Koch Materials Co. v. Shore Slurry Seal, Inc.
2002 WL 1558267, 2002 U.S. Dist. LEXIS 12757, 209 F. Supp. 2d 418 (2002)
Rule of Law:
A court will not reconsider matters that counsel failed to raise in the initial motion, nor will it certify a question for interlocutory appeal where there is no substantial ground for difference of opinion on a controlling question of law, especially when the relevant information for a decision must be evaluated contemporaneously.
Facts:
- Koch Materials Company (Koch) and Shore Slurry Seal, Inc. (Shore) were parties to a contract known as the Novachip Sublicense Agreement.
- Shore had an agreement with another contractor, Gorman, under which Gorman was to fulfill some portion of Shore’s obligations.
- On March 16, 2001, Capoferri, representing Shore, sent a letter to Koch stating that the Novachip Sublicense Agreement was not part of a proposed asset sale and that Shore would continue to exist to collect and remit Novachip royalties.
- Capoferri's March 16, 2001 letter also claimed that Shore intended to assign 'any and all existing ... contracts' to its buyer, creating ambiguity regarding the Gorman contract.
- On April 3, 2001, Koch had reasonable grounds for seeking assurances from Shore regarding its performance of the contract.
- Koch sought these assurances with sufficient formality, obliging Shore to respond.
- As of May 3, 2001, Shore did not provide commercially reasonable assurances that it would be able to perform its contractual obligations.
- Shore had filed a counterclaim alleging that Koch had itself breached agreements, including an earlier settlement agreement and the underlying contracts, before the time of Shore's alleged repudiation.
Procedural Posture:
- Plaintiff Koch Materials Company (Koch) filed a Motion for Partial Summary Judgment.
- Defendants Shore Slurry Seal, Inc. (Shore) and Asphalt Pavings Systems, Inc. filed various Cross-Motions.
- On June 12, 2002, the District Court (Orlofsky, J.) granted in part Koch’s Motion for Partial Summary Judgment, holding that Koch had reasonable grounds for seeking assurances from Shore and that Shore failed to provide commercially reasonable assurances by May 3, 2001.
- On June 12, 2002, in a separate order, the District Court largely granted Shore’s Motion to Continue Koch’s Partial Summary Judgment Motion on Shore’s Counterclaim, acknowledging Shore’s colorable argument that Koch had breached its agreements.
- On June 21, 2002, Shore filed a timely Motion for Reconsideration.
- Shore also asked the court to certify a portion of its June 12, 2002, Opinion and Order for immediate appeal pursuant to 28 U.S.C. § 1292(b), and to stay that Order pending the resolution of both motions.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a court's local rule for reconsideration, which allows for review of matters 'overlooked' by the judge, permit a party to raise arguments or present facts that it could have but failed to present during the initial summary judgment motion, and can a court certify a question for interlocutory appeal under 28 U.S.C. § 1292(b) if there is no substantial ground for difference of opinion regarding its prior determination?
Opinions:
Majority - Orlofsky, District Judge
No, a court will not reconsider matters that counsel failed to raise in the initial motion, nor will it certify a question for interlocutory appeal where there is no substantial ground for difference of opinion. The court denied Shore's Motion for Reconsideration because the local rule (L. Civ. R. 7.1(g)) permits reconsideration only of matters 'overlooked' by the judge, not those overlooked by counsel. Shore's arguments concerning Koch's alleged prior breach and the Gorman contract, though potentially pertinent, were not presented in opposition to Koch’s initial Motion for Partial Summary Judgment. Allowing such arguments on reconsideration would incentivize delay and inefficiency. Furthermore, even if the Gorman contract had been considered, it would not have changed the prior ruling that Koch had reasonable grounds to seek assurances due to the ambiguity in Shore's communications. The court also denied Shore's Motion for Certification for immediate appeal under 28 U.S.C. § 1292(b) because the question Shore sought to appeal—whether its performance after May 3, 2001, was relevant to the adequacy of assurances provided by that date—did not present a 'substantial ground for difference of opinion.' The adequacy of assurances must be judged based on information available at the time the decision is made, not on after-acquired knowledge, consistent with UCC principles.
Analysis:
This case underscores the strict procedural requirements for motions for reconsideration and interlocutory appeals, serving as a reminder to attorneys that arguments and facts must be thoroughly presented at the initial summary judgment stage. It clarifies that reconsideration is not an opportunity for counsel to present new arguments they failed to make initially, but rather for the court to address its own errors or omissions. The ruling also reinforces the principle that the adequacy of contractual assurances is judged based on the information available at the time the demand for assurances is made, preventing parties from using subsequent performance to retroactively validate prior insufficient assurances.
