Routman v. Automatic Data Processing, Inc.

Decision Date05 May 1989
Docket NumberNos. 87-3515,87-3655,s. 87-3515
Citation873 F.2d 970
PartiesRobert ROUTMAN, d.b.a. Robert Routman & Associates, Plaintiff-Appellant, v. AUTOMATIC DATA PROCESSING, INC. Defendant-Appellee.
CourtU.S. Court of Appeals — Sixth Circuit

Niki Z. Schwartz (argued), Gold, Rotatori, Schwartz & Gibbons Co., LPA, Orville E. Stifel, II (argued), Cleveland, Ohio, for plaintiff-appellant.

William D. Manson, Maynard F. Thomson (argued), Jones, Day, Reavis & Pogue, Cleveland, Ohio, for defendant-appellee.

Before ENGEL, Chief Judge, and KRUPANSKY and BOGGS, Circuit Judges.

KRUPANSKY, Circuit Judge.

Plaintiff-appellant Robert Routman, d/b/a Robert Routman & Associates (Routman), a sole proprietorship, has appealed from an order of summary judgment in favor of defendant-appellee, Automatic Data Processing, Inc. (ADP), in an action charging ADP with breach of contract as a result of its failure to purchase "Impact 36," a computer software system designed by appellant to specifically service the wholesale distribution data processing market.

The operative facts joining the issue confronting this appellate review were incorporated into an October 21, 1986 pretrial order entered as a result of an October 16, 1986 district court conducted conference:

The Court conducted a status call in the above-captioned case on October 16, 1986 with counsel present and participating. The plaintiff has alleged that the defendant breached a marketing agreement entered into with the plaintiff, and requests compensatory damages in the amount of $6.5 million. The Court finds that the threshold issue in the case is whether the parties entered into a marketing agreement. Accordingly, the Court extends discovery until November 30, 1986, but limits discovery to issues relating to whether the parties entered into a contract as alleged by the plaintiff.

The Court stays discovery as to all other issues. The Court grants the defendant leave until November 30, 1986 to file a motion for summary judgment on the contract formation issues.

(emphasis added).

The mandate of the trial court's order bifurcated the trial and limited the first issue for consideration to "contract formation" and deferred consideration of the "contract breach" to an unspecified future date.

On January 15, 1987, addressing the issue of contract formation, ADP filed its motion for summary judgment denying the existence of any contract between the parties. Appellant responded to the single issue joined by appellee's summary judgment motion. At a hearing before the district court on ADP's motion for summary judgment, appellee attempted to expand the issue of contract formation to include the issue of breach. Appellant objected and refused to address the question of appellee's bad faith breach of contract and insisted that the argument be confined to the existence of a valid contract because appellant had been precluded during its discovery, briefing and related preparation from pursuing its allegations of ADP's bad faith breach of the agreement in controversy.

On April 30, 1987, the trial court, notwithstanding its bifurcation order limiting its consideration to the issue of contract formation, elected, after finding that a contract existed between the parties, to ignore its order, and proceeded sua sponte to grant summary judgment in favor of ADP, concluding that appellant had failed to support its allegations of a bad faith breach by ADP.

Appellant timely filed a motion for reconsideration pursuant to Fed.R.Civ.P. 59(e) asserting that the trial court erred by ignoring the parameters of its October 21, 1986 order confining discovery, evidence, and argument to the single issue of contract formation and by granting summary judgment in favor of ADP on the bad faith breach of contract issue. The district court denied the motion and appellant timely appealed.

On appeal, appellant has charged that the trial court offended the ten-day notice requirement of Fed.R.Civ.P. 56(c), and its own order bifurcating the trial. Appellant also argues that it was misled by the language of the pretrial order because that order limited the parties to developing only the single issue of contract formation and deferred the "breach of contract" issue until after a disposition of the contract formation issue.

A district court may properly enter summary judgment sua sponte where the record discloses the absence of an issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). However, before summary judgment may be granted against a party, Fed.R.Civ.P. 56(c) mandates that the party opposing summary judgment be afforded notice and a reasonable opportunity to respond to all issues to be considered by the court. Portland Retail Druggist Ass'n v. Kaiser Foundation Health Plan, 662 F.2d 641, 645 (9th Cir.1981). "Implicit in the 'opportunity to respond' is the requirement that sufficient time be afforded for discovery necessary to develop 'facts essential to justify [a party's] opposition to the motion.' " Kaiser Foundation Health Plan, 662 F.2d at 645. Rule 56(c) requires at a minimum that an adverse party be extended at least ten days notice before summary judgment may be entered. Rule 56(c); Beck v. Borden, Inc., 724 F.2d 44 (6th Cir.1984); Kistner v. Califano, 579 F.2d 1004, 1005 (6th Cir.1978) (per curiam).

"Noncompliance with the time provision of the rule deprives the court of authority to grant summary judgment, ... unless the opposing party has waived this requirement, ... or there has been no prejudice to the opposing party by the Court's failure to comply with this provision of the...

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