IEI Inc. v. ETG Capital LLC

Background

IEI sued ETG in connection with a February 2018 Settlement Agreement and ETG’s alleged failure to purchase IEI’s insolvency claim. In an earlier order dated September 29, 2023, the court denied ETG’s motion for partial summary judgment and granted IEI’s renewed motion for summary judgment on its breach-of-contract claims. The court had found that ETG breached the Settlement Agreement and the MCPA by not purchasing IEI’s claim, and IEI was awarded CAD $457,447.06.

ETG then moved for reconsideration under Federal Rule of Civil Procedure 59(e). That rule allows reconsideration based on an intervening change in controlling law, new evidence, or the need to correct a clear error or prevent manifest injustice. The court also explained that Local Rule 6.3 requires the moving party to identify controlling law or factual matters previously presented that the court overlooked and that could reasonably change the result.

Discussion

The court found that ETG had shown sufficient material facts or law to justify reconsideration. It concluded that the earlier order had not adequately distinguished between the Assignment Notice and the Assignment of Claim Agreement mentioned in the Settlement Agreement, or between those documents and sections 4 and 8 of the MCPA.

The court considered ETG’s statement that the Settlement Agreement had resolved the dispute about delivery of the Assignment of Claim Agreement. The court said that statement could mean either that ETG agreed to excuse related nonperformance or that the Settlement Agreement merely restated and reinforced the parties’ existing obligations. The court also said the reference to the Assignment Notice could have been a typographical error, among other possibilities.

Because those competing interpretations involved disputed facts, the court held that a jury should decide them. Specifically, material factual issues remained about whether IEI satisfied the condition precedent concerning the Assignment of Claim Agreement. A condition precedent is an event or requirement that must occur before a contractual duty becomes enforceable.

The court also addressed IEI’s argument that ETG had waived this defense by raising it for the first time at summary judgment. The court stated that an affirmative defense not included in the pleadings may still be considered when the opposing party had an opportunity to respond. Because IEI had responded to ETG’s argument, the court found minimal prejudice and directed ETG to state whether it wanted to amend its answer to include the defense.

Disposition

Judge Carter granted ETG’s motion for reconsideration. The Clerk of Court was directed to terminate ECF No. 108, and the parties were directed to file a joint status report by October 16, 2024. The opinion does not expressly state whether the earlier summary-judgment order or damages award was vacated.