Ross v. MMI Asset Management Group, LLC
4:24-cv-10342
E.D. Mich.Sep 27, 2024Check TreatmentDocket
Opinion Summary
Facts
- Aviceda, a clinical-stage biotechnology company, entered into a Master Clinical Services Agreement with Trial Runners, a contract research organization, to manage its clinical study for drug candidate AVD-104. [lines="30-40"].
- Aviceda alleges that it paid Trial Runners $945,351.40 for Part 2 of the study before deciding to terminate the Agreement on October 12, 2023. [lines="110-118"].
- Upon notice of termination, Trial Runners responded by removing Aviceda's access to critical study data, only restoring it after Aviceda threatened legal action. [lines="135-141"].
- Aviceda contends that Trial Runners demanded additional payment before initiating the wind-down procedures necessary for transitioning to a new contract research organization. [lines="150-161"].
- Trial Runners failed to provide an accounting for the funds it received or communicate effectively post-termination, claiming conditions to facilitate a smooth transition weren't met. [lines="124-127"], [lines="454-456"].
Issues
- Whether Aviceda has standing to pursue its breach of contract claim against Trial Runners despite the contention that it suffered no injury at the time the complaint was filed. [lines="20-21"].
- Whether the alleged actions of Trial Runners constituted a breach of the implied covenant of good faith and fair dealing under Massachusetts law. [lines="412-413"].
Holdings
- The court determined Aviceda has standing as it sufficiently alleged economic harm from Trial Runners’ alleged breaches, thus possessing a right to damages under the breach of contract claim. [lines="406-406"].
- Aviceda sufficiently alleged injury stemming from Trial Runners’ failure to cooperate during the wind-down process, supporting its claim for breach of the implied covenant of good faith and fair dealing. [lines="462-463"].
OPINION
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
FAIRY ROSS, Case No. 24-10342
Plaintiff, F. Kay Behm
v. United States District Judge
MMI ASSET MANAGEMENT
GROUP, LLC, a Nevada limited
liability company,
Defendant.
___________________________ /
OPINION AND ORDER GRANTING PLAINTIFF’S
MOTION FOR SUMMARY JUDGMENT (ECF No. 8)
I. PROCEDURAL HISTORY
This matter is before the court on Plaintiff Fairy Ross’ Motion for
Summary Judgment (ECF No. 8). Ross filed her Complaint in Oakland
County Circuit Court in January 2024, alleging breach of contracts
(Count I) and seeking an equitable accounting of stock and distributions
allegedly owed to Ross (Count II). See Complaint, ECF No. 1. On
February 9, 2024, Defendant MMI Asset Management Group, LLC
(“MMI”), filed a notice of removal to federal court pursuant to 28 U.S.C.
§ 1446(b), 28 U.S.C. § 1441(a), and the federal diversity requirements
set forth in 28 U.S.C. § 1332(a). See ECF No. 1.
On March 4, 2024, Ross filed for summary judgment on Count I
only. ECF No. 8 ( “Plaintiff’s Motion”). Following a number of delays,
including the emergency withdrawal of MMI’s previous counsel, MMI
filed their response in opposition to Ross’s motion for summary
judgment on June 6, 2024. See ECF Nos. 19, 20. After this court’s
order to strike those pleadings for deficiencies in filing (ECF No. 25),
MMI resubmitted an amended Response on August 6, 2024. See ECF
No. 27 (“Defendant’s Response” and “Def’s Resp.”). MMI refiled their
exhibits several times (see ECF No. 28, 31), but were stricken; the final
exhibits attached to their response are filed at ECF No. 32. Ross filed a
reply on August 7, 2024. ECF No. 29 (“Plaintiff’s Reply”). A hearing on
the motion was set for September 18, 2024 and was held with counsel
for both parties. At oral argument, Plaintiff made an oral motion to
dismiss Count II in the event that her motion for summary judgment is
granted. For the reasons set out below, the court GRANTS Plaintiff’s
Motion for Summary Judgment on Count I and DISMISSES Count II
without prejudice.
II. FACTUAL BACKGROUND
Ross alleges that in 2013, MMI sold her two promissory notes in
exchange for payments in the principal amounts of those notes. See
ECF No. 1, PageID.8, 11. Ross and MMI differ on the characterization
of these transactions. Compare Plaintiff’s Motion, ECF No. 8,
PageID.99 (characterizing the transactions as Ross investing in MMI,
and in exchange Ross receiving promissory notes from MMI), with Def’s
Resp., ECF No. 27, PageID.1658, 66 (describing the transactions as
investments, but between MMI, a third-party Canadian real-estate
investment conglomerate, and Ross’ self-directed IRA).
A brief foray into definitions: a self-directed individual retirement
account (SDIRA or self-directed IRA) is a type of IRA that can hold
various alternative investments normally prohibited from regular IRAs,
such as promissory notes or real estate. Jason Stauffer, What is a self-
directed IRA and how does it work?, CNBC (Sep. 10, 2023),
https://www.cnbc.com/select/what-is-a-self-directed-ira/. Although a
custodian or trustee administers the account, it is directly managed by
the account holder (ie. the account holder has complete control over all
investment decisions), which is why it is referred to as self-directed.
The custodian might offer consultation, but ultimately their role is to
act as the bank and approve any transactions. See id.; Jones v. Horizon
Tr. Co., No. 17-11304, 2019 U.S. Dist. LEXIS 27198 , at *15 (E.D. Mich.
Feb. 21, 2019); see also Bob Carlson, Beware Of The Scams Using Self-
Directed IRAs, Forbes (Nov. 15, 2021)
https://www.forbes.com/sites/bobcarlson/2021/11/15/beware-of-the-
scams-using-self-directed-iras/ (“An IRA custodian is not your
investment advisor or attorney. It isn’t there to give you advice or vet
your transactions.”).
Here, Ross cut her self-directed IRA administrator, Premier Trust
Inc., two checks, which were then sent to MMI from her SDIRA on Ross’
behalf and at her direction. See ECF No. 32-8; ECF No. 32-9. In
return, MMI issued two promissory notes, addressed to “Premier Trust,
Inc., FBO Fairy Boyd-Ross,” and listing the balances on those notes as
“payable to” Fairy Boyd-Ross. See ECF No. 32-8, ECF No. 32-9; see also
ECF No. 8-2; ECF No. 8-3.1 Plaintiff had previously purchased similar
notes not at issue in this case, via a different self-directed IRA
administrator called Summit Trust Company. See generally ECF No.
32-2.
One note in this case was for a $150,000 principal paid in August
2013 (“Note No. 670”) (ECF No. 8-2); the other was for a $20,000
1 See also Def’s Resp., ECF No. 27, PageID.1658 (noting that Note No. 670
mistakenly lists “MMI” as both “Borrower” and as Ross’ Agent, and that “Agent”
should instead read “Premier Trust Inc. FBO Fairy Boyd-Ross”, consistent with
principal paid in November 2013 (“Note No. 675D”) (ECF No. 8-3). Both
notes provide that MMI would owe 7% interest per year and that the
notes would become due 8 years later, in 2021. Note No. 670, ECF No.
8-2; Note No. 675D, ECF No. 8-3. Previous notes issued to Plaintiff by
MMI list Plaintiff as “Lender” in the note itself; these two particular
documents do not (the previous notes otherwise contain largely the
same terms and conditions as the two at issue here). Compare, e.g.,
ECF No. 32-2 (Loan dated 1/20/2009), with Note No. 670, ECF No. 8-2;
Note No. 675D, ECF No. 8-3. Ross claims that she has received no
payment from MMI on either note at issue in this case. Declaration of
Fairy Ross, ECF No. 8-1. MMI largely denies Ross’ claim that she has
received no payment on the notes. See Def’s Resp., ECF No. 27,
PageID.1659.
MMI subsequently used the funds obtained by Ross’ purchase of
the notes to invest in pre-development land investments offered by the
Walton Group of Companies, a Calgary, Canada based consortium. See
Answer, ECF No. 5, PageID.65. In 2018, a restructuring event resulted
in certain obligations of the Walton companies, including obligations
owed to MMI as a result of its investments, being consolidated in a
newly-formed Canadian entity called Roll-Up Corporation (“RUC”). See
id. at PageID.66. MMI received shares in RUC in connection with the
restructuring event. Id. Ross and MMI disagree about whether MMI
has continued to receive distributions from RUC. Id. MMI claims,
however, that whatever Ross was owed under the promissory notes, she
has received everything she was entitled to because she received
dividends from the Walton investments when Walton’s obligation to
MMI was restructured into RUC. See Def’s Resp., ECF No. 27,
PageID.1659.
III. STANDARD OF REVIEW
When a party files a motion for summary judgment, it must be
granted “if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). “A party asserting that a fact cannot be or is
genuinely disputed must support the assertion by: (A) citing to
particular parts of materials in the record . . .; or (B) showing that the
materials cited do not establish the absence or presence of a genuine
dispute, or that an adverse party cannot produce admissible evidence to
support the fact.” Fed. R. Civ. P. 56(c)(1). The standard for determining
whether summary judgment is appropriate is “whether the evidence
presents a sufficient disagreement to require submission to a jury or
whether it is so one-sided that one party must prevail as a matter of
law.” State Farm Fire & Cas. Co. v. McGowan, 421 F.3d 433 , 436 (6th
Cir. 2005) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242 , 251–
52 (1986)). Furthermore, the evidence and all reasonable inferences
must be construed in the light most favorable to the non-moving party.
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 ,
587 (1986). The court’s role is limited to determining whether there is a
genuine dispute about a material fact, that is, if the evidence in the case
“is such that a reasonable jury could return a verdict for the nonmoving
party.” Anderson, 477 U.S. at 248 .
Where the movant establishes the lack of a genuine issue of
material fact, the burden of demonstrating the existence of such an
issue shifts to the non-moving party to come forward with “specific facts
showing that there is a genuine issue for trial.” Celotex Corp. v. Catrett,
477 U.S. 317 , 322–23 (1986). That is, the party opposing a motion for
summary judgment must make an affirmative showing with proper
evidence and to do so must “designate specific facts in affidavits,
depositions, or other factual material showing ‘evidence on which the
jury could reasonably find for the plaintiff.’” Brown v. Scott, 329 F.
Supp. 2d 905, 910 (6th Cir. 2004). In order to fulfill this burden, the
non-moving party only needs to demonstrate the minimal standard that
a jury could ostensibly find in his favor. Anderson, 477 U.S. at 248 ;
McLean v. 988011 Ontario, Ltd., 224 F.3d 797 , 800 (6th Cir. 2000).
However, mere allegations or denials in the non-movant’s pleadings will
not satisfy this burden, nor will a mere scintilla of evidence supporting
the non-moving party. Anderson, 477 U.S. at 248, 251 .
IV. ANALYSIS
A. Applicable State Law
Ross asserts that the promissory notes are enforceable under
Michigan law. ECF No. 8, PageID.108. MMI offers no response on this
point. However, the court must first determine whether Michigan law
applies to this case.
This case is before the court on the basis of diversity jurisdiction,
28 U.S.C. § 1332, and Ross’ claim is based entirely on state law.
Therefore, the court must apply the law of the forum state’s highest
court. Erie R.R. v. Tompkins, 304 U.S. 64 , 78 (1938). Federal courts
sitting in diversity also apply the choice-of-law rules of the forum state
(in this case, Michigan’s choice-of-law rules). Equitable Life Assur. Soc.
of United States v. Poe, 143 F.3d 1013 , 1016 (6th Cir. 1998).
Michigan recognizes choice-of-law provisions, and as an initial
matter its courts determine whether the parties in a contract dispute
are bound by such a provision. See Barshaw v. Allegheny Performance
Plastics, LLC, 334 Mich App 741 , 748 (2020). When determining
whether to give effect to a choice-of-law provision, the expectations of
the parties must be balanced with the interests of the states. Martino
v. Cottman Transmission Systems, Inc, 218 Mich. App. 54 , 60 (1996)
(citing Chrysler Corp v. Skyline Industrial Services, Inc, 448 Mich. 113 ,
125 (1995)). The parties’ choice of law should be applied if the issue is
one the parties could have resolved by an express contractual provision.
DaimlerChrysler Corp. Healthcare Benefits Plan v. Durden, 448 F.3d
918, 923 (6th Cir. 2006). However, there are exceptions. The parties’
choice of law will not be followed if (1) the chosen state has no
substantial relationship to the parties or the transaction or (2) there is
no reasonable basis for choosing that state’s law. Hudson v. Mathers,
283 Mich. App. 91 , 96-97 (2009); see also Restatement (Second) of
Conflict of Laws, § 187 (Am. L. Inst. 1988). Also, the chosen state’s law
will not be applied when it would be contrary to the fundamental policy
of the forum. See Martino, 218 Mich. App. at 60-61 .
Though neither party addresses this point in their briefs, both
promissory notes at issue in this case contain a choice of law provision
with the following language:
GOVERNING LAW: This Note will be governed by the laws
of the State of Delaware.
ECF No. 1, PageID.51; Id. at PageId.54 (italics added).
Neither party is from Delaware. Ross is a citizen of Michigan;
MMI is a single-member LLC whose citizenship is foreign.2 ECF No.
26. Neither party alleges that Delaware has any relationship to either
transaction at issue, other than that it is listed in the notes. The court
finds that Delaware has no substantial relationship to the parties or the
transaction, and will therefore apply Michigan law.
B. Plaintiff has met their burden of establishing the
elements of breach of contract.
To prevail on its claim for breach of contract, Ross must establish
by a preponderance of the evidence that (1) there was a contract, (2) the
other party breached the contract, and (3) the breach resulted in
damages to the party claiming breach. Bank of Am., NA v. First Am.
2 MMI’s sole member is a Canadian citizen. ECF No. 26. MMI is
incorporated in Nevada. ECF No. 5, PageID.59.
Title Ins. Co., 499 Mich. 74 , 100 (2016).3 The court finds that Plaintiff
Ross has met its burden to prevail on each element.
1. Ross has proven the existence of a contract.
A valid contract requires five elements: (1) parties competent to
contract, (2) a proper subject matter, (3) legal consideration, (4)
mutuality of agreement, and (5) mutuality of obligation. AFT Mich v
Michigan, 497 Mich 197 , 235 (2015). A promissory note constitutes a
written contract. Joseph & Anita Russell Tr. v. Russell, 338 Mich. App.
170, 179 (2021) (quoting Collateral Liquidation, Inc v Renshaw, 301
Mich 437, 443 (1942)).4
3 Although the court applies Michigan state law to resolve the instant case,
the result would be the same under Delaware law, which provides the same
elements of a breach of contract claim. See VLIW Tech., LLC v. Hewlett-Packard
Co., 840 A.2d 606 , 612 (Del. 2003) (“In a breach of contract claim under Delaware
law, a claimant must prove (1) the existence of a contractual obligation; (2) a breach
of that obligation; and (3) damages resulting from the breach.”).
4 Again, the analysis is the same even if Delaware law were applied. A
contract exists under Delaware law when (1) the parties intended that the contract
would bind them, (2) the terms of the contract are sufficiently definite, and (3) the
parties exchange legal consideration. Estate of Osborn v. Kemp, 991 A.2d 1153 (Del.
2010). A “promissory note” is a “promise or engagement, in writing, to pay a
specified sum at a time therein limited . . . to a person therein named, or to his
order, or bearer.” Black’s Law Dictionary 1093 (5th ed. 1979). A promissory note,
when structured as an investment or loan, is enforceable as a contract. Cf.
Washington v. Preferred Commun. Sys., 157 A.3d 1226 , 1228 (Del. 2017) (action
The two promissory notes at issue are valid contracts. Each is
proof of an agreement between Ross and MMI, and contains terms
describing in detail MMI’s obligations on the basis of a loan principal
provided by Ross. Neither note explicitly defines Ross’ own obligations
– however, the parties agree that Ross’ responsibility under the
investment or loan agreement was to provide the principal amount
listed on each note via her self-directed IRA, which she did. Compare
Declaration of Fairy Ross, ECF No. 8-1, with Def’s Resp., ECF No. 27,
PageID.1658-59. MMI also provided evidence of Ross’ payment for at
least Note No. 670 via her SDIRA. ECF No. 32-8, PageID.4421 (check
for $150,000 from Flint Area School Employees Credit Union to Premier
Trust, Inc.).5 And while Ross has provided a declaration that she paid
those principal amounts in consideration of the promises in the notes to
repay the principal plus interest, see ECF 8-1 (Declaration), MMI
provides nothing to refute this mutual exchange of promises. Both
notes thus treat Ross as the lender in a loan transaction, and though
5 At times at oral argument, MMI’s counsel appeared to represent that MMI
disputed that Ross ever provided a $20,000 check for Note 675D, since there is no
copy of that check in the records MMI produced as exhibits attached to their
response. But Ross has provided an declaration that she did pay $20,000 to MMI,
the promissory note is itself evidence that she “loaned” that money, and MMI has
provided no evidence, including affidavits or declarations, to dispute Ross’ evidence.
these particular notes never specifically identify Ross as the “Lender,”
previous notes in the parties’ course of dealing did identify her as such.
See ECF No. 32-2, PageID.3197. That Ross is the “lender” on the two
notes in question is further evidenced by the fact that Ross is the payee
on both notes. Note No. 670, ECF No. 8-2 (“payable to Fair J. Boyd-
Ross”); Note No. 675D, ECF No. 8-3 (the same). Therefore, Ross has
provided sufficient evidence to prove the existence of a contract, and
given no controverting evidence, no reasonable jury could conclude
otherwise.
At times, MMI appears to argue that the language listed in the
“Agent” section of the promissory notes might make MMI’s promise
payable to “Premier Trust Inc. Agent FBO Fairy Boyd-Ross” instead of
Ross. But just as a holder of a bank account would sue to recover funds
owed to their account, courts have held that the holder of a self-directed
IRA is the correct party in interest to bring actions to enforce rights
under the investments held in the account. See, e.g., Deem v. Baron,
2016 U.S. Dist. LEXIS 50681 (D. Utah April 14, 2016) (collecting cases).
Regardless, Premier Trust Inc. has since assigned whatever interest it
had in both promissory notes to Ross directly. See Pl’s Reply, ECF No.
29-1, PageID.3136-37; see also Reserves Dev. LLC v. Crystal Props.,
LLC, 986 A.2d 362 , 370 n.24 (Del. 2009) (such assignments of rights are
valid).
MMI has thus provided no evidence from which a jury could
conclude that Ross is not entitled to the benefit of MMI’s promises
under the terms of Note No. 670 and 675D.
2. Ross has proven breach by MMI.
In support of her motion, Ross has presented her declaration that
she has received no principal or interest payments on either promissory
note. ECF No. 8-1. Her declaration, and ability to testify to that fact,
meets the standard of a supporting fact under Rule 56. See Fed. R. Civ.
P. 56(c)(1)(A), 56(c)(4) (declarations are admissible to support a motion
for summary judgment if based on personal knowledge and set out facts
which would be admissible in evidence). MMI, for its part, denies that
Ross has received no payment on the notes. See Def’s Resp., ECF No.
27, PageID.1659. But despite that denial, MMI has presented no facts
to contradict Ross’ claim. In over 1200 pages of supporting
documentation, the relevance of most of which the court is frankly
unsure, the court is unable to locate any facts or evidence which
indicates that Ross has received any principal or interest on these
particular notes at issue (nor, for that matter, does MMI point to any).
It is not the court’s job to search the record in support of a party’s
arguments. See Emerson v. Novartis Pharm Corp., 446 F. App’x 733 ,
736 (6th Cir. 2011) (quoting United States v. Dunkel, 927 F.2d 955 , 956)
(7th Cir. 1991) (“‘Judges are not like pigs, hunting for truffles’ that
might be buried in the record.”).
Instead, in response to Ross’ relatively straightforward motion for
breach of contract, MMI presents an almost entirely different story.
MMI’s response to Ross’ Motion essentially argues that MMI invested
funds, provided by Ross in her payments to MMI, in land investments
offered by Walton Group, and Ross was aware that the funds she
invested would be used that way. See Def’s Resp., ECF No. 27. MMI’s
theory seems to be that Ross was investing in Walton’s land investment
offerings through her dealings with MMI, and therefore cannot seek to
collect on the promissory notes she received from MMI. In its view, as
far as the court understands, Ross must be content with a share of
whatever success, or lack thereof, MMI found in the land investments
for which it used her money. MMI makes this argument despite
documents that it submitted, which indicate that those land
investments were intended to secure MMI’s promise to pay, not subvert
it. See ECF No. 32-1, PageID.3183 (“Principal Guarantee – note holders
will have a security interest in the underlying investments secured up
to but no more than 75% of the originating principal.”). Moreover, each
note plainly contemplates MMI’s use of the funds without changing the
nature of the notes as traditional loans with interest. Each note
contains the following provision:
USE OF LOAN PROCEEDS: Lender is making this loan to
Borrower for traditional lending purposes. It is anticipated
that while Borrower may use the funds for any purpose(s),
that the funds . . . may also include secondary investing of
these funds into real estate investments . . .
Note No. 670, ECF No. 8-2; Note No. 675D, ECF No. 8-3. The notes
thus on their face contradict Defendant’s argument; any secondary
investments made with the lender’s funds are separate transactions
and are unrelated to the “traditional lending” purpose of the notes
themselves.
MMI relatedly (or perhaps in the alternative) appears to argue
that, because Ross was seeking to invest, albeit indirectly, in Walton’s
land investments, which were only open to Canadian citizens, she
cannot now seek recourse from MMI because Ross is an American
citizen. See Def’s Resp., ECF No. 27, PageID.1666. Wherever this
argument is meant to lead, the court need not follow – again, nowhere
does MMI show why either MMI’s underlying investments, or Ross’
national citizenship, is relevant to the question of whether MMI is
liable for its straightforward promise to pay Ross on the notes it issued
her.
Each note purports to create, essentially, a simple loan agreement
“for traditional lending purposes” between MMI and Ross (Note Nos.
670 and 675D); Ross loaned MMI a total of $170,000 in exchange for
promises that MMI would repay her in 8 years or less with 7% interest
per year on the principal amounts. MMI has provided no evidence from
which a jury could find otherwise. All that MMI’s allegations and
supporting documentation tend to prove is that MMI used the funds it
obtained from its agreement with Ross to invest elsewhere. Ross is
therefore entitled to summary judgment that MMI has breached its
promises under Note No. 670 and 675D.
3. Ross has proven damages as a result of MMI’s
failure to pay on the contracts.
In her motion, Ross calculates her damages as follows: a) for Note
No. 670, $150,000 for unpaid principal, and $105,000 for unpaid
interest accrued over the ten years from August 8, 2013 to August 8,
2023, and b) for Note No. 675D, $20,000 for unpaid principal, and
$14,000 for unpaid interest accrued over the ten years from November
21, 2013 to November 21, 2023. As discussed above, see infra Section
IV.B.2, Defendant has provided no evidence to dispute that Ross has
received no payment on these particular notes. However, at oral
argument, Plaintiff stipulated that they no longer seek ten years of
interest, but instead eight years as indicated by the terms of the notes.
Note No. 670, ECF No. 8-2 (listing the total interest on the note as
$84,000, calculated as $10,500 per year over eight years); Note No.
675D, ECF No. 8-3 (listing the total interest on the note as $11,200,
calculated as $1,400 per year over eight years).
Unless there is a valid defense to enforceability, “a court must
construe and apply unambiguous contract provisions as written.” Rory
v. Cont'l Ins. Co., 473 Mich. 457 , 461 (2005). Both promissory notes
clearly lay out not only the principal amount, but the calculation of total
interest over the note term of eight years, not ten. Accepting Plaintiff’s
oral stipulation as to the scope of their argument and interpreting the
contract as written, the court calculates damages as indicated on the
notes themselves:
Note Number Principal Interest Total Due and
(over 8 years) Payable
6706 $150,000 $84,000 $234,000
675D7 $20,000 $11,200 $31,200
Total $265,200
C. Summary judgment is not premature on Count I.
As an additional response to Ross’ motion, MMI asserts that
summary judgment on Count I is premature at this stage of the
proceedings. See Def’s Resp., ECF No. 27, PageID.1669-70. Thus, the
court must analyze whether that is the case.8
A party may move for summary judgment at any time, even as
early as the commencement of the action. See Fed. R. Civ. P. 56(b). The
Sixth Circuit has warned that generally, “in the absence of any
discovery . . . ruling on a summary judgment motion is . . . an abuse of
discretion.” First Floor Living LLC 22-3216 v. City of Cleveland, 83
F.4th 445, 453 (6th Cir. 2023) (citing cases) (cleaned up). But Rule 56
6 ECF No. 8-2.
7 ECF No. 8-3.
8 For the first time, at oral argument MMI also asserted that this court does
not have personal jurisdiction over MMI. A challenge to personal jurisdiction must
be raised in the first responsive pleading or be waived. Fed. R. Civ. P. 12(h)(1);
warns non-movants that, if they require more time to present their
claims or defenses, then their request to extend their time to respond or
to have discovery on particular points must be specific. See Fed. R. Civ.
P. 56(d) (indicating that a court must deny or defer a motion for
summary judgment when a non-movant shows “by affidavit or
declaration that, for specified reasons, it cannot [yet] present facts
essential to justify its opposition”) (emphasis added). Thus, despite the
“strong presumption” in favor of permitting discovery before ruling on
summary judgment, the Sixth Circuit has affirmed that seeking
discovery to survive a Rule 56 motion using only “general and
conclusory statements” lacking “any details or specificity” is not
sufficient to delay judgment on the motion. 83 F.4th at 453 (citing
Zakora v. Chrisman, 44 F.4th 452 , 479 (6th Cir. 2022)).
In support of its argument to defer summary judgment, MMI
asserts that discovery and more factual development are needed
because “the facts suggest a nuanced situation,” to grant summary
judgment would “undermine the integrity of the judicial process,” and a
“thorough examination of the facts” is necessary. Def’s Resp., ECF No.
27, PageID.1669. But these bare assertions are exactly the kind of
“conclusory” statements which are insufficient to establish a need for
discovery and, in any event, are unsupported by an affidavit. The terms
of the promissory notes MMI issued are clear. See United Rentals, Inc.
v. RAM Holdings, Inc., 937 A.2d 810 , 830 (Del. Ch. 2007) (“[P]arol
evidence cannot be used to manufacture an ambiguity in a contract that
facially has only one reasonable meaning.”).
Additionally, any evidence that would show that, notwithstanding
the plain language of those notes, MMI does not owe Ross performance
on the promissory notes, would be in MMI’s possession. For that
matter, evidence that would show that MMI has in fact paid Ross on the
notes would also be in MMI’s possession. MMI has not presented any
evidence, declarations, or affidavits to indicate that such evidence
would be forthcoming if the court were to defer judgment on Plaintiff’s
Motion.
V. CONCLUSION
Therefore, even viewing the evidence in the light most favorable to
the non-moving party, no reasonable jury could find that the promissory
notes do not provide the terms of two contracts between the parties, nor
that Defendant MMI is not in breach of those contracts. The court
GRANTS Plaintiff’s Motion for Summary Judgment on Count I. Ross
is therefore entitled to a total of $265,400 due and payable as principal
and interest on the two notes.
Furthermore, per Plaintiff’s oral motion to dismiss Count II in the
event that summary judgment is granted as to Count I, Count II is
DISMISSED without prejudice. This is a final order that closes the
case.
SO ORDERED.
Date: September 26, 2024 s/F. Kay Behm
F. Kay Behm
United States District Judge