TFB Midatlantic 4, LLC et al v. The Local Car Wash, Inc et al
Filing
105
MEMORANDUM OPINION AND ORDER denying 101 MOTION for Reconsideration. Signed by Magistrate Judge Martin C. Carlson on November 17, 2022. (kjn)
Case 1:21-cv-00299-MCC Document 105 Filed 11/17/22 Page 1 of 12
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
TFB MIDATLANTIC 4, LLC, et al.,
:
:
Plaintiffs,
:
:
v.
:
:
THE LOCAL CAR WASH, INC., et al., :
:
Defendants.
:
Civil No. 1:21-CV-299
(Magistrate Judge Carlson)
MEMORANDUM OPINION
I.
Introduction
This case comes before us on a motion to reconsider filed by the plaintiffs
(Doc. 101), which asks us to vacate our prior ruling granting summary judgment in
favor of the defendants. (Doc. 99). The plaintiffs, TFB Midatlantic 4, LLC and TFB
Midatlantic 4 RE, LLC (collectively, “TFB”), brought this suit against the
defendants, John Treanor, The Local Car Wash, Inc., and Treanor Properties, LLC,
arising out of the purchase of a car wash in Chambersburg, Pennsylvania. The
complaint asserted claims of breach of contract, fraud, and business conspiracy,
alleging that Mr. Treanor and his entities provided false financial information to
induce the plaintiffs to purchase the car wash business.
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We granted summary judgment in favor of the defendants on these claims
(Doc. 99), concluding that no reasonable juror could find that the defendants
breached the Purchase Agreement or that the defendants fraudulently induced the
plaintiffs to follow through with the purchase of the car wash by providing false
financial information based on the undisputed facts in record. We further found that
there was no evidence that Mr. Treanor conspired with others to provide the
plaintiffs with false or misleading financial information. The plaintiffs now ask us
to vacate this ruling, arguing that the Court impermissibly made credibility
determinations and resolved alleged factual disputes in favor of the defendants.
(Docs. 101, 102).
As we stated in our prior Memorandum Opinion, facts are stubborn things. In
the instant case, the plaintiffs characterize our ruling as making impermissible
credibility determinations. The plaintiffs misunderstand the factual underpinning of
our decision. That ruling did not endeavor to make contested credibility
determinations. Instead we accepted as true the uncontested statements of the
plaintiffs themselves. In this regard, the undisputed facts revealed that Mr. Cueter
and Mr. Wang, the owners of the plaintiff-entities, admitted that they were more
sophisticated than Mr. Treanor, and that Mr. Treanor did not understand all aspects
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of the business’ financials. Indeed, these individuals spent months researching the
car wash industry prior to approaching Mr. Treanor, and more than a year reviewing
the car wash’s financials after Mr. Treanor indicated he was willing to sell, at times
pointing out inconsistencies in the financials to Mr. Treanor. Nevertheless, the
plaintiffs, self-acknowledged sophisticated businessmen who averred that their
financial acumen was greater than that of the defendant, Mr. Treanor, contend that
they reasonably relied on one statement made by Mr. Treanor regarding the
business’ financials in moving forward with the purchase of the car wash, and due
to that reliance, are entitled to rescind the purchase agreement. Further, according to
the plaintiffs, when we relied upon their own uncontested statements which
described their higher degree of financial sophistication and acumen, we committed
a clear error which resulted in a manifest injustice to them. Thus, the plaintiffs’
motion to reconsider rests upon a fairly novel premise; namely, the idea that we did
an injustice to the plaintiffs when we accepted the accuracy of what they said.
After consideration, and given the exacting standards required for a motion to
reconsider, this motion will be denied.
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II.
Discussion
The legal standards that govern motions to reconsider are both clear, and
clearly compelling. “The purpose of a motion for reconsideration is to correct
manifest errors of law or fact or to present newly discovered evidence." Harsco Corp.
v. Zlotnicki, 779 F.2d 906, 909 (3d Cir. 1985). Typically, such a motion should only
be granted in three, narrowly defined circumstances: where there is either “(1) [an]
intervening change in controlling law, (2) availability of new evidence not
previously available, or (3) need to correct a clear error of law or prevent manifest
injustice.” Dodge v. Susquehanna Univ., 796 F.Supp. 829, 830 (M.D. Pa. 1992). As
the United States Court of Appeals for the Third Circuit has aptly observed:
“The purpose of a motion for reconsideration ... is to correct manifest
errors of law or fact or to present newly discovered evidence.” Max's
Seafood Café, 176 F.3d at 677 (quoting Harsco Corp. v. Zlotnicki, 779
F.2d 906, 909 (3d Cir.1985)). “Accordingly, a judgment may be altered
or amended if the party seeking reconsideration shows at least one of
the following grounds: (1) an intervening change in the controlling law;
(2) the availability of new evidence that was not available when the
court granted the motion for summary judgment; or (3) the need to
correct a clear error of law or fact or to prevent manifest injustice.” Id.
(citation omitted).
Howard Hess Dental Laboratories Inc. v. Dentsply Intern., Inc., 602 F.3d 237, 251
(3d Cir. 2010).
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Thus, it is well settled that a mere disagreement with the court does not
translate into the type of clear error of law which justifies reconsideration of a ruling.
Dodge, 796 F.Supp. at 830. Furthermore, “[b]ecause federal courts have a strong
interest in the finality of judgments, motions for reconsideration should be granted
sparingly.” Continental Casualty Co. v. Diversified Indus., Inc., 884 F.Supp. 937,
943 (E.D. Pa. 1995). Moreover, it is evident that a motion for reconsideration is not
a tool to re-litigate and reargue issues which have already been considered and
disposed of by the court. Dodge, 796 F.Supp. at 830. Rather, such a motion is
appropriate only where the court has misunderstood a party or where there has been
a significant change in law or facts since the court originally ruled on that issue. See
Above the Belt, Inc. v. Mel Bohannon Roofing, Inc., 99 F.R.D. 99, 101 (E.D. Va.
1983).
In the instant case, the plaintiffs do not argue that there has been an
intervening change in the law, nor do they offer new evidence to support their claims.
Rather, they contend that the Court erred in making credibility determinations and
in resolving alleged disputed facts in favor of the defendants. They further argue that
we incorrectly characterized the financial warranty paragraph in the Purchase
Agreement, which warranted that all financial information provided by the
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defendants was true and accurate.1 Thus, the plaintiffs invite us to conclude that our
summary judgment decision caused a manifest injustice which requires us to vacate
that decision.
We disagree.
First, with respect to the breach of contract claim, the plaintiffs again rely on
the federal tax returns that were provided by Treanor, which reflected the car wash’s
gross sales. They assert that because this number did not reflect the net income of
the car wash, and because the net income was much lower, that Treanor provided
inaccurate financial information in breach of the agreement. This argument,
however, fails to consider that the tax returns were not the only financial information
provided to the plaintiffs. Rather, the plaintiffs were also provided with the Sonny’s
Sales Detail Reports, which contained the net income of the car wash. Thus, the
plaintiffs would have us conclude that the fact that these two numbers are different
equates to Treanor providing inaccurate information. However, we cannot reach that
We note that in their brief in support of the motion to reconsider, the plaintiffs for
the first time appear to allege a claim for breach of express warranty with respect to
this paragraph of the Purchase Agreement. (Doc. 102, at 14). However, no such
claim was alleged in the complaint, and the plaintiffs may not now assert a new
theory of recovery in their brief in support of the motion for reconsideration. See
Com. Of Pa. ex rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173 (3d Cir. 1988).
1
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conclusion when the undisputed facts show that Treanor provided information
regarding both the gross sales and net income to the plaintiffs prior to the closing of
the Agreement. The mere fact that the plaintiffs chose to rely on the higher number
when calculating the car wash’s cash flow does not change our analysis.2
Accordingly, the plaintiffs have not shown a material breach of the Purchase
Agreement, and granting summary judgment in favor of the defendants on this claim
was not a clear error of law, nor does it amount to a manifest injustice to the
plaintiffs.
We reach a similar conclusion with respect to the plaintiffs’ business
conspiracy claim. As we found in our decision granting summary judgment on this
claim, there is simply no evidence in the record to support this claim. First, the law
is clear that Mr. Treanor cannot legally conspire with his own entities. Bowman v.
State Bank of Keysville, 331 S.E.2d 797, 801 (Va. 1985). Moreover, there is no
evidence in the record of an agreement or understanding between Treanor and any
other individual to provide the plaintiffs with misleading financial information or
While the plaintiffs assert that the Court “imputed a materiality condition” with
respect to the breach of contract claim, we remind the plaintiffs that Virginia law
requires a showing that an alleged breach of a contract was material. See Vienna
Metro LLC v. Pulte Home Corp., 786 F.Supp.2d 1076, 1081 (E.D. Va. 2011) (citing
Horton v. Horton, 487 S.E.2d 200, 204 (Va. 1997)).
2
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Case 1:21-cv-00299-MCC Document 105 Filed 11/17/22 Page 8 of 12
prohibit them from receiving other financial information. Accordingly, we find no
clear error of law or manifest injustice.
Further, with respect to our conclusion that the defendants are entitled to
summary judgment on the fraud claims, we similarly conclude that there was no
error of law in our decision, nor did our decision amount to a manifest injustice. On
this score, the plaintiffs contend that we erred by making credibility determinations
with respect to the financial sophistication of Mr. Cueter and Mr. Wang. However,
this argument ignores yet another stubborn fact—these individuals themselves
testified to their own experience, sophistication, and their belief that Mr. Treanor did
not understand certain financial aspects of the business. On this score, it is
undisputed that both Mr. Cueter and Mr. Wang had graduated from one of the
country’s top business schools, Mr. Cueter was employed as a financial analyst for
various private investment firms, and Mr. Wang also had experience performing
financial due diligence and reviewing financial documents. (Doc. 88, ¶¶ 22-24, 2830). Further, Mr. Cueter testified that he and Mr. Wang researched the car wash
business “extensively” prior to reaching out to Mr. Treanor about The Local Car
Wash. (Doc. 88, at 174-75).
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Moreover, with respect to the due diligence period undertaken by the
plaintiffs, Mr. Cueter testified regarding a few issues during their review of the
business’ financials, including “a sales and use issue, which, frankly, the seller didn’t
even understand.” (Id., at 230).3 Additionally, Mr. Cueter recounted that he and Mr.
Wang “were able to sit down with [Treanor] face-to-face and we had the reports and
the tax returns with us, and we were able to go through the reports side by side with
the 2019 tax return.” (Id., at 177).
On this score, the plaintiffs have not met their burden to show that this Court
committed a clear error of law that resulted in a manifest injustice to them. Rather,
While the plaintiffs assert that the Court improperly accused Mr. Cueter of
unilaterally trying to strike his sworn testimony, the record reveals that Mr. Cueter,
in fact, attempted to strike his own comment that Mr. Treanor did not understand
certain aspects of the car wash’s financials.
3
A:
Q:
A:
Q:
A:
As I mentioned, we ended up through our due diligence uncovering a
couple issues, which include the discount item that we mentioned
around the 2019 tax return as well as determining later that there was a
sales and use issue, which, frankly, the seller didn’t even understand.
So I think we did a fair amount of work.
Wait. The seller didn’t understand that?
The seller -- the seller -- I don’t know if he didn’t understand. The seller
didn’t do what he was supposed to do.
You just said the seller didn’t understand.
I would like to strike that comment.
(Doc. 88, at 230-31).
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we credited the plaintiffs’ own statements regarding their experience, research, due
diligence, and their belief that Mr. Treanor did not understand certain financial
aspects of the business. Given these statements of undisputed facts—facts provided
to us by the plaintiffs themselves—we concluded that no reasonable juror could find
that the plaintiffs reasonably relied on one statement by Mr. Treanor regarding the
business’ financials. Accordingly, we cannot now conclude that crediting the
plaintiffs’ own statements resulted in a manifest injustice to them.
As we have explained, a motion for reconsideration is not a tool to re-litigate
and reargue issues which have already been considered and disposed of by the court.
Dodge, 796 F.Supp. at 830. Moreover, a mere disagreement with the court does not
translate into the type of clear error of law which justifies reconsideration of a ruling.
Id. In the instant case, while the plaintiffs disagree with our decision and seek to
reargue their position with respect to their claims, they have not demonstrated any
new evidence, intervening change in the law, or clear error resulting in a manifest
injustice to meet the exacting standard for a motion to reconsider. Therefore, the
motion to reconsider will be denied.
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IV.
Conclusion
Accordingly, for the foregoing reasons, the plaintiffs’ motion for
reconsideration (Doc. 101) will be DENIED.
An appropriate order follows.
Submitted this 17th day of November 2022.
S/Martin C. Carlson
Martin C. Carlson
United States Magistrate Judge
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Case 1:21-cv-00299-MCC Document 105 Filed 11/17/22 Page 12 of 12
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
TFB MIDATLANTIC 4, LLC, et al.,
:
:
Plaintiffs,
:
:
v.
:
:
THE LOCAL CAR WASH, INC., et al., :
:
Defendants.
:
Civil No. 1:21-CV-299
(Magistrate Judge Carlson)
ORDER
AND NOW, this 17th day of November 2022, in accordance with the
accompanying Memorandum Opinion, IT IS HEREBY ORDERED THAT the
plaintiffs’ motion for reconsideration (Doc. 101) is DENIED.
S/Martin C. Carlson
Martin C. Carlson
United States Magistrate Judge
12
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