Klein-Becker usa et al v. Englert et al

Filing 345

MEMORANDUM DECISION denying 329 Defendants' Motion for New Trial; denying 329 Defendants' Motion to Alter or Amend Judgment. Signed by Judge Ted Stewart on 09/13/2011. (tls)

IN THE UNITED STATES COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION

KLEIN-BECKER usa, LLC, a Utah limited
liability company, et al.,
Plaintiffs,

MEMORANDUM DECISION AND
ORDER DENYING DEFENDANTS’
MOTION FOR NEW TRIAL AND/OR
TO ALTER OR AMEND JUDGMENT

vs.

PATRICK ENGLERT, et al.,

Case No. 2:06-CV-378 TS

Defendants.

This matter came before the Court for a bench trial on June 15, 2009. The Court issued
its Findings of Fact and Conclusions of Law on January 18, 2011, and Judgment was entered
against Defendants on January 25, 2011. Defendants subsequently filed this Motion for New
Trial and/or to Alter or Amend Judgment. For the reasons discussed below, the Court will deny
the Motion.
I. STANDARD OF REVIEW
Defendants seek a new trial under Fed.R.Civ.P. 59. Rule 59(a)(1)(B) provides that a new
trial may be granted “after a nonjury trial, for any reason for which a rehearing has heretofore

1

been granted in a suit in equity in federal court.”1 “Motions for a new trial are generally
disfavored, and should only be granted with great caution.”2
In the alternative, Defendants seek to alter or amend the Judgment under Rule 59(e).
Grounds for relief under Rule 59(e) “include (1) an intervening change in the controlling law, (2)
new evidence previously unavailable, and (3) the need to correct clear error or prevent manifest
injustice.”3
II. DISCUSSION
Defendants argue that they are entitled to a new trial and/or that the Judgment should be
amended for a number of reasons. The Court will discuss them in turn.
A.

SUFFICIENCY OF THE EVIDENCE CONCERNING DAMAGES
Defendants first argue that there was insufficient evidence for the Court to award

$673,988.17 in damages for Defendants’ trademark infringement. As the Court explained in its
Findings of Fact and Conclusions of law, this amount came from PayPal records showing
Defendants’s gross sales of StriVectin products. This evidence provided an ample basis for the
Court’s conclusion concerning the amount of damages. Though, as previously stated, this
amount “understates the gross sales” made by Defendants, there is ample evidence to support the

1

Fed.R.Civ.P. 59(a).

2

Chavez v. City of Albuquerque, 640 F. Supp. 2d 1340, 1342 (D. N.M. 2008).

3

Servants of Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000).
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conclusion that Plaintiffs suffered damages in at least this amount.4 Therefore, this argument
will be rejected.
B.

DEDUCTION OF OVERHEAD COSTS
Defendants next contend that the Court erred in failing to deduct Defendants’ overhead

costs when calculating damages based on Defendants’ gross profits. Once Plaintiffs met their
burden of showing gross costs, it became Defendants’ burden to show any overhead expenses to
be deducted.5 In this matter, Defendants presented no evidence, let alone any evidence
concerning overhead expenses. Therefore, there was no basis for the Court to deduct overhead
expenses. Defendants ask the Court to speculate about the existence of overhead expenses but,
without evidence being presented by Defendants to support these claims, the Court declines to
engage in such speculation.
C.

DISGORGEMENT OF PROFITS
Defendants argue that the Court assumed facts not in evidence and drew unreasonable

inferences when deciding to award Plaintiffs disgorgement of profits. Defendants also argue that
the Court abused its discretion in finding that Defendants acted willfully.
As the Court previously explained, a plaintiff may recover the defendant’s profits by
showing either actual damages or, absent actual damages, by establishing that the defendant’s
actions were willful.6 Though Plaintiffs did not seek actual damages, the Court found actual

4

Docket No. 324 at 26.

5

First Savings Bank, F.S.B. v. U.S. Bankcorp, 117 F. Supp. 2d, 1088 (D. Kan. 2000).

6

Western Diversified v. Hyundai Motor Am., 427 F.3d 1269, 1272-73 (10th Cir. 2005).
3

damages existed and that Defendants’ actions were willful. Having reviewed the record, the
Court finds that there was substantial evidence to support both of these conclusions and that the
inferences drawn were reasonable. Therefore, the Court will deny Defendants’ request for relief
under this argument.
D.

PIERCING THE CORPORATE VEIL
Defendants contend that Plaintiffs should have been required to present evidence to

pierce the corporate veil and that the Court erred in not making findings concerning piercing the
corporate veil. This argument, however, ignores the fact that judgment on the issue of liability
had been entered against Defendants prior to trial. Therefore, there was no need for Plaintiffs to
present evidence on this issue and no need for the Court to make findings with respect to piercing
the corporate veil.
E.

PERMANENT INJUNCTION
Defendants argue that the Court erred in entering a permanent injunction because

Plaintiffs failed to show irreparable harm. The Court disagrees. There is ample evidence in the
record, including Defendants’ actions throughout the case, which support a finding of irreparable
harm.
F.

CALLING OF WITNESSES
Defendants next argue that the Court erred when it refused to allow Defendants to call

witnesses. This argument, however, is not supported by the record. Rather than the Court, it was
Defendants who decided not to call any witnesses. Therefore, this argument fails.

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G.

FRAUD DAMAGES
Defendants also argue that the Court erred in its determination of fraud damages. The

Court made its determination of fraud damages by adhering to the rule set out in Watkins &
Faber v. Whiteley,7 where the Utah Supreme Court adopted a measure of damages which was
“the difference between the fair market value of that which the plaintiff actually received, and the
fair market value of the property bargained for, if it had been as represented.”8 Under this
standard, the Court found that the retail value of the product more accurately reflected the level
of damages due to Defendants’ fraud. Defendants contend that this conclusion was incorrect
because they purchased the product as a wholesaler. The Court disagrees with this assessment.
If not for their fraud, Defendants would have purchased the product as consumers, not
wholesalers. Thus, the proper level of damages is the retail value that Defendants would have
paid but for their fraud.
H.

JURY DEMAND
Defendants’ final argument is that this case should have been tried before a jury. In this

matter, Defendants filed a request for a jury demand, which Plaintiffs sought to strike as
untimely. The Magistrate Judge granted Plaintiffs’ Motion to Strike, thereby striking
Defendants’ jury demand. Defendants did not file an objection to the Magistrate Judge’s

7

578 P.2d 514 (Utah 1978).

8

Id. at 515.
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decision on this issue. Therefore, any objection thereto has been waived9 and the Court will not
reconsider this issue at this stage.
III. CONCLUSION
It is therefore
ORDERED that Defendants’ Motion for New Trial and/or to Alter or Amend Judgment
(Docket No. 329) is DENIED.
DATED September 13, 2011.
BY THE COURT:

_____________________________________
TED STEWART
United States District Judge

9

United States v. One Parcel of Real Prop., 73 F.3d 1057, 1060 (10th Cir. 1996).
6