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[W] Toshiba Machine Co. v. SPM Flow Control6/2/2005
I. Introduction
This case arises from the sale of two large machine tools. Toshiba Machine Company of America ("Toshiba") appeals a $9.25 million judgment on a jury verdict in favor of S.P.M. Flow Control, Inc. ("SPM"). In twelve issues, Toshiba complains of legally insufficient evidence to support jury findings on various aspects of SPM's breach of contract claims, mutually exclusive and inconsistent theories of recovery, overlapping damage awards, and excessive attorney's fees. In a single issue, SPM complains that the trial court used the wrong date to compute prejudgment interest. We affirm the judgment in all respects.
II. Factual and Procedural Background
SPM manufactures heavy-duty oilfield pumps. The pumps consist of two components: a "power end" and a "fluid end." SPM makes the fluid ends from blocks of solid steel weighing 3,000-4,000 pounds. The fluid ends have a complex internal shape machined through a process called "internal contouring."
In 1996, SPM began to shop for new machine tools to make fluid ends. The machines SPM used at the time dated from the 1960s and required 115 hours to make a single fluid end. SPM's primary goal in replacing the old machines was to reduce the time required to make a fluid end. SPM enlisted the help of Maruka, U.S.A., Inc., a machine tool distributor, to find suitable replacements. Maruka presented SPM with literature and quotes for several machine tools, including Toshiba's BMC 1000 Horizontal Machining Center ("BMC-1000").
SPM initially rejected Toshiba's quote because the BMC-1000 lacked the ability to perform internal contouring. Soon thereafter, however, Toshiba informed SPM that it had developed new software for the BMC-1000 that made internal contouring possible. Toshiba called the software, and the process it controlled, "orbit boring." Toshiba told SPM that Toshiba customers in Japan were already using the orbit-boring software on BMC-1000 machines.
Toshiba represented that orbit boring on the BMC-1000 could make fluid ends in much less time than SPM's existing tools. According to Toshiba, orbit boring allowed one cutting tool to do the work of many. The time saved by not having to change cutting tools would, said Toshiba, reduce the time needed to a make a fluid end, even though the cutting speed of the BMC-1000 was slower than that of SPM's existing equipment. SPM employees testified that Toshiba employees said, at various times before and after the sale, that orbit boring would allow SPM to make a fluid end in anywhere from fifteen to fifty hours.
A key issue at trial was what the term "orbit boring" meant. According to SPM's president, Dan Lowrance, Toshiba promoted orbit boring, also called "shake turning," as a new process that would bring new functionality to the BMC-1000. According to Toshiba's regional sales manager, Steve Oliphant, orbit boring on the BMC-1000 was simply a combination of older techniques called "Hale Interpolation" and "Archimedes Interpolation." Complicating the issue, Toshiba's parent company in Japan developed a new "concept" machine tool, the NX-76, to showcase what it touted as a "revolutionary" new process---a process also called "orbit boring." The parties hotly disputed whether shake turning on the BMC-1000 was the same process as orbit boring on the NX-76. SPM argued that Toshiba sold SPM orbit boring but delivered Hale and Archimedes Interpolation. Toshiba argued that orbit boring and shake turning were two names for the same process, regardless of which machine was involved.
In December 1997, SPM issued a purchase order for a BMC-1000 that Toshiba had available for immediate delivery. SPM's purchase order inc
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