Anaheim Industries, Inc. v. General Motors Corporation, No. 01-06-00440-CV (Tex. App. 12/20/2007)
| Decision Date | 20 December 2007 |
| Docket Number | No. 01-06-00440-CV.,01-06-00440-CV. |
| Court | Texas Court of Appeals |
| Parties | ANAHEIM INDUSTRIES, INC. & FRANK GILCHRIST, INC. d/b/a TEXAS STAGECOACH OF HOUSTON, Appellants, v. GENERAL MOTORS CORPORATION, Appellee. |
On Appeal from the 55th District Court, Harris County, Texas, Trial Court Cause No. 2002-62430.
Panel consists of Chief Justice RADACK and Justices ALCALA and BLAND.
Anaheim Industries, Inc. (Anaheim) and Frank Gilchrist, Inc. d/b/a Texas Stagecoach of Houston (Stagecoach) (collectively, the upfitters) appeal the trial court's grant of summary judgment in favor of General Motors (GM), claiming that, under Michigan law, the trial court erred in granting GM summary judgment on their claims for (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) unconscionability; (4) economic duress; (5) promissory estoppel; (6) negligent misrepresentation; and (7) fraud. Because the trial court properly concluded that the upfitters failed to raise a genuine issue of material fact in support of any of these claims, we affirm.
The upfitters are engaged in the business of customizing vans, trucks, and other vehicles by removing factory-installed seating and other fixtures and installing premium products and materials in their place. The upfitters performed custom conversions for GM as well as other vehicle manufacturers and dealers.
GM provided its vehicles to upfitters, also known as converters, through its Approved Converters Program. GM provided these converters with its Approved Converters Program Manual, which sets forth policies and procedures to follow to qualify as an approved converter as well as for ordering and processing the GM vehicles. If an upfitter qualified and GM selected it as an approved converter, they executed a "pool converter agreement" with the converter.
The converter agreement:
• reserves to GM the right to change the manual in writing at any time;
• reserves to GM the absolute right to accept or reject orders;
• does not require GM to provide any particular number or any specific model of vehicle;
• allows for termination at any time by either party with written notice;
• provides notice that "no waiver or modification of any term of this agreement or the creation of additional terms shall be valid or binding upon [GM] unless made in writing, executed on its behalf"; and
• contains a merger clause providing that the documents constituted the sole and complete agreement of the parties and that they had no other agreements, either oral, or written, between them with respect to their subject matter.
Stagecoach and Anaheim entered their first pool converter agreements with GM in approximately 1988. GM from time to time asked the upfitters to execute new agreements with revised terms, and they did so.
Over the years, consumer demand and industry developments led GM to upgrade the interior seating and other features available as factory-installed in its standard vehicle packages. As the formerly custom details became standard features installed on the GM assembly line, the demand for custom conversion dwindled, and the number of vehicles supplied to the upfitters declined. Also, without notice to the upfitters, GM began installing newly designed standard seating with integrated seatbelts in its vehicles. This change in seat design made the installation of custom seating unprofitable, which, until then, had been a popular custom feature.
As GM made fewer numbers and models of vehicles available to the upfitters, the upfitters could not meet the preferred volume of 300 vehicles set forth in the manual. In December 1998, GM put Stagecoach on probation in part because it had not converted the preferred volume of vehicles. Around the same time, GM had a new computer system installed at Stagecoach for ordering vehicles. The system did not work, though, and Stagecoach was unable to order vehicles for four months. GM terminated its relationship with Stagecoach in May 1999.
Throughout this period, Anaheim continued its relationship with GM, but found it increasingly difficult to turn a profit with the limited number and types of vehicles made available for conversion. As a result, Anaheim voluntarily terminated its agreement with GM in 2001.
In 2002, both upfitters sued GM for breach of contract, breach of a covenant of good faith and fair dealing, economic duress, promissory estoppel, negligent misrepresentation, and fraud. GM moved for summary judgment under both the traditional and no-evidence standard on the upfitters' claims, which the trial court granted. This appeal followed.
GM moved for summary judgment against the upfitters under both traditional and no-evidence grounds. See TEX. R. CIV. P. 166a(c), (i). The traditional standard for summary judgment requires a movant to show that no genuine issue of material fact exists and that the trial court should grant judgment as a matter of law. Tex. R. Civ. P. 166a(c); KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). We view all evidence in a light favorable to the nonmovant and indulge every reasonable inference in the nonmovant's favor. Provident Life & Accid. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). We review a no-evidence summary judgment de novo by construing the record in the light most favorable to the nonmovant and disregarding all contrary evidence and inferences. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). A nonmovant meets its burden and defeats a no-evidence motion by bringing forth more than a scintilla of probative evidence that raises a genuine issue of material fact. See TEX. R. CIV. P. 166a(i); Coastal Conduit & Ditching, Inc. v. Noram Energy Corp., 29 S.W.3d 282, 284 (Tex. App.-Houston [14th Dist.] 2000, no pet.). When, as here, the trial court's order does not specify the grounds for granting summary judgment, we affirm if any of the grounds raised by the movant is meritorious. FM Props. Operating co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000); Oliphint v. Richards, 167 S.W.3d 513, 516 (Tex. App.-Houston [14th Dist.] 2005, pet. denied).
Both converter agreements contain choice of law clauses specifying that Michigan law applies to any dispute arising under them.
Initially, we determine whether, as the upfitters claim, the converter agreements are ambiguous and, to the extent they are not, the manner in which they define the parties' relationship.
We depend on both the common law and the UCC in making these determinations. Among other goals, the UCC aims "to make uniform the law among various jurisdictions." Power Press Sales Co. v. MSI Battle Creek Stamping, 238 Mich. App. 173, 180, 604 N.W.2d 772, 776 (1999) (quoting MICH. COMP. LAWS ANN. § 440.1102(c) (West 1994). Accordingly, Michigan courts have found it appropriate to "seek guidance from the decisions of other jurisdictions" when interpreting UCC provisions. Id.; see Conagra, Inc. v. Farmers State Bank, 237 Mich. App. 109, 121, 602 N.W.2d 390, 396 (1999). In keeping with Michigan's judicial policy, we, too, look to other jurisdictions for guidance in interpreting the UCC provisions at issue.
"In ascertaining the meaning of a contract, we give the words used in the contract their plain and ordinary meaning that would be apparent to a reader of the instrument." Rory v. Cont'l Ins. Co., 473 Mich. 457, 464, 703 N.W.2d 23, 28 (2005). Further, "[w]e read contracts as a whole, giving harmonious effect, if possible, to each word and phrase." Wilkie v. Auto-Owners Ins. Co., 469 Mich. 41, 50 n.11, 664 N.W.2d 776, 781 n.11 (2003); see also Klapp v. United Ins. Group Agency, Inc., 468 Mich. 459, 468, 663 N.W.2d 447, 453 (2003) ().
The upfitters contend that the following manual provision renders the converter agreements ambiguous:
Annual Volume: The preferred annual volume is 300 units. An exception would be low volume manufacturers for which special consideration is required due to a strong reputation for customer satisfaction, special geographic locations or strong and long standing relationships with local Chevrolet dealers. Facilities and sales support should be adequate to grow over time — with minimum inventory turn rates of 6 times per year.
Specifically, the upfitters claim that this provision potentially conflicts with the express disclaimer that GM is not obligated to deliver any particular number or type of vehicles to its upfitters, and urge us to allow the jury to find whether the annual volume provision imposes a requirement that the upfitters customize at least 300 vehicles per year and, in turn, a corresponding requirement that GM provide sufficient vehicles.
The threshold issue of whether contract language is clear or ambiguous is a question of law for the court. Wilkie, 469 Mich. at 61, 664 N.W.2d at 787; Port Huron Educ. Ass'n v. Port Huron Area Sch. Dist., 452 Mich. 309, 323, 550 N.W.2d 228, 237 (1996). Contract language is ambiguous if it "may reasonably be understood in different ways." Raska v. Farm Bur. Ins. Co., 412 Mich. 355, 362, 314 N.W.2d 440, 441 (1982), quoted in UAW-GM Human Res. Ctr. v. KSL Recreation Corp., 228 Mich. App. 486, 491, 579 N.W.2d 411, 414 (1998). Courts must not create ambiguity where none exists. Mahnick v. Bell Co., 256 Mich. App. 154, 159, 662 N.W.2d 830, 833 (2003). Even if a contract is inartfully worded, it is not ambiguous if it "fairly admits of but one interpretation." Meagher v. Wayne State Univ., 222 Mich. App. 700, 722, 565 N.W.2d 401, 415 (1997).
Parol evidence may not be used to contradict or vary the terms of an unambiguous...
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