, Stang, Ziehl & Jones LLP, Wilmington, Steven M. Biskupic, John D. Finerty, Jr., and Charles J. Crueger, Michael Best & Friedlich LLP, Milwaukee, WI, for Plaintiff.

Stuart B. Drowos, Deputy Attorney General, Delaware Department of Justice, Wilmington, J.B. Van Hollen, Attorney General and Richard Briles Moriarty and Charlotte Gibson, Assistant Attorneys General, Wisconsin Department of Justice, Madison, WI, for Defendant.

OPINION

STARK, District Judge.

In this tort case stemming from a complex bankruptcy of long standing, the following constitute the Court's post-trial findings of fact and conclusions of law on the remaining claim of tortious interference.

BACKGROUND

I. Procedural History

The lengthy background of this case was comprehensively set forth in the Court's December 2007 opinion rejecting the plaintiff's fourth motion for summary judgment. See In re Joy Global, 381 B.R. 603, 606-10 (D.Del.2007). The Court has since ruled on two more rounds of summary judgment briefing and a motion to dismiss (D.I. 317; D.I. 511), as well as the parties' motions in limine (D.I. 537). The Court conducted a bench trial on March 1-3, 2010. (D.I. 550-52, hereinafter "Tr.") The parties submitted post-trial briefing, which was completed on June 24, 2010 (D.I. 562).

II. Evidentiary Objections

The Court's factual findings, and the conclusions that follow from them, are based on the Court's review of all of the evidence introduced by the parties. The Court did not sustain any evidentiary objections at trial and does not sustain any here either. Instead, the Court hereby finds that all evidentiary objections not previously ruled upon have been waived by the parties due to their failure to brief such objections in their post-trial briefs.

The Court made clear on numerous occasions that if the parties wished to press any objections to the admissibility of evidence, the parties were to brief such objections post-trial. For example, at the conclusion of the trial, the Court stated: "[T]he briefing is going to cover all legal

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issues that the party wants me to consider, including any objections that have been reserved at any point with respect to the evidence.... [The post-trial briefs are] to cover not only the legal argument on the elements of the tort and privilege or defenses that are raised but also any evidentiary objections that either side wishes to address." (Tr. at 530) Likewise, during the trial, when DWD rested its case, the Court admitted all exhibits and deposition testimony, adding: "Everybody's objections, however, are preserved and not waived. So it's without prejudice to, as we've talked about since the pretrial conference, everybody preserving the objections that have been stated and reevaluating them in light of what the ultimate testimony is and briefing them, if you choose to persist with any of the objections ... in your post-trial briefing. But the evidence is admitted." ((Tr. at 256) (emphasis added); see also D.I. 549 at 2 (providing, in post-trial written Order, schedule by which "the parties shall file briefing, containing legal argument, including on any evidentiary objections ") (emphasis added); D.I. 540 at 9 (pre-trial conference))

Despite this direction, DWD, in its opening post-trial brief, provided merely one paragraph of authorities supporting unspecified "hearsay objections" to Joy Global's prior testimony excerpts and broadly referred the Court to "revised objections" filed prior to trial. (D.I. 555-2 at 30-31) (citing D.I. 535 & D.I. 535-1) In its reply brief, DWD again cited to previous filings (six of them), where it purportedly "articulated and preserved" its objections. (D.I. 559 at 11) This is not the procedure the Court directed the parties to follow if they wished to maintain their objections—a fact that must have been clear to the parties, given their statements to the Court as well as the Court's explicit rejection of DWD's request to submit a "chart" or "checklist" or other separate filing devoted solely to evidentiary objections. (Tr. at 527-30; see also Tr. at 255 (Joy Global stating, "Your guidance at the pretrial conference was let it come in subject to post-trial briefing on the evidence and the objection."); Tr. at 490 (DWD responding to Joy Global motion to admit evidence by stating, "We do have issues about the listing of certain of the exhibits.... We'll take that up in post-trial briefing, if that is okay.") (emphasis added); D.I. 556 (letter to Court from Joy Global referencing that "the Court admitted evidence into the record subject to objections, and it made clear that if a party wanted the Court to address an issue with respect to an exhibit and rule on an objection, the party should raise the issue in post-trial briefing")) There would have been no point to the Court's establishment of page limits on post-trial briefing ( see Tr. at 528-31) had the Court intended for the parties simply to refer to lengthy prior or additional filings for argument on objections.

For its part, Joy Global devoted one footnote in its answering brief to responding to DWD's "unexplained objections" and later noted that it preserved objections at trial to certain testimony. (D.I. 557 at 19 n. 2 & 26) This, too, was inadequate to maintain objections, which would have required (at least) specific identification of the objectionable evidence, articulation of the basis for the objection, and citation to authority supporting a good faith basis for the objection. At no point in the post-trial briefing did either DWD or Joy Global do what was required to maintain its evidentiary objections.

III. Factual Findings

A. The Parties

1. "Joy Global" refers to Joy Global, Inc.; (b) "Harnischfeger" or "HII" refers to Harnischfeger Industries, Inc. that, as a result of bankruptcy proceedings, emerged

739 F.Supp.2d 715

from Chapter 11 reorganization as Joy Global, Inc.; (c) "Beloit" refers to Beloit Corporation; and, (d) "DWD" refers to the Wisconsin Department of Workforce Development. (D.I. 554 Ex. 1 (Joint Undisputed Proposed Findings of Fact, hereinafter "UPFOF") ¶ 1)

2. The "Debtors" are Harnischfeger and its U.S. based subsidiaries, including Beloit.

B. Key Individuals

3. Ross Altman was a Senior Vice President of Beloit and the General Counsel and Secretary of Beloit from April 1999 until he left in 2001. (UPFOF ¶ 34)

4. James A. Chokey was the General Counsel and Secretary of Harnischfeger, and an Executive Vice President of Harnischfeger, throughout calendar years 1998 and 1999. (UPFOF ¶ 35)

5. Robert N. Dangremond was a Principal at Jay Alix & Associates, a consultant to the Debtors whose retention was approved by the bankruptcy court. At a July 8, 1999 meeting of the Harnischfeger Board, he was elected Senior Vice President and Chief Restructuring Officer of Harnischfeger, retroactive to June 16, 1999, and remained in that position until sometime in 2001. At an October 26, 1999 meeting of the Board of Directors of Beloit, Dangremond was also elected Senior Vice President and Chief Restructuring Officer of Beloit with authority to: (i) solicit bids for the sale of Beloit, either as a whole or in parts, and (ii) liquidate the assets of Beloit to the extent he was unsuccessful in soliciting bids for the sale of Beloit and its parts. (UPFOF ¶ 36) William R. Currer was employed by Jay Alix from the spring of 1999 through June of 2002. (Ex. 104 at 5-7) He worked under the direction of Dangremond and was assigned to Beloit. (Ex. 104 at 6, 19)

6. John Nils Hanson was Vice Chairman, President and Chief Executive Officer of Harnischfeger from May of 1999 to August of 2000. During the relevant time period, Mr. Hanson was also the Chairman of Beloit's Board of Directors and Chief Executive Officer of Beloit. (UPFOF ¶ 38)

7. Kenneth A. Hiltz was a Principal at Jay Alix. At a July 8, 1999 meeting of the Harnischfeger Board, he was elected Senior Vice President and Chief Financial Officer of Harnischfeger, retroactive to June 16, 1999, and remained in that position through the balance of 1999. (UPFOF ¶ 39)

8. Carol Ann Mohr was Manager of Employee Benefits at Harnischfeger from the late 1980s until 2000 and Director of Employee Benefits at Harnischfeger during 2001. (UPFOF ¶ 42)

9. Mark Readinger was the President of Beloit from 1998 onward. Prior to that, from 1996 to 1998, he was President and Chief Operating Officer of Joy Mining Machinery, another subsidiary of Harnischfeger. Starting in 1997, Mr. Readinger also held the position of Senior Vice President of Harnischfeger and continued to do so throughout the relevant time period. Following his tenure as President of Beloit, Mr. Readinger was, from 2001 to 2002, the President and Chief Executive Officer of Armillaire Technologies, a company having no relationship with Harnischfeger or any of its subsidiaries. In 2002, Mr. Readinger assumed the position of Executive Vice President of Joy Global Inc. He was also the President and Chief Operating Officer of P & H Mining Equipment, one of Joy Global's subsidiaries, and continued to hold those positions at least through trial. (UPFOF ¶ 43)

10. Dennis Winkleman was Senior Vice President, Human Resources at Beloit from 1997 to February 2000. When he was deposed in December 2008, he had

739 F.Supp.2d 716

been an Executive Vice President at Joy Global since May 2000. (UPFOF ¶ 45)

11. Eric B. Fonstad was an Associate General Counsel and Assistant Secretary for Harnischfeger during calendar years 1999 and 2000. (UPFOF ¶ 46)

C. Events Leading to Beloit's Bankruptcy

12. Beloit was primarily a pulp and paper machine manufacturer and designer with employees in Wisconsin and...