NOT RECOMMENDED FOR PUBLICATION File Name: 21a0375n.06
No. 20-3358
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
FILED MICHAEL GRASSI; CFOM, INC., ) Aug 03, 2021 ) DEBORAH S. HUNT, Clerk Plaintiffs-Appellants, ) ) v. ) ON APPEAL FROM THE UNITED STATES ) DISTRICT COURT FOR THE NORTHERN JOHN GRASSI; ALOTECH LIMITED, ) DISTRICT OF OHIO LLC, ) ) OPINION Defendants-Appellees. )
BEFORE: BATCHELDER, GRIFFIN, and STRANCH, Circuit Judges.
JANE B. STRANCH, Circuit Judge. Brothers Michael and John Grassi spent several
years working together to develop a manufacturing technology called ablation casting, which was
ultimately licensed to Honda. The brothers now disagree on what role Michael played in the
development process, and what payment he may be owed. Michael Grassi and his company,
CFOM, filed suit against John Grassi and his company, Alotech, asserting claims including unjust
enrichment, quantum meruit, misappropriation of trade secrets, breach of contract, and promissory
estoppel. Michael alleges that he and his brother John had an oral partnership agreement, and that
he is owed a portion of the monies earned from the Honda deal. Defendants denied the allegations
and counterclaimed, including a request for a declaratory judgment that they own the intellectual
property claimed by Michael. At issue there are two intellectual property agreements from 2012
and a patent assignment from 2017, on which Michael claims his signatures were forged. No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.
The district court granted summary judgment to Defendants on all Plaintiffs’ claims except
breach of contract and promissory estoppel. Trial of those claims resulted in a jury verdict for
Defendants. Plaintiffs challenge the court’s summary judgment determinations, several key
evidentiary rulings, and a portion of the jury instructions. For the reasons stated below, we
AFFIRM in part and REVERSE in part, and REMAND for a new trial.
I. BACKGROUND
A. Factual Background
Plaintiff Michael Grassi and Defendant John Grassi are twin brothers. In 2002 or 2003,
John Grassi’s company, Defendant Alotech, patented a technology for casting metal parts called
ablation casting. Over the years, Alotech continued to refine the ablation casting process, filed
five more patents relating to the technology, listing John Grassi and collaborators as the inventors,
and began manufacturing parts for other companies.
In 2006, Michael Grassi and his company, CFOM, began assisting Alotech with certain
aspects of the ablation casting process. A few years later, another CFOM employee, Charles
Rizzuti, came onboard to help with the computer programming.
According to Michael Grassi, between 2006 and 2012, he and Rizzuti helped make the
technology commercially viable by contributing several innovations that sped up the casting
process, increased its consistency, and reduced costs. Michael testified that in 2008, he and John
agreed to evenly split the monies earned from the ablation casting process. The brothers’ mother,
Rosemarie Grassi, swore in an affidavit that in 2011, John told her that he and Michael planned
to split the profits from their ablation casting project. She also attached a letter she sent to John in
May 2019, recounting the conversation in which he told her about the partnership. Rizzuti
similarly testified at his deposition that Michael had told him about the deal early in their work
together.
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In the fall of 2012, Michael contends, John asked him to relocate from Minnesota to Ohio
to work on ablation casting at Alotech full-time. Michael agreed to do so. Around the same time,
Alotech was negotiating a deal for Honda to license the ablation casting technology to manufacture
automobile parts. Michael testified that in September 2012, he and John entered into an oral
agreement to split the monies1 from that deal and future deals, with Alotech/John Grassi receiving
65 percent and CFOM/Michael Grassi receiving 35 percent. Rizzuti testified that Michael told
him that he and John had agreed to split the proceeds from the Honda deal.
John Grassi, however, testified that he and Michael never entered into such an agreement.
Instead, he claims, Alotech hired Michael as an employee—it issued him a W-2, provided him
with an annual salary, and enrolled him in its 401(k) plan.
Defendants also claim that in October 2012, at Alotech’s behest, Michael signed a
“Confidentiality and Work Product Agreement” (IP Agreement) providing that Alotech would
own his work product and any value relating to ablation casting created by CFOM while Michael
was “engaged by” Alotech. According to Vicki Hawker, Alotech’s administrative assistant, nearly
all Alotech employees signed similar agreements at the time, and Alotech’s files contained two
copies of Michael’s agreement, one signed on October 22, 2012, and one signed on October 25,
2012. The documents are essentially the same, but the earlier contract bears the signature of
“Michael J Grassi President” on behalf of CFOM and lists an address for CFOM in Somerset, PA,
while the later-dated contract bears the signature of “Mike J. Grassi” on behalf of CFOM and lists
an address in Duluth, Minnesota. Neither contains initialed pages. Michael testified that at the
1 Defendants contend that Michael has been “inconsistent” about whether the oral agreement concerned the proceeds or the profits of the Honda deal. However, at his deposition, Michael explained that because the Honda deal was a licensing agreement, there were no costs, making the terms “proceeds” and “profits” interchangeable.
-3- No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.
time, he was living in Duluth but had a house in Somerset that CFOM had used as its business
address at some point. He did not think that CFOM was using the Somerset address as its business
address in October 2012, but did not remember for certain and his testimony on the issue was
inconsistent. Neither Hawker nor John Grassi claimed they or anyone else witnessed Michael
signing the IP Agreements, nor did they explain Alotech’s methods for maintaining the integrity
of business records. Alotech’s counsel, Brett Lockwood, stated in a declaration that on October
25, 2012, he received from Alotech an e-mail attaching nine IP Agreements signed by Alotech
employees, including the Agreement of October 25 that was purportedly signed by “Mike J.
Grassi.”
Michael Grassi agrees that Alotech presented him with the IP Agreement, but maintains
that he did not sign it. He did, however, use the same form agreement with an Alotech employee
whose services he was engaging for a separate company, called DynoPro. That contract was
executed on October 22, 2012; Michael initialed the agreement on every page, signed his name as
“Michael J. Grassi,” and listed a Danville, Ohio, business address for DynoPro.
Alotech’s deal with Honda was finalized in April 2013. Among other things, the licensing
agreement provided that Alotech’s future intellectual property relating to ablation casting would
be the joint property of Alotech and Honda, but it excluded any such property developed by
Alotech prior to the date of the agreement. So, as part of the due diligence process, one of
Alotech’s attorneys, Jay Moldovanyi, worked with John and Michael to develop a list of 22 items
of previously developed intellectual property that belonged to Alotech, which Michael reviewed
and agreed was accurate. Michael acknowledges that he reviewed that list, but contends he viewed
Alotech as being “John and Mike,” rather than a separate entity. He explained that he approved
the list because John wanted to present all the relevant technology as belonging to Alotech in order
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to show Honda they could “pull this off.” Moldovanyi stated in an affidavit that he viewed the list
as enumerating intellectual property that belonged only to Alotech. However, Moldovanyi had
previously represented CFOM and another of Michael’s companies on unrelated matters, and
Michael testified at his deposition that he believed Moldovanyi was “representing [his] interests”
and knew he was “independent of John.”
In June 2017, Defendants assert, Michael assigned to Alotech a patent that had previously
been filed by him, John Grassi, and another individual. The assignment document (Patent
Assignment) bears Hawker’s notary seal and signature. Hawker testified at her deposition that she
personally witnessed Michael signing the document, and that she was the only person who was
present. John Grassi first testified that he did not see Michael sign the document, then later said
he had. Michael Grassi contends that his signature on the Patent Assignment was forged.
Later in 2017, Michael approached John to demand that Alotech pay him his share of the
monies from the Honda deal. The brothers’ relationship deteriorated soon afterwards, and they
parted ways. Defendants contend that Michael was fired; Michael contends that he was never an
employee.
Over the years, Defendants made hundreds of thousands of dollars in payments to
Plaintiffs. The amounts are generally undisputed, but the parties offer differing views of precisely
what those payments were compensation for. From 2006 to 2012, Michael Grassi and Rizzuti
were reimbursed by John Grassi and/or Alotech for costs and materials relating to their work for
Alotech. Some expenses were also covered by third party companies interested in the technology.
In addition, CFOM received payments in the amount of $726,000 from 2009 to 2016. Michael
Grassi states that these payments were merely reimbursements for costs and materials, and that he
has never received compensation for his intellectual contributions to the ablation casting
-5- No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.
technology during that time period. John Grassi, disputes this and testified, for example, that he
paid Michael $350,000 for “Ablation Valve Control Improvements” in connection with the Honda
deal. In addition, from 2012 to 2017, Alotech paid Michael approximately $693,000 for the period
2012 to 2017. Defendants characterize this as salary, but Michael contends the payments were his
personal draw from his partnership with John.
B. Procedural History
Plaintiffs filed their complaint against Defendants in Ohio state court in October 2018,
asserting claims for breach of contract, promissory estoppel, quantum meruit, unjust enrichment,
fraud, and misappropriation of trade secrets. After removing this case to federal court based on
diversity jurisdiction, Defendants filed an answer and counterclaims against Michael Grassi and
CFOM for deceptive trade practices and breach of contract and for a declaratory judgment that
Defendants own Alotech, all of Alotech’s profits, and certain Alotech intellectual property;
counterclaims against Michael Grassi alone for business defamation, conversion, and tortious
interference with current and prospective business; and a third-party claim against Rizzuti for a
declaratory judgment that neither CFOM nor Rizzuti has a claim to additional monetary payments
from Alotech or any ownership stake in Alotech.
On February 5, 2020, the district court granted summary judgment, (1) dismissing
Plaintiffs’ claims of quantum meruit, unjust enrichment, misappropriation of trade secrets, and
fraud; (2) entering a declaratory judgment that Plaintiffs have no legally cognizable ownership
interest in Alotech’s intellectual property in ablation casting; and (3) entering a declaratory
judgment that Rizzuti does not have any claim to additional monetary payments from Alotech or
any ownership stake in Alotech. As part of its decision, the district court rejected Plaintiffs’
contention that his signature on the June 2017 Patent Assignment and the two IP Agreements had
been forged, finding that there was no issue of material fact as to the validity of those contracts.
-6- No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.
Defendants voluntarily dismissed their counterclaims for conversion, breach of contract,
and declaratory judgment as to the ownership of Alotech and its profits. The case went to trial on
the remaining causes of action: Plaintiffs’ claims of breach of contract and promissory estoppel,
and Defendants’ counterclaims for defamation, tortious interference with current and prospective
business, and deceptive trade practices. Based on its conclusion at summary judgment that the
Patent Assignment and the IP Agreements were valid, the district court barred Michael from
testifying that the second IP Agreement was inauthentic. The district court also excluded Trial
Exhibit 8, a 2013 e-mail chain relating to the IP Agreements, finding it protected by Alotech’s
attorney-client privilege.
At the conclusion of the evidence, the district court granted Plaintiffs’ motion for a directed
verdict on Defendants’ three remaining counterclaims and referred the promissory estoppel and
breach of contract claims to the jury. The court instructed the jury that Plaintiffs’ burden of
persuasion on the promissory estoppel claim was “clear and convincing evidence,” rejecting
Plaintiffs’ argument that the applicable standard was “preponderance of the evidence.” The jury
returned a verdict in favor of Defendants on Plaintiffs’ breach of contract and promissory estoppel
claims.
Plaintiffs then moved for a new trial and relief from judgment, seeking an evidentiary
hearing on their forgery claims as well as vacatur of the district court’s order on summary judgment
as to the validity of the IP Agreements and the Patent Assignment. The district court denied the
motion. It agreed that it had erred in excluding the e-mails as protected by attorney-client privilege,
but concluded that any error was harmless because it had already decided as a matter of law that
the IP Agreements were valid.
-7- No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.
Plaintiffs appeal the district court’s (1) grant of summary judgment dismissing their
damages claims of quantum meruit and unjust enrichment, their declaratory judgment claim
regarding the ownership of intellectual property, and their claim of misappropriation of trade
secrets; (2) order excluding evidence relating to the validity of the IP Agreement; (3) order
excluding Trial Exhibit 8 and related testimony; and (4) jury instructions regarding their
promissory estoppel claim.
II. ANALYSIS
A. The District Court’s Grant of Summary Judgment
We first address Plaintiffs’ challenge to the grant of summary judgment, grouping together
their claims of quantum meruit and unjust enrichment in one category, and their declaratory
judgment claim concerning intellectual property and their misappropriation of trade secrets claim
in another category.
The district court’s grant of summary judgment is reviewed de novo. Kalich v. AT&T
Mobility, LLC, 679 F.3d 464, 469 (6th Cir. 2012). Summary judgment is appropriate when the
record, viewed in the light most favorable to the nonmoving party, reveals that there is no genuine
issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Fed.
R. Civ. P. 56(a). Defendants, as movants, bear the burden of making this showing. Troutman v.
Louisville Metro Dep’t of Corr., 979 F.3d 472, 481 (6th Cir. 2020). In examining the record to
determine if there is an issue of material fact, we do not judge credibility or weigh evidence;
instead, we believe the evidence of the nonmoving parties, and draw “all justifiable inferences” in
their favor. Anderson v. Liberty Lobby, 477 U.S. 242, 255 (1986). Ultimately, a genuine dispute
exists where “there is sufficient evidence” that “a reasonable jury could return a verdict for the
nonmoving party.” Id. at 248–49
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Our review of the district court’s a grant of partial summary judgment is limited to the
evidence before the district court at the time of its ruling, and we do not consider evidence that
was later introduced at trial. Biegas v. Quickway Carriers, Inc., 573 F.3d 365, 374 (6th Cir. 2009).
1. Quantum Meruit and Unjust Enrichment
Under Ohio law, unjust enrichment and quantum meruit claims share the same essential
elements: “(1) the plaintiff conferred a benefit on the defendant, (2) the defendant knew of the
benefit, and (3) it would be unjust to permit the defendant to retain the benefit without payment.”
Meyer v. Chieffo, 950 N.E.2d 1027, 1039 (Ohio Ct. App. 2011); see also Hambleton v. R.G. Barry
Corp., 465 N.E.2d 1298, 1302 (Ohio 1984)). Because these equitable remedies are intended to
“prevent injustice,” the third element is critical; it is not enough for a plaintiff to show merely that
he conferred a benefit upon the defendant. Andersons, Inc. v. Consol., Inc., 348 F.3d 496, 502 (6th
Cir. 2003) (quoting Giles v. Hanning, 2002-Ohio-2817, 2002 WL 1173512, at *2 (Ohio Ct. App.
May 31, 2002) and citing Katz v. Banning, 617 N.E.2d 729, 735 (Ohio Ct. App. 1992)); see also
Liberty Mut. Ins. Co. v. Three-C Body Shop, Inc., 2020-Ohio-2694 ¶ 10, 2020 WL 2042916, at *2
(Ohio Ct. App. Apr. 28, 2020). Instead, a plaintiff must show “enrichment that is unjust”—that
under the circumstances, the plaintiff has a “superior equity” that makes it “unconscionable for
the . . . [defendant] to retain the benefit.” Andersons, 348 F.3d at 502 (alterations in original)
(quoting Katz, 617 N.E.2d at 735). To demonstrate this superior equity, “a plaintiff must show
that the substantial benefit to the defendant is ‘causally related’ to the substantial detriment to the
plaintiff.” Id. (quoting Gaier v. Midwestern Grp., 601 N.E.2d 624, 627 (Ohio Ct. App. 1991));
see also Longmire v. Danaci, 155 N.E.2d 1014, 1024–25 (Ohio Ct. App., 2020). Damages for an
unjust enrichment claim are the amount of the defendant’s benefit, while damages for a quantum
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meruit claim are the measure of the value of the plaintiff’s services, less any damages incurred by
the defendant. Meyer v. Chieffo, 950 N.E.2d 1027, 1039–40 (Ohio Ct. App. 2011).
Plaintiffs’ unjust enrichment and quantum meruit claims rest on their allegations that they
performed services and provided intellectual property to Defendants in connection with the
development of the ablation casting technology, and that they have not been reasonably
compensated for those contributions. The district court found it undisputed that Defendants had
paid Plaintiffs approximately $1.3 million for their work on ablation casting, and that nothing in
the record suggested this compensation was not “fair value” for the work they did. The district
court reasoned that Plaintiffs had “failed to create a genuine issue of material fact as to whether it
would be unjust for Defendants to retain the benefit provided by Plaintiffs.”
On appeal, Plaintiffs argue that the district court ignored both contradictory evidence
indicating that Plaintiffs actually received less than $1.3 million from defendants, and Michael’s
testimony that any payments were merely reimbursement for costs incurred from 2009 to 2016.
According to Plaintiffs, they were never compensated for Michael Grassi’s time or intellectual and
technological contributions to the ablation casting, particularly his contributions prior to 2009.
This argument is at odds with Michael Grassi’s own testimony that the nearly $700,000 he
received from Defendants was his draw from the 50/50 partnership with John Grassi. Moreover,
Plaintiffs must also offer evidence from which a jury could conclude it was “unjust” for Defendants
to retain the benefit of Plaintiffs’ time and services. Andersons, 348 F.3d at 502. Plaintiffs fail to
point to any testimony or documents suggesting that they suffered any detriment, much less a
substantial one, as a result of their efforts. When asked at oral argument to articulate the harm
they had suffered, Plaintiffs asserted that detriment was “inherent” in their claim that they
performed work for Defendants but did not receive compensation for their work. That response,
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which echoes the allegations of the complaint, amounts to an argument that Defendants were
unjustly enriched “merely [because] [Plaintiffs] conferred a benefit upon” them. Id. As Andersons
and Ohio caselaw make clear, that is not sufficient to make out an unjust enrichment claim. See
id. Thus, although the evidence cited by Plaintiffs on appeal might raise factual questions about
the amount of money Plaintiffs received from Defendants and the purpose of those payments, it
does not ultimately create a genuine issue of material fact as to whether it would be unjust for
Defendants to retain the benefit provided by Plaintiffs. On this record, no reasonable jury could
find for Plaintiffs on their unjust enrichment and quantum meruit claims, and summary judgment
was appropriate.
2. Misappropriation of Trade Secrets and Ownership of Intellectual Property
In Count VI, misappropriation of trade secrets, Plaintiffs allege that Defendants licensed
the ablation casting technology Plaintiffs had developed without their consent. Defendants
counterclaimed for a declaratory judgment that Alotech owns all the intellectual property in
ablation casting that it uses in its business and sells to third parties. The district court granted
Defendants’ motion for summary judgment on both claims, concluding that the IP Agreement and
the Patent Assignment established beyond dispute that Plaintiffs have no legally cognizable
ownership right in the intellectual property at issue. Michael Grassi’s testimony that his signature
had been forged, the district court explained, was “self-serving” and uncorroborated by other
evidence, and could not create an issue of material fact as to the agreements’ authenticity and
validity.
A plaintiff may properly demonstrate an issue of fact by pointing to a wide range of
materials, including depositions and affidavits. Fed. R. Civ. P. 56(c)(1)(A). “A court may not
disregard evidence merely because it serves the interests of the party introducing it.” Harris v.
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J.B. Robinson Jewelers, 627 F.3d 235, 239 (6th Cir. 2010) (citing Niemi v. NHK Spring Co., 543
F.3d 294, 300 (6th Cir. 2008) (“[Plaintiff’s] affidavit, albeit arguably self-serving, is not ‘no
evidence.’” (alteration in original))); see also Davis v. Gallagher, 951 F.3d 743, 750 (6th Cir.
2020). Michael’s specific and repeated sworn deposition testimony that the signatures were forged
(see, e.g., R. 24-2, PageID 432–34)—uncontroverted by prior or subsequent statements or
actions—is therefore sufficient to create a question of fact as to the authenticity of the Agreements.
See Harris, 627 F.3d at 239; Churchwell v. Bluegrass Marine, Inc., 444 F.3d 898, 904 (6th Cir.
2006) (“Plaintiff’s testimony creates sufficient evidence to create a genuine issue of material
facts[.]”) This is so even though the testimony came from Michael Grassi himself. Further, that
testimony was corroborated by Rizzuti, who testified Michael told him that both the IP Agreements
and the Patent Assignment were forged. (R. 24-6, PageID 1183–84) Defendants urge us to
disregard this testimony because Rizzuti offered it only after this lawsuit was filed. It is not our
role, however, to gauge the value of a witness’s testimony; we merely ask whether a reasonable
jury could find the evidence as a whole to be sufficient to render a verdict in favor of the
nonmoving party. Anderson, 477 U.S. at 248.
The district court relied heavily on four other pieces of evidence that it determined weighed
conclusively in Defendants’ favor. First, the court relied on the notarized 2017 Patent Assignment.
But though a notarized document is “self-authenticating” and presumed to be admissible, see Fed.
R. Evid. 902(8), nothing in the Rule suggests it is unassailable. Despite the presence of a notary
seal, a reasonable jury may find an acknowledged signature to be forged based on other evidence
in the record. Defendants offered conflicting testimony on the circumstances of the signature.
Hawker testified specifically that she was the only person who saw Michael sign the document
and that no one else was near her desk at the time. (R. 24-5, PageID 1124) John Grassi, however,
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first claimed that he was not in the room while Michael signed, then changed his mind, testifying
that he had in fact witnessed the signing after Hawker “beckoned [him] over.” (R. 24-4, PageID
908) From this disputed evidence, a reasonable jury might find Hawker’s testimony that she
witnessed Michael Grassi signing the document not credible. And that finding might in turn cast
doubt on the authenticity of the Patent Assignment. Of course, a reasonable jury might also find
the notary stamp to be compelling, and Michael’s account of forgery unbelievable. But it is for
the jury to weigh that evidence and assess credibility; it is not the province of the court. Anderson,
477 U.S. at 255.
Second, Michael Grassi admitted that he offered a DynoPro employee a copy of the IP
Agreement and signed that agreement on October 22, 2012, the same day Defendants claim he
executed the Agreement with Alotech. The district court interpreted this as evidence that Michael
in fact signed the IP Agreement offered by Alotech. But this evidence necessarily proves only that
Michael was presented with the Agreement on or before October 22, 2012—something he does
not dispute. Moreover, Michael signed the DynoPro agreement as “Michael J. Grassi” and
initialed every page; other documents offered by Hawker as exemplars also bear the signature of
“Michael J. Grassi.” (R. 24-7, PageID 1239–43; R. 24-3, PageID 671) In contrast, the October
25 copy of Defendants’ Agreement is signed by “Mike J. Grassi,” the October 22 copy is signed
by “Michael J. Grassi President,” and neither copy contains initialed pages. A reasonable jury
might conclude from these discrepancies that the IP Agreements were forged.
Third, the district court was also persuaded by the affidavit of one of Alotech’s attorneys,
who stated that on October 25, 2012, he received from Alotech an e-mail attaching an image of
the October 25 IP Agreement signed by “Mike J. Grassi,” along with similar executed agreements
from eight other individuals. (R. 36, PageID 1537; R. 24-8, PageID 1266) That statement is
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corroborating evidence of Defendants’ position—that multiple Alotech employees signed those
agreements on October 25—but it does not establish beyond dispute that Michael Grassi himself
signed the Agreement that was included in the email.
Fourth, the district court determined that Michael Grassi’s failure to object to the licensing
agreement with Honda—which described various pieces of technology as Alotech intellectual
property, including intellectual property that Michael claimed he developed—contradicted his
claim that he did not sign away that intellectual property. But Michael testified that he agreed to
the list in order to assure Honda that Alotech owned what it was licensing and that there were no
potential title issues as to the underlying technology. (R. 24-2, PageID 372, 383–84, 395, 441–
44) He further testified that he viewed Alotech as belonging to both himself and John Grassi, (R.
24-2, PageID 439–40, 443–44; R. 24-13, PageID 1368), a claim supported by the affidavit of the
brothers’ mother that John Grassi told her in 2011 that he and Michael planned to split evenly the
profits from their ablation casting project. (R. 26-1, PageID 1458) Rizzuti also testified at his
deposition that Michael had told him about the 50/50 deal early in their work together, and
informed him around the time of the Honda deal that the split had been modified to 65/35, with
Rizzuti to receive 40 percent of Michael’s share. (R. 24-6, PageID 1157, 1159, 1179–81) A
reasonable jury might therefore accept Michael’s explanation that in approving the list, he did not
believe he was signing away his intellectual property because he believed he had a stake in
Alotech. Additionally, although the attorney who worked on that list on behalf of Alotech, Jay
Moldovanyi, averred his belief that it enumerated items of intellectual property that had been
developed by Alotech and belonged to Alotech, Moldovanyi had previously been engaged to
represent CFOM and another of Michael Grassi’s companies on unrelated matters. (R. 24-9,
PageID 1277–78) Michael testified at his deposition that he believed Moldovanyi was
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“representing [his] interests” and knew he was “independent of John,” statements that a jury could
find pertinent to Michael’s lack of objection to the licensing agreement. (R. 24-2, PageID 456)
The record makes clear that there are substantial issues of material fact as to whether
Michael Grassi’s signatures on the IP Agreements and the Patent Assignment were forged. In
concluding those signatures were authentic despite the evidence to the contrary, the district court
resolved factual questions that belong in the domain of the jury. We therefore reverse the district
court’s grant of summary judgment to Defendants on Plaintiffs’ claim of misappropriation of trade
secrets and on Defendants’ counterclaim for declaratory judgment regarding ownership of
intellectual property. These issues are remanded for further proceedings.
B. Challenges to Decisions at Trial
1. Exclusion of Trial Exhibit 8 and Michael Grassi’s testimony regarding Trial Exhibit 59
We review for abuse of discretion the district court’s evidentiary rulings and subsequent
denial of Plaintiffs’ motion for a new trial based on those rulings. Cummins v. BIC USA, Inc., 727
F.3d 506, 509–10 (6th Cir. 2013). An abuse of discretion is established if the district court applies
the incorrect legal standard, misapplies the correct legal standard, or relies upon clearly erroneous
findings of fact. Id. But we reverse “only if we are firmly convinced of a mistake that affects
substantial rights and amounts to more than harmless error.” Lyngaas v. Ag, 992 F.3d 412, 430–
31 (6th Cir. 2021) (quoting United States v. Baldwin, 418 F.3d 575, 579 (6th Cir. 2005)).
The abuse of discretion standard also applies to a district court’s application of the law-of-
the-case doctrine. Rouse v. DaimlerChrysler Corp., 300 F.3d 711, 715 (6th Cir. 2002). Under that
doctrine, a court’s ruling should “continue to govern the same issues in subsequent stages of the
same case” in the absence of “extraordinary circumstances such as where the initial decision was
-15- No. 20-3358, Michael Grassi, et al. v. John Grassi, et al.
‘clearly erroneous and would work a manifest injustice.’” Christianson v. Colt Indus. Operating
Corp., 486 U.S. 800, 815–17 (1988) (quoting Arizona v. California, 460 U.S. 605, 618 n.8 (1983)).
The district court barred Plaintiffs from introducing two categories of evidence based on
its decision at summary judgment that the IP Agreements were valid, which it deemed to be the
law of the case. Specifically, it instructed the jury to disregard Michael Grassi’s testimony that
the IP Agreements were inauthentic and then affirmed that ruling in denying Plaintiffs’ motion for
a new trial. The court also excluded, on the ground of attorney-client privilege, a chain of e-mails
among Alotech employees and Michael Grassi. In those e-mails, Alotech’s counsel, Brett
Lockwood sent John Grassi a proposed “contractor work product agreement for CFOM,” very
similar in form and content to the 2012 IP Agreements, but that purportedly addressed “work that
is done for Alotech that is paid for by Alotech” and did not address the licensing of technology
“that Mike regards as belonging to CFOM.” John Grassi forwarded the e-mail chain and
attachment to Michael, who responded that it was “more in tune with what [he] would sign.”
Upon Plaintiffs’ motion for a new trial, the district court acknowledged that it had
incorrectly designated the chain as privileged but reasoned that the error was harmless because it
had already decided that the IP Agreements were valid, which established that the exhibit was not
relevant to any triable issues.
As we have explained, in ruling at the summary judgment stage that the IP Agreements
and the Patent Assignment were valid, the district court engaged in factfinding that should have
been referred to the jury. That was an error of law, and the district court’s evidentiary rulings
rested on that infirm ground. In instructing the jury to disregard Michael Grassi’s testimony and
in excluding Trial Exhibit 8, the district court abused its discretion.
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We next ask whether that abuse of discretion affected Plaintiffs’ substantial rights.
Plaintiffs’ claims of breach of contract and promissory estoppel rested on their allegations that the
parties had entered into an agreement to split the profits of the ablation casting technology, but
Defendants never paid Plaintiffs their share. The court specifically instructed the jury that
Plaintiffs “ha[d] no legally recognizable ownership interest in any of the intellectual property that
[D]efendant Alotech is using in its business . . . in connection with ablation casting” and that the
IP Agreements and Patent Assignment were “valid and enforceable.” Thus, Defendants were able
to counter Plaintiffs’ evidence that they “made valuable contributions to Alotech’s process” by
using the court’s evidentiary rulings to argue that “whatever contributions were made were owned
by Alotech under the [IP Agreements].” The court’s erroneous exclusion of Trial Exhibit 8, a
chain of e-mails among Alotech employees and Michael Grassi, denied Plaintiffs the opportunity
to provide evidence to the jury in support of Michael Grassi’s claim that the IP Agreements were
forgeries.
Defendants also argued generally that Michael Grassi’s testimony on the details of the
partnership agreement was self-serving and constantly changing, exhibiting a “willingness . . . to
change his story, to make up events, to do or say anything to try to get what he wants in this case.”
They bolstered this narrative by taking advantage of the emails’ exclusion to impeach Michael:
when Michael cited the email chain as evidence of the oral partnership agreement, Defendants
questioned him as to why he had not presented the chain to the jury.
The jury ultimately returned a verdict in favor of Defendants. But additional testimony
and documents suggesting that the IP Agreements were forged might well have led the jury to
reach the opposite conclusion. Such evidence would have undermined Defendants’ argument that
a partnership between the brothers was implausible given that Michael had already signed over to
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Alotech the intellectual property he contributed; it would also have impacted the jury’s view of
Michael’s and John’s credibility. In light of these possibilities, we conclude that because the
district court’s errors impacted the outcome of the trial, the errors affected Plaintiffs’ substantial
rights and were not harmless. We accordingly reverse the judgment and remand for a new trial.
2. Promissory Estoppel Jury Instruction
Finally, Plaintiffs argue persuasively that the district court erred in instructing the jury to
apply the clear and convincing evidence standard to Plaintiffs’ promissory estoppel claim, rather
than the ordinary preponderance of the evidence standard. However, because we remand for a
new trial on that claim based on the district court’s evidentiary rulings, we need not and do not
reach the merits of this challenge.
III. CONCLUSION
For the foregoing reasons, we AFFIRM the district court’s grant of summary judgment
dismissing Plaintiffs’ unjust enrichment and quantum meruit claims. We REVERSE the court’s
grant of summary judgment on Plaintiffs’ misappropriation of trade secrets claim and Defendants’
counterclaim for declaratory judgment regarding the ownership of intellectual property,
REVERSE the court’s judgment after trial on Plaintiffs’ breach of contract and promissory
estoppel claims, and REMAND for a new trial.
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