iLight Technologies, Inc. v. Clutch City Sports & Entertainment, L.P.

414 S.W.3d 842, 2013 WL 4602731, 2013 Tex. App. LEXIS 11101
Court of Appeals of Texas·Decided August 29, 2013·No. 01-12-00574-CV·Published·Cited by 6 cases

Opinion

OPINION

LAURA CARTER HIGLEY, Justice.

Clutch City Sports & Entertainment Inc. (“Clutch City”) sued iLight Technologies, Inc. (“iLight”) for strict liability manufacturing defect and for negligence. A jury found iLight liable under these theories and determined that Clutch City had incurred damages in excess of $2.5 million. iLight appeals the trial court’s judgment rendered on the jury’s verdict. Raising three issues, iLight contends that the evidence is legally insufficient to support the judgment, challenging the two liability findings and the damages award.

We reverse and render.

Background Summary

The Toyota Center, a sports and entertainment facility in downtown Houston, opened in 2003. It is the home of the Houston Rockets and a venue for other sporting and entertainment events. Clutch City operates, maintains, and manages the Toyota Center. Clutch City entered into a “naming rights agreement” with Gulf States Toyota to have the venue named “Toyota Center.” Toyota agreed to pay approximately $5 million a year for the naming rights. As part of that contract, Clutch City agreed to display a lighted “Toyota” logo on the roof of the facility. A sign was installed on the Toyota Center roof, outlining Toyota’s logo. The sign was illuminated by red Plexineon light emitting diode (“LED”) strips manufactured by iLight.

In February 2007, a fire occurred on the Toyota Center roof involving the Plexineon sign. iLight replaced the affected sections of the LED sign without charge to Clutch City. The cause of the 2007 fire was not investigated.

In February 2009, the Plexineon sign caught fire. The fire caused damage to the Toyota Center’s roof, which cost $1,217.18 to repair. Clutch City replaced the damaged sections of the LED sign with extra parts of the sign that it had in storage. Clutch City lit the sign at night for another week after the repair but then noticed that other sections of the LED lights appeared melted. For safety reasons, Clutch City decided not to illuminate the sign.

Clutch City requested that iLight replace the damaged Plexineon sign at iLight’s expense. iLight declined to replace the sign without charge. It asserted that Clutch City’s use of a bleach-and-water solution and a high-pressure washer to clean the roof had caused the deterioration and corrosion of the lights, which led to their failure. iLight offered to replace the damaged portions of the LED sign at a reduced cost. Clutch City refused the offer. The parties were unable to reach an agreement with regard to replacement of the damaged sign. Clutch City replaced the damaged portions of the roof-top sign in August 2011, replacing between 500 and 800 feet of the sign. The replacement cost was $168,434.61.

*845 The illuminated roof-top sign is an important part of Toyota’s naming rights agreement with Clutch City because it is a high-profile advertising medium. However, even after the 2009 fire, Toyota continued to pay Clutch City the approximate $5 million as required by the naming rights agreement. Clutch City negotiated an arms-length agreement with Toyota to offset the loss of advertising that resulted from turning off the lights on the sign. Clutch City provided Toyota with certain “make goods” in the form of alternate advertising media in the Toyota Center. From February 2009 to August 2011, Clutch City claimed that it provided alternative advertising to Toyota worth approximately $4.675 million.

Clutch City filed suit against iLight in November 2009. Over the course of the litigation, Clutch City refined its claims against iLight. In its fourth amended petition, Clutch City alleged that the fire was caused by an electrical short in the LED strip, which had resulted from iLight’s defective manufacturing process. Clutch City also alleged that iLight had been aware of defects in the LED lights but had failed to warn Clutch City of the defects. Clutch City asserted claims against iLight for strict products liability and for negligence.

As damages, Clutch City requested the cost to repair the Toyota Center’s roof and the cost to replace the damaged portion of the sign. In addition, Clutch City sought damages for the “loss of use” of the roof and the sign following the 2009 fire. Clutch City asserted that the loss-of-use damages were measured by the value of the “make goods” or alternate advertising provided to Toyota. In other words, Clutch City asserted that it was entitled to $4.675 million for loss-of-use damages.

Clutch City tried the case to a jury on three theories of liability: strict liability manufacturing defect, strict liability marketing defect, and negligence. In support of its manufacturing defect claim, Clutch City offered the testimony of two experts. The report of one of those experts was also admitted into evidence. In addition, Clutch City relied on evidence from a federal lawsuit filed by iLight against the manufacturer of the LED light strip contained in iLight’s Plexineon light product.

Of the three liability theories submitted, the jury found iLight liable for strict liability manufacturing defect and for negligence, but it did not find iLight liable for strict liability marketing defect. The jury awarded the following damages: (1) $1,217.81 for the cost of repairs to the roof; (2) $168,434.61 for the cost of the LED sign replacement; and (3) $2,337,575.00 for loss of use of the roof and LED sign. The trial court rendered judgment on the jury’s verdict.

iLight had objected to the jury charge on the basis that there was legally insufficient evidence to submit any of the liability claims to the jury. iLight also filed post-judgment motions in which it challenged the legal sufficiency of the evidence to support the jury’s liability findings on strict liability manufacturing defect and negligence. It further challenged the legal sufficiency of the evidence to support the loss-of-use damages awarded to Clutch City. This appealed followed.

Legal Sufficiency

iLight presents three issues on appeal. In its first two issues, it contends that the evidence was legally insufficient to support the liability findings. iLight’s third issue challenges the sufficiency of the evidence to support the jury’s award of loss-of-use damages.

*846 A. Standard of Review

Because it is attacking the legal sufficiency of the evidence supporting adverse findings on issues for which it did not have the burden of proof, iLight must show that no evidence supports the jury’s adverse findings. Exxon Corp. v. Emerald Oil & Gas Co., L.C., 348 S.W.3d 194, 215 (Tex.2011) (citing Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex.1983)). Evidence is legally sufficient if it “would enable reasonable and fair-minded people to reach the verdict under review.” City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.2005). In making this determination, we credit favorable evidence if a reasonable fact-finder could and disregard contrary evidence unless a reasonable fact-finder could not. Id.

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iLight Technologies, Inc. v. Clutch City Sports & Entertainment, L.P., 414 S.W.3d 842, 2013 WL 4602731, 2013 Tex. App. LEXIS 11101 (Tex. Ct. App. 2013).

414 S.W.3d 842 (iLight Technologies, Inc. v. Clutch City Sports & Entertainment, L.P.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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