YXRAY GmbH v. Welspun Tubular LLC
ORDER denying 34 Motion in Limine; denying 39 Motion in Limine; denying 41 Motion for Leave to File an Amended Complaint. Signed by Judge D. P. Marshall Jr. on 12/16/11. (kpr)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
WELSPUN TUBULAR LLC
The Court reluctantly granted a continuance in this case, resetting trial
for August 2012. Document Nos. 48 & 50. Several motions remain pending;
and because their resolution may aid the parties in preparing for trial and
evaluating their claims, the Court rules now.
YXRAY's Motion For Leave To Amend The Complaint. At issue
is a clause in the parties' contract providing for engineers to work, on-site at
Welspun's facility, "for appro 25 to 30 working days" to complete the
"mounting and set in function" of the x-ray equipment. YXRAY charged
Welspun for 144 working days, part of which remains unpaid and thus
YXRAY's breach claim. YXRAY now wants to amend its complaint to assert
restitution as a fall-back theory of recovery.
YXRAY's claim is on the
contract-however imperfect it may be-and therefore the enforceable
written agreement governs the parties' relationship and the remedies
available in this dispute.
In general, Arkansas law "never accommodates a party with an implied
contract when he has made a specific one on the same subject matter." Glenn
Mechanical, Inc. v. South Arkansas Regional Health Center, Inc., 101 Ark. App.
440,445,278 S.W.3d 583, 587 (2008) (quotation omitted). And although this
"general rule" has many exceptions, United States v. Applied Pharmacy
Consultants, Inc., 182 F.3d 603, 606-07 (8th Cir. 1999) (Richard S. Arnold, }.),
none of them apply here. The parties have an enforceable written contract
covering the issue in dispute. The reasonableness of YXRAY's performance
beyond the "25 to 30 working days" and the allocation of risk for the cost of
that performance are contested matters. But that contest must occur on the
parties' contract, not as a matter of unjust enrichment. Glenn Mechanical, 101
Ark. App. at 443-445,278 S.W.3d at 585-86.
Nor is this a case of "overperformance," cf QHG of Springdale, Inc. v.
Archer, 2009 Ark. App. 692, at 13-14, --- S.W.3d at ---. The "mounting and set
in function" was a bargained-for element in the contract, one that YXRAY was
obligated to perform, notwithstanding the parties' dispute about the
reasonableness of how long YXRAY took in performing. YXRAY's motion for
leave to file an amended complaint, Document No. 41, is therefore denied.
2. Welspun's Motion In Limine. Welspun objects to the admissibility
of several emails in which various company officials propose to "clear all
payments" and" pay all the pending dues" if YXRAY will send its employees
to Arkansas to inspect and service the x-ray equipment. Welspun contends
that this evidence should be excluded under Federal Rule of Evidence 408 as
offers of compromise, or, in the alternative, as unfairly prejudicial under Rule
403. The Court is unconvinced. Rule 408 bars evidence of compromise only
when offered to prove the "liability for," the" invalidity of," or the" amount
of" a disputed claim. FED. R. EVID. 408(a) & Advisory Committee Note to the
2006 Amendment. YXRAY maintains that it will offer the emails not to prove
liability or damages, but to counter Welspun's claim that YXRAY refused to
repair the equipment, thus causing Weispun to purchase replacement
equipment. YXRAY also says that the emails are relevant and necessary to its
defense of prevention of performance- Welspun allegedly refused to allow
YXRAY's representatives in to the Arkansas facility. The Court agrees that
admissibility for these purposes takes the evidence outside Rule 408 and
substantiates its probative value under Rule 403. If Welspun wants limiting
instructions, it should propose them. Welspun's motion in limine is denied.
YXRAY's Motion In Limine. YXRAY seeks to stop introduction of
conversations that Welspun representatives had with employees of NorthStar
Welspun hired NorthStar to inspect and evaluate the x-ray
equipment supplied by YXRAY. YXRAYcontends that NorthStar employees
may have given opinions about the cause of the alleged problems with the
equipment and that these statements are inadmissible under Rules 801 and
The statements, if any, are admissible. Out-of-court statements are
hearsay only if offered to prove the truth of the matter asserted. FED. R. EVID.
801(c). Welspunsuggests that any statements by NorthStar employees would
be offered only to show Welspun's motivation and basis for obtaining and
paying for replacement x-ray equipment. Testimony may be admitted under
Rule 801(c) to show why a party "did what [it] did as a
conversation, rather than to show the truth of the matter asserted in that
conversation." United States v. Amahia, 825 F.2d 177, 181 (8th Cir. 1987).
Because the NorthStar statements would not be offered for their truth, they
are admissible for the limited purpose of establishing why Welspun acted to
obtain replacement equipment. Here again, a limiting instruction may be
needed. If YXRAY thinks so, it should propose one. YXRAY's motion in
limine is therefore denied.
YXRAY's motion for leave to file an amended complaint, Document No.
41, Welspun's motion in limine, Document No. 34, and YXRAY's motion in
limine, Document No. 39, are all denied.
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