EXCENTUS CORPORATION v. GIANT EAGLE, INC et al

Filing 208

OPINION setting forth the reasons the motion for reconsideration 143 , motion to strike 157 , and motion to stay 158 will be DENIED. An appropriate order will be entered. Signed by Chief Judge Joy Flowers Conti on 7/10/14. (kjm)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
EXCENTUS CORPORATION,
Plaintiff,

v.
GIANT EAGLE, INC., DAVID
SHAPIRA, DANIEL SHAPIRA,
Defendants.

) CIVIL ACTION NO. 13-178
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OPINION

CONTI, Chief District Judge
I. Introduction
Pending before the court is a motion for reconsideration (ECF No. 143) filed by plaintiff
Excentus Corporation (“plaintiff” or “Excentus”) requesting this court reconsider its decision
permitting defendant David Shapira and Daniel Shapira (the “Shapira defendants”) to forward
their legal bills to Excentus for payment. (H.T. 12/12/13 (ECF No. 149) at 29.) Based upon the
submissions by the parties and review of the applicable legal standard, Excentus’ motion for
reconsideration will be denied for the reasons set forth herein.
II. Procedural History1
On May 9, 2013, the Shapira defendants filed a motion for summary judgment on their
counterclaims asserted in this case. (ECF No. 23.) On November 25, 2013, the court heard oral
argument about, among other motions, the Shapira defendants’ motion for summary judgment.
The court continued the hearing to December 12, 2013. One of the issues raised by the parties’

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The procedural history section of this opinion sets forth only the procedural history relevant to
the disposition of the motion for reconsideration.

briefing with respect to the Shapira defendants’ counterclaims was whether the Shapira
defendants “actually incurred” legal fees in relation to the case pending before this court and the
case before the District Court for the Northern District of Texas because defendant Giant Eagle,
Inc. (“Giant Eagle”) agreed to pay those fees for the Shapira defendants.
At the December 12, 2013 hearing, the court after consideration of the parties’
submissions and arguments, instructed the Shapira defendants to furnish copies of unpaid bills
for their legal fees to Excentus, and instructed Excentus to pay the reasonable fees within thirty
days. (H.T. 12/12/13 (ECF No. 149) at 29.) The court reserved judgment with respect to whether
Excentus is liable for legal fees Giant Eagle paid on behalf of the Shapira defendants dating back
to the beginning of the litigation in the Northern District of Texas to the date of the hearing
before this court, i.e., December 12, 2013. (Id.)
On December 18, 2013, Excentus filed the pending motion for reconsideration and brief
in support of the motion. (ECF Nos. 143, 144.) On January 8, 2014, the Shapira defendants filed
an omnibus brief supplementing their motion for summary judgment and responding to
Excentus’ motion for reconsideration. (ECF No. 151.) On January 15, 2014, Excentus filed a
motion to strike the omnibus brief and attachments. (ECF No. 157.) On January 20, 2014, the
Shapira defendants filed a response in opposition to the motion to strike. (ECF No. 159.) On the
same day, Excentus filed a motion to stay requesting the court stay consideration of the Shapira
defendants’ prospective legal bills “until it takes Excentus’s Motion for Reconsideration and
related briefing under consideration and rules on that motion.” (ECF No. 158 at 2.) On March 24,
2014, the court issued an order denying the Shapira defendants’ motion for summary judgment
without prejudice to the Shapira defendants filing a renewed motion for summary judgment once
discovery on whether the legal fees were “actually incurred” is completed. (ECF No. 185 at 3.)

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Excentus’ motion for reconsideration having been fully briefed is now ripe to be decided
by the court.
III. Standard of Review
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). A party seeking reconsideration must show at least one of the following: (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. Max's Seafood Cafe ex rel. Lou–Ann,
Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir. 1999); N. River Ins. Co. v. CIGNA Reinsurance
Co., 52 F.3d 1194, 1218 (3d Cir. 1995).
By reason of the interest in finality at the district court level, motions for reconsideration
should be granted sparingly; the parties are not free to relitigate issues the court already decided.
Am. Beverage Corp. v. Diageo N. Am., Inc., Civ. Action No. 12–601, 2013 WL 4010825, at * 1
(W.D. Pa. Aug. 6, 2013); Rottmund v. Cont'l Assurance Co., 813 F.Supp. 1104, 1107 (E.D. Pa.
1992). Stated another way, a motion for reconsideration is not properly grounded in a request for
a district court to rethink a decision it, rightly or wrongly, already made. Williams v. Pittsburgh,
32 F.Supp.2d 236, 238 (W.D. Pa. 1998). Just as motions for reconsideration should not be used
to relitigate issues already resolved by the court, they should not be used to advance additional
arguments that could have been made by the movant before judgment. Solis v. Makozy, Civ.
Action No. 09–1265, 2012 WL 1458232, at * 1 (W.D. Pa. Apr. 27, 2012); Reich v. Compton,
834 F.Supp. 753, 755 (E.D. Pa. 1993).

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IV. Discussion
Excentus argues that pursuant to its bylaws, the Shapira defendants, who are both
members of Excentus’ board of directors, are not entitled to advancement of their defense costs.
Section 8.1 of the Excentus bylaws provides, in pertinent part:
The Corporation shall indemnify, and advance expenses to, each present or
former director or officer of the Corporation against all judgment, penalties
(including excises and similar taxes), fines, amounts paid in settlement and
reasonable expenses actually incurred by any such director or officer in
connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of his being or having been a director or operating of the
Corporation (whether or not he continues to be a director or officer at the time of
incurring such expenses and liabilities) to the fullest and same extent that
indemnification of directors is permitted by all valid and applicable laws,
including, without limitation, Article 2.02 of the Texas Business Corporation Act.
The indemnification and advancement of expenses provided in this section
shall…not be required if and to the extent that the person otherwise entitled to
payment of such amounts hereunder has actually received payment therefore
under any insurance policy, contract or otherwise.
(ECF No. 28-1 at 326 (emphasis added).) Excentus argues that pursuant to this provision, it is
not required to advance expenses to the Shapira defendants because the expenses are being billed
to and paid by Giant Eagle, and, under those circumstances, the Shapira defendants have not
“actually incurred” those legal expenses. (ECF No. 144 at 2.)
At the December 12, 2013 hearing, counsel for Giant Eagle and the Shapira defendants in
response to Excentus’ argument that the Shapira defendants have not “actually incurred” legal
fees related to this case because Giant Eagle is being billed for and is paying the legal fees,
stated:
[I]f this whole issue turns on whether Giant Eagle cuts a check to the Shapiras,
before we leave the courtroom we’re going to call Giant Eagle and we’re going to
say stop the payments; don’t pay last month’s fees and don’t pay anything more
for the Shapiras because Excentus is making this argument that if you send us the
check, they’re not going to be entitled—the Shapiras will not be entitled to
advancement. So, at a minimum, no matter what—with respect to this “actually
incurred” argument, the last couple months of fees and going forward the
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Shapiras are entitled because there’s no way we’re going to counsel Giant Eagle
to keep sending us a check for the Shapiras.
(H.T. 12/12/13 (ECF No. 149) at 27.) In response to the foregoing argument, counsel for
Excentus stated:
And so it’s—if they change things going forward, that creates a different
situation; but what we’re here today about, Your Honor, is we’re here today about
a summary judgment record where there is nothing in there that the Shapiras have
actually incurred any expense; it’s all Giant Eagle.
…
[T]hey have to—they have to show Excentus in this case that they are going to
actually incur expenses. They didn’t do that. They—they made a demand, but
they didn’t actually incur any. They didn’t tell us they were actually incurring
any. Giant Eagle was the one that was actually incurring those expenses.
(Id. at 27-29.) The court after review of the submissions by the parties and consideration of their
arguments, held:
What I’m going to do is I’m going to reserve judgment on the issue of fees that
have been paid to date by Giant Eagle. To the extent there is a bill for expenses
that have been—is sent to the Shapiras by the law firm, that is going to be
forwarded to Excentus and Excentus must pay those expenses within 30
days.
(H.T. 12/12/13 (ECF No. 149) at 29 (emphasis added).)
Excentus in its motion for reconsideration requests this court reconsider its decision
ordering Excentus to pay the Shapira defendants’ prospective legal fees based upon the need to
correct a clear error of law or fact or to prevent manifest injustice. (ECF No. 144 at 1.) Excentus
argues “[t]here is no evidence before this Court that the Shapiras have ‘actually incurred’ any
expenses or that they are ‘actually incurring’ expenses going forward.” (Id.) According to
Excentus, “[i]n order to ‘actually incur’ expenses under Texas law, the Shapiras must become
liable for the claimed expenses.” (Id.) Excentus in support of its argument relies upon the
evidence submitted by the Shapira defendants and Giant Eagle in the form of legal bills “which
do not contain a single bill to the Shapiras, do not contain any engagement agreement between
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the Shapiras and the law firms at issue, do not contain any payment by the Shapiras for any legal
expenses rendered, and do not contain any documentation of an obligation by the Shapiras to pay
the fees.” (Id. at 1-2.)
The court’s holding set forth on the record at the December 12, 2013 hearing directly
responds to counsel for Giant Eagle and the Shapira defendants’ assertion that Giant Eagle would
no longer pay the legal fees for the Shapira defendants and counsel for Excentus’ assertion that
because the Shapira defendants were never billed for the legal expenses, they did not “actually
incur” those expenses. The court at the December 12, 2013 hearing emphasized: “So to the
extent that there’s bills that are given to the Shapiras, they’re going to have to be paid.” (Id.
(emphasis added).) The court reserved ruling about bills not sent to the Shapira defendants, but
held that to the extent the law firm representing the Shapira defendants sends the Shapira
defendants a bill for legal services rendered on their behalf, the Shapira defendants will “actually
incur” those fees, and Excentus will be liable to pay them. The court at the December 12, 2013
hearing held that Excentus will have an opportunity to object to the reasonableness of legal bills
sent to them by the Shapira defendants. (H.T. 12/12/13 (ECF No. 149) at 31-32.)2 To the extent

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The court at the December 12, 2013 hearing instructed:
I understand you don't agree with the ruling, but I would like the Shapira -- I
would like the Shapira counsel to draft the proposed order for this kind of
procedure. You're going to agree on a special master because I think that does
make sense here, because you'll get a much quicker hearing and a quicker turn
around; and I can do it by de novo -- I'll de novo review it if there's a problem. A
lot of times they can work these things out and it gets very narrow in terms of
what issues really come before the Court. So I think that would be a good way to
approach it.
So you can draft the order for the Court with respect to any bill that is sent to the
Shapiras for payment has to be paid within 30 days. If there are any portions of
that that are -- that the Plaintiff -- Excentus feels would be unreasonable, they
have to pay the reasonable portion within the 30 days, give notice about what
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the Shapira defendants do not provide Excentus legal bills addressed to the Shapira defendants
for payment by them to evidence that the Shapira defendant actually incurred the fees listed in
the bills, Excentus may object to payment of those fees in accordance with the procedure agreed
upon by the parties or provided for by the court.3 Based upon the foregoing analysis, the court’s
decision permitting the Shapira defendants to forward their unpaid legal bills to Excentus for
payment is not required to be reconsidered to correct a clear error of law or fact or to prevent
manifest injustice. Excentus’ motion for reconsideration (ECF No. 143) will, therefore, be
DENIED.

portions they're objecting to. That dispute would go to a special master for
resolution and then it will ultimately come to me for de novo review. Something
along those lines.
If you get that to me -- make sure you share it with the -- Excentus counsel; and if
you -- if you don't dispute the form of the order, it can come to me and I will, as a
proposed order, I would sign it. If you dispute provisions of it you think that are
not reasonable, you notify -- you notify opposing counsel and request a hearing,
and we can try to do it telephonically so we don't waste too much time or travel
and expense money.
(H.T. 12/12/13 (ECF No. 149) at 31-32.)
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On January 8, 2014, the Shapira defendants submitted a proposed order outlining the
procedure for payment of the Shapira defendants’ attorneys’ fees by Excentus. (ECF No. 152.)
The Shapira defendants indicated in their submission that they sent a copy of the proposed order
to Excentus for comment, but Excentus—as of January 8, 2014—did not provide a response or
comment to the proposed order. (Id.)
In accordance with the court’s statements on the record at the December 12, 2013
hearing, see note 2 supra, on or before July 28, 2014, the parties must meet and confer with
respect to the Shapira defendants’ proposed order and nominee for special master. If the parties
cannot agree upon a procedure to use for payment of the Shapira defendants’ legal fees or a
nominee to serve as special master, on or before July 28, 2014, the parties shall file a joint notice
on the docket identifying the nature of their disagreement. If the parties cannot agree upon a
proposed order or a person to serve as special master, the court will schedule a hearing to address
those issues.
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In light of the court denying the Shapira defendants’ motion for summary judgment (ECF
No. 185) and denying Excentus’ motion for reconsideration, Excentus’ motion to strike (ECF
No. 157) and motion to stay (ECF No. 158) will be denied as moot.
An appropriate order will be entered.
BY THE COURT,
Dated: July 10, 2014

/s/ JOY FLOWERS CONTI
Joy Flowers Conti
Chief United States District Judge

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