Opinion ID: 2972014
Heading Depth: 2
Heading Rank: 1

Heading: Eaton’s claimed damages.

Text: At trial, Eaton submitted a “claim summary,” which alleged that it incurred $3,872,102 in costs associated with the defective Montevideo motors. Michael Crown, Eaton’s Senior Financial Analyst, was the only witness to testify on damages. Crown testified that Eaton incurred expenses of $662,073 in dealing with the 159 dysfunctional DCBMs, including the cost of fixing the STMs with the dysfunctional DCBMs and the losses Eaton incurred because the defective DCBMs had ruined some STMs. Crown also testified that Eaton incurred costs for labor and materials associated with retrofitting the STMs ($2,068,772); providing Boeing with functioning STMs to use while Eaton performed the retrofit ($438,048); redesigning the DCBM ($400,860); additional personnel costs ($109,309); and Montevideo’s failure to install in the DCBMs “spring washers” that were required by Eaton’s design ($193,040). B. Montevideo’s violations of the district court’s in limine rulings. On October 1, 2002, Eaton filed a Motion in limine based on FED. R. EVID. (“FRE”) 401, 402, and 403, which sought to exclude evidence and argument concerning Eaton’s relationship with Boeing and Montevideo’s allegations that Eaton had acted in bad faith or was contributorily negligent. During the Final Pretrial Conference, the district court ruled that “there appears to be some testimony as to Boeing’s relationship with Eaton as it pertains to the bearings and the testings -3- of this motor” that is relevant to whether Montevideo’s DCBM was merchantable as warranted. However, “any other problems with the STMs of Eaton’s and Boeing’s is not relevant,” because “Boeing’s contract with Eaton is not per se relevant.” The district court also ruled that Eaton’s alleged negligence and assumption of risk were not relevant and that Montevideo could not use Eaton’s failure to perform tests required by Boeing as “a sword.” Finally, the district court ruled that evidence of payments by Boeing to Eaton was irrelevant and “highly prejudicial” and forbade Montevideo from arguing that Eaton acted “in bad faith.” The record demonstrates that Montevideo’s counsel violated the in limine rulings on numerous occasions, including repeatedly, during cross-examination of various witnesses, using questions and portions of depositions indicating that the STMs had problems unrelated to the DCBMs; suggesting during closing argument that Eaton had acted in bad faith; and questioning witnesses regarding payments made from Boeing to Eaton. C. Jury instructions. At the conclusion of Montevideo’s case, Eaton submitted proposed jury instructions listing a number of defenses that the jury could not properly consider, including Eaton’s assumption of risk, Eaton’s failure to test the DCBMs, STM malfunctions unrelated to Montevideo’s DCBM, and Eaton’s bad faith. The court refused to give these instructions, and instead instructed the jury on the elements of breach of express and implied warranty. Eaton did not object to the instructions actually given by the court or to the jury verdict form provided to the jury. At the conclusion of the evidence, the jury found Montevideo liable for breach of express and implied warranties and returned a verdict of $650,000 in damages in favor of Eaton. Eaton filed a FED. R. CIV. P. 59 motion for a new trial on damages on grounds that 1) Eaton had been prejudiced -4- by Montevideo’s violation of pretrial rulings; 2) the jury’s verdict on damages was against the weight of the evidence; and 3) the district court’s jury instructions failed to instruct the jury on matters that could not properly be used by Montevideo as defenses. The district court denied this motion on January 2, 2003, and Eaton filed a notice of appeal. On February 20, 2003, the district court denied Eaton’s 28 U.S.C. § 1927 motion for sanctions against Montevideo, which was likewise based on Eaton’s claims of prejudice as a result of Montevideo’s violation of pretrial rulings. Eaton’s timely appeal followed on March 11, 2003.