Montgomery County v. Microvote Corp.

Opinions of the United

2003 Decisions States Court of Appeals

for the Third Circuit

2-26-2003

Montgomery Cty v. Microvote Corp

Precedential or Non-Precedential: Precedential

Docket 01-2998

Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2003

Recommended Citation

"Montgomery Cty v. Microvote Corp" (2003). 2003 Decisions. Paper 766.

http://digitalcommons.law.villanova.edu/thirdcircuit_2003/766

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova

University School of Law Digital Repository. It has been accepted for inclusion in 2003 Decisions by an authorized administrator of Villanova

University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.

PRECEDENTIAL

Filed February 26, 2003

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 01-2998 and 01-2999

MONTGOMERY COUNTY

v.

MICROVOTE CORPORATION; CARSON MANUFACTURING

COMPANY, INC.; WESTCHESTER FIRE INSURANCE

CO., INC.

Westchester Fire Insurance Company,

Appellant in 01-2998

MICROVOTE CORPORATION; CARSON MANUFACTURING

COMPANY, INC.; WESTCHESTER FIRE INSURANCE

CO., INC.

Microvote Corporation,

Appellant in 01-2999

Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. Civil Action No. 97-cv-06331)

District Judge: Honorable Robert F. Kelly

Argued on October 15, 2002

Before: BECKER, Chief Judge, ROTH

and ROSENN Circuit Judges

(Opinion filed: February 26, 2003)

John M. Elliott, Esquire

Timothy T. Myers, Esquire (Argued)

Meredith T. Shepherd, Esquire

Elliott Reihner Siedzikowski

& Egan, P.C.

925 Harvest Drive

Blue Bell, PA 19422

COUNSEL FOR APPELLEE

John R. Price, Esquire (Argued)

John R. Price & Associates

9000 Keystone Crossing, 150

Indianapolis, IN 46240

Robert T. Carlton, Jr., Esquire

(Argued)

Ellisworth, Carlton, Mixell &

Waldman, P.C.

1105 Berkshire Blvd., Suite 320

Wyomissing, PA 19610

COUNSEL FOR APPELLANT

OPINION OF THE COURT

ROTH, Circuit Judge:

Carson Manufacturing Company, Inc., and Microvote

Corporation sold an electronic voting system to Montgomery

County, Pennsylvania. Pursuant to the sales contract,

Microvote obtained a performance bond from Westchester

Fire Insurance Company, Inc. The voting system

malfunctioned in the November 1995 general election and

the April 1996 primary election. As a result, the County

filed a six count diversity action, alleging negligence by

Microvote and Carson, breach of warranty by Microvote and

Carson, breach of contract by Microvote, fraud by

Microvote, wrongful use of civil proceedings by Microvote,

and breach of the performance bond by Westchester.

Carson settled with Montgomery County shortly before trial,

and a jury returned a verdict against Microvote on the

breach of implied warranty cause of action and against

2

Westchester on the performance bond claim. Microvote and

Westchester appealed.

On appeal, Westchester claims that the District Court

erred in finding that the statute of limitations did not bar

this action. Westchester also raises various other

challenges to the District Court’s jury charge and its denial

of Westchester’s post-trial motions. Both Microvote and

Westchester contend that the District Court erred in its

refusal to admit into evidence the videotape deposition of

defendants’ expert witness. They also claim that the District

Court should have limited Montgomery County’s remedy to

repair and replacement of the defective machines and

should have off-set the judgment against them by the

amount of Carson’s settlement with the County. For the

reasons stated below, we will affirm.

I. Facts and Procedural History

On May 25, 1994, the County entered into a written

contract with Microvote to purchase 900 direct recording

electronic voting machines (DREs), a central computer

system, computer software, and support services for a total

of $3,822,000. The bid explicitly stated that it was for an

"integrated voter registration and election system" and that

"Microvote is bidding the entire system, as specified,

including all requisite hardware and software." Microvote

manufactured the system software, Microvote Election

Management Software (MEMS), but it purchased the

machines and their internal software from Carson. The

contract required Microvote personnel to operate the system

during elections through 1995.

Pursuant to the sales agreement, Microvote obtained a

performance bond from Westchester. The performance bond

incorporated the sales contract by reference and contained

a warranty that all materials, equipment, and labor will be

furnished in a "complete and workmanlike manner." The

performance bond required Microvote to provide

Westchester with notice of any default. It did not require

the County to give Westchester notice of default. Nor, did

Westchester ever ask the County to provide notice of

default. Westchester’s affiliate, Universal, obtained a

3

$150,000 letter of credit as collateral on the performance

bond. The letter of credit expired on June 1, 1996.

The DREs were phased in to use over the course of three

elections: the November 1994 general election, the April

1995 primary election, and the November 1995 general

election. The November 1995 election was the first time the

County used all 900 DREs and the MEMS software. In the

November 1995 general election, DREs repeatedly shut

down. This resulted in long lines, in voters leaving polling

stations before they voted, and in lost votes. The shut-

downs occurred because the DREs would randomly turn

themselves into power-fail mode. Apparently, the scroll

motors were emitting power surges to the internal computer

chips when the brushes in the scroll motors interacted with

the casing of the motors to generate electromagnetic

interference. The DREs’ microcomputer chip would then

shut down in order to protect the circuitry. Thus, when a

voter pushed a button on a DRE to scroll to the next page,

the scroll motor would activate, and the machine might

randomly shut down in front of the voter. In this situation,

the vote would be lost unless the voter re-voted. In

addition, the MEMS software malfunctioned when counting

the votes, causing Microvote employees to report the wrong

"unofficial results" to the press.

The DRE malfunctions were haphazard. William Carson,

the President and CEO of Carson, wrote to the County after

the November 1995 general election that "the problem

seems to appear and disappear for no particular reason."

Carson admitted in an internal memorandum, and in his

trial testimony, that the DREs had problems in the

November 1995 election. Microvote’s on-site manager in an

internal memorandum also noted "serious problems" with

the MEMS software. The software problems were not

detected by pre-election testing because Microvote was

making changes in the software up to the day before the

election. Under the contract and Pennsylvania law, the

system, including the software, should have been tested

and certified prior to the election. MEMS, however, was not

certified in Pennsylvania.

After the November 1995 election, County officials met

with representatives from Microvote. At the meeting, the

4

County expressed its intention to return the defective

system and seek a refund. Microvote’s Sales Director

responded that Microvote will "make certain that in April of

next year we don’t face any machine down time at all." On

March 1, 1996, the Solicitor of Montgomery County notified

Microvote that the County "considers you in default of your

contract." Microvote claimed that additional machines

would cure the problem and offered to provide the County

with 390 additional "loaner" machines free of charge for the

April 1996 primary election. The County agreed to give the

DREs another chance. On March 13, 1996, the parties

entered into an agreement under which the County

maintained its position that Microvote was in breach of the

May 25, 1994, sales contract but would use the 900 DREs

the County owned, along with the 390 additional DREs on

loan from Microvote, in the April 1996 election to determine

if the system could function properly with additional DREs.

Microvote made several attempts to cure the problems,

including working on the motor brushes and retrofitting the

machines with less sensitive computer chips. Nevertheless,

the system failed again in the April 1996 primary election.

On June 28, 1996, the County replaced the DREs with

1,050 machines from another manufacturer that the

County purchased for $5,617,500, less a $1,350,000 trade-

in allowance for the Microvote machines.1 Neither the

County, nor Microvote, notified Westchester of the default

and Universal’s Letter of Credit expired. Nor, however, did

Westchester obtain a release from the County despite the

fact that Westchester’s policy required a completion letter

from the County before allowing the Letter of Credit to

expire. Moreover, Westchester twice attempted

unsuccessfully to obtain written releases from the County.

On July 1, 1996, Microvote filed an action against the

County in the United States District Court for the Eastern

District of Pennsylvania. The complaint alleged that the

County had breached an oral agreement to purchase 350 of

the 390 DREs that Microvote had loaned the County. The

District Court dismissed the action pursuant to Fed. R. Civ.

P. 12(b)(6) on the ground that Pennsylvania law requires all

_________________________________________________________________

1. The Microvote machines have been repurchased by other counties.

5

contracts with local governments to be in writing. We

affirmed that decision in Microvote v. Montgomery County,

124 F.3d 187 (3d Cir. 1997).

On October 10, 1997, the County brought this diversity

action, alleging breach of contract, of warranty, and of the

performance bond, as well as negligence, fraud, and

wrongful use of civil process. Microvote moved to dismiss

on grounds that the County should have raised the claims

as compulsory counterclaims in Microvote v. Montgomery

County, that the complaint was untimely, and there was a

lack of personal jurisdiction. Alternatively, Microvote moved

for a transfer of venue. The District Court denied the

motions.

Following discovery, defendants moved for summary

judgment. The District Court granted summary judgment to

defendants on the negligence claim, the fraud claims

arising prior to the November 1995 election, and the

wrongful use of civil proceedings claim, but denied

defendants’ motion for summary judgment with respect to

the remaining fraud claims, the breach of contract claim,

the breach of warranty claim, and the performance bond

claim. One week prior to the start of trial, Carson entered

into a Covenant Not to Sue with the County.2

The jury trial commenced against Microvote and

Westchester on October 18, 2000. At the close of the

County’s case, Microvote and Westchester moved for

judgment as a matter of law pursuant to Fed. R. Civ. P.

50(a). The District Court reserved ruling on the motions. At

the close of evidence, Microvote and Westchester renewed

their motions, which the Court denied. On November 1,

2000, the jury returned a verdict. The jury found in favor

of Microvote on the breach of contract, the breach of

express warranties, and the fraud counts. However, the

jury found that Microvote had breached implied warranties

of merchantability and fitness for a particular purpose and

_________________________________________________________________

2. According to a newspaper article, of which the District Court took

judicial notice, Carson paid the County $587,000 in exchange for the

County agreeing not to sue Carson. At oral argument, plaintiff ’s counsel

stated that the actual settlement was greater than the amount reported

in the press.

6

that Westchester had violated the performance bond. The

jury awarded Montgomery County $1,048,500 in damages.

In separate post-trial motions, Microvote and Westchester

moved to amend the judgment, for relief from final

judgment, for judgment as a matter of law, and for a new

trial. The County also filed a post-trial motion seeking to

mold the jury verdict, judgment as a matter of law, and a

new trial. The District Court denied all the post-trial

motions in separate orders dated June 25, 2001. Microvote

and Westchester timely appealed. The County did not

appeal the denial of its post-trial motion.

II. Jurisdiction and Standard of Review

The District Court had diversity jurisdiction over this

matter pursuant to 28 U.S.C. S1332. We have appellate

jurisdiction pursuant to 28 U.S.C. S1291.

We subject "the District Court’s interpretation of Federal

Rule of Evidence 702 to plenary review. However, we review

the District Court’s decision to admit or exclude scientific

evidence for an abuse of discretion." In re TMI Litig., 193

F.3d 613, 666 (3d Cir. 1999) (citation omitted). We exercise

plenary review over an order denying a motion for judgment

as a matter of law and apply the same standard as the

District Court. Lightning Lube, Inc. v. Witco Corp., 4 F.3d

1153, 1166 (3d Cir. 1993). Motions for judgment as a

matter of law are granted only if, "viewing the evidence in

the light most favorable to the nonmovant and giving it the

advantage of every fair and reasonable inference, there is

insufficient evidence from which a jury reasonably could

find liability." Id.

The scope of review of erroneous jury instructions is

whether the charge, "taken as a whole, properly appraises

the jury of the issues and the applicable law." Smith v.

Borough of Wilkinsburg, 147 F.3d 272, 275 (3d Cir. 1998)

(citation and quotation omitted). We review a District

Court’s denial of a motion for a new trial pursuant to Fed.

R. Civ. P. 59 and the denial of a motion pursuant to Fed.

R. Civ. P. 60(b) for an abuse of discretion. See Reform Party

of Allegheny County v. Allegheny County Dep’t. of Elections,

174 F.3d 305, 311 (3d Cir. 1999); Olefins Trading Inc. v.

7

Han Yang Chem. Corp., 9 F.3d 282, 289 (3d Cir. 1993). An

abuse of discretion occurs when "the district court’s

decision rests upon a clearly erroneous finding of fact, an

errant conclusion of law or an improper application of law

to fact." Reform Party of Allegheny County , 174 F.3d at 311.

III. Discussion

A. Statute of Limitations and Nullum Tempus

The District Court did not err in denying Westchester’s

motion for judgment as a matter of law on the ground that

the statute of limitations bars this action because the

doctrine of nullum tempus occurit regi ("time does not run

against the king") applies here. Under the doctrine of

nullum tempus, the statute of limitations does not bar

actions brought by the state or its agencies, unless a

statute expressly so provides. See City of Philadelphia v.

Lead Indus. Ass’n, Inc., 994 F.2d 112, 118 (3d Cir. 1993).

"The rationale of this rule is that the Commonwealth, as a

plaintiff, seeks the vindication of public rights and the

protection of public property." Id.; accord Broselow v.

Fisher, ___ F.3d ___ (3d Cir. 2003) (slip op. at 8). The

County, however, is a political subdivision of the

Commonwealth. The doctrine of nullum tempus is not

available to political subdivisions of the state except in

limited circumstances of obligations imposed by law:

[S]tatutes of limitations cannot be pleaded against such

political subdivisions when they are seeking to enforce

strictly public rights, that is, when the cause of action

accrues to them in their governmental capacity and the

suit is brought to enforce an obligation imposed by law

as distinguished from one arising out of an agreement

voluntarily entered into by the defendant.

Lead Indus. Ass’n, Inc., 944 F.2d at 119 (quoting City of

Philadelphia v. Holmes Elec. Protective Co., 6 A.2d 884

(1939)).

Nullum tempus does not apply to a common law contract

claim against a political subdivision, arising out of a

voluntary agreement, because such a claim does not accrue

solely to a governmental entity. However, where a

8

subdivision of the Commonwealth is required by the

Constitution or by statute to engage in an activity, nullum

tempus applies to contracts entered into with private

parties in order to fulfill this duty. See Lead Indus. Ass’n,

Inc., 994 F.2d at 120-21 (holding that nullum tempus does

not apply where the City of Philadelphia and state housing

authorities bring an action against a lead paint

manufacturer and trade association to recover the cost of

abating lead paint in public housing because the plaintiffs

were not "required by law . . . to contract for the purchase

of lead-based paint or to construct the buildings in which

that paint was used."); Mt. Lebanon School Dist. v. W.R.

Grace and Co., 607 A.2d 756 (Pa. Super. Ct. 1992) (holding

that the doctrine of nullum tempus applies where a school

district brings breach of contract and tort claims against

contractors and manufacturers for defects in the

construction of school buildings because the school district

was required by the Constitution and statute to build the

schools and the school district contracted with private

parties in order to fulfil this duty); Stroudsburg Area School

Dist. v. R.K.R. Assoc./Architects, 611 A.2d 1276 (Pa. Super.

Ct. 1992), app. denied, 622 A.2d 1377 (1993) (same).

The nullum tempus doctrine applies in this case because,

as in Mt. Lebanon School District and Stroudsburg Area

School District, but unlike in Lead Industries Association,

Inc., the County was required by law to hold elections and

to procure electronic voting machines. The County was

required "[t]o purchase, preserve, store and maintain

primary and election equipment of all kinds, including . . .

voting machines." 25 P.S. S2642(c). Further, in November

1993, the citizens of the County voted to replace the

County’s manual voting machines with electronic voting

machines. Following this vote, the County was required by

law to purchase electronic machines. Under Pennsylvania

law, if "a majority of the qualified registered electors voting

on the question in any county . . . vote in favor of the

adoption of an electronic voting system, the county board of

elections of that county shall purchase, lease, or otherwise

procure . . . the components of an electronic voting

system." 25 P.S. S3031.4(a). Thus, as in Mt. Lebanon School

District, the County is:

9

unquestionably compelled by law . . . to provide

[electronic voting machines]. The practical implications

of such a duty require [the County], in [its]

governmental capacity, to enter into contractual

relations with private parties who can construct and

maintain such suitable facilities. Where, as here, a

cause of action accrues to a party in its governmental

capacity and the suit is brought to enforce strictly

public rights and an obligations imposed by . . .

statute, such as that herein, the doctrine of nullum

tempus applies.

Mt. Lebanon Sch. Dist., 607 A.2d at 762.

Further, contrary to Westchester’s assertion, the

acquisition of the performance bond also was an obligation

imposed by law. Under Pennsylvania law:

The successful bidder, when advertising is required

herein, shall be required to furnish a bond with

suitable reasonable requirements guaranteeing

performance of the contract, with sufficient surety in

the amount of fifty per centum (50%) of the amount of

the contract, within thirty (30) days after the contract

has been awarded, . . . unless the commissioners shall

waive the bond requirement in the bid specification.

16 P.S. S5001(c). In this case, the bond requirement was

not waived in the bid specification.

Moreover, as the District Court held, the performance

bond should not be examined apart from the underlying

contract in determining whether nullum tempus applies.

The purpose of the performance bond was to ensure that

the County was able to perform its statutorily mandated

duty to obtain electronic voting machines. Therefore, in

bringing this action to recover under the performance bond,

the County was enforcing the obligation to provide

electronic voting machines imposed by law. As Microvote

represented at oral argument, the County most likely would

not be able to recover on its judgment absent the

performance bond because of Microvote’s limited assets.

B. Expert Witness

The District Court did not abuse its discretion in

excluding the testimony of defendants’ expert, Robert J.

10

Naegele. Federal Rule of Evidence (FRE) 702 was amended

in 2000 to provide that:

If scientific, technical, or other specialized knowledge

will assist the trier of fact to understand the evidence

or to determine a fact in issue, a witness qualified as

an expert by knowledge, skill, experience, training, or

education, may testify thereto in the form of an opinion

or otherwise, if (1) the testimony is based upon

sufficient facts or data, (2) the testimony is the product

of reliable principles and methods, and (3) the witness

has applied the principles and methods reliably to the

facts of the case.

FRE 702. This rule was amended in response to Daubert v.

Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). See

FRE 702 Advisory Committee Notes. In Daubert, the

Supreme Court established a "gatekeeping role for the

judge" in determining the reliability and relevancy of expert

testimony under FRE 702. Id. at 589. The Court stated:

Faced with a proffer of expert scientific testimony,. . .

the trial judge must determine at the outset, pursuant

to Rule 104(a), whether the expert is proposing to

testify to (1) scientific knowledge that (2) will assist the

trier of fact to understand or determine a fact in issue.

This entails a preliminary assessment of whether the

reasoning or methodology underlying the testimony is

scientifically valid and of whether that reasoning or

methodology properly can be applied to the facts in

issue.

Id. at 592-93.

Daubert identifies a non-exhaustive list of factors for

consideration when determining the reliability of proffered

testimony. This includes whether 1) a theory or technique

is scientific knowledge that will assist the trier of fact; 2)

the theory or technique has been subjected to peer review

and publication; 3) the known or potential rate of error, and

the existence and maintenance of standards controlling the

technique’s operation; and 4) the general acceptance of the

theory or technique. Id.; see also Oddi v. Ford Motor Co.,

234 F.3d 136, 145 (3d Cir. 2000), cert. denied , 532 U.S.

11

921 (2001); In re TMI Litig., 193 F.3d at 664; In re Paoli R.R.

Yard PCB Litig., 35 F.3d 717 (3d Cir. 1994).

The Supreme Court concluded that the inquiry is a

flexible one, but that trial courts should focus"solely on

principles and methodology, not on the conclusions they

generate." Daubert, 509 U.S. at 595. However, the Supreme

Court has noted that conclusions and methodology are not

entirely distinct from one another, and that a "court may

conclude that there is simply too great a gap between the

data and the opinion proffered." Gen. Elec. Co. v. Joiner,

522 U.S. 136, 146 (1997). Daubert was decided in the

context of scientific knowledge, but the Supreme Court has

extended its reasoning to the kind of "technical or other

specialized knowledge" at issue here. See Kumho Tire Co.,

Ltd. v. Carmichael, 526 U.S. 137, 141 (1999).

While FRE 702 is the "primary locus" of a District Court’s

gatekeeping role, it also must look to other rules, including

FRE 703. Daubert, 509 U.S. at 590; In re TMI Litig., 193

F.3d at 696. FRE 703 provides that:

The facts or data in the particular case upon which an

expert bases an opinion or inference may be those

perceived by or made known to the expert at or before

the hearing. If of a type reasonably relied upon by

experts in the particular field in forming opinions or

inferences upon the subject, the facts or data need not

be admissible in evidence in order for the opinion or

inference to be admitted.

FRE 703. When "a trial judge analyzes whether an expert’s

data is of a type reasonably relied on by experts in the field,

he or she should assess whether there are good grounds to

rely on this data to draw the conclusion reached by the

expert." In re TMI Litig., 193 F.3d at 697. If the data

underlying "the expert’s opinion are so unreliable that no

reasonable expert could base an opinion on them, the

opinion resting on that data must be excluded." Id.

In this case, the District Court acted within its discretion

when it excluded the videotaped deposition of Naegele,

author of the Federal Election Commission ("FEC")’s design

performance and testing requirements for Punchcard

Marksense and Direct Recording Electronic Voting Systems.

12

In the deposition, Naegele testified that the Microvote DREs

met or exceeded the FEC standards in the April 23, 1996,

primary election. While the District Court did not question

Naegele’s qualifications as an expert to offer such

testimony, the testimony of a witness, who is well-qualified

by experience, still may be barred if it is not based on

sound data. See Kumho Tire Co., 526 U.S. at 153. The trial

judge, after viewing the videotape deposition, held that the

videotape was inadmissible because it was unreliable,

noting that "I’m a little concerned about some of the things

that were shown to him he didn’t seem to know where they

were from or what the source of them were. That, I find

disturbing."

In his deposition,3 Naegele indicates that he relied on a

document prepared by Microvote’s National Sales Director,

Gary Greenhalgh, in which Greenhalgh, who was not

present during the April 1996 elections, made a"reverse"

"guestimate" about the amount of time that the machines

were down. Greenhalgh did not base his determination on

primary data. Naegele admited that he did not know what

the document was, who created it, or how it was created.

Naegele also relied on other documents, some of which

apparently were derived from the Greenhalgh document.

Again, Naegele could not identify the source or basis of

some of these documents, and Naegele admitted that he did

not measure actual election use data to determine how long

the machines were down. While Naegele testified that he

relied on audit trail tapes, these were a sampling of tapes

that were selected by an attorney for Carson. See In re TMI

Litig., 193 F.3d at 697-98 (holding that a District Court

properly excluded expert testimony where the sole basis for

the testimony was summaries prepared by a party’s

attorney).

Under these circumstances, we conclude that the District

Court did not abuse its discretion in excluding Naegele’s

testimony because the court reasonably concluded that the

data underlying Naegele’s opinion was so unreliable that no

reasonable expert could base an opinion on it. See id.

_________________________________________________________________

3. Naegele was not subjected to cross-examination at his deposition

because plaintiff ’s attorney was not present.

13

C. Damages

The District Court did not err in denying defendants’

motion for judgment as a matter of law on the ground that

the exclusive remedy under the contract was repair and

replacement of defective machines. It is clear from the law

and the evidence that a reasonable jury could have

concluded that monetary damages were available to the

County. The Uniform Commercial Code provides as follows:

(a) General rule.--Subject to the provisions of

subsections (b) and (c) and of section 2718 (relating to

liquidation or limitation of damages; deposits):

(1) The agreement may provide for remedies in

addition to or in substitution for those provided in

this division and may limit or alter the measure of

damages recoverable under this division, as by

limiting the remedies of the buyer to return of the

goods and repayment of the price or to repair and

replacement of nonconforming goods or parts.

(2) Resort to a remedy as provided is optional

unless the remedy is expressly agreed to be

exclusive, in which case it is the sole remedy.

13 Pa. C.S.A. S2719(a).

In this case, the repair and replacement remedy is an

optional remedy, not the sole remedy, because Microvote

and the County did not expressly agree that repair and

replacement would be the exclusive remedy. The May 25,

1994 sales agreement provides as follows:

It is further agreed that in case any of the said

materials, equipment and/or supplies furnished and

delivered under this contract are rejected by the

authorized or proper County Agent as unsuitable or

unfit, such materials, equipment, and/or supplies so

rejected shall be removed at once by [Microvote], and

other materials, equipment, and/or supplies of the

proper kind and quality, and fully up to the

requirements of the contract, furnished in place

thereof, to the satisfaction of County Agent, at the cost

and expense of [Microvote]; provided, however, that in

the event [Microvote] fails, neglects, or refuses to furnish

14

the replacement therefor within sixty (60) days after

receipts of written request so to do, County may

purchase said replacements and [Microvote] agrees to be

liable for costs thereof.

The remedies herein provided shall be in addition to

and not in substitution of the rights and remedies which

would otherwise be vested in [the County] under the

terms of this agreement, including those contained in

the bid, proposal, and specifications, all of which rights

and remedies are specifically reserved by [the County].

(emphasis added). Rather than expressly limiting the

County’s remedy exclusively to repair and replacement, this

contractual provision explicitly states that the repair and

replacement remedy does not substitute for other remedies

and that the County retains the right to seek other

remedies.

D. Effect of Carson Settlement on Judgment Against

Microvote and Westchester

The District Court did not abuse its discretion in denying

defendants’ motion pursuant to Fed. R. Civ. P. 60(b) to "off-

set" the judgment against non-settling defendants

Microvote and Westchester by the amount of money the

County received from co-defendant Carson as part of a

settlement. We come to this conclusion because the non-

settling defendants waived any claim to the settlement.

Under Pennsylvania law, a "non-settling tortfeasor is

required to pay his full pro-rata share." Charles v. Giant

Eagle Markets, 522 A.2d 1, 2 (1987). Accordingly, in Rocco

v. Johns-Manville Corp., we held that, under the

Pennsylvania Joint Tortfeasors Act, settlement by a joint

tortfeasor reduces the amount a plaintiff may recover from

the non-settling co-defendant to his pro rata share or the

amount paid for the release, whichever is greater. See 754

F.2d 110, 111 (3d Cir. 1985); 42 Pa.C.S.A. S8326. However,

"[u]nder Pennsylvania law, if the released party is not a

joint tortfeasor, he is considered a volunteer. In that

circumstance, the amount paid for the release is not

deducted from the recovery against a nonreleased party."

Id. In order to reduce a plaintiff ’s recovery, the co-

defendant’s culpability as a joint tortfeasor must be

15

established through adjudication or concession of joint

tortfeasor status in the settlement. See id. at 114-15.

In this case, as the District Court noted, neither

Microvote nor Westchester submitted a jury interrogatory

for apportionment of liability. On the contrary, Microvote

took "violent exception" to special jury interrogatories

proposed by Carson prior to settling that would have

apportioned damages between Carson and Microvote.

Further, defendants did not present any evidence at trial

that would support a jury finding regarding apportionment.

They did not attempt to keep Carson in the case in order to

apportion liability, nor did they request substitution of a

settlement that delineated Carson’s pro-rata share of

liability under Griffin v. United States, 500 F.2d 1059 (3d

Cir. 1974). As we held in Rocco:

One would have expected the nonsettling defendants to

either have requested substitution of Griffin -type

releases or judicial determination of liability. The

nonsettling defendants took no action, apparently

acquiescing in the settling part[y’s] absence from the

trial. That failure to act may be considered a waiver of

any benefit from the [settling defendant’s release] or

the amounts paid for [it].

754 F.2d at 115. Since the jury did not apportion liability

and the settlement did not mention the non-settling

defendants’ liability, Microvote and Westchester have

waived any claim to the settlement under Giant Eagle

Markets and Rocco.4

_________________________________________________________________

4. Defendants argue that Giant Eagle Markets and Rocco do not apply to

the present case because those cases involved tort claims, while the

present case is for breach of warranty, which defendants claim is

contractual in nature. It is unlikely that the Pennsylvania Supreme

Court would adopt an off-set rule for breach of warranty claims that

differs from the rule in the tort context in light of Williams v. West Penn

Power Co., 467 A.2d 811 (1983) (holding that the statute of limitations

for tort claims does not apply to breach of warranty claims, even if the

breach results in a personal injury). In Williams, the Pennsylvania

Supreme Court noted that:

The Superior Court in [Salvador v. Atlantic Steel Boiler Co, 389 A.2d

1148 (Pa. Super. Ct. 1978), aff ’d, 424 A.2d 497 (1981)] strayed into

16

Even if defendants had not waived an off-set claim, the

jury’s verdict does not suggest that defendants are entitled

to an off-set. The jury found that the County sustained

damages in the amount of $1,048,500. This amount is

about half of the difference between the value of the DREs

as warranted ($3,822,000) and the trade-in value of the

DREs ($1,348,500). Since the jury neither heard evidence

regarding Carson’s liability to the County, nor received

instruction from the District Court that they were to

determine Carson’s liability, nothing in the verdict suggests

that the $1,048,500 award represents the full amount of

damages that the County suffered from the actions both of

the non-settling defendants and of Carson. See Giant Eagle

Markets, 522 A.2d at 3 ("There is no basis for concluding

the jury verdict must serve as a cap on the total recovery

that a plaintiff may receive.").5

_________________________________________________________________

error by embracing a tort/contract dichotomy. The inherent fallacy

of such a dichotomy is that in the area of products liability we enter

the borderland of tort and contract. It is not a question of whether

a claim sounds in tort or assumpsit. Rather it sounds in both.

Therefore, there is no legitimacy in attempting to use such a

dichotomy as the predicate for distinction as to the limitation to be

given the action.

Id. at 817

5. We also conclude that Westchester’s three remaining arguments lack

merit. First, Westchester’s argument that the District Court erred in

declining to reduce the judgment against it by the amount that the jury

found that Westchester had been prejudiced by the County’s failure to

timely notify it of Microvote’s default lacks merit because the County had

no contractual obligation to provide notice of default. Under

Pennsylvania law, creditors such as the County are not required to

provide notice to a surety that a principal has defaulted, unless the

contract requires such notice. See United States v. Minnesota Trust Co.,

59 F.3d 87, 90 (8th Cir. 1995); In re Sherry & O’Leary Inc., 148 B.R.

248, 256 (W.D. Pa. 1992). Second, even if the jury’s verdict that

Microvote breached implied warrantees of merchantability and fitness for

a particular purpose are inconsistent with the jury’s finding that

Microvote did not breach the May 25, 1994, contract with the County,

there is sufficient evidence to support the verdict on the breach of

warranty claim and "consistent jury verdicts are not, in themselves,

necessary attributes of a valid judgment." Mosley v. Wilson, 102 F.3d 85,

90 (3d Cir. 1996). In Mosley, this Court held that "in certain

17

IV. Conclusion

For the reasons stated above, the judgment of the District

Court will be affirmed.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

_________________________________________________________________

circumstances, a court retains the authority, even in a civil case, to

allow an apparently inconsistent verdict to stand." Id. (quoting Los

Angeles v. Heller, 475 U.S. 796, 805 (Stevens, J., dissenting). Those

circumstances are where the verdict appears to be the result of

compromise, as opposed to jury confusion. See Heller, 475 U.S. at 806

n. 12, 806 n. 13 (Stevens, J., dissenting). In the present case, the

apparently inconsistent verdict would appear to be the result of

compromise, as evidenced by the fact that the jury awarded the County

approximately half the expectation damages the County sought on its

breach of contract claim. Finally, the District Court did not err in

declining to instruct the jury that the County could only recover for

defective individual machines because the machines, along with the

MEMS software, constitute one voting system.

18