Court Opinion

ID: 4708732
Source: CourtListenerOpinion
Date Created: 2021-08-03 17:01:13.115364+00
Date Added: 2024-06-11T08:06:52.301954
License: Public Domain

NOT RECOMMENDED FOR PUBLICATION
                               File Name: 21a0375n.06

                                          No. 20-3358

                          UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT

                                                                                  FILED
 MICHAEL GRASSI; CFOM, INC.,                     )                          Aug 03, 2021
                                                 )                      DEBORAH S. HUNT, Clerk
        Plaintiffs-Appellants,                   )
                                                 )
 v.                                              )       ON APPEAL FROM THE UNITED STATES
                                                 )       DISTRICT COURT FOR THE NORTHERN
 JOHN GRASSI; ALOTECH LIMITED,                   )       DISTRICT OF OHIO
 LLC,                                            )
                                                 )                         OPINION
        Defendants-Appellees.                    )

       BEFORE: BATCHELDER, GRIFFIN, and STRANCH, Circuit Judges.

       JANE B. STRANCH, Circuit Judge. Brothers Michael and John Grassi spent several

years working together to develop a manufacturing technology called ablation casting, which was

ultimately licensed to Honda. The brothers now disagree on what role Michael played in the

development process, and what payment he may be owed. Michael Grassi and his company,

CFOM, filed suit against John Grassi and his company, Alotech, asserting claims including unjust

enrichment, quantum meruit, misappropriation of trade secrets, breach of contract, and promissory

estoppel. Michael alleges that he and his brother John had an oral partnership agreement, and that

he is owed a portion of the monies earned from the Honda deal. Defendants denied the allegations

and counterclaimed, including a request for a declaratory judgment that they own the intellectual

property claimed by Michael. At issue there are two intellectual property agreements from 2012

and a patent assignment from 2017, on which Michael claims his signatures were forged.
No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

       The district court granted summary judgment to Defendants on all Plaintiffs’ claims except

breach of contract and promissory estoppel. Trial of those claims resulted in a jury verdict for

Defendants. Plaintiffs challenge the court’s summary judgment determinations, several key

evidentiary rulings, and a portion of the jury instructions. For the reasons stated below, we

AFFIRM in part and REVERSE in part, and REMAND for a new trial.

                                      I.   BACKGROUND

       A.      Factual Background

       Plaintiff Michael Grassi and Defendant John Grassi are twin brothers. In 2002 or 2003,

John Grassi’s company, Defendant Alotech, patented a technology for casting metal parts called

ablation casting. Over the years, Alotech continued to refine the ablation casting process, filed

five more patents relating to the technology, listing John Grassi and collaborators as the inventors,

and began manufacturing parts for other companies.

       In 2006, Michael Grassi and his company, CFOM, began assisting Alotech with certain

aspects of the ablation casting process. A few years later, another CFOM employee, Charles

Rizzuti, came onboard to help with the computer programming.

       According to Michael Grassi, between 2006 and 2012, he and Rizzuti helped make the

technology commercially viable by contributing several innovations that sped up the casting

process, increased its consistency, and reduced costs. Michael testified that in 2008, he and John

agreed to evenly split the monies earned from the ablation casting process. The brothers’ mother,

Rosemarie Grassi, swore in an affidavit that in 2011, John told her that he and Michael planned

to split the profits from their ablation casting project. She also attached a letter she sent to John in

May 2019, recounting the conversation in which he told her about the partnership. Rizzuti

similarly testified at his deposition that Michael had told him about the deal early in their work

together.

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No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

       In the fall of 2012, Michael contends, John asked him to relocate from Minnesota to Ohio

to work on ablation casting at Alotech full-time. Michael agreed to do so. Around the same time,

Alotech was negotiating a deal for Honda to license the ablation casting technology to manufacture

automobile parts. Michael testified that in September 2012, he and John entered into an oral

agreement to split the monies1 from that deal and future deals, with Alotech/John Grassi receiving

65 percent and CFOM/Michael Grassi receiving 35 percent. Rizzuti testified that Michael told

him that he and John had agreed to split the proceeds from the Honda deal.

       John Grassi, however, testified that he and Michael never entered into such an agreement.

Instead, he claims, Alotech hired Michael as an employee—it issued him a W-2, provided him

with an annual salary, and enrolled him in its 401(k) plan.

       Defendants also claim that in October 2012, at Alotech’s behest, Michael signed a

“Confidentiality and Work Product Agreement” (IP Agreement) providing that Alotech would

own his work product and any value relating to ablation casting created by CFOM while Michael

was “engaged by” Alotech. According to Vicki Hawker, Alotech’s administrative assistant, nearly

all Alotech employees signed similar agreements at the time, and Alotech’s files contained two

copies of Michael’s agreement, one signed on October 22, 2012, and one signed on October 25,

2012. The documents are essentially the same, but the earlier contract bears the signature of

“Michael J Grassi President” on behalf of CFOM and lists an address for CFOM in Somerset, PA,

while the later-dated contract bears the signature of “Mike J. Grassi” on behalf of CFOM and lists

an address in Duluth, Minnesota. Neither contains initialed pages. Michael testified that at the

1
  Defendants contend that Michael has been “inconsistent” about whether the oral agreement
concerned the proceeds or the profits of the Honda deal. However, at his deposition, Michael
explained that because the Honda deal was a licensing agreement, there were no costs, making the
terms “proceeds” and “profits” interchangeable.

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No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

time, he was living in Duluth but had a house in Somerset that CFOM had used as its business

address at some point. He did not think that CFOM was using the Somerset address as its business

address in October 2012, but did not remember for certain and his testimony on the issue was

inconsistent. Neither Hawker nor John Grassi claimed they or anyone else witnessed Michael

signing the IP Agreements, nor did they explain Alotech’s methods for maintaining the integrity

of business records. Alotech’s counsel, Brett Lockwood, stated in a declaration that on October

25, 2012, he received from Alotech an e-mail attaching nine IP Agreements signed by Alotech

employees, including the Agreement of October 25 that was purportedly signed by “Mike J.

Grassi.”

       Michael Grassi agrees that Alotech presented him with the IP Agreement, but maintains

that he did not sign it. He did, however, use the same form agreement with an Alotech employee

whose services he was engaging for a separate company, called DynoPro. That contract was

executed on October 22, 2012; Michael initialed the agreement on every page, signed his name as

“Michael J. Grassi,” and listed a Danville, Ohio, business address for DynoPro.

       Alotech’s deal with Honda was finalized in April 2013. Among other things, the licensing

agreement provided that Alotech’s future intellectual property relating to ablation casting would

be the joint property of Alotech and Honda, but it excluded any such property developed by

Alotech prior to the date of the agreement. So, as part of the due diligence process, one of

Alotech’s attorneys, Jay Moldovanyi, worked with John and Michael to develop a list of 22 items

of previously developed intellectual property that belonged to Alotech, which Michael reviewed

and agreed was accurate. Michael acknowledges that he reviewed that list, but contends he viewed

Alotech as being “John and Mike,” rather than a separate entity. He explained that he approved

the list because John wanted to present all the relevant technology as belonging to Alotech in order

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No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

to show Honda they could “pull this off.” Moldovanyi stated in an affidavit that he viewed the list

as enumerating intellectual property that belonged only to Alotech. However, Moldovanyi had

previously represented CFOM and another of Michael’s companies on unrelated matters, and

Michael testified at his deposition that he believed Moldovanyi was “representing [his] interests”

and knew he was “independent of John.”

       In June 2017, Defendants assert, Michael assigned to Alotech a patent that had previously

been filed by him, John Grassi, and another individual. The assignment document (Patent

Assignment) bears Hawker’s notary seal and signature. Hawker testified at her deposition that she

personally witnessed Michael signing the document, and that she was the only person who was

present. John Grassi first testified that he did not see Michael sign the document, then later said

he had. Michael Grassi contends that his signature on the Patent Assignment was forged.

       Later in 2017, Michael approached John to demand that Alotech pay him his share of the

monies from the Honda deal. The brothers’ relationship deteriorated soon afterwards, and they

parted ways. Defendants contend that Michael was fired; Michael contends that he was never an

employee.

       Over the years, Defendants made hundreds of thousands of dollars in payments to

Plaintiffs. The amounts are generally undisputed, but the parties offer differing views of precisely

what those payments were compensation for. From 2006 to 2012, Michael Grassi and Rizzuti

were reimbursed by John Grassi and/or Alotech for costs and materials relating to their work for

Alotech. Some expenses were also covered by third party companies interested in the technology.

In addition, CFOM received payments in the amount of $726,000 from 2009 to 2016. Michael

Grassi states that these payments were merely reimbursements for costs and materials, and that he

has never received compensation for his intellectual contributions to the ablation casting

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No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

technology during that time period. John Grassi, disputes this and testified, for example, that he

paid Michael $350,000 for “Ablation Valve Control Improvements” in connection with the Honda

deal. In addition, from 2012 to 2017, Alotech paid Michael approximately $693,000 for the period

2012 to 2017. Defendants characterize this as salary, but Michael contends the payments were his

personal draw from his partnership with John.

       B.      Procedural History

       Plaintiffs filed their complaint against Defendants in Ohio state court in October 2018,

asserting claims for breach of contract, promissory estoppel, quantum meruit, unjust enrichment,

fraud, and misappropriation of trade secrets. After removing this case to federal court based on

diversity jurisdiction, Defendants filed an answer and counterclaims against Michael Grassi and

CFOM for deceptive trade practices and breach of contract and for a declaratory judgment that

Defendants own Alotech, all of Alotech’s profits, and certain Alotech intellectual property;

counterclaims against Michael Grassi alone for business defamation, conversion, and tortious

interference with current and prospective business; and a third-party claim against Rizzuti for a

declaratory judgment that neither CFOM nor Rizzuti has a claim to additional monetary payments

from Alotech or any ownership stake in Alotech.

       On February 5, 2020, the district court granted summary judgment, (1) dismissing

Plaintiffs’ claims of quantum meruit, unjust enrichment, misappropriation of trade secrets, and

fraud; (2) entering a declaratory judgment that Plaintiffs have no legally cognizable ownership

interest in Alotech’s intellectual property in ablation casting; and (3) entering a declaratory

judgment that Rizzuti does not have any claim to additional monetary payments from Alotech or

any ownership stake in Alotech. As part of its decision, the district court rejected Plaintiffs’

contention that his signature on the June 2017 Patent Assignment and the two IP Agreements had

been forged, finding that there was no issue of material fact as to the validity of those contracts.

                                                 -6-
No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

          Defendants voluntarily dismissed their counterclaims for conversion, breach of contract,

and declaratory judgment as to the ownership of Alotech and its profits. The case went to trial on

the remaining causes of action: Plaintiffs’ claims of breach of contract and promissory estoppel,

and Defendants’ counterclaims for defamation, tortious interference with current and prospective

business, and deceptive trade practices. Based on its conclusion at summary judgment that the

Patent Assignment and the IP Agreements were valid, the district court barred Michael from

testifying that the second IP Agreement was inauthentic. The district court also excluded Trial

Exhibit 8, a 2013 e-mail chain relating to the IP Agreements, finding it protected by Alotech’s

attorney-client privilege.

          At the conclusion of the evidence, the district court granted Plaintiffs’ motion for a directed

verdict on Defendants’ three remaining counterclaims and referred the promissory estoppel and

breach of contract claims to the jury. The court instructed the jury that Plaintiffs’ burden of

persuasion on the promissory estoppel claim was “clear and convincing evidence,” rejecting

Plaintiffs’ argument that the applicable standard was “preponderance of the evidence.” The jury

returned a verdict in favor of Defendants on Plaintiffs’ breach of contract and promissory estoppel

claims.

          Plaintiffs then moved for a new trial and relief from judgment, seeking an evidentiary

hearing on their forgery claims as well as vacatur of the district court’s order on summary judgment

as to the validity of the IP Agreements and the Patent Assignment. The district court denied the

motion. It agreed that it had erred in excluding the e-mails as protected by attorney-client privilege,

but concluded that any error was harmless because it had already decided as a matter of law that

the IP Agreements were valid.

                                                    -7-
No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

       Plaintiffs appeal the district court’s (1) grant of summary judgment dismissing their

damages claims of quantum meruit and unjust enrichment, their declaratory judgment claim

regarding the ownership of intellectual property, and their claim of misappropriation of trade

secrets; (2) order excluding evidence relating to the validity of the IP Agreement; (3) order

excluding Trial Exhibit 8 and related testimony; and (4) jury instructions regarding their

promissory estoppel claim.

                                       II.   ANALYSIS

       A.      The District Court’s Grant of Summary Judgment

      We first address Plaintiffs’ challenge to the grant of summary judgment, grouping together

their claims of quantum meruit and unjust enrichment in one category, and their declaratory

judgment claim concerning intellectual property and their misappropriation of trade secrets claim

in another category.

       The district court’s grant of summary judgment is reviewed de novo. Kalich v. AT&T

Mobility, LLC, 679 F.3d 464, 469 (6th Cir. 2012). Summary judgment is appropriate when the

record, viewed in the light most favorable to the nonmoving party, reveals that there is no genuine

issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Fed.

R. Civ. P. 56(a). Defendants, as movants, bear the burden of making this showing. Troutman v.

Louisville Metro Dep’t of Corr., 979 F.3d 472, 481 (6th Cir. 2020). In examining the record to

determine if there is an issue of material fact, we do not judge credibility or weigh evidence;

instead, we believe the evidence of the nonmoving parties, and draw “all justifiable inferences” in

their favor. Anderson v. Liberty Lobby, 477 U.S. 242, 255 (1986). Ultimately, a genuine dispute

exists where “there is sufficient evidence” that “a reasonable jury could return a verdict for the

nonmoving party.” Id. at 248–49

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No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

       Our review of the district court’s a grant of partial summary judgment is limited to the

evidence before the district court at the time of its ruling, and we do not consider evidence that

was later introduced at trial. Biegas v. Quickway Carriers, Inc., 573 F.3d 365, 374 (6th Cir. 2009).

       1. Quantum Meruit and Unjust Enrichment

       Under Ohio law, unjust enrichment and quantum meruit claims share the same essential

elements: “(1) the plaintiff conferred a benefit on the defendant, (2) the defendant knew of the

benefit, and (3) it would be unjust to permit the defendant to retain the benefit without payment.”

Meyer v. Chieffo, 950 N.E.2d 1027, 1039 (Ohio Ct. App. 2011); see also Hambleton v. R.G. Barry

Corp., 465 N.E.2d 1298, 1302 (Ohio 1984)). Because these equitable remedies are intended to

“prevent injustice,” the third element is critical; it is not enough for a plaintiff to show merely that

he conferred a benefit upon the defendant. Andersons, Inc. v. Consol., Inc., 348 F.3d 496, 502 (6th

Cir. 2003) (quoting Giles v. Hanning, 2002-Ohio-2817, 2002 WL 1173512, at *2 (Ohio Ct. App.

May 31, 2002) and citing Katz v. Banning, 617 N.E.2d 729, 735 (Ohio Ct. App. 1992)); see also

Liberty Mut. Ins. Co. v. Three-C Body Shop, Inc., 2020-Ohio-2694 ¶ 10, 2020 WL 2042916, at *2

(Ohio Ct. App. Apr. 28, 2020). Instead, a plaintiff must show “enrichment that is unjust”—that

under the circumstances, the plaintiff has a “superior equity” that makes it “unconscionable for

the . . . [defendant] to retain the benefit.” Andersons, 348 F.3d at 502 (alterations in original)

(quoting Katz, 617 N.E.2d at 735). To demonstrate this superior equity, “a plaintiff must show

that the substantial benefit to the defendant is ‘causally related’ to the substantial detriment to the

plaintiff.” Id. (quoting Gaier v. Midwestern Grp., 601 N.E.2d 624, 627 (Ohio Ct. App. 1991));

see also Longmire v. Danaci, 155 N.E.2d 1014, 1024–25 (Ohio Ct. App., 2020). Damages for an

unjust enrichment claim are the amount of the defendant’s benefit, while damages for a quantum

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No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

meruit claim are the measure of the value of the plaintiff’s services, less any damages incurred by

the defendant. Meyer v. Chieffo, 950 N.E.2d 1027, 1039–40 (Ohio Ct. App. 2011).

       Plaintiffs’ unjust enrichment and quantum meruit claims rest on their allegations that they

performed services and provided intellectual property to Defendants in connection with the

development of the ablation casting technology, and that they have not been reasonably

compensated for those contributions. The district court found it undisputed that Defendants had

paid Plaintiffs approximately $1.3 million for their work on ablation casting, and that nothing in

the record suggested this compensation was not “fair value” for the work they did. The district

court reasoned that Plaintiffs had “failed to create a genuine issue of material fact as to whether it

would be unjust for Defendants to retain the benefit provided by Plaintiffs.”

       On appeal, Plaintiffs argue that the district court ignored both contradictory evidence

indicating that Plaintiffs actually received less than $1.3 million from defendants, and Michael’s

testimony that any payments were merely reimbursement for costs incurred from 2009 to 2016.

According to Plaintiffs, they were never compensated for Michael Grassi’s time or intellectual and

technological contributions to the ablation casting, particularly his contributions prior to 2009.

       This argument is at odds with Michael Grassi’s own testimony that the nearly $700,000 he

received from Defendants was his draw from the 50/50 partnership with John Grassi. Moreover,

Plaintiffs must also offer evidence from which a jury could conclude it was “unjust” for Defendants

to retain the benefit of Plaintiffs’ time and services. Andersons, 348 F.3d at 502. Plaintiffs fail to

point to any testimony or documents suggesting that they suffered any detriment, much less a

substantial one, as a result of their efforts. When asked at oral argument to articulate the harm

they had suffered, Plaintiffs asserted that detriment was “inherent” in their claim that they

performed work for Defendants but did not receive compensation for their work. That response,

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No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

which echoes the allegations of the complaint, amounts to an argument that Defendants were

unjustly enriched “merely [because] [Plaintiffs] conferred a benefit upon” them. Id. As Andersons

and Ohio caselaw make clear, that is not sufficient to make out an unjust enrichment claim. See

id. Thus, although the evidence cited by Plaintiffs on appeal might raise factual questions about

the amount of money Plaintiffs received from Defendants and the purpose of those payments, it

does not ultimately create a genuine issue of material fact as to whether it would be unjust for

Defendants to retain the benefit provided by Plaintiffs. On this record, no reasonable jury could

find for Plaintiffs on their unjust enrichment and quantum meruit claims, and summary judgment

was appropriate.

        2. Misappropriation of Trade Secrets and Ownership of Intellectual Property

        In Count VI, misappropriation of trade secrets, Plaintiffs allege that Defendants licensed

the ablation casting technology Plaintiffs had developed without their consent. Defendants

counterclaimed for a declaratory judgment that Alotech owns all the intellectual property in

ablation casting that it uses in its business and sells to third parties. The district court granted

Defendants’ motion for summary judgment on both claims, concluding that the IP Agreement and

the Patent Assignment established beyond dispute that Plaintiffs have no legally cognizable

ownership right in the intellectual property at issue. Michael Grassi’s testimony that his signature

had been forged, the district court explained, was “self-serving” and uncorroborated by other

evidence, and could not create an issue of material fact as to the agreements’ authenticity and

validity.

        A plaintiff may properly demonstrate an issue of fact by pointing to a wide range of

materials, including depositions and affidavits. Fed. R. Civ. P. 56(c)(1)(A). “A court may not

disregard evidence merely because it serves the interests of the party introducing it.” Harris v.

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No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

J.B. Robinson Jewelers, 627 F.3d 235, 239 (6th Cir. 2010) (citing Niemi v. NHK Spring Co., 543

F.3d 294, 300 (6th Cir. 2008) (“[Plaintiff’s] affidavit, albeit arguably self-serving, is not ‘no

evidence.’” (alteration in original))); see also Davis v. Gallagher, 951 F.3d 743, 750 (6th Cir.

2020). Michael’s specific and repeated sworn deposition testimony that the signatures were forged

(see, e.g., R. 24-2, PageID 432–34)—uncontroverted by prior or subsequent statements or

actions—is therefore sufficient to create a question of fact as to the authenticity of the Agreements.

See Harris, 627 F.3d at 239; Churchwell v. Bluegrass Marine, Inc., 444 F.3d 898, 904 (6th Cir.

2006) (“Plaintiff’s testimony creates sufficient evidence to create a genuine issue of material

facts[.]”) This is so even though the testimony came from Michael Grassi himself. Further, that

testimony was corroborated by Rizzuti, who testified Michael told him that both the IP Agreements

and the Patent Assignment were forged. (R. 24-6, PageID 1183–84) Defendants urge us to

disregard this testimony because Rizzuti offered it only after this lawsuit was filed. It is not our

role, however, to gauge the value of a witness’s testimony; we merely ask whether a reasonable

jury could find the evidence as a whole to be sufficient to render a verdict in favor of the

nonmoving party. Anderson, 477 U.S. at 248.

       The district court relied heavily on four other pieces of evidence that it determined weighed

conclusively in Defendants’ favor. First, the court relied on the notarized 2017 Patent Assignment.

But though a notarized document is “self-authenticating” and presumed to be admissible, see Fed.

R. Evid. 902(8), nothing in the Rule suggests it is unassailable. Despite the presence of a notary

seal, a reasonable jury may find an acknowledged signature to be forged based on other evidence

in the record. Defendants offered conflicting testimony on the circumstances of the signature.

Hawker testified specifically that she was the only person who saw Michael sign the document

and that no one else was near her desk at the time. (R. 24-5, PageID 1124) John Grassi, however,

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No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

first claimed that he was not in the room while Michael signed, then changed his mind, testifying

that he had in fact witnessed the signing after Hawker “beckoned [him] over.” (R. 24-4, PageID

908) From this disputed evidence, a reasonable jury might find Hawker’s testimony that she

witnessed Michael Grassi signing the document not credible. And that finding might in turn cast

doubt on the authenticity of the Patent Assignment. Of course, a reasonable jury might also find

the notary stamp to be compelling, and Michael’s account of forgery unbelievable. But it is for

the jury to weigh that evidence and assess credibility; it is not the province of the court. Anderson,

477 U.S. at 255.

       Second, Michael Grassi admitted that he offered a DynoPro employee a copy of the IP

Agreement and signed that agreement on October 22, 2012, the same day Defendants claim he

executed the Agreement with Alotech. The district court interpreted this as evidence that Michael

in fact signed the IP Agreement offered by Alotech. But this evidence necessarily proves only that

Michael was presented with the Agreement on or before October 22, 2012—something he does

not dispute. Moreover, Michael signed the DynoPro agreement as “Michael J. Grassi” and

initialed every page; other documents offered by Hawker as exemplars also bear the signature of

“Michael J. Grassi.” (R. 24-7, PageID 1239–43; R. 24-3, PageID 671) In contrast, the October

25 copy of Defendants’ Agreement is signed by “Mike J. Grassi,” the October 22 copy is signed

by “Michael J. Grassi President,” and neither copy contains initialed pages. A reasonable jury

might conclude from these discrepancies that the IP Agreements were forged.

       Third, the district court was also persuaded by the affidavit of one of Alotech’s attorneys,

who stated that on October 25, 2012, he received from Alotech an e-mail attaching an image of

the October 25 IP Agreement signed by “Mike J. Grassi,” along with similar executed agreements

from eight other individuals. (R. 36, PageID 1537; R. 24-8, PageID 1266) That statement is

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No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

corroborating evidence of Defendants’ position—that multiple Alotech employees signed those

agreements on October 25—but it does not establish beyond dispute that Michael Grassi himself

signed the Agreement that was included in the email.

       Fourth, the district court determined that Michael Grassi’s failure to object to the licensing

agreement with Honda—which described various pieces of technology as Alotech intellectual

property, including intellectual property that Michael claimed he developed—contradicted his

claim that he did not sign away that intellectual property. But Michael testified that he agreed to

the list in order to assure Honda that Alotech owned what it was licensing and that there were no

potential title issues as to the underlying technology. (R. 24-2, PageID 372, 383–84, 395, 441–

44) He further testified that he viewed Alotech as belonging to both himself and John Grassi, (R.

24-2, PageID 439–40, 443–44; R. 24-13, PageID 1368), a claim supported by the affidavit of the

brothers’ mother that John Grassi told her in 2011 that he and Michael planned to split evenly the

profits from their ablation casting project. (R. 26-1, PageID 1458) Rizzuti also testified at his

deposition that Michael had told him about the 50/50 deal early in their work together, and

informed him around the time of the Honda deal that the split had been modified to 65/35, with

Rizzuti to receive 40 percent of Michael’s share. (R. 24-6, PageID 1157, 1159, 1179–81) A

reasonable jury might therefore accept Michael’s explanation that in approving the list, he did not

believe he was signing away his intellectual property because he believed he had a stake in

Alotech. Additionally, although the attorney who worked on that list on behalf of Alotech, Jay

Moldovanyi, averred his belief that it enumerated items of intellectual property that had been

developed by Alotech and belonged to Alotech, Moldovanyi had previously been engaged to

represent CFOM and another of Michael Grassi’s companies on unrelated matters. (R. 24-9,

PageID 1277–78)       Michael testified at his deposition that he believed Moldovanyi was

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No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

“representing [his] interests” and knew he was “independent of John,” statements that a jury could

find pertinent to Michael’s lack of objection to the licensing agreement. (R. 24-2, PageID 456)

       The record makes clear that there are substantial issues of material fact as to whether

Michael Grassi’s signatures on the IP Agreements and the Patent Assignment were forged. In

concluding those signatures were authentic despite the evidence to the contrary, the district court

resolved factual questions that belong in the domain of the jury. We therefore reverse the district

court’s grant of summary judgment to Defendants on Plaintiffs’ claim of misappropriation of trade

secrets and on Defendants’ counterclaim for declaratory judgment regarding ownership of

intellectual property. These issues are remanded for further proceedings.

       B.      Challenges to Decisions at Trial

               1.     Exclusion of Trial Exhibit 8 and Michael Grassi’s testimony regarding
                      Trial Exhibit 59

       We review for abuse of discretion the district court’s evidentiary rulings and subsequent

denial of Plaintiffs’ motion for a new trial based on those rulings. Cummins v. BIC USA, Inc., 727

F.3d 506, 509–10 (6th Cir. 2013). An abuse of discretion is established if the district court applies

the incorrect legal standard, misapplies the correct legal standard, or relies upon clearly erroneous

findings of fact. Id. But we reverse “only if we are firmly convinced of a mistake that affects

substantial rights and amounts to more than harmless error.” Lyngaas v. Ag, 992 F.3d 412, 430–

31 (6th Cir. 2021) (quoting United States v. Baldwin, 418 F.3d 575, 579 (6th Cir. 2005)).

       The abuse of discretion standard also applies to a district court’s application of the law-of-

the-case doctrine. Rouse v. DaimlerChrysler Corp., 300 F.3d 711, 715 (6th Cir. 2002). Under that

doctrine, a court’s ruling should “continue to govern the same issues in subsequent stages of the

same case” in the absence of “extraordinary circumstances such as where the initial decision was

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No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

‘clearly erroneous and would work a manifest injustice.’” Christianson v. Colt Indus. Operating

Corp., 486 U.S. 800, 815–17 (1988) (quoting Arizona v. California, 460 U.S. 605, 618 n.8 (1983)).

       The district court barred Plaintiffs from introducing two categories of evidence based on

its decision at summary judgment that the IP Agreements were valid, which it deemed to be the

law of the case. Specifically, it instructed the jury to disregard Michael Grassi’s testimony that

the IP Agreements were inauthentic and then affirmed that ruling in denying Plaintiffs’ motion for

a new trial. The court also excluded, on the ground of attorney-client privilege, a chain of e-mails

among Alotech employees and Michael Grassi.             In those e-mails, Alotech’s counsel, Brett

Lockwood sent John Grassi a proposed “contractor work product agreement for CFOM,” very

similar in form and content to the 2012 IP Agreements, but that purportedly addressed “work that

is done for Alotech that is paid for by Alotech” and did not address the licensing of technology

“that Mike regards as belonging to CFOM.” John Grassi forwarded the e-mail chain and

attachment to Michael, who responded that it was “more in tune with what [he] would sign.”

       Upon Plaintiffs’ motion for a new trial, the district court acknowledged that it had

incorrectly designated the chain as privileged but reasoned that the error was harmless because it

had already decided that the IP Agreements were valid, which established that the exhibit was not

relevant to any triable issues.

       As we have explained, in ruling at the summary judgment stage that the IP Agreements

and the Patent Assignment were valid, the district court engaged in factfinding that should have

been referred to the jury. That was an error of law, and the district court’s evidentiary rulings

rested on that infirm ground. In instructing the jury to disregard Michael Grassi’s testimony and

in excluding Trial Exhibit 8, the district court abused its discretion.

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No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

       We next ask whether that abuse of discretion affected Plaintiffs’ substantial rights.

Plaintiffs’ claims of breach of contract and promissory estoppel rested on their allegations that the

parties had entered into an agreement to split the profits of the ablation casting technology, but

Defendants never paid Plaintiffs their share. The court specifically instructed the jury that

Plaintiffs “ha[d] no legally recognizable ownership interest in any of the intellectual property that

[D]efendant Alotech is using in its business . . . in connection with ablation casting” and that the

IP Agreements and Patent Assignment were “valid and enforceable.” Thus, Defendants were able

to counter Plaintiffs’ evidence that they “made valuable contributions to Alotech’s process” by

using the court’s evidentiary rulings to argue that “whatever contributions were made were owned

by Alotech under the [IP Agreements].” The court’s erroneous exclusion of Trial Exhibit 8, a

chain of e-mails among Alotech employees and Michael Grassi, denied Plaintiffs the opportunity

to provide evidence to the jury in support of Michael Grassi’s claim that the IP Agreements were

forgeries.

       Defendants also argued generally that Michael Grassi’s testimony on the details of the

partnership agreement was self-serving and constantly changing, exhibiting a “willingness . . . to

change his story, to make up events, to do or say anything to try to get what he wants in this case.”

They bolstered this narrative by taking advantage of the emails’ exclusion to impeach Michael:

when Michael cited the email chain as evidence of the oral partnership agreement, Defendants

questioned him as to why he had not presented the chain to the jury.

       The jury ultimately returned a verdict in favor of Defendants. But additional testimony

and documents suggesting that the IP Agreements were forged might well have led the jury to

reach the opposite conclusion. Such evidence would have undermined Defendants’ argument that

a partnership between the brothers was implausible given that Michael had already signed over to

                                                -17-
No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.

Alotech the intellectual property he contributed; it would also have impacted the jury’s view of

Michael’s and John’s credibility. In light of these possibilities, we conclude that because the

district court’s errors impacted the outcome of the trial, the errors affected Plaintiffs’ substantial

rights and were not harmless. We accordingly reverse the judgment and remand for a new trial.

               2.      Promissory Estoppel Jury Instruction

       Finally, Plaintiffs argue persuasively that the district court erred in instructing the jury to

apply the clear and convincing evidence standard to Plaintiffs’ promissory estoppel claim, rather

than the ordinary preponderance of the evidence standard. However, because we remand for a

new trial on that claim based on the district court’s evidentiary rulings, we need not and do not

reach the merits of this challenge.

                                      III.   CONCLUSION

       For the foregoing reasons, we AFFIRM the district court’s grant of summary judgment

dismissing Plaintiffs’ unjust enrichment and quantum meruit claims. We REVERSE the court’s

grant of summary judgment on Plaintiffs’ misappropriation of trade secrets claim and Defendants’

counterclaim for declaratory judgment regarding the ownership of intellectual property,

REVERSE the court’s judgment after trial on Plaintiffs’ breach of contract and promissory

estoppel claims, and REMAND for a new trial.

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