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Crew Tile Distribution, Inc. v. Porcelanosa Los Angeles, Inc.

United States District Court, D. Colorado

December 29, 2017

CREW TILE DISTRIBUTION, INC., Plaintiff and Counter Defendant,


          William J. Martínez United States District Judge

          This business dispute brought under 28 U.S.C. § 1332 proceeded to a jury trial March 13-24, 2017, and a jury verdict entered on the parties' legal claims. (ECF No. 355.) Following post-trial briefing, the Court entered its own rulings on the parties' equitable claims, and Final Judgment entered November 20, 2017. (See ECF Nos. 392 & 393.) Now before the Court is the Motion for New Trial filed by Plaintiff and CounterClaim Defendants (together, “Crew Tile”) on November 20, 2017 (ECF No. 394 (the “Motion”)), to which Defendants/CounterClaimants (together, “Porcelanosa”) filed a Response on December 5, 2017 (ECF No. 397). For the reasons set forth below, the Motion is denied.

         I. BACKGROUND

         The Court does not repeat here the detailed factual background of this case, which has been set out in prior orders. (See, e.g., ECF Nos. 236, 392.) Broadly summarized, Crew Tile alleged that it entered into a contract in December 2009 to be the exclusive distributor of Porcelanosa's products in Colorado (the “2009 Agreement”), and that Porcelanosa had breached that contract, triggering a $2.5 million termination payment to Crew Tile. (See generally ECF No. 250 at 2-4.) Porcelanosa alleged that the 2009 Agreement was a forgery, and that Crew Tile's lawsuit against Porcelanosa for that alleged agreement was a sham.

         Separate from the disputed 2009 Agreement at the center of the parties' claims, discovery revealed the existence of a document which appeared to be an “Exclusivity Agreement” dated July 29, 2004, and signed by Ryan Davis and a former Porcelanosa officer, Josep Domingot (on behalf of “Porcelanosa Group (PG) Anaheim California”), purportedly granting exclusive distribution rights for certain ventilated facade products manufactured by Porcelanosa to a predecessor entity to Crew Tile, also controlled by Ryan Davis. (Trial Ex. J.; ECF No. 251-1 (the “2004 Agreement”).) However, in his sworn deposition testimony, Mr. Domingot denied ever having negotiated or signed such an agreement with Ryan Davis. (ECF No. 267-13 at 4-6.) Certain other facts about this document also cast doubt on its authenticity. (See ECF No. 392 at 24, ¶ 20.c.)

         Prior to trial, Crew Tile moved to exclude any evidence of this 2004 Agreement, arguing it was irrelevant and improperly prejudicial under Federal Rules of Evidence 401 and 403, and constituted impermissible character evidence under Rule 404. (ECF No. 251 at 1-8.) The Court denied Crew Tile's motion to exclude all evidence related to the 2004 Agreement. The Court reasoned that “the evidence related to the alleged 2004 contract is a material part of th[e] overall history of the parties' business relationships, and this remains true, regardless of which side's evidence the jury ultimately believes.” (ECF No. 279 at 26-27.) The Court also held that “to the extent evidence related to the 2004 contract could be viewed as a character attack, ” potentially subject to exclusion under Rule 404(a), “it is nevertheless admissible under Rule 404(b) to prove, among other things, the parties' knowledge of one another's business goals or practices, the existing relationship between the parties, and the parties' opportunity to modify or expand an (allegedly) pre-existing distribution agreement.” (Id. at 27.) However, the Court expressly noted that “[a]t trial the Court will entertain a request . . . seeking a limiting instruction to direct the jury that it should not weigh evidence related to the 2004 agreement as character evidence, or as evidence tending to show that the conduct of any party in 2009 was in keeping with prior conduct or character.” (ECF No. 279 at 28 n.11.)

         At trial, evidence related to the 2004 Agreement was admitted. Per its usual practice, the Court reminded all parties that its pretrial evidentiary rulings are “not self-executing, ” and that “it was incumbent on counsel to raise objections based on [the Court's] rulings . . . at trial.” (Tr. at 1085.)[1] However, at no point during trial did Crew Tile's counsel object that evidence related to the 2004 Agreement was being admitted in violation of either the Court's pretrial evidentiary rulings or Rule 404, nor that such evidence or argument had become impermissibly prejudicial in violation of Rule 403.[2]Crew Tile also did not request any limiting instruction with respect to the 2004 Agreement specifically, or to character evidence in general. (See ECF Nos. 261, 315; see also Tr. at 2173-82.)

         After hearing nine days of evidence, the jury returned a verdict in Porcelanosa's favor, finding, in part, that Crew Tile and certain of its principals committed the tort of abuse of process by prosecuting a lawsuit predicated on the 2009 Agreement. In addition, the Court's subsequent rulings on equitable claims found, among other facts, that a preponderance of the evidence showed the 2009 Agreement was not a legitimate contract, and that Ryan Davis's testimony regarding the 2004 Agreement was not credible. (See ECF No. 392 ¶¶ 1-2, 20.c.)


         Rule 59(a)(1) permits the Court to order a new trial “for any reason for which a new trial has heretofore been granted in an action at law in federal court.” Here, Crew Tile argues for a new trial on grounds that the Court erred in allowing evidence of the 2004 Agreement, and also suggests that the arguments advanced by Porcelanosa's counsel related to the 2004 Agreement were improper. (ECF No. 394.)

         Where a party seeks a new trial based on a claim of the Court's error, the Court may grant such a motion if “the ‘claimed error substantially and adversely' affected the party's rights.” Henning v. Union Pac. R.R. Co., 530 F.3d 1206, 1217 (10th Cir. 2008) (quoting Sanjuan v. IBP, Inc., 160 F.3d 1291, 1297 (10th Cir. 1998)). “A motion for new trial is addressed to the sound discretion of the trial court.” Shugart v. Cent. Rural Elec. Co-op., 110 F.3d 1501, 1506 (10th Cir. 1997). The district court is given “wide latitude with respect to a motion for a new trial because it is uniquely able to assess the likelihood that the evidence was prejudicial.” Henning, 530 F.3d at 1217 (internal quotation marks omitted; alterations incorporated). Likewise, as to alleged improper conduct or argument by an attorney, “[t]he decision on whether counsel's misconduct at trial was so egregious as to require retrial is left largely to the discretion of the district court.” Abuan v. Level 3 Commc'ns, Inc., 353 F.3d 1158, 1175 (10th Cir. 2003).[3]

         In addition, Rule 61 provides that “[u]nless justice requires otherwise, no error in admitting or excluding evidence-or any other error by the court or a party-is ground for granting a new trial, ” and that “the court must disregard all errors and defects that do not affect any party's substantial rights.”

         III. ANALYSIS

         Crew Tile argues Porcelanosa's evidence regarding the 2004 Agreement “was not used in a manner allowed under [Rule] 404(b), rather it was repeatedly used by Defendants' counsel . . . to prove that Ryan Davis was a serial forger, ” allegedly in violation of Rule 404(a). (ECF No. 394 at 5.) Analysis of Crew Tile's argument turns on two questions: (1) whether admission of evidence regarding the 2004 Agreement ...

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