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Zykronix Inc. v. Conexant Systems, Inc.

United States District Court, D. Colorado

April 25, 2018

ZYKRONIX, INC., a Colorado corporation, Plaintiff,
v.
CONEXANT SYSTEMS, INC., a Delaware corporation, Defendant.

          ORDER

          KRISTEN L. MIX UNITED STATES MAGISTRATE JUDGE.

         This matter is before the Court on Plaintiff's Motions in Limine [#108][1] (the “Motions”). Defendant filed a collective Response [#113] in opposition to the Motions [#108], and Plaintiff filed a Reply [#120]. Additionally, the parties filed the Joint Status Report [#152] pursuant to Court Order [#149]. The Court has reviewed the briefing, the entire case file, and the applicable law, and is sufficiently advised in the premises. Each individual motion is addressed in turn.

         I. Background

         Plaintiff Zykronix, Inc. (“Plaintiff”) is a Colorado corporation doing business in Colorado and Taiwan. Joint Amendment to Section 4 of the Scheduling Order [#46]. Defendant Conexant Systems, Inc. (“Defendant”) is a Delaware corporation doing business in California whose registered agent is in Colorado. Id. In early 2012, Plaintiff entered into an agreement with a third-party named Home Automation, Inc. (“HAI”), pursuant to which Plaintiff agreed to design and manufacture for HAI a home automation product called the OmniTouch 7. Motion [#69] at 2-3. HAI was later acquired by Leviton Manufacturing, Co. Ltd. (“Leviton”). Id. at 2 n.2.

         Plaintiff met with Defendant because it needed an audio chip for the OmniTouch 7. Id. at 2-3. In March 2013, Plaintiff ordered approximately 10, 000 chips. Id. Plaintiff delivered the OmniTouch 7 devices, including the chips, to Leviton for sale to customers. Id. Eventually, a loud buzzing noise was discovered in some of the devices. Id. Plaintiff alleges that the noise originates from the chips, and that, as of May 8, 2017, Leviton had returned 540 devices that emitted the noise. Id. at 6; Pl. Am. Responses to Def. First Set of Interrogatories to Pl. [#70-8] at 3. On June 9, 2017, Defendant entered into a Settlement Agreement with Leviton that agreed to release Plaintiff “from any other obligations that [it] may have to repair and/or replace any . . . Device due to any defect or noise caused by any Conexant chip.” Settlement Agreement [#79-20].

         II. Legal Standard

         “The purpose of a motion in limine is to aid the trial process by enabling the Court to rule in advance of trial on the relevance of certain forecasted evidence, as to issues that are definitely set for trial, without lengthy argument at, or interruption of, the trial.” Martensen v. Koch, No. 13-CV-02411-REB-CBS, 2015 WL 514913, at *2 (D. Colo. Feb. 6, 2015) (quoting Mendelsohn v. Sprint/United Management Co., 587 F.Supp.2d 1201, 1208 (D. Kan. 2008), aff'd, 402 Fed.Appx. 337 (10th Cir. 2010)). Although motions in limine can save time when ruled on prior to trial, “a court is almost always better situated during actual trial to assess the value and utility of evidence.” Id.

         III. Analysis

         A. Motion #1: Settlement Agreement

         Plaintiff seeks to exclude evidence related to the Settlement Agreement between Defendant and third-party Leviton, including (1) general communications between Defendant and Leviton, and (2) the Settlement Agreement itself. Motions [#108] at 1-5. Plaintiff clarified in the Joint Status Report [#152] that “[b]esides informing the jury that [Defendant] has taken over all future repairs pursuant to the Settlement Agreement, ” Plaintiff believes that any evidence related to the Settlement Agreement is irrelevant, and that Defendant failed to produce a witness prepared to testify on that topic. Joint Status Report [#152] at 2.

         The Court first considers relevance. Defendant explains that the failure rate of the chips is likely to be an issue at trial. Id. at 3. Thus, Defendant avers that it will present evidence that “since June 9, 2017 when [Defendant] and Leviton entered into the Settlement Agreement, Leviton has only returned 40 OmniTouch 7 devices.” Id. at 4. While Defendant is entitled to challenge the alleged failure rate of the chips, Defendant fails to sufficiently explain how the contents of the Settlement Agreement and general communications related to the Settlement Agreement are relevant to the issue of the number of devices returned. In other words, the Settlement Agreement does not appear to have any bearing on the rate at which chips were returned for repair, or if it does, Defendant has failed to explain the connection. Thus, the Court does not find Defendant's argument convincing. Additionally, the Court notes that the actual Settlement Agreement document is not needed for Defendant to establish the date on which it was signed.[2]

         Defendant also argues that Plaintiff has put the Settlement Agreement at issue by stating in the Final Pretrial Order that two of its witnesses are expected to testify regarding “[Defendant's] agreement with Leviton regarding the repair of OmniTouch 7 devices.” Joint Status Report [#152] at 4. Of course, Plaintiff may open the door to introduction of the Settlement Agreement into evidence by presenting its own evidence at trial. Because the Court cannot determine in advance of trial whether that will occur, Plaintiff's motion to exclude the Settlement Agreement is DENIED without prejudice.[3] Absent testimony inviting introduction of the Settlement Agreement into evidence, an objection to its admission based on relevance is likely to be sustained.

         B. Motion #2: The “Terms and Conditions”

         Plaintiff seeks a Court order precluding Defendant from introducing any evidence or testimony related to Defendant's “Terms and Conditions” because a court has previously ruled on the issue of whether the Terms and Conditions constitute part of the contract between these parties. Plaintiff contends that several of Defendant's Affirmative Defenses should also be excluded. Motions [#108] at 6.

         As Plaintiff argues, in March 2016, Defendant filed a Petition to Compel Arbitration for Complaint for Declaratory Relief in the U.S. District Court of the Central District of California.[4]See California Court Order [#108-6]. Defendant sought to compel arbitration based on language in the Terms and Conditions, [#108-5] at 16, which were included in an email Defendant sent to Plaintiff in response to Plaintiff's Purchase Order. Id. at 2. Before the California court, Defendant argued that the additional terms in the Terms and Conditions became part of the parties' contract because Plaintiff accepted the shipments of chips and did not object to or dispute the new terms. Id. at 6. The California court found against Defendant, holding that the Terms and Conditions did not ...


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