Mohegan Lake Motors, Inc. v. Maoli

Background

Mohegan Lake Motors, Inc. sued Thomas Maoli and Celebrity Auto of Mohegan Lake, LLC over an asset purchase agreement involving a dealership. The case included Mohegan Lake Motors’ contract and fraud claims, as well as defendants’ counterclaim against Mohegan Lake Motors and third-party claim against Barry Rost and William Rost for breach of contract and contractual indemnification.

In a September 9, 2021 opinion, the court granted Mohegan Lake Motors’ cross-motion for summary judgment on defendants’ breach-of-contract claim. The court found that defendants had not produced evidence creating a genuine factual dispute that they suffered damages from the alleged misrepresentation of Mohegan Lake Motors’ income. The court also denied defendants’ summary-judgment motion on Mohegan Lake Motors’ alter-ego, fraudulent-inducement, and breach-of-contract claims.

Before trial, Mohegan Lake Motors filed a motion in limine asking the court to confirm that defendants’ contractual-indemnification claim had also been dismissed and would not be tried. Defendants argued that the earlier opinion had dismissed only their breach-of-contract claim.

Rule 60(a) Clarification

The court held that the request was better treated as a motion under Federal Rule of Civil Procedure 60(a). That rule permits a court to correct clerical mistakes and omissions in an order so that the record reflects the decision the court actually made. It does not permit the court to change the parties’ substantive rights or adopt a new position.

The court concluded that its earlier opinion intended to dismiss the contractual-indemnification claim along with the breach-of-contract claim. Both claims rested on the same alleged underlying conduct: Mohegan Lake Motors’ alleged misrepresentation of its income. Because defendants had failed to create a factual dispute that they suffered a loss resulting from that conduct, the indemnification claim could not proceed.

The court also rejected defendants’ argument that they could seek indemnification for attorneys’ fees and costs. It read the agreement’s indemnification provision together with its attorneys’ fee provision, which entitled only the prevailing party to fees. Because defendants were not the prevailing party, the court concluded that they could not recover those fees as an indemnification loss.

Disposition

The court granted Mohegan Lake Motors’ motion in limine to the extent it construed the motion as one under Rule 60(a) seeking clarification of the prior opinion. It confirmed that defendants had no affirmative claims to be tried and deemed defendants’ contractual-indemnification claim against Mohegan Lake Motors dismissed. The Clerk was directed to terminate the motion.