Am Gen. LLC v. Demmer Corp.

AM GENERAL LLC, Plaintiff, v. DEMMER CORPORATION, Defendant.

Cause No. 3:12-CV-00333-WCL-RBC

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF INDIANA FORT WAYNE DIVISION

March 18, 2015

OPINION AND ORDER

On October 6, 2014, following a week-long bench trial and the filing of post-trial briefs, the undersigned entered an Opinion and Order (the "Trial Order") in this breach of contract action, directing the Clerk to enter a judgment in favor of Plaintiff, AM General, LLC ("AMG") on all of its claims in the amount of $27,966,498 exclusive of prejudgment interest, costs, and attorneys' fees. [DE 208-209]. Currently before the Court is Defendant, Demmer Corporation's ("Demmer's"), "Motion for New Trial and to Alter Judgment" filed on November 03, 2014 wherein it seeks to amend the judgment and/or relitigate several issues in this case. [DE 224]. Demmer filed its supporting brief on November 20, 2014. AMG responded in opposition on December 4, 2014 to which Demmer replied on December 11, 2014. For the following reasons, Demmer's Motion for New Trial and to Alter Judgment will be DENIED.

I. BACKGROUND

The Trial Order directing the $27,966,498 judgment exclusive of prejudgment interest, fees and costs in AMG's favor followed a week long bench trial held on June 16-20, 2014,centering on what the various players at AMG and Demmer really intended when they included ambiguous language in a purchase order for bi-metal doors that Demmer produced for AMG in the years 2010-2011. (DE 208.) Additional issues related to the parties' contract were litigated, all of which the court determined favorably to AMG.¹

The relevant language at the center of this dispute was language in a February, 2010 Change Blanket Contract ("Purchase Order") which included an additional note that became the subject of the parties' opposing interpretations.

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Based upon the above language, Demmer argued at trial and in all of its pretrial filings that the parties intended the price change in the first line of the Purchase Order to be a firm, fixed price to be paid for all deliveries in 2010. Demmer further argued that the "additional note" language in the Purchase Order did not require a new price only a "re-negotiation." Since the "re-negotiation" did not occur (in part because the audit referenced in the "additional note" was never concluded), it asserted that the fixed price for deliveries of bi-metal doors continued throughout 2010. Since AMG had withheld payment for some of the deliveries from Demmer pursuant to AMG's rights under other contract provisions, Demmer asserted a counterclaim for the difference between the alleged fixed price and the amount AMG withheld from it under the other provisions.

AMG, on the other hand, argued at trial and in all of its pretrial filings, that the parties intended to set a placeholder price in the Purchase Order which served as an open, not-to-exceed price for 2010 deliveries. According to AMG, the parties intended the placeholder price to remain in place until an internal audit of the pricing was completed.² At that time, pricing would be re-negotiated consistent with the results of the audit with the finalized price not exceeding the placeholder price originally set. AMG further argued that since the parties never renegotiated the price, because, as AMG asserted and the Court eventually found, Demmer frustrated and delayed the audit process, the court was required to set a "reasonable price at the time for delivery." UCC §305(2). Alternatively, AMG contended that Demmer breached Clauses 16 of the Terms and Conditions of the contract ("T & C") requiring Demmer to provide accurate and complete pricing information to AMG. Under either theory, AMG argued its damages for overpayment of the doors were the same.

In addition, AMG argued that Demmer breached Clause 24 of the T & C when it refused to comply with the dispute resolution portions of the contract thereby entitling AMG to prejudgment interest on the amount overpaid to Demmer from the date of this breach. Finally, AMG asserted that Clause 29 of the T & C allowed for the recovery of attorney fees and costs for any breach of the contract.

Following the trial and preparation of transcripts, counsel submitted detailed revised proposed findings of fact and conclusions of law. (DE 202-203). After examining the entire record, considering the arguments of counsel, and determining the credibility of the witnesses, the Court entered its Trial Order in the form of Findings of Fact and Conclusions of Law andrendered the $27,966,498 judgment, exclusive of prejudgment interest, in favor of AMG. (Docket # 208.) In so doing, the Court concluded as follows:

(1) AMG prevails on its claim that the ambiguous language in the Purchase Order set an open, "not to exceed" price as opposed to a fixed price. The Court concluded that the language of the Purchase Order and all of the extrinsic evidence, including the testimony of the witnesses from both parties, supported AMG's position that the parties intended to set open, "not to exceed" prices rather than a firm, fixed price for 2010 deliveries;

(2) Since the parties agreed to open pricing, the UCC requires the Court to establish the "reasonable price at the time for delivery" and the Court, crediting the testimony and methodology of AMG's damages expert, determined that the reasonable price at the time for delivery was consistent with AMG's expert's calculation.³ The Court awarded damages based upon that calculation;

(3) Alternatively to item 1 above, Demmer breached Clause 16 of the T & C by furnishing AMG cost or pricing data that were incomplete and inaccurate. The Court concluded damages for this breach are equal to the UCC damage calculation in item (2);

(4) Clause 24 of the T & C required the parties to attempt to resolve the dispute over 2010 bi-metal door pricing and permitted AMG to require continued performance from Demmer while demanding a refund of the amounts AMG believed Demmer overpaid upon issuance of a Final Decision Letter on September 9, 2011;

(5) Demmer breached Clause 24 when it failed to comply with the dispute resolution process prior to litigating and did not comply with AMG's Final Decision Letter by refunding AMG amounts it claimed were owed, FOF ¶¶138-139; accordingly, AMG is entitled to the lost value of the funds that should have been refunded to it in the form of prejudgment interest from the date of the Final Decision Letter (September 9, 2011) forward.

(6) Pursuant to Clause 29 of the T & C, requiring Demmer to indemnify AMG for any damages including attorneys' fees and court costs for "any failure of [Demmer] to comply with the requirements of the Purchase Order," AMG prevails on its claim for attorneys' fees, expenses and costs.

(7) As to Demmer's Counterclaims,⁴ given the Court's findings with respect to AMG's claims, Demmer failed to prove it is entitled to a refund of amounts that AMG withheld for overpayments on the 2010 price dispute.

Dissatisfied with these conclusions, Demmer filed the present motion asserting that the Court erred on a number of issues.

II. APPLICABLE STANDARD

Demmer brings its present motion pursuant to Fed.R.Civ.P. 59 (a) and 59(e). Federal Rule of Civil Procedure 59(a) allows a court to order a new trial after a bench trial "for any reason for which a rehearing has heretofore been granted in a suit in equity in federal court." Fed.R.Civ.P. 59(a)(1)(B); see, e.g., Hunter v. Dutton, No. 06-cv-444, 2011 WL 3611327, at *1 (S.D.Ill. Aug.16, 2011). In deciding a motion for a new trial under Rule 59, the "district court must determine whether the verdict is against the weight of the evidence, the damages are excessive, or if for other reasons the trial was not fair to the moving party." Krippelz v. Ford Motor Co., 750 F.Supp.2d 938, 942 (N.D.Ill.2010) (quoting Westchester Fire Ins. Co. v. Gen. Star Indem. Co., 183 F.3d 578, 582 (7th Cir.1999)); see Kapelanski v. Johnson, 290 F.3d 525, 530 (7th Cir.2004);Powers v. Fredrickson, No. 03-CV-670, 2008 WL 5262772, at *1 (S.D.Ill.Dec. 17, 2008). "[T]he court may, on a motion for a new trial, open the judgment if one has been entered, take additional testimony, amend findings of fact and conclusions of law or make new ones, and direct the entry of a new judgment." Fed.R.Civ.P. 59(a)(2); see Hunter, 2011 WL 3611327, at *1.

Under Rule 59(e), a district court may entertain "[a] motion to alter or amend a judgment." Fed.R.Civ.P. 59(e). Rule 59(e) motions are utilized for a very limited purpose: to correct manifest errors of law or fact, to present newly discovered evidence, or where there has been an intervening and substantial change in the controlling law since the submission of the issues to the district court. Divane v. Krull Elec. Co., Inc., 194 F.3d 845, 848 (7th Cir.1999).Thus, motions sounding under Rule 59(e) should only be granted in rare circumstances. Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir.1990). A party seeking relief pursuant to Rule 59(e) bears a heavy burden of establishing that the court should reverse its prior judgment. See Caisse Nationale de Credit Agricole v. CBI Indus., Inc., 90 F.3d 1264, 1270 (7th Cir.1996). Rule 59(e) is not an appropriate vehicle for re-litigating arguments that the district court previously rejected, or for arguing issues or presenting evidence that could have been raised previously. Id.; Sigsworth v. City of Aurora, 487 F.3d 506, 512 (7th Cir.2007).

III. DISCUSSION

In its motion Demmer makes five separate arguments. First, Demmer takes issue with the Court's factual conclusion that the parties intended an open price term with "not to exceed language" rather than a fixed price contract and contends that the legal analysis employed by the Court constitutes manifest error of law. Next, it argues that the court erred in the manner in which it determined damages using UCC §305. Third, it asserts that the award of prejudgment...