Ordos City Hawtai Autobody Co. v. Dimond Rigging Co.
| Decision Date | 20 August 2015 |
| Docket Number | Case No. 13-14909 |
| Parties | Ordos City Hawtai Autobody Company, Ltd. and Inner Mongolia OED Engine Company, Ltd., Plaintiffs, v. Dimond Rigging Company, LLC d/b/a Absolute Rigging & Millwrights, Defendant. |
| Court | U.S. District Court — Eastern District of Michigan |
Honorable Sean F. Cox
This case is, chiefly, a breach of contract action. Plaintiffs Ordos City Hawtai Autobody ("Ordos") and Inner Mongolia OED Engine Company, Ltd. ("Inner Mongolia") (collectively, "Plaintiffs") allege that Defendant Dimond Rigging Company, LLC, d/b/a Absolute Rigging & Millwrights ("ARM") breached several contracts requiring ARM to dismantle, pack, care for and ultimately transport two large pieces of automotive manufacturing equipment to Plaintiffs in China. Defendant denies that it breached any of the parties' contracts, and asserts several counterclaims against Plaintiffs. Defendant has demanded a trial by jury.
This matter is before the Court on Plaintiffs' Motion for Summary Judgment pursuant to Fed. R. Civ. P. 56. (Doc. #97). Plaintiffs seek summary judgment in their favor on all nine of Defendant's counterclaims. (Doc. #97). Plaintiffs also seek entry of judgment as to liability onCount Four of the Verified Complaint. Defendant did not timely respond to Plaintiffs' motion.1 For the reasons set forth below, the Court shall GRANT Plaintiffs' motion.
Plaintiffs Ordos and Inner Mongolia are wholly-owned subsidiaries of Hawtai Motor Group ("Hawtai"). ). Hawtai, Ordos and Inner Mongolia are organized under the laws of China, and their principal places of business are in China. (Id.) Defendant ARM is a Michigan limited liability company located in Birmingham, Michigan. (Joint Stip. Facts at ¶ 2).
In 2011, Plaintiffs purchased two pieces of automotive manufacturing equipment from a closing Chrysler plant in Twinsburg, Ohio. The first piece of equipment was a used Vernon Press and a used Schuler Cut to Length Press, including an ASRS system ("Line 7 Equipment"). . Plaintiffs also purchased a 2002 Schuler Crossbar Line ("Line 15 Equipment"). (Joint Stip. Facts ¶ 10).
Through the execution of several contracts, Plaintiffs hired ARM to perform rigging work on the purchased equipment and to arrange for the shipment of the equipment from Ohio to China. On March 31, 2011, Ordos entered into four contracts with ARM for the washing, packing, and rigging of all of the Line 7 Equipment. (Line 7 Rigging Agreements, Pl. Ex. D). The Line 7 Rigging Agreements all contain merger clauses that state:
This Agreement constitutes the complete and exclusive statement of the terms and conditions between the parties, which supersedes and merges all prior proposals,understandings and all other agreements, oral and written, between the parties relating to the subject of this Agreement.
(Pl. Ex. D at Page ID## 1244, 1247, 1255, 1261, 1267).
On June 7, 2011, Ordos and ARM entered into a contract under which ARM agreed to arrange for the transportation of the Line 7 Equipment from Ohio to China. (Pl. Ex. E). Among other things, the Line 7 Transportation Agreement states that "the Contract Price of the services . . . is $1,250,000 which covered the cost for, including but not limited to . . . Leasing or purchasing shipping containers . . . ." (Pl. Ex. E § 1.3). The Line 7 Transportation Agreement provides that "Customer [Inner Mongolia] will not be responsible for any more payment beyond the Contract Price." (Id. at § 1.5). The Line 7 Transportation Agreement also contains a merger clause identical to the one contained in the Line 7 Rigging Agreements. (Pl. Ex. E at § 5.6). According to Alan Hseuh ("Hsueh"), an employee and agent of Ordos, Ordos paid ARM the full Contract Price due under the Line 7 Transportation Agreement. (Declaration of Alan Hsueh, Pl. Ex. F at ¶ 2; Pl. Ex. F at Attachment 1 p. 2).
On August 29, 2011, Inner Mongolia and ARM entered into a Rigging Agreement by which Inner Mongolia agreed to pay $760,000 to ARM in exchange for ARM's "rigging, dismantling, washing, packing, and loading of the Line 15 Equipment." . The Line 15 Rigging Agreement provides, in pertinent part:
(Line 15 Rigging Agreement, Pl. Ex. G at pp. 1, 3). Ronald Lech, President of ARM, admitted at the May 9, 2014 injunction hearing that the Line 15 Rigging Agreement covered all of the Line 15 Equipment and contemplated the transportation and dismantling of the entire Line 15 machine. (Lech Trans., Pl. Ex. H at 32-33).
On November 3, 2011, Plaintiff Inner Mongolia and ARM executed a contract under which ARM agreed to transport the Line 15 Equipment from Twinsburg, Ohio to China. (Line 15 Transportation Agreement, Pl. Ex. I). The Line 15 Rigging and Transportation Agreements contain merger clauses identical to those contained in the contracts concerning the Line 7 equipment. (Pl. Ex. G at p. 7; Pl. Ex. I at p. 4).
Plaintiffs claim that ARM "transported much of the Line 7 Equipment to China by ocean vessel in late 2011/early 2012." (Pl. Stmt. of Facts, ¶ 17). As required by the Line 7 Transportation Agreement, ARM procured insurance for the Line 7 Equipment from Traveler's Insurance Company ("Traveler's). (See Claim Correspondence, Pl. Ex. J). Plaintiffs have not submitted a copy of ARM's insurance policy with Traveler's.
On January 12, 2012, while some of the Line 7 Equipment was en route to China, the ship was caught in a storm in the North Sea. (Insurance Claim Correspondence between ARM and Traveler's, Pl. Ex. J at Page ID #1310). The Line 7 elevator was lost at sea and several containerswere damaged. (Id.)
On January 16, 2012, ARM filed a claim with Traveler's for Ordos's lost elevator. (Claim Correspondence, Pl. Ex. J). On or about February 19, 2013, Traveler's paid $975,000 to ARM to cover ARM's claim for the lost elevator. (Claim Payment Documentation, Pl. Ex. K at Page ID# 1342, 1349). According to Hsueh, ARM paid no portion of the claim proceeds to Ordos, nor did ARM ever provide a replacement elevator to Ordos. (Hsueh Declaration, Pl. Ex. F at ¶ 3).
On May 7, 2013, the parties executed an Amended Transportation Agreement, under which Plaintiffs agreed to pay ARM an additional $700,000 in order for ARM to complete the Line 7 and Line 15 transportation services. (Amended Trans. Agreement, Pl. Ex. L). The Amended Transportation Agreement also states that ARM "acknowledges that it has obtained approval from the insurance company to begin obtaining or constructing the Line 7 equipment, specifically the elevator, lost at sea January 2012." (Amended Trans. Agreement, Pl. Ex. L at p. 2). Ordos ultimately paid ARM $500,000 pursuant to the Amended Transportation Agreement. (Pl. Ex. F at Attachment 1).
The Line 15 Transportation Agreement called for ARM to transport the Line 15 Equipment to Cleveland, Ohio on or before December 30, 2011 in preparation for departure to China. (Line 15 Trans. Agreement, Pl. Ex. I). ARM did not complete the transportation of the Line 15 Equipment to Cleveland before December 30, 2011. ARM transported some portions of the Line 15 Equipment to China in August 2013. (Joint Stip. Facts ¶ 8).
In September 2013 through November 2013, ARM performed additional millwright work on the remaining pieces of Line 15 equipment still located in Twinsburg, Ohio. (Joint Stip. Facts at ¶ 9; Lech Trans., Pl. Ex. H at 10-12). Defendant then transported some of the Line 15 Equipmentto its property in Hastings, Michigan. (Joint Stip. Facts at ¶ 9).
On November 19, 2013, ARM issued an Invoice to Inner Mongolia in the amount of $226,850.00 for the millwright work performed on the Line 15 Equipment in Twinsburg. (Invoice, Pl. Ex. O). On November 15, 2013, ARM posted a "Lien Notice" on the Line 15 Equipment in Twinsburg. (Lien Notice, Pl. Ex. N). The Lien Notice stated: "UNDER OHIO LAW, THE EQUIPMENT TO WHICH THIS NOTICE IS POSTED IS SUBJECT TO AN ARTISAN'S LIEN FOR MILLWRIGHT WORK PERFORMED BY" ARM. (Pl. Ex. N).
ARM never completed transportation of the Line 15 Equipment to China and Plaintiffs never paid ARM the amount charged for the additional millwright work. On November 27, 2013, Plaintiffs' counsel e-mailed ARM and notified it that it "consider[ed] the Agreements terminated immediately based on ARM's breaches and repudiation." (Rustmann E-mail to Biehl, Pl. Ex. Q).
Plaintiffs filed their Verified Complaint on November 27, 2013. (Doc. #1). Plaintiffs allege six (6) counts against Defendant:
Count One: Claim and Delivery
Count Two: Conversion
Count Three: Declaratory Relief
Count Four: Breach of Contracts
Count Five: Negligence
Count Six: Unjust Enrichment
(Verified Compl., Doc. #1).2
On December 2, 2013, Plaintiffs filed a Motion for Temporary Restraining Order and Preliminary Injunction. (Doc. #3). Plaintiffs alleged that Defendant was in possession of the Line 15 Equipment and had not shipped it to China as required by their contract. (Doc. #3 at 1-2). Plaintiffs alleged that the Line 15 Equipment was "exposed to the...
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