Great Lakes Water Authority v. Petro Envrionmental Technologies, Inc. et al
OPINION and ORDER Granting Defendants' 9 MOTION for Summary Judgment. Signed by District Judge Robert H. Cleland. (SBur)
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN
GREAT LAKES WATER AUTHORITY,
Case No. 16-14180
PETRO ENVIRONMENTAL TECHNOLOGIES,
INC., et al.,
OPINION AND ORDER GRANTING DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT
Before the court in this breach of contract case is a motion for summary
judgment filed by all Defendants. (Dkt. # 16-14180.) The motion is fully briefed and a
hearing is unnecessary. See E.D. Mich. LR 7.1(f)(2). For the reasons that follow, the
court determines that Plaintiff’s claims are time-barred. Defendants’ motion must be
The following facts are undisputed unless otherwise noted. Plaintiff Great Lakes
Water Authority is a municipal corporation that operates and controls both the water
supply and sewage disposal systems of the City of Detroit. (Dkt. # 1, Pg. ID 4.) The
Detroit Water and Sewerage Department (“DWSD”) operated these systems until the
Plaintiff and the City entered into a “Regional Sewer Disposal Lease” on June 12, 2015,
authorizing Plaintiff to “administer and enforce DWSD’s approved industrial
pretreatment program and to carry out DWSD’s rights and obligations as the Control
Authority[.]” (Dkt. # 13-1.) As part of the lease agreement, GLWA adopted the pollution
surcharge system established by DWSD as required by the Clean Water Act, 33 U.S.C.
1284(b). (Dkt. # 13-1.)
Defendant Petro Environmental Technologies, Inc. (“Petro Inc.”) established a
pollution surcharge account with DWSD as part of a contract with the South Macomb
Disposal Authority (“SMDA”), relating to cleanup efforts at “landfill sites 9 and 9A.” (Dkt.
# 9, Pg. ID 73.) Petro Inc. last received an invoice from DWSD for this account on or
around September 15, 2010. (Dkt. # 10, PG. ID 89.)
Shortly after, SMDA filed a lawsuit against Petro Inc. and others in the Eastern
District of Michigan. See South Macomb Disposal Authority v. Model Development,
LLC, Case No. 11-cv-12715 (E.D. Mich. June 22, 2011). In its amended complaint,
SMDA alleged that Petro Inc. received an insurance payment for the final invoice on the
surcharge account and was obliged to turn that money over to SMDA, but retained it
instead. (See Dkt. # 10-3.) Petro Inc. and SMDA settled in September of 2013. (Dkt. #
The parties agree that the unpaid invoices form the basis of Plaintiff’s claims and
part of the the SDMA lawsuit. (See Dkt. # 13, Pg. ID 111.) Defendants contend that any
payment due on the pollution surcharge account is owed by SMDA, against which they
have filed a third-party complaint. (Dkt. # 7.) However, in the instant motion Defendants
primarily argue that any claim Plaintiff may have against them relating to the pollution
surcharge account is time-barred. (Dkt. # 10, Pg. ID 75.)
Summary judgment is proper “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). “In deciding a motion for summary judgment, the court must
view the evidence in the light most favorable to the non-moving party, drawing all
reasonable inferences in that party’s favor.” Sagan v. United States, 342 F.3d 493, 497
(6th Cir. 2003). The movant has the initial burden of showing the absence of a genuine
dispute as to a material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “[T]hat
burden may be discharged by showing . . . that there is an absence of evidence to
support the nonmoving party’s case.” Bennett v. City of Eastpointe, 410 F.3d 810, 817
(6th Cir. 2005) (internal quotation marks omitted).
The burden then shifts to the nonmovant, who must put forth enough evidence to
show that there exists “a genuine issue for trial.” Horton v. Potter, 369 F.3d 906, 909
(6th Cir. 2004) (citation omitted). Summary judgment is not appropriate when “the
evidence presents a sufficient disagreement to require submission to a jury.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 243 (1986). In evaluating a summary judgment
motion, “the judge’s function is not himself to weigh the evidence and determine the
truth of the matter but to determine whether there is a genuine issue for trial . . .
credibility judgments and weighing of the evidence are prohibited.” Moran v. Al Basit
LLC, 788 F.3d 201, 204 (6th Cir. 2015) (internal quotation marks and citations omitted).
The central question before the court is whether Plaintiff’s contract claims are
time-barred. The parties agree that Michigan’s six-year statute of limitations governs
here. (See Dkt. # 9, Pg. ID 80 (citing Mich. Comp. Laws § 600.5807(8)); Dkt. # 13, Pg.
ID 111.) Plaintiff filed its complaint on November 29, 2016. (See Dkt. # 1.) Defendants
argue that the statute of limitations began to run, at the latest, on September 15, 2010—
the date of the last DWSD invoice claiming an arrearage. (Dkt. # 9, Pg. ID 80.) Plaintiff
responds that the statute began to run either after the conclusion of the SMDA litigation
or, alternatively, that the statute was tolled during that litigation. (Dkt. # 13, Pg. ID 11112.)
As provided in the relevant statute, Mich. Comp. Laws § 600.5807, the limitations
period begins once the cause of action for breach of contract “accrues.” In Michigan,
actions of this kind accrue “at the time of the asserted breach of contract.” Garden City
Osteopathic Hosp. v. HBE Corp., 55 F.3d 1126, 1133 (6th Cir. 1995) (quoting Huhtala v.
Travelers Ins. Co., 257 N.W.2d 640, 646 (Mich. 1977)). The breach alleged here was
Defendants’ failure to pay the amount due, and since there is no dispute that the due
date stated on the last invoice was September 15, 2010, Defendants argue persuasively
that the breach occurred—and the claim accrued—that day. The court agrees.
Plaintiff argues in opposition first that the statute of limitations did not begin to run
until after the SDMA litigation, because “the balance owed on Defendants’ pollutant
surcharge account was not determined until the conclusion of the SDMA Lawsuit.” (Dkt.
# 13, Pg. ID 111.) Plaintiff avers that as part of the settlement, SMDA and Defendants
agreed that $185,454.35 was the correct amount owed on the pollutant surcharge
account—though Defendants dispute this characterization. (Id.) According to Plaintiff,
“[t]he pollutant surcharge account was an open account until the conclusion of the
SDMA Lawsuit[,] at which time Plaintiff converted the account into an account stated
based upon the parties agreement.” (Id.) In effect, Plaintiff argues that the limitations
period on its account stated claim did not begin to run until the settlement agreement.
Under Michigan law, an account stated “is a contract based on assent to an
agreed balance, and it is an evidentiary admission by the parties of the facts asserted in
the computation and of the promise by the debtor to pay the amount due.” Fisher Sand
and Gravel Co. v. Neal A. Sweebe, Inc., 837 N.W.2d 244, 252-53 (Mich. 2013). In
Fisher Sand and Gravel, the Michigan Supreme Court explained the nature of an action
on an account stated as follows:
If a claimant renders an account and it is assented to as correct by the
other party with an express or implied promise to pay, an action may be
maintained on the promise. The account stated is a new, independent
cause of action superseding and merging the antecedent causes of action
represented by the particular items included in the computation.
Id. at 253 (quoting 13 Corbin, Contracts (rev. ed.), § 72.4, pp. 466-67) (emphasis
removed). An account stated, in some cases, may be inferred by a party’s failure to
object within a reasonable time of receiving an account. Id.
However, “[a]n account stated, like all contracts, requires mutual assent.” Id. at
252-53 (“Specifically, ‘[a]n account stated requires the manifestation of assent by both
parties to the correctness of the statement of the account between them.’”) (quoting 13
Corbin, Contracts (rev. ed.), § 72.1(3), p. 457). Plaintiff does not explain how a
settlement agreement to which it was not a party as part of a lawsuit in which it was not
involved satisfies the mutual assent requirement.
Plaintiff also argues that “any applicable statute of limitations . . . was tolled by
the SMDA lawsuit.” (Dkt. # 13, Pg. ID 112.) In support, Plaintiff relies on Mich. Comp.
Laws § 600.5856, which provides for tolling “[a]t the time jurisdiction over the defendant
is otherwise acquired.” Mich. Comp. Laws § 600.5856(b). Plaintiff correctly observes
that that Michigan courts have applied section 600.5856 when a party files a lawsuit
after the limitation period has run and seeks to toll the time elapsed during a prior
lawsuit against the same defendant. (Dkt. # 13, Pg. ID 112.)
However, the statute applies only when the prior lawsuit is between the same
parties and involves the same cause of action. Plaintiff’s own cited cases demonstrate
this limitation. See Terrace Land Dev. Corp. v. Seeligson & Jordan, 250 Mich. App. 452
(2002) (“[W]here a party, for the first time, files suit against a defendant, the limitation
period is measured at the time the complaint was filed . . . . [§ 600.5856] comes into
play where a party files suit beyond the limitation period and seeks to toll the time that
elapsed during a previously dismissed lawsuit against the same defendant[.]”); Great
Lakes Gas Transmission Co. v. State Treasurer, 140 Mich. App. 635, 649 (1985) (prior
lawsuits between parties will toll the running of the period of limitation where the prior
lawsuit involves the same cause of action.”) (emphasis added). Neither Plaintiff nor
DWSD were a party to the SMDA lawsuit. Plaintiff provides no case in which a Michigan
court has tolled the statute of limitations under § 600.5856 in light of previous litigation
to which the plaintiff seeking tolling was not a party.
Finally, Plaintiff avers that it “was a third-party beneficiary to the SDMA Lawsuit
and the settlement reached in the SDMA Lawsuit.” (Dkt. # 13, Pg. ID 112.) Even
assuming this were correct, Plaintiff does not explain how it would be relevant to the
statute of limitations. Plaintiff’s complaint does not allege breach of contract as a thirdparty beneficiary to the SMDA settlement—in fact, the complaint does not mention the
SMDA lawsuit or settlement at all. (See Dkt. # 1.) Neither does Plaintiff explain the
logical connection between its alleged third-party-beneficiary status and the tolling
statute or the requirement of mutual assent for an account-stated claim. The court will
not construct Plaintiff’s arguments for it—in this Circuit, “issues adverted to in a
perfunctory manner, unaccompanied by some effort at developed argumentation, are
deemed waived.” Meridia Prod. Liab. Litig. v. Abbott Laboratories, 447 F.3d 861, 868
(6th Cir. 2006) (“It is not sufficient for a party to mention a possible argument in the most
skeletal way, leaving the court to put flesh on its bones.”) (quoting McPherson v. Kelsey,
125 F.3d 989, 995-96 (6th Cir. 1997)).1
In any event, the court is not persuaded that Plaintiff or DWSD is a third-party
beneficiary to the settlement agreement. In defining third-party beneficiary status, the
Michigan statute provides:
Any person for whose benefit a promise is made by way of contract, as
hereinafter defined, has the same right to enforce said promise that he
would have if the said promise had been made directly to him as the
(1) A promise shall be construed to have been made for the benefit of
a person whenever the promisor of said promise had undertaken to
give or to do or refrain from doing something directly to or for said
Mich. Comp. Laws § 600.1405.
Under Michigan law, “[t]he primary goal in the construction or interpretation of
any contract is to honor the intent of the parties.” Sault Ste. Marie Tribe of Chippewa
Indians v. Engler, 146 F.3d 367, 372 (6th Cir. 1998) (quoting Rasheed v. Chrysler
Corp., 445 Mich. 109 (1994)). “The Court ‘must look for the intent of the parties in the
words used in the instrument.’” Id. (quoting Michigan Chandelier Co. v. Morse, 297
Cf. United States v. Olano, 507 U.S. 725, 733 (1993): “Waiver is different from
forfeiture. Whereas forfeiture is the failure to make the timely assertion of a right, waiver
is the ‘intentional relinquishment or abandonment of a known right.’” Olano, 507 U.S. at
733 (quoting Johnson v. Zerbst, 304 U.S. 458, 464 (1938)).
Mich. 41 (1941)). Therefore, “[u]sing an objective standard, a court is to determine ‘from
the form and meaning of the contract itself, whether the promisor undertook to give or to
do or to refrain from doing something directly to or for the person claiming third-party
beneficiary status.’” Osprey-Troy Officentre L.L.C. v. World Alliance Financial Corp., 822
F.Supp.2d 700, 706 (E.D. Mich. 2011) (Cook Jr., J.) (quoting Schmalfeldt v. North
Pointe Ins. Co., 469 Mich. 422 (2003)).
Section 13.1 of the settlement agreement states as follows:
Other than as set forth in the releases and and discharges In (sic) Section
1.0, nothing in this SETTLEMENT AGREEMENT, express or implied, is
intended to or shall be construed to confer upon or give to any person or
entity other than the Parties hereto, and any of their successors and
permitted assigns, any rights, remedies or other benefits under or by
reason of this SETTLEMENT AGREEMENT. Other than as set forth in the
releases and discharges in Section 1.0, there are no third party
beneficiaries of this SETTLEMENT AGREEMENT.
(Dkt. # 13-4, Pg. ID 130.) Neither Plaintiff nor DWSD appear in Section 1.0 or elsewhere
in the settlement agreement. Accordingly, the court concludes that Plaintiff is not a thirdparty beneficiary.
Defendants have provided affidavits and exhibits demonstrating that the invoices
at issue here were presented for payment more than six years before Plaintiff filed its
complaint, based upon underlying services rendered even earlier. To survive summary
judgment, Plaintiff must produce actual evidence to show that some material issue
remains for trial, see Horton, 369 F.3d at 909, but Plaintiff has not done so. The court
concludes that Plaintiff’s contract claims are time-barred.
Plaintiff declines to address Defendants’ arguments regarding its conversion,
quantum meruit, and implied contract claims—counts III-V. The conversion claim is
similarly barred by the corresponding three-year statute of limitations, Mich. Comp.
Laws § 600.5805(10). Plaintiff’s equitable claims are no timelier than its contract claims.
See Future Now Enterprises, Inc. v. Foster, 860 F. Supp.2d 420, 431 (E.D. Mich. 2012),
aff’d, in relevant part, 525 Fed. Appx. 395, 400 (6th Cir. 2013). Accordingly, the court
will grant summary judgment as to these claims as well.
IT IS ORDERED that Defendants’ motion for summary judgment (Dkt. # 9) is
GRANTED. A separate judgment shall issue.
s/Robert H. Cleland
ROBERT H. CLELAND
UNITED STATES DISTRICT JUDGE
Dated: February 28, 2017
I hereby certify that a copy of the foregoing document was mailed to counsel of record
on this date, February 28, 2017, by electronic and/or ordinary mail.
s/Shawna C. Burns
Case Manager Generalist
S:\Cleland\JUDGE'S DESK\C1 ORDERS\16-14180.GREATLAKES.summary.judgment.TLH.docx
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