Opinion
C.A. No. 99C-06-041-FSS
Submitted: September 18, 2002
Decided: December 19, 2002
Upon Weston Investments, Inc.'s and George Weston Limited's Motion for Partial Reargument of Their Motion for Summary Judgment on all Claims — DENIED
Richard D. Allen, Esquire Morris, Nichols, Arsht Tunnell
Frederick L. Cottrell, III, Esquire Richards Layton Finger
Stephanie L. Nagel, Esquire McDermott Will Emery
Dear Counsel:
This is the decision on Weston's Motion for Reargument of the Opinion and Order dated September 4, 2002. In its Opinion and Order the court reviewed the contract and decided that reading it in its own context, Domtar was not bound to reimburse Weston for tax imposed on Weston at closing, but generated by Weston's pre-sale activities.
Weston now claims that the "Opinion and Order did not . . . address whether Schedule F [of the Purchase and Sale Agreement] required Domtar Industries to gross up the $3 million reimbursement that Weston Investments had already received." That reimbursement concerned income generated post-sale but pre-closing, i.e. during the "stub period."
Domtar opposes reargument for two reasons, one procedural and the other substantive. Procedurally, Domtar claims that "Weston never put the [gross up] issue before the Court. . . . No where in its complaint did Weston ask for a gross up on the $3 million payment." And Domtar argues that reargument under Superior Court Civil Rule 59(e) is not the time to inject new issues into an already decided case.
Domtar's procedural argument, standing on a technical point as it does, is ironic. It also is inapt. Literally it is true, as Domtar says, that Weston never put the gross up issue before the court. In fact, it was Domtar that raised the issue in its motion for summary judgment, which the court granted and for which Weston is seeking reargument. It also is literally true that Weston's complaint contains no separate claim for any gross up payment. The claim, while not separate, is implicit. Or as Domtar puts it: "[Weston's damage claim] unquestionably includes a surcharge . . . under the rubric of a `gross up.'" Thus, Domtar's procedural opposition to reargument rings hollow. Even so, the court appreciates Domtar's point that Weston never showed serious interest in the relatively small gross up payment until the court granted summary judgment in favor of Domtar. But, Weston's motion is timely and procedurally proper.
Substantively, the court did not overlook the issue. As discussed below, the undisputed facts concerning Weston's attempt at self-help are dispositive. As presented in the Opinion and Order, shortly before the deal closed, Weston helped itself to $15 million based on what Weston had decided that Domtar owed under the agreement's Schedule F. Domtar protested and Weston returned all but $3 million. Now, Weston insists that it is entitled to a gross up on the amount it took and kept.
The court sees from the appendices to the parties' briefs that discovery was taken concerning the $15 million. The only facts presented, however, are through the testimony of Domtar's General Counsel. He testified that when the dust-up over the $15 million threatened the deal, Weston's representative approached him and said:
Well, . . . you [i.e. Domtar] still owe us money on the stub income, so we should be able to keep that back.
According to his undisputed testimony, Domtar's General Counsel replied: "Sure." Then the two men estimated "[the stub income] at $3 million." And Weston's representative then said, "Well, we will keep three, and we will return twelve."
As far as the court is concerned, that exchange says it all about the $3 million and any gross up on it. The court stands by its original view:
Because the court concludes that Domtar does not owe any reimbursement beyond the amount that Weston already took and kept, it is not necessary to address the gross-up provision.
Weston's claim under the gross up provision seemingly was first discovered by Domtar, while Domtar was briefing its motion for summary judgment. The notion gained some currency when the court mentioned it during oral argument. In its Opinion and Order, however, the court treated the gross up issue like the afterthought that it is. In any event, when Weston decided to "keep three," it abandoned any claim to an additional gross up on that money. If Weston, at the time, thought it was entitled to a gross up on the stub period income tax, it should have held more money back. Whether it is by abandonment, estoppel or otherwise, Weston's conduct delimited its claim.
For the foregoing reasons, Weston Investments' Motion for Reargument is DENIED.
IT IS SO ORDERED.