Opinion ID: 618950
Heading Depth: 3
Heading Rank: 2

Heading: Procedural Summary Judgment Analysis

Text: Plaintiff complains that the district court abused its discretion when it granted summary judgment on the basis of an issue never contested through the summary judgment proceedings. Plaintiff claims that the source of Turcar’s interest in the Property was not in dispute, and therefore, Plaintiff was not on notice of a need to present additional items, such as a deed of ownership, to prove its interest in the Property. While a sua sponte entry of judgment is “disfavored,” the practice is not prohibited per se, and a district court may do so “in certain limited circumstances,” provided the losing party is afforded “notice and [a] reasonable opportunity to respond to all the issues to be considered by the court.” Shelby Cnty. Health Care Corp., 203 F.3d at 931 (quoting Employers Ins. of Wausau v. Petroleum Specialties, Inc., 69 F.3d 98, 105 (6th Cir. 1995)); Salehpour v. Univ. of Tenn., 159 F.3d 199, 204 (6th Cir. 1998); see also Celotex Corp. v. Catrett, 477 U.S. 317, 326 (1986). We have held that a court must provide a party with a reasonable opportunity to respond by adhering to the same ten-day time frame prescribed for a party’s motion for summary judgment. See Yashon v. Gregory, 737 F.2d 547, 552 (6th Cir. 1984) (citing Kistner v. Califano, 579 F.2d 1004 (6th Cir. 1978)).2 A 2 Although not applicable to the present dispute, we note that Rule 56(c) was amended in 2010 and 2011. The revised rules now expressly provide that a district court may act sua sponte. Under Rule 56(f), after giving notice and a reasonable time to respond, the court may: (1) grant summary judgment for a nonmovant; (2) grant summary judgment on grounds not raised by a party; or (3) consider summary judgment on its own after identifying for the parties material facts that may not 6 No. 10-1340 district court’s failure to adhere to the ten-day rule is subject to harmless error review. Meyer v. AmerisourceBergen Drug Corp., 264 F. App’x 470, 478 (6th Cir. 2008) (citations omitted). The “key inquiry” is whether the losing party was on sufficient notice that it needed to come forward with all its evidence required to withstand summary judgment. Excel Energy, 246 F. App’x 959–60. In making this inquiry, this Court looks to the totality of the proceedings below to determine whether the losing party had sufficient notice of the possibility that summary judgment could be granted against it. Id. at 960. In evaluating this question, this Court considers whether the prevailing party moved for summary judgment; whether the losing party moved for summary judgment; what issues the parties focused on in their briefs; what factual materials the parties submitted to the court; and whether motions were filed by co-defendants. See id. (citing cases). Generally, procedural concerns are highest where summary judgment was granted absent a party motion or where the court granted summary judgment in the non-moving party’s favor. By contrast, a decision in the moving party’s favor, even if on an alternative basis than those argued before the court, is a less extreme sua sponte action, because the moving party’s motion puts its opponent on at least some notice that defensive action is required. See id. at 960 n.7; Meyer, 264 F. App’x at 478. In order to obtain appellate relief, the party seeking to overturn the summary judgment decision must also demonstrate prejudice. Yashon, 737 F.2d at 552. “[E]ven in circumstances where the procedure implemented by the district court did not provide adequate notice,” this Court need not remand the case to the district court where doing so “would merely entail an empty formality be genuinely in dispute. Fed. R. Civ. P. 56(f); see also J.D. Fields & Co., Inc. v. United States Steel Int’l Inc., 426 F. App’x 271, 280 n.9 (5th Cir. 2011). 7 No. 10-1340 with no appreciable possibility of altering the judgment.” See Excel Energy, Inc., 246 F. App’x at 960 (citing United Rentals (N. Am.), Inc. v. Keizer, 355 F.3d 399, 411 (6th Cir. 2004); additional citations omitted). In the instant case, the district court easily could have informed the parties that it was considering summary judgment on an alternative basis. Although we question why the court chose not to do so, we cannot say that the court’s sua sponte action requires reversal. Plaintiff was on notice that the chain of title before the district court was facially insufficient to support its claims. Moreover, Plaintiff has not shown prejudice. First, the district court granted the moving party’s motion based on “issue[s] and evidentiary material” that were “the same [as those] set forth in” the parties’ arguments. Cottrell v. Yuetter, No. 93-4336, 1994 WL 560967, at  (6th Cir. Oct. 11, 1994). This is not a case where the parties provided “little to no argument” regarding the Property’s ownership. Excel Energy, Inc., 246 F. App’x at 962. In order to address the government’s superior interest theory, both parties were required to extensively brief the Property’s chain of title. Accordingly, a defense sufficient to withstand summary judgment necessarily required Plaintiff to examine the government’s presentation of chain of title. Similarly, the response provided Plaintiff with an opportunity to supplement the government’s evidence, if required. Moreover, both of Plaintiff’s claims required that it prove its interest as a prima facie element. See Sumpter v. United States, 302 F. Supp. 2d 707, 719 (E.D. Mich. 2004) (quiet title) and McGinness v. United States, 90 F.3d 143, 145 (6th Cir. 1996) (wrongful levy). Despite this burden, Plaintiff offered little evidence to support its claims. Plaintiff’s complaint was barren of supporting 8 No. 10-1340 documentation, and on summary judgment, Plaintiff relied primarily on the exhibits provided by the government. The Property’s lengthy chain of title obscures the fact that only two of the documents even named Turcar. We cannot take seriously Plaintiff’s claim that this glaring gap in the evidence caught it unaware. On summary judgment, the sole document evidencing Plaintiff’s acquisition of interest was the quitclaim deed dated April 21, 1998, purporting to convey Turchan’s interest to Turcar. However, Plaintiff argued that this deed be disregarded, on the theory that Turchan did not have an interest to convey when he executed the transaction. This argument was self-defeating, even if viewed in Plaintiff’s favor, because it completely undercut the only evidence linking Turcar to the Property. Having severed its interest by its own argument, Plaintiff provided only two additional documents to reestablish its position. One replicated an exhibit already provided by the government, which showed Turchan and Turcar relinquishing interest in the Property. The second evidenced Turchan’s forfeiture of interest to FRD, but did not name Turcar. The fact that Plaintiff supplemented the record on these points demonstrates that it had notice and an opportunity to correct any links it believed were omitted in the government’s presentation of chain of title, including whatever documents it believed demonstrated a ruling in its favor. Additionally, contrary to Plaintiff’s protestations, the summary judgment motion notified Plaintiff that the government questioned Turcar’s source of interest in the Property. Although the government moved on a theory of superior interest, Plaintiff overstates the government’s position when it claims that the IRS conceded this point. In fact, the IRS specifically highlighted this issue, 9 No. 10-1340 but stated that it would presume, for purposes of the summary judgment motion only, that Turcar could present facts to establish its interest. A review of the chain of title as presented to the district court shows that Plaintiff should have been aware of the facts supporting a grant of summary judgment in the government’s favor. As such, the burden fell to Plaintiff to contradict the government’s case with specific facts showing a genuine issue for trial. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The district court’s basis for granting summary judgment was embraced within the evidence and arguments presented by the parties, and the government did not concede Turcar’s interest. Under the totality of these circumstances, Plaintiff cannot show that it was deprived of notice and an opportunity to present the facts necessary to survive summary judgment. Furthermore, in order to warrant remand, Plaintiff is required to show prejudice. A losing party is prejudiced where the court’s entry of summary judgment deprived it of its ability to develop the record or to present legal arguments that would disturb the prevailing party’s entitlement to judgment as a matter of law. See Erickson’s Flooring & Supply Co., Inc. v. Tembec, Inc., 212 F. App’x 558, 567 (6th Cir. 2007); Meyer, 264 F. App’x at 479. “[W]hen the legal issue has already been fully briefed and no factual dispute exists, that party has not been prejudiced by the court’s noncompliance with Rule 56(c).” Harrington v. Vandalia-Butler Bd. of Educ., 649 F.2d 434, 436 (6th Cir. 1981). Here, Plaintiff was presented with multiple opportunities to develop the record and arguments in its favor. Yet, Plaintiff has not demonstrated that it could have produced new favorable evidence or arguments had more notice been given. Erickson’s Flooring & Supply Co., Inc., 212 F. App’x 10 No. 10-1340 at 567 (citing Hoopes v. Equifax, Inc., 611 F.2d 134, 136 (6th Cir. 1979)). Plaintiff had the opportunity in its complaint, in its response to the government’s motion for summary judgment, and on its motion for reconsideration to point to evidence that might alter the district court’s judgment. Id. Likewise, Plaintiff could have attempted to supplement the record on appeal. Id. Plaintiff has not done so. The sole additional document provided by Plaintiff following summary judgment is the July 1998 quitclaim deed conveying the Property from Turchan to Turcar. However, Plaintiff did not provide any argument, either before the district court or on appeal here, to show that this document changes the district court’s after-acquired title merits analysis. Likewise, Plaintiff’s contention that the court should have taken judicial notice of the deed showing Turcar’s conveyance to DTL is unconvincing. The fact that a party ostensibly gave away property does not show that the party had anything to give. Accordingly, Plaintiff cannot show that it was prejudiced by the district court’s failure to notify the parties of its alternative sua sponte basis for granting summary judgment.