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Titan Atlas Manufacturing Inc. v. Sisk

United States District Court, W.D. Virginia, Abingdon Division

March 4, 2014

TITAN ATLAS MANUFACTURING INC. and STRATA MINE SERVICES, LLC, Plaintiffs,
v.
FRANK A. SISK and PRECISION MINE REPAIR, INC., Defendants. FRANK A. SISK and PRECISION MINE REPAIR, INC., Plaintiffs,
v.
TITAN ATLAS MANUFACTURING INC. and STRATA MINE SERVICES, INC., Defendants.

Mark D. Loftis, Woods Rogers PLC, Roanoke, Virginia, and James A. Gale and Javier Sobrado, Feldman Gale, P.A., Miami, Florida, for Frank Sisk and Precision Mine Repair, Inc.

Angela H. France and Malik K. Cutlar, PCT Law Group, PLLC, Alexandria, Virginia, for Titan Atlas Manufacturing, Inc.

Steven R. Minor, Elliott Lawson & Minor, Bristol, Virginia, and James R. Davis, J. Davis Law Firm, P.C., Daniel Island, South Carolina, for Franz X. Meier, XJM Company, LLC, StructurTech Systems, LLC, and FXM & Company, LLC.

OPINION AND ORDER

JAMES P. JONES, District Judge.

The court denied a Motion to Intervene in these consolidated cases and entered a Consent Final Judgment and Permanent Injunction sought by agreement of the existing parties. Thereafter, the parties seeking intervention filed a timely Motion to Alter or Amend Judgment, seeking reconsideration of the prior order and judgment, which motion is now before the court for decision. For the reasons that follow, the motion will be denied.

I

These two consolidated cases, filed in this court in 2011, involved a product used in the ventilation of underground coal mines.In one case Frank Sisk and Precision Mine Repair, Inc. (collectively, "PMR") asserted claims against Titan Atlas Manufacturing, Inc. ("Titan") and Strata Mine Services, LLC ("Strata") for patent infringement, inducement to infringe, breach of a distributorship agreement, and unfair competition.In the other case Titan and Strata sought a declaratory judgment against PMR, asserting that Titan and Strata did not infringe or induce infringement of the patent in question, and that in any event the patent was unenforceable. Eventually PMR and one of the alleged infringers, Strata, settled their respective claims and I entered a Consent Judgment and Order of Dismissal on April 24, 2013. Thereafter, on June 28, 2013, I entered a default against the other alleged infringer, Titan, dismissing its claims and scheduling a trial as to the damages to be awarded against it on PMR's claims.[1]

On October 18, 2013, a few days prior to the trial on damages, PMR and Titan announced that they had settled their dispute and filed a Notice of Settlement and Stipulation of Dismissal. On the same day, a Motion to Intervene was filed by Franz X. Meier, XJM Company, LLC, StructurTech Systems, LLC, and FXM & Company, LLC (collectively, "StructurTech"). On October 21, 2013, after consideration of these filings, I denied the Motion to Intervene and entered a Consent Judgment and Permanent Injunction requested by PMR and Titan as a condition of their settlement. Pursuant to the Consent Judgment and Permanent Injunction, I ruled that PMR's patent-in-suit was valid, that Strata had infringed the patent using certain products (called "3D Panels") purchased from Titan and that Titan was enjoined from further such infringement, including selling 3D Panels to Strata or any other third party. Thereafter, StructurTech filed the present Motion to Alter or Amend Judgment.

StructurTech alleged in support of its Motion to Intervene that it had sold its business manufacturing mine ventilation products, including 3D Panels, to Titan in 2010 pursuant to an Asset Purchase Agreement. The Asset Purchase Agreement contains representations and warranties as well as a promise by StructurTech to indemnify Titan for any losses resulting from any breach by StructurTech of the representations and warranties. StructurTech asserted that in January of 2013, Titan filed suit against it in state court in New York seeking indemnity under the Asset Purchase Agreement for losses, including attorneys' fees, incurred by Titan in the litigation in this court. Counsel for StructurTech has represented that the New York action has not progressed beyond the pleading stage, although the state judge has denied a motion to dismiss made by StructurTech.[2]

In addition, as part of the 2010 Asset Purchase Agreement, Titan became indebted to Franz X. Meier, one of the putative interveners and a party to the Asset Purchase Agreement, for $1 million, which debt is secured by a mortgage on South Carolina real estate conveyed as part of the asset purchase.[3] The Asset Purchase Agreement contains a setoff provision allowing a deduction from indebtedness owed by StructurTech for any breach of the representations and warranties. StructurTech alleges that Titan has asserted a right of setoff under this provision in a South Carolina mortgage foreclosure proceeding, claiming indemnity for its losses in the litigation in this court.

In its Motion to Intervene, StructurTech avered that if it was allowed to intervene, it would file a complaint seeking a declaratory judgment against Titan, in which it would assert that PMR's claims in this action arose solely out of Titan's infringing conduct and not for any act or omission by StructurTech and thus it is not obligated to pay any indemnity to Titan under the Asset Purchase Agreement. Counsel for StructurTech disclaims any intent to reopen the court's prior determinations that PMR's patent is valid and that Titan and Strata infringed that patent.

The Motion to Alter or Amend Judgment filed by StructurTech has been briefed and orally argued and is ripe for decision.

II

A motion to alter or amend a judgment under Rule 59(e) of the Federal Rules of Civil Procedure, "may only be granted in three situations: (1) to accommodate an intervening change in controlling law; (2) to account for new evidence not available at trial; or (3) to correct a clear error of law or prevent manifest injustice." Mayfield v. Nat'l Ass'n for Stock Car Auto Racing, Inc., 674 F.3d 369, 378 (4th Cir. 2012) (internal ...


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