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LEI Packaging, LLC v. Emery Silfurtun Inc.

United States District Court, D. Minnesota

August 16, 2017

LEI Packaging, LLC, Plaintiff,
v.
Emery Silfurtun Inc., Samey ehf, and Hedinn Ltd., Defendants.

          Peter C. Hennigan, Esq., William Z. Pentelovitch, Esq., and Sarah A. Horstmann, Esq., Maslon LLP, Minneapolis, MN, on behalf of Plaintiff.

          MEMORANDUM OPINION AND ORDER

          ANN D. MONTGOMERY U.S. DISTRICT JUDGE

         I. INTRODUCTION

         This matter is before the undersigned United States District Judge for a ruling on the damages claim of Plaintiff LEI Packaging, LLC (“LEI”). After being granted Default Judgment [Docket No. 135] against Defendant Samey ehf (“Samey”), LEI's earlier request for damages was denied as premature. See Mem. Op. Order [Docket No. 155]. The claims against Hedinn are now resolved, and for the reasons set forth below, LEI's renewed request for damages against Samey is granted.

         II. BACKGROUND[1]

         LEI seeks judgment against Samey in the amount of $4, 454, 873.43 for damages related to LEI's purchase of a Rotary Quattro TO Pulp Moulding Machine (the “Machine”). This is LEI's second effort to secure a money judgment against Samey after Default Judgment was entered against Samey on November 17, 2016. In a March 22, 2017 Memorandum Opinion and Order [Docket No. 155], the Court denied as premature LEI's initial attempt to obtain a sum certain judgment because co-Defendant Hedinn Ltd. (“Hedinn”) remained an active participant in the case.

         On April 11, 2017, LEI agreed to dismiss all claims against Hedinn. See Stipulation [Docket No. 156]. Now, with Hedinn's case resolved, LEI renews its motion seeking judgment against Samey.

         A. Samey's History in this Lawsuit

         1. Samey's Dismissal Motions are Denied

         Samey was named in the original lawsuit LEI filed on April 20, 2015 in Minnesota state court. See Compl. [Docket No. 1-1]. On July 17, 2015, Samey (and Hedinn) filed the first of three motions to dismiss. See Mot. Dismiss [Docket No. 18]. This Motion was made moot by the Amended Complaint [Docket No. 30] LEI filed on August 7, 2015.

         LEI and Defendant Emery Silfurtun Inc. (“Emery”) agreed to arbitrate their claims, but Samey and Hedinn refused to participate in arbitration. In response, LEI served upon Samey and Hedinn the Amended Complaint and Demand for Arbitration, seeking an order compelling Samey and Hedinn to participate in arbitration. Samey's (and Hedinn's) second Motion to Dismiss [Docket No. 34] followed, which prompted LEI to file a Motion to Compel Arbitration [Docket No. 41]. On December 22, 2015, both Motions were denied. See Mem. Op. Order [Docket No. 56].

         Samey then sought to stay proceedings pending the resolution of the ongoing arbitration between LEI and Emery. See Letter [Docket No. 61]. That too was denied. See Letter [Docket No. 64].

         On February 23, 2016, LEI filed its Second Amended Complaint [Docket No. 66], alleging that Samey designed, manufactured, and planned the installation of the electrical controls for the Machine. Second Am. Compl. ¶ 37. LEI further alleged that a Samey employee served as the “Project Manager” for the Machine, and that Samey was directly responsible for problems with the Machine's robotic transfer system. Id. ¶¶ 21, 39, 48. Based upon these and other allegations, LEI asserted third-party beneficiary claims against Samey for breaching its contract with Emery to design, manufacture, install, and maintain the Machine as required by its contract with Emery. Id. ¶¶ 58-62. LEI also asserted direct claims against Samey for breaches of the implied warranties of merchantability and for fitness for a particular purpose. Id. ¶¶ 63-73.

         On March 15, 2016, Samey (and Hedinn) filed a Motion to Dismiss [Docket No. 79] the Second Amended Complaint. Samey argued that 1) the Court lacked personal jurisdiction over Samey, 2) Minnesota was an improper venue, 3) there was no basis for joint and several liability, and 4) the Second Amended Complaint failed to state plausible causes of action. On August 16, 2016, Samey's third Motion to Dismiss was denied in its entirety. See Mem. Op. Order [Docket No. 105].

         2. Samey Does Not Defend the Case

         On September 8, 2016, counsel for Samey informed LEI's counsel that Samey would not answer the Second Amended Complaint. Hennigan Decl. [Docket No. 120] ¶ 11. On September 9, 2016, counsel for Samey filed a Motion to Withdraw [Docket No. 113]. The motion was granted on October 11, 2016. See Order [Docket No. 132].

         On September 15, 2016, LEI Applied for Entry of Default [Docket No. 119], which the Clerk of Court entered on September 26, 2016. See Entry Default [Docket No. 122].

         B. LEI's Damages Claims Against Samey

         Although there are three defendants in this case, LEI contends that Samey bears responsibility for the majority of the Machine's failures. LEI bases its contention on Samey's extensive involvement with the project overall, as well as Samey's exclusive responsibility for significant components of the Machine that failed to perform to specification.

         1. History of Emery and ...


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