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Manley v. Boat/U.S., Inc.

United States District Court, N.D. Illinois, Eastern Division

November 9, 2017

JOHN J. MANLEY d/b/a CHICAGO MARINE TOWING, Plaintiff,
v.
BOAT/U.S., INC., a Virginia corporation, GREAT LAKES REPAIR, INC., d/b/a GREAT LAKES TOWING & REPAIR, a Michigan corporation, and RICHARD N. LENARDSON, an individual and resident of Michigan, Defendants.

          MEMORANDUM OPINION AND ORDER

          ROBERT M. DOW, Jr. United States District Judge

         On January 3, 2017, the Court granted Defendant Boat U.S., Inc.'s motion for summary judgment as to Plaintiff Chicago Marine's claim for intentional interference with prospective economic advantage and Chicago Marine's claim for defamation per quod, and denied Boat U.S.'s motion for summary judgment as to Chicago Marine's claims for breach of contract for wrongful termination (Count I), breach of implied covenant of good faith and fair dealing (Count II), and defamation per se (Count IV). [See 77]. Before the Court is Boat U.S.'s motion for reconsideration of parts of the January 3, 2017 opinion pursuant to F.R.C.P. Rule 54(b) [84]. For the reasons that follow, Boat U.S.'s motion [84] is denied. This case is set for further status hearing on November 29, 2017 at 9:00 a.m.

         I. Background

         The full background of this case is set forth in the Court's summary judgment opinion, knowledge of which is assumed here. [See 77 at 1-8.] Facts relevant to resolving Boat U.S.'s motion are set forth in the analysis below.

         II. Legal Standard

         There has not yet been a final judgment in this case, thus Rule 54(b) governs Boat U.S.'s motion for reconsideration. Under Rule 54(b), “any order or other decision [ ] that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.” Fed.R.Civ.P. 54(b); see also Rothwell Cotton Co. v. Rosenthal & Co., 827 F.2d 246, 251 (7th Cir.), opinion amended on denial of reh'g, 835 F.2d 710 (7th Cir. 1987) (affirming district court's denial of motion to reconsider under Rule 54(b)).

         Revisions under Rule 54(b) are discouraged and should be reserved for circumstances in which the initial decision was “clearly erroneous and would work a manifest injustice.” See Ghashiyah v. Frank, 2008 WL 680203, at *3 (E.D. Wis. Mar. 10, 2008) (quoting Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 817 (1988)) (internal quotation marks omitted). In general, “litigants must fight an uphill battle in order to prevail on a motion for reconsideration.” Id. (citation and internal quotation marks omitted).

         Motions to reconsider under Rule 54(b) “are judged by largely the same standards as motions to alter or amend a judgment under Rule 59(e).” Ghashiyah, 2008 WL 680203, at *3. The Court may grant a Rule 59(e) motion to alter or amend the judgment if the movant presents newly discovered evidence that was not available at the time of trial, points to evidence in the record that clearly establishes a manifest error of law or fact, or if the Court previously misunderstood a party's arguments. Miller v. Safeco Ins. Co. of Am., 683 F.3d 805, 813 (7th Cir. 2012); United States v. Ligas, 549 F.3d 497, 501 (7th Cir. 2008). Rule 59(e) “enables the court to correct its own errors and thus avoid unnecessary appellate procedures.” Miller, 683 F.3d at 813 (citation and internal quotation marks omitted). Rule 59(e) motions are “not appropriately used to advance arguments or theories that could and should have been made before the district court rendered a judgment, or to present evidence that was available earlier.” Id. (citation and internal quotation marks omitted). Additionally, “‘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) (quoting Sedrak v. Callahan, 987 F.Supp. 1063, 1069 (N.D. Ill. 1997)).

         III. Analysis

         Boat U.S. seeks reconsideration of the Court's January 3, 2017 opinion to the extent that it denies Boat U.S.'s motion for summary judgment as to Count I, Count II, and Count IV of Chicago Marine's complaint.

         A. Wrongful Termination of Contract (Count I) and Breach of Implied Covenant of Good Faith and Fair Dealing (Count II)

         On July 23, 2012, Boat U.S. terminated its contract with Chicago Marine pursuant to which Chicago Marine was a Boat U.S.-authorized marine towing company. [61-2 ¶¶ 6, 31.] According to the termination letter that it sent, Boat U.S. terminated this agreement because Chicago Marine materially breached it by failing to comply with the law of salvage. [1, Exhibit D, at 1-2.] Specifically, Boat U.S. determined that Manley's actions in connection with Chicago Marine's July 1, 2012 salvage operation assisting distressed boaters Nathan Locher and Laurie Jagla materially violated salvage law because Manley both refused to tell Locher the location of his boat and also refused to immediately allow Locher access to his boat. [Id.] Before terminating the Chicago Marine contract, Boat U.S. conducted a thorough investigation of Chicago Marine's handling of the July 1, 2012 salvage operation. [61-2 ¶ 30.] Boat U.S. decided to terminate the contract based on this investigation. [Id. ¶ 31.] Chicago Marine subsequently brought claims against Boat U.S. for breach of contract for wrongful termination (Count I) and breach of implied covenant of good faith and fair dealing (Count II). Boat U.S. filed a motion for summary judgment on both of these claims.

         Whether this termination breached the parties' contract depends on whether Chicago Marine violated salvage law in connection with the July 1, 2012 salvage operation at issue. Salvage law concerns the compensation awarded to those who voluntarily render assistance to vessels in peril at sea. The Sabine, 101 U.S. 384, 384 (1879). The law of salvage compensates potential salvors in order to incentivize their efforts to save these vessels. Id.; see also R.M.S. Titanic, Inc. v. The Wrecked & Abandoned Vessel, 435 F.3d 521, 531 (4th Cir. 2006) (“Without some promise of remuneration, salvors might understandably be reluctant to undertake the often dangerous and costly efforts necessary to provide others with assistance.”). In order to secure this compensation, salvage law gives salvors a maritime possessory lien on the salved property. R.M.S. Titanic, 435 F.3d at 531; The Snow Maiden, 159 F.Supp. 30, 32 (D. Mass. 1958). This lien attaches “to the exclusion of all others, including the property's true owner, ” but it does not divest the true owner of title to the salved property. R.M.S. Titanic, Inc. v. Haver, 171 F.3d 943, 963 (4th Cir. 1999); see also R.M.S. Titanic, 435 F.3d at 531. Furthermore, salvors in possession of a salved vessel have “duties of good faith, honesty, and diligence in protecting the property” in their care. Haver, 171 F.3d at 964.

         In its summary judgment opinion, this Court held that summary judgment on Counts I and II was not warranted because a reasonable jury could conclude that Chicago Marine did not breach salvage law and that Boat U.S.'s early termination of the contract was thus not permitted. [77 at 15.] The Court found that there was a genuine dispute of material fact as to Locher's and Jagla's mental states on the night of the July 1, 2012 salvage operation, such that a reasonable jury adopting Manley's assessment of their mental states as drunk or ...


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