Wells Fargo Equipment Finance, Inc. v. Innovative Truck and Trailer, Inc. d/b/a Innovative Trailers, Inc. et al

Filing 22

MEMORANDUM AND ORDER entered DENYING 13 Opposed MOTION to Stay Proceedings.(Signed by Chief Judge Lee H Rosenthal) Parties notified.(leddins, 4)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
WELLS FARGO EQUIPMENT
FINANCE, INC.
Plaintiff,
v.
INNOVATIVE TRUCK &
TRAILER, INC., et al.,
Defendants.

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September 07, 2017
David J. Bradley, Clerk

CIVIL ACTION NO. H-17-1274

MEMORANDUM AND ORDER
This case alleges a breach of warranty against patent infringement. A related patentinfringement lawsuit—Keith Manufacturing Co. v. Cargo Floor B.V., et al., Case No.: 5:15-cv-9—is
pending in the Eastern District of Texas. The Keith case is set for trial on October 2, 2017. In the
present case, Wells Fargo Equipment Finance alleges that Innovative Truck and Trailer and
Performance Trailer breached the warranty against infringement under § 213(c) of the Texas
Business and Commerce Code by selling trailers to Wells Fargo’s predecessor-in-interest, despite
knowing about the Keith lawsuit and that the trailers and their floor-shuttle systems potentially
infringed on a patent. Innovative Truck and Performance Trailer move to stay the present case
pending a final judgment in Keith, arguing that if the Keith court finds no infringement, the
defendants here could not have breached the warranty against infringement. (Docket Entry No. 13).
Wells Fargo disagrees, arguing that Innovative Truck and Performance Trailer have breached the
warranty against infringement even if the Keith court finds no infringement, because the warranty

promises no nonfrivolous infringement claim. (Docket Entry No. 15). Instead of a stay, Wells
Fargo requests limited discovery until the Keith case is resolved. The court held a hearing at which
counsel discussed the relationship between this case and Keith.
A district court has inherent power to stay cases to control its docket and promote efficient
use of judicial resources. See Ambraco, Inc. v. Bossclip B.V., 570 F.3d 233, 243 (5th Cir. 2009)
(citing Landis v. N. Am. Co., 299 U.S. 248, 254–55 (1936)); Ventura v. David’s Bridal, 248 F.3d
1139, 1139 n.2 (5th Cir. 2001). In determining whether a stay is appropriate pending the resolution
of another case, a district court considers (1) potential prejudice to plaintiffs from a brief stay, (2)
hardship to defendants if the stay is denied, and (3) judicial-efficiency impacts, in terms of
simplifying or complicating issues, proof, or questions of law. Coker v. Select Energy Servs., LLC,
161 F. Supp. 3d 492, 495 (S.D. Tex. 2015).
The court agrees with Wells Fargo that a stay is unnecessary. Although the Keith case will
affect the arguments, evidence, and damages in this case, the parties have already agreed to limit
discovery until judgment or other resolution of that case. (Docket Entry No. 10 at p. 3). Staying
this case until Keith is resolved would prejudice Wells Fargo by preventing any discovery on its
claims. Denying the stay will impose little hardship on Innovative Truck and Performance Trailer
because their discovery objections will be limited until Keith is resolved. Finally, denying the stay
promotes judicial efficiency because the parties will be able to continue discovery into the issues
not resolved by Keith.
The motion to stay the proceedings pending the outcome in Keith is denied. (Docket Entry
No. 13). Until Keith is resolved or this court orders otherwise, discovery is limited to initial

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disclosures and the exchange of documents relating to the contracts covering the trailers at issue in
this case, and to obtaining the discovery produced in Keith relevant to this case.
SIGNED on September 7, 2017, at Houston, Texas.
______________________________________
Lee H. Rosenthal
Chief United States District Judge

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