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`United States District Court
`EASTERN DISTRICT OF TEXAS
`SHERMAN DIVISION
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`CASE NO. 4:14-CV-543
`LEAD
`Judge Mazzant
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`§
`§
`§
`§
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`§
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`§
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`FELD MOTOR SPORTS, INC.
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`v.
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`TRAXXAS, LP
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`MEMORANDUM OPINION AND ORDER
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`Pending before the Court is Traxxas, LP’s Renewed Motion for Judgment as a Matter of
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`Law, Motion for New Trial or Alternative Motion to Amend/Modify the Judgment (Dkt. #168).
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`After reviewing the relevant pleadings and the relevant trial testimony and evidence, the Court
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`finds that the motion should be denied.
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`PROCEDURAL BACKGROUND
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`On April 14, 2014, Traxxas LP (“Traxxas”) filed its action against Feld Motor Sports,
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`Inc. (“Feld”) in the 429th District Court of Collin County, Texas, in which it sought declaratory
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`relief, stating that it did not owe Feld royalties on the two-wheel drive Brushless Stampede (“the
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`Stampede VXL”), the Nitro Stampede, and the Stampede 4x4 (See Dkt. #3 in 4:14-cv-463). On
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`July 11, 2014, the case was removed to the Eastern District of Texas, and filed as Traxxas, LP v.
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`Feld Motor Sports, Inc., No. 4:14-cv-463 (E.D. Tex. 2014) (Dkt. #1).
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`On July 11, 2014, Feld filed its action against Traxxas in the United States District Court
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`for the Eastern District of Virginia, in which it alleged that Traxxas has breached the License
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`Agreement, breached the implied covenant of good faith and fair dealing, failed to pay audit
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`expenses, and failed to pay interest on late payments (Dkt. #1). On August 15, 2014, the case
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`Case 4:14-cv-00543-ALM Document 188 Filed 04/14/16 Page 2 of 35 PageID #: 7807
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`was transferred to the Eastern District of Texas, and filed as Feld Motor Sports, Inc. v. Traxxas,
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`LP, No. 4:14-cv-543 (E.D. Tex. 2014) (Dkt. #21).
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`On April 3, 2015, Traxxas filed its Motion for Summary Judgment (Dkt. #51). On April
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`27, 2015, Feld filed its response (Dkt. #84). On May 11, 2015, Traxxas filed its reply (Dkt. #97).
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`On May 21, 2015, Feld filed its sur-reply (Dkt. #105).
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`On April 3, 2015, Feld filed its Motion for Summary Judgment (Dkt. #54). On April 27,
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`2015, Traxxas filed its response (Dkt. #81), and file its objections to Feld’s Summary Judgment
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`Evidence (Dkt. #80). On May 11, 2015, Feld filed its reply (Dkt. #92), and filed its response to
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`Traxxas’s objections (Dkt. #96). On May 21, 2015, Traxxas filed its sur-reply (Dkt. #109), and
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`it reply to its objections (Dkt. #108). On June 1, 2015, Feld filed its sur-reply to Traxxas’s
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`objections (Dkt. #111). On May 11, 2015, Traxxas filed its objections to Feld’s summary
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`judgment opposition evidence (Dkt. #100). On May 21, 2015, Feld filed its response (Dkt.
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`#104). On June 1, 2015, Traxxas filed its reply (Dkt. #112). On June 11, 2015, Feld filed its
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`sur-reply (Dkt. #113). On July 31, 2015, the Court denied both Traxxas’s Motion for Summary
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`Judgment and Feld’s Motion for Summary Judgment, finding that material fact issues existed in
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`the case (Dkt. #118).
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`On June 12, 2015, Feld filed its Motion to Consolidate Cases and to Remain as Plaintiff
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`(Dkt. #98 in 4:14-cv-463). Also on June 12, 2015, Traxxas filed its Unopposed Motion to
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`Consolidate Cases and Opposed Motion to Establish Order of Proof (Dkt. #99 in 4:14-cv-463).
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`On June 23, 2015, Feld filed its response to Traxxas’s moton (Dkt. #101 in 4:14-cv-463). On
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`June 24, 2015, Traxxas filed its response to Feld’s motion (Dkt. #102 in 4:14-cv-463). On June
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`24, 2015, the Court held a hearing on consolidation. Following the hearing, the Court ordered
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`the matters Feld Motor Sports, Inc. v. Traxxas, LP, No. 4:14-cv-543, and Traxxas, LP v. Feld
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`Case 4:14-cv-00543-ALM Document 188 Filed 04/14/16 Page 3 of 35 PageID #: 7808
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`Motor Sports, Inc., No. 4:14-cv-463, to be consolidated (Dkt. #103 in 4:14-cv-463). However,
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`the Court held its determination as to which case would be the lead case until a later date (Dkt.
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`#103 in 4:14-cv-463). On July 31, 2015, after considering the relevant pleadings, the Court
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`determined that Feld would remain as Plaintiff in the consolidated cases, and that the No. 4:14-
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`cv-543 case would be the lead case in the consolidated action (Dkt. #119 in 4:14-cv-543).
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`The trial began on August 24, 2015. At the close of Feld’s case-in-chief, Traxxas made a
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`motion for judgment as a matter of law, in which it requested that the Court grant judgment as a
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`matter of law in favor of Traxxas, as Feld had not proved its case. The Court denied Traxxas’s
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`motion. On August 31, 2015, Feld requested judgment as a matter of law, which the Court
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`denied. On September 1, 2015, the jury rendered its verdict and found the following: (1) the
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`parties intended the License Agreement to include (a) the Stampede Brushless VXL; (b) the
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`Stampede Brushed 4x4; (c) the Stampede Brushless 4x4 VXL; and (d) the Nitro Stampede, when
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`calculating royalties; and (2) Traxxas owed Feld $955,620.30 in unpaid royalties under the
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`License Agreement (Dkt. #162).
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`On October 7, 2015, Traxxas filed its Renewed Motion for Judgment as a Matter of Law,
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`Motion for New Trial or Alternative Motion to Amend/Modify the Judgment (Dkt. #168). On
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`October 26, 2015, Feld filed its response (Dkt. #173). On November 5, 2015, Traxxas filed its
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`reply (Dkt. #176). On November 16, 2015, Feld filed its sur-reply (Dkt. #179).
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`FACTUAL BACKGROUND
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`At trial, Mark Abernethy (“Abernethy”) testified that he began communicating with Kent
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`Poteet (“Poteet”) at Traxxas regarding a potential licensing arrangement between the two
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`companies (Abernethy Trial Tr. (8/25/2015) at 10:9-21; Trial Ex. 12). On July 14, 2010,
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`Abernethy sent an email to Poteet regarding Feld’s “potential opportunity to be working with
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`Case 4:14-cv-00543-ALM Document 188 Filed 04/14/16 Page 4 of 35 PageID #: 7809
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`Traxxas on a line of Monster Jam branded R/C monster trucks.” (Trial Ex. 13). In the email,
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`Abernethy refers to the “Stamped R/C Vehicles” and discusses the wholesale cost of $150 (See
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`Trial Ex. 13). Abernethy testified that he received the information from Poteet (Abernethy Trial
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`Tr. (8/25/2015) at 22:3-23:5; 25:10-18). Abernethy testified that a meeting between Feld and
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`Traxxas was scheduled for July 28, 2010, for members of Feld’s sponsorship and licensing teams
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`to meet with Traxxas’ executive team (Abernethy Trial Tr. (8/25/2015) at 21:5-16).
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`Abernethy testified that the meeting took place on July 28, 2010. Abernethy, Tim
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`Murray, Alison Lort, John Leiber, and Suzanne Ludera represented Feld at the meeting, while
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`Mike Jenkins (“Jenkins”), Tommy DeWitt (“DeWitt”), and Poteet represented Traxxas
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`(Abernethy Trial Tr. (8/26/2015) at 2:14-3:4). The meeting took place at Traxxas headquarters
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`in Plano, Texas (Abernethy Trial Tr. (8/26/2015) at 3:3-4). Abernethy testified that Traxxas
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`products were displayed along a wall with probably forty to fifty vehicles on display (Abernethy
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`Trial Tr. (8/26/2015) at 3:11-20). DeWitt also testified that “the majority of everything
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`[Traxxas] sold was in the conference room.” (DeWitt Trial Tr. at 15:10-16:20).
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`DeWitt testified that the meeting was “introducing Feld to the product” and doing a kind
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`of “show and tell.” (DeWitt Trial Tr. at 17:1-7). Although DeWitt remembers that Traxxas
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`showed Feld “[t]he Stampedes[,]” he testified that there wasn’t specific talk about any distinction
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`between Stampede models (DeWitt Trial Tr. at 19:6-20:19). Abernethy also testified that during
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`the July 28, 2010 meeting there was no specific discussion about the vehicles, but just an
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`overview (Abernethy Trial Tr. (8/26/2015) at 5:24-6:6).
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`Following the meeting, Feld and Traxxas continued to negotiate on the terms of the
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`License Agreement. On July 30, 2010, Abernethy sent Poteet an email, in which he thanked him
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`for the meeting, and gave him a revised proposal that included an asterisk (Trial Ex. 17). The
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`Case 4:14-cv-00543-ALM Document 188 Filed 04/14/16 Page 5 of 35 PageID #: 7810
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`asterisk stated, “[t]his sliding scale takes into consideration that Traxxas will be converting the
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`Stamped line of R/C vehicles 100% to Monster Jam branded vehicles. It also takes into
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`consideration that the Stamped line sells 30,000 units per year. If the Stamped line off [sic] R/C
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`vehicles does not sell 30,000 units per year, then we’ll need to adjust this sliding scale.” (Trial
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`Ex. 17). On August 4, 2010, Poteet responded to Abernethy’s email, and in his revised proposal
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`referred to “these Stampedes.” (Trial Ex. 19).
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`On August 16, 2010, Abernethy sent another revised proposal to Poteet, in which he
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`stated, “This takes into consideration that Traxxas will be converting the Stamped line of R/C
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`vehicles 100% to Monster Jam branded vehicles. It also takes into consideration that the
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`Stamped line sells 30,000 units per year. If the Stamped line off R/C vehicles does not currently
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`sell 30,000 units per year, then we’ll need to re-adjust.” (Trial Ex. 22). On September 2, 2010,
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`Abernethy sent a revised proposal to Poteet, in which he stated, “[t]he Stamped line of R/C’s will
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`be converted to MJ branded vehicles.” (Trial Ex. 24). Poteet forwarded the email to Jenkins,
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`and Jenkins told him to “[a]dd Stampede sales in to a total to get to the 30k.” (Trial Ex. 25).
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`Milo Mattorano (“Mattorano”) testified that during the final stages of negotiations, he
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`was the lead negotiator for Traxxas (See Mattorano Trial Tr. (8/28/2015) at 26:11-27:15).
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`Between September 21, 2010, through September 24, 2010, Feld and Traxxas sent a proposed
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`License Agreement back-and-forth (See Trial Exs. 39, 215, 216, 217, 218, 219).
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`On October 11, 2010, Traxxas sent Feld a fully executed version of the Monster Jam
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`License Agreement (the “License Agreement) (Tr. Ex. 11). The License Agreement gave
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`Traxxas the right to use certain Intellectual Property of Feld in the marketing and sale of
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`Traxxas’s R/C trucks. (Tr. Ex. 11). In return, Feld would be paid a royalty on those sales. (Tr.
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`Ex. 11). Specifically, the Licensing Agreement, in relevant states:
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`Case 4:14-cv-00543-ALM Document 188 Filed 04/14/16 Page 6 of 35 PageID #: 7811
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`5. Royalty Rate: In determining the number of Licensed Articles on which
`Licensor will receive royalties, “Licensed Articles” shall be deemed to include
`all R/C Vehicle Units and R/C Bodies manufactured with the Stampede chassis
`and/or Stampede body, whether or not branded with the Property or
`“Stampede.”
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`(Tr. Ex. 11 at p. 11 ¶ 5) (emphasis in original). The License Agreement also stated that
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`“Licensed Articles” would be “[h]obby-grade battery-operated remote control operated monster
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`truck vehicles (“R/C Vehicle Units”) and monster truck vehicle bodies (“R/C Bodies”) branded
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`with the Property. Licensed Articles shall include a minimum of four (4) different monster
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`truck molds of R/C Bodies each year, for each year during the Term other than 2010.” (Tr. Ex.
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`11 at p. 11 at ¶ 2) (emphasis in original). It also contained a clause that stated that “R/C Vehicle
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`Units must maintain a minimum wholesale cost of One Hundred Dollars ($100.00).” (Tr. Ex. 11
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`at p. 12 ¶ 14) (emphasis in original).
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`Abernethy testified that Feld believed that the Licensing Agreement allowed them to
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`receive royalties on the entire Stampede Lineup (Abernethy Trial Tr. (8/26/2015 at 175:10-25).
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`Mattorano testified that Traxxas believed that the Licensing Agreement only required royalty
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`payments on the Monster Jam models and the Stampede Model 3605/36054 (Mattorano Trial Tr.
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`(8/31/2015) at 3:2-16).
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`During the term of the License Agreement, Traxxas sent Feld quarterly royalty payment
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`reports (Mattorano Trial Tr. (8/31/2015) at 2:14-3:16; Trial Ex. 408). Mattorano testified that in
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`January 2014, Douglas Edwards (“Edwards”) visited Traxxas’ offices to conduct an audit
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`(Mattorano Trial Tr. (8/28/2015) at 9:18-9:25). Abernethy testified that Feld asked for the audit
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`based upon the audit provision language in the License Agreement (Abernethy Trial Tr.
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`(8/26/2015) at 82:19-84:12). Abernethy testified that it was after Edwards conducted his audit
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`that Feld believed Traxxas had not paid Feld its due amount of royalties (Abernethy Trial Tr.
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`(8/26/2015) at 104:11-108:7).
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`LEGAL STANDARD
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`“A motion for judgment as a matter of law… in an action tried by jury is a challenge to
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`the legal sufficiency of the evidence supporting the jury’s verdict.” Ford v. Cimarron Ins. Co.,
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`Inc., 230 F.3d 828, 830 (5th Cir. 2000) (quoting Jones v. Kerrville State Hosp., 142 F.3d 263,
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`265 (5th Cir. 1998) (quoting Harrington v. Harris, 118 F.3d 359, 367 (5th Cir. 1997)) (internal
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`citations omitted). Judgment as a matter of law is only appropriate when “a reasonable jury
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`would not have a legally sufficient evidentiary basis to find for the party on that issue.” FED. R.
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`CIV. P. 50(a). “If the court does not grant a motion for judgment as a matter of law made under
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`Rule 50(a), the court is considered to have submitted the action to the jury subject to the court’s
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`later deciding the legal questions raised by the motion.” FED. R. CIV. P. 50(b). Therefore, a
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`movant may file a renewed judgment as a matter of law, which may include an alternative or
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`joint request for a new trial under Rule 59, “[n]o later than 28 days after the entry of judgment.”
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`Id.. “[A] jury verdict must be upheld, and judgment as a matter of law may not be granted,
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`unless ‘there is no legally sufficient evidentiary basis for a reasonable jury to find as the jury
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`did.’” Fractus, S.A. v. Samsung Elec. Co., Ltd., 876 F. Supp. 2d 802, 813 (E.D. Tex. 2012)
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`(citing Hiltgen v. Sumrall, 47 F.3d 695, 700 (5th Cir. 1995)). The jury’s verdict must be
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`supported by “substantial evidence” in support of each element of the claims. Am. Home
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`Assurance Co. v. United Space All., 378 F.3d 482, 487 (5th Cir. 2004).
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`“A court reviews all evidence in the record and must draw all reasonable inferences in
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`favor of the nonmoving party; however, a court may not make credibility determinations or
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`weigh the evidence, as those are solely functions of the jury.” Fractus, 876 F. Supp. 2d at 813;
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`Case 4:14-cv-00543-ALM Document 188 Filed 04/14/16 Page 8 of 35 PageID #: 7813
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`see Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150-151 (2000). “The moving
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`party is entitled to judgment as a matter of law, ‘only if the evidence points so strongly and so
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`overwhelmingly in favor of the [] moving party that no reasonable juror could return a contrary
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`verdict.’” SSL Servs., LLC v. Citrix Sys., Inc., 940 F. Supp. 2d 480, 486 (E.D. Tex. 2013)
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`(quoting Porter v. Epps, 659 F.3d 440, 445 (5th Cir. 2011) (alteration in original, citation
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`omitted)).
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`“The court may, on motion, grant a new trial on all or some of the issues[.]” FED. R. CIV.
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`P. 59(a)(1). “[I]f the trial judge is not satisfied with the verdict of a jury, he has the right—and
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`indeed the duty—to set the verdict aside and order a new trial.” Smith v. Transworld Drilling
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`Co., 773 F.2d 610, 613 (5th Cir. 1985) (citation omitted). In ruling on a motion for new trial, the
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`jury’s verdict may not be lightly set aside. See Ellis v. Weasler Eng’g, Inc., 258 F.3d 326, 343
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`(5th Cir. 2001) (“[C]ourts ‘must attempt to reconcile the jury’s findings, by exegesis, if
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`necessary, before we are free to disregard the jury’s verdict and remand the case for a new
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`trial.’”). “In considering whether the seemingly inconsistent verdicts may be reconciled, the
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`court must view the evidence in the light most favorable to upholding the jury’s decision by a
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`finding of consistency.” Id; see Hiltgen, 47 F.3d at 701.
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`A Rule 59(e) motion “calls into question the correctness of a judgment.” Templet v.
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`HydroChem Inc., 367 F.3d 473, 478 (5th Cir. 2004) (quoting In re Transtexas Gas Corp., 303
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`F.3d 571, 581 (5th Cir. 2002)). The Fifth Circuit “has held that such a motion is not the proper
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`vehicle for rehashing evidence, legal theories, or arguments that could have been offered or
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`raised before the entry of judgment.” Id. at 479 (citing Simon v. United States, 891 F.2d 1154,
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`1159 (5th Cir. 1990)). A motion to alter or amend judgment may be granted on grounds
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`including: (1) an intervening change in controlling law; (2) the availability of new evidence not
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`Case 4:14-cv-00543-ALM Document 188 Filed 04/14/16 Page 9 of 35 PageID #: 7814
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`previously available; or (3) the need to correct clear error or manifest injustice. See In re
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`Benjamin Moore & Co., 318 F.3d 626, 629 (5th Cir. 2002). Although courts have a great deal of
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`discretion in ruling on a 59(e) motion, it is “an extraordinary remedy that should be used
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`sparingly[.]” Templet, 367 F.3d at 479.
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`Renewed Motion for Judgment as a Matter of Law
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`ANALYSIS1
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`Traxxas requests that the Court enter judgment against Feld for the following reasons:
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`(1) Traxxas’ subsequent conduct is proof of its intent to include only the Stampede Model
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`3605/36054 under the License Agreement; (2) there is no evidence that Traxxas intended to
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`include the Stampede 4x4 VXL or Stampede 4x4 under the License Agreement; (3) Feld did not
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`intend to include either the Stampede 4x4 VXL or the Stampede 4x4 under the License
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`Agreement; (4) the jury’s award creates an improper windfall; (5) the royalty rate clause is
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`triggered by the manufacturing process not the brand; and (6) there is no evidence that
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`Abernethy’s use of “Stamped line” meant the “Stampede line.” (See Dkt. #168).2
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`1 As a preliminary matter, the parties agree that New York law controls this diversity action under the terms of the
`License Agreement. “When the laws of two or more states may apply to the various claims in a federal diversity
`action, the court must apply the choice of law rules of the forum state.” Quicksilver Res., Inc. v. Eagle Drilling,
`LLC, 792 F. Supp. 2d 948, 951 (S.D. Tex. 2011) (citing Mayo v. Hartford Life Ins. Co., 354 F.3d 400, 403 (5th Cir.
`2004)). Therefore, Texas choice of law rules determine which law applies to each claim in the present case.
`Generally, Texas law gives effect to contractual choice of law provisions. Quicksilver Res., Inc., 792 F. Supp. 2d at
`951; see Caton v. Leach Corp., 896 F.2d 939, 942 (5th Cir. 1990); Restatement (Second) of Conflict of Laws § 187
`(1971). Therefore, based upon the language of the License Agreement, the Court will apply New York law when
`determining Traxxas’ Renewed Judgment as a Matter of Law Motion, its Motion for New Trial, and its Motion to
`Amend/Modify the Judgment (Trial Ex. 11 at p. 10 ¶ 25).
`2 Traxxas cites to Kevin M. Ehringer Enterprises, Inc. v. McData Services Corp., 646 F.3d 321 (5th Cir. 2011), for
`the proposition that judgment as a matter law should be granted in favor of Traxxas. 646 F.3d at 327 n. 3.
`However, the Court finds that this case does not support Traxxas’ contention for the following reasons: (1) the case
`involves a fraudulent inducement claim under Texas law, whereas this case involves a breach of contract case under
`New York law; (2) the fraudulent inducement case considered whether evidence of intent to perform the contract
`was provided during trial, which is completely unrelated to the present case. Additionally, Traxxas cites to Catlin
`Specialty Insurance Co. v. QA3 Financial Corp., 36 F. Supp. 3d 336 (S.D.N.Y. 2014), for the proposition that when
`a contract is ambiguous, the fact finder must determine the parties’ intent. 36 F. Supp. 3d 341-42. In the present
`case, the jury verdict form specifically asked the jury to determine if Feld proved the parties’ intent. (Dkt. #162 at p.
`1) (Did Feld Motor Sports, Inc….prove by a preponderance of the evidence, that in addition to Monster Jam
`products and Stampede Model 3605/36054, the parties intended the License Agreement to include the following
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`Jury’s Determination of the Parties’ Intent of the License Agreement
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`First, Traxxas asserts the following: (1) there is no evidence that Traxxas intended to
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`include the Stampede 4x4 or the Stampede 4x4 VXL in the License Agreement; (2) there is no
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`evidence that Feld intended to include the Stampede 4x4 or the Stampede 4x4 VXL in the
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`License Agreement; (3) Traxxas’ subsequent conduct demonstrates its intent to include only the
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`Stampede Model 3605/36054 in the License Agreement; (4) the royalty rate was triggered by the
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`manufacturing process; and (5) Abernethy’s use of “Stamped line” is not the “Stampede
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`Lineup.” (Dkt. #168).3
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`First, Traxxas asserts that there was no evidence presented that Traxxas intended to
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`include the Stampede 4x4 or Stampede 4x4 VXL in the License Agreement. Specifically,
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`Traxxas argues that the Stampede 4x4 VXL was announced to the public on October 21, 2010,
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`almost a month after Traxxas entered into the License Agreement (Dkt. #168 at p. 3). Traxxas
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`also contends that there was no evidence presented that Feld intended to include the Stampede
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`4x4 or Stampede 4x4 VXL in the License Agreement (Dkt. #168 at pp. 5-6).
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`Stampede models when calculating royalties? Answer “Yes” or “No.”). To the extent that Traxxas is arguing that
`the Court erred by not including a contra proferentem instruction, Traxxas did not argue that one was needed at the
`time of trial or during the jury charge conference. Additionally, the Court finds that based upon the reading of
`Catlin Speciality Insurance Co., the instruction would not apply in the present case. See 36 F. Supp. 3d at 342.
`(“[C]ontra proferentem did not apply in this case because QA3 was a sophisticated party that negotiated the terms of
`the insurance policy. Contra proferentem does not apply where contracts are negotiated by sophisticated parties of
`equal bargaining power.” (citations omitted)). In the present case, both Feld and Traxxas were sophisticated parties;
`therefore, the contra proferentem instruction would not apply.
`3 As a preliminary matter, Traxxas argues that “[i]n order to find in favor of [Feld], the jury was required to find that
`[Feld] proved beyond a preponderance of the evidence that Traxxas and [Feld] intended the License Agreement to
`not only include the Stampede, but also the Stampede VXL, the Nitro Stampede, the Stampede 4x4 VXL, and the
`Stampede 4x4.” (Dkt. #168 at pp. 1-2). The Court finds that Traxxas misstates Feld’s burden of proof. A plaintiff’s
`burden is to prove its case by a preponderance of the evidence, not beyond one. The jury was likewise correctly
`instructed on Plaintiff’s burden by the Court in the Final Jury Charge, which stated the following:
`Plaintiff Feld Motor Sports, Inc….has the burden of proving its case by a preponderance of the
`evidence. To establish by a preponderance of the evidence means to prove something is more
`likely so than not so. If you find that Feld Motor Sports has failed to prove any element of its
`claim by a preponderance of the evidence, then it may not recover on that claim.
`(Dkt. #160 at p. 2).
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`Feld asserts that the evidence of the parties’ negotiations, as well as the License
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`Agreement itself, demonstrates that the parties’ intent was to include the entire Stampede Lineup
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`within the royalty rate calculation, including the Stampede 4x4 and the Stampede 4x4 VXL,
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`which were not in production at the time of entering the License Agreement (See Dkt. #173 at
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`pp. 4-6). Feld also asserts that “the jury heard evidence that definitively proved the parties’
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`intent to include every Stampede model when calculating royalties.” (Dkt. #173 at p. 2).
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`To recover for breach of contract under New York law, a plaintiff must prove (1) the
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`existence of a contract between Plaintiff and Defendant; (2) adequate performance of Plaintiff’s
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`obligations; (3) breach of the contract by Defendant; and (4) damages to Plaintiff caused by
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`Defendant’s breach. Casolaro v. Armstrong, No. 10-CV-4276 (PKC), 2014 WL 7370025, at *5
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`(E.D.N.Y. Dec. 29, 2014) (“Casolaro I”); see Diesel Props S.r.l. v. Greystone Bus. Credit II LLC,
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`631 F.3d 42, 52 (2d Cir. 2011); Casolaro v. Armstrong, No. 10-cv-4276(DRH)(ETB), 2012 WL
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`6093778, at *2 n. 1 (E.D.N.Y. Dec. 7, 2012) (“Casolaro II”).
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`
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`“Under New York law ‘the initial interpretation of a contract is a matter of law for the
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`court to decide.’ Included in this initial interpretation is the threshold question of whether the
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`terms of the contract are ambiguous.” Maniolos v. United States, 741 F. Supp. 2d 555, 566
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`(S.D.N.Y. 2010) (quoting Alexander & Alexander Serv. Inc. v. These Certain Underwriters at
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`Lloyd’s, 136 F.3d 82, 86 (2d Cir. 1998) (citations omitted); accord, e.g., W.W.W. Assoc., Inc. v.
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`Giancontieri, 566 N.E.2d 639, 642 (N.Y. 1990) (“Whether or not a writing is ambiguous is a
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`question of law to be resolved by the courts.”); Sutton v. E. River Sav. Bank, 435 N.E.2d 1075,
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`1077 (N.Y. 1982) (“the threshold decision on whether a writing is ambiguous is the exclusive
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`province of the court.”). Therefore, “[i]n reviewing a written contract, a trial court’s primary
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`objective is to give effect to the intent of parties as revealed by the language they chose to use.”
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` 11
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`Case 4:14-cv-00543-ALM Document 188 Filed 04/14/16 Page 12 of 35 PageID #: 7817
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`Casolaro I, 2014 WL 7370025, at *5 (quoting Seiden Assoc., Inc. v. ANC Holdings, Inc., 959
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`F.2d 425, 428 (2d Cir. 1992) (citing Slatt v. Slatt, 477 N.E.2d 1099, 1100 (N.Y. 1985)).
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`Therefore, under New York law, “the Court must first determine whether the language of the
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`written contract is clear or ambiguous.” Id.; see Seiden Assoc., Inc., 989 F.2d at 429; see also JA
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`Apparel Corp. v. Abboud, 568 F.3d 390, 396 (2d Cir. 2009) (“the question of whether a written
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`contract is ambiguous is a question of law for the court.”).
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`“The cardinal principal for the construction and interpretation of [ ] contracts…is that the
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`intentions of the parties should control.” SR Int’l Bus. Ins. Co., Ltd. v. World Trade Ctr. Prop.,
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`LLC, 467 F.3d 107, 125 (2d Cir. 2006) (quoting Newmont Mines Ltd. v. Hanover Ins. Co., 784
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`F.2d 127, 135 (2d Cir. 1986)). “Under New York law, ‘[w]hen the intent of the parties can fairly
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`be gleaned from the face of the instrument, the plain words of the contract govern, and matters
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`extrinsic to the agreement may not be considered.’” In re Holocaust Victim Assets Litig., 256 F.
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`Supp. 2d 150, 153 (E.D.N.Y. 2003) (quoting RJE Corp. v. Northville Indus. Corp., 198 F. Supp.
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`2d 249, 262 (E.D.N.Y. 2002) (internal quotation marks omitted)). However, if the contract’s
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`language is “susceptible to differing interpretations, each of which may be said to be as
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`reasonable as another…the meaning of the words becomes an issue of fact[.]” Casolaro I, 2014
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`WL 7370025, at *5 (quoting Seiden Assocs., 959 F.2d at 428 (citations omitted)); see In re
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`Holocaust Victim Assets Litig., 256 F. Supp. 2d at 153 (“A contract is ambiguous where its terms
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`suggest more than one meaning when viewed objectively by a reasonably knowledgeable person
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`who has examined the context of the entire integrated agreement.”) (citations omitted).
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`To resolve an ambiguity, the Court considers extrinsic evidence to determine the parties’
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`intent. Casolaro I, 2014 WL 7370025, at *7; see JA Apparel Corp., 568 F.3d at 397 (“[W]here
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`the contract language creates ambiguity, extrinsic evidence as to the parties’ intent may properly
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` 12
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`Case 4:14-cv-00543-ALM Document 188 Filed 04/14/16 Page 13 of 35 PageID #: 7818
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`be considered.”). “Where there is such extrinsic evidence, the meaning of an ambiguous contract
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`is a question of fact for the factfinder.” JA Apparel Corp., 568 F.3d at 397. “Courts have
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`considered testimony offered by the parties, the parties’ course of conduct and dealing, and post-
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`contract conduct to determine the parties’ intent.” Casolaro I, 2014 WL 7370025, at *7; see
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`Diesel Props. S.r.l., 631 F.3d at 51 (stating factfinder may consider party testimony); CDR-
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`Wantagh, Inc. v. Shell Oil Co., No. 07-CV-4497, 2011 WL 6371582, at *10 (E.D.N.Y. Dec. 20,
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`2011) (“To determine intent, the court should look to the contract as a whole and the parties’
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`conduct, as well as any evidence of surrounding facts and relevant circumstances, industry
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`custom and practice, and course of dealing.”)(citation omitted).
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`As a preliminary matter, the Court has found the License Agreement to be ambiguous,
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`and thus, the meaning of the License Agreement is a question for the trier of fact. See JA
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`Apparel Corp., 568 F.3d at 397; see also Dkt. #160 at pp. 6-7; Dkt. #118 at p. 4). At trial,
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`Abernethy and DeWitt4, who were negotiators for Feld and Traxxas, testified that the companies’
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`relationship was designed to increase sales of the Stampede brand, not one individual model
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`(DeWitt Trial Tr. at 94:11-18; Abernethy Trial Tr. (8/26/2015) at 5:19-6:4). Abernethy testified
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`that he intended all models to be included because “a Stampede is a Stampede is a Stampede.”
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`(Abernethy Trial Tr. (8/26/2015) at 157:3-5; see Abernethy Trial Tr. (8/26/2015) at 39:4
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`(“Stampede is anything that’s branded as Stampede.”); 156:19-20 (“I didn’t know to distinguish
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`each one as individual vehicles.”). DeWitt testified that the Traxxas negotiators were “talking
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`about the Stampede line” and “none of us [referring to Jenkins, Mattorano, Poteet, and DeWitt]
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`4 In its motion, Traxxas describes DeWitt as “a disgruntled, former Traxxas employee who admittedly hates Traxxas
`and its leadership.” (Dkt. #168 at p. 3). However, the Court finds that Traxxas’ characterization of DeWitt is
`irrelevant to its judgment as a matter of law motion because the jury, not the Court, determines credibility of the
`witnesses, and the weight to give DeWitt’s testimony. See Fractus, S.A., 876 F. Supp. 2d at 813 (“A court reviews
`all evidence in the record and must draw all reasonable inferences in favor of the nonmoving party; however, a court
`may not make credibility determinations or weigh the evidence, as those are solely functions of the jury.”).
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`Case 4:14-cv-00543-ALM Document 188 Filed 04/14/16 Page 14 of 35 PageID #: 7819
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`that I recall ever spoke of any of the breakdowns of the vehicle.” (DeWitt Trial Tr. at 97:11-21).
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`Additionally, Jenkins5 testified that through its relationship with Feld, Traxxas was hoping to be
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`able to sell more of its product, not just a particular model (Jenkins Trial Tr. at 52:16-25).
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`Additionally, the trial record is replete with voluminous testimony and evidence that the
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`parties intended to include the entire Stampede Lineup within the License Agreement. For
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`example, the parties’ discussions indicated that they were negotiating over an entire brand, not a
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`specific model. During negotiations, Abernethy repeatedly referred to the “Stamped line.”6
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`(Trial Ex. 22) (“This takes into consideration that Traxxas will be converting the Stamped line of
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`R/C vehicles 100% to Monster Jam branded vehicles….If the Stamped line off [sic] R/C vehicles
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`does not currently sell 30,000 units per year, then we’ll need to re-adjust.”); (Trial Ex. 24) (“The
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`Stamped line of R/C’s will be converted to MJ branded vehicles.”); (Trial Exs. 18, 25).7 Traxxas
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`did not dispute this description. (See Abernethy Trial Tr. (8/26/2015) at 39:11-14 (“[Q.] Had
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`you heard anything from Traxxas that had walked that [Abernethy’s reference to Stampede line]
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`back and said we’re not talking about a Stampede line anymore? A. No, never.”); see also Trial
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`5 In its reply brief, Traxxas argues that Jenkins did not partici