Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-05098/USCOURTS-cand-3_04-cv-05098-32/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

TK POWER, INC.,

Plaintiff,

v.

TEXTRON, INC.,

Defendant.

___________________________________/

No. C-04-5098 EMC

ORDER DENYING DEFENDANT’S

MOTION FOR JUDGMENT AS A

MATTER OF LAW ON NEGLIGENT

MISREPRESENTATION CLAIM AND

ALTERNATIVE MOTION TO ALTER

OR AMEND JUDGMENT

(Docket No. 227)

Defendant’s motion came on for hearing on June 14, 2006. Having considered the papers

filed in support of and in opposition to the motion, the record in this case, and the argument of

counsel, and good cause appearing therefor, the Court hereby DENIES the motion.

The issue presented by Defendant’s motion is not whether the jury should have found in

Defendant’s favor on the negligent misrepresentation claim, but whether a reasonable jury could

have found for the Plaintiff – whether there was a “legally sufficient evidentiary basis for a

reasonable jury to find” for the Plaintiff. Fed. R. Civ. P. 50(a). The parties do not dispute that the

standard is identical to the summary judgment standard under Rule 56. Moore’s Federal Practice

(3d ed.), Section 50.06[5][b]. While the evidence in support of the plaintiff must be more than a

“mere scintilla,” Chisholm Bros. Farm Equip. Co. v. International Harvester Co., 498 F.2d 1137,

1140 (9th Cir.), cert. denied, 419 U.S. 1023 (1974), all the evidence and all reasonable inferences

which may be drawn from the evidence must be viewed in a light most favorable to the non-moving

party. Janich Bros., Inc. v. The American Distilling Co., 570 F.2d 848, 853 (9th Cir. 1977). 

Case 3:04-cv-05098-EMC Document 239 Filed 07/18/06 Page 1 of 3
United States District Court

For the Northern District of California

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Moreover, the court is not free to weigh the party’s evidence at trial, nor to pass on the credibility of

the witnesses. Nelson v. Silverman, 1995 U.S. Dist. LEXIS 12562 (S.D. Cal. 1995) at *4. 

Viewing the evidence and inferences most favorably to TK Power, the Court concludes there

is a legally sufficient basis for a reasonable jury to find for TK Power on the negligent

misrepresentation claim. As clarified by the papers, the alleged misrepresentation by Textron/E-ZGO is John Cochoy’s statement that “they definitely decided they were going with an on-board

charger.” The representation that a decision had been made is an assertion of a present or past fact,

not a future promise or prediction, and is therefore actionable. Tarmann v. State Farm Mut. Aut. Ins.

Co., 2 Cal.App.4th 153, 158 (1991).

The question is whether there is sufficient evidence that said misrepresentation was

inaccurate (and thus from which a jury may infer that Mr. Cochoy did not have a reasonable basis

for making the representation). In its papers and at the hearing herein, TK Power pointed to the

following facts:

1. It took more than a year after Mr. Cochoy’s statement for Textron/E-Z-GO to enter

into a contract to build the prototype.

2. When it finally issued the purchase order, Textron/E-Z-GO agreed only to pay for the

development of the prototype; it did not agree or commit to purchasing the beta units or the ultimate

mass production (even on a conditional or contingent basis).

3. It only devoted one staff person to the project, and he was often pulled from the

project to work on other matters.

4. There was a lengthy delay in issuing the purchase order after Textron/E-Z-GO told

TK Power it had been selected to develop the charger, and there was an additional delay in issuing

the payment.

5. Textron/E-Z-GO decided to review all aspects of the charger, including those which

seemed fundamental to the project in 2003 (including cost efficiency, safety concerns, and

marketing analysis).

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United States District Court

For the Northern District of California

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As TK Power points out, subsequent failure to perform or conduct inconsistent with an

earlier promise or representation can warrant an inference that a party did not intend to perform

when they promised. Longway v. Newbery, 13 Cal.2d 603, 611-12 (1939). On the other hand, an

inference of fraud is more compelling when the failure to perform a promise is immediate. Kaylor v.

Crown Zellerbach, Inc., 643 F.2d 1362, 1368 (9th Cir. 1981). Moreover, initial performance in

accordance with a promise negates an inference of fraud. Id. Here, Textron/E-Z-GO can argue that

the 2003 review is remote and came only after its good faith effort to development the charger – it

did contract and pay for the development of the prototype. If TK Power were to rely solely on the

2003 review, judgment as a matter of law might be warranted. However, TK Power has cited a

number of facts, in addition to the 2003 review.

The Court concludes that under the lenient and favorable standards applicable under Rule

50(b), Textron/E-Z-GO is not entitled to judgment as a matter of law. Since no judgment has been

entered, the Court denies the motion to amend the judgment under Rule 59(e). 

This Order disposes of Docket No. 227.

IT IS SO ORDERED.

Dated: July 18, 2006

 EDWARD M. CHEN

United States Magistrate Judge

Case 3:04-cv-05098-EMC Document 239 Filed 07/18/06 Page 3 of 3