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Geo Finance, LLC v. University Square 2751, LLC

United States District Court, E.D. Michigan, Southern Division

January 22, 2015

GEO FINANCE, LLC, Plaintiff,

For GEO Finance, LLC, Plaintiff: Paul D. Vink - NOT SWORN, Bose McKinney & Evans, Indianapolis, IN; H. Adam Cohen, Steinhardt, Pesick, Birmingham, MI.

For University Square 2751 LLC, Defendant, ThirdParty Plaintiff: Shereef H. Akeel, Akeel & Valentine, Troy, MI.

For First American Title Insurance Agency, a California corporation, Defendant, ThirdParty Defendant: Phillip J. Neuman, Couzens, Lansky, Farmington Hills, MI.


Honorable David M. Lawson, United States District Judge.

This matter is before the Court on the motion by defendant and former third-party plaintiff University Square 2751, LLC for reconsideration of the Court's December 29, 2014 order granting third-party defendant First American Title Insurance Company's motion to dismiss. University Square contends that reconsideration is warranted because the Court adjudicated the motion under Federal Rule of Civil Procedure 12(b)(6) rather than Rule 56, despite the fact that the Court previously entered an order converting the motion to dismiss to a motion for summary judgment. University Square argues that genuine issues of fact remain on several critical points, which were addressed in the supplemental briefing that the parties submitted in response to the Court's prior orders. The Court finds that University Square has identified a palpable defect in the Court's ruling as a result of the application of the wrong standard of review. However, it has not demonstrated that " correcting the defect will result in a different disposition of the case." E.D. Mich. LR 7.1(h)(3). The Court therefore will deny the motion for reconsideration.


Motions for reconsideration may be granted pursuant to E.D. Mich. LR 7.1(h)(1) when the moving party shows (1) a " palpable defect, " (2) that misled the court and the parties, and (3) that correcting the defect will result in a different disposition of the case. E.D. Mich. LR 7.1(h)(3). A " palpable defect" is a defect which is obvious, clear, unmistakable, manifest, or plain. Mich. Dep't of Treasury v. Michalec, 181 F.Supp.2d 731, 734 (E.D. Mich. 2002) (citations omitted). " Generally . . . the court will not grant motions for rehearing or reconsideration that merely present the same issues ruled upon by the court." E.D. Mich. LR 7.1(h)(3).

University Square's motion must be denied because the plaintiff has failed to show that a different outcome would result if the Court applied the Rule 56 (summary judgment) standard of review rather than the Rule 12(b)(6) (motion to dismiss) standard. In its previous opinion, the Court concluded that " [b]ased on the undisputed facts alleged in the pleadings and relied upon by the parties' in their briefing, there is no set of facts under which the claims in the original complaint or third-party complaint would 'arguably fall within the coverage of the policy.' Royce v. Citizens Ins. Co., 219 Mich.App. 537, 542-43, 557 N.W.2d 144, 146-47 (1996)." Op & Order [dkt. #44] at 11. Having reconsidered the parties' positions in light of the proper standard of review, the Court finds that conclusion to be correct.


Summary judgment is appropriate " 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). When determining whether fact issues exist, " [t]he court must view the evidence and draw all reasonable inferences in favor of the non-moving party." Alexander v. CareSource, 576 F.3d 551, 557-58 (6th Cir. 2009). The question that must be answered 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." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Irrelevant or unnecessary factual disputes do not create " genuine" issues of " material" fact. St. Francis Health Care Centre v. Shalala, 205 F.3d 937, 943 (6th Cir. 2000). A fact is " material" if its resolution affects the outcome of the lawsuit. Lenning v. Commercial Union Ins. Co., 260 F.3d 574, 581 (6th Cir. 2001). " Materiality" is determined by the substantive law claim. Boyd v. Baeppler, 215 F.3d 594, 599 (6th Cir. 2000). An issue is " genuine" if a " reasonable jury could return a verdict for the nonmoving party." Henson v. Nat'l Aeronautics & Space Admin., 14 F.3d 1143, 1148 (6th Cir. 1994) (quoting 477 U.S. at 248). In a defensive motion for summary judgment, the party who bears the burden of proof must present a jury question as to each element of the claim. Davis v. McCourt, 226 F.3d 506, 511 (6th Cir. 2000). Failure to prove an essential element of a claim renders all other facts immaterial for summary judgment purposes. Elvis Presley Enters., Inc. v. Elvisly Yours, Inc., 936 F.2d 889, 895 (6th Cir. 1991).

In its motion for reconsideration, University Square contends that summary judgment on its third-party complaint was improper because genuine issues of fact remain on the following questions: (1) whether " Exception 2" (which excludes coverage for " [e]asements, liens or encumbrances, or claims thereof, not shown by the Public Records") should have been deleted from the policy of insurance issued by First American, under the terms of the purchase agreement between University Square and its seller of the property; (2) whether " Exception 2" applies to the claims asserted in the original complaint by plaintiff GEO Finance, LLC; and (3) whether the coverage under the policy extends to the claims raised in the original complaint. None of those alleged disputes suffices to show that a genuine issue of material fact remains as to the claims in the third-party complaint.

A. Enforceability of Exception 2

As an initial matter, any dispute as to whether, under certain terms of the purchase agreement, " Exception 2" should have been deleted from the policy that was issued by First American is immaterial, because the claims in the third-party complaint are based upon an alleged breach of the title insurance policy as issued, and the third-party complaint does not ...

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