The opinion of the court was delivered by: Honorable Marvin E. Aspen U.S. District Court Judge
MEMORANDUM OPINION AND ORDER MARVIN E. ASPEN, District Judge:
Plaintiff Citadel Group Limited ("Citadel") asks us to reconsider our grant of summary judgment in favor of Defendant Washington Regional Medical Center ("WRMC") on Count II of Citadel's amended complaint. (Mot. at 1--9; Op. 3/22/11 at 26.) Citadel also asks us to reconsider our prior dismissal of Count III of its amended complaint. (Mot. at 10--17; Op. 5/13/09 at 17--20.) Citadel's motion is denied.
We need not rehash all the facts of this case but will instead highlight those relevant to the present motion. This case arises from the fractured relationship between Citadel and WRMC. This relationship developed as WRMC was considering constructing a medical office building in Springdale, Arkansas in 2005. WRMC was originally planning to construct the building through a leaseback arrangement with a third-party developer. According to this arrangement, WRMC would execute a long-term ground lease with a third-party developer, who would then construct the building and lease it back to WRMC. WRMC sought this type of arrangement in order to construct the building without having to accrue additional debt on its balance sheet. After considering several other third-party developers, WRMC signed an "Authorization to Proceed" with Citadel. Before executing ground or space leases with Citadel, however, WRMC decided to terminate its relationship with Citadel. Although WRMC ultimately constructed the building, it did so without entering a leaseback arrangement with a third-party developer.
Citadel initially sued WRMC for breach of contract based on WRMC's alleged failure to cover certain costs specified in the Authorization to Proceed. After discovering WRMC had built the building without Citadel but with the same architect and engineer Citadel had been using, Citadel subsequently amended its complaint to add Counts II and III, which are at issue here. In Count II, Citadel sought the profits it allegedly lost when WRMC completed the building without it. In Count III, Citadel alleged that WRMC had failed to negotiate in good faith in declining to close the leaseback deal. Citadel now asks us to reconsider our order of March 22, 2011, in which we granted summary judgment in favor of WRMC on Count II of Citadel's amended complaint. Citadel also asks us to reconsider our order of May 13, 2009, in which we dismissed Count III of Citadel's amended complaint for failure to state a claim. We consider Citadel's arguments with respect to these two counts in turn.
In Count II, Citadel sought to recover the profits it allegedly lost when WRMC decided not to close the leaseback deal. (Am. Compl. at 4--5.) We granted summary judgment for WRMC on Count II because we determined that the Authorization to Proceed-the only agreement reached between WRMC and Citadel-did not include ground and space leases essential to Citadel's Count II damages. (Op. 3/22/11 at 11--26.) Applying the principles of contract interpretation followed in Illinois, we held that the unambiguous language of the Authorization to Proceed demonstrated a lack of present intent to execute any leases. (Id. at 18.) In short, we determined that the Authorization to Proceed was a preliminary agreement that, although potentially enforceable in some respects, was not a final agreement to construct the building using a leaseback arrangement. (Id. at 22--23.) Citadel now asks us to reconsider that decision. (Mot. at 1--9.)
Although Citadel does not say so, we presume that Citadel brings its motion to reconsider our grant of summary judgment on Count II pursuant to Rule 59(e). See Fed. R. Civ. P. 59(e) (providing for motions to "alter or amend a judgment" filed within twenty-eight days of entry of the judgment). To succeed on a Rule 59(e) motion, the moving party must present newly discovered evidence, point out an intervening change in controlling law, or clearly establish that the court committed a manifest error of law or fact. See Caisse Nationale de Credit Agricole v. CBA Indus., Inc., 90 F.3d 1264, 1269--70 (7th Cir. 1996); Publishers Res., Inc. v. Walker-Davis Publ'ns, Inc., 762 F.2d 557, 561 (7th Cir. 1985). "A 'manifest error' is not demonstrated by the disappointment of the losing party. It is the 'wholesale disregard, misapplication, or failure to recognize controlling precedent.'" Oto v. Metro. Life Ins. Co., 224 F.3d 601, 606 (7th Cir. 2000) (internal citation omitted). Indeed, reconsideration is appropriate in limited circumstances, such as "where (1) the court has patently misunderstood a party; (2) the court has made a decision outside the adversarial issues presented to the court by the parties; (3) the court has made an error not of reasoning but of apprehension; (4) there has been a controlling or significant change in law . . . or (5) there has been a controlling or significant change in the facts." BP Amoco Chem. v. Flint Hills Res., LLC, 489 F. Supp. 2d 853, 856 (N.D. Ill. 2007); Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191--92 (7th Cir. 1990); see also Hickory Farms, Inc. v. Snackmasters, Inc., 509 F. Supp. 2d 716, 719 (N.D. Ill. 2007) ("Reconsideration is appropriate, generally speaking, only when the Court overlooked or misunderstood something.").A motion for reconsideration should not be used for "rehashing previously rejected arguments or arguing matters that could have been heard during the pendency of the previous motion." Caisse Nationale de Credit Agricole, 90 F.3d at 1270.
Citadel attempts to bring its motion within the narrow circumstances warranting reconsideration by arguing that our order "misconstrued the nature of Citadel's 'comprehensive development proposal'" that WRMC allegedly accepted by signing the Authorization to Proceed. (Mot. at 1.) Citadel argues that "[w]hat the court viewed as indefinite terms were, in fact, Citadel's offer to conform the proposal to any changes by WRMC to the building, all within the framework of the fixed formula showing the relationship between costs and rent." (Id. at 2.) Moreover, in Citadel's view, "[a]ll of the points cited by the Court are consistent with a build-to-suit program" that WRMC accepted by signing the Authorization to Proceed. (Id.)
Despite its insistence otherwise, however, Citadel's motion is largely a "rehashing [of] previously rejected arguments." Caisse Nationale de Credit Agricole, 90 F.3d at 1270. Indeed, we considered and rejected Citadel's formula argument in our prior decision. (Op. 3/22/11 at 19--21.) We did so for two primary reasons. First, we determined that the absence of the formula from any of the documents purportedly comprising the contract precluded the conclusion that the formula was in fact an agreed-upon component of the Authorization to Proceed. (Id. at 20 (citing PFT Roberson, Inc. v. Volvo Trucks North America, Inc., 420 F.3d at 730).) Second, and more importantly, we determined that, even if WRMC was aware of the basic formulaic relationship between total project cost and the estimated lease rates, "WRMC was not committing to pay any total project cost, however high, in the form of correspondingly high lease rates." (Id.) In distinguishing Citadel's formula theory from other cases in which courts have allowed an agreed-upon formula to supply missing contract terms, we observed that Citadel's formula contained "numerous contingencies" that rendered it something far short of "the fixed lodestar Citadel would like it to be." (Id. at n.9.)
Thus, Citadel's argument that we somehow misunderstood the "build-to-suit program" of which the formula was supposedly the linchpin is incorrect. (Mot. at 2.) We did not misunderstand Citadel's argument. We simply rejected it as an attempt to conjure up essential lease terms where no such terms had been agreed upon. Indeed, it does not matter whether WRMC knew about the basic relationship between the total project cost and the lease rates in Citadel's initial proposal. What matters is whether WRMC and Citadel intended the Authorization to Proceed to constitute the ground and space leases that were the core of the leaseback deal. See Feeley v. Michigan Ave. Nat. Bank, 141 Ill. App. 3d 187, 192, 490 N.E.2d 15, 18 (1st Dist. 1986) ("The final determination in ascertaining whether an instrument is a lease is what was intended by the parties.") As we have already determined, the unambiguous language of the Authorization to Proceed and the accompanying documents makes it clear that neither WRMC nor Citadel had such intent. (Op. at 16--19.)
We cannot accept that Citadel, a sophisticated business entity, actually understood the Authorization to Proceed and the Preliminary Terms Sheet to encompass enforceable ground and space leases. Regarding the alleged ground lease, would Citadel really have felt entitled to occupy WRMC's property for sixty years-let alone construct a building on it-based on the three bullet points pertaining to the ground lease in the Preliminary Terms Sheet? We think not. Similarly, we do not accept that all WRMC had to do was name the building size and build-out allowance and, shazam, the space leases would materialize according to Citadel's formula. (Mot. at 8.)
As Citadel CEO David Varwig admitted, the total project cost-the key variable linked to the lease rates-was subject to myriad contingencies outside either party's control. When asked what could cause the total ...