Opinion
Case No. 1:99-CV-384
July 17, 2002
OPINION
The Court has before it Aero-Motive's motion for reconsideration of the Court's June 27, 2002, Order granting Garnishee Defendants' motions for stay of garnishment and to quash subpoenas and depositions. The Order indicates that the reasons for granting the motions were stated on the record. In the instant motion, Aero-Motive contends that it presented sufficient evidence to deny the motions.
Standard
To prevail on a motion for reconsideration, the movant must "not only demonstrate a palpable defect by which the Court and the parties have been mislead, but [must] also show that a different disposition of the case must result from a correction thereof." W.D. Mich. L.Civ.R. 7.4(a). There is no provision in the Federal Rules of Civil Procedure that provides for a motion for reconsideration, and such a motion is to be evaluated as a motion for relief from judgment under Fed.R.Civ.P. 59(e).Huff v. Metro. Life Ins. Co., 675 F.2d 119, 122 (6th Cir. 1982). A motion for reconsideration may not be used to raise issues that could have been raised in the previous motion, see Kohl v. Murphy, 767 F. Supp. 895, 904 (ND. Ill. 1991), or to introduce evidence which could have been proffered during the pendency of a summary judgment motion see Thomas Indus., Inc. v. Wagner Spray Tech Corp., 619 F. Supp. 1280, 1284 (E.D. Wis. 1985);Indep. Petroleum Ass'n of Am. v. Babbitt, 178 F.R.D. 323, 327 (D.D.C. 1998). It is not an opportunity to reargue the case, but rather to point out manifest error of law or present newly discovered evidence. Sault Ste. Marie Tribe of Chippewa Indians v. Engler, 146 F.3d 367, 374 (6th Cir. 1998).
Pertinent Facts
There has been much activity in this case since its inception in 1999. However, the facts can be distilled, for purposes of the present motion, as follows:
1. Aero-Motive sued the Beckers for the costs of pollution clean-up on property formerly owned by the Beckers.
2. Aero-Motive and the Beckers settled their case in early February of 2002, with the entry of a consent judgment for $5,000,000.00. Aero-Motive agreed to accept $100,000.00 from the Beckers on that Judgment, and seek the balance from insurance companies that allegedly insured the Beckers from 1964-1972.
3. Eight days later, the insurance companies filed their declaratory action in this Court on February 15, 2002 (Case No. 1:02-CV-108).
4. On May 21, 2002, in reliance upon the consent judgment, Aero-Motive Aero-Motive obtained Writs of Garnishment against the insurance companies.
5. The insurance companies then filed motions to have the Writs of Garnishment stayed pending the resolution of the declaratory action, and to have deposition notices and subpoenas underlying the garnishment quashed.
6. Aero-Motive then filed a motion to have the declaratory action stayed, and resolve the insurance company/Becker liability issue vis-a-vis the garnishment proceedings.
On June 25, 2002, at a hearing held on the motions noted above, the Court granted the insurance
companies motions to stay the garnishments and quash the deposition notices and subpoenas. In conjunction therewith, the Court denied Aero-Motive's motion to stay the declaratory action.
Analysis
Aero-Motive raises three objections to the Court's ruling: 1) the insurance companies are proper garnishee defendants; 2) the consent judgment is valid and proper as to the garnishee defendants; and 3) the garnishee defendants may not collaterally attack the consent judgment. All three of these objections can be dealt with by reviewing the Court's comments from the June 25, 2002, record.
As was detailed by the Court at the hearing, the consent judgment was never meant to bind the insurance companies:
And let me just go back in history a little bit to this consent order and tell you my role in this, so that everybody is starting out with the same knowledge. I was on vacation, and I got a call from my case manager. I think it was Mr. Denton and Mr. Jonker —
I think it was Mr. Jonker. — wanted me to enter a consent order, and it was either faxed to me or sent to me by Federal Express. And I took a look at it, and I expressed a major concern; and that was, the effect of the consent order on other parties. And I don't recall for sure, but I think I mentioned the potential effect that it would have on any insurance company, because I knew that this could be a problem. Although I didn't know, because I don't think anyone informed me, that there had been a settlement conference with insurance companies in front of Magistrate Judge Brenneman. But anyway, I expressed that concern. And for that reason, I did not sign the consent order that was prepared and delivered to me that first time.
What I suggested to them was that they put language in it that said specifically that it was only binding on the parties and would not affect any other party. I also expressed some concern about the findings of fact. I think my recollection is — and I didn't save, although, my office might have, the original draft. But my recollection is it had certain findings of fact and conclusions of law, and I was concerned about those being in the consent judgment.
And I think it was Mr. Jonker — and that's why I think Mr. Jonker said, well, would you be — if you just say there is evidence in the record and files to support the findings of fact and conclusions of law, I would say, yes, that's probably true, but not to the extent that it would, for example, be binding in a summary judgment case or that it would be ultimate findings of fact after a trial. But I was sufficiently knowledgeable about the case, having dealt with — a couple of times with motions for summary judgment and hearing testimony regarding some of the — I don't remember if it was testimony, but certainly argument regarding some of the problems of — not remediation so much, but as to the movement of the pollution and where it could have come from and all that. I mean, I heard all of that from Mr. Denton and Mr. Jonker and everybody. So I said, "yes, there is evidence to support that." But whether those would be findings in the ultimate sense, I didn't think so.
The other thing is, the thing came back to me and it said that the "consent judgment applies to, is binding upon and inures to the parties only and their successors, permitted assigns, heirs, privies designees." And the insurance companies would not be included in any one of those definitions.
So I looked at the consent judgment then — and I still look at it now — as binding on the parties only. And by that, I mean Aero-Motive Company and William Becker and Roger Becker. Nothing in there, in my judgment, was meant to bind the insurance companies as to anything. It was just a resolution of one step in a dispute between the parties. And I feel pretty strongly about that. Let's put it this way. The parties may have had another intent, and to the extent they want to argue about contract interpretation, they can; but to the extent they want to argue about the interpretation of the consent judgment, which I signed, that consent judgment does not affect the rights of the insurance carriers in any respect whatsoever.
TR at 4-6. Clearly, when this Court granted the insurance companies' motions, it was not based upon a legal determination of whether an insurance company is a privy in relation to the policyholder. It was based upon the specific conditions under which the Court agreed to enter the consent judgment.
This was evident later in the June 25th hearing, when the Court once again stated its purpose in entering the consent judgment:
I think that with this consent judgment, as I understood it when it was entered, that it was — could not be used to the disadvantage of any third party. It was for the benefit of the parties only and could not be used for the benefit of any third party. And insurance companies, in my judgment, are third parties.
TR at 9. Again, whether insurance companies are third parties in a legal sense is irrelevant here. The Court used the term in connection with the consent judgment in a certain way, to prevent the very situation that occurred when Aero-Motive obtained the Writs of Garnishment.
While not wanting to beat a dead horse, the Court restated its recollection of the entry of the consent judgment two more times, as the proceeding progressed:
But let's go back to the consent judgment. My understanding of this when I entered it was that it would be binding only on the Beckers and Aero-Motive and their — you know, if Beckers assigned any rights or Aero-Motive assigned any rights, I don't know about that.
And I'm not going to argue about privity with you, Mr. Denton. I'm going to stick to my original understanding of what I signed . . .
And as stated in paragraph 3 of the consent judgment, the consent judgment is binding upon the parties and their direct assigns, et cetera, only. And this provision was inserted into the consent judgment to avoid any adverse impact of that particular agreement and those findings upon third parties. And I consider the insurance companies third parties, as I said earlier. They're not covered by the parties that are bound by that consent judgment. I know this is all screwed up, maybe, but we're going to have to figure it out as we go along here.
The consent judgment was not intended to resolve the disputes between Aero-Motive — was to resolve the disputes between Aero-Motive and the Beckers without affecting the issues regarding coverage and/or the scope of coverage or any defense that the insurers may have available to them.
TR at 11, 34-35. On June 25th, the Court stood by its recollection of how and why it agreed to enter the consent judgment, and it stands by that recollection again in denying Aero-Motive's motion for reconsideration.
Conclusion
Thus, Aero-Motive cannot, and has not, demonstrated "a palpable defect" that caused a different disposition of the case, as required by W.D. Mich. L.Civ.R. 7.4(a). There is no manifest error of law in the Court's accurate recollection of why and how it agreed to enter the consent judgment. An Order in accord with this Opinion shall be entered.