Wmanning, thank you for your tip and I also found another solution for the issue.

For those who has the workflow between SU and AutoCAD,
There are option to check. If you use 2009, Go to Tools-Option in the top menu bar. It opens up the option dialogu box. Under the User Preference tab, in the Associatice Dimensioning category, there is a check box. If you check this option, the issue will be solved. I will post a image.

P.S: I am sorry. I know this is rather CAD issue but I have been frusttrated by the issue for a long time. I think this will be a good tip to whom has the same issue.
option.png

Indeed the FM tool (as well as intersect) has issues with creating faces whose edges are about 1mm or 1/16". It used to have this problem in V 5 and 6 as well.

The general workaround is to temporarily scale everything up (say by 10), do the FM then scale back.