Facts

Plaintiff Starco Enterprises Inc. is a chemical manufacturer based in Los Angeles. Defendant Westech Aerosol Corp. is a Georgia corporation based out of the state of Washington.
On or about early October 2012, Starco and Westech entered into discussions in which Starco would manufacture certain retail chemical products for Westech and deliver the Starco manufactured products to Westech customers. In turn, Westech would provide Starco with some of their raw materials and equipment and instruct their customers to pay Starco directly for the product, and Starco would credit Westech a mutually determined sum for its compounds and equipment.

In the course of negotiations between Starco and Westech, various written drafts of the agreement were circulated between the parties. Yet prior to the consummation of a final written agreement, Starco and Westech engaged and acted in conformance upon the material agreed terms and Starco proceeded with the manufacturing and delivery of the chemical products on behalf of Westech. No written contract was ever executed by all parties.

Plaintiff filed suit, claiming breach of oral contract, promissory estoppel, common counts, reasonable value of goods and services, and fraud.

Defendant filed a cross-complaint for negligent misrepresentation, intentional misrepresentation, negligence, intentional interference with economic relations, claim and delivery, breach of contract, and conversion.

PLAINTIFF'S CONTENTIONS:
To facilitate the engagement, Westech delivered certain machinery, equipment, raw materials, and compounds to Starco, for the commencement of Starco's manufacturing process. Westech also provided Starco with a $10,000 deposit for commencing the manufacturing of its products. Upon receipt of the equipment and compounds from Westech, Starco expended considerable resources in manufacturing Westech's products. Thereafter, Starco proceeded to ship the finished manufactured goods to Westech and Westech's customers.

In conjunction with the agreement between Starco and Westech, from Nov. 1, 2012 to Jan. 30, 2013, Starco manufactured and delivered its chemical products to Westech's customers. The cost of the production and delivery of the shipped goods to Westech's customers, less credit for the initial $10,000 deposit, the equipment, the compounds, and the materials provided by Westech was approximately $140,000. Westech failed to pay this amount and Starco ceased producing products for Westech.

Westech had separately invoiced and received payments from its customers for the products manufactured and delivered by Starco, but failed to pay Starco any monies for the production and delivery of these products, except for the initial deposit. Westech claimed that it had an agreement or some promise that Starco would purchase its company in exchange for over $5 million and royalty payments on sales of Westech products. No agreement was ever reached and the option to purchase Westech's stock was quickly dismissed as soon as plaintiff's representatives viewed the basic financial information provided by Westech. Instead, the parties entered into an agreement so that Westech would use Starco as its manufacturer in order to eliminate most of Westech's production expenses.

Westech sued Starco premised on Starco's rejection of the purchase of Westech's assets and its contention that Starco breached its agreement with Westech by stopping the manufacturing of its products for delivery to Westech's customers.

CROSS-DEFENDANT'S CONTENTIONS:
Plaintiff/cross-defendant Starco further contended that it never entered into any agreement to purchase Westech's assets and properly ceased production of chemical products for Westech's customers because Westech failed to timely pay the amounts due and owing to Starco.

DEFENDANT'S

Damages

Westech sought $12.5 million in damages.

Result

The jury found in favor of Starco and against Westech in the amount of $140,000 on the complaint. The jury found in favor of cross-defendant Starco on the cross-complaint.

Other Information

Three settlement conferences failed to resolve the dispute. FILING DATE: Sept. 6, 2013.

Deliberation

three hours

Length

11 days