Marks Management Services, Inc. v. Reliant Manufacturing, Inc.
Docket: No. 01-2550
Court: Court of Appeals for the Sixth Circuit; August 18, 2003; Federal Appellate Court
Marks Management Services, Inc. (MMS) appeals the district court's affirmation of the bankruptcy court's summary judgment favoring Reliant Manufacturing, Inc. Reliant acquired the assets of Genesis Manufacturing, Inc. during its bankruptcy, having previously been represented by MMS as a sales agent. MMS claimed entitlement to sales commissions from contracts with General Motors Corporation (GM) that it had initially secured for Genesis and which were later transitioned to Reliant. Reliant filed a renewed motion for summary judgment on August 29, 2000, to which MMS did not timely respond. Consequently, on September 22, 2000, the bankruptcy court issued a judgment for Reliant based on the existing record, following Local Bankruptcy Rule (L.B.R.) 9014-1, which allows for motion rulings without a hearing if the responding party fails to file a timely response.
MMS then appealed this judgment to the district court, which upheld the bankruptcy court's decision, determining that the bankruptcy court did not abuse its discretion in granting Reliant's motion and that MMS failed to show any genuine issues of material fact. The appeals court reviewed the summary judgment de novo, affirming that no genuine dispute existed warranting a jury submission, and highlighted that the bankruptcy court's procedural adherence to L.B.R. 9014-1 was correct. The judgment confirmed that Reliant's purchase was free of any liens or claims, and that MMS's claims against Reliant lacked legal grounding.
If a timely response is not filed, the movant can submit a certification of this along with a proposed order and proof of service of the motion. The court may then enter the proposed order without a hearing. In this case, Reliant filed such a certification 21 days after their renewed motion for summary judgment, leading to a judgment for Reliant on September 22, 2000. MMS claimed that a clerical error by its attorneys caused the delay in filing its response. However, under Rule 9006(b)(1) of the Federal Rules of Bankruptcy Procedure, a court may allow an act post-deadline if the failure was due to excusable neglect, but the district court found that the bankruptcy court did not abuse its discretion in denying MMS's motion for an extension. The court ruled that a clerical error did not qualify as excusable neglect.
Upon reviewing the record de novo, the district court affirmed the bankruptcy court's summary judgment for Reliant, drawing parallels with the case In re AutoStyle Plastics, Inc., where the bankruptcy court ruled that a party could not contest a sale order after the fact. The district court determined that Reliant acquired Genesis’s assets free and clear of all claims, including GM purchase orders. MMS's arguments for recovery based on unjust enrichment or promissory estoppel were found unpersuasive, especially since it failed to show the admissibility of evidence related to valuable services it claimed to have provided after the sale, which was barred by a prior bankruptcy court order. MMS did not appeal this order nor provided justification to disregard it.
MMS's claims against Reliant hinge on two theories: promissory estoppel and unjust enrichment. For promissory estoppel to apply, MMS needed to demonstrate that Reliant made a promise that MMS reasonably relied upon or that Reliant was aware it benefited from MMS's actions. However, MMS failed to provide evidence that Reliant had knowledge of receiving any benefit or made a promise to MMS. The court noted that MMS's efforts to persuade Reliant of the potential benefits of their knowledge and contacts did not constitute a genuine issue of material fact regarding their claims. The district court thoroughly reviewed the evidence and found no factual basis for MMS's claims, a conclusion that the appellate court found no reason to challenge. Additionally, MMS raised two new arguments on appeal: that GM had consented to transfer purchase orders to Reliant and that the Michigan Sales Representative Act required Reliant to pay commissions to MMS for securing similar orders. The court deemed these arguments unpersuasive and reiterated that issues not raised in the district court are generally not considered on appeal. Consequently, the appellate court affirmed the district court's judgment.
