JMB MANUFACTURING, INC. v. CHILD CRAFT, LLC et al

Filing 280

ENTRY ON MOTION FOR RECONSIDERATION - 261 Motion for Reconsideration is GRANTED in part and DENIED in part. The compensatory damages awarded to Child Craft are reduced by $1,277,172.00, making the final award $2,769,816.00. An amended final judgment will be issued. 265 Motion to Stay Enforcement of the Judgment is DENIED as moot. See Entry for details. Signed by Judge Tanya Walton Pratt on 9/19/2014. (LBT)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
NEW ALBANY DIVISION
HARRISON MANUFACTURING, LLC
formerly known as CHILD CRAFT, LLC,
Counter Claimants,
v.
JMB MANUFACTURING, INC., doing
business as SUMMIT FOREST PRODUCTS
COMPANY, and RON BIENIAS,
Counter Defendants.

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) Case No. 4:11-cv-00065-TWP-WGH
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ENTRY ON MOTION FOR RECONSIDERATION
This matter is before the Court on JMB Manufacturing, Inc.’s (“JMB”) and Ron Bienias’
(“Mr. Bienias”) (collectively, “Counter Defendants”) Motion for Reconsideration (Filing No.
261). This action was before the Court on a bench trial on June 10, 2013, which resulted in a ruling
for Counter-Claimant Harrison Manufacturing, LLC, (“Child Craft”) against Mr. Bienias (Filing
No. 234). The Court entered final judgment and awarded damages on April 25, 2014, following a
hearing at which Mr. Bienias appeared pro se. (Filing No. 250). Mr. Bienias and JMB, through
counsel, now seek reconsideration of the Court’s judgment. For the following reasons, the Motion
is GRANTED in part and DENIED in part.
I. LEGAL STANDARD
Motions to reconsider under Federal Rule of Civil Procedure 59(e) serve a limited function,
to be used “where the Court has patently misunderstood a party, or has made a decision outside
the adversarial issues presented to the Court by the parties, or has made an error not of reasoning
but of apprehension.” Davis v. Carmel Clay Sch., 286 F.R.D. 411, 412 (S.D. Ind. 2012) (quoting
Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990))

(additional quotations omitted). To prevail under Rule 59(e), “the moving party must clearly
establish (1) that the court committed a manifest error of law or fact, or (2) that newly discovered
evidence precluded entry of judgment.” Edgewood Manor Apartment Homes, LLC v. RSUI Indem.
Co., 733 F.3d 761, 770 (7th Cir. 2013) (internal quotation omitted). “A ‘manifest error’ is not
demonstrated by the disappointment of the losing party.

It is the ‘wholesale disregard,

misapplication, or failure to recognize controlling precedent.’” Oto v. Metro. Life Ins. Co., 224
F.3d 601, 606 (7th Cir. 2000) (quoting Sedrak v. Callahan, 987 F. Supp. 1063, 1069 (N.D. Ill.
1997)). Further, “an argument raised for the first time in a Rule 59(e) motion is waived.”
Estremera v. United States, 442 F.3d 580, 587 (7th Cir. 2006).
II. DISCUSSION
Because the facts of this case are set forth at length in the Court’s Findings of Fact and
Conclusions of Law, (Filing No. 234), the Court will refrain from further recitation.
The Counter Defendants do not offer any newly discovered evidence to support its Rule 59
motion but argue only that the Court misapplied the controlling law and misapprehended the
evidence. Specifically, JMB and Mr. Bienias contend the Court committed manifest errors of law
in four areas, which the Court will address in turn.
First, Counter Defendants argue that the Court awarded benefit-of-the-bargain damages to
Child Craft, which conflicts with the Restatement (Second) of Torts § 552B. They further argue
that the Court decided this issue outside of the adversarial process because the Court relied on
Trytko v. Hubbell, Inc., 28 F.3d 715 (7th Cir. 1994), which was not cited by the parties in the
context of damages. However, “[f]ederal courts are entitled to apply the right body of law, whether
the parties name it or not.” ISI Int’l, Inc. v. Borden Ladner Gervais LLP, 256 F.3d 548, 551 (7th
Cir. 2001). Trytko was cited by Counter Defendants during the liability phase of this trial and is

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on point for both the liability and damages issues presented in this case. The Court disagrees that
citation and reliance upon Trytko was outside the adversarial issues presented by the parties.
In Trytko, the Seventh Circuit described the difference between out-of-pocket and benefitof-the-bargain damages. It stated:
the key distinction between these two measures of damages . . . is concisely
summarized as the difference between reliance and expectancy damages. The
limitation on benefit-of-the-bargain damages refers to the expectancy damages
caused where a misrepresentation underlies a bargain. In other words, benefit-ofthe-bargain damages arise only where the misrepresentation created an expectancy.
The plaintiff is not entitled to recover the expectancy described or contemplated by
the misrepresentation because it was not a real loss suffered.
28 F.3d at 724. The Court previously found that because of Mr. Bienias’ misrepresentations, Child
Craft suffered the total loss of its business, which included a total loss of $5,046,988.00. That
number included a subset of lost profits for the Vogue Line of $2,227,172.00, which the Court
reduced by $1 million. Despite that Mr. Bienias did not raise a benefit-of-the-bargain argument
earlier, the Court agrees that as it applies to lost profits, these were expectancy damages improperly
awarded. Upon reconsideration, the Court finds it was a misapplication of the law to allow any
lost profits damages. Recognizing that the Court has already reduced the $2,227,172.00 in lost
profits by one million dollars; the Court will reduce the overall award by an additional
$1,277,127.00.
Second, Counter Defendants argue that the economic loss doctrine should bar Child Craft’s
claims. This issue was thoroughly litigated, and in rendering its decision, the Court carefully
considered Indiana precedent and found that Mr. Bienias’ position as a broker supplying
information was similar enough to the professional identified in Jeffrey v. Methodist Hospitals,
956 N.E.2d 151, 156 (Ind. Ct. App. 2011), to warrant moving forward. The Jeffrey court cited the
U.S. Bank, N.A. v. Integrity Land Title Corp., 929 N.E.2d 742, 747 (Ind. 2010), for the proposition

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that, “[a] professional may owe a duty to a third party with whom the professional has no
contractual relationship, but the professional must have actual knowledge that such third person
will rely on his professional opinion.” The Court previously found that Mr. Bienias was such a
professional providing information. Specifically the Court found:
Mr. Bienias has an extensive work history as it relates to wood and wood
processing, including work as quality control manager, manufacturing manager and
plant manager for several furniture manufacturing companies. In the early 1990s,
Mr. Bienias formed Summit through which he acts as an independent consultant
and broker for furniture manufacturers. Mr. Bienias has a bachelor’s degree in
forestry, a master’s degree in wood technology, and a degree in business.
(Filing No. 234 at ECF pp. 1-2). Just as in Jeffrey and U.S. Bank, Mr. Bienias’ position and
relationship with Child Craft was “advisory,” and he was in possession of superior knowledge and
expertise. Counter Defendants disagree with the Court’s reasoning, but have presented no legal
authority to convince the Court that its reasoning was a manifest error. Accordingly, the Court
will not reconsider its ruling on this issue.
Third, Counter Defendants argue that Mr. Bienias did not make false representations and
Child Craft did not justifiably rely on Mr. Bienias’ statements. Counter Defendants ask the Court
to reinterpret the evidence presented at trial and render a ruling in their favor. They provide no
newly discovered evidence which could change the Court’s ruling, and only put forth arguments
that could have been or were made at trial. The Court will not reconsider this issue.
Fourth, Counter Defendants argue the Court ignored Mr. Bienias’ defense of contributory
negligence. They are correct that the Court did not make a conclusion of law in Mr. Bienias’ favor
assigning Child Craft contributory negligence following the bench trial. The Court’s findings of
fact do not support such a conclusion. Consistent with the Rule 59(e) standard, the Court will not
reweigh the evidence or reconsider this argument.

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III. CONCLUSION
Accordingly, Counter Defendants’ Motion for Reconsideration (Filing No. 261) is
GRANTED in part and DENIED in part. The compensatory damages awarded to Child Craft
are reduced by $1,277,172.00, making the final award $2,769,816.00. An amended final judgment
will be issued.
Additionally, Counter Defendants’ Motion to Stay Enforcement of the Judgment (Filing
No. 265) is DENIED as moot.

SO ORDERED.
Date: 9/19/2014

DISTRIBUTION:
S. Chad Meredith
RANSDELL AND ROACH, PLLC
[e-mail]
Michael Munley
TOMLINSON LAW OFFICE, P.C.
[e-mail]
Eric S. Pavlack
PAVLACK LAW LLC
[e-mail]
W. Keith Ransdell
RANSDELL AND ROACH, PLLC
[e-mail]
John C. Roach
RANSDELL & ROACH, PLLC
[e-mail]
Michael P. Tomlinson
TOMLINSON LAW OFFICE, P.C.
[e-mail]

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