George Chesney Crane v. Orbotron Inc., et al.
Published: Nov. 11, 1995 | Result Date: Oct. 18, 1995 | Filing Date: Jan. 1, 1900 |Case number: EC008878 – $0
Judge
Court
San Diego Superior
Attorneys
Plaintiff
John Allcock
(DLA Piper LLP )
Defendant
Friedrich W. Seitz
(Murchison & Cumming LLP)
Scott L. Hengesbach
(Murchison & Cumming LLP)
Experts
Plaintiff
George Chesney Crane
(technical)
Defendant
M. Neill W. Freeman
(technical)
Facts
In 1989 and early 1990, Mitsubishi International Corporation (MIC) entered into various marketing agreements with former Defendant Orbotron Inc., to market Orbotron devices, a Tri-Axil exerciser amusement ride. The units were initially manufactured by Rings of Steel, Inc., and later on, by Ride and Show Engineering, Inc. Orbotron Inc. was the patent holder of the Orbotron. Pursuant to the agreements between Orbotron and MIC, MIC was to receive the first 75 Orbotron units to be manufactured. Plaintiff George Crane first came into contact with an Orbotron device in August of 1990 when he observed such a device being operated at a beach in San Diego. He also met with employees of MIC. Crane, with other investors, formed Spacewalker Trust and purchased one Orbotron unit which was damaged in transit from Los Angeles to San Diego in September 1990 and not replaced with a new unit until November 1990. Crane then form Scenic Points Inc., as business through which he planned to purchase 50 or more Orbotrons and operate them on a pay-per-ride basis at beaches and amusement areas throughout various parts of the country. In addition, he planned to tie in with the operation of the Orbotrons T-shirt sales and sell ads to be placed around the Orbotrons. Money to capitalize the business was raised by way of contribution by some of the original officers and by way of an offering memorandum with shares to be sold to private investors. Crane sought financing from MIC to purchase the units and, although he drafted numerous letters of intent, none were ever signed by MIC. Beginning in late 1990 and continuing into 1991, the relationship between Orbotron and MIC deteriorated rapidly for various reasons. Attempts were made to negotiate some type of a buy out or acquisition of patent rights by Ride and Show (who had, in the interim, become the manufacturer of the Orbotrons) of Orbotron, to deal with the problems existing between Orbotron and MIC. Eventually, MIC decided to pull out of the entire project on or about March 14, 1991; however, a final agreement among MIC, Orbotron, and Ride and Show was not reached until the fall of 1991 whereby MIC, to avoid liability for any of the units it owned, sold the units back to Ride and Show, who then sold them to Orbotron, thus cutting off any product liability exposure to MIC. Plaintiff never received any Orbotrons, but was able to negotiate a lease whereby Scenic Points, Inc. acquired ten units from another outfit which it operated at various sites toward the end of June to September of 1991. When Scenic Points was advised by its insurance carrier that their comprehensive general liability insurance would not be renewed, it ceased operations.
Settlement Discussions
Defendants contend they made no offers and Plaintiff made a demand following the jury's verdict on the statute phase (phase 1) in the amount of $3,000,000.
Damages
Plaintiff contended that, had he received the 50 units that he was promised before Memorial Day, the high season being between Memorial Day and Labor Day, his net profit would have been (on a pay-per-ride basis) $1,200,000 per season. In addition, income was also expected from T-shirt sales and advertising sales. Plaintiff also sought punitive damages with regard to the fraud causes of action and treble damages with regard to the restraint of trade causes of action.
Result
Plaintiff dismissed all Defendants except MIC and its employees prior to trial. This case was tried in two phases; the first phase dealing with the statute of limitation focusing primarily on the fraud causes of action. The jury returned a verdict in favor of the Plaintiff with regard to the statute of limitation as to the fraud causes of action by a vote of 10-2. Plaintiff dismissed the interference with prospective economic advantage cause of action given its 2-year statute after the conclusion of phase 1. Phase 2 dealt with the merits of the various causes of action the unfair competition cause of action was dismissed during phase 2; and the jury returned a defense verdict. Punitive damages were bifurcated and were to be tried in phase 3.
Deliberation
3 days (Phase one); 2 days (Phase two)
Poll
10-2
Length
9 days (Phase one); 7 days (Phase two)
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