Davis, Cedillo & Mendoza Wins $21.8 Million Verdict Against Johnson Controls for Mexican Battery Maker

    SAN ANTONIO--March 21, 2002--The San Antonio law firm of Davis, Cedillo & Mendoza Inc. has achieved a major legal victory against U.S. corporate giant Johnson Controls Inc. for its client, Corporacion Pipsa, S.A. de C.V., headquartered in Monterrey, Nuevo Leon, Mexico.
    After nearly three weeks of trial and four days of deliberation, a Bexar County, Texas, jury awarded $6.3 million in actual damages, plus attorneys fees and prejudgment interest, and $15.5 million in punitive damages to Corporacion Pipsa, S.A. de C.V. (Pipsa) on March 18, 2002. The jury, applying the "clear and convincing" evidentiary standard, unanimously found Johnson Controls guilty of fraud and promissory estoppel.
    The trial was held in the 57th district court with Judge Pat Boone presiding. Pipsa was represented by Davis, Cedillo & Mendoza partner Ricardo Cedillo and associate Steve Chiscano, and Kendall Montgomery and Vincent Marable of Houston.
    Pipsa, who produces lead oxide for batteries, sued Johnson Controls and its subsidiaries Johnson Controls Battery Group Inc., and Global Energy Systems, alleging that the three American companies engaged Pipsa in fraudulent business negotiations dating back over seven years.
    In 1995, Johnson Controls and its subsidiaries promised Pipsa lucrative long-term supply contracts on the condition that Pipsa make substantial improvements to its lead smelter plant and battery oxide plant located in Monterrey, Mexico. Pipsa spent approximately $6.5 million over the next several years making the plant enhancements specified by Johnson Controls. In 1998, Pipsa was informed that Johnson Controls had entered into a joint venture with Grupo IMSA, Pipsa's competitor, and that the new joint venture entity would oversee operations at the Pipsa facilities.
    "This verdict represents a well deserved victory for our client, Corporacion Pipsa," said Ricardo Cedillo, Davis, Cedillo & Mendoza partner. "This case was yet another example of a large U.S. corporation going into Mexico and making empty promises to its business partners there. We are pleased that the jury recognized Johnson Controls' wrongdoing and are gratified that our client has received the justice it deserves."
    The case is significant because it is very rare for a United States court to find a U.S. corporation liable to a Mexican plaintiff for conduct involving a Mexico business relationship.
    The first major case of this type was in 1999, when the Mexican firm Valores received a $624 million judgement against Wal-Mart. The plaintiff in that case was also represented by Mr. Cedillo.

    Milwaukee-based Johnson Controls Inc. is a global market leader in automotive systems and facility management and control with 2001 total sales of $18.4 billion.

    Davis, Cedillo & Mendoza Inc. is engaged in a diversified practice, principally in the areas of commercial litigation, business and real estate, and insurance tort defense. The commercial litigation practice has substantial experience and expertise in complex litigation in State and Federal Courts throughout the United States, handling diverse issues for a broad array of clients. The business and real estate practice is a transactional practice engaged predominantly in the area of real estate development and corporate matters. The insurance defense practice represents individuals, corporations, charitable organizations and religious groups in lawsuits involving allegations of negligence, breach of warranty, product liability, wrongful death and intentional torts including premises liability cases involving third-party criminal acts and sexual assaults by employees. For more information, visit the firm's Web site at www.daviscedillomendoza.com.