DELPHI Auto. Sys. LLC. v. UNITED PLASTICS INC.
| Decision Date | 31 March 2011 |
| Docket Number | No. 09-4241,09-4241 |
| Parties | DELPHI AUTOMOTIVE SYSTEMS, LLC, Plaintiff-Appellant, v. UNITED PLASTICS, INC., et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Sixth Circuit |
OPINION TEXT STARTS HERE
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO
BEFORE: McKEAGUE and WHITE, Circuit Judges; MAYS, District Judge.*
McKeague, Circuit Judge. Delphi Automotive Systems, LLC ("Delphi") contracted with United Plastics, Inc. ("United Plastics") for the sale of scrap metal. After United Plastics received all material it purchased pursuant to two purchase orders, but failed to pay in full, Delphi filed a complaint alleging a number of state law claims against United Plastics and various defendants who were involved either in the sale of material by Delphi to United Plastics or in transactions occurring after the initial sale involving the Delphi scrap metal. Specifically, Delphi named as defendants Robert C. Geib ("Geib"), Abraham Hooshiarnejad ("Hooshiarnejad"), Rodney Cronin ("Cronin"), Michael France ("France"), American Recycling Concepts ("American"), and Alright International, Inc. ("Alright"). Delphi also filed a motion for summary judgment, which the district court granted as to Delphi's contract claim against United Plastics. The district court denied Delphi's motion as to its claims against all other defendants, and then entered judgment on their behalf sua sponte. Delphi now appeals. For the reasons that follow, we find that the district court did not abuse its discretion in entering judgment sua sponte in favor of defendants, and we AFFIRM the district court's grant of summary judgment.
Delphi, a Delaware limited liability company with its headquarters in Troy, Michigan, filed a complaint in the United States District Court for the Northern District of Ohio, raising various claims arising from an alleged breach of contract by United Plastics, an Ohio corporation with its principal place of business in Franklin County, Ohio. After submitting two more amended complaints, Delphi filed its third amended complaint against United Plastics, Geib, Hooshiarnejad, Cronin, France, American, and Alright, all Ohio residents or Ohio corporations with principal places of business in Ohio.1 The complaint raised claims of breach of contract, unjust enrichment, action on account, negligent misrepresentation, promissory estoppel, intentional misrepresentation/fraudulent inducement, promissory fraud, conversion, and civil conspiracy. Delphi sought to recover $1,658,516.73, the amount it alleged United Plastics still owed Delphi, pursuant to the parties' purchase order contracts. United Plastics, Geib, Hooshiarnejad, France, and Alright filed a joint answer to the complaint, and Cronin filed his own answer to the complaint.2
On March 2, 2009, Delphi filed a motion for summary judgment against all defendants. The motion and attached exhibits established the following undisputed facts. United Plastics, owned and operated by Hooshiarnejad, bid on and won the right to enter into purchase orders to purchase plastic coated copper wire and tin-plated scrap material ("scrap metal" or "the material") from Delphi. The executed bid sheets were submitted by Geib, who "work[ed] on behalf of United Plastics with respect to the bids, Purchase Orders and the Material received from Delphi." On December 16, 2006, after winning the bid, United Plastics issued a purchase order for the material, which stated that invoices submitted by Delphi would be paid within fifteen days. Although United Plastics picked up two loads of material between January 1 and March 31, 2007, it did not pay for the material it obtained within the time specified on the purchase order, despite the fact that France, who worked "on behalf of United Plastics with respect to the bids and the Material received from Delphi," "instructed where the Material should be stored, and took an active role in attempting to sell the Material," had secured a purchaser for that material who had already paid United Plastics.
Even though it had not received payment from United Plastics pursuant to the first purchase order, Delphi issued another request for bids by United Plastics in the second quarter of 2007. United Plastics issued a second executed bid sheet on March 18, 2007, which was accepted by Delphi and resulted in a second purchase order being submitted by United Plastics for more material.
This purchase order covered the period from April 1 to June 30, 2007 and again stated that invoices submitted by Delphi would be paid within fifteen days. During the time period covered by the second purchase order, United Plastics "or its agent" picked up approximately 900,000 pounds of material. Although invoices were issued after the pick-up of each load of material, and United Plastics admitted that it had received all material it was entitled to, it failed to pay for all the material it received in both the first and second quarter.
Specifically, United Plastics received $171,142.28 for material it picked up from Delphi during the first quarter of 2007 and then sold to a third party, but United Plastics never remitted payment to Delphi for that material. Regarding material picked up during the second quarter, Delphi asserted that "United Plastics, and its agents, Defendants Geib, France, [Hooshiarnejad] and Alright, arranged for other entities to become involved in the sale of the Delphi Material." (emphasis added). France solicited the services of Cronin, who found a buyer for almost half of the material picked up during the second quarter. The buyer then wired funds to a company owned by Cronin's son, which wire-transferred money into Alright's bank account (a company that was owned and operated by Geib). Delphi, however, was never fully compensated.
Although the facts pertaining to the actual transfer of funds remain somewhat unclear, it appears that while United Plastics agreed to pay $2,508,118.15 for all the material it received from Delphi in the first and second quarter of 2007, Alright, the company responsible for wire transfers between United Plastics and Delphi, paid Delphi only $849,601.42. Delphi attempted to collect on the remaining amount due and, in July 2007, it contacted Geib, who assured Delphi that pursuant to representations made by France, United Plastics' customer would be wiring funds to United Plastics and, in turn, United Plastics would pay Delphi. In August 2007, Geib and Hooshiarnejad met with Delphi representatives to discuss the past due amount and established proposed payment plans. After making one payment in September 2007, United Plastics failed to make any further payments, and Delphi asserted that it was still owed $1,658,516.73. Having not been fully paid for its material, Delphi requested the opportunity to inspect the remaining material. Geib contacted France, who set up a meeting in September 2007 between Delphi representatives and Hooshiarnejad, Geib, France, and Cronin at Cronin's warehouse. Cronin, who operates American, had taken possession of the material and was the last person seen with it.
In its motion for summary judgment, Delphi first argued that it was entitled to summary judgment on its breach of contract and action on account claims because "the unambiguous terms of the purchase orders" required payment by United Plastics in the full amount still due for the material picked up but not yet paid for by United Plastics. In its joint response to the motion for summary judgment filed on behalf of United Plastics, Geib, Hooshiarnejad, France, and Alright, United Plastics admitted some liability on its part (though disputing the liability of any other defendant), but challenged the amount it actually owed to Delphi. The district court concluded that there was "no ambiguity in the language of the contract," that United Plastics owed Delphi $1,658,516.73 (the full amount Delphi was seeking), and entered judgment in favor of Delphi on its breach of contract and action on account claims against United Plastics. Delphi Auto. Sys., LLC v. United Plastics, Inc., et al., Case No. 5:08-cv-00253, slip op at 8 (N.D. Ohio Sept. 9, 2009).
Delphi next argued that defendants were unjustly enriched because they received the benefit of Delphi's material, but never remitted payment for receipt of that material. Similarly, Delphi argued that all defendants were liable for conversion because they "came into possession of the Delphi Material," which was located at defendants Cronin and American's warehouse, "the Material is gone, and Delphi has not been fully paid." The district court ruled that, to the extent these two claims sought the exact amount of contract damages, they were "an alternate to recovery" to the breach of contact and action on account claims against United Plastics, and therefore they were "superfluous" as to United Plastics. Delphi Auto. Sys., at 9. As to the remaining defendants, the court first found that they "held themselves out as [United Plastics'] agents, with [United Plastics'] knowledge and approval, and that Delphi perceived them and dealt with them" as United Plastics' agents, and thus they could not be personally liable with respect to these claims. Id. Moreover, even assuming these defendants were not acting as agents of United Plastics, the court determined that "Delphi would still not be entitled to summary judgment against them on a claim of unjust enrichment because Delphi did not confer a benefit on any of them" sufficient to satisfy the requirements for this claim. Id. at 10. Additionally, Delphi did not have any ownership interest in the material once United Plastics took possession, as was required to state a claim for conversion and to recover possession of the material. Id. at 10-11.
Delphi also alleged that United Plastics, Hooshiarnejad, Geib, and Alright were liable for promissory estoppel,...
To continue reading
Request your trial