Servicios Especiales Al Comercio Exterior v. Johnson Controls Inc

Filing 111

ORDER signed by Judge J P Stadtmueller on 4/19/11 denying 99 defendant's Rule 7(h) Expedited Non-Dispositive Motion for Reconsideration. See Order. (cc: all counsel) (nm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
SERVICIOS ESPECIALES AL COMERCIO EXTERIOR,
Plaintiff,
v.

Case No. 08-CV-1117

JOHNSON CONTROLS, INC.,
Defendant.

ORDER
On April 4, 2011, defendant Johnson Controls, Inc. (“JCI”) filed a Rule 7(h)
Expedited Non-Dispositive Motion for Reconsideration (Docket #99).1 JCI’s motion
requests reconsideration of the court’s finding in its April 1, 2011 Order (Docket #98)
that a genuine dispute remained as to whether a number of the invoices at issue in
this case are non-actionable due to the statute of limitations. As such, the court
denied summary judgment on that issue. More specifically, JCI now contends that
the affidavit of an employee offered to oppose summary judgment by plaintiff
Servicios Especiales al Comercio Exterior (“Servicios”) was in fact a sham affidavit
that should not have precluded entry of summary judgment.
Because JCI’s further submissions here do not establish that the affidavit was
a sham, and because the court’s finding would stand independent of the alleged

1

The court begins by noting that Civil Local Rule 7(h) permits (as reflected by the title of the
motion) expedited motions seeking “non-dispositive” relief. Civil L. R. 7(h)(1). It would seem that,
given that the reconsideration requested would in fact result in the grant of JCI’s earlier dispositive
partial summary judgment motion, this rule may not be the proper vehicle for such a request.
However, the issue is simple and easily disposed of, so the court addresses it nonetheless.

sham affidavit, the court is obliged to deny JCI’s motion. The sham affidavit rule
prevents a party from defeating summary judgment through a declaration or affidavit
contradicting prior testimony. Bank of Ill. v. Allied Signal Safety Restraint Sys., 75
F.3d 1162, 1168 (7th Cir. 1996). The key is looking to whether the statement is
“inherently inconsistent” or “so squarely contradicts an earlier one as to create only
a sham issue of fact.” Id. at 1169, 1170. Further, when offered to oppose a motion
for summary judgment, an affidavit must be made on personal knowledge. Fed. R.
Civ. P. 56(c)(4).
JCI now argues that the affidavit of Alfredo de Jesus Dominguez Rodriguez
(“Dominguez”), asserting personal knowledge as to the terms of the oral contract at
issue, was a sham. In Dominguez’s declaration, he asserted that he had personal
knowledge of the terms of the oral contract and that a fifteen-day payment window
was not a term.2 (Dominguez Rodriguez Decl. ¶¶ 4, 7-9) (Docket #84). In order to
establish Dominguez’s contradiction, JCI submits portions of his earlier deposition,
a relevant portion of which follows:
Q

. . . Do you see in Servicios’ answer to Interrogatory No. 2 that
Servicios responded that, “Servicios had an oral contractual
agreement with JCI and JCAM where Servicios provided
financial, logistical and technical services to JCI and JCAM.” Do
you see that?

A

Yes.

2

The existence of a fifteen-day payment window is material to the issue of whether the
statute of limitations bars action on the vast majority of unpaid invoices subject to this action. For
further factual background, see the court’s April 1, 2011 Order (Docket #98).

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Q

W ould you describe the oral contractual agreement referenced
in the answer to Interrogatory No. 2?

MR. RAMIREZ: Objection, calls for a legal conclusion. Subject
to that, go ahead and answer.
THE W ITNESS: The oral contract is an agreement with a client
to undertake all of the agreement that is mentioned here. In the
specific case of this business, our original client was Keiper of Mexico.
At one point they were contacted or that is, the job was
undertaken by Francisco King Hernandez. That was the point at which
the contract arose. I wasn’t present. This I know through my boss.
This particular system of work, that oral contract was in existence
when Johnson Controls bought Keiper of Mexico. We continued
working with them in the normal fashion, and nothing changed.
...
Q

W ho from JCI, from Johnson Controls, Incorporated, made the
oral contractual agreement referenced in interrogatory - - in
Servicios’ answer to Interrogatory No. 2?

MR. RAMIREZ: Objection, calls for a legal conclusion. Subject
to the objection, go ahead and answer.
THE W ITNESS: I do not know that. I don’t know that information
now.
BY MR. JOHNSON:
Q

So as the corporate designee of Servicios, you do not know who
from Johnson Controls entered into the oral contractual
agreement referenced in Servicios’ answer to Interrogatory No.
2?

A

Yes, because I was not present.

Q

So does that mean that no one within your company, within
Servicios knows who from Johnson Controls made the oral
contractual agreement?

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A

No. I simply said that I was not present. I would imagine that my
boss, Francisco King Cancino, would know that.

Q

So Mr. King Cancino knows who from Johnson Controls,
Incorporated made the oral contractual agreement referenced in
Servicios’ answer to Interrogatory No. 2?

A

Yes.
...

Q
And so as you sit here today as the corporate designee of
Servicios, you cannot tell me who from JCI entered into the oral
contractual agreement referenced in Servicios’ answer to Interrogatory
No. 2?
A

That’s correct. I don’t remember exactly the name of the person.

Q

Do you know the date that the oral contractual agreement was
made?

A

Not the exact date. Supposedly it was done in 1996.

Q

Do you know where you made it, like the physical location?

A

Yes.
. . . THE W ITNESS: In Tlaxcala, that’s where the physical plant

is.
...
Q

I understand. And what were the terms of the agreement?

A

The general terms were concerning operations of import and
export. Through our corporation, the payment of taxes and also
inherent expenses within - -

. . . THE W ITNESS: - - and also costs that were inherent to our
cargo, our merchandise.
BY MR. JOHNSON:
Q

And how did the agreement work?

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A

W e would, first of all, carry out inspection of merchandise. They
were informed of the costs of expenses and taxes. And then
when these would come into the country, we were permitted to
pay for these costs ahead of time. And then by means of a
follow-up bill, we were reimbursed for these charges as well as
for our fees.
...

Q

So it was kind of like a revolving account?

A

Yes.

(Dominguez Rodriguez Dep. 18:16-19:18, 22:2-23:2, 24:1-24:18, 25:10-26:11)
(Docket #99-2). JCI argues that Dominguez’s declaration of personal knowledge
contradicts this earlier testimony because at his deposition he testified that he was
not present during the making of the alleged oral contract. Thus, JCI argues,
Dominguez could not possibly have personal knowledge of the contract’s terms.
However, JCI’s argument is overly black and white. Dominguez’s declaration of
personal knowledge does not squarely contradict his deposition. A contextual
reading of the deposition reveals that it does not unambiguously establish a lack of
knowledge as to the alleged contractual terms. Rather, it simply establishes that he
was not present at the contract’s creation. That does not necessarily preclude a
person from knowledge of the terms.

It is no more necessary that a person

operating under an oral contract be present at its creation than a person operating
under a written contract in order to hold knowledge of the terms. JCI alludes to a
counter argument here by citing the proposition that a witness must have “sense
data” about the matter in order to have personal knowledge, citing Unterreiner v.

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Volkswagen of Am., Inc., 8 F.3d 1206 (7th Cir. 1993). That citation is only half the
story, however. The court’s statement involved a slightly longer quotation from
another Seventh Circuit case, stating that “[p]ersonal knowledge . . . includes . . .
inferences from sense data as well as sense data themselves.” Id. at 1211 (citing
Palucki v. Sears, Roebuck & Co., 879 F.2d 1568, 1572 (7th Cir. 1989) (emphasis
added)). In turn, the Palucki court drew its rule from another case in which the court
briefly explored the philosophical underpinnings of human knowledge. As the court
explained:
All perception is inferential, and most knowledge social; since Kant we
have known that there is no unmediated contact between nature and
thought. Knowledge acquired through others may still be personal
knowledge within the meaning of Fed. R. Evid. 602, rather than
hearsay, which is the repetition of a statement made by someone elsea statement offered on the authority of the out-of-court declarant and
not vouched for as to truth by the actual witness. Such a statement is
different from a statement of personal knowledge merely based, as
most knowledge is based, on information obtained from other people.
Agfa-Gevaert, A.G. v. A.B. Dick Co., 879 F.2d 1518, 1523 (7th Cir. 1989). In
Dominguez’s declaration, he asserts not just that he has personal knowledge of the
terms, but that he gained that knowledge during the course of his employment.
(Dominguez Rodriguez Decl. ¶ 4).

Thus, Dominguez’s absence at contract

formation does not establish a lack of personal knowledge which he later contradicts
in his declaration.3

3

This line of reasoning applies equally to JCI’s brief contention that “[t]o the extent
[Dominguez] learned anything about the terms . . . it was through his boss Mr. King.” (Def.’s Mot.
to Reconsider 3) (Docket #99).

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JCI argues that Dominguez’s deposition testimony reveals that he has no
knowledge of the terms because “he could not answer questions about the specific
terms,” rather only giving “a general description of the services” provided. (Def.’s
Mot. to Reconsider 3 n.2) (Docket #99). But a full reading of the offered deposition
excerpts reveals that counsel for JCI never actually asked about specific terms.
Counsel asked only what the terms were, to which Dominguez responded with the
“general terms.” Counsel then followed up by asking how the agreement worked.
Dominguez again gave an overview. But he was never asked whether he knew
whether there was a solid payment window, or otherwise pressed on specifics in a
way that reveals a lack of personal knowledge. W hile JCI may ultimately be able to
convince a jury to disregard Dominguez’s characterization of the payment terms, that
goes to the weight of the evidence, which is not a proper consideration on summary
judgment. In total, Dominguez’s deposition testimony simply does not assert a clear
lack of knowledge, which his later declaration squarely contradicts.
Further, even if Dominguez’s declaration fell afoul of the sham affidavit rule,
the remainder of the court’s analysis was sufficient to support its finding. While the
court formed the basis of its finding by considering both Francisco King Cancino’s
(“King”) and Dominguez’s declarations, the finding would stand even if only
considering King’s declaration. As the court noted, King’s deposition, in which he
stated “I think” it was a fifteen-day payment period, is not so unequivocal as to
establish his later declaration as a sham affidavit. This is particularly true in that

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King’s later declaration provides testimony as to the fact that invoices were often
paid later than fifteen days without assessed penalties. Taking the circumstances
and testimony into account, along with the instruction to apply the sham affidavit rule
“with great caution,” Bank of Ill., 75 F.3d at 1169, the court remains confident that
Servicios was not simply attempting to offer a sham issue to avoid summary
judgment. Thus, the court finds first that Dominguez’s declaration did not run afoul
of the sham affidavit rule and, therefore, there is no reason to reconsider the court’s
earlier finding that a genuine issue of material fact existed regarding the statute of
limitations defense. Alternatively, even if the affidavit were a sham, the court’s
finding would remain the same.
Accordingly,
IT IS ORDERED that the defendant’s Rule 7(h) Expedited Non-Dispositive
Motion for Reconsideration (Docket #99) be and the same is hereby DENIED.
Dated at Milwaukee, W isconsin, this 19th day of April, 2011.
BY THE COURT:

J.P. Stadtmueller
U.S. District Judge

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