FinishMaster, Inc. v. Richard's Paint and Body Shop, LLC et al

Filing 273

ORDER DENYING 264 Motion Concerning Scope of New Trial. Signed by Judge Andrew W. Austin. (jk)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION
RICHARD’S PAINT AND BODY SHOP,
LLC D/B/A CUSTOM CAR CRAFTERS
Plaintiff, Counter-Defendant
v.
BASF CORPORATION AND
FINISHMASTER, INC.,
Defendants, Counter-Plaintiffs

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NO. A-11-CA-560 AWA

ORDER
Before the Court are: Defendants’ Motion Concerning Scope of New Trial, filed on
December 26, 2012 (Clerk’s Docket No. 264); Plaintiff’s Response Concerning Scope of New Trial,
filed on January 7, 2013 (Clerk’s Docket No. 268); and Defendants’ Reply, filed on January 10, 2013
(Clerk’s Docket No. 270). On January 11, 2013, the Court conducted a hearing and heard argument
from counsel regarding the scope of the new trial. After reviewing the relevant case law, the parties’
briefs and the parties’ oral argument, the Court makes the following rulings.
On November 5, 2012, the Court granted in part and denied in part Defendants’ Rule 49
Motion for a New Trial. After finding that the Jury’s answers to the fraud questions (Questions
Three and Six) were in direct conflict with the Jury’s answers on the excuse questions (Questions
Seven and Nine)—since both questions required the Jury to find that BASF and FinishMaster made
a material false misrepresentation to CCC—the Court ordered a new trial on CCC’s affirmative fraud
claim and its fraud defenses to BASF and FinishMaster’s breach of contract counterclaims.
However, the Court denied Defendants’ Motion for a New Trial as to the breach of warranty claims
since there was no conflict as to those issues.

Defendants’ Motion Concerning the Scope of the New Trial argues that the new trial should
apply to all of the claims in the case. The Court disagrees.
Under Federal Rule of Civil Procedure 59 the court may “grant a new trial on all or some of
the issues—and to any party.” Fed. R. Civ. P. 59 (a)(1)(A) (emphasis added). Rule 59 was written
in light of the Supreme Court’s decision in Gasoline Products Co. v. Champlin Refining Co., 283
U.S. 494 (1931), and of state practices of allowing partial new trials. 11 FED . PRAC. & PROC. CIV .
§ 2814 (3d ed.). “Thus, it recognizes the court’s power to grant a partial new trial.” Id.
It therefore now may be regarded as settled that if an error at the trial requires a new
trial on one issue, and this issue is separate from the other issues in the case and the
error did not affect the determination of the other issues, the scope of the new trial
may be limited to the single issue. Perhaps the most common example is the grant of
a new trial limited to damages when liability has been properly determined, but there
also may be a new trial on liability with the prior determination of damages allowed
to stand. There also may be a new trial on some elements of liability but not all, on
comparative negligence, or on any other separable matters. A partial new trial will
not be granted to try a new issue that was not litigated at the first trial, however.
Id. One limitation on the power to grant a partial new trial is that “it may not properly be resorted
to unless it clearly appears that the issue to be retried is so distinct and separable from the others that
a trial of it alone may be had without injustice.” Id. (citing Gasoline Products, at 500.) Thus, if the
issues are sufficiently interwoven, a partial new trial is inappropriate. “The court must consider the
totality of the circumstances in determining realistically whether all issues need to be retried even
though the immediate impact of the error complained of was on a particular issue.” Id.
After considering the “totality of the circumstances,” the Court finds that a partial new trial
is appropriate in this case. See Davidson Oil Country Supply Co. v. Klockner, Inc., 917 F.2d 185,
187 (5th Cir. 1990) (“a court must consider the totality of the circumstances in determining
realistically whether all issues need to be retried”). The Court finds that the implied warranty claims
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are distinct and separable from the fraud-related claims in this case, and they involved different
evidence and issues. When a new trial is needed on distinct and separable claims—like the fraud
claims here—it is entirely appropriate for the court to order only a partial new trial. See Auster Oil
& Gas, Inc. v. Stream, 835 F.2d 597, 604 at n.6 (5th Cir.) (remanding for a new trial on the issue of
punitive damages only), cert. denied, 488 U.S. 848 (1988); Maxey v. Freightliner Corp., 727 F.2d
350, 352 (5th Cir. 1984) (ruling that the new trial should be limited to the issue of exemplary
damages); Hadra v. Herman Blum Consulting Eng’rs, 632 F.2d 1242, 1245 (5th Cir. 1980) (rejecting
argument that the district court erred in granting new trial only as to the issue of damages arising
from breach of contract), cert. denied, 451 U.S. 912 (1981); Guidry v. Ken Mfg. Co., 598 F.2d 402,
407 (5th Cir. 1979) (remanding case for retrial on just the cross-claim for contribution), cert. denied,
445 U.S. 929 (1980).
The Court also rejects Defendants’ argument that a new jury would be prohibited under the
Seventh Amendment from ruling on the issue of compensatory damages. It is important to
emphasize that all parties agreed that the damages CCC suffered from any breach of warranty were
the very same damages it suffered from any fraud—the cost of repairing defective paint and lost
profits from lost customers. In fact, Defendants requested that the Court instruct the jury that
compensatory damages were the proper measure of recovery for both the breach of warranty and
fraud claims. See Defendants’ Proposed Instructions (Clerk’s Doc. No. 170). Moreover, when the
Court submitted a single damage question for all three of the liability theories sent to the jury, the
Defendants did not object. See Trial Tr., Vol. VIII at p. 26-36 (Clerk’s Doc. No. 259). In addition,
the Court notes that there will be no need for the second jury to revisit the first jury’s damage award,

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given that the first jury’s damage finding is properly applied to any fraud liability finding the second
jury might make, for the reasons just recited.1
Finally, the Court rejects the Defendants’ arguments that errors in the implied warranty
verdict require a new trial on those issues. The jury’s findings on the implied warranty claims were
based on sufficient evidence and were made in accordance with law.
Based upon the foregoing, the Court HEREBY DENIES Defendants’ Motion Concerning
Scope of New Trial (Clerk’s Doc. No. 264), and their request the a complete new trial be ordered
in this case. The new trial will address only Plaintiff’s affirmative fraud claim, and the Plaintiff’s
excuse-because-of-fraud defense to the breach of contract claim.
SIGNED this 30th day of January, 2013.

_____________________________________
ANDREW W. AUSTIN
UNITED STATES MAGISTRATE JUDGE

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As discussed at the hearing on this issue, to the extent that the second jury must find
“damage” as an element of fraud, the Court can address that issue by including it within the liability
question on fraud.
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