MERCHANTS PUB. v. Maruka Machinery Corp. of America, 4:91-CV-86.

• Decision Date: 13 May 1992
• Docket Number: No. 4:91-CV-86.,4:91-CV-86.
• Parties: MERCHANTS PUBLISHING CO., Plaintiff, v. MARUKA MACHINERY CORP. OF AMERICA and Akiyama Corp. of America, Defendants.
• Court: U.S. District Court — Western District of Michigan

800 F. Supp. 1490

MERCHANTS PUBLISHING CO., Plaintiff, v. MARUKA MACHINERY CORP. OF AMERICA and Akiyama Corp. of America, Defendants.

No. 4:91-CV-86.

United States District Court, W.D. Michigan, S.D.

May 13, 1992.

Alan H. Silverman, Barbara H. Donnelly, Alan H. Silverman, P.C., Kalamazoo, Mich., for plaintiff.

Sharon J. LaDuke, George A. Sumnik, Jaffe, Snider, Raitt & Heuer, P.C., Detroit, Mich., James P. McCabe, Kelley, Drye & Warren, New York City, John J. Quinn, Los Angeles, Cal., for defendant Maruka Machinery Corp. of America.

Grant J. Gruel, Thomas R. Behm, Gruel, Mills, Nims & Pylman, Grand Rapids, Mich., for defendant Akiyama Corp. of America.

MEMORANDUM OPINION AND ORDER

ROBERT HOLMES BELL, District Judge.

Maruka Machinery Corporation of America ("Maruka") moves, pursuant to Fed. R.Civ.P. 12(b)(6), to dismiss Counts V, VI, and VII in Merchants Publishing Company's ("Merchants") First Amended Complaint. For the reasons that follow, the Court GRANTS the motion.¹

This action began about a year ago. Merchants, complaining of faulty printing presses it received from Maruka, filed a complaint, alleging a variety of contractual, statutory and fraud/misrepresentation-based claims.

Shortly thereafter, Maruka moved, pursuant to Fed.R.Civ.P. 12(b)(6), to dismiss certain claims in that complaint. Some of those claims were: Count IV, alleging fraud and misrepresentation; Count V, alleging innocent and negligent misrepresentation; and Count VI, requesting rescission of contract.

The Court heard oral arguments on Maruka's motion to dismiss on October 3, 1991.² At the conclusion of the arguments, the Court granted Maruka's motion in part, dismissing, among other claims, much of the operative portions of Counts IV and V, as well as all of Count VI. See Hearing Transcript at 25-28. In its bench ruling, the Court concluded that the operative allegations in those claims were lacking. More specifically, the Court ruled that since the majority of the allegations relating to those claims spoke of Maruka's future promises, they did not speak of fraud, which requires a statement relating to a past or an existing fact. See id. at 26-28 (relying on Hi-Way Motor Co. v. International Harvester Co., 398 Mich. 330, 336, 247 N.W.2d 813 (1976); Cloverdale Equipment Co. v. Simon Aerials, Inc., 869 F.2d 934, 940 (6th Cir.1989)). The Court pointed out that these allegations were couched with the term, "would." See id. at 27-28. In addition, the Court concluded that some of the allegations in the counts spoke to Maruka's puffery, not its fraud. Id. (relying on Van Tassel v. McDonald Corp., 159 Mich.App. 745, 750, 407 N.W.2d 6 (1987)). The Court accordingly held that certain portions of Counts IV and V and all of Count VI could not be maintained as fraud/misrepresentation-based claims.

Subsequently, Merchants filed its First Amended Complaint. Two general sets of changes are apparent in the amended complaint: first, Merchants has added a new party defendant, Akiyama Corporation of America ("Akiyama"), and new allegations relating to Akiyama; second, the new complaint re-alleges some of the previously dismissed counts.

Focusing on the second set of changes, which is at issue here, the amended complaint recasts a fraud and misrepresentation claim (as Count V); an innocent and negligent misrepresentation claim (as Count VI); and a rescission of contract claim (as Count VII). As recasted, the operative allegations are as follows:

Count V — Fraud and Misrepresentation

* * * * * *

57. Akiyama and/or Maruka made the following representations to Merchants knowing them to be false or with reckless disregard as to the truth or falsity of the statements:

a. The contract between the parties was for Akiyama's "new model" press;

b. The Supplemental Sales Agreement, executed between the parties on September 19, 1988, provided for "electronic sheet detection devices ... able to detect whether the subject has been printed on or not." (Item 1, paragraph A).

* * * * * *

Count VI — Innocent and Negligent Misrepresentation

* * * * * *

63. Akiyama and/or Maruka made the following representations to Merchants negligently which representations it should have known were false:

a. The contract between the parties was for Akiyama's "new model" press;

b. The Supplemental Sales Agreement, executed between the parties on September 19, 1988, provided for "electronic sheet detection devices ... able to detect whether the subject has been printed on or not." (Item 1, paragraph A).

* * * * * *

Count VII — Rescission of Contract

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72. Merchants signed the Additional Agreement in reliance on Akiyama's and/or Maruka's representations including, but not limited to the following:

a. The new Akiyama presses, models BT 640 and BT 640 BCL, purchased by Merchants were fully operable and free from defects;

b. Maruka and/or Akiyama had agreed to and had the ability to modify the presses to include certain mechanical features, including the incorporation of "electronic sheet detection devices ... able to detect whether the subject has been printed or not." (Supplemental Sales Agreement, item 1, paragraph A).

Facing this new complaint, Maruka again moves, pursuant to Fed.R.Civ.P. 12(b)(6), to dismiss the fraud/misrepresentation-based claims, Counts V, VI, and VII, of the First Amended Complaint. Maruka advances two arguments: (1) that the law of the case doctrine precludes re-litigation of the realleged claims that are substantially similar; and (2) that the Merchants's re-alleged claims are not grounded on...