Hollister Incorporated v. Zassi Holdings, Inc. et al

Filing 138

ORDER denying 130 Motion for New Trial. Signed by Judge Paul A. Magnuson on 5/6/2015. (ALT)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
Hollister, Inc.,

Case No. 3:13-cv-132
Plaintiff,

v.

MEMORANDUM AND ORDER

Zassi Holdings, Inc. and
Peter von Dyck,
Defendants.

This matter is before the Court on Defendants’ Motion for a New Trial. For the
reasons that follow, the Motion is denied.
BACKGROUND
In early February 2014, this Court held a four-day jury trial on the liability issues in
this case alleging breach of contract and fraudulent misrepresentation.1 The crux of the
parties’ dispute is Plaintiff Hollister, Inc.’s contention that Defendants Peter von Dyck and
his company, Zassi Holdings, Inc., misrepresented to Hollister the scope of a release of
claims between Zassi and a competitor. After Hollister purchased medical technology from
Zassi, Hollister tried to enforce its newly acquired patents against this competitor. The
competitor successfully defended the lawsuit because of a broad release of claims between
the competitor and Zassi that included the technology Hollister purchased.
The jury found that Zassi and von Dyck misrepresented the contents of the release to

1

The Court had previously bifurcated the liability and damages issues into separate
trials. (Docket No. 26.)

Hollister and thereby breached the parties’ Asset Purchase Agreement and committed fraud
against Hollister. (Verdict Form (Docket No 77).)
The Court did not enter judgment after the jury’s February 10, 2014, verdict because
the issue of damages remained to be determined. No post-trial motion practice followed the
jury’s verdict, aside from Defendants’ oral motion for a directed verdict. (Docket No. 71.)
The Court denied that motion contemporaneously. (Docket No. 72.)
The damages issue was set for discovery and trial, with a trial date of May 4, 2015.
(Docket No. 91.) Less than six weeks before that date, and little more than one month
before the final pretrial conference on the damages issue, Defendants filed the instant
Motion, seeking a new trial on liability.
In the Motion, Defendants raise two distinct issues. The first relates to a document
that Defendants contend was erroneously excluded from evidence in the liability-phase trial.
The second contends that Defendants were not entitled to claim fraud as a matter of law
because of a no-reliance clause in the Asset Purchase Agreement.
DISCUSSION
The Rules permit a party to move for a new trial within 28 days of the entry of
judgment. Fed. R. Civ. P. 59(b). In this case, because the issues were bifurcated, there was
no entry of judgment after the verdict on liability. However, the liability issue was a final
adjudication of that distinct issue on which judgment could have been entered.

See id.

R. 54(b). That the Court did not do so does not excuse Defendants’ unreasonable delay in
bringing this Motion. Having waited more than 13 months after the liability verdict, the
2

Motion is clearly untimely under the spirit, if not the letter, of Rule 59.
Even if Defendants could plausibly contend that they did not realize the basis for their
Motion until after a January 2015 deposition, Defendants still waited nearly two months after
that deposition to file the instant Motion. Defendants’ lack of diligence is not to be
condoned.
But even if timely, and even if Defendants had exercised diligence in bringing the
Motion, the Motion fails on its merits, as discussed below.
A.

Due Diligence Checklist
Defendants contend that the Court erred in excluding a document from evidence that

could have convinced the jury that Hollister’s claims regarding the release were not credible.
This document is a Due Diligence Checklist that Hollister produced during discovery. A
blank copy of this checklist was introduced into evidence; the copy that Defendants contend
should have been introduced contained unidentified and somewhat indecipherable
handwriting in its margins. During trial, Hollister’s witnesses consistently stated that they
did not author the checklist, that they had not seen this checklist, and that the writing on the
document was not theirs. Defendants claim that Hollister knew that the writing on the
document belonged to John Swanson, a Hollister employee, but that Hollister concealed this
fact from Defendants and led the Court to believe that the document was not a business
record.
As an initial matter, it was Defendants’ burden, not Hollister’s, to establish that the
document in question was admissible as a business record. Hollister points out that
3

Defendants did not conduct any depositions before the liability phase of the trial, and that
Defendants listed Mr. Swanson as a witness but did not call him. Had Defendants deposed
Mr. Swanson before the liability phase, they would have learned who made the notations on
the documents. Because Defendants’ own lack of diligence caused the alleged error in the
admission of the document, Defendants may not now raise that alleged error.
But regardless of the Defendants’ actions or lack thereof, the document is not the
smoking gun Defendants believe it is. At best, it contains some cryptic notations that, read
in a certain light, might indicate that someone at Hollister at some point thought that the
release related to the technology Hollister purchased from Zassi. But a jury could just as
easily have disregarded these notations as indecipherable and inconsistent with the great
weight of the evidence.
A motion for a new trial requires a showing that the verdict was against the weight of
the evidence, or that the Court committed substantial errors in the admission or rejection of
evidence or in its instructions to the jury. Montgomery Ward & Co. v. Duncan, 311 U.S.
243, 251 (1940). Defendants’ Motion fails because Defendants have not established that the
Court erroneously excluded the document from evidence. Defendants did not lay the proper
foundation for the document, and their failure to do so is entirely their own. There was no
substantial error in the Court’s determination that the document was hearsay and was not
admissible under any hearsay exception.
B.

No-Reliance Clause
Defendants contend that they raised this issue in their directed-verdict motion by
4

claiming that there was no evidence to support Hollister’s fraud claim. But an argument that
there was a failure of proof as to a factual issue is very different from the argument
Defendants make here, which is that Hollister’s fraud claim is legally untenable.
Reliance is a central element of a fraud claim, and in this case the jury specifically
found that Hollister relied to its detriment on material misrepresentations made by both Zassi
and von Dyck. (Verdict Form Questions 2.e, 3.e.) At no point during the discussion of the
verdict form or the jury instructions did Defendants argue that Hollister’s fraud claim failed
as a matter of law because of the existence of a no-reliance clause in the Asset Purchase
Agreement. Nor did Defendants argue this issue in their immediate post-trial motions.
Having failed to raise that issue at any point, Defendants are barred from raising it now.
CONCLUSION
Defendants’ Motion for a New Trial is without merit. Accordingly, it is hereby
ordered that the Motion (Docket No. 130) is DENIED.

Dated: May 6, 2015

s/Paul A. Magnuson
Paul A. Magnuson
United States District Court Judge

5