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Red Equipment PTE Ltd. v. BSE Tech LLC

United States District Court, D. Arizona

March 23, 2016

RED EQUIPMENT PTE LTD., a Singapore private limited company, Plaintiff/counterdefendant,
v.
BSE TECH, LLC, a Delaware limited liability company; and BOSTON SEMI-EQUIPMENT, LLC, a Delaware limited liability company, Defendants/counterclaimants. BSE TECH, LLC, a Delaware limited liability company; and BOSTON SEMI-EQUIPMENT, LLC, a Delaware limited liability company, Third-party plaintiffs,
v.
LONE STAR LITHOGRAPHY, LLC, a Texas limited liability company, and OBIE ROOKER, Third-party defendants.

ORDER MOTION FOR SUMMARY JUDGMENT; MOTION IN LIMINE; MOTION FOR SANCTIONS

H. Russel Holland United States District Judge.

Plaintiff and counterdefendants move for summary judgment on defendants’ counterclaims.[1] This motion is opposed.[2] Plaintiff and counterdefendants also move to exclude the testimony of John Kleman.[3] This motion is opposed.[4] And, plaintiff moves for sanctions.[5] This motion is opposed.[6] Oral argument was requested and has been heard on all three pending motions.

Facts

Plaintiff/counterdefendant is Red Equipment Pte Ltd. Lone Star Lithography, LLC and Obie Rooker are also counterdefendants. Defendants/counterclaimants are BSE Tech, LLC and Boston Semi-Equipment, LLC (referred to herein collectively as “BSE”).

Plaintiff “is in the business of ... deinstalling certain used semiconductor equipment” and selling “shipping kits for certain used semiconductor equipment.”[7] BSE is in the business of selling and leasing “used and refurbished semiconductor equipment (‘tools’) in the United States and abroad.”[8]

“In or about January 2013, ” BSE and Red Equipment “entered into an agreement through purchase orders and statements of work whereby [Red Equipment] was responsible for de-installing certain of the tools manufactured by Nikon..., and for providing and affixing specialized shipping kits for the Nikon Tools ... in preparation for their extraction from” a fabrication plant in Tateyama, Japan “and subsequent shipping to customers....”[9] Rooker avers that he and four other subcontractors were hired by Red Equipment to perform the de-installation work and to affix the shipping kits.[10] The other four subcontractors were John Kleman, Gal Dery, Norikazu Okiji, and Miguel Sanchez.[11]

BSE alleges that some of the Nikon tools were shipped to California, where upon arrival, it was discovered that some of them “had sustained substantial damage.”[12] BSE alleges that after it discovered this damage in California, it de-crated and inspected some of the Nikon tools that were still in Japan and “a number of deficiencies” were uncovered.[13]BSE contends that Red Equipment, Rooker, and Lone Star were responsible for the damage and deficiencies. Red Equipment, Rooker, and Lone Star dispute that they were responsible for any damage to the Nikon tools or any deficiencies in the crating of the Nikon tools.

On May 14, 2013, Red Equipment commenced this action, in which it asserts a breach of contract claim against BSE, claiming that BSE owes it $463, 804.50 for the work that Red Equipment performed under the parties’ agreement.[14] BSE has counterclaimed, asserting claims for breach of contract, breach of the implied covenant of good faith and fair dealing, gross negligence, and negligence against Red Equipment, and negligence and gross negligence claims against Rooker and Lone Star.

Red Equipment, Rooker, and Lone Star (referred to collectively from here on out as Red Equipment) now move for summary judgment on BSE’s counterclaims on the theory that BSE cannot prove damages. Red Equipment also moves to exclude the testimony of John Kleman and to strike the declarations of Kent Shoot. And, plaintiff moves for sanctions for BSE’s alleged discovery violations.

Motion for Summary Judgment

Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The initial burden is on the moving party to show that there is an absence of genuine issues of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). If the moving party meets its initial burden, then the non-moving party must set forth specific facts showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). In deciding a motion for summary judgment, the court views the evidence of the non-movant in the light most favorable to that party, and all justifiable inferences are also to be drawn in its favor. Id. at 255. “[T]he court’s ultimate inquiry is to determine whether the ‘specific facts’ set forth by the nonmoving party, coupled with undisputed background or contextual facts, are such that a rational or reasonable jury might return a verdict in its favor based on that evidence.” T.W. Elec. Service, Inc. v. Pacific Elec. Contractors Ass’n, 809 F.2d 626, 631 (9th Cir. 1987).

Although the facts may be disputed as to who was responsible for the damage to the Nikon tools or even whether the Nikon tools were in fact damaged, Red Equipment argues that it is still entitled to summary judgment on BSE’s counterclaims because BSE has no evidence as to the damages it suffered as a result of the alleged faulty work. Damages are an essential element of each of BSE’s counterclaims.

Red Equipment’s argument is based on the deposition testimony of Bryan Banish. Banish was BSE’s Rule 30(b)(6) deponent on certain topics, including the facts related to BSE’s claims against Red Equipment, which would include the damages that BSE suffered as a result of Red Equipment’s alleged faulty work.

Banish testified that Telefunken purchased the Nikon tools in question and paid BSE in full for the tools.[15] Banish, however, testified ...


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