UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

J. Krist Schell

v. Civil No. 06-cv-425-JM Opinion No. 08NH191P Thomas W. Kent

O R D E R

Plaintiff and defendant both have moved for reconsideration

of my May 9, 2008, order granting in part and denying in part

cross motions for summary judgment ("Summary Judgment Order").

Each party claims the order was based on three different errors

of fact or law which justify the reconsideration now sought. See

United States District Court for the District of New Hampshire

Local Rule ("LR") 7.2(e) (following Fed. R. Civ. P. 59(e) by

requiring motions for reconsideration to demonstrate a manifest

error of either fact or law). After carefully considering the

arguments on both sides, for the reasons set forth below,

plaintiff's motion (document no. 56) is granted in part and

denied in part, and defendant's motion (document no. 58) is

denied. Discussion

1. Standard of Review

"The granting of a motion for reconsideration is 'an

extraordinary remedy which should be used sparingly.'" Palmer v.

Champion Mortq.,

(1st Cir. 2006) (quoting 11

Charles Alan Wright, et a l., Fed. Practice & Procedure § 2810.2

(2d ed. 1995)). A motion for reconsideration is not available to

revisit or reargue theories previously advanced and rejected.

See id. Instead, the movant must demonstrate either that

evidence has been newly discovered that could not have been

discovered previously, that some intervening change in the law

has occurred, or that the court's decision was based on some

"manifest error of law," rendering the motion necessary to

prevent "manifest injustice." Id. The Rule 59(e) motion may

not be used to relitigate old matters or to raise arguments or

present evidence that could have been raised prior to the entry

of judgment. Id.; see also Laundrau-Romero v. Banco Popular de

P .R .,

, 612 (1st Cir. 2000) ("new legal arguments or

evidence may not be presented via Rule 59(e)").

With this standard in mind, I turn to each of the parties'

arguments.

2 2. Defendant's Motion (document no. 58)

I begin with defendant's motion, because it challenges the

basis of my summary judgment analysis that found defendant's

failure to timely respond to plaintiff's Requests for Admission

deemed the assertions made therein undisputed and accepted as

true. See Summary Judgment Order at 12, 14. Defendant now

contends that this "essentially default[]" judgment against him

was unfair, because the untimeliness of defendant's response was

inadvertent and excusable. The record does not substantiate this

claim. Instead, the record reflects that plaintiff's counsel

inquired about defendant's failure to respond on August 3, 2007.

See Document no. 19-4, Aff. of David. A. Strock, Ex. D-6. Though

defense counsel promptly forwarded a copy of Defendant's Answers

to Plaintiff's First Set of Interrogatories, see id., Ex. D-7,

defense counsel did not provide Defendant's Response to

Plaintiff's First Set of Requests for Admissions until August 31,

2007, explaining they "were lost in the file and not sent." Id.,

Ex. D-8.

Once the error was recognized, defendant could and should

have asked for leave to file his untimely responses, but did not.

See Fed. R. Civ. P. 6(b) (allowing the court to extend time for

3 excusable neglect); see also Fed. R. Civ. P. 36(a)(3) (allowing

the court to order a "longer time for responding" to requests for

admission). Defendant also could have moved to withdraw or amend

the admissions, pursuant to Fed. R. Civ. P. 36(b). Defendant

chose to do nothing until almost a year after the late admissions

were filed, and only after the Summary Judgment Order was issued.

That is simply too little, too late. Defendant cannot now claim

a manifest error of fact or law was done by the court following

the explicit provisions of the Federal Rules of Civil Procedure.

See Rule 36(a)(3) ("A matter is admitted unless, within 30 days

after being served, the party to whom the request is directed

serves on the requesting party a written answer or objection

addressed to the matter and signed by the party or its

attorney."); see also Brook Vill. N. Ass'n v. Gen. Elec. Co.,

(1st Cir. 1982) (finding an admission under Rule

36(a)(3) is "conclusively established"); Sunoco, Inc. v. MX

Wholesale Fuel Corp.,

(D.N.J. 2008)

(granting summary judgment based on Rule 36(a)(3) admissions).

Defendant's motion fails to satisfy the demanding standards

of Rule 59(e). The motion cites only documents already in the

record which, therefore, cannot be newly discovered evidence that

4 was not previously available. The motion also does not cite a

single legal authority and, therefore, does not rely on a recent

change in the law that the court must now consider to avoid a

manifest injustice. The motion, instead, improperly attempts to

relitigate the facts and issues previously considered, while

neglecting to develop any argument to justify the relief sought.

See Cao v . P .R .,

, 115-16 (1st Cir. 2008) (citing

authority to explain previously undeveloped arguments cannot be

presented in a Rule 59(e) motion); see also Bourne v. Town of

Madison, slip op. No. 05-CV-365-JD,

, *2 (D.N.H.

June 19, 2007) (citing Higgins v. New Balance Athletic Shoe,

Inc.,

(1st Cir. 1999) to disregard undeveloped

arguments). Accordingly, defendant's motion (document no. 58) is

denied.

3. Plaintiff's Motion (document no. 56)

Plaintiff advances three arguments in support of his request

for reconsideration. The first two arguments are unpersuasive;

the third, however, warrants the relief sought.

(a) Scope of the Indemnification Agreement

Plaintiff first contends the Indemnification Agreement

covers all of his damages related to the underlying state law

5 suits and is not limited to those related to the Guarantee,

because defendant's untimely response to plaintiff Request for

Admission ("RFA") number 17 conclusively establishes defendant's

liability for those costs, fees and expenses. RFA 17 stated:

The costs, attorney's fees, and expenses incurred by J. Krist Schell in defending against Edward Myslik's claims in Edward H. Mvslik v. Bradley Reed Lumber Company, LLC, et a l ., Grafton County Superior Court (Docket No. 04-C-167) are covered by the indemnification provisions of the Indemnification Agreement, dated February 28, 2000.

Document no. 19-1, 5 17. In support of his position, plaintiff

cites Sigmund v. Starwood Urban Retail VI, LLC.,

(D.D.C. 2006). Plaintiff also argues defendant's Answer to the

Complaint did not respond to 5 22, which alleged that the "costs,

attorney's fees, and expenses incurred by plaintiff in defending

the New Hampshire and Maine Lawsuits are covered by the terms of

the Indemnification Agreement." Plaintiff claims that

defendant's failure to answer that allegation deems it admitted

as well, citing Fed. R. Civ. P. 8(d). Plaintiff contends that

these admissions "define - as a matter of law - the scope of the

Indemnification Agreement," and that a narrower interpretation by

the court constitutes a manifest error of fact and law. Document

no. 56 at 4.

6 I do not agree. It is black letter law that the

interpretation of a contract is a question of law for the court.

See Hill of Portsmouth Condo. Ass'n v. Parade Office, LLC, slip

op. No. 04-CV-4 03-SM,

, *6 (D.N.H. June 12, 2006)

(citing authority); Found, for Seacoast Health v. HCA Health

Servs. of N.H., __ N.H. __ ,

(2008). "In the absence

of ambiguity, the parties' intent will be determined from the

plain meaning of the language used. The words and phrases used

by the parties will be assigned their common meaning, and we will

ascertain the intended purpose of the contract based upon the

meaning that would be given it by a reasonable person."

(quotation omitted). The relevant language from the

Indemnification Agreement was not disputed, and clearly provided

that defendant would reimburse plaintiff for 2/3 of:

any and all damages, losses, obligations, liabilities, claims, lawsuits, deficiencies, costs and expenses . . . by reason of, or in connection with, or arising out of [plaintiff's] liability resulting from the Guarantee . . . or other cause for [plaintiff's] payment under the Guarantee.

Compl. 5 16; see also Document no. 19-1, Pi.'s RFA, Ex. A (Feb.

28, 2000 Indem. A g t .). This provision unequivocally limited

coverage to damages sustained by plaintiff in connection with his

7 obligations stemming from the Guarantee, nothing further.

In his motion for reconsideration, plaintiff attempts to

relitigate the scope of the Indemnification Agreement, without

demonstrating how Sigmund or Rule 8 (d) represent a change in the

law that I must now consider to prevent some manifest injustice.

Sigmund discusses why questions similar to those allowed under

Rule 36(a) should also be allowed in a deposition under Rule

3 0 (b), and determined that the plaintiff could inquire about

defendant's understanding of the contract's divvying up of

responsibilities. See

.1 Plaintiff

seems to rely on Sigmund for the proposition that Rule 36(a)

allows RFA 17 to define the scope of the Indemnification

Agreement and to trump my construction of that contract, set

forth in the Summary Judgment Order. Neither Sigmund nor the

cases on which it relies, however, support a reading of Rule

36(a) to change well-settled principles of contract construction

by allowing the parties, rather than the court, to interpret the

1The Sigmund court explained that for the same reasons questions about defendant's understanding of "who was responsible for repairing and maintaining the parking garage door under its management contract" would be appropriate as a Request for Admission under Rule 36(a), those questions could be asked in a deposition under Rule 30(b). See

. meaning of an unambiguous contract.

While Rule 36(a) allows mixed questions of law and fact, to

discover "any matters within the scope of Rule 26(b)," those

admissions include only opinions or conclusions reasonably drawn

from facts. See 8A Wright & Miller, Fed. Practice & Procedure, §

2255 (2d ed. 1994). The rule anticipates questions such as

whether a contract exists, or whether an employee acted within

the scope of his employment, or whether a property was under the

control of one of the defendants, and may even ask what was

intended to clarify ambiguous terms in a contract. See id.; see

also Booth Oil Site Admin. Group v. Safetv-Kleen Corp.,

(W.D.N.Y. 2000); cf. Disability Rights Council v.

Wash. Metro. Area,

(D.D.C. 2006). It does not,

however, allow a request for an admission of a pure matter of

law. See 8A Wright & Miller, Fed. Practice & Procedure § 2255;

see also Booth Oil Site Admin. Group,

(citing 4A

Moore's Fed. Practice, 5 36.04 (2) & (4) (2d ed. 1982)). When a

contract is unambiguous, like the Indemnity Agreement at issue

here, parole evidence, either through Rule 36(a) or otherwise,

regarding what the parties intended simply is not considered.

C f .

(allowing Rule 36 admissions for extrinsic evidence

9 to interpret a contract because the contract language was not

clear).

Similarly, Federal Rule of Civil Procedure 8 (d) provides no

basis to reevaluate my prior decision. Rule 8(d) describes how

allegations should be stated; it does not provide that an

unanswered allegation is deemed admitted.2 The rule is lenient

and inclusive, allowing alternative statements and providing "the

pleading is sufficient if any one of them is sufficient." Fed.

R. Civ. P. 8(d)(2). I was aware of the Federal Rules of Civil

Procedure when I issued the Summary Judgment Order. They provide

no support for the pending Rule 59(e) motion.

Here, the Indemnification Agreement was clear and its

references to the Guarantee were unambiguous. There was no need

2Perhaps plaintiff intended to cite Fed. R. Civ. P. 8(b), which addresses "Defenses; Admissions and Denials," and which provides that an allegation is admitted if it is not denied in a responsive pleading. See Fed. R. Civ. P. 8(b)(6). Yet, the rules also provide that a party can generally deny all the allegations. Rule 8(b)(3), and that the "pleadings must be construed so as to do justice." Fed. R. Civ. P. 8(e). Based on plaintiff's own allegations, plaintiff knew that defendant did not intend to reimburse all his business-related expenses. See Compl., 5 13. Defendant also denied any liability on the Guarantee and answered that the Indemnification Agreement was irrelevant. See A n s ., 16, 24 & 25. Construing the pleadings "to do justice," defendant did not admit liability under the Indemnification Agreement for all of plaintiff's costs, fees and expenses in the underlying state law suits.

10 for any extrinsic evidence to determine the scope of the

indemnification coverage. Any admission regarding the contract's

scope conveyed in RFA 17 or Defendant's Answer is irrelevant to

my construction of what the Indemnification Agreement covered.

Plaintiff's motion for reconsideration proffers no basis to

reevaluate my analysis of his claims based on the Indemnification

Agreement as decided in the Summary Judgment Order.

(b) Breach of the Oral Agreement

Plaintiff's second argument for reconsideration asserts that

I erroneously found that the statute of limitations had run on

his claims based on an oral agreement he had with defendant for

reimbursement of certain business expenses incurred on behalf of

and capital contributions to the company. In the Summary

Judgment Order, I found that, again because of the untimeliness

of defendant's responses to plaintiff's Requests for Admission,

defendant had admitted an oral agreement was made in February

2001 pertaining to the repayment of that money, and that

defendant had reaffirmed that obligation as late as January 2003.

I concluded that any claims based on the January 2003

reaffirmation of that debt were barred after January 2006, based

on New Hampshire's three year statute of limitations. See N.H.

11 Rev. Stat. Ann. 508:4, I (1997). Plaintiff now contends that I

erred, because the oral agreement was not breached until

defendant's 2007 denial of the debt, which first triggered the

running of the statute of limitations.

In support of his argument, plaintiff relies heavily on

Archdiocese of San Salvador v. FM Int'l, LLC, slip op. No. 05-cv-

2 37-JD,

(D.N.H. Feb. 23, 2006). In that case,

defendants breached their oral promise to repay plaintiff money

within one month of plaintiff having made an investment with

defendants. Based on the agreement between the parties, the

money should have been paid in April 2002. In May 2002, one

defendant acknowledged his liability for the debt and promised to

repay it as soon as a bank guaranty was procured. In July 2002,

plaintiff realized the bank guaranty was counterfeit. After

several unsuccessful attempts to secure repayment of the money,

plaintiff commenced suit in June 2005. The court held that the

statute of limitations had run on the original promise to pay in

April 2005, because plaintiff was aware that defendants had

breached their promise and that plaintiff would be harmed as a

result of that breach as early as April 2002. See id. at *4.

The statutory period was not tolled by the one defendant's

12 reaffirmation of his liability for that debt in May 2002. See

id. at *5. Instead, the court held that in May 2002 the one

defendant had made a new promise, conditioning repayment of the

debt on his receipt of a bank guaranty, which the original

promise had not had. See id. ("[t]he admission [of liability]

itself does not take the action out of the statue of limitations;

rather, it is the new promise that may be inferred from that

admission that removes the bar." (internal quotation omitted)).

The court held that the breach occurred when the counterfeit bank

guaranty was discovered and defendant's nonperformance first

became clear, in July 2002, because the promise to repay had been

conditioned on the receipt of the bank guaranty. See id. at 5.

Plaintiff's claim, therefore, was not barred by the statute of

limitations.

The critical issue in San Salvador, as it is here, is when

was the promise to repay breached? Because the second promise,

made in May 2002, was conditioned on an event the non-performance

of which was not discovered until July 2002, that promise was not

breached until July 2002; accordingly, the June 2005 claims based

on that breach were not barred by the statute of limitations.

Plaintiff argues here that defendant's promise to pay was not

13 breached until 2007 when he first denied any liability based on

the February 2001 oral agreement. That argument assumes

defendant's promise to pay was open-ended and indefinitely

enforceable into the future, which it could not be if it is

understood to be an enforceable contract. Such a promise would

be illusory and not supported by any consideration. Under those

circumstances, there would be no contract. But defendant's debt

under the oral agreement was deemed to be admitted under Rule

3 6 (a) .

Plaintiff's claim accrued in February 2001, when he first

knew that he was leaving the company without being compensated

for hisfinancial contributions to it, and when he first

understood that defendant would reimburse him for those amounts:

A claim accrues when all the events have occurred which fix the liability on the [defendant] and entitle the claimant to institute the action. Claims for breach of contract generally accrue at the time of the breach. A claim does not accrue, however, unless the claimant knew or should have known that the claim existed. Alternatively, a claim accrues when damages are ascertainable.

Patton v . U.S.,

(Fed. Cl. 2005) (internal

quotations omitted). The undisputed facts in the record, taken

from plaintiff's own Requests for Admission, demonstrate that

14 defendant's liability for the monies plaintiff had contributed to

the company was fixed when plaintiff left in February 2001, and

was reaffirmed in January 2003. Based on the record, at that

time the amount of plaintiff's financial contribution was known

and defendant had admitted his liability for it. Plaintiff's

claim was fixed, and defendant's promise to pay plaintiff was,

based on the admission, not conditioned on any specified event or

period of time. Defendant's promise to pay was, therefore,

immediately performable, and his failure to do so constituted a

breach of that promise which triggered the statute of

limitations. See Archdiocese of San Salvador,

at

*5 n.9 ("Of course, the limitations period on the new promise

will commence at the time of its making 'if the promise is

immediately performable.'" (quoting 3 Eric Mills Holmes, Corbin

on Contracts, § 9.10, at 280-81 (rev. ed. 1996)); see also 14 Am.

Law Reports 4th 1385, § 1 (1982) (collecting cases that hold the

statue of limitations begins to run on an oral promise to pay

money which does not contain a time for repayment from the date

the promise was made); Zecos v. Nicholas-Appleqate Capital Mqmt.,

(9th Cir. 2002) ("a cause of action for a

breach of an oral contract accrues at the time of the breach.

15 i.e., when the party charged with the duty to perform under the

contract fails to perform").

Plaintiff's motion for reconsideration has not demonstrated

that my statute of limitations analysis was based on a clear

error of fact or law. To find, as plaintiff would like me to do,

that the February 2001 promise was indefinitely enforceable would

require finding a contract based on an illusory promise not

supported by consideration and, therefore, unenforceable.3

Plaintiff's motion based on the oral contract is denied.

(c) Unjust Enrichment Claims

Plaintiff's last argument focuses on my finding that his

claims based on unjust enrichment were barred by the statute of

limitations. While the court is entitled to make findings on

summary judgment sua sponte, see Sanchez v. Triple-S Mcrmt. Corp.,

(1st Cir. 2007), the party against whom summary

judgment is entered must be provided with "appropriate notice and

a chance to present its evidence on the essential elements of the

3Plaintiff has not identified any condition on which the promise to pay depended, other than the company needing to become profitable. That condition expresses a promise to pay that is too "equivocal, vague and indeterminate, leading to no certain conclusion, but at best to probable inferences" to be enforceable. Soper v. Purdy,

(1999).

16 claim or defense."

I did not provide plaintiff with that

opportunity, and so will reverse my decision with respect to his

unjust enrichment claims. The discovery process here was

"sufficiently advanced that the parties have enjoyed a reasonable

opportunity to glean the material facts," see

however, I did

not afford plaintiff the requisite opportunity to respond to this

defense. See

(requiring the district court to meet the

discovery and notice conditions before entering summary

judgment). Accordingly, plaintiff's motion for reconsideration

to reverse the entry of summary judgment in favor of defendant is

granted. Plaintiff is hereby notified, however, that I find the

record supports a statute of limitations defense with respect to

the unjust enrichment claims.

Conclusion

For the reasons set forth above, the pending motions for

reconsideration (document nos. 56 and 58) are denied in all

respects, except that plaintiff's motion for reconsideration of

the entry of summary judgment on its unjust enrichment claims

asserted in Count III is reversed.

SO ORDERED.

James R. Muirhead

17 United States Magistrate Judge

Date: October 15, 2008

cc: Melinda J. Caterine, Esq. K. William Clauson, Esq.

18