Elliott Greenleaf Wins in U.S. Court of Appeals, Affirming Multi-Million Dollar Settlement and Jury Verdict

Elliott Greenleaf successfully defended and then prosecuted an action on behalf of a major county against the seller and manufacturer of an electronic voting system, and the company that issued a performance bond for the sales contract. Montgomery County v. Microvote Corporation, et al., 320 F.3d 440, 60 Fed. R. Evid. Serv. 873 (3d Cir.2003).

Microvote Corp. sold an electronic voting system to Montgomery County, Pennsylvania (“County”). The County contended that the voting system malfunctioned after the voting machines shut down randomly and unpredictably as a result of their microcomputer chips sensing internal power surges emitted by the motors that scrolled the ballot pages. This resulted in long lines, in voters leaving polling stations before they voted, and in lost votes. In addition, after the polls closed, the software malfunctioned when counting the votes, causing Microvote employees to report the wrong results to the media.

Microvote sued the County for $1.8 million, alleging that the County orally promised to buy more machines, and that the problems during the elections were the result of the County not having purchased the promised number of voting machines. The District Court granted Elliott Greenleaf’s Motion to Dismiss Microvote’s lawsuit against the County. Microvote v. Montgomery County, 942 F.Supp. 1046 (1996), 124 F.3d 187 (3d Cir. 1997).

Elliott Greenleaf then sued Microvote, Carson Manufacturing Co., and Westchester Fire Insurance Company on behalf of the County. Carson settled with Montgomery County shortly before trial for approximately $587,500. The jury returned a verdict against Microvote and Westchester for in excess of $1,048,500. Microvote and Westchester appealed. The Third Circuit affirmed the jury verdict and the judgment of the District Court on all issues. The dismissal of all claims against the County and its subsequent settlement, jury verdict and judgment, won by Elliott Greenleaf, represent a swing of in excess of $3.4 million for the County.

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The Third Circuit affirmed the District Court’s holding that the statute of limitations on the performance bond was tolled by the doctrine of nullum tempus occurit regi (“time does not run against the king”). Under the doctrine of nullum tempus, the statute of limitations does not bar actions brought by the state or its political subdivisions, unless a statute expressly so provides, because the Commonwealth seeks the vindication of public rights and the protection of public property. The doctrine of nullum tempus is not available to political subdivisions of the state except in limited circumstances of obligations imposed by law, 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. 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 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. The District and Circuit Courts applied the doctrine of nullum tempus in this case because the County was required by law to hold elections and to procure electronic voting machines. The County was also required to purchase election equipment by statute and by a voter referendum.

The Third Circuit also affirmed the District Court’s granting of Elliott Greenleaf’s Motion to Preclude the non-settling defendants from presenting the expert testimony of the settling defendant. During the trial, Microvote and Westchester conducted a video deposition of Carson’s expert. In the deposition, the expert testified that the Microvote voting machines met or exceeded the federal FEC standards in the April 1996 primary election. The trial judge, after viewing the videotape deposition, granted Elliott Greenleaf’s Motion to Preclude the expert testimony as unreliable. Elliott Greenleaf trial lawyers successfully argued that the expert relied on a document prepared by Microvote that was not based on primary data. The expert admitted that he did not know what the document was, who created it, or how it was created. The expert also relied on other documents, some of which apparently were derived from the Microvote document, and again, could not identify the source or basis of some of these documents. The expert also admitted that he did not measure actual election use data to determine how long the machines were down.

The Third Circuit also affirmed the District Court’s denial of Defendants’ motion 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 its settlement. In structuring the settlement, Elliott Greenleaf’s lawyers also insisted on a covenant not to sue instead of issuing a release to Carson. Elliott Greenleaf successfully argued that, under Pennsylvania law, if the settling party is not a joint tortfeasor, he is considered a volunteer. In that circumstance, the amount paid in settlement is not deducted from the recovery against a nonsettling party. In order to reduce a plaintiff’s recovery, the co-defendant’s culpability as a joint tortfeasor was required to be determined by the jury.

In this case, as Elliott Greenleaf successfully argued, neither Microvote nor Westchester submitted a jury interrogatory for apportionment of liability, nor did they present sufficient evidence at trial that would support a jury finding regarding apportionment. Since the jury did not apportion liability and the settlement did not mention the non-settling defendants’ liability, both the trial court and the appellate court agreed with Elliott Greenleaf’s argument that Microvote and Westchester waived any claim to reduce the judgment by the amount of the settlement under Pennsylvania law.

The County was represented by Elliott Greenleaf’s John M. Elliott, Timothy T. Myers and Eric J. Bronstein.