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Powertrain, Inc. v. MA

United States District Court, N.D. Mississippi, Aberdeen Division

August 11, 2014

POWERTRAIN, INC., a Mississippi corporation, Plaintiff,
JOYCE MA, Defendant.


GLEN H. DAVIDSON, Senior District Judge.

Presently before the Court are Counter defendant PowerTrain, Inc.'s motion for summary judgment [202] on Counter plaintiff Joyce Ma's counter claims and Defendant Joyce Ma's motion for summary judgment [211] on Plaintiff PowerTrain, Inc.'s claims. Upon due consideration, the Court finds that Counter defendant PowerTrain, Inc.'s motion for summary judgment [202] should be granted, and Defendant Joyce Ma's motion for summary judgment [211] should be denied.

A. Factual and Procedural Background

Plaintiff PowerTrain, Inc. ("PowerTrain") brings this diversity action against Defendant Joyce Ma ("Ma"), [1] a California citizen.[2] The parties apparently agree that Mississippi law governs the action. PowerTrain alleges that Ma, both individually and as the alter ego of Best Machinery & Electrical, Inc., imported to the United States from China small engines that violated the EPA's emission and labeling standards and were not covered by certificates of confonnity; PowerTrain purchased 78, 284 of the engines (the "subject engines") from Ma; PowerTrain sold and/or distributed the subject engines to Wood Sales, Inc. for further resale in the United States by Wood Sales, Inc. and/or Tool Mart, Inc.; and the EPA detennined that the subject engines violated the Clean Air Act and regulations promulgated thereunder. PowerTrain alleges that as a direct and proximate result of Ma's sale of the subject engines to PowerTrain, the United States filed civil actions against PowerTrain for injunctive relief and the assessment of civil penalties for these violations. A consent decree/judgment was entered against PowerTrain for civil penalties in the amount of $2, 000, 000 plus interest and ordering PowerTrain to export or pennanently destroy the certain engines that were in violation of federal law and implement an emission off-set project. PowerTrain asserts causes of action against Ma for negligence/wantonness, breach of contract, breach of warranty, and piercing-the-corporateveil/alter ego liability.

Ma asserts counter claims against PowerTrain for breach of contract, breach of fiduciary duty, fraud, negligent misrepresentation, and constructive fraud. Ma alleges that on or about December 19, 2003 PowerTrain and others filed a complaint against American Honda Motor Co. in a case styled Powertrain, Inc., et al., v. American Honda Motor Co., et al., No. 1:03-cv-668, 2007 WL 2254346 (N.D. Miss. Aug. 2, 2007) (the " Honda case"), Ma's Counter claims [34] ¶ 5, a case concerning whether PowerTrain and others had illegally copied American Honda Motor Co.'s trade dress. Ma alleges that shortly thereafter, Oneal Wood, the owner of PowerTrain, informed Ma that PowerTrain needed her help in the Honda case and offered to represent her. Id. ¶ 6. Ma further alleges that she informed Oneal Wood that she was afraid of being personally involved in the Honda case. Id. ¶ 7. Ma avers that Oneal Wood "offered to Ma that Power[T]rain would do no harm to Ma and represent Ma if [American Honda Motor Co.] were to sue Ma and if Best [Machinery & Electrical, Inc.] would refuse to pay Ma's attorney[']s fees." Id. Ma says she accepted the offer. Id. ¶ 9. William H. Shawn, Esquire, lead counsel for PowerTrain and others in the Honda case, then allegedly "prepared Ma for and represented Ma in the deposition of Ma by [American Honda Motor Co.], " while reassuring her that PowerTrain would do no harm to her. Id. ¶¶ 9-10. "[Jeffrey] Wood, son of Oneal Wood and an employee of Power[T]rain, further promised Ma that if [American Honda Motor Co.] were to involve Ma personally in the [ Honda ] case, Power[T]rain would file papers with the Court to dismiss Ma." Id. ¶ 11. Ma avers that she cooperated fully with PowerTrain and performed her part of the bargain in the Honda case. Id. ¶ 12. Ma further avers that PowerTrain lost the Honda case; that American Honda Motor Co. turned its material over to the EPA which caused the EPA to file a civil complaint against PowerTrain; and that eventually PowerTrain settled with the EPA. Id. ¶¶ 13-14. Subsequently, on May 3, 2011, PowerTrain, through its local counsel Duncan L. Lott, filed the instant complaint against Ma.[3] According to Ma, the filing of the instant lawsuit constituted a breach of the alleged contract entered into by Ma and PowerTrain. Id. ¶ 15.

In the midst of the proceedings in the instant case, Ma sought and was granted leave to file third-party claims against William H. Shawn and ShawnCoulson, LLP. In her third-party complaint and amended third-party complaint, Ma averred that the Third-party Defendants represented her in the earlier Honda case and committed legal malpractice and negligent misrepresentation when they, inter alia, failed to put in writing an oral do-no-harm agreement between Ma and PowerTrain. Ma further alleged that that failure proximately caused the instant lawsuit to be brought against Ma. Her factual allegations in support of her third-party claims almost exactly mirrored those in her counter claims against PowerTrain. This Court subsequently dismissed the third-party claims on a motion by the Third-Party Defendants, finding that Ma had failed to adequately allege both the existence of a lawyer-client relationship and proximate cause, and thus that Ma had failed to state a claim for legal malpractice against the Third-Party Defendants. See Ct.'s Order [234] & Mem. Op. [235]. The Court further found that Ma had failed to state a claim for negligent misrepresentation against the Third-Party Defendants. Therefore, the Court dismissed Ma's third-party claims against William H. Shawn and ShawnCoulson, LLP.

The Court now has before it two motions for summary judgment: one filed by PowerTrain with respect to Ma's counter claims against PowerTrain, and one filed by Ma with respect to PowerTrain's claims against Ma.

B. Summary Judgment Standard

Summary judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). See FED. R. CIV. P. 56(a); Weaver v. CCA Indus. Inc., 529 F.3d 335, 339 (5th Cir. 2008). The rule "mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a sufficient showing to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp., 477 U.S. at 322, 106 S.Ct. 2548.

The party moving for summary judgment bears the initial responsibility of informing the Court of the basis for its motion and identifying those portions of the record it believes demonstrate the absence of a genuine dispute of material fact. See id. at 323, 106 S. ct. 2548. Under Rule 56(a), the burden then shifts to the nonmovant to "go beyond the pleadings and by... affidavits, or by the depositions, answers to interrogatories, and admissions on file, ' designate specific facts showing that there is a genuine issue for trial.'" Id. at 324, 106 S.Ct. 2548; Littlefield v. Forney Indep. Sch. Dist., 268 F.3d 275, 282 (5th Cir. 2001); Willis v. Roche Biomedical Labs., Inc., 61 F.3d 313, 315 (5th Cir. 1995).

Where the parties dispute the facts, the Court must view the facts and draw reasonable inferences in the light most favorable to the plaintiff. Scott v. Harris, 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007) (internal citations omitted). "However, a nonmovant may not overcome the summary judgment standard with conclusional allegations, unsupported assertions, or presentation of only a scintilla of evidence." McClure v. Boles, 490 F.Appx. 666, 667 (5th Cir. 2012) (per curiam) (citing Hathaway v. Bazany, 507 F.3d 312, 319 (5th Cir. 2007).

With the foregoing standard in mind, the Court examines first PowerTrain's motion for summary judgment on the counter claims and then Ma's motion for summary judgment on the claims.

C. PowerTrain's Motion for Summary Judgment on Ma's Counter claims

PowerTrain contends in its motion for summary judgment that the Court should dismiss Ma's counter claims, because Ma's counter claims are barred by the applicable statute of limitations and by the statute ...

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