Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca6-09-05520/USCOURTS-ca6-09-05520-0/pdf.json

Parties Involved:
Ford Motor Company
Appellee
Hesco Parts Corporation LLC
Appellant

Document Text:

The Honorable R. Leon Jordan, United States District Judge for the Eastern District of *

Tennessee, sitting by designation.

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

File Name: 10a0289n.06

No. 09-5520

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

HESCO PARTS CORPORATION LLC,

Plaintiff-Appellant,

v.

FORD MOTOR COMPANY,

Defendant-Appellee.

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ON APPEAL FROM THE

UNITED STATES DISTRICT

COURT FOR THE WESTERN

DISTRICT OF KENTUCKY

O P I N I O N

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

Corp., 556 F.3d 502, 511 (6th Cir. 2009). Summary judgment is appropriate “if the pleadings, the

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Hesco Parts Corp. v. Ford Motor Co.

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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 forsummary 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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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.

In addition, the district court determined that this provision was eliminated from what 1

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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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 andmemorialized 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. On appeal, Hesco’s promissory 1

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

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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.

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