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UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

ZURICH AMERICAN INSURANCE 

COMPANY as subrogee of WALTER 

TOEBE CONSTRUCTION COMPANY, 

Plaintiff, 

v. 

MACK INDUSTRIES, INC., 

Defendant. 

 

/ 

Case No. 14-cv-14244 

UNITED STATES DISTRICT COURT JUDGE

GERSHWIN A. DRAIN

UNITED STATES MAGISTRATE JUDGE

MONA K. MAJZOUB

OPINION AND ORDER GRANTING PLAINTIFF’S MOTION FOR RECONSIDERATION 

[33] 

I. INTRODUCTION

Zurich American Insurance Company (“Plaintiff”) commenced this action 

against Mack Industries, Inc. (“Defendant”) in the Circuit Court for the County of 

Livingston. See Dkt. No. 1 (Exhibit A). On November 4, 2014, the action was 

removed to Federal Court. Id. On September 18, 2015, the Defendant moved for 

summary judgment. See Dkt. No. 21. This Court granted summary judgment to the 

Defendant on December 8, 2015. See Dkt. No. 31. 

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Presently before the Court is Plaintiff’s Motion for Reconsideration. See

Dkt. No. 33. For the reasons discussed below, the Motion for Reconsideration is 

GRANTED. 

II. BACKGROUND

Plaintiff originally filed the instant action against Defendant claiming to 

enforce an indemnification clause in a Purchase Order (“PO”). See Dkt. No. 1 

(Exhibit A, pp. 2–5). Defendant moved for summary judgment on the basis that the 

claim was barred by the statute of frauds and that there was no enforceable contract 

between the parties. See Dkt. No. 21. At oral argument, the Defendant admitted to 

the Court that the parties had formed an oral contract before the PO was ever sent. 

Transcript of Oral Argument at 4–5. The Court granted summary judgment on the 

grounds that an enforceable oral contract had been formed, rendering the PO a 

mere confirmation of the agreement, and any additional terms, including the 

indemnification provision, unenforceable. See Dkt. No. 31. 

III. LAW AND ANALYSIS

Motions for Reconsideration are governed by Local Rule 7.1(g)(3) of the 

Local Rules of the United States District Court for the Eastern District of 

Michigan, which provides: 

[M]otions for rehearing or reconsideration which merely present the 

same issues ruled upon by the court, either expressly or by reasonable 

implication, shall not be granted. The movant shall not only 

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demonstrate a palpable defect by which the court and the parties have 

been misled but also show that a different disposition of the case must 

result from a correction thereof. 

E.D. Mich. L.R. 7.1(g)(3). “A ‘palpable defect’ is ‘a defect that is obvious, clear, 

unmistakable, manifest, or plain.’” United States v. Lockett, 328 F. Supp. 2d 682, 

684 (E.D. Mich. 2004) (quoting United States v. Cican, 156 F. Supp. 2d 661, 668 

(E.D. Mich. 2001)). 

 Upon a careful review of the record, Plaintiff has demonstrated a palpable 

defect within the Court’s Order. Plaintiff chiefly argues that the Court was misled 

by the Defendant’s concession of an oral contract at oral argument, and because 

the issue was not raised by the Defendant’s Motion for Summary Judgment, the 

Plaintiff did not have an adequate chance to respond. 

Parties are generally expected to set forth all their arguments in support of 

summary judgment in a single dispositive motion; piecemeal litigation at the 

summary-judgment stage is disfavored. McKay v. Federspiel, No. 14-cv-10252, 

2015 WL 163563, at *3 (E.D. Mich. Jan. 13, 2015); see also Fed. R. Civ. P. 56(a).

 Defendant did not address the issue of an oral contract in its original motion. 

See Dkt. No. 21. Defendant only argued that the claim was barred by the statute of 

frauds and that there was no enforceable contract. See id. 

Despite this fact, at oral argument Defendant conceded, for the first time, 

that an oral contract had been formed. See Transcript of Oral Argument at 4–5 

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(“We’re not disputing that there is a contract or an agreement as it relates to the 

price and the quantity and that we delivered it. I mean, we can’t argue that . . . 

there was discussions only about price and material and some delivery time with a 

‘go ahead get started.’ That was what the contract or the agreement was.”). At this 

point, the matter had already been fully briefed. Plaintiff had not briefed this 

specific issue. 

 As noted by the Plaintiff, the Court was left wanting for more facts in its 

Opinion. See Dkt. No. 31 at 6–7 (Pg. ID No. 279–80) (“The parties have not given 

much in the way of facts regarding the depth of these conversations in their 

briefs.”); see also id. at 7 (Pg. ID No. 280) (“Here, once again, the parties don’t 

provide much in the way of facts with regard to events prior to the [Purchase 

Order] being sent in May of 2009.”). The Court concluded there was an oral 

contract because the parties agreed to material terms and work began before any 

written contract was sent to the Defendant. Id. (“Mack’s commencement of work 

was done in reliance on the communication with Toebe, and thus Mack accepted 

the oral contract.”). 

 However, having had an opportunity to brief the issue more fully, Plaintiff 

argues that “the discussions held before the Purchase Order occured during the bid 

process for the Michigan Department of Transportation construction project,” and 

“any prior discussions discussions between the parties were understood to be part 

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of the bid process, and not binding on the parties until the Prime Contract was 

issued by the MDOT.” Dkt. No. 33 at 25 (Pg. ID No. 308). In other words, Plaintiff 

argues that the parties understood, despite reaching agreement on some important 

terms, that there was no contract. 

 The Court originally relied on the deposition testimony of Jeffrey Stover in 

its conclusion that a contract had been formed. See Dkt. No. 31 at 6 (Pg. ID No. 

279). However, Plaintiff provides testimony from Jeffrey Stover that cuts against 

this conclusion: 

Q. When you were discussing terms of the quote with representative 

of Mack Industries, was a final agreement reached, a final 

agreement that would take the place of a purchase order? 

 

A. Absolutely not. 

Q. Okay. What was the final agreement that was reached with regard 

to the purchase of panels from Mack Industries? 

 

A. The terms of our purchase order that we sent them. 

Dkt. No. 33 at 19–20 (Pg. ID No. 302–03) (citing Dep. Stover, P. 68, L. 2–10). 

This excerpt was not included in the original pleadings. 

 Plaintiff further argues that in the construction industry, an oral contract 

does not arise “every time a contractor and subcontractor merely come to some 

understanding on esential terms.” Dkt. No. 33 at 29 (Pg. ID No. 312). The 

testimony of a witness, Bill Deacon, evidences this custom. Id. at 27 (Pg. ID No. 

310). 

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 Whether Plaintiff’s assertions are true is not for this Court to decide. 

Regardless, Plaintiff’s arguments do present an issue of material fact regarding the 

formation of the contract that, if originally argued, would have resulted in a 

different disposition of Defendant’s Motion for Summary Judgment. The only 

reason why they were not argued was because Plaintiff was not provided notice of 

Defendant’s belief that an oral contract existed. Accordingly, the motion will be 

granted. 

IV. CONCLUSION

 For the reasons state above, 

IT IS ORDERED that the Plaintiff’s Motion for Reconsideration [33] is 

GRANTED. 

IT IS FURTHER ORDERED that the Defendant’s Motion for Summary 

Judgment [21] is DENIED. 

IT IS FURTHER ORDERED that a status conference will be held on 

February 16, 2016 at 3:00 p.m. to put this matter back on track for trial. 

Dated: February 8, 2016 /s/Gershwin A Drain 

Detroit, MI HON. GERSHWIN A. DRAIN 

 United States District Court Judge

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