File Na me: 12a0060n.06 NOT RECOMMENDED F OR FUL L -TEXT PUB L I CATI ON

No. 09-2310 UNITED STAT ES COURT OF AP P EALS FOR THE SI XTH CI RCUI T

BA Y CORRUGATED CONTAI NER, I NCORPORATED, Plaintiff-Appellant,

v. GOUL D, I

NCORPORATED, Def endant, GOUL D EL ECTRONI CS, I NC., I nterve nor-Appe llee. ON APPEAL FROM THE UNI TED STATES DI STRI CT COURT FOR THE EASTERN DI STRI CT OF MI CHI GAN

/ BEF ORE: MARTI

N, SUHRHEI

NRI CH, and COL E, Circuit J udg es. BO YCE F. MARTI

N, J R., Circuit J udg e. This case arises out of a consent judgme nt enter ed by the district court in 1994 in which Gould, I nc. and Gou l d E l ec t ro nics, I nc. ag ree d to pay for environmenta l investigation and reme diation of proper ty sold by Gould, Inc. to Ba y Corrug ated Container, I nc. I n 1999, Ba y filed a petition to enfor ce the consent judgme nt and Gould, I nc. moved to dismi ss. I n its petiti on, Ba y acknow ledg ed that Gould, I nc.’s suc cessor , GNB , I nc. (now Ex ide Tec hnologie s), had assumed Gould, I nc.’s responsibilities under the s et t l em ent ag ree ment. The parties enter ed mediation and Ba y enter ed into a settlement with Ex ide. In 2009, Ba y filed a “Notice Requesting Resolution of Petition to Enforc e Consent J udg ment.” Afte r s o li c it in g status updates andNo. 09-2310

Bay Corrugated Container, Inc. v . Gould, Inc. Pag e 2 h o ld in g a n o n-evide ntiary hear ing, the district court g rante d Gould, I nc.’s motion to dismiss

. Rely in g

on a deter

mination by the Seventh Circuit that GNB assumed all of Gould, I nc.’s environmenta l liabiliti es when it purcha sed Gould, I nc.’s battery business in 1984, and Ba y ’s mediated settlement ag ree ment with Ex ide, the district court deter mined that Gould, I nc. had no liability in this matter. I n the alternat i v e, the district court ruled that the “nine y ear s of inactivity ” in this case war rante d dismiss al under Fe dera l Rule of Civil Procedur e 41(b) and Easter n District of Michig an L ocal Rule 41.2. Ba y moved the district court to rec onsider its dismiss al; the district court denied Ba y ’s motion. I n this same order , the court allowed Gould Elec t ro n i cs to respond to Ba y ’s motion for

rec onsideration and to inte rv en e fo r p urposes of appea l. The district court also allowed Gould Electronic s to intervene on appea l. Ba y appea ls, arguing that dismiss al of the petition was err or. We REVERSE

. Ba y argues that Gould, I nc. rema ins liable to Ba y under the 1994 settlement and judgme nt. Ba y also arg ues t hat Bay ’s neg otiation of the mediated settlement with Ex ide, i n addition to other acknow ledg ments of GNB ’s assumption of Gould, I nc.’s liabiliti es, does not show that Ba y rele ased Gould, I nc. Gould, I nc.’s continued liability to Ba y depends upon whether there has been a novation that substitut ed Gould, I nc.’s liability with that of GN B or Ex ide. The resolution of this issue depends upon whether Ba y ’s discussions and neg oti at i o n s with GNB and Ex ide actua lly ext i ng uished its ag ree ment with Gould, I nc. or whether GNB and Ex ide mere ly assumed Gould, I nc.’s oblig ations. Under Michig an law, “[t] he elements of a novation require the cre ditor’s intention both that the new debtor a ssume the obliga tion and that the ol d debtor be rele ased.” Impe rial Hotels Corp.No. 09-2310

Bay Corrugated Container, Inc. v . Gould, Inc. Pag e 3 v. Dore , 257 F.3d 615, 622 (6th Cir. 2001) (citing Harrin g t o n -Wia rd Co. v. Blomstr om Mgf. Co. , 131 N.W. 559, 563-64 (Mich. 1911)). Consent to a novation “is not to be implied mere ly from the perf ormanc e of the contra ct or the pa y ment of money

by the substitute, for that might well consist with the continued liability of the orig inal party .” Harrington-W iard Co. , 131 N.W. at 563 (citation omitted). “The circ umstances surrounding a series of t ransa ctions may be conside red, in a ddition to the text of any written instruments, in deter mining whether the parties rea ched a no v at i o n that exti ng uished the liability of one debtor and substitut ed for it t h e l iability of another .” Impe rial Hotels Corp. , 257 F.3d a t 620. The district court based its dismiss al on “its conclusion that [Gould, I nc.] has no liability for the contamination at issue beca use it s lia bility transfe rre d to GNB ” and Ba y ’s “extremely long period of inac tivity

war rante d dismiss al for la ck of prosec ution.” The district court thus implicitl y found or assumed that there had been a novation of Gould, I nc.’s liabili ty to Ba y , transfe rring it to GNB or Exide. However , we f ind the rec ord conta ins insufficient fa cts to support this conclusion. We hold that it cannot be deter mined from the rec ord whether there has been a novation and whether , as the district court deter mined, Gould, I nc. is no longe r liable to Ba y . L ikewise, the district court’s summary dismiss al under Rule 41(b) does not allow us to revie w the appropr iateness of the decision. For the fore g oing rea sons, we REVERSE the district court’s dismiss al of the case and its denial of the motion for rec onsideration, and REMAND for further proce eding s consistent with this opinion.