Zurich American Insurance Company v. Mack Industries, Inc.

Filing 39

OPINION AND ORDER DENYING DEFENDANTS MOTION FOR RECONSIDERATION re 37 . Signed by District Judge Gershwin A. Drain. (TBan)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

ZURICH AMERICAN INSURANCE
COMPANY as subrogee for WALTER
TOEBE CONSTRUCTION,

Case No. 14-cv-14244

Plaintiff,

UNITED STATES DISTRICT COURT JUDGE
GERSHWIN A. DRAIN

v.

UNITED STATES MAGISTRATE JUDGE
MONA K. MAJZOUB

MACK INDUSTRIES, INC.,
Defendant.
/

OPINION AND ORDER DENYING DEFENDANT’S
MOTION FOR RECONSIDERATION [37]
I. INTRODUCTION
Zurich American Insurance Company (“Plaintiff”) commenced this action
against Mack Industries, Inc. (“Defendant”) in the Circuit Court for the County of
Livingston. See Dkt. No. 1 (Exhibit A). On November 4, 2014, the action was
removed to Federal Court. Id. On September 18, 2015, the Defendant moved for
summary judgment. See Dkt. No. 21. This Court granted summary judgment to the
Defendant on December 8, 2015. See Dkt. No. 31. On February 8, 2016, upon
Plaintiff’s Motion for Reconsideration [33], the Court reversed its summary
judgment ruling. See Dkt. No. 35.

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Presently before the Court is Defendant’s Motion for Reconsideration. See
Dkt. No. 37. For the reasons discussed below, the Motion for Reconsideration is
DENIED.
II. BACKGROUND
Plaintiff originally filed the instant action against Defendant claiming to
enforce an indemnification clause in a Purchase Order (“PO”). See Dkt. No. 1
(Exhibit A, pp. 2–5). Defendant moved for summary judgment on the basis that the
claim was barred by the statute of frauds and that there was no enforceable contract
between the parties. See Dkt. No. 21. At oral argument, the Defendant stated to the
Court that the parties had formed an oral contract before the PO was ever sent.
Transcript of Oral Argument at 4–5. The Court granted summary judgment on the
grounds that an enforceable oral contract had been formed, rendering the PO a
mere confirmation of the agreement, and any additional terms, including the
indemnification provision, unenforceable. See Dkt. No. 35.
On February 22, 2016, Plaintiff filed a Motion for Reconsideration [33] of
the Court’s Opinion. On February 8, 2016, the Court granted Plaintiff’s Motion,
and reversed its prior Order. There, the Court held that Plaintiff had demonstrated a
palpable defect in the prior order, showing that they were not given notice of the
dispositive issue, and providing evidence of a genuine issue of material fact. On

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February 22, 2016, Defendant filed a Motion for Reconsideration of the Court’s
reconsideration.
III. LAW AND ANALYSIS
Motions for Reconsideration are governed by Local Rule 7.1(g)(3) of the
Local Rules of the United States District Court for the Eastern District of
Michigan, which provides:
[M]otions for rehearing or reconsideration which merely present the
same issues ruled upon by the court, either expressly or by reasonable
implication, shall not be granted. The movant shall not only
demonstrate a palpable defect by which the court and the parties have
been misled but also show that a different disposition of the case must
result from a correction thereof.
E.D. Mich. L.R. 7.1(g)(3). “A ‘palpable defect’ is ‘a defect that is obvious, clear,
unmistakable, manifest, or plain.’ ” United States v. Lockett, 328 F. Supp. 2d 682,
684 (E.D. Mich. 2004) (quoting United States v. Cican, 156 F. Supp. 2d 661, 668
(E.D. Mich. 2001)).
The Defendant does not present any authority supporting the position that
the Court may reconsider a grant of reconsideration. For the purposes of this
motion, the Court assumes that it may. Defendant makes three arguments for why
the Court should reconsider its prior Order: (1) Defendant did not mislead the
Court during its Motion for Summary Judgment [21]; (2) Defendant is entitled to
summary judgment despite Plaintiff’s Motion for Reconsideration [33]; and (3) the
Court improperly reversed its opinion without permitting Defendant to brief the
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issues. Under careful review of the record, the Defendant has not demonstrated a
palpable defect within the Court’s Order.
A. Defendant’s First Argument
In the Court’s Opinion and Order granting Plaintiff’s Motion for
Reconsideration [35], the Court found the issue of oral agreements was never
raised in Defendant’s original Motion for Summary Judgment. Additionally, the
Court found that as a result of Defendant’s omission, Plaintiff was not given proper
notice of the argument. The Court further held that, had the issue been raised,
Plaintiff would have been able to present genuine issues of material fact.
In the instant motion, Defendant argues that it “never suggested that there
was no agreement with Toebe, as Zurich suggests.” Dkt. No. 37 at 5 (Pg. ID No.
503). The Defendant further argues that Plaintiff’s Motion for Reconsideration
took the Defendant’s argument “out of context so that it [appeared]” that the
Defendant argued that there was no agreement at all.
In the Court’s Order granting Plaintiff’s Motion for Reconsideration, the
Court carefully reviewed the briefing submitted by the parties. The Court found
that “Defendant did not address the issue of an oral contract in its original motion.”
Dkt. No. 35 at 3. Whatever “context” surrounding the original briefing was not
obvious to the Court then and it is not obvious to the Court now. See, e.g. Dkt. No.
21 at 11 (Pg. ID No. 89) (“Clearly, the conduct of Toebe and Mack constitutes, at
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most, expressions of intentions, discussions and negotiations, and cannot constitute
a binding contract.”); Dkt. No. 28 at 5 (Pg. ID No. 262) (“Based on these
undisputed facts of this case, a valid contract was never created because there was
no meeting of the minds between the parties on the essential terms of the alleged
agreement, including indemnification.”); Id. at 6 (Pg. ID No. 263) (“If,
alternatively, this Court determines that a contract existed between Mack and
Toebe, then the contract failed to comply with either codifications of Michigan’s
Statute of Frauds, MCL 566.132(1) and/or MCL 440.2201 and is therefore not
enforceable.”). Accordingly, this argument fails.
B. Defendant’s Second Argument
Defendant next argues that it was still entitled to summary judgment based
on the arguments left unaddressed in the Court’s Opinion and Order. In the
Defendant’s Motion of Summary Judgment, Defendant raised two arguments: (1)
the Plaintiff’s claim was barred by the statute of frauds, and (2) Plaintiff could not
meet its burden of proof that a valid contract existed between the parties. See Dkt.
No. 21. In Defendant’s Reply brief, Defendant did not raise any new arguments.1

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In Defendant’s Motion for Reconsideration, Defendant argues that Plaintiff’s interpretation of
the Purchase Order renders the Purchase Order untenable due to Michigan’s abolishment of joint
and several liability. However, this argument was not raised by Defendant in their Motion for
Summary Judgment, and thus will not be addressed on reconsideration. Werdlow v. Caruso, No.
09–11003, 2011 WL 52608 (E.D. Mich. January 7, 2011) (citing Hamilton v. Gansheimer, 536
F. Supp. 2d 825, 842) (“Courts should not reconsider prior decisions where the motion for
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In the original Opinion and Order Granting Defendant’s Motion, the Court
held that the statute of frauds did not bar Plaintiff’s claim, and that an oral contract
had been formed prior to the issuance of the Purchase Order. See Dkt. No. 31.
Therefore, the Court addressed both of the issues raised in Defendant’s summary
judgment motion. Id. The Court’s later finding of an issue of material fact with
regard to the formation of the oral contract, and subsequent reversal of its summary
judgment order, did not throw the case back into the wheelhouse of Defendant’s
Motion for Summary Judgment. Therefore, this argument also fails to point to an
obvious or clear flaw.
C. Defendant’s Third Argument
Finally, Defendant argues that the Court erred in reversing its original order
and should have allowed the parties to brief the issues. However, Defendant points
to no authority demonstrating that the Defendant was entitled to respond to
Plaintiff’s Motion for Reconsideration. Due to the evidence provided by Plaintiff
on reconsideration, in combination with the evidence already in the record
(provided by both parties), the Court held that there was a genuine issue of material
fact as to whether the parties had an oral contract. That evidence included
testimony of Jeffrey Stover, Vice President of Estimating and Business
Development at Toebe Construction, stating explicitly that the parties had not
reconsideration . . . proffers new arguments that could, with due diligence, have been discovered
and offered during the initial consideration of the issue.”).
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reached agreement through oral negotiations. Defendant’s belief that a rehearing
would be “appropriate” does not raise a palpable defect in the Court’s order.
IV. CONCLUSION
Accordingly, for the reasons stated above, Defendant’s Motion for
Reconsideration [37] is DENIED.

IT IS SO ORDERED.
Dated: March 28, 2016
Detroit, MI

/s/Gershwin A Drain
HON. GERSHWIN A. DRAIN
United States District Court Judge

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