Hesco Parts Corporation LLC v. Ford Motor Company ( 2010 )

                               File Name: 10a0289n.06
                                                No. 09-5520
                                                                                          May 12, 2010
                               UNITED STATES COURT OF APPEALS
                                                                                    LEONARD GREEN, Clerk
                                    FOR THE SIXTH CIRCUIT
    HESCO PARTS CORPORATION LLC,                               )
                                                               )        ON APPEAL FROM THE
           Plaintiff-Appellant,                                )        UNITED STATES DISTRICT
                                                               )        COURT FOR THE WESTERN
    v.                                                         )        DISTRICT OF KENTUCKY
    FORD MOTOR COMPANY,                                        )                           OPINION
           Defendant-Appellee.                                 )
    BEFORE:        KENNEDY and COLE, Circuit Judges, and JORDAN, District Judge.*
           COLE, Circuit Judge. Plaintiff-Appellant Hesco Parts Corporation LLC (“Hesco”) filed
    a complaint against Defendant-Appellee Ford Motor Company (“Ford”) under diversity jurisdiction
    in federal district court alleging claims of (1) breach of contract; (2) breach of implied covenants of
    good faith and fair dealing; (3) unjust enrichment and quantum meruit; (4) promissory estoppel; (5)
    fraud and equitable estoppel; and (6) tortious interference with a contract and prospective economic
    advantage. The district court issued an order granting Ford summary judgment on all of Hesco’s
    claims, from which Hesco appeals. We AFFIRM the district court’s judgment.
           We review de novo a district court’s grant of summary judgment. Barrett v. Whirlpool
    556 F.3d 502
    , 511 (6th Cir. 2009). Summary judgment is appropriate “if the pleadings, the
           The Honorable R. Leon Jordan, United States District Judge for the Eastern District of
    Tennessee, sitting by designation.
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    Hesco Parts Corp. v. Ford Motor Co.
    discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as
    to any material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
    56(c). When reviewing a grant of summary judgment, this Court construes factual evidence in the
    light most favorable to the non-moving party and makes all reasonable inferences in that party’s
    favor. Barrett, 556 F.3d at 511; see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 
    475 U.S. 574
    , 587 (1986). The central issue in considering a motion for summary judgment 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.” Anderson v. Liberty Lobby, Inc., 
    477 U.S. 242
    , 251-52 (1986). “The availability of summary judgment in diversity actions is governed by the
    federal standard, . . . rather than by state law.” Biegas v. Quickway Carriers, Inc., 
    573 F.3d 365
    , 374
    (6th Cir. 2009). Further, in diversity cases, we review de novo a district court’s determination of
    state law. Andrews v. Columbia Gas Transmission Corp., 
    544 F.3d 618
    , 624 (6th Cir. 2008).
           Hesco is a former remanufacturer and distributor of auto parts for Ford. Hesco’s claims arise
    out of a series of contracts between Hesco, Ford, and Visteon Corporation, which was a division of
    Ford until 2000. There are four contracts central to this appeal: (1) a 1995 agreement between Hesco
    and Ford that established Hesco as a Ford Authorized Remanufacturer and a distributor of Ford
    products (“1995 FAR Agreement”); (2) a 1998 agreement between Hesco and Ford that established
    Hesco as a Ford Authorized Distributor (“1998 FAD Agreement”); (3) a 1998 supply agreement
    between Hesco and Visteon, executed when Visteon was still a division of Ford, and which
    established Hesco as a remanufacturer of alternators and starters for Visteon (“1998 Supply
    Agreement”); and (4) a 2002 agreement between Hesco and Visteon (after Visteon had been spun
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    Hesco Parts Corp. v. Ford Motor Co.
    off as an independent entity), under which Hesco distributed heating and climate control parts
    manufactured by Visteon.
           Hesco’s breach of contract claims concern the 1995 FAR Agreement and the 1998 FAD
    Agreement. Hesco argues that Ford breached the 1995 FAR Agreement by serially deauthorizing
    product lines rather than formally terminating the contract under the termination provision. Hesco
    argues that Ford breached the 1998 FAD Agreement by forcing Hesco to choose between distributing
    only Motortrend or only Powertrain products, rather than both. The district court concluded that
    both contracts clearly and unambiguously authorized Ford to carry out product and product-line
    deauthorizations, and the court therefore granted Ford summary judgment on Hesco’s contract
    claims. Hesco’s claims that Ford breached implied covenants of good faith and fair dealing rest on
    the same factual allegations. The district court concluded that these claims also failed as a matter
    of law because Ford was exercising its express contractual rights in deauthorizing products and the
    exercise of express contractual rights cannot give rise to a breach of good faith and fair dealing.
           Hesco’s unjust enrichment and quantum meruit claims rest on allegations that Ford
    surreptitiously took remanufacturing “know-how” from Hesco without compensation. The claims
    are rooted in a provision in the 1998 supply agreement which stated that Hesco and Visteon were
    negotiating terms whereby Hesco would provide Visteon with assistance in launching a Visteon
    remanufacturing facility, but which also stated that specifics regarding compensation and what
    services Hesco would provide would be set forth in an appendix to the contract “[t]o the extent that
    [the parties] determine[d] specifics.” (R.E. 194, Attachment #122 (Exhibit 112), at 4.) The district
    court determined that Hesco’s unjust enrichment and quantum meruit claims failed because the
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    Hesco Parts Corp. v. Ford Motor Co.
    provision was not a definite promise but simply a statement that Hesco would be compensated for
    any such assistance to the extent the parties agreed upon specifics and memorialized their agreement.
    Further, the court concluded that an implied-contract claim is not available when the subject matter
    of the claim was specifically provided for in an actual contract.1 On appeal, Hesco’s promissory
    estoppel claim rests entirely on the same allegations as its unjust enrichment and quantum meruit.
    The district court determined that this claim failed because Hesco and Visteon never reached a final
    agreement on these terms and there was no definite promise by Ford to compensate Hesco.
           Hesco’s fraud and equitable estoppel claims are based on allegations that Ford concealed a
    scheme to stop doing business with Hesco while making misrepresentations to Hesco about their
    future remanufacturing relationship.      The district court determined that all of the alleged
    misrepresentations documented by Hesco dealt with future events and thus could not serve as
    grounds for a cognizable fraud claim or Hesco’s related equitable estoppel claim.
           Finally, Hesco alleges that Ford inappropriately interfered with the distribution arrangement
    between Hesco and Visteon that lasted from 2002 to 2003, after Visteon had been spun off as an
    independent entity. The district court concluded that Hesco’s claims for tortious interference failed
    because Hesco did not have a valid contract or business expectancy with Visteon at the time Visteon
    ended its relationship with Hesco. Further, Hesco had not put forth sufficient evidence that Ford’s
            In addition, the district court determined that this provision was eliminated from what
    became the final, integrated, and executed version of the supply agreement between Hesco and
    Visteon. While the provision in the earlier draft was more specific in that it stated that the
    potential remanufacturing facility would be located in Mexico, the final agreement retained the
    same, basic terms. However, this is of no moment because Hesco’s claims still fail, for the other
    reasons stated in the district court’s opinion.
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    Hesco Parts Corp. v. Ford Motor Co.
    interference was improper.
           After carefully reviewing the record, the applicable law, and the parties’ briefs, we conclude
    that the district court was correct in its conclusion that Ford was entitled to summary judgment on
    all of Hesco’s claims. As the district court’s opinion correctly sets out the law governing the issues
    raised and clearly articulates the reasons underlying its decision, issuance of a full written opinion
    by this Court would serve no useful purpose. Accordingly, for the reasons stated in the district
    court’s memorandum opinion, we AFFIRM.