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Caravan Ingredients, Inc. v. Azo, Inc.

United States District Court, D. Kansas

April 24, 2015

Caravan Ingredients, Inc., Plaintiff,
v.
AZO, Inc., Defendant.

MEMORANDUM AND ORDER

J. THOMAS MARTEN, District Judge.

By the present Order the court addresses what is essentially the third wave of motions in this action by Caravan Ingredients, Inc. alleging that a defective screen manufactured by former defendant Sefar, Inc. and sold by defendant AZO, Inc. caused contamination of flour produced by the plaintiff. The court has addressed the parties' earlier motions by two separate Orders (Dkt. 93, 131), the factual findings and legal conclusions of which are incorporated herein. The present Order is further issued on an expedited basis to assist in the parties' scheduled mediation of the matter on April 27, 2015. Fuller exploration of the issues involved in the present wave of motions may issue at a later date.

1. Amount of Damages

Caravan seeks summary judgment as to the amount of its damages. Specifically, it seeks a determination that the failure of the screen on the sifter required it to recall the flour produced from the sifter. Further, it seeks a determination that it suffered $3, 416, 901.36 in damages as a result of the recall of the flour. The damages reflect the costs of claims by Caravan's customers, as well as the freight costs to return contaminated flour and to ship re-ordered flour. Additionally, acknowledging AZO's defense which alleges that Caravan should have detected the failure of the wire screen earlier and that its damages should therefore be limited to a recall of the product during the first week of use (January 9 to 16, 2012), Caravan seeks a determination that its damages for that first week are $1, 169, 388.00. The court set forth the controlling summary judgment standards in its previous Orders.

The facts set forth in Caravan's motion are largely uncontroverted. Indeed, of the 28 paragraphs of uncontroverted fact submitted by plaintiff, AZO explicitly admits 25. Of the remaining three (¶¶ 2, 26, and 28), AZO offers responses to two which fail to effectively controvert the requested finding. Thus, Caravan alleges that the screen fragments located in the flour came from the failed Sefar-AZO screen. AZO denies the requested finding, but the underlying testimony of AZO's own expert acknowledges that "it's more probable than not that the Canada Bread screen fragment came from the destroyed screen."

Caravan alleges that "AZO has not produced any witness, or evidence challenging the damage totals set forth above and in the exhibits attached hereto." AZO's response does not deny this contention. Rather, the defendant "admits that it has not produced any evidence challenging Caravan's damage totals to date." (Dkt. 137, at 11).

However, AZO does argue that Caravan has overstated the amount of damages for the first week of production ( id. at 12-16), and that the damages for the first week are $932, 305.00. AZO premises this contention based on its own separate assessment of the figures submitted to Caravan in connection with its motion for partial summary judgment on damages. AZO recalculated the amounts due for the costs of claims

Caravan replies to AZO by arguing that AZO's calculations should be rejected because they were not previously disclosed pursuant to FED.R.CIV.PR. 26(a). Further, it argues that AZO's calculations lack foundation. The dispute also has generated both additional motions (Caravan moving to strike AZO's damages calculations, attached as Exhibits A - D to its Reply, and AZO moving for leave to file a surreply) and a direct dispute of fact between counsel.

AZO argues that there is no reason why it should have previously produced separate calculations as to Caravan's first week of damages, since Caravan itself only set forth these calculations in the motion for summary judgment on damages. Caravan states that this is false.

Both parties dispute whether Caravan's Exhibit 12 in support of its motion, a listing of various damages, was tendered to AZO at an earlier date. Caravan has submitted an affidavit stating that the exhibit was "one of the documents physically handed over to counsel for AZO and former Defendant, Sefar... during the deposition." (Dkt. 143-1, ¶ 5). AZO has submitted an affidavit from one of its attorneys affirmatively stating that the exhibit "was not produced or marked as an exhibit" during the deposition. (Dkt. 141-1, ¶ 3). Counsel further states that the exhibit "was not produced in Caravan's Initial Rule 26 Disclosures, any supplemental Rule 26 Disclosures, any bates-stamped documents produced by Caravan, included in any Caravan exhibit lists, or referenced in the Pre-Trial Order." (Id. at ¶ 4).

The court denies the motion to strike and grants leave to surreply. Although AZO's damages lack separate expert support, they appear to be fairly straightforward reviews of Caravan's own damages calculations. The plaintiff's foundation arguments lack merit, given the fact that the only support for its first week damages in its summary judgment memorandum (Dkt. 123, ¶ 28) is simply a spreadsheet, otherwise entirely lacking in explanation or foundation.

The court need not resolve the direct factual dispute between counsel as to whether Exhibit 12 was physically presented at the deposition. Exhibit 12 is a single-page set of calculations. The document has no formal heading, and could have easily been lost amidst the other paper presented during the course of the deposition. The exhibit could have been tendered to counsel for Sefar and not conveyed to AZO.

Most importantly, there is no indication that Caravan ever formally presented these calculations to AZO as a statement of its claims for damages until the motion for summary judgment. The court finds that AZO's recalculations of these figures do not require expert testimony, that the defendant's recalculations are not lacking in foundation, and finds that a material issue of fact exists as to Caravan's damages during the first week of production.

The plaintiff's motion is otherwise granted.

2. AZO Defense Paragraph 2

Caravan has moved for summary judgment as to Paragraph 2 of AZO's Comparative Fault Defense, which asserts that Sefar caused the accident by making a defective screen, as well as any claim by AZO that the accident was caused by the screen frame, rather than the screen itself. In its Response, AZO agrees that it will not assert that the screen frame caused the ...


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