Nat'l Waste Assocs. v. Lifeway Christian Res. of the S. Baptist Convention

• Decision Date: 25 October 2022
• Docket Number: 3:20-cv-00654
• Parties: NATIONAL WASTE ASSOCIATES, LLC, Plaintiff, v. LIFEWAY CHRISTIAN RESOURCES OF THE SOUTHERN BAPTIST CONVENTION, Defendant.
• Court: U.S. District Court — Middle District of Tennessee

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NATIONAL WASTE ASSOCIATES, LLC, Plaintiff, v. LIFEWAY CHRISTIAN RESOURCES OF THE SOUTHERN BAPTIST CONVENTION, Defendant.

No. 3:20-cv-00654

United States District Court, M.D. Tennessee, Nashville Division

October 25, 2022

MEMORANDUM OPINION AND ORDER

WAVERLY D. CRENSHAW, JR., CHIEF UNITED STATES DISTRICT JUDGE.

National Waste Associates, LLC (NWA) filed this breach-of-contract case against Lifeway Christian Resources of the Southern Baptist Convention (Lifeway). The parties filed cross-motions for summary judgment. The Court denied NWA's motion and granted Lifeway's motion in part, leaving only NWA's breach-of-contract claim and request for punitive damages. Lifeway filed a motion to reconsider the punitive-damages ruling, and the motion is fully briefed. (Doc. Nos. 14647 152, 155). In light of this briefing, as explained below, the Court exercises its discretion to reconsider its prior analysis and grant summary judgment to Lifeway on NWA's request for punitive damages under Connecticut common law.

I. BACKGROUND

The Court summarized the background of this case in its prior Memorandum Opinion. (See Doc. No. 141 at 2-3.) In short, NWA contracted to manage waste and recycling services at Lifeway's retail bookstores for a term of five years. This contract became effective on November 1, 2018. (See Doc. No. 1-2). After reviewing sales information for the 2018 Christmas season, Lifeway decided to close all its retail bookstores. (Doc. No. 91 ¶ 21). Lifeway notified NWA of this decision in March 2019 and closed all retail bookstores by November 30, 2019, communicating with NWA about the timing of each closure and paying every invoice tendered by NWA along the way. (Id. ¶¶ 22, 27-28).

NWA sued Lifeway, claiming breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and quantum meruit, including requests for punitive damages and attorney's fees. (Doc. No. 1). The Court granted Lifeway's motion to dismiss NWA's implied-covenant claim (Doc. No. 42), and it granted Lifeway's request for summary judgment on NWA's unjust enrichment claim, quantum meruit claim, and request for contractual attorney's fees. However, the Court denied summary judgment on NWA's breach-of-contract claim and request for punitive damages. (Doc. Nos. 141-42).

The punitive damages analysis involved a choice of law issue, and the Court-contrary to Lifeway's position-applied the law of Connecticut instead of Tennessee. (Doc. No. 141 at 1921). Lifeway does not contest this aspect of the Court's analysis. The Court also concluded that a reasonable jury could award NWA punitive damages under Connecticut law for Lifeway's asserted breach. (Id. at 21-23). It is this ruling that Lifeway asks the Court to revisit. (Doc. No. 146).

II. ANALYSIS

A. Procedural Posture

As an initial matter, NWA rightly notes that Lifeway relied solely on Tennessee law in the punitive-damages portion of its summary judgment motion. (See Doc. No. 65 at 30-32). NWA essentially contends that this failure amounts to forfeiture of the legal argument Lifeway presses in its motion to reconsider-that NWA's request for punitive damages cannot survive summary judgment under Connecticut law. (See Doc. No. 152 at 2-6). But an order denying summary judgment is interlocutory, so it “may be revised in the district court's discretion until final judgment.” ACT, Inc. v. Worldwide Interactive Network, Inc., 46 F.4th 489, 508 (6th Cir. 2022) (citations omitted). Indeed, the Court is “free to reconsider or reverse its decision for any reason.” ACLU of Ky. v. McCreary Cnty., Ky., 607 F.3d 439, 450 (6th Cir. 2010) (quoting Cameron v. Ohio, 344 Fed.Appx. 115, 118 (6th Cir. 2009)); see Cameron, 344 Fed.Appx. at 117-18 (citation omitted) (explaining that a motion to reconsider denial of summary judgment is not subject to the “strictures” of a motion seeking review of a final judgment). The Court, therefore, may consider Lifeway's motion even if it is “effectively a renewed motion for summary judgment.” Cameron, 344 Fed.Appx. at 118; see Lexicon, Inc. v. Safeco Ins. Co. of Am., 436 F.3d 662, 670 n.6 (6th Cir. 2006) (quoting Kovacevich v. Kent State Univ., 224 F.3d 806, 835 (6th Cir. 2000)) (“District courts may in their discretion permit renewed or successive motions for summary judgment.”).

Although Lifeway's insistent, ineffectual focus on Tennessee law in this section of its summary judgment briefing left much to be desired,^[1] its position did not prevent NWA from presenting its argument to apply and rule in its favor under Connecticut law. (Doc. No. 90 at 2526). Lifeway replied by arguing that the result was the same under both Tennessee and Connecticut law, distinguishing four Connecticut cases in a string cite. (Doc. No. 95 at 6 (“Even NWA's foreign cases do not suggest otherwise.”)). And most importantly, the motion to reconsider has allowed both parties to fully brief the punitive damages issue under applicable Connecticut law, providing the Court a useful survey of caselaw clarifying the level of tortious conduct required to justify punitive damages for a breach of contract. (Doc. No. 152 at 6-14 (NWA's response); Doc. No. 155 at 3-5 (Lifeway's reply)).

The Court expects, and ordinarily requires, parties “to present their strongest arguments in their initial summary judgment motion.” See Whitford v. Boglino, 63 F.3d 527, 530 (7th Cir. 1995).

But in the unique circumstances of this case, it would not make sense to send NWA's punitive-damages request to trial if the Court is now convinced that it does not survive scrutiny under the summary judgment standard. After all, “a legal ruling does not become more insulated from reversal by a senior court every time the junior court refuses to reconsider a prior ruling.” Med. Ctr. at Elizabeth Place, LLC v. Atrium Health Sys., 922 F.3d 713, 734-35 (6th Cir. 2019) (Sutton, J., concurring). Accordingly, the Court exercises its discretion to consider the substance of Lifeway's motion to reconsider. See Retail Ventures, Inc. v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA, No. 2:06-CV-443, 2010 WL 11538539, at *4 (S.D. Ohio Sept. 28, 2010) (“The Court allows Defendant to renew its motion for summary judgment because both parties were fully able to brief the issues and if dismissal pursuant to Rule 56(c) is proper, it is in the interest of judicial economy to do so.”); Whitford, 63 F.3d at 530 (holding that district court did not abuse its discretion by allowing “defendants to submit a second summary judgment motion [that] presented a new and (in the eyes of the district court) more convincing legal argument”).

B. Merits

Summary judgment is appropriate for a moving party that shows “there is no genuine dispute as to any material fact” and that it is “entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Under Connecticut law, “[i]t is well settled that punitive damages generally are not recoverable for breach of contract.” Lydall, Inc. v. Ruschmeyer, 282 Conn. 209, 260 n.24 (2007) (citing Triangle Sheet Metal Works, Inc. v. Silver, 154 Conn. 116, 127 (1966)). To that end, a breach of contract does not merit punitive damages “unless the breach is ‘founded on tortious conduct.'” Edible Arrangements Int'l, Inc. v. Chinsammy, 446 Fed.Appx. 332, 333 (2d Cir. 2011) (quoting L.F. Pace & Sons, Inc. v. Travelers Indem. Co., 514 A.2d 766, 776 (Conn. App. Ct. 1986); citing Triangle Sheet Metal Works, 154 Conn. at 127)). “Tortious conduct” includes “acts done with a bad motive or with a reckless indifference to the interests of others.” L.F. Pace & Sons, 514 A.2d at 776 (quoting Triangle Sheet Metal Works, 154 Conn. at 128).

NWA maintains that Lifeway's asserted breach of contract was reckless. And NWA is correct that, under Connecticut law, “reckless indifference” does not require “an actual intention to do harm to the plaintiff.” Gaughan v. Higgins, 200 A.3d 1161, 1174 (Conn. App. Ct. 2018) (quoting Berry v. Loiseau, 223 Conn. 786, 811 (1992)). Still, recklessness is “more than negligence, more than gross negligence,” and “more than a failure to . . . take reasonable precautions to avoid injury to [others].” Id. at 1175 (quoting Franc v. Bethel Holding Co., 807 A.2d 519, 537 (Conn. App. Ct. 2002)). Indeed, Connecticut courts have observed that reckless conduct “tends to take on the aspect of highly unreasonable conduct, involving an extreme departure from ordinary care.” Craig v. Driscoll, 781 A.2d 440, 454 (Conn. App. Ct. 2001) (quoting Dubay v. Irish, 207 Conn. 518, 532 (1988)).

Here, considering the record as a whole, the Court concludes that NWA has not shown this to be the rare case justifying punitive damages for a breach of contract. It is undisputed that Lifeway decided to close all its retail bookstores after reviewing sales information for the 2018 Christmas season, informed NWA of its decision in March 2019, and communicated with NWA about the timing of each closure before closing the final store on November 30, 2019. That was about thirteen months into the parties' five-year contract. The parties dispute whether the contract permitted Lifeway's closure of all locations and cancellation of all services before the contract's five-year term was complete. As the Court previously concluded, the contract language governing the breach dispute is ambiguous, and extrinsic evidence of the language's meaning cuts both ways, so a jury must decide whether Lifeway breached. (Doc. No. 141 at 5-16).

Punitive damages, however, require more than mere breach. The breach must have resulted from conduct either supporting an underlying tort claim or giving the breach “a tortious overtone.” See L.F. Pace & Sons, 514 A.2d at 776 (discussing Triangle Sheet Metal Works, 154 Conn. at 128). There is no underlying tort claim in this...