BENCHMARK ELECTRONICS, INC., ET AL. V. CREE, INC.
Filing
69
MEMORANDUM OPINION AND ORDER, signed by JUDGE WILLIAM L. OSTEEN, JR on 03/05/2019, that Cree's Motion to Amend or Alter Judgment Pursuant to Fed.R.Civ.P.52(a), 54(c) and 59(e) and for New Trial Pursuant to Fed.R.Civ.P.59(a), doc 61 is DENIED. (Coyne, Michelle)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
BENCHMARK ELECTRONICS, INC.,
and BENCHMARK ELECTRONICS DE
MEXICO, S. DE R.L. DE C.V.,
Plaintiffs,
v.
CREE, INC.,
Defendant.
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1:16CV529
MEMORANDUM OPINION AND ORDER
OSTEEN, JR., District Judge
Presently before the court is a post-judgment motion filed
by counterclaim plaintiff Cree, Inc. (“Cree”) seeking to amend
or alter the judgment pursuant to Fed. R. Civ. P. 52(a), 54(c)
and 59(e) and, alternatively, requesting a new trial pursuant to
Fed. R. Civ. P. 59(a). (Doc. 61.) Counterclaim defendants
Benchmark Electronics, Inc. and Benchmark Electronics de Mexico,
S. de R.L. de C.V. (collectively, “Benchmark”) have responded in
opposition, (Doc. 65), and Cree has filed a reply, (Doc. 67).
Cree’s motion is now ripe for resolution, and, for the reasons
stated herein, Cree’s motion will be denied.
I.
BACKGROUND & ARGUMENTS
On June 27, 2018, judgment was entered in favor of
Benchmark on its claim for breach of contract, against Benchmark
on its unjust enrichment claim, and against Cree on all of its
counterclaims, including breach of contract, breach of the
covenant of good faith and fair dealing, unjust enrichment,
violation of the Unfair and Deceptive Trade Practices Act
(“UDTPA”), and conversion. (See Doc. 57.)
Cree’s motion asks this court “to correct evidentiary and
legal errors” and find that Cree proved Benchmark’s liability
for conversion and breach of contract or, in the alternative,
unjust enrichment. (Cree’s Mem. in Supp. of Mot. to Am. or Alter
Judg. (“Cree’s Mem.”) (Doc. 62) at 5.) Cree contends that it
“prov[ed] the essential terms of a bailment contract.” (Id. at
6.) As a result, Cree also argues that the parties had a
“special relationship” as generally required to prevail on a
claim for breach of the covenant of good faith and fair dealing.
(Id. at 7-8.)
Alternatively, Cree asserts that it “put on evidence of
industry standards regarding maximum allowable scrap in the
parties’ agreement” and the court erred in finding that Cree did
not prove the existence of such an industry standard that would
be “presumptively included” in the contract. (See id. at 6, 8–
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10.) Even if such a standard was not presumptively included,
Cree contends it proved that a maximum allowable scrap rate is a
“background norm” that automatically constitutes part of the
parties’ agreement unless it is specifically renounced. (Id. at
10-11.)
Next, Cree argues that this court’s conclusion that there
is no industry standard of imposing financial liability for
scrap above a certain rate belies common sense and is
contradicted by “unrebutted testimony . . . that the purpose of
having a maximum allowable component scrap rate is to reduce the
cost to the contract manufacturer of manufacturing finished
goods.” (Id. at 11.) Cree states that, because Benchmark
received documents listing the cost incurred by Cree for each
LED, this court should “amend its findings to hold that
Benchmark understood that the LEDs that it scrapped in excess of
the maximum allowable rate had value for which Benchmark would
be liable to Cree.” (Id. at 12-13.)
Cree further argues that Calvin Clemons, Benchmark’s
witness, lacked direct knowledge regarding Benchmark’s reporting
and that “Clemons’ lack of personal knowledge of the subjects of
his testimony — notwithstanding its proven inconsistency — is
fatal to his credibility.” (Id. at 14-15.) Cree, having asserted
that this court erred in not finding a contractual agreement
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regarding maximum allowable scrap rate, argues that this court
“implie[d]” that Cree had waived Benchmark’s breach, when Cree
could not have waived this breach because “Benchmark did not
report excessive scrap of XB-G LEDs until the last two months of
the parties’ relationship . . . .” (Id. at 15-17.)
As to Cree’s unjust enrichment claim, Cree contends that
“Benchmark did not overcome the presumption that Cree expected
payment for its LEDs.” (Id. at 17.) Cree also argues that
“the fact that the parties mutually referred to their agreement as
a ‘consignment’ is compelling evidence that Cree expected payment
for its consigned goods, either in the form of LEDs returned to it
in finished goods or money.” (Id. at 18.) Next, Cree argues that
this court based “its unjust enrichment conclusions on a finding
that Cree did not expect payment for consigned LEDs until the end
of the parties’ relationship . . . .” (Id. at 19.) Cree claims
that this finding is unsupported by any evidence and that Cree
simply did not know it had any right to payment until it became
aware of the high scrap rate. (Id. at 19–20.)
Finally, Cree contends that the court erred in dismissing
Cree’s conversion claim because the court’s finding was
unsupported by the evidence. (Id. at 20.) Cree contends that
Benchmark’s shipping documentation is “unreliable” and that
“[t]he only reasonable conclusion is that the shipment did not
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contain individual LEDs, but instead finished goods.” (Id. at
21-22.) Cree also contends that this court should disregard any
explanation based on “frozen” reporting because Clemons lacked
personal knowledge. (Id. at 22.)
Benchmark argues in response that this court correctly
determined that Cree did not show an industry-wide maximum scrap
rate that would be automatically included in the contract. (Doc.
65 at 8–9.) Next, Benchmark argues that Cree is barred from
asserting any bailment-based claim at this stage because the
claim was not properly pled; even if Cree could assert this
claim, Benchmark contends that it must fail because it is an
attempt to impose tort liability based on the breach of a
contractual agreement. (Id. at 10–12.) Benchmark further argues
that Cree’s bailment argument is precluded by contributory
negligence because “Cree admits that it also contributed to the
higher scrap rates.” (Id. at 12.) Finally, Benchmark asserts
that this court correctly dismissed Cree’s UDTPA, unjust
enrichment and conversion claims in its original post-trial
order. (Id. at 12–17.)
In reply, Cree asserts that it is entitled to recover in
either contract or tort if the court found the necessary
elements of a bailment, “even if the legal theory upon which the
Court enters judgment is different than that which Cree included
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in its complaint.” (Doc. 67 at 7–8.) Cree further argues that it
cannot be held contributorily negligent because it took
reasonable steps to address manufacturing issues that increased
the scrap rate and because these issues did not meaningfully
impact the rate itself. (Id. at 8–9.) Finally, Cree asserts that
its unjust enrichment claim was wrongfully dismissed because
“Cree demonstrated that it provided valuable goods[,] . . .
Benchmark understood it was responsible for[] payment for wasted
LEDs” and Benchmark did not present conclusive evidence
regarding its return of any LEDs. (Id. at 11–12.)
II.
LEGAL STANDARDS
A.
Rules 59(e) & 52(b) 1
Rule 59(e) of the Federal Rules of Civil Procedure provides
for a motion to alter or amend a judgment. Rule 59(e) “permits a
district court to correct its own errors, ‘sparing the parties
and the appellate courts the burden of unnecessary appellate
proceedings.’” Pac. Ins. Co. v. Am. Nat’l Fire Ins. Co., 148
F.3d 396, 403 (4th Cir. 1998) (quoting Russell v. Delco Remy
Div. of Gen. Motors Corp., 51 F.3d 746, 749 (7th Cir. 1995)).
“Rule 59(e) motions will be granted in three circumstances: (1)
to accommodate an intervening change in controlling law; (2) to
1
Cree asks this court to amend its findings pursuant to
Rule 52(a), but Rule 52(b) governs amended findings.
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account for new evidence not available at trial; or (3) to
correct a clear error of law or prevent manifest injustice.”
Ingle ex rel. Estate of Ingle v. Yelton, 439 F.3d 191, 197 (4th
Cir. 2006) (citation and internal quotation marks omitted). “In
general reconsideration of a judgment after its entry is an
extraordinary remedy which should be used sparingly.” Pac. Ins.
Co., 148 F.3d at 403 (citation omitted).
Rules 52(b) and 59(e) “together enable a court to amend its
findings and conclusions made in conjunction with a bench trial
and amend the judgment accordingly.” Westchester Surplus Lines
Ins. Co. v. Clancy & Theys Constr. Co., No. 5:12-CV-636-BR, 2015
WL 12803655, at *1 (E.D.N.C. Oct. 22, 2015); see also Fed. R.
Civ. P. 52(b); Fed. R. Civ. P. 59(e). For example, after a bench
trial, Rule 52(b) provides that “the court may amend its
findings — or make additional findings — and may amend the
judgment accordingly.” Fed. R. Civ. P. 52(b). Neither rule
permits a party “to relitigate old matters or to raise arguments
that could have been raised prior to entry of the judgment from
which relief is sought.” Life Advocates, Inc. v. City of
Asheville, 197 F.R.D. 562, 563 (W.D.N.C. 2000); accord Goodwin
v. Cockrell, Civil Action No. 4:13-cv-199-F, 2015 WL 12851581,
at *1 (E.D.N.C. Dec. 30, 2015).
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B.
Rule 54(c)
Rule 54(c) “authorizes recovery under any theory supported
by the facts proven at trial . . . ‘even if the party has not
demanded such relief in the party's pleadings.’” Gilbane Bldg.
Co. v. Fed. Reserve Bank of Richmond, 80 F.3d 895, 900 (4th Cir.
1996) (quoting Fed. R. Civ. P. 54(c)). While Rule 54(c) permits
recovery “without regard to errors in the pleadings, [it] does
not allow the district court to award relief based on a theory
that was not properly raised at trial, or to a party that has
not prevailed.” Old Republic Ins. Co. v. Emp’rs Reinsurance
Corp., 144 F.3d 1077, 1080 (7th Cir. 1998) (citations omitted).
This rule “permits relief based on a particular theory of relief
only if that theory was squarely presented and litigated by the
parties at some stage or other of the proceedings.” Evans Prods.
Co. v. W. Am. Ins. Co., 736 F.2d 920, 923 (3d Cir. 1984).
C.
Rule 59(a)
Under Rule 59(a), a district court must
set aside the verdict and grant a new trial if (1) the
verdict is against the clear weight of the evidence,
or (2) is based upon evidence which is false, or (3)
will result in a miscarriage of justice, even though
there may be substantial evidence which would prevent
the direction of a verdict.
Knussman v. Maryland, 272 F.3d 625, 639 (4th Cir. 2001)
(citation omitted). A new trial may be granted “on all or
some of the issues — and to any party . . . for any reason
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for which a new trial has heretofore been granted in an
action at law in federal court.” Fed. R. Civ. P. 59(a).
“[T]he district court may weigh evidence and assess
credibility in ruling on a motion for a new trial.” Wilhelm
v. Blue Bell, Inc., 773 F.2d 1429, 1433 (4th Cir. 1985).
However, “Rule 59 motions cannot be used to introduce new
evidence, tender new legal theories, or raise arguments
that could have been offered” during trial. Parton v.
White, 203 F.3d 552, 556 (8th Cir. 2000).
III. ANALYSIS
This court has reviewed and considered the following:
(1) Cree’s motion and assignments of error as well as Cree’s
proposed amended findings of fact and conclusions of law,
(2) Benchmark’s response, (3) Cree’s reply, and (4) the original
Memorandum Opinion and Order. (“Mem. Op. & Order” (Doc. 56).)
Following this review, this court finds no basis upon which to
grant the extraordinary remedy of amending or altering the
judgment or granting a new trial.
A.
Summary of the Court’s Original Findings
This court previously found that the Bengal driver boards
project was a newly-formed manufacturing relationship between
Cree and Benchmark. (Mem. Op. & Order (Doc. 56) at 5–8.) The
parties entered into a written letter agreement that did not
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address the issue of liability for scrap LEDS. (Id. at 12–13.)
This court further found that, while scrap rates were discussed,
they were discussed only in terms of aspirational targets or
goals and not with the intent of creating a contract term
imposing liability for scrap LEDs above a certain percentage.
(Id. at 19.)
This court found that Cree did not meet “its burden of
proving that the parties’ conduct or communications reflected
the existence of a contractual agreement of a half a percent
scrap rate above which there would be financial liability and
that this risk of loss was allocated to Benchmark.” (Id. at 40.)
While certain explicit contractual terms existed in the
relationship, after consideration of all the evidence, this
court did not and does not find that the parties ever mutually
agreed (whether by communications or conduct) that Benchmark
would be liable to Cree for scrap LEDs above a certain
percentage of waste in the manufacturing process. In all candor,
this court is not persuaded that Cree even considered seeking
compensation for excessive scrap rates until after the
relationship started and Cree became concerned with the scrap
rates and related reporting by Benchmark. Although Cree suggests
that this court implicitly found that Cree had waived any breach
of contract, that is not correct. This court did not and does
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not find a waiver of a contractual term; instead, this court
finds that the alleged contractual term did not exist at all.
Alternatively, Cree argued at trial that a maximum
allowance for scrap LEDs is a term established by relevant trade
usage. However, as this court found, Cree’s own director of
engineering, David Power, testified that ordinarily any target
attrition rate “would be outlined in the RFQ in the beginning of
a project.” (See Mem. Op. & Order (Doc. 56) at 41.) Here, there
was no well-established custom between the parties because this
was the first joint undertaking by Benchmark and Cree. Further,
this court was not persuaded by Cree’s evidence that any “usage
of trade” existed within the industry regarding financial
liability for scrap, such that it would presumptively apply to
an agreement between Cree and Benchmark.
In short, Cree never transferred ownership of any LEDs to
Benchmark. As a result, Cree retained liability for the risk of
loss through manufacturing process scrap. This court did not and
does not find that Cree transferred financial responsibility for
scrap loss above a certain percentage to Benchmark, whether
expressly, impliedly through party-specific custom, or through
any industry usage of trade.
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B.
Existence of a Bailment Arrangement
As to Cree’s first assignment of error, this court
disagrees with Cree’s proposed legal conclusion that this court
“found the elements of a bailment agreement” and that, “[a]s
bailee, Benchmark was obligated to redeliver the LEDs to Cree at
the termination of the agreement” and must financially
compensate Cree for LEDs that it did not return. (Cree’s Mem.
(Doc. 62) at 6–7.) This court did reject any factual or legal
conclusion that an LED consignment relationship existed as a
matter of law. (Mem. Op. & Order (Doc. 56) at 13 n.10.) However,
this finding does not by implication require this court to find
that a bailment relationship existed between Cree and Benchmark
or, relatedly, that Benchmark breached any bailment agreement.
Cree’s allegations and evidence at trial were directed
toward proving the alleged breach of a contractual term. The
issue presented in this case was whether Benchmark’s scrap LEDs
exceeded an allowable amount under any contractual provision
(express or implied), not whether Benchmark was negligent in
handling LEDs or generating scrap LEDs. Cree (as the nonprevailing party) cannot successfully obtain relief via an
amended judgment based on a new legal theory, such as bailment,
even if this theory was proved at trial. See Innovative Home
Health Care, Inc. v. P.T.-O.T. Assocs. of the Black Hills, 141
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F.3d 1284, 1286 (8th Cir. 1998) (“Such motions cannot be used to
introduce new evidence, tender new legal theories, or raise
arguments which could have been offered or raised prior to entry
of judgment.”); Pearson v. Fair, 935 F.2d 401, 414 (1st Cir.
1991) (“[B]ecause final judgment was not rendered in appellants’
favor, appellants were not entitled to any relief.”).
Nevertheless, this court will address the merits of Cree’s
argument.
This court does not find that a bailment existed between
Cree and Benchmark. “To constitute a bailment . . . [t]here must
be such a full transfer, actual or constructive, of the property
to the bailee as to exclude the possession of the owner and all
other persons and give the bailee for the time being the sole
custody and control thereof.” Wells v. West, 212 N.C. 656, 656,
194 S.E. 313, 315 (1937).
Here, Cree surrendered custody of the LEDs to Benchmark
when Cree sent LEDs to Benchmark for the limited purpose of
incorporating those LEDs into finished goods. However, Benchmark
at all times remained obligated to use the LEDs only under the
terms of its contracts with Cree; that is, for the purpose of
manufacturing the Bengal driver boards. Further, while the
parties clearly disagree about the financial implications of
scrap above a certain rate, the parties undisputedly presupposed
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that Benchmark would incur a certain amount of waste through
scrap during the process. As a result, the terms and conditions
of the relationship between Cree and Benchmark were set by the
contractual agreement and subsequent conduct. Because the LED
transfer was within the scope of the explicit contractual
agreement between the parties, it was not a bailment arrangement
that could give rise to tort liability. See Freeman v. Myers
Auto. Serv. Co., 226 N.C. 736, 737–38, 40 S.E.2d 365, 366–67
(1946).
This court agrees with Benchmark that Cree neither pled nor
proved a contract-based negligence claim under a bailment
theory. As another district court explained:
Under North Carolina law, a tort claim cannot
ordinarily be founded on a failure by one party to a
contract to carry out a contractual duty to another
party to the contract. . . . [However], in contrast to
most tort claims, a bailment claim can proceed in the
face of a contract under North Carolina law because of
its underlying common law basis. . . . [B]ecause the
bailment standard is one of ordinary negligence,
simple negligence claims duplicating duties under a
contract may proceed only to the extent they are based
on the bailment. Consequently, to the extent the
negligence claims arise from obligations of the
contract apart from the bailment, they are barred by
the general prohibition against tort claims in
contract actions.
Rush Indus., Inc. v. MWP Contractors, LLC, 1:08cv810, 2011 WL
13076759, at *3 (M.D.N.C. Mar. 3, 2011). To prove a prima facie
negligence claim based on a bailment arrangement, the “bailor
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[must] offer[] evidence tending to show or it is admitted that
the property was delivered to the bailee; that the bailee
accepted it and thereafter had possession and control of it; and
that the bailee failed to return the property or returned it in
a damaged condition.” McKissick v. R. Connelly Jewelers, Inc.,
41 N.C. App. 152, 155, 254 S.E.2d 211, 213 (1979).
Assuming arguendo that the LED transfer arrangement created
a common-law duty on the part of Benchmark to return scrap LEDs,
this court is not persuaded that Benchmark breached that duty
and was negligent in storing and manufacturing the Bengal
boards. To the contrary, scrap LEDs were the result of problems
in the manufacturing process attributable to both Cree and
Benchmark. (Mem. Op. & Order (Doc. 56) at 17–18.) This court
thus finds that Cree was potentially contributorily negligent in
producing scrap and thus barred from recovering on a negligence
theory. See, e.g., Davis v. Hulsing Enters., LLC, 370 N.C. 455,
458, 810 S.E.2d 203, 205–06 (2018); (see also Mem. Op. & Order
(Doc. 56) at 18 (noting that “Cree sent Benchmark non-conforming
goods”).)
Further, it is clear from the record that some amount of
scrap was anticipated by both parties at the outset. The
acceptable limit on scrap LEDs — whether 0.5%, as Cree contends,
or some higher percentage — is the critical factor to determine
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whether Benchmark was negligent in failing to return scrap LEDs.
This court found that Cree’s evidence suggested only “a target
rather than a contractual limit” of 0.5%. (Mem. Op. & Order
(Doc. 56) at 19 n.13.) Based on that finding, this court does
not believe that the 0.5% target can be used to conclusively
determine whether Benchmark was negligent as a matter of law.
Therefore, Cree has failed to carry its burden of
establishing that Benchmark was negligent in engaging in a
manufacturing process that resulted in a scrap rate greater than
0.5%, where the parties clearly anticipated that some LEDs would
be scrapped and where such scrap was attributable to the actions
of both Cree and Benchmark. Even if a prima facie case is
proved, “the ultimate burden of proof of establishing actionable
negligence against defendant is on plaintiff, and remains on it
throughout the trial.” M.B. Haynes Elec. Corp. v. Justice Aero
Co., 263 N.C. 437, 441, 139 S.E.2d 682, 685 (1965). Cree has not
carried this burden, and this court finds Cree has failed to
prove that Benchmark was negligent under a bailment theory.
C.
Trade Usage and Scrap Rate
As to Cree’s second assignment of error, Cree contends that
it presented extensive testimony proving an industry standard or
at least a “background norm” of 0.5% maximum allowable component
scrap rate in the electronics manufacturing industry and
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“financial liability for excess scrap.” (Cree’s Mem. (Doc. 62)
at 8–12.) After reviewing the testimony and evaluating the
credibility of all witnesses, this court disagrees, for the same
reasons already described in its Memorandum Opinion, that Cree
has factually proven such an industry standard or background
norm. See N.C. Gen. Stat. § 25-1-303(c) (“The existence and
scope of such a usage must be proved as facts.”).
Cree argues that there is no meaningful distinction between
a scrap rate and financial liability for scrap; however, this
argument misstates the court’s findings. Specifically, as this
court found, there is a distinction between a target scrap rate
(whether arising from the parties’ conduct or from an industry
norm) and a contractual provision creating financial liability
for Benchmark when the scrap rate rises above a certain level.
In the first instance — a target scrap rate — Cree remains free
to subsequently memorialize this goal (with Benchmark’s
acquiescence) or to terminate the contract if Benchmark is
unable to perform in an acceptable manner, as ultimately
occurred in this case. In the alternative, if maximum scrap rate
is a contractual provision giving rise to liability, Cree may
sue for breach of contract. This court found that 0.5% was an
aspirational target, not a contractual provision.
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This court has considered the testimony Cree highlights in
its briefing. This court notes, however, that Cree ignores other
testimony regarding how scrap rate or attrition affected
Benchmark’s cost. Clemons testified, for example, that certain
manufacturing issues that caused increased attrition also
increased Benchmark’s costs because Benchmark would then have to
undertake additional work to create the finished product. (See
Trial Tr. Vol. 2 (Doc. 59) at 106:14-21.) This court, to the
extent not previously discussed, finds this testimony both
credible and compelling and incorporates it into the Memorandum
Opinion. This court additionally declines to amend its findings
to state that “Benchmark understood that the LEDs that it
scrapped in excess of the maximum allowable rate had value for
which Benchmark would be liable to Cree.” (Cree’s Mem. (Doc. 62)
at 12-13.) The record shows that Benchmark, at Cree’s direction,
charged Cree a certain amount for storing and managing the LEDs
that it sent to Benchmark and that the LEDs were provided to
Benchmark at zero cost.
This court did not determine, and finds it unnecessary to
determine now, what value should be assigned to the LEDs, as
Cree has not prevailed and is not entitled to damages.
Nevertheless, this court did find that “Cree supplied LEDs at
zero cost to Benchmark.” (Mem. Op. & Order (Doc. 56) at 14.)
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This court further found that “Cree preferred this arrangement
because . . . Cree did not want to share with a third party its
cost to make LEDS, information Cree considered
proprietary . . . .” (Id.) These facts further undermine Cree’s
claim that a contractual agreement existed requiring Benchmark
to pay for excess scrap at the beginning of this contract. Cree
did not want to disclose its costs, presumably a significant
part of any contractual agreement to pay for excess scrap LEDs.
As this court found, Cree intended to “optimize the price Cree
paid for the finished product” and sought an aggressive quote
from Benchmark because Benchmark would not have any carrying
cost for purchasing the LEDs. (Id.) Not passing the financial
risk of excessive scrap LEDs to Benchmark is consistent with
Cree’s intent to obtain an aggressive quote from Benchmark.
Next, Cree disputes the credibility of Calvin Clemons’
testimony. (Cree’s Mem. (Doc. 62) at 14–15.) This court has
reviewed all the testimony and admitted exhibits. First, the
record shows that Clemons was personally involved in negotiating
the Bengal Project, attended the Bengal Project kickoff meeting,
and communicated with Cree to discuss LED inventory value and
attrition. (See, e.g., Doc. 62-4 at 74.) Second, contrary to
Cree’s argument implying that only Clemons described the scrap
target rate as a “goal,” (Cree’s Mem. (Doc. 62) at 14), Clemons,
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Stevens, and the reports themselves all variously described the
rate as a target or goal. (See, e.g., Doc. 62-5 at 27.) While
this court has weighed and evaluated the credibility of Clemons,
Power, and Stevens as their testimony related to Benchmark’s
reporting, this court has also carefully reviewed the documents
submitted as evidence in this case and finds nothing to suggest
that Cree communicated a contractual scrap rate to Benchmark.
Having found no contractual scrap rate, this court finds that no
breach was possible. Cree’s awareness is thus not relevant, and
this court declines to adopt Cree’s legal conclusion that Cree
could not waive a breach of which it was unaware. (Cree’s Mem.
(Doc. 62) at 15–17.)
D.
Unjust Enrichment
Cree’s next assignment of error concerns the court’s
finding that Cree did not expect payment for the LEDs as the
services were rendered, or, in this case, as the LEDs were
shipped to Benchmark for incorporation into finished goods. This
court notes that, contrary to Cree’s assertion, the record
provides evidence that the LEDs were provided to Benchmark at
“zero cost.” (See, e.g., Doc. 62-1 at 26–27.) Cree argues,
however, that there are “only two exceptions that overcome the
presumption that Cree expected payment from Benchmark” for the
LEDs: (1) a gift or gratuitous transfer, and (2) a shipment in
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exchange for discharging Cree of an obligation found in another
agreement between the parties. (Cree’s Mem. (Doc. 62) at 18.)
This court disagrees that there is any default presumption
that Cree expected payment from Benchmark for LEDs. First, any
LEDs used in the driver boards were ultimately shipped back to
Cree, and Cree was expected to pay for the finished board.
Second, as this court found, Cree set the price that Benchmark
billed Cree for storing and handling the LEDs, suggesting that
no agreement existed pursuant to which Cree expected payment
from Benchmark. (See Doc. 62-4 at 16–19.) Third, it appears to
this court that the Letter of Authorization (“LOA”) could be
reasonably expected to contain any agreement regarding payment
for scrapped LEDs. Instead, the LOA gave Cree the power to
terminate the arrangement at any time, at least in accordance
with North Carolina law, rather than any payment expectation
outside of the contract. (See, e.g., (Doc. 8), Ex. 1; Mem. Op. &
Order (Doc. 56) at 36.) Given this written agreement, there can
be no unjust enrichment claim. This court, upon review of all
the evidence, finds it reasonable to infer that, if Benchmark
failed to meet LED scrap goals, Cree would terminate the
relationship as described in the LOA.
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E.
Conversion
Cree next assigns error to the original findings on its
conversion claim and asks this court to disregard Clemons’
testimony explaining that one side of the inventory
reconciliation report was “frozen.” (Cree’s Mem. (Doc. 62) at
22.) This court notes that it evaluated Clemons’ testimony, in
light of his knowledge, and found that his explanation did
trigger heightened scrutiny of the inventory reports. This fact
weighed against Benchmark because the court credited the
shipping documentation more heavily. Moreover, this court
reviewed each weekly report sent to Cree, including the XT-E LED
side of the inventory reconciliation reports. (See Mem. Op. &
Order (Doc. 56) at 46 n.28.) Even disregarding Clemons’
testimony on this point entirely would not change this court’s
conclusion regarding Cree’s conversion claim. The original
findings properly accounted for the issues raised by Cree; this
court declines to re-assess witness credibility at this stage
and Cree’s argument on its conversion claim is unavailing.
IV.
CONCLUSION
In summary, this court finds no basis to alter or amend its
judgment, nor does this court find that Cree is entitled to
relief under Rules 52(b), 54(c) or 59(a).
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For the reasons stated herein, IT IS HEREBY ORDERED that
Cree’s Motion to Amend or Alter Judgment Pursuant to Fed. R.
Civ. P. 52(a), 54(c) and 59(e) and for New Trial Pursuant to
Fed. R. Civ. P. 59(a), (Doc. 61), is DENIED.
This the 5th day of March, 2019.
_______________________________________
United States District Judge
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