United States District Court, S.D. Indiana, Indianapolis Division
UNITED STATES OF AMERICA for the use and benefit of SUSTAINABLE MODULAR MANAGEMENT, INC., Plaintiff,
CUSTOM MECHANICAL SYSTEMS, CORP. also known as CMS CORPORATION, LEXON INSURANCE COMPANY, Defendants. CUSTOM MECHANICAL SYSTEMS, CORP., Counter Claimant,
SUSTAINABLE MODULAR MANAGEMENT, INC., Counter Defendants. CUSTOM MECHANICAL SYSTEMS, CORP., Third Party Plaintiff,
GREAT AMERICAN INSURANCE COMPANY, Third Party Defendants.
ORDER ON PLAINTIFF'S MOTION TO AMEND
Jane Magnus-Stinson, Chief Judge
case involves the Miller Act, which requires bonds for
certain types of government construction contracts.
Subcontractor Sustainable Modular Management, Inc.
(“SMM”) brought suit against prime
contractor Custom Mechanical Systems, Corp., also known as
CMS Corporation (“CMS”), and surety
Lexon Insurance Company (“Lexon”),
related to a construction project at a Marine Corps Base in
Hawaii. SMM alleged breach of contract and quantum meruit
claims against CMS and a payment bond claim against Lexon.
[Filing No. 14 at 4-5.] On May 5, 2017, this Court
dismissed several of SMM's claims against CMS and Lexon.
[Filing No. 59.] SMM then filed a Motion to Alter or
Amend Judgment pursuant to Rule 59(e) of the Federal Rules of
Civil Procedure, [Filing No. 63], which is now ripe
for the Court's review. In addition, CMS and Lexon filed
a Motion to file a Sur-Reply in opposition to SMM's
Motion, [Filing No. 72], which the Court will also
styled their Motion a “Motion to Alter or Amend
Judgment, ” citing Rule 59(e) of the Federal Rules of
Civil Procedure. [Filing No. 63 at 1.] Rule 59(e),
however, only applies when a party seeks the reconsideration
of a ruling that was accompanied with a final judgment.
See Fed.R.Civ.P. 59(e); see also
Coleman v. Labor & Indus. Review Comm'n of
Wisconsin, 860 F.3d 461, 472 (7th Cir. 2017) (explaining
that “an order disposing of less than all claims of all
parties does not qualify as a final judgment unless the
district court enters a Rule 54(b) certification that there
is no just reason for delay and that the judgment is indeed
final for the party and claim so certified”);
Abcarian v. McDonald, 617 F.3d 931, 943 (7th Cir.
2010) (“We have often held that the simple dismissal of
a complaint does not terminate the litigation”)
(quotation omitted). In its order dismissing several of
SMM's claims, the Court noted that if SMM declined to
file a Second Amended Complaint, then CMS should advise
whether the Court could enter final judgment in its favor.
[Filing No. 59 at 17.] On May 22, 2017, SMM filed an
Amended Complaint, [Filing No. 61], and, as a
result, the Court has not yet issued judgment in this case.
Therefore, the Court cannot consider SMM's Motion under
Rule 59(e). Instead, the Court will construe SMM's Motion
as a motion to reconsider. The Seventh Circuit has noted that
“[t]echnically, a ‘Motion to Reconsider' does
not exist under the Federal Rules of Civil Procedure.”
GHSC Assocs. Ltd. P'ship v. Wal-Mart Stores,
Inc., 29 Fed.Appx. 382, 384 (7th Cir. 2002).
However, Rule 54(b) of the Federal Rules of Civil Procedure
“governs non-final orders and permits revision at any
time prior to the entry of judgment. . . .” Galvan
v. Norberg, 678 F.3d 581, 587 n.3 (7th Cir. 2012). Under
Rule 54(b), the Court may exercise its inherent authority to
reconsider or revise its interlocutory orders. Bell v.
Taylor, 2015 WL 13229553, at *2 (S.D. Ind. Dec. 4,
2015). Such motions to reconsider perform “a valuable
function” in the limited circumstances wherein the
Court has: (1) patently misunderstood a party, (2) made a
decision outside the adversarial issues presented to the
Court by the parties, or (3) made an error not of reasoning
but of apprehension. Bank of Waunakee v. Rochester Cheese
Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990). In
addition, a motion to reconsider may be appropriate when a
controlling or significant change in the law or facts has
occurred since the submission of the issue to the Court.
Id. Because such problems “rarely arise,
” a motion to reconsider “should be equally
rare.” Id. at 1191.
Defendants' Motion for Leave to File a Sur-Reply
[Filing No. 72]
outset, the Court notes that CMS and Lexon (collectively,
“Defendants”) filed a Motion to File a
Sur-Reply. [Filing No. 72.] “The decision to
permit the filing of a surreply is purely discretionary and
should generally be allowed only for valid reasons, such as
when the movant raises new arguments in a reply brief.”
Meraz-Camacho v. United States, 417 Fed.Appx. 558,
559 (7th Cir. 2011). Defendants argue that SMM
raised a new issue in its reply brief by requesting to amend
its Complaint. [Filing No. 72 at 3.] SMM opposes
Defendants' Motion, claiming that it raised no new issues
in its reply and had explicitly requested to amend its
pleading in the original motion. [Filing No. 78 at
2.] Comparing the two documents filed by SMM - its brief
in support of it Motion to Reconsider, [Filing No.
64], and its reply brief, [Filing No. 71] -
reveals that the former makes brief mention of amending the
Complaint, while the latter contains a detailed argument to
that effect, including citations to Seventh Circuit
authority. As such, the Court exercises its discretion to
consider Defendants' proposed surreply in order to allow
Defendants to respond to the substantive arguments set forth
in SMM's reply. Defendants' Motion for Leave to File
a Sur-Reply is therefore
SMM's Motion to Reconsider [Filing No.
support of its Motion to Reconsider, SMM makes both
procedural and substantive arguments. SMM first argues that
the Court “misapplied the standard” of review for
a Rule 12(b)(6) motion to dismiss, [Filing No. 64 at
2], and that, at a minimum, the Court should have
allowed SMM to “replead its claim in its Second Amended
Complaint, stating in more detail the factual basis of its
claims for additional compensation, ” [Filing No.
64 at 4]. Substantively, SMM argues that the Court and
Defendants relied upon the wrong portions of the contracts at
issue to determine SMM's claims for additional
compensation. [Filing No. 64 at 7-9 (arguing that
SMM's claims for additional compensation are governed by
Section 6.5 of the contracts, rather than Sections 6.1, 6.2
or 6.6).] In addition, SMM argues that “strict
application” of certain contract provisions was
“modified by the parties' conduct.”
[Filing No. 64 at 10-13.]
response, Defendants argue that SMM's Motion to
Reconsider fails to articulate any basis under FRCP Rule
59 and constitutes an inappropriate second bite at the
apple. [Filing No. 67 at 4-6.] In addition,
Defendants state that SMM “presented its
‘new' evidence without making any showing that the
evidence was ‘unavailable'” when SMM
responded to the Motion to Dismiss. [Filing No. 67 at
6.] Regarding SMM's argument that it should have
been allowed to amend its Complaint, Defendants point out
that SMM never attempted to do so while the Motion to Dismiss
was pending. [Filing No. 67 at 6, n.2.] Finally,
Defendants respond to SMM's substantive contractual
arguments by arguing that SMM cannot show contractual
entitlement to additional costs. [Filing No. 67 at
reply, SMM requests to re-plead its claim and states that,
“[w]hether styled as a Rule 59(e) motion or a
motion for reconsideration, SMM believes that several viable
theories of liability are available to show a right to relief
for compensation related to the additional work.”
[Filing No. 71 at 4.]
surreply, Defendants allege that SMM's arguments in its
Motion to Reconsider differ significantly from its arguments
in opposition to the Motion to Dismiss and that any attempt
on SMM's part to amend its Complaint is futile.
[Filing No. 72-1 at 3-4.] Further, Defendants
reiterate that SMM never filed a motion for leave ...