$200 FIGHT TURNS INTO $1.1 MILLION CASE

MIAMI REVIEW – FEBRUARY 1990

IN THE MATTER OF JAR LIDS, DEFUNCT PACKING PLANT IS THE WINNER.

A defunct Opa-Locka packing plant whose parent company tried to settle a product liability dispute with an international equipment manufacturer for $200 worth of jar lids has settled its subsequent federal court suit for $1.125 million.

Landsman Packing Co., of New Jersey which owned plants in Opa-Locka and Red Hook N.Y., sued Continental Can Co., Inc. in 1983 in U.S. District Court in Miami, claiming that the vacuum capping machine it leased from Continental for its New York plant was defective.

Because of the poor packing of fruit products, both of Landsman’s plants lost customers and both went out of business, according to Landsman’s lawyer, Peter Kneski of the Miami firm Kneski & Kneski. Landsman subsequently lost the building it owned in Opa-Locka, when NCNB National Bank of Florida won a $300,000 foreclosure action in Dade Circuit Court in June 1989.

Before the exodus of customers began, Landsman owner Samuel Landsman in 1982 offered to settle any potential claim against Delaware-based Continental Can for 40 boxes of jar lids, each box containing 1,000 lids worth a half-cent each.

Continental Can, however, turned down the settlement offer, worth about $200 because it did not want to make a gesture that Landsman would view as a concession of guilt, according to a copy of a Continental internal memo.

Continental blamed the packing problems on Landsman and its employees. The problems “are all the result of poor maintenance and maladjustments of our equipment by customer personnel,” the Continental memo states.

However, in December 1986, three years after Landsman filed its suit, Continental lawyer Hugh J. Turner offered to settle the case for $25,000. Turner stated in a letter offering the settlement that his client was willing to pay the $25,000 rather than litigate “for economic reasons.”

Turner, with the Miami office of News York’s Kelley, Drye & Warren, also stated in the letter, “I have every intention of recommending to my client that they consider seeking to recover sanctions in this case if we are forced to trial and your client loses, as I trust it will.”

Landsman turned down the $25,000 offer because it had already spent more than that on legal costs, Kneski said. “We probably would have settled for a low to mid-six-figure amount,” he said.

In May 1987, after a two-week trial, a Miami federal court jury awarded Landsman $5.83 million. U.S. District Judge Edward B. Davis found that the jury, in determining the direct damages portion of the award, included more of Landsman’s expenses than it should have and he reduced the award to about $5.33 million.

But on Jan. 30, 1989, the 11th Circuit Court of Appeal vacated the verdict and ordered a new trial. The appellate court found that Davis improperly instructed the jury on Landsman’s breach of contract claim and that the jury ruled against the weight of the evidence on a counterclaim by Continental.

Continental had alleged in its counterclaim that Landsman was holding hostage the equipment it leased and was not paying rent for it. Although Landsman admitted in trial that it did have the machine and was not paying rent, the jury ruled against Continental. Continental, before the trial, won a summary judgment for about $26,000 for machine parts and equipment rental.

Facing a Feb. 12 date for the new trial, Continental and Landsman settled their claims on Jan. 31, with Continental agreeing to pay Landsman $1.125 million and both parties stipulating to dismiss with prejudice. Landsman agreed to release the machine it leased from Continental. Neither party admitted guilt in the settlement.

Continental, which maintains that the capping machine was not defective, agreed to the settlement because it wanted to avoid another jury trial and the possibility of another multimillion-dollar verdict, according to attorney Turner.

“We think that the settlement was a very good result from our standpoint,” Turner said. “We thought the damages (in the first trial) were excessive, but there’s always the possibility that a jury will find otherwise.”

Kneski said his client agreed to the settlement because, “form the practical point of view, even if we got a judgment in the second trial, they’d take another appeal and it would be two years before we saw a dime.”

“The impression I got was we were the little guys and they were trying to wear us down and outspend us.” Kneski said. “It was a paper war and it was harder for me to fight than it was for Kelly, Drye & Warren.”

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