Cypress Insurance Company v. SK Hynix America, Inc.

BRIEF ON MODIFICATION OF CONTRACT BY E-MAIL

W.D. Wash.March 26, 2019

PROFFER OF THE EXPERT TESTIMONY OF RICHARD DYKSTRA TESTIMONY - 1 LAW OFFICES OF COZEN O’CONNOR A PROFESSIONAL CORPORATION 999 THIRD AVENUE SUITE 1900 SEATTLE, WASHINGTON 98104 (206) 340-1000 LEGAL\40490141\1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE CYPRESS INSURANCE COMPANY, as subrogee of Microsoft Corporation Plaintiff, vs. SK HYNIX AMERICA INC. Defendant. ) ) ) ) ) ) ) ) ) ) ) Case No. 2:17-cv-00467-RAJ CYPRESS BRIEF ON MODIFICATION OF CONTRACT BY E-MAIL Now comes Plaintiff Cypress Insurance Company (“Cypress”) and herein provides its Brief on the jury question regarding whether or not a post-breach e-mail can constitute a modification of the 9th amendment. The jury submitted a question as to whether an e-mail sent by Terry King (Ex 1119) in December 2013 (after the alleged breach) can constitute a written waiver of the 9th amendment. Based upon the case law and contract terms the answer should be No. Exhibit 1 (the CPA) Sec. 15.9 Modification states: This Agreement may not be modified except by a written agreement dated subsequent to the Effective Date and signed in a non- Case 2:17-cv-00467-RAJ Document 278 Filed 03/26/19 Page 1 of 5 PROFFER OF THE EXPERT TESTIMONY OF RICHARD DYKSTRA TESTIMONY - 2 LAW OFFICES OF COZEN O’CONNOR A PROFESSIONAL CORPORATION 999 THIRD AVENUE SUITE 1900 SEATTLE, WASHINGTON 98104 (206) 340-1000 LEGAL\40490141\1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 electronic format on behalf of supplier and Microsoft by their duly authorized representatives. Mr. King’s e-mail is not signed in a non-electronic format and there’s no evidence Mr. King is authorized to modify the contract, and no duly authorized representative of Microsoft (namely Nino Storniolo who signed the Ninth Amendment) is even a recipient of the email. Further, the e- mail is also not signed by both parties. A post-breach e-mail simply cannot operate as a modification to the contract. Further, RCW 62A.2-209 (2) states: A signed agreement which excludes modification or rescission except by signed writing cannot otherwise be modified or rescinded, [but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party]. This clearly indicates that the provision is enforceable and that this unsigned e-mail cannot be a proper modification. The Berg v Hudesman case states: However, parol evidence cannot add to, modify, or contradict the terms of a fully integrated contract. Id. at 670, 801 P.2d 222. Also W.P.I. 301.07 states: Once a contract has been entered into, mutual assent of the contracting parties is essential for any modification of the contract. Not mutual assent is present here. Berg stands generally for the proposition that a fully integrated contract (with an integration clause or clauses like 15.15 and 15.19 of the Agreement which state parties cannot alter the terms of the contract without a writing in a certain form signed by both parties) is to be interpreted as a matter of law without reference to extrinsic evidence, such as Trial Ex. 1119. Both parties must agree to the modification of a contract in order for the change to be effective. Wagner v. Wagner, 95 Wn.2d 94, 103, 621 P.2d 1279 (1980). No such agreement is present here. Case 2:17-cv-00467-RAJ Document 278 Filed 03/26/19 Page 2 of 5 PROFFER OF THE EXPERT TESTIMONY OF RICHARD DYKSTRA TESTIMONY - 3 LAW OFFICES OF COZEN O’CONNOR A PROFESSIONAL CORPORATION 999 THIRD AVENUE SUITE 1900 SEATTLE, WASHINGTON 98104 (206) 340-1000 LEGAL\40490141\1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WPI 301.07 (Contract Modification) supports this position, providing that “once a contract has been entered into, mutual assent of the contracting parties is essential for any modification of the contract. To establish a modification, the party asserting the modification must show, through words or conduct of the parties, that there was an agreement of the parties on all essential terms of the contract modification, and that the parties intended the new terms to alter the contract.” Tr. Ex. 1119 begins with an email exchange involving only Terry King and Arnon Kraft (neither of whom is a duly authorized representative of Microsoft to modify, amend or waive the agreement – Nino Storniolo signed the 9th Amendment) and Hynix representatives. The remainder of the email exchange on Tr. Ex. 1119 is internal to Hynix. There is no writing showing any agreement by the parties on all of the essential terms to modify the agreement. DATED this 26th day of March 2019 COZEN O’CONNOR By: /s/ Mark S. Anderson Mark S. Anderson, WSBA 17951 999 Third Avenue Suite 1900 Seattle, WA 98104 Telephone: 206.340.1000 Toll Free Phone: 800.423.1950 Facsimile: 206.621.8783 Email: manderson@cozen.com James B. Glennon (Pro Hac Vice) George D. Pilja (Pro Hac Vice) FORAN GLENNON PALANDECH PONZI & RUDLOFF PC 222 North LaSalle Street, Suite 1400 Chicago, Illinois 60601 Phone: (312) 863-5000 Facsimile: (312) 863-5099 Email: jglennon@fgppr.com Case 2:17-cv-00467-RAJ Document 278 Filed 03/26/19 Page 3 of 5 PROFFER OF THE EXPERT TESTIMONY OF RICHARD DYKSTRA TESTIMONY - 4 LAW OFFICES OF COZEN O’CONNOR A PROFESSIONAL CORPORATION 999 THIRD AVENUE SUITE 1900 SEATTLE, WASHINGTON 98104 (206) 340-1000 LEGAL\40490141\1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Email: gpilja@fgppr.com Diana R. Lotfi (Pro Hac Vice) FORAN GLENNON PALANDECH PONZI & RUDLOFF PC 450 Newport Center Drive, Suite 630 Newport Beach, California 92660 Phone: (949) 791-1060 Facsimile: (949) 791-1070 Email: dlotfi@fgppr.com Attorneys for Plaintiff Case 2:17-cv-00467-RAJ Document 278 Filed 03/26/19 Page 4 of 5 PROFFER OF THE EXPERT TESTIMONY OF RICHARD DYKSTRA TESTIMONY - 5 LAW OFFICES OF COZEN O’CONNOR A PROFESSIONAL CORPORATION 999 THIRD AVENUE SUITE 1900 SEATTLE, WASHINGTON 98104 (206) 340-1000 LEGAL\40490141\1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CERTIFICATE OF SERVICE I hereby certify that on this day I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following: Alex A. Baehr, WSBA No. 25320 Summit Law Group PLLC 315 Fifth Avenue South, Suite 1000 Seattle, WA 98104-2682 alexb@summitlaw.com Timothy B. Yoo, CA Bar No. 254332 Ekwan E. Rhow, CA Bar No. 174604 Jennifer C. Won, CA Bar No. 307807 Bird, Marella, Boxer, Wolpert, Nessim Drooks, Lincenberg & Rhow, P.C. 1875 Century Park West, 23rd Floor Los Angeles, CA 90067-2561 tyoo@birdmarella.com dchao@birdmarella.com erhow@birdmarella.com Attorneys for Defendant Dated: this 26th day of March, 2019 /s Renita Cook Renita Cook Legal Assistant Case 2:17-cv-00467-RAJ Document 278 Filed 03/26/19 Page 5 of 5