IceMOS Technology Corporation v. Omron Corporation

MOTION for Summary Judgment

D. Ariz.March 17, 2019

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 Robert D. Atkins (State Bar No. 015375) PATENT LAW GROUP: Atkins and Associates, P.C. 55 North Arizona Place, Suite 104 Chandler, Arizona 85225 Telephone: 480.499.9400 main@plgaz.com (Additional Counsel Identified On Signature Page) Attorneys for Plaintiff IceMOS Technology Corporation IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA IceMOS Technology Corporation, Plaintiff, v. Omron Corporation, Defendant. CASE NO. 2:17-cv-02575-JAT PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT DEMAND FOR JURY TRIAL Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 1 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE ii TABLE OF CONTENTS I. INTRODUCTION ........................................................................................... 1 II. PROCEDURAL BACKGROUND ................................................................. 2 III. ARGUMENTS & AUTHORITIES ................................................................. 2 A. Applicable Standard .............................................................................. 2 B. Omron’s Fraud Counterclaim is Legally and Factually Baseless ......... 3 1. Omron’s Fraud Counterclaim is barred by the statute of limitations. ................................................................................... 3 2. Omron cannot establish one or more elements of its Fraud Counterclaim. .............................................................................. 5 C. Omron’s Late Payment Counterclaim Is Factually Baseless ................ 9 1. Omron materially breached the Supply Agreement. .................. 9 2. Supply Agreement did not require payment for most of Late Paid Invoices. ....................................................................12 3. Omron has waived the right to demand timely payment. .........13 D. The Non-Payment Counterclaim is Factually Baseless ......................15 IV. CONCLUSION ..............................................................................................17 Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 2 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE iii TABLE OF AUTHORITIES CASES: Alarm Monitoring Corp. v. D’Agostino Supermarkets, Inc., 875 N.Y.S.2d 818 (N.Y. Sup. Ct. 2008) .......................................................................... 14 Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) ........................................................................................................... 2 Automotive Holdings, L.L.C. v. Phoenix Corners Portfolio, L.L.C., No. CV-09-01843-PHX-JAT, 2010 WL 1781007 (D. Ariz. May 4, 2010) ...................... 5 Cavan v. Maron, 182 F. Supp. 3d 954 (D. Ariz. 2016) ................................................................................. 3 Celotex Corp. v. Catrett, 477 U.S. 317 (1986) ....................................................................................................... 2, 3 Coronado Dev. Corp. v. Super. Ct. of Ariz., 678 P.2d 535 (Ariz. Ct. App. 1984) ................................................................................... 3 Echostar Satellite L.L.C. v. ESPN, Inc., 914 N.Y.S.2d 35 (N.Y. App. Div. 1st Dept. 2010).......................................................... 14 Frankel v. Aramark Servs. Inc., No. CV-16-03101-PHX-JAT, 2018 WL 3429426 (D. Ariz. July 16, 2018) ..................... 2 Frank Felix Assocs., Ltd. v. Austin Drugs, Inc., 111 F.3d 284 (2d Cir. 1997) ............................................................................................ 10 Guerin v. Am. Smelting & Refining Co., 236 P. 684 (Ariz. 1925) ..................................................................................................... 3 Harvey v. Agle, 982 N.Y.S.2d 620 (N.Y. App. Div. 4th Dept. 2014) ....................................................... 14 Industrial Eng’g & Dev., Inc. v. Static Control Components, Inc., 2014 WL 4983912 (M.D. Fla., October 6, 2014) ............................................................ 17 Law v. Sidney, 53 P.2d 64 (Ariz. 1936) ..................................................................................................... 6 Madison Ave. Leasehold, LLC v. Madison Bentley Assocs. LLC, 811 N.Y.S.2d 47 (N.Y. App. Div. 1st Dept. 2006).............................................. 13, 14, 15 Markham Gardens L.P. v. 511 9th LLC, 954 N.Y.S.2d 811 (N.Y. Sup. Ct. 2012) ................................................................ 9, 11, 13 McAlister v. Citibank (Arizona), 829 P.2d 1253 (Ariz. Ct. App. 1992) ................................................................................. 8 Orlander v. Staples, Inc., 802 F.3d 289 (2d Cir. 2015) .............................................................................................. 9 Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 3 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE iv Sara Lee Corp. v. Kraft Foods, Inc., 276 F.R.D. 500 (N.D. Ill. 2011) ....................................................................................... 17 Snide v. Larrow, 463 N.Y.S.2d 88 (N.Y. App. Div. 3d Dept. 1983) .............................................. 13, 14, 15 Spudnuts v. Lane, 641 P.2d 912 (Ariz. Ct. App. 1982) ................................................................................... 8 Staheli v. Kaufman, 595 P.2d 172 (Ariz. 1979) ................................................................................................ 8 Tekvet Techs., Co. v. Crystaltech Web Hosting, Inc., 2016 WL 1651848 (S.D.N.Y. Apr. 25, 2016) ............................................................. 9, 14 Tolan v. Cotton, 572 U.S. 650 (2014) ........................................................................................................... 2 TSS-Seedman’s, Inc. v. Elota Realty Co., 72 N.E.2d 646 (N.Y. 1988) .............................................................................................. 15 Union Pump Co. v. Centrifugal Tech., Inc., 404 Fed. Appx. 899 (5th Cir. 2010) ................................................................................. 17 VFS Fin., Inc. v. Falcon Fifty LLC, 17 F. Supp. 3d 372 (S.D.N.Y. 2014) ............................................................................... 10 Wagner v. Casteel, 663 P.2d 1020 (Ariz. Ct. App. 1983) ................................................................................. 5 STATUTES: A.R.S. § 12-543(3) ................................................................................................................. 3 RULES: FED. R. CIV. P. 12 ................................................................................................................... 2 FED. R. CIV. P. 30 .......................................................................................................... passim FED. R. CIV. P. 56 ................................................................................................................... 2 FED. R. EVID. 801 ................................................................................................................ 17 Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 4 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 1 I. INTRODUCTION Plaintiff IceMOS Technology Corporation (“IceMOS”) moves the Court for summary judgment on Defendant Omron Corporation’s (“Omron”) fraud in the inducement counterclaim (the “Fraud Counterclaim”), breach of contract for failure to make timely payments counterclaim (the “Late Payment Counterclaim”), and non-payment breach of contract counterclaim (the “Non-Payment Counterclaim”).1 The record demonstrates that Omron’s counterclaims are legally and factually baseless and were filed without an adequate pre-suit investigation. Omron’s Fraud Counterclaim that the forecasts in the Supply Agreement were intentionally inflated with no intent to make any effort to achieve them is barred by the three- year statute of limitations because Omron actually learned, or reasonably could have learned, that the forecasts were off by at least 90% in September of 2011, more than six and half years before it filed the Fraud Counterclaim. Moreover, fraud cannot be based on matters of estimate as to future events. See Dkt. 69. Omron knew the forecasts included in the Supply Agreement were just agreed estimates that were neither true nor false at the time and could not be reasonably relied upon. Omron’s Late Payment Counterclaim fails because Omron anticipatorily breached the Supply Agreement by failing to (1) fully resource development of all generations of Super Junction MOSFETs, including not providing IceMOS with capacity ahead of demand and reducing engineering lots, and (2) timely deliver the products or sufficiently qualify them to trigger IceMOS’s payment obligations. Omron also waived the right to demand timely payment by repeatedly accepting late payments and never withdrawing such waiver of IceMOS’s timely payment obligations under the Supply Agreement. Omron’s Non-Payment Counterclaim also fails because IceMOS was not required to pay the subject invoices. The products at issue were delivered beyond the Supply Agreement’s ten-week lead time requirement and failed to meet commercial yields. As such, Omron 1 IceMOS previously filed a motion for judgment on the pleadings as to the Fraud and Late Payment Counterclaims under Rule 12(c). Dkt. 69. This Rule 56 motion is in the alternative to the relief sought in the Motion to Dismiss. Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 5 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 2 agreed that IceMOS could return the late delivered, non-yielding products after IceMOS’s customer refused to accept them months late, a delay caused by Omron’s breaches of the Supply Agreement. No reasonable jury could return a verdict for Omron on its counterclaims. Because Omron’s counterclaims are completely meritless and were asserted in bad faith and without a reasonable investigation, IceMOS seeks summary judgment and an award of its fees and costs for the defense of each. II. PROCEDURAL BACKGROUND IceMOS filed this lawsuit on August 2, 2017 and filed a First Amended Complaint on August 28, 2017. See Dkt. 1 & Dkt. 14. On September 11, 2017, Omron filed a motion to dismiss under Fed. R. Civ. P. 12(b)(2) and (6) (Dkt. 20), which the Court denied on July 6, 2018, deciding inter alia that Arizona law applied to IceMOS’s tort (fraud) claims and New York law applied to its contract claims under Section IX of the Supply Agreement. Dkt. 25 at 14 & 20. On July 16, 2018, Omron filed its Answer and Counterclaims to IceMOS’s First Amended Complaint. Dkt 28. In response to IceMOS’s Second Amended Complaint (Dkt. 59), Omron filed its Answer and Counterclaims on November 7, 2018 and incorporated by reference each of its original counterclaims as pled in its Answer and Counterclaims to IceMOS’s First Amended Complaint. Dkt. 60 at 63. III. ARGUMENTS & AUTHORITIES A. APPLICABLE STANDARD “One of the principle purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses … .” Celotex Corp. v. Catrett, 477 U.S. 317, 323- 24 (1986). Summary judgment is proper where the movant shows that there are no genuine disputes of material fact and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Tolan v. Cotton, 572 U.S. 650, 656-57 (2014). “A material fact is any fact that may affect the outcome of the case under the governing substantive law.” Frankel v. Aramark Servs. Inc., No. CV-16-03101-PHX-JAT, 2018 WL 3429426, at *2 (D. Ariz. July 16, 2018) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). “A dispute Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 6 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 3 about a fact is ‘genuine’ if the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Id. The movant is entitled to judgment as a matter of law where the nonmoving party cannot or does not make a sufficient showing on an essential element of its case for which it has the burden of proof. Celotex, 477 U.S. at 323. Because the undisputed facts establish that no reasonable jury could return a verdict in Omron’s favor on its counterclaims, IceMOS is entitled to judgment as a matter of law on those claims. B. OMRON’S FRAUD COUNTERCLAIM IS LEGALLY AND FACTUALLY BASELESS 1. Omron’s Fraud Counterclaim is barred by the statute of limitations. Under Arizona law, fraud claims are subject to a three-year statute of limitations. A.R.S. § 12-543(3). This period “begins to run when the plaintiff by reasonable diligence could have learned of the fraud, whether or not he actually learned of it.” Coronado Dev. Corp. v. Super. Ct. of Ariz., 678 P.2d 535, 537 (Ariz. Ct. App. 1984) (citing Guerin v. Am. Smelting & Refining Co., 236 P. 684 (Ariz. 1925)); see also Cavan v. Maron, 182 F. Supp. 3d 954, 962 (D. Ariz. 2016). “[A] person does not have to know every fact about his fraud claim before the statute begins to run.” Coronado Dev. Corp., 678 P.2d at 537. Thus, “actual knowledge that fraud had occurred” is not required. Id. Here, Omron’s Fraud Counterclaim is based on forecasts Omron agreed to include in the Supply Agreement as to the potential future demand for IceMOS’s products. See, e.g, Dkt. 59-1 at ECF 13. Omron’s corporate representative, Takahiro Hasegawa, testified that the only pre-Supply Agreement forecasts provided by IceMOS’s Samuel Anderson are the same as those included in the Supply Agreement. Declaration of Michael Shore (“Shore Decl.”), Ex. D (Rule 30(b)(6) Hasegawa Vol 1) at 21:21-22:3 (“Yeah. The forecast which was supplied to me before signing the agreement is the one right here, included right here.”); see also id. at 23:8-13 (confirming same). Although the parties entered into the Supply Agreement on February 28, 2011, Omron did not assert its claim until July 16, 2018. See Dkt. 28. Omron first learned that the Supply Agreement forecasts were incorrect—by a margin of at least 90%—on September 9, 2011, more than six and a half years before it first filed its counterclaims. Id., Ex. F (Hasegawa Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 7 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 4 Ind. Depo) at 54:19-58:8 (admitting Omron knew in September 2011 that the IceMOS forecast was only about 4,125 wafers for the whole year); id., Ex. Q at PDF 2-3 (forecasts provided at the September 9, 2011 meeting). And IceMOS provided multiple updated forecasts to Omron during the term of the Supply Agreement from 2011 through 2014. Id., Ex. D (Rule 30(b)(6) Hasegawa Vol 1) at 16:1-2 (“I was receiving forecasts from Mr. Anderson from time to time.”); id. at 18:8-11; id., Ex. F (Hasegawa Ind. Depo) at 99:14- 100:23 (discussing request and provision of updated forecasts); see also Declaration of Samuel Anderson (“Anderson Decl.”), Exs. A & B (August 2012 emails regarding updated forecasts); id., Ex. C (updated forecast projecting out to 2014). Each of those updated forecasts projected demand quantities substantially and materially below the forecasts Omron now claims were fraudulent and relied upon. Compare Anderson Decl., Ex. C with Dkt. 59-1 at ECF 14; see also Shore Decl., Ex. F (Hasegawa Ind. Depo) at 102:1-4 (admitting same). Thus, any inaccuracy in the forecasts in the Supply Agreement was known to Omron beginning in September 2011 and was repeatedly illustrated by multiple forecasts provided thereafter. Moreover, on March 6, 2015 in a PowerPoint presentation (the “Presentation”), announcing Omron’s breach of the Supply Agreement, Omron described in detail to IceMOS that the original Supply Agreement forecasts had never been met, and that actual purchases in 2014 were less than 4% of the forecasts. Id., Ex. J at PDF 10 (Omron March 2015 Presentation). That same presentation attempted to limit IceMOS’s future wafer capacity based on the prior year’s demand of 114 wafers a month, an amount approximately 96% less than the Supply Agreement forecasts of 3,500 wafers a month. Id. The Presentation notes the shortfalls in demand to the Supply Agreement forecasts, but never accused IceMOS of fraud or any other form of misconduct. Thus, exercising reasonable diligence, Omron could, and should, have learned of the alleged inaccuracy of the Supply Agreement forecasts as early as 2011 and certainly not later than March 2015. Id., Ex. Q at PDF 2-3 (forecasts provided at the September 9, 2011 meeting); id., Ex. J at 10 (Omron March 2015 Presentation); see also id., Ex. C at 18-19 Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 8 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 5 (Omron’s responses to Request Nos. 333-336 admitting Omron never accused IceMOS or its chairman of fraudulent or reckless forecasts before November 10, 2014). The Fraud Counterclaim is barred by Arizona’s three-year statute of limitations. IceMOS is entitled to judgment as a matter of law. 2. Omron cannot establish one or more elements of its Fraud Counterclaim. Omron’s Fraud Counterclaim further fails as a matter of law because Omron cannot establish that IceMOS made any actionable false representations. To prevail on its fraud claim, Omron must show “‘(1) a representation; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted upon by the person and in a manner reasonably contemplated; (6) the hearer’s ignorance of its falsity; (7) his reliance on its truth; (8) his right to rely thereon, and (9) his consequent and proximate injury.’” Automotive Holdings, L.L.C. v. Phoenix Corners Portfolio, L.L.C., No. CV-09-01843-PHX-JAT, 2010 WL 1781007, at *4 (D. Ariz. May 4, 2010) (quoting Wagner v. Casteel, 663 P.2d 1020, 1022 (Ariz. Ct. App. 1983)). Here, Omron cannot establish at least the first, second, third, seventh, and eighth elements of its Fraud Counterclaim. Omron’s Fraud Counterclaim is based on allegedly false forecasts of future demand in the Supply Agreement. Dkt. 28 ¶¶ 63-64, 68. First, Omron cannot establish that such forecasts are representations of fact to be relied upon. Omron’s corporate representative, Takahiro Hasegawa, testified that the forecasts included in the Supply Agreement are identical to what he was provided prior to Omron entering into the Supply Agreement. Shore Decl., Ex. D (Rule 30(b)(6) Hasegawa Vol 1) at 21:21-22:3 (“Yeah. The forecast which was supplied to me before signing the agreement is the one right here, included right here.”); id. at 23:8-13 (confirming same). And Omron has admitted that the “Supply Agreement contains no representations, promises, or guarantees by IceMOS as to demand or minimum monthly purchases.” Dkt. 60 at 18; see also Shore Decl., Ex. V (Yamada Depo) at 46:17-22 (admitting that Omron could have insisted on a minimum purchase requirement in the agreement if Omron wanted one). Every Omron witness questioned about the forecasts, including Omron’s own president Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 9 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 6 and chief executive officer, characterized them as estimates and understood the forecasts were subject to conditions and variables beyond IceMOS’s control. See Shore Decl., Ex. D (Rule 30(b)(6) Hasegawa Vol 1) at 41:10-22 (“When it comes generally, any type of information such as this that’s being sent out out there as a forecasting, it’s just an estimation, so it’s something that’s being presented as a general idea.”) (emphasis added); id. at 63:15-17 (“So as far as the forecast is concerned, it only creates the impression of future sales that’s achievable or not.”); id. at 47:20-49:2 (referring to six year projection as “just speculation”); id. at 64:6-71:17 (discussing the various variables affecting sales); id., Ex. F (Hasegawa Ind. Depo) at 117:1-5 (stating “forecast implies here to be an estimate”); id., Ex. U (Yugami Depo) at 28:19-32:6 (confirming same); id., Ex. V (Yamada Depo) at 287:14-24 (“I mean, no one can say what’s going to happen with the business environment or with exchange rates or, for that matter, with the trade war between the US and China.”); id. at 36:25-40:3 (describing the 2020 plan as “an aspiration or goal” and effects of the environment and competitors on forecasts); see also id., Ex. C at 24-25 (Omron’s responses to Request Nos. 367-369, admitting the numerous conditions outside IceMOS’s control when the Supply Agreement was executed). Such admissions and testimony demonstrate there is no genuine dispute that the forecasts are not representations of facts to be reasonably relied upon. As Omron’s corporate representative on all topics related to forecasts—Takahiro Hasegawa—testified, a forecast “creates the impression of future sales that’s achievable or not” and is “just speculation.” Id., Ex. D (Rule 30(b)(6) Hasegawa Vol 1) at 41:10-22; id. at 63:15-17. A forecast cannot, therefore, be true or false when made. This is consistent with long-established Arizona law that a “false representation must be of a matter or fact which exists in the present” and cannot be based “upon representations in regard to matters of estimate or judgment.” Law v. Sidney, 53 P.2d 64, 66 (Ariz. 1936). Omron admitted that all “[t]he material terms of the Supply Agreement had already been negotiated before the forecasts in Exhibit A were prepared.” Dkt. 60 at 19, ¶ 80; see also Shore Decl., Ex. O (no mention of forecasts in the emails finalizing the Supply Agreement); Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 10 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 7 id., Ex. E (Rule 30(b)(6) Hasegawa Vol 2) at 38:2-6 (confirming no mention of forecast in the email chain approving terms of the Supply Agreement). The forecasts were, therefore, not a material term of the Supply Agreement and could not be material to Omron’s decision to enter into the Supply Agreement. Having admitted that the forecasts were not a material term of the Supply Agreement and were not representations but rather just estimates of future events based on factors beyond IceMOS’s control, Omron cannot establish either that it reasonably relied on those forecasts or that it had a right to rely on them. Omron knew that the forecasts were just “speculation” and were “achievable or not.” Id., Ex. D (Rule 30(b)(6) Hasegawa Vol 1) at 63:12-17; id. at 47:20-49:2. Moreover, Omron knew that whether the forecasts were met or not depended to a large degree on Omron itself. Omron’s corporate representative testified that Omron could only produce 50 wafers per month in February 2011, before the Supply Agreement was executed, based on the amount of available starting materials. Id. at 38:19-25; id., at 85:1- 91:5 (discussing Omron’s action plan to acquire more materials); id., Ex. K (action items presentation). As such, there is no genuine dispute of material fact that IceMOS did not provide material, false representations that Omron relied on as matter of right. Moreover, the person who signed the Supply Agreement on behalf of Omron, Yoshio Sekiguchi, has not provided any testimony, refusing to appear for his deposition. Id. ¶ 2; id., Ex. A; Dkt. 59-1. There is no evidence in the materials Omron produced that Mr. Sekiguchi relied upon the forecasts in signing the Supply Agreement. Rather, the evidence demonstrates that Omron signed the Supply Agreement because it was desperate for customers at the Yasu Fab, a facility that was operating at less than 10% capacity and at times was paying workers to polish the equipment. Shore Decl., Ex. U (Yugami Depo) at 40:18-41:23 (admitting the entire Yasu Fab production averaged less than 2,500 wafers in three months and “[b]ecause there was just not enough work to do. I often refer to the workers who operate the machinery, just to clean and maintain the items, because there’s just not enough work to go around.”); id. at 42:5-8 (“[W]hen I became the manager, yes, there were months that were even far less below 500 per month. That’s how little work there Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 11 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 8 was at the time”) (emphasis added);2 see also id., Ex. R (Nukii Ind. Depo) at 29:17-19 (stating it is hard and expensive to cut employees in Japan); id. at 14:23-16:14 (admitting when Omron bought the Yasu Fab in 2007, its only customer was Seiko Epson and that business fell significantly); id. at 29:24-30:1 (IceMOS and its affiliate Great Wall Semiconductor Corp. were still the only foundry customers in 2011). Finally, every Omron witness questioned on the subject admitted that IceMOS did everything it was asked to do to the develop the Super Junction MOSFET products and that IceMOS’s marketing efforts were both continuous and genuine. Id., Ex. G (Rule 30(b)(6) Nukii Vol 1) at 145:15-20 (Omron’s corporate representative stating there was no indication that IceMOS was not fully committed to achieving commercial yields); id., Ex. P (February 2012 email from Omron’s Takahiro Hasegawa thanking IceMOS’s CEO for “continuous effort on SJ promotion”); id., Ex. E (Rule 30(b)(6) Hasegawa Vol 2) at 74:24-75:9 (failing to identify any evidence that IceMOS did not sincerely attempt to meet the forecast). Because IceMOS fully intended to achieve the projected sales in the forecasts, Omron cannot claim that the forecasts were actionable promises. See McAlister v. Citibank (Arizona), 829 P.2d 1253, 1260 (Ariz. Ct. App. 1992) (quoting Spudnuts, Inc. v. Lane, 641 P.2d 912, 914 (Ariz. Ct. App. 1982) (“Fraud can be based upon unfulfilled promises or expressions concerning future events only if statements regarding those events ‘were made with the present intent not to perform.’”) (emphasis added); see also Staheli v. Kaufman, 595 P.2d 172, 175 (Ariz. 1979) (stating that fraud cannot be “predicated on unfulfilled promises, expressions of intention or statements concerning future events unless such were made with the present intention not to perform.”). Based on the evidence, the only reason the sales forecasts in the Supply Agreement were 2 Katsuyaki Yugami was the manager of the Yasu Fab from 2008 to June 2011. Id., Ex. U (Yugami Depo) at 27:20-23. So the timeline coincides with when the Supply Agreement was negotiated and executed. Since less than 2,500 wafers were produced in three months, no more than 833 wafers were produced per month. Omron employee Susumu Nukii admitted that the entire capacity of the Yasu Fab was 10,000 wafers per month. Id., Ex. R (Nukii Ind. Depo) at 17:3-21. Therefore, the facility’s entire operating capacity was 8.3%, i.e. (833/10000)*100%. Even assuming the Yasu Fab had only 5,000 wafers per month capacity, id., Ex. U (Yugami Depo) at 39:4-40:16, the facility was operating at less than 10% when production was far less than 500 wafers per month. Id. at 42:5-8; see also id., Ex. R (Nukii Ind. Depo) at 19:9-25:6 (confirming that the Yasu Fab operated at less than 40-50% capacity from 2007 to 2009). Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 12 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 9 not met was Omron’s failure to carry sufficient starting material inventory, failure to achieve on-time delivery of products, and failure to achieve consistent commercial yields. Shore Decl., Ex. D (Rule 30(b)(6) Hasegawa Vol 1) at 38:19-25 (admitting Omron could only produce 50 wafers per month February 2011); id., Ex. K (February 1, 2011 action items presentation); id., Ex. F (Hasegawa Ind. Depo) at 83:13-85:16 (confirming delivery delay due to lack of materials); id. at 90:15-97:2 (discussing ten-week lead time and delays due to equipment malfunction); id. at 113:5-114:8 (discussing scrapped lots due to product failure and resultant delay); id., Ex. G (Rule 30(b)(6) Nukii Vol. 1) at 225:5-227:22 (discussing delivery delay due to contamination issue); id., Ex. V (Yamada Depo) at 51:17-25 (admitting delayed development results in market delay); Declaration of Irene Chang (“Chang Decl.”), Exs. A-C (demonstrating low yields and Omron’s late delivery). No genuine issue of material fact exists as to the Fraud Counterclaim. IceMOS is entitled to judgment as a matter of law. C. OMRON’S LATE PAYMENT COUNTERCLAIM IS FACTUALLY BASELESS “Under New York law, the elements for breach of contract are ‘(i) the formation of a contract between the parties; (ii) performance by the plaintiff; (iii) failure of defendant to perform; and (iv) damages.’” Tekvet Techs., Co. v. Crystaltech Web Hosting, Inc., 2016 WL 1651848, at *3 (S.D.N.Y. Apr. 25, 2016) (quoting Orlander v. Staples, Inc., 802 F.3d 289, 294 (2d Cir. 2015)). Here, Omron cannot establish either the second or third element of its Late Payment Counterclaim. 1. Omron materially breached the Supply Agreement. Omron cannot establish it fully performed its obligations under the Supply Agreement. When one party commits a material breach of a contract, the other party to the contract is relieved, or excused, from further performance under the contract. Markham Gardens L.P. v. 511 9th LLC, 954 N.Y.S.2d 811, 815 (N.Y. Sup. Ct. 2012). Omron alleges that IceMOS breached the Supply Agreement by failing to timely pay certain invoices (the “Late Paid Invoices”). Dkt. 28 at 47; see also id. at 43-44. However, Omron engaged in multiple and repeated material breaches of the Supply Agreement that excused IceMOS from its Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 13 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 10 performance. Omron materially breached the Supply Agreement by failing to provide IceMOS with capacity ahead of demand and an uninterrupted supply. “A breach is material if it ‘go[es] to the root of the agreement between the parties [and] is so substantial that it defeats the object of the parties in making the contract.’” VFS Fin., Inc. v. Falcon Fifty LLC, 17 F. Supp. 3d 372, 379-80 (S.D.N.Y. 2014) (quoting Frank Felix Assocs., Ltd. v. Austin Drugs, Inc., 111 F.3d 284, 289 (2d Cir. 1997)). The Supply Agreement specifically states: It is important to IceMOS that supply agreements are in place that allow IceMOS to provide IceMOS customers products with high quality and reliability standards, competitive pricing and cost down programs, uninterrupted supply programs, on time delivery, failure analysis, technology roadmaps, and capacity ahead of demand. Dkt. 59-1 at ECF 2 (emphasis added). Despite this fundamental purpose of the Supply Agreement, Omron deprived IceMOS of such benefits. For example, Omron unilaterally reduced the operation of the Yasu Fab from 3-shift operation to 2-shift operation. Dkt. 60 at 28. In the Supply Agreement, Omron “agree[d] to support IceMOS up to a minimum capacity of three thousand and five hundred (3500) wafers per month.” Dkt. 59-1 § 4.14. But rather than providing capacity ahead of demand, Omron required IceMOS to place additional orders before it would return the Yasu Fab to 3-shift operation and improve lead time and delivery. See Shore Decl., Ex. C at 7 (response to Request No. 270); Anderson Decl., Ex. L (“If you give me more than 1500wafers P/O, I will return to 3-shift operation for improvement leadtime issue … Again, If [sic] you give me more P/O, I will be able to return to 3-shif [sic] and improve delivery issue.”). Likewise, the Supply Agreement requires Omron to fully resource the development of all generations of IceMOS’s Super Junction MOSFETs, including providing free of charge engineering lots. Dkt. 59-1 § 4.2.1; Dkt. 60 at 16. Omron’s corporate representative testified that § 4.2.1 of the Supply Agreement required Omron to provide “all support” necessary for development, including unlimited engineering lots. Shore Decl., Ex G (Rule 30(b)(6) Nukii Vol 1) at 124:17-127:2 (confirming that the Supply Agreement has no limits on support). Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 14 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 11 Nonetheless, Omron unilaterally restricted IceMOS’s access to engineering lots in direct violation of the material terms of the Supply Agreement. Anderson Decl., Ex. M (Omron “decided to place restrictions” and limit IceMOS to a maximum of three engineering lots per month). Omron also failed to maintain adequate starting materials to provide IceMOS with capacity ahead of demand, causing IceMOS to lose potential sales. Shore Decl., Ex. D (Rule 30(b)(6) Hasegawa Vol 1) at 25:24-35:11 (discussing Omron’s inability to meet demand for IceMOS’s business opportunity and the costly alternative). Each of these breaches went to the root purpose of the Supply Agreement and directly frustrated IceMOS’s attempts to enjoy the benefits thereof. IceMOS was accordingly excused from paying for any of the Late Paid Invoices because of Omron’s prior material breaches. Further, the Supply Agreement specifically provides that “[p]roduction lead time will not exceed ten (10) weeks for the products which have less than fifteen (15) photo layers.” Dkt. 59-1 § 4.11.3 Although fifty-nine percent (59%) of the products covered by the Late Paid Invoices had only thirteen photo layers,4 Anderson Decl. ¶ 2, Omron failed to deliver the majority of these products within the required ten-week production lead time. Chang Decl., Ex. C. Omron’s corporate representative, Susumu Nukii, confirmed the lack of any obligation by IceMOS to pay for late delivered products in his deposition. Shore Decl., Ex. H (Rule 30(b)(6) Nukii Vol. 2) at 76:6-11 (“Q Okay. So IceMOS is not obligated to accept any lots from Omron that go beyond the ten-week manufacturing period, correct? ... There’s no requirement for payment.”); see also id., Ex. U (Yugami Depo) at 45:6-10 (admitting on- time delivery is critical in the semiconductor industry). For each of the lots that Omron failed to timely deliver, IceMOS was excused from the obligation to make timely payment, and 3 While the parties were negotiating and finalizing the Supply Agreement, Omron specifically revised the ten- week lead time provision, changing it from nine weeks to ten weeks. Shore Decl., Ex. O at PDF 3-4 (“We made a minor change on production lead time.”). 4 It should be noted that, of the remaining lots, at least 9 were built with 15 layers due to Omron’s failure to disclose its unauthorized use of non-qualified process and unapproved equipment for past lots. Anderson Decl. ¶ 2. This directly violated Section 2.2 of the Supply Agreement, and as such, these lots should have been scrapped rather than billed to IceMOS. See Dkt. 59-1§ 2.2; see also Shore Decl., Ex. U (Yugami Depo) at 25:16-27:15 (confirming customers must approve any changes). Furthermore, had Omron disclosed the misconduct, IceMOS would have been aware that such unauthorized processes and equipment were the cause of errors in past lots and would not have built future lots with more layers than necessary. Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 15 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 12 Omron’s counterclaim accordingly fails. Markham Gardens L.P., 954 N.Y.S.2d at 815. 2. Supply Agreement did not require payment for most of Late Paid Invoices. Omron’s Late Payment Counterclaim further fails because, for the majority of the Late Paid Invoices, Omron cannot establish a breach of the Supply Agreement. First, one of the alleged Late Paid Invoices is not covered by the Supply Agreement. In particular, Invoice No. MD140611OM150514 relates to cavity lid wafer process and not a Super Junction MOSFET product. Anderson Decl., Ex. N; see also Exs. O & P. The Supply Agreement only pertains to the production of Super Junction MOSFET products. See, e.g., Dkt. 59-1 at ECF 3 (“IceMOS desires to establish a FOUNDRY source of supply of fabricated and unprobed wafers using the Super Junction MOSFET processes and product line”) (emphasis added). Because the cavity wafer is not a Super Junction MOSFET, any alleged late payment of this invoice does not constitute breach of the Supply Agreement. Second, Invoice MD140401-2 relates to development costs, which IceMOS is not required to pay under the Supply Agreement. Id., Exs. O & P. The Supply Agreement specifically requires Omron to “fully resource the development of all generations of Super Junction MOSFETs.” Dkt. 59-1 § 4.2.1. And Omron’s corporate representative testified that the Supply Agreement does not place any limits on the amount or costs of the support Omron must provide for such development. See Shore Decl., Ex G (Rule 30(b)(6) Nukii Vol 1) at 124:17-127:2 (“Q And there’s no limitation in Section 4.2.1 about the cost to Omron? A When it comes to the cost, there’s nothing written there.”); id. at 117:13-119:11 (confirming that the Supply Agreement has no limits on support); id. at 152:3-17 (same). Third, IceMOS was not required to pay for the products covered by the majority of the other Late Paid Invoices. Under the Supply Agreement, IceMOS was only required to pay for production lots. Dkt. 59-1 § 4.1. As Omron has admitted, commercial yield is necessary for production in the semiconductor industry. Shore Decl., Ex G (Rule 30(b)(6) Nukii Vol 1) at 148:21-151:7; id., Ex. D (Rule 30(b)(6) Hasegawa Vol 1) at 52:18-53:3 (admitting a consistent commercial yield is necessary). The Supply Agreement accordingly defines “Target Yield” as “an average number of good Products resulting from production wafers Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 16 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 13 which shall be agreed between IceMOS and OMRON.” Dkt. 59-1, Art. I. IceMOS and Omron specifically agreed to an 80% yield to qualify production lots. See Shore Decl., Ex. S (Rule 30(b)(6) Anderson Depo) at 53:22-56:17 (confirming agreement on target yield); id. at 206:11-207:20 (same); id., Ex. E (Rule 30(b)(6) Hasegawa Vol 2) at 61:12-24 (“When I look in this e-mail, yes, there was definitely appearance that 80 percent of the yield was required in order for the product to go to the production.”); id., Ex. J at PDF 12 (Omron presentation providing >80% yield for Gen1); id., Ex. C at 22 (Omron’s response to Request No. 353 admitting IceMOS requested a yield guarantee for mass production on August 4, 2011); Anderson Decl., Exs. D-F (IceMOS emails insisting on at least 80% yield). Of the 33 remaining Late Paid Invoices, 32 included wafer lots that failed to achieve the 80% target yield with at least one of the lots billed for having a 0% yield. Chang Decl. Exs. B & C.5 For each of the lots failing to achieve the target 80% yield, IceMOS’s payment obligation under the Supply Agreement was not triggered. Because it did not have any obligation to pay for such lots at all, IceMOS cannot have breached the Supply Agreement by paying for those lots “late” as alleged. Omron cannot, therefore, establish an essential element of its counterclaim for those invoices, and IceMOS is entitled to judgement thereon as a matter of law. 3. Omron has waived the right to demand timely payment. The evidence demonstrates that Omron has waived its right to demand timely payment by repeatedly and knowingly accepting late payments from IceMOS over an extended period of time. “Any provision of a contract is subject to waiver, particularly a provision requiring timely payment.” Madison Ave. Leasehold, LLC v. Madison Bentley Assocs. LLC, 811 N.Y.S.2d 47, 51 (N.Y. App. Div. 1st Dept. 2006), aff’d 861 N.E.2d 69, (N.Y. 2006). “[K]knowledgeable acceptance of late payments over an extended period of time … establishes the necessary elements to constitute a waiver of the right to insist upon timely payments.” Snide v. Larrow, 463 N.Y.S.2d 88, 89 (N.Y. App. Div. 3d Dept. 1983), aff’d 464 5 Of all the products IceMOS paid for pursuant to the Late Paid Invoices, only lot 1003H6, subject to invoice number MD140425IO14021201, and lot 1009H9, subject to MD140123IO13111101, achieved the required 80% target yield. Chang Decl., Ex. C. at 10-11; see also id., Ex. B at 4-5. Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 17 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 14 N.E.2d 480 (N.Y. 1984); see also Madison Ave. Leasehold, 811 N.Y.S.2d at 49 (“[L]andlord’s acceptance of the tendered rent with knowledge of the lease violation extinguishes the default as a matter of law. … [L]andlord’s practice of accepting the proffered rent payments, without protest, over a period of three years, constitutes a course of conduct effecting a waiver of the timely payment covenant.”). New York courts have consistently considered waiver of timely payment in a variety of contexts, including services agreements. See, e.g., Harvey v. Agle, 982 N.Y.S.2d 620, 621 (N.Y. App. Div. 4th Dept. 2014) (promissory note); Echostar Satellite L.L.C. v. ESPN, Inc., 914 N.Y.S.2d 35, 39 (N.Y. App. Div. 1st Dept. 2010) (licensing agreement); Snide, 463 N.Y.S.2d at 88 (sale of real property contract); Alarm Monitoring Corp. v. D’Agostino Supermarkets, Inc., 875 N.Y.S.2d 818 (N.Y. Sup. Ct. 2008) (services contract); Tekvet Techs., 2016 WL 1651848, at *4 (services agreement). It is undisputed that Omron repeatedly—at least 13 times—received and accepted late payments from IceMOS over an extended period of time—more than a year. Shore Decl., Ex. B at 1-52 (admitting that payment was received and accepted for each and every invoice identified in paragraph 21 of Omron’s counterclaims). None of the allegedly late paid invoices were outstanding when Omron filed its counterclaims. Id. And Omron never considered IceMOS’s late payments a material breach of the Supply Agreement. In fact, Omron’s corporate representative, Takahiro Hasegawa, testified that the only alleged material breach by IceMOS is the non-payment of two invoices. Shore Decl., Ex. D (Rule 30(b)(6) Hasegawa Vol 1) at 71:21-73:3. It is also undisputed that Omron never gave written notice to IceMOS as strictly prescribed in the Supply Agreement that it was withdrawing such prior waiver and would thereafter demand strict compliance of timely payment for later payments. Id., Ex. B at 1- 52; Dkt. 59-1 § 9.4. “Out of simple fairness, a party that has repeatedly waived a condition of performance, particularly the timeliness of payment, is required to give notice that its waiver has been withdrawn before demanding strict compliance with the condition.” Madison Ave. Leasehold, 811 N.Y.S.2d at 52. Similarly, the fact that the Supply Agreement Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 18 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 15 contains a no-waiver clause is unavailing. Id. at 51(“[A] no-waiver clause is waived by the acceptance of rent.” (citing TSS-Seedman’s, Inc. v. Elota Realty Co., 72 N.E.2d 646, 648 (N.Y. 1988))). Accordingly, under well-established New York contract law, Omron has waived the right to demand timely payment. See Madison Ave. Leasehold, 811 N.Y.S.2d at 49 (acceptance of late payments with knowledge of lateness extinguishes default as a matter of law); see also Snide, 463 N.Y.S.2d at 89. Because there is no genuine dispute of material fact as to whether Omron waived the right to demand timely payment, IceMOS is entitled to judgment as a matter of law on Omron’s Late Payment Counterclaim. D. THE NON-PAYMENT COUNTERCLAIM IS FACTUALLY BASELESS As with its Late Payment Counterclaim, Omron cannot establish essential elements of its Non-Payment Counterclaim—i.e., that Omron fully performed and IceMOS failed to perform under the Supply Agreement. Nor can Omron refute IceMOS’s proof that Omron agreed to the return of the lots and continued to do business with IceMOS based on Omron’s agreement that no outstanding balances were due. Omron’s Non-Payment Counterclaim is based on its allegation that IceMOS failed to pay certain invoices (the “Unpaid Invoices”). Dkt. 28 at 48; see also id. at 44-45. First, Omron breached the Supply Agreement by failing to deliver the products within the ten-week lead time. Shore Decl., Ex. G (Rule 30(b)(6) Nukii Vol 1) at 225:5-226:6 (“Q And under the Supply Agreement, Omron is supposed to provide the wafers within ten weeks, correct? A That’s right. Q And Omron failed to meet that ten-week limit or requirement because of a contamination issue in the Yasu Fab, correct?... A That’s right.”); see also id. at 227:6-24. Specifically, due to a manufacturing defect, the wafer lots billed in the Unpaid Invoices were significantly delayed, ultimately causing IceMOS to lose the subject customer to a competitor. Anderson Decl., Ex. G (November 29, 2016 email regarding customer switch and return); id., Ex. H (December 2, 2016 email regarding scrapped lots); id., Ex. I (January 12, 2017 email regarding customer cancellation). And Omron’s corporate representative, Susumu Nukii, admitted that IceMOS had no obligation to pay for such late-delivered lots. Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 19 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 16 Shore Decl., Ex. H (Rule 30(b)(6) Nukii Vol 2) at 75:18-76:11 (“There’s no requirement for payment.”). Also, as with the Late Paid Invoices, two of the three lots billed in the Unpaid Invoices failed to obtain the necessary 80% yield to qualify as production lots and trigger IceMOS’s payment obligation. Chang Decl., Exs. B & C. Specifically, Lot No. 1601H8 in Invoice No. MD161012IO16052401 and Lot No. 1602H8 in Invoice No. MD161021IO16060301 had yields below 80%. Id., Ex. B at 3-5; id., Ex. C at 12. These lots did not qualify as production lots, and IceMOS did not breach the Supply Agreement by refusing to pay for them. More importantly, Omron agreed that the two invoices did not have to be paid. IceMOS’s chief executive officer, Samuel Anderson, reached an agreement with Yoshio Sekiguchi of Omron that, because IceMOS had lost its customer due to the manufacturing defect and resultant delay, IceMOS could return the subject wafers by making them available in China for Omron to witness their destruction. Shore Decl., Ex. T (Anderson Depo Vol 2) at 166:8- 171:13 (discussing the January 24, 2017 agreement and the lots to be scrapped); see also id., Exs. L & M (emails regarding January 2017 meeting concerning invoices); id., Ex. N at 1 (March 2017 email regarding revised term sheet based on the January 2017 meeting). Omron’s corporate representative, Susumu Nukii, confirmed that IceMOS and Omron agreed that the subject lots for the Unpaid Invoices would be returned or scrapped and that IceMOS did not have to pay the Unpaid Invoices. Shore Decl., Ex. G (Rule 30(b)(6) Nukii Vol 1) at 228:12-232:5 (“Q So it was agreed that Omron would take these parts back and that IceMOS did not have to pay for them, correct? A As far as I remember, yes.”). Consistent with this admission, Omron’s employee in charge of payment issues, Yoshihisa Segawa, also testified that as of August 30, 2017,6 IceMOS had fulfilled all of its obligations to IceMOS under the Supply Agreement. Id., Ex. I (Segawa Depo) at 82:1-83:25; see also Anderson Decl., Ex. J (stating all Super Junction invoices have been paid);7 id., Ex. K (updated invoices with no reference to the invoices at issue). The testimony is unequivocal: No invoices were 6 Sent and received dates of the email correspondence are different due to the time difference between Kyoto and Arizona. 7 No Omron employee denied this contention. Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 20 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 17 owed and due when Omron filed its counterclaims. Moreover, the person who made the agreement with Mr. Anderson that the Unpaid Invoices did not have to be paid due to Omron’s delay in processing the wafers, Yoshio Sekiguchi, has refused to appear for his deposition. Shore Decl. ¶ 2; id., Ex. A. Any statements attributed to him now denying such an agreement would be inadmissible hearsay. Industrial Eng’g & Dev., Inc. v. Static Control Components, Inc., 2014 WL 4983912, at *4 (M.D. Fla. October 6, 2014) (citing Union Pump Co. v. Centrifugal Tech., Inc., 404 Fed. Appx. 899, 907-908 (5th Cir. 2010)). The facts of the agreement by Omron to accept return/scrapping of the lots at issue are undisputed by any competent evidence. The agreement by Mr. Sekiguchi to accept the return of the lots is not hearsay when offered by IceMOS against Omron. Sara Lee Corp. v. Kraft Foods, Inc., 276 F.R.D. 500, 503-504 (N.D. Ill. 2011) (“When courts allow one party to admit Rule 30(b)(6) testimony from the opposing party, little concern arises about whether the opposing party was able to meaningfully cross- examine the statements of its own representative. See Fed. R. Evid. 801(d)(2) (defining admissions by a party-opponent as non-hearsay)”). The undisputed facts establish no breach by IceMOS and an agreement was reached to allow the lots subject to the Non-Payment Counterclaim to be returned to Omron. Because there is no genuine dispute of material fact that IceMOS fully performed under the Supply Agreement or that Omron failed to perform, IceMOS is entitled to judgment as a matter of law on Omron’s Non-Payment Counterclaim. IV. CONCLUSION Because the facts are undisputed with respect to Omron’s counterclaims, IceMOS respectfully requests that the Court to grant summary judgment in its favor. Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 21 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 18 Dated: March 17, 2019 Respectfully submitted, /s/ Michael W. Shore Robert D. Atkins (State Bar No. 015375) PATENT LAW GROUP: Atkins and Associates, P.C. 55 North Arizona Place, Suite 104 Chandler, Arizona 85225 Telephone: 480.499.9400 main@plgaz.com Michael W. Shore (admitted pro hac vice) mshore@shorechan.com Alfonso G. Chan (admitted pro hac vice) achan@shorechan.com Samuel E. Joyner (admitted pro hac vice) sjoyner@shorechan.com Paul T. Beeler (admitted pro hac vice) pbeeler@shorechan.com Shukri Abdi (admitted pro hac vice) sabdi@shorechan.com SHORE CHAN DEPUMPO LLP 901 Main Street, Suite 3300 Dallas, Texas 75202 Telephone: (214) 593-9110 Facsimile: (214) 593-9111 COUNSEL FOR PLAINTIFF ICEMOS TECHNOLOGY CORPORATION Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 22 of 23 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 PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT PAGE 19 CERTIFICATE OF SERVICE I hereby certify that on March 17, 2019, I electronically transmitted the attached document to the Clerk’s Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/EFC registrants: Brett M Doran Jonathan H Clayton Matthew AC Zapf Greenberg Traurig LLP 77 W Wacker Dr., Ste. 2400 Chicago, IL 60601 312-456-8400 Fax: 312-456-8435 Email: doranb@gtlaw.com Email: claydonj@gtlaw.com Email: zapfm@gtlaw.com Nicole Maroulakos Goodwin Greenberg Traurig LLP 2375 E Camelback Rd., Ste. 700 Phoenix, AZ 85016 602-445-8000 Fax: 602-445-8722 Email: goodwinn@gtlaw.com Brian W. LaCorte Jonathon A. Talcott Ballard Spahr LLP 1 E. Washington Street, Suite 2300 Phoenix, AZ 85004 (602) 798-5400 Email: lacorteb@ballardspahr.com Email: talcottj@ballardspahr.com Matthew Lowrie Kevin Littman Foley & Lardner LLP 111 Huntington Ave. Boston, MA 02199 (617) 342-4006 Email: mlowrie@foley.com Email: klittman@foley.com /s/ Michael W. Shore Michael W. Shore X Case 2:17-cv-02575-JAT Document 145 Filed 03/17/19 Page 23 of 23