Gonzalez Prod. Sys., Inc. v. Martinrea Int'l Inc.
| Decision Date | 17 November 2014 |
| Docket Number | Case No. 13-cv-11544 |
| Parties | GONZALEZ PRODUCTION SYSTEMS, INC., Plaintiff, v. MARTINREA INTERNATIONAL INC., MARTINREA HEAVY STAMPINGS INC., Defendants and Counter-Plaintiff. |
| Court | U.S. District Court — Eastern District of Michigan |
Honorable Gershwin A. Drain
Plaintiff, Gonzalez Production Systems, Inc. ("Gonzalez"), commenced this action on April 4, 2013 against Defendant Martinrea International Inc. ("Martinrea International"). See Dkt. No. 1. On May 17, 2013, Plaintiff filed an Amended Complaint adding Martinrea Heavy Stampings, Inc. ("Martinrea Stampings") as an additional Defendant in this dispute. See Dkt. No. 8. In the Amended Complaint, Plaintiff contends that both Martinrea International and Martinrea Stampings (collectively "Martinrea" or "Defendants"), are liable for breach of contract, or, in the alternative, liable in equity under the theory of promissory estoppel. Id.
On June 17, 2013, Defendant Martinrea Stampings filed a counterclaim against Plaintiff for breach of contract on behalf of Plaintiff. See Dkt. No. 201. Additionally, Martinrea has sought a declaratory judgment against Plaintiff regarding a purported settlement that occurred in November of 2011. Id.
Presently before the Court are two Motions for Summary Judgment filed by both the Plaintiff and the Defendants (collectively "the Parties"). The Defendants' Motion seeks Summary Judgment for the dismissal of Plaintiff's First Amendment Complaint. See Dkt. No. 88. Plaintiff's Motion seeks Summary Judgment on the Affirmative Defenses advanced by the Defendants, and Defendant Martinrea Stampings's request for a Declaratory Judgment regarding a disputed settlement that occurred in November of 2011. See Dkt. No. 86. Both Motions are fully briefed, and the Court heard oral argument on the Motions on November 13, 2014. For the following reasons, the Court will DENY Defendants' Motion [#88], and GRANT Plaintiff's Motion [#86].
This case is a breach of contract action between automotive supply companies. Plaintiff, Gonzalez, is an automotive supplier that designs and builds robotic welding systems for its customers. Plaintiff's customers are automotive manufactures and other automotive suppliers. Defendants, Martinrea International and Martinrea Stampings, are an automotive supplier.
In October of 2010, Gonzalez and Martinrea entered into an agreement in which Gonzalez would manufacture an assembly line for Martinrea using Martinrea's equipment. The ultimate end user of the assembly line was the Ford Motor Company ("Ford"). The Parties agreed that Martinrea would supply the robots and other parts of the assembly line. The Parties, further, agreed that the assembly line should produce one part every 44.3 seconds.
Gonzalez began to make the assembly line using Martinrea's robots, weld guns, controllers, and other equipment. Throughout the process, Gonzalez purportedly advised Martinrea that it would need to use different equipment in order to create an assembly line that met the Parties' expectation. Martinrea insisted that Gonzalez use Martinrea's parts. Gonzalezasserts that it spent a considerable amount of time attempting to make the system work with Martinrea's equipment. Ultimately, it is undisputed that Gonzalez did not produce the desired assembly line as requested. The Parties dispute the cause of the failure to make a part in the desired time interval.
The Court has diversity jurisdiction over this matter pursuant to 28 U.S.C. § 1332. Accordingly, pursuant to the Erie doctrine, Michigan law will govern the substantive issues raised herein while federal law will govern the procedural matters. See Erie R.R. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938) (); Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 417, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996) (); Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S. Ct. 1020, 1021, 85 L. Ed. 1477 (1941) (); see also Performance Contracting Inc. v. DynaSteel Corp., 750 F.3d 608, 611 (6th Cir. 2014).1
Federal Rule of Civil Procedure 56(a) empowers the court to render summary judgment "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." See Redding v. St. Eward, 241 F.3d 530, 532 (6th Cir. 2001). The Supreme Court has affirmed the Court's use of summary judgment as an integral part of the fair and efficient administration of justice. The procedure is not a disfavoredprocedural shortcut. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986); see also Cox v. Kentucky Dept. of Transp., 53 F.3d 146, 149 (6th Cir. 1995).
The standard for determining whether summary judgment is appropriate is " 'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.' " Amway Distributors Benefits Ass'n v. Northfield Ins. Co., 323 F.3d 386, 390 (6th Cir. 2003) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)). The evidence, and all reasonable inferences, must be construed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Redding, 241 F.3d at 532 (6th Cir. 2001). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original); see also National Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d 900, 907 (6th Cir. 2001).
If the movant establishes by use of the material specified in Rule 56(c) that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law, the opposing party must come forward with "specific facts showing that there is a genuine issue for trial." First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 270 (1968); see also McLean v. 988011 Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000). Mere allegations or denials in the non-movant's pleadings will not meet this burden, nor will a mere scintilla of evidence supporting the non-moving party. Anderson, 477 U.S. at 248, 252. Rather, there must be evidence on which a jury could reasonably find for the non-movant. McLean, 224 F.3d at 800 (citing Anderson, 477 U.S. at 252).
As previously mentioned, both Parties have put forth Motions for Summary Judgment. Defendants' Motion seeks Summary Judgment for the dismissal of Plaintiff's First Amended Complaint. See Dkt. No. 88. Plaintiff's Motion seeks Summary Judgment on the Affirmative Defenses advanced by the Defendants, and Defendant Martinrea Stampings's request for a Declaratory Judgment regarding the disputed settlement that occurred in November of 2011. See Dkt. No. 86. The Court will address each Motion in turn.
Defendants seek summary judgment with regard to both of Plaintiff's claims. Defendants argue that Plaintiff's Amended Complaint should be dismissed because the Plaintiff entered a "fixed-price contract" and it is undisputed that Plaintiff "never designed, built, and installed a Machine capable of the contractually required Cycle Time[.]" Dkt. No. 88 at 29. Furthermore, the Defendants argue that Plaintiff's promissory estoppel claim should be dismissed in light of the Plaintiff's reliance on an alleged promise to engage in future negotiations despite the fact that there is an express contract covering "all labor and material necessary" to complete Plaintiff's work. See Dkt. No. 88 at 21.
Plaintiff frames the case in an entirely different manner. According to Plaintiff, the Parties entered into a bilateral contract, whereupon the Defendants were the first party to breach their contractual responsibility. See Dkt. No. 99 at 5. Plaintiff maintains that there is "[v]oluminous evidence and witness testimony" that "demonstrates that Martinrea breached its contractual responsibilities to supply [] robots and related equipment necessary for Gonzalez to perform its work." Id. Furthermore, while Defendants argue that there was only a promise toengage in future negotiations; the Plaintiff argues that Defendants unambiguously promised to compensate Plaintiff for additional work completed. Id. at 14.
The Court agrees with Plaintiff. After reviewing the Motions, and examining the many Exhibits provided by both parties, the Court will deny Defendants' Motion for Summary Judgment because questions of fact exist with respect to critical issues in dispute. An explanation of the Courts reasoning is discussed herein.
The Honorable Judge Marianne O. Battani in the Eastern District of Michigan neatly outlined the proper approach to contract interpretation by explaining that "[t]he cardinal rule of contract interpretation is to ascertain the intent of the parties." Gerken Paving Inc. v. LaSalle Grp. Inc., No. 10-CV-14905, 2012 WL 3079249, at *4 (E.D. Mich. July 30, 2012) aff'd, 558 F. App'x 510 (6th Cir. 2014). The intent of parties is to be discerned from the agreement itself:
[W]hen the language of an agreement leaves no doubt...
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