Centralian Controls Pty, Ltd. v. Maverick International, Ltd.

Filing 69

ORDER OVERRULING OBJECTIONS AND ADOPTING MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION. It is ordered that Maverick's objections 68 are overruled; the magistrate judge's 67 Report and Recommendation is adopted and Maverick's 49 Motion for Summary Judgment is granted in part and denied in part. Summary judgment is granted in favor of Maverick on Centralian's equitable estoppel defense. Summary judgment is granted in favor of Maverick on Centralian's breach of warranty claim. In all other respects, Maverick's motion is denied. Signed by District Judge Marcia A. Crone on 3/20/18. (mrp, )

UNITED STATES DISTRICT COURT
CENTRALIAN CONTROLS PTY, LTD.
Plaintiff,
v.
MAVERICK INTERNATIONAL, LTD.
Defendant.

EASTERN DISTRICT OF TEXAS
'
'
'
'
'
'
'
'
'

CIVIL ACTION NO. 1:16-CV-37

ORDER OVERRULING OBJECTIONS AND ADOPTING MAGISTRATE JUDGE’S
REPORT AND RECOMMENDATION
The court referred this case to the Honorable Zack Hawthorn, United States Magistrate
Judge, for pretrial management. Doc. No. 60. Pending before the court is Defendant Maverick
International, Ltd.’s (Maverick) “Motion for Summary Judgment on Limitations and,
Alternatively, for Partial Summary Judgment on Fraud.” Doc. No. 49. The court has received
and considered the report (Doc. No. 67) of the magistrate judge, recommending the court grant in
part and deny in part Maverick’s motion for summary judgment.

Maverick filed timely

objections (Doc. No. 69) to the report and recommendation.
A party who files timely written objections to a magistrate judge’s report and
recommendation is entitled to a de novo determination of those findings or recommendations to
which the party specifically objects. 28 U.S.C. § 636(b)(l)(C) (Supp. IV 2011); FED. R. CIV. P.
72(b)(2)–(3). “Parties filing objections must specifically identify those findings [to which they
object]. Frivolous, conclusive or general objections need not be considered by the district
court.” Nettles v. Wainwright, 677 F.2d 404, 410 n.8 (5th Cir. 1982) (en banc), overruled on
other grounds by Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415 (5th Cir. 1996) (en banc).

Maverick first objects that the magistrate judge should have concluded that the discovery
rule does not apply as a defense to the statutes of limitation because Centralian Controls Pty,
Ltd.’s (Centralian) injury was not inherently undiscoverable despite due diligence. Doc. No. 68,
at 1–5.1

The magistrate judge devoted considerable analysis to this issue (Doc. No. 67, at 8–

10) and held that a reasonable juror could conclude that the injury was inherently undiscoverable
on a categorical basis despite due diligence. Id. at 9. Maverick implies that the magistrate
judge used a subjective standard instead of objective standard to analyze the “type of injury” that
was categorically undiscoverable despite due diligence. Doc. No. 68, at 4–5. Re-stenciled
nameplates and forged MTRs are the types of injuries that may be categorically undiscoverable
despite due diligence by any company receiving goods. The fact that Centralian did not discover
the alleged fraud is not a factor, and the magistrate judge did not treat it as such. Accordingly,
the magistrate judge’s analysis is correct, and the objection is overruled.
Next, Maverick objects that the magistrate judge’s report omits from its analysis of
fraudulent concealment that “‘actions of fraudulent concealment’ do not lead to a blank check or
open-ended suspension of the statute of limitations.” Id. at 5. The magistrate judge concluded
that “Centralian has raised a fact issue on each element of fraudulent concealment, [thus] the
fraudulent concealment defense should proceed to the trier of fact. Accordingly . . . fraudulent
concealment may apply to toll the statutes of limitation.” Doc. No. 67, at 12 (emphasis added).
Maverick’s first objection also claims that the magistrate judge concluded, “as a matter of law,
the accrual date of all causes of action alleged is November 2005.” Doc. No. 68, at 1 (citing Doc. No.
67, at 7). As is evident from the context of the magistrate judge’s report (Doc. No. 67, at 7–10),
however, and the report later clarifies, “[t]he court cannot determine, as a matter of law, the accrual date
of Centralian’s cause of action because the discovery rule may apply, and Centralian’s reasonable
diligence under the rule is a question best left for the trier of fact.” Id. at 10 (footnote omitted). The
court overrules Maverick’s objection and adopts the magistrate judge’s report as clarified because
Centralian’s defenses may defer accrual and/or toll the statutes of limitation.
1

2 of 3

This conclusion is not at odds with Maverick’s objection. In the instant case, when the statutes
of limitation began to run is a question for the trier of fact, as Centralian raised a genuine dispute
of material fact on each element of fraudulent concealment. Maverick’s objection is overruled.
Finally, Maverick argues that it conclusively established Centralian could not prove the
elements for its fraud and fraud-by-nondisclosure claims because Maverick was, at worst,
negligent in relying on representations T-3 made about the performance capabilities of modified
Class 600 valves and their “functional[] fit[ness]” to serve like unmodified Class 900 valves.
Doc. No. 68, at 6–8. The magistrate judge explicitly analyzed and rejected both of these
arguments.

See Doc. No. 67, at 15.

For the reasons outlined by the magistrate judge,

Centralian demonstrated that there is a genuine dispute of material fact on each of the elements for
its fraud and fraud-by-nondisclosure claims, and Maverick’s objection is overruled.
It is ORDERED that Maverick’s objections (Doc. No. 68) are OVERRULED; the
magistrate judge’s report and recommendation (Doc. No. 67) is ADOPTED; and Maverick’s
“Motion for Summary Judgment on Limitations and, Alternatively, for Partial Summary
Judgment on Fraud” (Doc. No. 49) is GRANTED in part and DENIED in part. Summary
judgment is GRANTED in favor of Maverick on Centralian’s equitable estoppel defense.
Summary judgment is GRANTED in favor of Maverick on Centralian’s breach of warranty
claim. In. all other aspects, Maverick’s motion is DENIED.
SIGNED at Beaumont, Texas, this 7th day of September, 2004.
SIGNED at Beaumont, Texas, this 20th day of March, 2018.

________________________________________
MARCIA A. CRONE
UNITED STATES DISTRICT JUDGE
3 of 3