Walker Mfg., Inc. v. Hoffmann, Inc., C00-103-MWB.
| Decision Date | 13 September 2002 |
| Docket Number | No. C00-103-MWB.,C00-103-MWB. |
| Citation | 220 F.Supp.2d 1024 |
| Parties | WALKER MANUFACTURING, INC., Plaintiff, v. HOFFMANN, INC., an Iowa Corporation, Larry Emmert, Marty Sixt, and J.R. Sales and Machinery Service, Inc., Defendants. |
| Court | U.S. District Court — Northern District of Iowa |
Mark L. Zaiger, Kevin J. Caster, Shuttleworth & Ingersoll, Cedar Rapids, IA, for Plaintiff.
Michael L. Noyes, Lane & Waterman, Davenport, IA, Michael McDonough, Moyer & Bergman, PLC, Gregory M. Lederer, Simmons Perrine Albright Ellwood, Cedar Rapids, IA, for Defendants.
Marty Sixt, Iowa City, IA, Pro se.
This matter is before the court on a motion for partial summary judgment (Doc. No. 101) filed February 21, 2002, by the defendant Hoffmann, Inc. ("Hoffmann")1. Hoffmann supports its motion with a brief, a statement of facts, and an appendix filed under seal (Doc. Nos. 102, 103 & 105, respectively). After receiving an extension of time from the court, the plaintiff Walker Manufacturing, Inc. ("Walker") filed, on May 22, 2002, a brief in resistance to Hoffmann's motion, a statement of disputed facts, and an appendix filed under seal (Doc. Nos. 111, 112 & 113, respectively), followed on May 24, 2002, by an "Affidavit of Richard Rank Ratifying Right to Sue" (Doc. No. 114). Hoffmann filed a reply brief and a response to Walker's statement of additional facts on June 5, 2002, together with a Second Supplemental Appendix filed under seal (Doc. Nos. 118, 119 and 123, respectively).
Hoffmann is represented on its motion by Michael L. Noyes and Nathan Clark of Lane & Waterman, Davenport, Iowa. Walker is represented by Mark L. Zaiger and Kevin J. Caster of Shuttleworth & Ingersoll, Cedar Rapids, Iowa.
Before turning to the merits of Hoffmann's motion, the court will address two preliminary issues raised by Hoffmann, one relating to Walker's statement of facts and the other relating to Walker's viability as a plaintiff in this case.
Hoffmann contends Walker has impermissibly relied upon the facts found by the court in its supplemental order on Walker's motion for preliminary injunction (i.e., Order entered August 28, 2000, Doc. No. 33, supplementing Order of August 11, 2000, Doc. No. 30, granting Walker's motion for preliminary injunction). Hoffmann argues "the findings entered by this Court at the preliminary injunction stage have no effect on the trial stage, including on the instant motion for summary judgment." Doc. No. 119, p. 1 (citing Imperial Chem. Indus. Ltd. v. Nat'l Distillers & Chem. Corp., 354 F.2d 459, 463 (2d Cir. 1965)). Hoffmann therefore argues Walker's factual contentions should be ignored to the extent those contentions rely on "findings made by this Court in a proceeding that has no effect on this stage of the litigation." Doc. No. 119, p. 1.
It is a "general rule that `the findings of fact and conclusions of law made by a court granting a preliminary injunction are not binding at trial on the merits.'" Henderson v. Bodine Aluminum, Inc., 70 F.3d 958, 962 (8th Cir.1995) (quoting University of Texas v. Camenisch, 451 U.S. 390, 395, 101 S.Ct. 1830, 1834, 68 L.Ed.2d 175 (1981)). Accord Irish Lesbian, Gay Org. v. Giuliani, 143 F.3d 638, 644 (2d Cir.1998); Six Clinics Holding Corp., II v. Cafcomp Sys. Inc., 119 F.3d 393, 400 (6th Cir.1997); TEC Eng. Corp. v. Budget Molders Supply, Inc., 82 F.3d 542, 545 (1st Cir.1996); Clark v. K-Mart Corp., 979 F.2d 965, 969 (3d Cir.1992); Mylett v. Jeane, 910 F.2d 296, 299 (5th Cir.1990); United States v. Jefferson County, 720 F.2d 1511, 1519 n. 21 (11th Cir.1983). Thus, the substantive issues discussed in the court's Order granting the preliminary injunction are not foreclosed from being relitigated at trial. See Henderson, supra.
However, this does not mean that where the court's factual findings at the preliminary injunction stage are supported by the record, those findings have "no effect on this stage of the litigation." While it is true the parties have not benefitted from a full opportunity to present their case, the court nevertheless may rely, to the extent appropriate, upon sworn testimony and affidavits offered in the injunction proceedings. Cf. Hamilton Watch Co. v. Benrus Watch Co., 206 F.2d 738, 740 (2d Cir.1953) (). Furthermore, in a summary judgment posture, Hoffmann's argument is to some extent moot because the court views all the facts in the light most favorable to the nonmoving party and gives that party the benefit of all reasonable inferences that can be drawn from the facts. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); Quick v. Donaldson Co., 90 F.3d 1372, 1377 (8th Cir.1996). The court will consider the prior factual findings to the extent they are supported by the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits." Fed. R.Civ.P. 56(c).
Preliminarily, Hoffmann argues several of Walker's claims should be dismissed on procedural grounds because Walker is not a real party in interest. The following facts are relevant to this issue.
Walker is the successor corporation to R.J. Manufacturing, Inc. ("RJM"). RJM manufactured and sold self-propelled crop sprayers2 from at least 1995 until May 2000, when Walker purchased most of RJM's assets. RJM marketed its crop sprayers under trademarked names including "Walker," "Walker 44," and "Walker Ultra" (the "Walker trademarks"). As part of the asset purchase agreement between Walker and RJM, Walker became owner of the Walker trademarks, as well as certain other tangible and intangible property of RJM.
Hoffmann's primary business is manufacturing and selling silos and smokestacks. Hoffmann owns and operates a fabrication shop which fabricates parts and supplies for its silos and smokestacks, and Hoffmann also does custom fabrication for other businesses. In January 1998, Martin Sixt, who was head engineer and chief of design services at RJM, negotiated a contract with Hoffmann to have Hoffmann fabricate parts to be used in RJM's crop sprayers. As part of that contract, RJM supplied Hoffmann with certain design drawings and specifications in both paper and electronic formats. As will be discussed in more detail later in this opinion, this lawsuit centers around Walker's claim that Hoffmann misappropriated the RJM design drawings and specifications and used them to design Hoffmann's own crop sprayer.
Hoffmann argues the terms of the asset purchase agreement between RJM and Walker did not convey to Walker the right to sue Hoffmann for claims arising from the RJM-Hoffmann contract. The agreement contains a list of "omitted assets" which includes, among other things, the following:
All claims, demands or other causes of action that may be asserted by Seller, now or in the future, against any person or entity, specifically including but not limited to the claim that may be asserted against Poclain Hydraulics, Inc.
Doc. No. 105 (sealed), p. 109, ¶ 2(d)3. Hoffmann also claims RJM assigned to Walker only those certain contracts listed in the agreement, and the RJM-Hoffmann contract is not so listed.4 Further, Hoffmann argues the asset purchase agreement contains only a general assignment of intellectual property from RJM to Walker, and without a specific assignment of RJM's pre-transfer claims against Hoffmann, Walker is precluded from raising any claims that existed prior to the transfer. Hoffmann concludes RJM retained any claims it had against Hoffmann and did not convey those claims to Walker, with the result that "Walker does not possess many of the rights it seeks to enforce." Doc. No. 102, p. 6. Therefore, Hoffmann claims Walker is not the real party in interest and Hoffmann is entitled to dismissal of certain of Walker's claims, specifically Count II (Lanham Act), Count V (unfair competition), Count VI (breach of contract), Count VII (fraudulent non-disclosure), and Count VIII (breach of fiduciary duty).
Hoffmann further argues that the court "should neither permit Walker the opportunity to ratify the action nor honor any subsequent assignment from [RJM]," because Hoffmann "has been greatly prejudiced by defending against claims Walker has no right to assert."...
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