India Globalization Capital, Inc. v. Apogee Financial Investments, Inc.

Background

India Globalization Capital, Inc. (IGC) and Apogee Financial Investments, Inc. sued each other for breach of contract arising from a failed business deal involving IGC’s purchase of a broker-dealer called Midtown. Apogee and John R. Clarke brought counterclaims against IGC. In an earlier summary-judgment ruling, the court partially granted IGC’s motion. It ruled that a factual dispute remained over whether IGC breached the Purchase Agreement by issuing restricted rather than freely tradable initial shares to Apogee. It also ruled that Apogee was entitled to 673,846 initial shares, rather than 1 million, because Apogee failed to adequately capitalize Midtown by the deadline the court found applicable.

The court also ruled that Apogee breached the Purchase Agreement by failing to use best efforts to obtain approval from the Financial Industry Regulatory Authority (FINRA). Apogee had conceded that it never filed the paperwork required to obtain that approval.

Motion for Reconsideration

Apogee moved for reconsideration of the prior summary-judgment rulings. Reconsideration is an exceptional remedy. The moving party must generally identify a controlling legal decision or important information that the court overlooked, an intervening change in controlling law, newly available evidence, or a clear error or manifest injustice. A party may not use reconsideration simply to present arguments or evidence that it could have presented earlier or to relitigate an issue already decided.

Share Entitlement

Apogee argued that the Purchase Agreement’s provision requiring it to infuse $325,000 into Midtown in order to receive 1 million initial shares instead of 673,846 was ambiguous. The court rejected the argument because Apogee had not made it when responding to IGC’s summary-judgment motion. Instead, Apogee had accepted IGC’s interpretation of the provision without challenging it. The court held that Apogee’s failure to raise a potentially winning argument earlier did not justify reconsideration.

FINRA Approval

Apogee also argued that the Purchase Agreement merely encouraged, rather than required, it to obtain FINRA approval by June 30, 2015. The court noted that Apogee had not properly raised that argument at summary judgment. The court further held that the argument failed on the merits because Apogee never applied for FINRA approval, either before or after June 30, 2015. As a result, disputes about the approval deadline did not change the court’s conclusion that Apogee failed to use the contractually required best efforts. The court also noted that the agreement referred to a breach if approval was not obtained by that date.

Disposition

The court denied Apogee’s motion for reconsideration. It directed the clerk to close the open motion at Docket Entry 104. The order did not alter the court’s prior rulings described above.