Tate & Lyle Americas LLC v. Glatt Air Techniques Inc., 863 F.3d 569

Background

Tate (Tate & Lyle) contracted with Glatt to design and build a $7M granulator for Tate’s corn-product facility; the granulator caught fire in 2009 while processing flammable dust.
Tate sued Glatt over alleged equipment defects (missing/defective fire suppression, defective filters) more than three years after the fire; insurer American Guarantee subrogated and joined to recover payments.
Parties tried before a magistrate/jury: magistrate precluded lost-profit recovery under a contract exclusion for “special damages,” narrowing damages; jury awarded insurer damages but not Tate; district court awarded Tate and insurer contractual attorneys’ and professional fees.
Glatt argued the trial court erred by allowing Tate to present evidence at trial contradicting Tate’s prior Rule 36 admissions that it had no evidence of cracked/poorly fitting filters at the time of the fire.
The district court permitted Tate to present testimony and evidence about defective/broken filters despite the admissions (no formal Rule 36(b) motion to withdraw); majority on appeal treated any error as harmless and affirmed judgment and fee awards.
Judge Hamilton dissented, arguing the court applied the wrong standard and that permitting contradiction of Rule 36 admissions without a Rule 36(b) motion prejudiced Glatt and warranted reversal and a new trial.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether plaintiffs could present evidence at trial contradicting their Rule 36 admissions about cracked/poorly fitting filters	Tate argued its admissions were limited or qualified and it later produced evidence (including testimony and documents) supporting defective filters predating the fire	Glatt argued admissions were binding under Rule 36 and plaintiffs never filed a Rule 36(b) motion to withdraw or amend, so plaintiffs should be precluded from presenting contrary evidence	Majority: admission reading was not an outright contradiction; allowing evidence was harmless error (no reversible error). Dissent: trial court abused discretion by applying wrong standard and should have enforced admissions; would reverse and remand.
Whether attorneys’ fees and professional fees awarded are barred as “special damages” under the contract’s exclusion	Tate relied on the contract provision awarding reasonable legal and professional fees to prevailing parties; fees are not barred by the separate exclusion for "special damages"	Glatt contended the contract’s ban on recovery of “special damages” should include attorneys’ and professional fees, nullifying the fees award	Held: Majority affirmed award; the exclusions were not read to encompass the contractual fee-shifting provision.
Whether evidentiary rulings and discovery rulings below require reversal	Tate argued trial judge properly exercised discretion in admitting evidence and denying additional discovery; any discovery issues were resolved by judge	Glatt argued multiple evidentiary and discovery rulings were erroneous and prejudiced its defense	Held: Majority found Glatt’s challenges cursory and the trial judge resolved issues soundly; no reversible error.
Whether failure to move under Rule 36(b) was fatal to plaintiffs’ ability to contradict admissions at trial	Tate did not file a Rule 36(b) motion but supplemented discovery and presented evidence; argued admission language was qualified and supplemented	Glatt argued absence of a Rule 36(b) motion and late presentation prejudiced its case and required exclusion of contradicting evidence	Held: Majority treated absence of formal motion as harmless; dissent emphasized Rule 36(b) requires a motion and stricter standard and would have required reversal.

Key Cases Cited

Keller v. United States, 58 F.3d 1194 (7th Cir. 1995) (judicial admissions are conclusive absent withdrawal by the court)
David v. Caterpillar, Inc., 324 F.3d 851 (7th Cir. 2003) (discusses duty to supplement discovery responses under Rule 26(e))
McCann v. Mangialardi, 337 F.3d 782 (7th Cir. 2003) (preclusive effect of Rule 36 admission can be dispositive)
Banos v. City of Chicago, 398 F.3d 889 (7th Cir. 2005) (affirming denial of leave to withdraw admissions)
Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (U.S. 1990) (standards for judicial sanctions and related procedural issues)
Kalis v. Colgate-Palmolive Co., 231 F.3d 1049 (7th Cir. 2000) (affirms consequence of failing to move to withdraw Rule 36 admissions)
Airco Industrial Gases, Inc. v. Teamsters, 850 F.2d 1028 (3d Cir. 1988) (Rule 36 admissions should be given binding effect)
Williams v. City of Dothan, 818 F.2d 755 (11th Cir. 1987) (reversing district court for failing to recognize Rule 36 admission)
Brook Village North Assocs. v. Gen. Elec. Co., 686 F.2d 66 (1st Cir. 1982) (reversing decision allowing evidence contradicting Rule 36 admissions)