That's a misunderstanding.
Why do you say "a misunderstanding", instead of that's misunderstanding?
Why do you need an article for this gerund?
Misunderstanding is a noun both countable and uncountable:
[ C or U ] an occasion when someone does not understand something correctly:
- There must be some misunderstanding. I never asked for these chairs to be delivered.
- His ridiculous comments showed a complete misunderstanding of the situation.
Other usage examples:
If there is any misunderstanding and discord between you and Mary, I can't blame her for it at a all.
There are materials for misunderstanding here.
"I am very, very grateful to you," she said in French, "but I hope it was all a misunderstanding and that no one is to blame for it."
Words that end in -ing are not always gerunds or -ing forms of verbs. For example,
building is very often used as a noun
That's a building you don't want to enter.
Yet, building can be a gerund:
Building a building is hard work.
The bolded building is a gerund. The building after the indefinite article is a count noun that is not considered a gerund.
The same applies to misunderstanding. It is a common noun, just like building. And that's how it is used in the sentence you ask about.
But it can be a gerund:
Misunderstanding you makes me ill.
(Historically, building and similar words used as common nouns may have originated as gerunds, but I'm not sure.)