Crew Tile Distribution, Inc. v. Porcelanosa Los Angeles, Inc. et al

Filing 401

ORDER Denying Plaintiff's and Counterclaim Defendants' 394 Motion for New Trial, by Judge William J. Martinez on 12/29/2017. (angar, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 13-cv-3206-WJM-KMT
CREW TILE DISTRIBUTION, INC.,
Plaintiff and CounterDefendant,
and
RYAN A. DAVIS,
DARLYNE A. DAVIS,
GLENN L. DAVIS,
SHANA L. BASTEMEYER,
PARADIGM TILE & STONE DISTRIBUTORS, LLC, and
G&D DAVIS HOLDINGS, LLC,
Counterclaim Defendants,
v.
PORCELANOSA LOS ANGELES, INC.,
PORCELANOSA NEW YORK, INC.,
PORCELANOSA TEXAS, CORP., and
PORVEN, LTD.,
Defendants and CounterClaimants.

ORDER DENYING PLAINTIFF’S AND COUNTERCLAIM
DEFENDANTS’ MOTION FOR NEW TRIAL

This business dispute brought under 28 U.S.C. § 1332 proceeded to a jury trial
March 13–24, 2017, and a jury verdict entered on the parties’ legal claims. (ECF No.
355.) Following post-trial briefing, the Court entered its own rulings on the parties’
equitable claims, and Final Judgment entered November 20, 2017. (See ECF Nos. 392
& 393.) Now before the Court is the Motion for New Trial filed by Plaintiff and

CounterClaim Defendants (together, “Crew Tile”) on November 20, 2017 (ECF No. 394
(the “Motion”)), to which Defendants/CounterClaimants (together, “Porcelanosa”) filed a
Response on December 5, 2017 (ECF No. 397). For the reasons set f orth below, the
Motion is denied.
I. BACKGROUND
The Court does not repeat here the detailed f actual background of this case,
which has been set out in prior orders. (See, e.g., ECF Nos. 236, 392.) Broadly
summarized, Crew Tile alleged that it entered into a contract in December 2009 to be
the exclusive distributor of Porcelanosa’s products in Colorado (the “2009 Agreement”),
and that Porcelanosa had breached that contract, trig gering a $2.5 million termination
payment to Crew Tile. (See generally ECF No. 250 at 2–4.) Porcelanosa alleged that
the 2009 Agreement was a forgery, and that Crew Tile’s lawsuit against Porcelanosa for
that alleged agreement was a sham.
Separate from the disputed 2009 Agreement at the center of the parties’ claims,
discovery revealed the existence of a document which appeared to be an “Exclusivity
Agreement” dated July 29, 2004, and signed by Ryan Davis and a former Porcelanosa
officer, Josep Domingot (on behalf of “Porcelanosa Group (PG) Anaheim California”),
purportedly granting exclusive distribution rights for certain ventilated facade products
manufactured by Porcelanosa to a predecessor entity to Crew Tile, also controlled by
Ryan Davis. (Trial Ex. J.; ECF No. 251-1 (the “2004 Agreement”).) However, in his
sworn deposition testimony, Mr. Domingot denied ever having negotiated or signed
such an agreement with Ryan Davis. (ECF No. 267-13 at 4–6.) Certain other facts

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about this document also cast doubt on its authenticity. (See ECF No. 392 at 24, ¶
20.c.)
Prior to trial, Crew Tile moved to exclude any evidence of this 2004 Agreement,
arguing it was irrelevant and improperly prejudicial under Federal Rules of Evidence
401 and 403, and constituted impermissible character evidence under Rule 404. (ECF
No. 251 at 1–8.) The Court denied Crew Tile’s motion to exclude all evidence related to
the 2004 Agreement. The Court reasoned that “the evidence related to the alleged
2004 contract is a material part of th[e] overall history of the parties’ business
relationships, and this remains true, regardless of which side’s evidence the jury
ultimately believes.” (ECF No. 279 at 26–27.) The Court also held that “to the extent
evidence related to the 2004 contract could be viewed as a character attack,” potentially
subject to exclusion under Rule 404(a), “it is nevertheless admissible under Rule 404(b)
to prove, among other things, the parties’ knowledge of one another’s business goals or
practices, the existing relationship between the parties, and the parties’ opportunity to
modify or expand an (allegedly) pre-existing distribution agreement.” (Id. at 27.)
However, the Court expressly noted that “[a]t trial the Court will entertain a request . . .
seeking a limiting instruction to direct the jury that it should not weigh evidence related
to the 2004 agreement as character evidence, or as evidence tending to show that the
conduct of any party in 2009 was in keeping with prior conduct or character.” (ECF No.
279 at 28 n.11.)
At trial, evidence related to the 2004 Agreement was admitted. Per its usual
practice, the Court reminded all parties that its pretrial evidentiary rulings are “not selfexecuting,” and that “it was incumbent on counsel to raise objections based on [the
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Court’s] rulings . . . at trial.” (Tr. at 1085.)1 However, at no point during trial did Crew
Tile’s counsel object that evidence related to the 2004 Agreement was being admitted
in violation of either the Court’s pretrial evidentiary rulings or Rule 404, nor that such
evidence or argument had become impermissibly prejudicial in violation of Rule 403.2
Crew Tile also did not request any limiting instruction with respect to the 2004
Agreement specifically, or to character evidence in general. (See ECF Nos. 261, 315;
see also Tr. at 2173–82.)
After hearing nine days of evidence, the jury returned a verdict in Porcelanosa’s
favor, finding, in part, that Crew Tile and certain of its principals committed the tort of
abuse of process by prosecuting a lawsuit predicated on the 2009 Agreement. In
addition, the Court’s subsequent rulings on equitable claims found, among other facts,
that a preponderance of the evidence showed the 2009 Agreement was not a legitimate
contract, and that Ryan Davis’s testimony regarding the 2004 Agreement was not
credible. (See ECF No. 392 ¶¶ 1–2, 20.c.)
II. LEGAL STANDARD
Rule 59(a)(1) permits the Court to order a new trial “for any reason for which a
new trial has heretofore been granted in an action at law in federal court.” Here, Crew
Tile argues for a new trial on grounds that the Court erred in allowing evidence of the

1

With the exception of the trial transcript, citations to all materials in the docket are to
the docketed “ECF No.” Citations to the trial transcript (“Tr.”) are to the page number in the
continuously-paginated trial transcript, docketed at ECF Nos. 359–69.
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Crew Tile’s Motion raises no instances where such a contemporaneous objection was
raised during trial, and the Court’s own review of the Trial Transcript identifies no such
objections raised under Rules 403, 404, or 608.

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2004 Agreement, and also suggests that the arguments advanced by Porcelanosa’s
counsel related to the 2004 Agreement were improper. (ECF No. 394.)
Where a party seeks a new trial based on a claim of the Court’s error, the Court
may grant such a motion if “the ‘claimed error substantially and adversely’ affected the
party’s rights.” Henning v. Union Pac. R.R. Co., 530 F.3d 1206, 1217 (10th Cir. 2008)
(quoting Sanjuan v. IBP, Inc., 160 F.3d 1291, 1297 (10th Cir. 1998)). “A m otion for new
trial is addressed to the sound discretion of the trial court.” Shugart v. Cent. Rural Elec.
Co-op., 110 F.3d 1501, 1506 (10th Cir. 1997). T he district court is given “wide latitude
with respect to a motion for a new trial because it is uniquely able to assess the
likelihood that the evidence was prejudicial.” Henning, 530 F.3d at 1217 (internal
quotation marks omitted; alterations incorporated). Likewise, as to alleged improper
conduct or argument by an attorney, “[t]he decision on whether counsel’s misconduct at
trial was so egregious as to require retrial is left largely to the discretion of the district
court.” Abuan v. Level 3 Commc'ns, Inc., 353 F.3d 1158, 1175 (10th Cir. 2003). 3
In addition, Rule 61 provides that “[u]nless justice requires otherwise, no error in
admitting or excluding evidence—or any other error by the court or a party—is ground
for granting a new trial,” and that “the court must disregard all errors and defects that do
not affect any party’s substantial rights.”

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Accord Spahr v. Ferber Resorts, LLC, 419 F. App’x 796, 805 (10th Cir. 2011) (“. . . the
district judge . . . is usually in the best position to determine any prejudice and the need for a
new trial”); Whittenberg v. Werner Enterprises Inc., 561 F.3d 1122, 1128 (10th Cir. 2009) (the
trial judge “is uniquely positioned to assess the prejudicial effect of an improper argument in the
context of the overall trial”).

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III. ANALYSIS
Crew Tile argues Porcelanosa’s evidence regarding the 2004 Agreement “was
not used in a manner allowed under [Rule] 404(b), rather it was repeatedly used by
Defendants’ counsel . . . to prove that Ryan Davis was a serial forger,” allegedly in
violation of Rule 404(a). (ECF No. 394 at 5.) Analysis of Crew Tile’s argument turns on
two questions: (1) whether admission of evidence regarding the 2004 Agreement was,
in fact, in error; and (2), if so, whether any such error was sufficiently prejudicial to
require a new trial.4
A.

Evidence of the 2004 Agreement Was Properly Admitted
Federal Rule of Evidence 404 addresses “Character Evidence” and provides, in

relevant part:
(a)(1) Evidence of a person’s character or character trait is
not admissible to prove that on a particular occasion the
person acted in accordance with the character or trait.
***
(b) Crimes, Wrongs, or Other Acts.
(1) Prohibited Uses. Evidence of a crime, wrong, or other act
is not admissible to prove a person’s character in order to
show that on a particular occasion the person acted in
accordance with the character.
(2) Permitted Uses; * * * This evidence may be admissible
for another purpose, such as proving motive, opportunity,

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Crew Tile argues in a footnote that the Court should also grant a new trial based on
claimed error in the admission of the expert testimony of Crew Tile’s handwriting expert, Ms.
Carlson. (ECF No. 394 at 8 n.1.) The Court rejects this argument because it is “inadequately
developed,” see United States v. Hunter, 739 F.3d 492, 495 (10th Cir. 2013), and in light of the
Court’s extensive pretrial analysis allowing Ms. Carlson’s testimony under Rule 702 (ECF No.
237 at 4–23).

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intent, preparation, plan, knowledge, identity, absence of
mistake, or lack of accident.
The relevant analysis here proceeds under Rule 404(b). The precedent applying
this rule provides:
To determine whether Rule 404(b) evidence is properly
admitted, [the Court look[s] to the four-part test from
Huddleston v. United States, 485 U.S. 68 (1988):
(1) The evidence must be offered for a proper
purpose under Rule 404(b);
(2) The evidence must be relevant under Rule 401;
(3) The probative value of the evidence must not be
substantially outweighed by its potential for unfair
prejudice under Rule 403; and
(4) The district court, upon request, must have
instructed the jury pursuant to Rule 105 to consider
the evidence only for the purpose for which it was
admitted.
United States v. Henthorn, 864 F.3d 1241, 1247–48 (10th Cir. 2017), pet’n for cert.
pending. “Admissibility of evidence under Rule 404(b) involves a case-specific inquiry
that is within the district court’s broad discretion.” Id. at 1248.
Although Crew Tile does not cite or apply this four-part test, its argument is
directed to the first element, arguing that evidence of the 2004 Agreement “was used
only as a character attack,” and not for any purpose permitted under Rule 404(b)(2).
(ECF No. 394 at 9.) However, the permissible purposes for admitting evidence under
Rule 404(b)(2) are “illustrative, not exhaustive,” and “Rule 404(b) is considered to be an
inclusive rule, admitting all evidence of other . . . acts except that which tends to prove
only criminal disposition.” Henthorn, 864 F.3d at 1248. (internal quotation marks and
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citation omitted; emphasis in original). Engaging in the requisite case- and fact-specific
analysis, the Court adheres to its pretrial view that even assuming it was otherwise
inadmissible, evidence of the 2004 Agreement was admitted for proper purposes under
Rule 404(b)(2), including to show “the history of the business relationship between
[Crew Tile] and Porcelanosa,” and the parties’ knowledge “of one another’s business
goals or practices.” (ECF No. 279 at 26, 27.) In fact, as actually admitted at trial, this
evidence came in as part of a larger body of evidence setting out the history of the
parties’ dealings, including Ryan Davis’s former employment with Porcelanosa and his
development of several business entities which sold Porcelanosa’s products in
Colorado. In addition, to prevail on its abuse of process claim, Porcelanosa was
required to prove the CounterDefendants acted intentionally and with knowledge that
the 2009 Agreement was not valid, making the existence of the 2004 Agreement
admissible to “rebut the defense of accident or to show plan and intent.” Cf. Henthorn,
864 F.3d at 1249. In short, based on the nature of the evidence, the record of how it
was introduced, and in the exercise of the Court’s discretion, the Court disagrees with
Crew Tile’s claim that evidence of the 2004 Agreement was introduced only as an
improper character attack.
Crew Tile’s Motion does not address the other three Huddleston factors, and the
Court finds they all support admissibility here. Regarding relevance, as the Court found
pretrial, evidence of the 2004 Agreement could make either side’s factual claims more
likely, depending how the jury viewed the competing evidence. The 2004 Agreement
was also very similar to the 2009 Agreement, since both ostensibly granted exclusive
distribution rights, both were effectively entered between the same parties, and both
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contained numerous drafting errors (which might tend to show that both were
inauthentic, or that Porcelanosa had a history of tolerating such errors prior to 2009).
Cf. Henthorn, 864 F.3d at 1249 (“[t]he lynchpin of Huddleston relevance is similarity”).
The relevance of the 2004 Agreement was also independent of any inference regarding
Ryan Davis’s character, since, as analyzed above, it was introduced as part of a larger
body of evidence documenting the parties’ business history, and was relevant to the
parties’ claims without the jury needing to draw any forbidden inference regarding Ryan
Davis’s character. Id. at 1254 (“[a]lthough the evidence may allow the jury to draw
negative inferences about [defendant’s] character, such inferences are not required
before a jury may find that the prior incidents are relevant for a proper purpose”).
Indeed, if the jury had believed Ryan Davis that the 2004 Agreement was authentic, this
evidence would still have been relevant and admissible.
For similar reasons, the Court finds that the prejudicial effect of any evidence
regarding the 2004 Agreement, if any, did not outweigh its probative value. Having
presided over the entire trial, the Court rejects Crew Tile’s contention that this evidence
was unduly prejudicial or inflammatory, either by its inherent nature or in the way it was
presented. This is so particularly in the context of a trial where both side’s claims
already, and necessarily, accused the other side and multiple witnesses of blatant
dishonesty and misconduct. Moreover, and significantly, Crew Tile never raised any
Rule 403 objection to this evidence during trial.
“The fourth and final Huddleston factor requires the district court, upon request,
to instruct the jury to consider the evidence only for the purpose for which it was
admitted.” Henthorn, 864 F.3d at 1256 (emphasis added). Since Crew Tile made no
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such request, this presents no grounds to have excluded the evidence, much less to
grant a new trial.
Finally, to the extent Crew Tile argues this evidence was improper under Rule
608(b), the Court rejects this argument for largely the same reasons addressed above.
Evidence regarding the 2004 Agreement was admissible to show that it was either more
or less likely that Porcelanosa and Crew Tile entered into a similar agreement in 2009,
irrespective of any potential (but not necessary) inferences regarding Ryan Davis’s
character for truthfulness. Cf. Henthorn, 864 F.3d at 1252 (“[e]vidence remains
admissible even if it has the potential impermissible side effect of allowing the jury to
infer criminal propensity, so long as the jury is not required to make any such
inferences” (internal quotation marks omitted)). Moreover, Crew Tile elicited evidence
regarding this agreement during Ryan Davis’s direct testimony, as well as during the
testimony of its first witness, Ray Perry, thus “opening the door” to other evidence
regarding the 2004 Agreement. (See, e.g., Tr. at 244, 279–80, 604–06.) Crew Tile did
not thereafter raise any objections that evidence elicited by Porcelanosa regarding the
ventilated facades, including the 2004 Agreement, was improper extrinsic evidence
meant only to impugn Ryan Davis’s character, in violation of Rule 608.
B.

Any Prejudice Does Not Warrant a New Trial
Even assuming some portion of evidence regarding the 2004 Agreement was

admitted in violation of Rule 404 and/or Rule 608, Crew Tile has not carried its burden
of showing that any prejudice it suffered was of a degree warranting a new trial.
“As a general rule, courts will not disturb jury verdicts in the absence of extreme

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circumstances, such as a case of manifest injustice.” 12-59 Moore’s Federal
Practice–Civil § 59.13 (Matthew Bender 3d ed. 2017) (“Moore’s”). Thus, as a practical
matter, in both civil and criminal cases, “motions for a new trial are disfavored and
rarely granted.” See United States v. Cole, 2007 WL 1489811, at *2 (D. Colo. May 18,
2007) (citing United States v. Quintanilla, 193 F.3d 1139, 1146 (10th Cir. 1999)); cf.
Spahr v. Ferber Resorts, LLC, 686 F. Supp. 2d 1214, 1223 (D. Utah 2010) (“vacating a
jury award and ordering a new trial on the basis of an inappropriate closing argument is
an extreme remedy only to be granted in unusual cases”), aff'd, 419 F. App’x 796 (10th
Cir. 2011).
Here, in the exercise of its discretion, and having presided over the lengthy and
highly-contested trial of this matter, the Court is in no way persuaded by Crew Tile’s
argument that its rights were substantially and adversely impacted, that a manifest
injustice was done, or that Crew Tile was denied a fair trial. Although the jury might
have concluded from evidence of the 2004 Agreement that it was forged by Ryan
Davis, it might also have accepted his own testimony, in which he adamantly
maintained that the 2004 Agreement was a legitimate contract which he had negotiated
and signed with Mr. Domingot. Or the jury might have reached no ultimate conclusion
regarding the 2004 Agreement at all, and simply viewed it as part of the extensive
evidence of the parties’ prior dealings, which could tend to make it either more or less
likely that they mutually entered into the separate 2009 Agreement. Thus, while this
evidence was arguably prejudicial in the sense that a jury crediting Porcelanosa’s
evidence would be more likely to find against Crew Tile, the reverse was also true. The

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Court disagrees with Crew Tile’s suggestion that the 2004 Agreement was presented in
a manner that was given undue emphasis, deployed as a character assassination, or
used to create an improper degree of prejudice or emotional response.
Moreover, during trial Crew Tile never raised contemporaneous objections that
this evidence was being introduced in violation of the Court’s pretrial ruling regarding its
acceptable purposes under Rule 404(b) or in violation of Rules 403 or 608. By the
Court’s count, Crew Tile’s Motion cites 29 examples from the trial transcript where Crew
Tile claims that Porcelanosa’s argument or introduction of this evidence was improper.
(See ECF No. 394 at 6–9.) However, Crew Tile raised contemporaneous objections in
only 3 of these 29 instances, and then only on unrelated grounds (hearsay, lack of
foundation, or an improper leading question). Crew Tile cites no instances where it
objected that evidence of the 2004 Agreement was being introduced in a manner that
ran afoul of the Court’s pretrial evidentiary rulings or violated any combination of Rules
403, 404(b), or 608.
This total lack of contemporaneous objections corroborates the Court’s view that
the manner in which this evidence was introduced was not, in fact, unfairly prejudicial.
In any event, the failure to raise contemporaneous objections is effectively fatal to Crew
Tile’s subsequent, post hoc argument that the presentation of this evidence and
argument was so utterly improper as to require a new trial. See Moore’s § 59.13 (“The
improper admission of evidence at trial may warrant the grant of a motion for new trial
. . . . However, a new trial motion based on [this] ground[] requires a prope r objection at
trial and is limited to the basis of the objection argued w hen the evidence was offered

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for admission.” (emphasis added)); 11 Charles A Wright, et al., Federal Practice &
Procedure § 2805 (3d ed., Apr. 2017 update) (“A principle that strikes v ery deep is that
a new trial will not be granted on grounds not called to the court’s attention during the
trial unless the error was so fundamental that gross injustice would result. * * * The
importance of Rule 61 in its application to motions for a new trial cannot be overlooked.
It provides specifically that ‘unless justice requires otherwise,’ no error ‘is ground for
granting a new trial, for setting aside a verdict, or for vacating, modifying, or otherwise
disturbing a judgment or order.’”).
In short, even assuming there was some error in the Court’s admission of
evidence regarding the 2004 Agreement, Crew Tile has fallen well short of persuading
the Court that it was denied a fair trial or that either justice or the standards of Rule 59
call for the Court, in the exercise of its discretion, to grant a new trial.
IV. CONCLUSION
For the reasons set forth above, Plaintiff’s and Counterclaim Defendants’ Motion
for New Trial (ECF No. 394) is DENIED.
Dated this 29th day of December, 2017.
BY THE COURT:

William J. Martínez
United States District Judge

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