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Great Lakes Water Authority v. Petro Envrionmental Technologies, Inc.

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

February 28, 2017




         Before the court in this breach of contract case is a motion for summary judgment filed by all Defendants. (Dkt. # 16-14180.) The motion is fully briefed and a hearing is unnecessary. See E.D. Mich. LR 7.1(f)(2). For the reasons that follow, the court determines that Plaintiff's claims are time-barred. Defendants' motion must be granted.

         I. BACKGROUND

         The following facts are undisputed unless otherwise noted. Plaintiff Great Lakes Water Authority is a municipal corporation that operates and controls both the water supply and sewage disposal systems of the City of Detroit. (Dkt. # 1, Pg. ID 4.) The Detroit Water and Sewerage Department (“DWSD”) operated these systems until the Plaintiff and the City entered into a “Regional Sewer Disposal Lease” on June 12, 2015, authorizing Plaintiff to “administer and enforce DWSD's approved industrial pretreatment program and to carry out DWSD's rights and obligations as the Control Authority[.]” (Dkt. # 13-1.) As part of the lease agreement, GLWA adopted the pollution surcharge system established by DWSD as required by the Clean Water Act, 33 U.S.C. 1284(b). (Dkt. # 13-1.)

         Defendant Petro Environmental Technologies, Inc. (“Petro Inc.”) established a pollution surcharge account with DWSD as part of a contract with the South Macomb Disposal Authority (“SMDA”), relating to cleanup efforts at “landfill sites 9 and 9A.” (Dkt. # 9, Pg. ID 73.) Petro Inc. last received an invoice from DWSD for this account on or around September 15, 2010. (Dkt. # 10, PG. ID 89.)

         Shortly after, SMDA filed a lawsuit against Petro Inc. and others in the Eastern District of Michigan. See South Macomb Disposal Authority v. Model Development, LLC, Case No. 11-cv-12715 (E.D. Mich. June 22, 2011). In its amended complaint, SMDA alleged that Petro Inc. received an insurance payment for the final invoice on the surcharge account and was obliged to turn that money over to SMDA, but retained it instead. (See Dkt. # 10-3.) Petro Inc. and SMDA settled in September of 2013. (Dkt. # 13-4.)

         The parties agree that the unpaid invoices form the basis of Plaintiff's claims and part of the the SDMA lawsuit. (See Dkt. # 13, Pg. ID 111.) Defendants contend that any payment due on the pollution surcharge account is owed by SMDA, against which they have filed a third-party complaint. (Dkt. # 7.) However, in the instant motion Defendants primarily argue that any claim Plaintiff may have against them relating to the pollution surcharge account is time-barred. (Dkt. # 10, Pg. ID 75.)

         II. STANDARD

         Summary judgment is proper “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). “In deciding a motion for summary judgment, the court must view the evidence in the light most favorable to the non-moving party, drawing all reasonable inferences in that party's favor.” Sagan v. United States, 342 F.3d 493, 497 (6th Cir. 2003). The movant has the initial burden of showing the absence of a genuine dispute as to a material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “[T]hat burden may be discharged by showing . . . that there is an absence of evidence to support the nonmoving party's case.” Bennett v. City of Eastpointe, 410 F.3d 810, 817 (6th Cir. 2005) (internal quotation marks omitted).

         The burden then shifts to the nonmovant, who must put forth enough evidence to show that there exists “a genuine issue for trial.” Horton v. Potter, 369 F.3d 906, 909 (6th Cir. 2004) (citation omitted). Summary judgment is not appropriate when “the evidence presents a sufficient disagreement to require submission to a jury.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 243 (1986). In evaluating a summary judgment motion, “the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial . . . credibility judgments and weighing of the evidence are prohibited.” Moran v. Al Basit LLC, 788 F.3d 201, 204 (6th Cir. 2015) (internal quotation marks and citations omitted).


         The central question before the court is whether Plaintiff's contract claims are time-barred. The parties agree that Michigan's six-year statute of limitations governs here. (See Dkt. # 9, Pg. ID 80 (citing Mich. Comp. Laws § 600.5807(8)); Dkt. # 13, Pg. ID 111.) Plaintiff filed its complaint on November 29, 2016. (See Dkt. # 1.) Defendants argue that the statute of limitations began to run, at the latest, on September 15, 2010- the date of the last DWSD invoice claiming an arrearage. (Dkt. # 9, Pg. ID 80.) Plaintiff responds that the statute began to run either after the conclusion of the SMDA litigation or, alternatively, that the statute was tolled during that litigation. (Dkt. # 13, Pg. ID 111-12.)

         As provided in the relevant statute, Mich. Comp. Laws § 600.5807, the limitations period begins once the cause of action for breach of contract “accrues.” In Michigan, actions of this kind accrue “at the time of the asserted breach of contract.” Garden City Osteopathic Hosp. v. HBE Corp., 55 F.3d 1126, 1133 (6th Cir. 1995) (quoting Huhtala v. Travelers Ins. Co., 257 N.W.2d 640, 646 (Mich. 1977)). The breach alleged here was Defendants' failure to pay the amount due, and since there is no dispute that the due date stated on the last invoice was September 15, 2010, Defendants argue persuasively that the breach occurred-and the claim accrued-that day. The court agrees.

         Plaintiff argues in opposition first that the statute of limitations did not begin to run until after the SDMA litigation, because “the balance owed on Defendants' pollutant surcharge account was not determined until the conclusion of the SDMA Lawsuit.” (Dkt. # 13, Pg. ID 111.) Plaintiff avers that as part of the settlement, SMDA and Defendants agreed that $185, 454.35 was the correct amount owed on the pollutant surcharge account-though Defendants dispute this characterization. (Id.) According to Plaintiff, “[t]he pollutant surcharge account was an open account until the conclusion of the SDMA Lawsuit[, ] at which time Plaintiff converted the account into an account stated ...

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