Fax Agency, Inc. v. ERJ Insurance Group, Inc.
ORDER DENYING DEFENDANTS MOTION TO VACATE JUDGMENT [#52], MOTION TO VACATE OPINION AS TO DAMAGES AND VACATE JUDGMENT [#53], AND PLAINTIFFS MOTION TO AMEND JUDGMENT [#55]. Signed by District Judge Gershwin A. Drain. (Bankston, T)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
FAX Agency, Inc., a Michigan corporation,
Case No. 11-15343
HON. GERSHWIN A. DRAIN
E.R.J. Insurance Group, Inc. d/b/a American
Heritage Insurance Services (AHIS), a Florida
ORDER DENYING DEFENDANT’S MOTION TO VACATE JUDGMENT [#52],
MOTION TO VACATE OPINION AS TO DAMAGES AND VACATE JUDGMENT [#53],
AND PLAINTIFF’S MOTION TO AMEND JUDGMENT [#55]
Presently before the Court are Defendant’s Motion to Vacate Judgment and Motion
to Vacate Opinion as to Damages and Judgment filed on June 14, 2013. Also before the
Court is Plaintiff’s Motion to Amend Judgment filed on June 28, 2013.
challenges the decision in the Court’s May 31, 2013 Order granting Summary Judgment
in favor of Plaintiff. First, Defendant requests the judgment be vacated because its
counterclaim is still pending. Second, Defendant claims that, contrary to the Court’s
finding, the amount of damages owed to Plaintiff is in dispute. Plaintiff requests that the
Court add $75,928.00 to its Judgment based on allegedly newly discovered evidence of
withheld broker fees. For the reasons below, Defendant’s Motions and Plaintiff’s Motion
1. Defendant’s Motions
Defendant brought the present Motions pursuant to Federal Rule of Civil Procedure
60(b)(1), (2), and (4) and Local Rule 7.1(h)(3). Federal Rules of Civil Procedure 60(b)
allows a party relief from judgment, order or other proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence, that, with reasonable diligence, could have
been discovered in time to move for a new trial under Rule 59(b);
(4) the judgment is void;
FED. R. CIV. P. 60(b). Local Rule 7.1(h)(3) of the United States District Court for the
Eastern District of Michigan 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(h)(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) (citing United States v. Cican, 156 F. Supp. 2d 661, 668 (E.D. Mich. 2001)).
The first Motion claims entry of judgment was a mistake under Rule 60(b)(1), or void
by law under Rule 60(b)(4), because there was a pending counter claim. The second
Motion argues the Court incorrectly held that the amount of damages was undisputed.
Relief is requested on three grounds. First, pursuant to Rule 60(b)(1), Defendant claims
this Court’s judgment on Plaintiff’s Motion for Summary Judgment constituted surprise
since the hearing on that Motion was set for July 2, 2013 and Defendant’s failure to brief
its new exhibit is “excusable neglect” because of the surprise. Secondly, relief is requested
pursuant to Rule 60(b)(2) based on “newly discovered evidence” of corrections required to
make in Defendant’s own database of “chargebacks” that was the basis of Plaintiff’s
requested amount of damages. Finally, Defendant states that it was “palpable error” under
Local Rule 7.1(h)(3) to conclude that damages were undisputed and requests
reconsideration of this determination.
As to the first Motion, the Court acknowledged and decided Defendant’s
counterclaim. Admittedly, the Court should have done so with greater clarity, but the merits
of the claim were considered. In rejecting Defendant’s Motion for Summary Judgment, the
Court also denied any basis for Defendant’s counterclaim since it is based on the same
dispute over the meaning of the Contract between the parties. Since the dispute was
resolved in favor of Plaintiff, there was no basis for Defendant to maintain their claim. As
noted by Plaintiff, the Court has the power to grant Summary Judgment sua sponte when
the parties have had the opportunity to present evidence. Defendant has clearly had that
opportunity through its own Motion for Summary Judgment and Response to Plaintiff’s
Motion for Summary Judgment.
Given that there was no merit to Defendant’s
counterclaim, dismissal and entry of judgment in favor of Plaintiff was appropriate.
The second motion is similarly without merit. For starters, the Court’s Order should
not come as a surprise when the decision was reached after full briefing by both parties on
cross-Motions for Summary Judgment. This case was started in December 2011, which
should have given Defendant ample time to review the financial data involved. Local Rule
7.1(f)(2) allows the Court to determine the appropriate outcome of a case without oral
argument when the outcome is clear from the briefing, as it was in this case. Secondly,
Defendant’s discovery of an error in its own data, used in its own exhibits, does not
constitute “discovery of new evidence.” Plaintiff aptly described this as “a belated analysis
of [Defendant’s] own data.” Since it is Defendant’s own financial data, they clearly had
access to this information prior to the Court’s May 31, 2013 Order. There is simply nothing
new about this discovery.
Finally, the Court did not commit palpable error by concluding that damages were
undisputed. This is the first time that Defendant has ever raised any argument about the
amount of damages claimed by Plaintiff. Not once in their response to Plaintiff’s Motion for
Summary Judgment was the amount of damages disputed, only liability. Damages were
clearly undisputed by Defendant.
Contrary to Defendant’s claim, there is nothing speculative about the amount
awarded to Plaintiff as it came from Defendant’s own data. It was no secret that Plaintiff
relied on this figure since this was the amount requested in its Motion for Summary
Judgment. Defendant had the opportunity to dispute the amount at that time. The only
excuse offered by Defendant is that Mr. Phelps’ testimony prompted them to examine their
own data to see if corrections were required. This is no excuse at all as Defendant should
have verified that the information, filed with this Court as Exhibits 14 and 15, was correct
There was a reasonable basis for Plaintiff’s requested damages and
Defendant never disputed the amount claimed, thus it was not a palpable error to award
that amount to Plaintiff.
2. Plaintiff’s Motion to Amend Judgment
Plaintiff’s request an additional $75,928.00 in recovery based on allegedly newly
discovered evidence about illegally withheld broker fees. The discovery of the additional
sum originated with the Affidavit of Timothy Meerbott, filed as an exhibit alongside
Defendant’s Motion to Vacate. The relevant portion of the Affidavit states:
13. Review of the zero amounts paid indicate that Fax Agency was not paid for
reinsurance with the exception of one dealership which, if paid at the same
commission rate, would be a total of $56,254.00.
14. In addition, the zero paid spreadsheet indicates that Fax Agency was not paid
a total of $14,659.50 on the direct non-reinsured business.
Aff. of Timothy Meerbott ¶¶ 13-14.
The Court considered and denied a similar request in its April 17, 2013 Order
denying Plaintiff’s Motion to Amend.
At that time, Plaintiff requested an additional
$138,999.50 based on 15,544 GAP contracts and incorrectly calculated commissions. The
Motion was denied in part because Plaintiff had access to this data and was untimely in its
request. Plaintiff insists that the amount requested now are different than the amount
requested at the time. Further, in accordance with Rule 60(b)(2), Plaintiff claims that this
evidence is newly discovered as it was previously withheld by Defendant. Defendant
disputes that there is anything new about the sum of money discussed in Mr. Meerbott’s
Affidavit. Instead, Defendant states that the sums discussed in the Affidavit are just revised
calculations of the same “zero payments” previously disallowed by the Court.
The same logic for denying Plaintiff’s Motion to Amend is applicable here. The
amounts provided by Mr. Meerbott are calculations based on the same financial data that
was previously available to Plaintiff.
That is, Mr. Meerbott’s Affidavit is not newly
discovered evidence, just revised calculations of the same evidence that has always been
available to Plaintiff. Since this evidence was previously available to Plaintiff, it may not be
used to amend the judgment. As such, Plaintiff’s Motion is DENIED.
For the foregoing reasons, Defendant’s Motion to Vacate Judgment [#52] and
Motion to Vacate Opinion as to Damages and Judgment [#53] are DENIED.
Plaintiff’s Motion to Amend Judgment [#55] is DENIED.
Dated: August 14, 2013
/s/Gershwin A Drain
GERSHWIN A. DRAIN
U.S. DISTRICT JUDGE
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