1 

UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

PLASTECH HOLDING 

CORPORATION, 

 

 Plaintiff, 

 Case No. 14-cv-14049 

v. 

 HON. MARK A. GOLDSMITH 

WM GREENTECH AUTOMOTIVE 

CORPORATION, et al., 

Defendants. 

_______________________________/ 

OPINION AND ORDER 

DENYING DEFENDANT JAC MOTORS’ MOTION TO DISMISS COUNT IV OF THE 

SECOND AMENDED COMPLAINT (Dkt. 43) 

I. INTRODUCTION 

This matter is before the Court on Defendant JAC Motors’ motion to dismiss count IV of 

the second amended complaint (Dkt. 43). Defendant seeks a ruling that, as a matter of law, it did 

not breach any fiduciary duty, because there was no fiduciary relationship between it and 

Plaintiff. As explained fully below, the Court denies the motion to dismiss, because Plaintiff has 

pleaded sufficient factual allegations that plausibly state a claim for breach of fiduciary duty. 

II. BACKGROUND 

Plaintiff Plastech Holding Corporation (“PHC”), a corporation that imports, distributes, 

and develops products for motor vehicles, and Defendant JAC Motors (“JAC”),1

 a Chinese 

original equipment manufacturer of automobiles, began working together in 2009 to assist JAC 

in readying passenger vehicles for distribution and sale in the United States. Second Am. 

 

1

 JAC Motors is also known as Anhui Jianghuai Automotive Co., Ltd., but will be referenced as 

JAC for purposes of this opinion and order. See Second Am. Compl. ¶ 15 (Dkt. 35); Def. Mot. 

at 1 (Dkt. 43) 

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Compl. ¶¶ 20-21, 25 (Dkt. 35). At that time, JAC’s vehicles were not engineered to meet various 

safety and emissions standards of the United States. Id. ¶ 26. During several discussions, PHC 

explained to JAC that, in order to successfully sell vehicles in the United States, JAC must meet 

both the federally mandated safety and quality standards. Id. ¶ 27. PHC indicated that it would 

be willing to assist JAC in satisfying these standards, provided JAC agreed to the following: 

(i) PHC would act as the exclusive distributor for these vehicles in the United States; and (ii) 

JAC would promise not to abandon the venture and, in fact, make the vehicles available to PHC. 

Id. ¶ 28. 

In 2010, the parties executed a Framework Agreement (Dkt. 35-1) in Dearborn, 

Michigan, with an effective date of October 27, 2010. Second Am. Compl. ¶ 29.2 According to 

the Framework Agreement, PHC had the right to distribute passenger vehicles manufactured by 

JAC in the United States. Id. ¶ 30. JAC also agreed not to sell its vehicles directly to consumers 

in the United States through any channel other than PHC. Id. ¶ 31. 

Based on their business relationship dating back to 2009, PHC invested millions of 

dollars assisting JAC in engineering, homologation, and other activities, with the anticipation 

that PHC would distribute JAC’s vehicles in the United States. Id. ¶ 34. In particular, PHC 

provided JAC with “extensive market intelligence, including competitive data, product 

performance requirements, content, pricing, advertising, consumer response and feedback, and a 

host of other relevant data.” Id. ¶ 39. 

Beginning in June 2011, and continuing into 2012, JAC sought additional technical and 

other assistance from PHC, separate and apart from PHC’s duties set forth in the Framework 

 

2

 The parties also executed a supplementary agreement (Dkt. 35-2), dated January 18, 2011, 

which set forth additional understandings of the parties’ forthcoming work relating to the 

homologation of JAC’s automobiles. See Second Am. Compl. ¶ 29. 

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Agreement. Id. ¶ 43. Specifically, JAC asked PHC to develop a design studio to provide design 

and styling suggestions on current and next generation vehicles, assist in improving engines and 

transmissions, and help develop and evaluate JAC’s supply base. Id. ¶ 44. PHC retained and 

paid an engine design firm, which identified, designed, and engineered various improvements for 

JAC. Id. ¶¶ 46-47. PHC spent an additional $1.6 million in assisting JAC with these extracontractual tasks, unrelated to the parties’ Framework Agreement. Id. ¶ 48. JAC assured PHC 

that these funds would be repaid, but JAC has failed to honor its agreement to pay these 

unrelated funds. Id. ¶¶ 49-50. 

PHC alleges that Defendants WM Industries Corporation, GreenTech Automotive 

Corporation, and GreenTech Automotive, Inc. (collectively “GreenTech”) subsequently entered 

into an agreement with JAC for the distribution of electric vehicles, knowing that PHC had an 

exclusive distribution agreement with JAC. Id. ¶¶ 54-59. PHC further claims that, because of 

JAC’s agreement with GreenTech, resources have been diverted away from PHC’s venture, and 

JAC has failed to manufacture and provide PHC with passenger vehicles for sale in the United 

States. Id. ¶¶ 66-67. 

As a result, PHC asserts the following counts against JAC in its second amended 

complaint: (i) anticipatory breach of contract; (ii) breach of contract; (iii) breach of an oral 

and/or written agreement to repay funds; (iv) breach of fiduciary duty; (v) fraud in the 

inducement/innocent misrepresentation/fraudulent misrepresentation; (vi) fraud in the 

inducement/constructive fraud/innocent misrepresentation relating to the extra-contractual 

payments; and (vii) civil conspiracy. PHC also alleges that GreenTech’s conduct with JAC 

constitutes tortious interference, civil conspiracy, unjust enrichment, and the aiding and abetting 

of JAC’s breach of fiduciary duty. 

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It is count IV of the second amended complaint against JAC — breach of fiduciary duty 

— that is the subject of the present motion to dismiss. 

III. ANALYSIS 

Under Federal Rule of Civil Procedure 12(b)(6), “[c]ourts must construe the complaint in 

the light most favorable to plaintiff, accept all well-pled factual allegations as true, and determine 

whether the complaint states a plausible claim for relief.” Albrecht v. Treon, 617 F.3d 890, 893 

(6th Cir. 2010). To survive a motion to dismiss, a complaint must plead specific factual 

allegations, and not just legal conclusions, in support of each claim. Ashcroft v. Iqbal, 556 U.S. 

662, 678-679 (2009). A complaint will be dismissed unless it states a “plausible claim for 

relief.” Id. at 679; Bell Atlantic Corp. v. Twombly, 550 US 544, 570 (2007) (same). 

Although the Supreme Court did not comprehensively define the concept of plausibility 

in Iqbal and Twombly, it did provide certain guideposts from which the contours of that concept 

can be discerned. It required that the pleading contain sufficient factual allegations to allow the 

court “to draw the reasonable inference that the defendant is liable for the misconduct alleged.” 

Iqbal, 556 U.S. at 678. It also stated that a court must use “its judicial experience and common 

sense” with reference to the specific context of the case to determine whether the viability of the 

claim was more than possible, without demanding that it be probable. Id. at 678-679. Thus, the 

focus at the pleading stage is whether there are sufficient factual allegations to supply more than 

a modicum of assurance that the claim is worthy of pursuit in a judicial forum. With the 

Iqbal/Twombly development in the law, courts must now examine whether there is some ring of 

truth to what a plaintiff alleges. 

At this stage of the litigation — when discovery may have only barely begun, if at all — 

a plaintiff should not be required to spell out, in great detail, all the facts he or she would have to 

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prove at trial. Armstrong v. Shirvell, 596 F. App’x 433, 444 (6th Cir. 2015) (“While the plaintiff 

must give sufficient facts to support his claim, he need not provide every fact that may be raised 

at trial.”). Instead, a plaintiff’s obligation is to plead sufficient factual allegations that make it 

reasonable to conclude that there may be other facts that discovery would uncover. See 

Twombly, 550 U.S. at 556 (plausibility “simply calls for enough fact to raise a reasonable 

expectation that discovery will reveal evidence” of the claim). This is especially true when 

dealing with relationships for which there are no bright-line requirements and ultimate legal 

conclusions may well depend on exploring a complex history of interactions. See, e.g., In re 

WellPoint, Inc. Out-of-Network UCR Rates Litigation, 865 F. Supp. 2d 1002, 1026 (C.D. Cal. 

2011) (holding that the plaintiffs’ factual allegations sufficiently alleged the existence of a 

plausible conspiracy among the defendants, because “it is reasonable to expect that discovery 

will uncover specific answers to Plaintiffs’ fact-based allegations,” and Twombly does not 

require “concrete answers . . . at the pleadings stage”). With this perspective, the Court now 

addresses the issue whether PHC has pleaded specific factual allegations that plausibly state a 

claim for breach of fiduciary duty. 

“Under Michigan law, a fiduciary relationship arises from the reposing of faith, 

confidence, and trust and the reliance of one upon the judgment and advice of another.” 

Petroleum Enhancer, LLC v. Woodward, 690 F.3d 757, 765 (6th Cir. 2012). The existence of 

such a relationship places a duty on the fiduciary “to act for the benefit of the principal regarding 

matters within the scope of the relationship.” Id. at 766. 

 A fiduciary relationship may arise in one of the following situations: 

(1) when one person places trust in the faithful integrity of another, 

who as a result gains superiority or influence over the first, (2) 

when one person assumes control and responsibility over another, 

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[or] (3) when one person has a duty to act for or give advice to 

another on matters falling within the scope of the relationship. 

Mike Vaughan Custom Sports, Inc. v. Piku, 15 F. Supp. 3d 735, 753 (E.D. Mich. 2014). Courts 

have traditionally recognized the following as fiduciary relationships: trustees to beneficiaries, 

guardians to wards, attorneys to clients, and doctors to patients. See, e.g., Ford Motor Co. v. 

Ghreiwati Auto, 945 F. Supp. 2d 851, 865 (E.D. Mich. 2013). 

When a particular relationship falls outside of these well-defined examples, determining 

whether it amounts to a fiduciary relationship is a question of fact. Id. Because there is no rule 

in the Sixth Circuit that a particular relationship could never impose fiduciary obligations, the 

Court must look to the actual relationship that existed between the parties. Fremont 

Reorganizing Corp. v. Duke, 811 F. Supp. 2d 1323, 1345 (E.D. Mich. 2011); see also Muglia v. 

Kaumagraph Corp., 64 F.3d 663 (6th Cir. 1995) (table) (“Except for certain per se fiduciary 

relationships . . . fiduciary relationships arise from the facts and circumstances surrounding the 

relationship between the parties.”). Because “the inquiry as to whether a fiduciary relationship 

exists is fact-specific, a claim alleging the existence and breach of fiduciary duties is generally 

not subject to dismissal under Rule 12(b)(6).” Ajuba Int’l, L.L.C. v. Saharia, 871 F. Supp. 2d 

671, 688 (E.D. Mich. 2012). This is because a finding that a fiduciary relationship existed 

between the parties often “requires an examination into a fully developed record beyond simply 

the language of the parties’ agreement.” McGregor v. Hunting Specialized Coating, Inc., No. 

04-73547, 2005 WL 1345676, at *3 (E.D. Mich. June 3, 2005) (emphasis added). 

It is JAC’s contention that the only relationship that existed between it and PHC was 

simply that of manufacturer and distributor. Def. Br. at 4 (Dkt. 43).3 JAC argues that the 

 

3

 Although JAC labels its relationship as “buyer-seller,” it does so by direct reference to another 

manufacturer-distributor case, Sudamax Industria E Comercio De Cigaros, Ltda v. Buttes & 

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parties’ contractual agreement and, in particular, its pricing provisions evidence that the parties 

were acting in their own best interests. Id. at 7. According to JAC, its primary interest was to 

maximize its profits from its sales of passenger vehicles to PHC, which conflicts, to a degree, 

with PHC’s primary interest of purchasing the vehicles for a low price in order to maximize its 

profit margins. Id. JAC also argues that, absent a confidential relationship, the alleged breaches 

do not constitute breaches of fiduciary duties. Id. at 7-8. Rather, the complaint alleges, at most, 

breaches of the agreement between the parties. Id. at 8. The Court disagrees. 

It is true that a traditional relationship between a manufacturer and its distributor, without 

more, has often been found not to be a fiduciary one. See, e.g., Aerospace Am., Inc. v. 

Abatement Techs., Inc., 738 F. Supp. 1061, 1071 (E.D. Mich. 1990) (rejecting the argument that 

a manufacturer-distributor relationship implicitly creates a “confidential” or “fiduciary” 

relationship). And in the abstract, one could view JAC as simply a manufacturer of passenger 

vehicles and PHC as the anticipated distributor of those vehicles, in accordance with the parties’ 

Framework Agreement. However, the customized relationship existing between PHC and JAC 

can also arguably be viewed as one that is not necessarily a traditional, run-of-the-mill 

manufacturer-distributor relationship for which no fiduciary duties could ever arise. 

PHC has alleged that it first took the reins of the business venture by providing JAC with 

extensive market intelligence and provided a product development plan for vehicles that would 

satisfy both the safety and emissions standards of the United States. Some of this conduct 

included extra-contractual tasks unrelated to the parties’ Framework Agreement, including the 

retention and payment of an engine design firm, which identified, designed, and engineered 

various improvements for JAC. This endeavor required PHC to invest significant amounts of 

 

Ashes, Inc., No. 1:05-CV-60-M, 2007 WL 1035144 (W.D. Ky. Mar. 29, 2007). See Def. Br. at 

6. 

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money, time, and resources to ensure that a compliant product was manufactured. That plan was 

than provided to JAC to manufacture passenger vehicles in accordance with the strictures laid 

out by PHC. PHC placed its trust and confidence in JAC to abide by that plan and construct 

vehicles that could then be distributed throughout the United States. 

PHC has also sufficiently alleged that, by providing the development plan, JAC was 

placed in a position of superiority, because PHC was required to act first by investing money in 

research and design development required to homologize JAC’s vehicles, as well as providing 

that information to JAC. By alleging a combination of services that not every distributor 

performs, PHC articulates a relationship that may be arguably different from the standard 

vendor-vendee relationship that exists between a manufacturer and its distributor. Therefore, for 

purposes of a motion to dismiss, PHC has sufficiently pleaded facts that a fiduciary relationship 

between itself and JAC was plausibly created. 

Furthermore, it has been recognized that a fiduciary relationship “may be found to exist 

either by virtue of an express confidentiality non-use/non-disclosure agreement or, in appropriate 

circumstances, may be implied by law.” Goscicki v. Custom Brass & Copper Specialties, Inc., 

229 F. Supp. 2d 743, 757 (E.D. Mich. 2002) (citing Aerospace Am., 738 F. Supp. at 1071). For 

a relationship to be confidential, Michigan courts “require that there be an explicit, at least 

verbal, warning that the information disclosed is confidential and/or not to be disclosed or used 

without authorization.” Id. at 758. The Goscicki court held that, for purposes of summary 

judgment, the plaintiff failed to establish the existence of a fiduciary relationship, because she 

did not allege “that she communicated to the Defendants, either orally or in writing, that the 

information she shared was confidential.” Id. at 757. 

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In this case, unlike Goscicki, section 16.1 of the parties’ Framework Agreement 

expressly stated, in writing, that “[b]oth parties shall guarantee not to disclose to any other 

person or business entity any information in relation to any content in this Agreement or 

information in relation to the cooperation between both parties; except as necessary to conduct 

business in the ordinary course.” Framework Agreement at 11. This agreement not to disclose 

information clearly demonstrates the confidential nature of the parties’ relationship, and the 

factfinder could reasonably determine that the phrase “cooperation between both parties” extends 

to the parties’ extra-contractual dealings. The Framework Agreement, therefore, plausibly gives 

rise to a fiduciary relationship. 

Lastly, JAC’s arguments rely heavily on the unpublished case Sudamax Industria E 

Comercio De Cigaros, Ltda v. Buttes & Ashes, Inc., No. 1:05-CV-60-M, 2007 WL 1035144 

(W.D. Ky. Mar. 29, 2007). However, that case is distinguishable from the present matter for two 

reasons. First, and most important, Sudamax was decided on summary judgment, as opposed to 

the present matter, which is only at the motion-to-dismiss stage of the proceedings and lacks a 

fully developed record. See McGregor, 2005 WL 1345676, at *3; Ajuba Int’l, L.L.C., 871 F. 

Supp. 2d at 688 (“[A] claim alleging the existence and breach of fiduciary duties is generally not 

subject to dismissal under Rule 12(b)(6)” because “the inquiry as to whether a fiduciary 

relationship exists is fact-specific . . . .”). Second, although the Sudamax court did not mention 

whether a confidential relationship existed between the parties, the court did acknowledge that a 

fiduciary relationship might exist between a buyer and seller when there is a confidential 

relationship. Sudamax, 2007 WL 1035144, at *7. Again, in light of the parties’ non-disclosure 

provision in the Framework Agreement, a confidential relationship plausibly existed in this case, 

which could give rise to a fiduciary relationship.

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Accordingly, the Court denies JAC’s motion to dismiss. 4

IV. CONCLUSION 

For the reasons stated above, the Court denies JAC’s motion to dismiss count IV of the 

second amended complaint (Dkt. 43).5

 SO ORDERED. 

Dated: January 8, 2016 s/Mark A. Goldsmith 

 Detroit, Michigan MARK A. GOLDSMITH 

 United States District Judge 

 

 

CERTIFICATE OF SERVICE

The undersigned certifies that the foregoing document was served upon counsel of record and 

any unrepresented parties via the Court's ECF System to their respective email or First Class 

U.S. mail addresses disclosed on the Notice of Electronic Filing on January 8, 2016. 

 s/Karri Sandusky 

 Case Manager 

 

4

 In its reply brief, JAC raises an entirely new argument that the breach of fiduciary duty claim is 

based solely on contractual promises, rather than any duty arising out of a non-contractual 

source. Def. Reply at 2-4 (Dkt. 53). Because this argument was raised for the first time in 

JAC’s reply brief, it is not properly before the Court. Clark v. Shop24 Global, LLC, 77 F. Supp. 

3d 660, 677 n.6 (S.D. Ohio 2015) (“A movant cannot raise new issues for the first time in a reply 

brief because consideration of such issues deprives the nonmoving party of its opportunity to 

address the new arguments.”). Therefore, the Court declines to address this argument. 

5

 GreenTech filed a joinder of concurrence in the relief sought by JAC, arguing that, if count IV 

is dismissed, the Court should also dismiss count XII, which alleged that GreenTech aided and 

abetted in JAC’s breach of fiduciary duty, because that claim is derivative of, and dependent on, 

count IV. See Notice of Joinder at 2 (Dkt. 51). Because the Court denies JAC’s motion to 

dismiss count IV, the Court rejects GreenTech’s request to also dismiss count XII. 

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