ISOVOLTA AG v. DIELECTRIC SOLUTIONS, LLC

Filing 32

MEMORANDUM OPINION AND ORDER granting 30 Motion for Sanctions and finding Dielectric in contempt of Court. Dielectric shall pay Isovolta $41,088.19 forthwith. Beginning on April 30, 2012, the amount due shall increase by $100 per day, until paid in full. Isovolta shall file petition to recover reasonable fees and cost on or before May 14, 2012. Dielectric may respond thereto on or before May 21, 2012.. Signed by Judge Terrence F. McVerry on 4/23/12. (mh, )

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA

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)
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) 2:11-cv-910
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)
)

ISOVOLTA AG,
Plaintiff,
v
DIELECTRIC SOLUTIONS, LLC,
Defendant.

MEMORANDUM OPINION AND ORDER OF COURT
Pending before the Court is the NOTICE OF NON-COMPLIANCE WITH COURT
ORDER AND MOTION FOR ADDITIONAL SANCTIONS (Document No. 30) filed by
Plaintiff Isovolta AG (“Isovolta”). Defendant Dielectric Solutions, LLC (“Dielectric”) filed a
response (Document No. 31) and the motion is ripe for disposition.
Unfortunately, this case has an extensive procedural history. Isovolta filed this lawsuit
and a motion for a temporary restraining order (TRO) in July 2011, alleging that Dielectric had
failed to pay past-due lease payments for, or to return, certain precious metals (platinum and
rhodium) that were being utilized in Dielectric’s manufacturing process. On September 2, 2011,
after the parties reached an amicable resolution of the case, the Court entered a Consent Order
Settlement Agreement and Release and retained jurisdiction to enforce the settlement.
When Dielectric failed to comply with the schedule set forth in the Consent Order,
Isovolta filed a Motion to Enforce the Consent Order. On November 10, 2011, the Court found
that Dielectric had unquestionably breached the Consent Order and held Dielectric in contempt
of Court. The Court also found that “as a result of Dielectric’s breach and contempt, Isovolta has
incurred, and may seek recovery for monetary damages including additional lease payment(s) to

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Mitsubishi, Zangl’s travel expenses from Austria, and reasonable attorneys fees and costs.”
Isovolta filed a fee petition, to which Dielectric filed objections.
By Memorandum Opinion and Order dated February 7, 2012, the Court found that
Isovolta was entitled to recover certain fees and costs. Specifically, the Court Ordered: “On or
before March 17, 2012, or upon such other terms as the parties may agree, Dielectric shall
reimburse Isovolta for the following: (a) counsel fees of $28,875.60; (b) travel expenses of
$7,094.96; and (c) additional lease costs of $5,117.63, for a total of $41,088.19. In reaching its
decision, the Court addressed Dielectric’s request for additional time to pay, as follows: “On
December 1, 2011 Dielectric requested ninety (90) days to pay this award. Over sixty (60) days
has already elapsed. Accordingly, the Court will permit an additional forty-two (42) days for
Dielectric to make payment to Isovolta.”
Thus, the Court permitted Dielectric more time to pay (102 days) than Dielectric had
originally requested. At no time did Dielectric seek reconsideration or petition the Court for
additional time. Nor did it notify the Court (or Isovolta) of its alleged inability to comply with
the Court Order. Instead, the March 17, 2012 deadline simply expired without payment or
explanation from Dielectric.
On March 26, 2012, counsel for Isovolta sent a letter to demand payment. When no payment
was received, Isovolta filed the pending motion. In its response, Dielectric admits that it failed
to comply with the Court-ordered deadline for payment. It attempts to excuse its failure by
alleging that it was caused by Isovolta’s own breach of the Settlement Agreement. In particular,
Dielectric contends that because Isovolta has not released its security interests, Dielectric has
been unable to obtain the new financing necessary for it to remain in business.

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Dielectric’s excuses are without merit. The September 2011 Settlement Agreement is
unavailing. A condition precedent to Isovolta’s performance under the Agreement was that
Dielectric “shall not have breached any term.” See ¶ 1(e)(vi). The Court has found that
Dielectric did breach the Agreement. Moreover, the deadline for Dielectric to pay Isovolta was
established by the Court, not Isovolta. Dielectric’s duty to comply with the Court Order was
unconditional. To the extent that Dielectric was making good faith attempts to comply with the
Court Order, it should have communicated those efforts to the Court and Isovolta prior to the
expiration of the deadline and should have sought appropriate relief. Dielectric is, once again, in
contempt of Court.
The motion for additional sanctions will be GRANTED. Dielectric shall pay $41,088.19 to
Isovolta forthwith. In addition, Isovolta is entitled to recover the reasonable counsel fees and
costs it was forced to incur due to Dielectric’s contempt.

An appropriate Order follows.

McVerry, J.

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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA

)
)
Plaintiff,
)
) 2:11-cv-910
v
)
DIELECTRIC SOLUTIONS, LLC,
)
Defendant.
)
)
)
)
ORDER OF COURT
ISOVOLTA AG,

AND NOW, this 23rd day of April, 2012, in accordance with the foregoing Memorandum
Opinion, it is hereby ORDERED, ADJUDGED and DECREED that the NOTICE OF NONCOMPLIANCE WITH COURT ORDER AND MOTION FOR ADDITIONAL SANCTIONS
(Document No. 30) is GRANTED. The Court finds that Dielectric is in contempt of the
February 7, 2012 Memorandum Opinion and Order of Court. Dielectric shall pay Isovolta
$41,088.19 forthwith. As a sanction, the amount due shall increase by $100 per day,
commencing on April 30, 2012, until paid in full.
On or before May 14, 2012 Isovolta shall file an appropriate petition for an award of the
additional costs, fees and expenses which it incurred in connection with this motion. Dielectric
may file a response thereto on or before May 21, 2012.

BY THE COURT:
s/Terrence F. McVerry
United States District Judge

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cc:

Cindy Dunlap Hinkle, Esquire
Email: [e-mail]
Stanley Yorsz, Esquire
Email: [e-mail]
Robert O. Lampl, Esquire
Email: [e-mail]

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