Linamar’s motion included a motion for dismissal which was originally made pursuant 1

to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Linamar’s reply brief noted that it

should have been made pursuant to Rule 12(c). Because Linamar filed its motion after the close

of discovery, the Court shall construe the entire motion as a motion for summary judgment

pursuant to Rule 56.

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

McNAUGHTON-McKAY ELECTRIC CO.,

Plaintiff,

v. Case No. 09-11165

LINAMAR CORPORATION, Hon. Sean F. Cox

Defendant.

______________________________/

OPINION & ORDER DENYING PLAINTIFF’S

MOTION FOR SUMMARY JUDGMENT AND GRANTING 

DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

Plaintiff McNaughton-McKay Electric Co. (“McNaughton”) sued Defendant Linamar

Corporation (“Linamar”), alleging a claim of quantum meruit / unjust enrichment. The case is

before the Court on the parties’ cross-motions for summary judgment. The parties presented 1

oral argument on July 15, 2010. For the following reasons, the Court shall DENY

McNaughton’s motion for summary judgment and shall GRANT Linamar’s motion for summary

judgment.

BACKGROUND

McNaughton filed its complaint on March 30, 2009 (Doc. No. 1), asserting one claim for

quantum meruit / unjust enrichment. On May 07, 2010, after the close of discovery, both parties
2

filed motions for summary judgment. See McNaughton’s motion and supporting brief,

(hereinafter “Pl.’s Br.”) (Doc. No. 26), and Linamar’s motion and supporting brief (hereinafter

“Def.’s Br.”) (Doc. No. 29). 

Pursuant to this Court’s practice guidelines, McNaughton filed a statement of undisputed

material facts (hereinafter “Pl.’s stm. of fact”) (Doc. No. 28). Linamar also filed a statement of

material facts not in dispute (hereinafter “Def.’s stm. of fact”) (Doc. No. 25). On May 28, 2010,

both parties filed counter-statements of material facts (hereinafter “Pl.’s counter-stm” and “Def.’s

counter-stm”) (Doc. Nos. 35 & 32, respectively). The following facts can be gleaned from the

parties’ submissions. 

In 2008, Linamar contracted with Chrysler Group, LLC (“Chrysler”) to operate a facility

in Kokomo, Indiana. The venture was known as the “Kokomo project,” and the plan called for

Linamar to produce dual clutch transmissions at the facility. (Def.’s stm. of facts ¶ 1; Pl.’s stm.

of facts ¶ 1). 

As part of the Kokomo project, Linamar was to use four “special-purpose machines”

which would be installed at the manufacturing facility. (Def.’s stm. of facts ¶ 2; Pl.’s counterstm. ¶ 2). Linamar contracted with Ann Arbor Machine Company, Inc. (“Ann Arbor Machine”)

to build the special-purpose machines. (Def.’s stm. of facts ¶ 3; Pl.’s counter-stm. ¶ 3). Ann

Arbor Machine, in turn, contracted with McNaughton to supply parts and components which

were incorporated into the machines. (Def.’s stm. of facts ¶ 4; Pl.’s counter-stm. ¶ 4). Linamar

did not have a contract with McNaughton for the project. (Def.’s stm. of facts ¶ 5; Pl.’s counterstm. ¶ 5). 

McNaughton claims that it timely and properly provided the components to Ann Arbor
According to McNaughton, the cancellation agreement between Linmar and Ann Arbor 2

Machine provided that the “holdback” sum would be paid after Ann Arbor Machine negotiated

the claims of its suppliers. (Pl.’s Br. at 8) (Pl.’s Ex. 33). 

3

Machine (Pl.’s Cmpl. at ¶ 12). Despite this, Ann Arbor Machine allegedly only paid $603.55,

leaving a balance of $423,412.07. (Pl.’s Cmpl. at ¶ 17).

On October 22, 2008, Chrysler notified Linamar by email that it had decided to cancel the

Kokomo project. (Def.’s stm. of facts ¶ 6; Pl.’s counter-stm. ¶ 6). On October 24, 2008,

Linamar sent a letter to its suppliers advising them of the cancellation. (Def.’s stm. of facts ¶ 7;

Pl.’s counter-stm. ¶ 7). 

On January 27, 2009, Chrysler and Linamar reached an agreement to resolve all

outstanding Linamar claims related to the cancellation of the Kokomo project in exchange for

$16.6 million. (Def.’s stm. of facts ¶ 8; Pl.’s stm. of facts ¶ 18). On January 30, 2009, Chrysler

paid Linamar $2 million of the agreed settlement. (Def.’s stm. of facts ¶ 10; Pl.’s counter-stm. ¶

10). 

On March 27, 2009, Chrysler and Linamar amended their agreement so that Linamar

would only receive $10.25 million in payments from Chrysler. (Def.’s stm. of facts ¶ 9; Pl.’s

stm. of facts ¶ 21). McNaughton maintains that Linamar also received “prospective business

opportunities” and “other financial concessions.” (Pl.’s counter-stm. ¶ 9; Pl.’s stm. of facts ¶ 20). 

Also on March 27, 2009, Linamar and Ann Arbor Machine signed an agreement settling

Ann Arbor Machine’s claims against Linamar in exchange for a payment of $5 million with a 

“holdback” of $150,000. (Def.’s stm. of facts ¶ 12, 13; Pl.’s counter-stm. ¶ 12, 13). 2

Under the settlement agreement with Ann Arbor Machine, Linamar retained the right to

take possession of the special-purpose machines, but never did so. (Pl.’s stm. of facts ¶ 24; Def.’s
4

stm. of facts ¶ 19). Rather, Ann Arbor Machine’s creditor, Citizens Bank, seized the machines

and sold them at auction. (Def.’s stm. of facts ¶ 20; Pl.’s counter-stm. ¶ 20).

On March 31, 2009, Chrysler paid Linamar the remaining $8.25 million. (Def.’s stm. of

facts ¶ 11; Pl.’s counter-stm. ¶ 11). 

On April 1, 2009, Linamar paid Ann Arbor Machine $4.85 million. (Def.’s stm. of facts

¶ 14; Pl.’s counter-stm. ¶ 14). McNaughton claims that this amount was less than half of the

total costs of the special-purpose machines. (Pl.’s stm. of facts ¶ 26).

McNaughton sued Ann Arbor Machine on its contract, and obtained a default judgment. 

(Pl.’s stm. of facts ¶ 28; Def.’s counter-stm. ¶ 28). McNaughton claims that it has not been able

to collect on that judgment because Ann Arbor Machine has gone out of business. (Pl.’s stm. of

facts ¶ 29).

McNaughton further claims that Linamar never paid Ann Arbor Machine the $150,000 

holdback amount, nor did they use any of that money to pay Ann Arbor Machine’s suppliers. 

(Pl.’s stm. of facts ¶ 24). 

Lastly, McNaughton claims that Linamar received $10.25 million in payments from

Chrysler, but only paid out $7,489,000 of that amount, retaining a total of $2,760,000 as “extra

income.” (Pl.’s Br. at 14).

STANDARD OF REVIEW

Summary judgment is proper where “there is no genuine issue as to any material fact” and

where the moving party is “entitled to judgment as a matter of law.” FED.R.CIV.P. 56(c)(2). The

party seeking summary judgment has the initial burden of informing the court of the basis for its

motion and identifying those portions of the pleadings, depositions, answers to interrogatories,
5

and admissions on file, together with the affidavits, which it believes demonstrate the absence of

a genuine issue of material fact. Celotex v. Catrett, 477 U.S. 317, 323 (1986). The burden then

shifts to the nonmoving party who “must set forth specific facts showing that there is a genuine

issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (quoting FED. R. CIV.

P. 56(e)). In deciding a motion for summary judgment, a court must view the evidence and draw

all reasonable inferences in favor of the nonmoving party. See Matsushita Elec. Indus. Co. v.

Zenith Radio Corp., 475 U.S. 574, 587 (1986). 

ANALYSIS

I. Legal Standard For Quantum Meruit And Unjust-Enrichment Claims

“Even though no contract may exist between two parties, under the equitable doctrine of

unjust enrichment, a person who has been unjustly enriched at the expense of another is required

to make restitution to the other.” Kammer Asphalt Paving Co. v. East China Twp. Schools, 443

Mich. 176, 185 (1993) (internal quotes and citations omitted). “[I]n order to sustain a claim of

unjust enrichment, a plaintiff must establish (1) the receipt of a benefit by the defendant from the

plaintiff and (2) an inequity resulting to the plaintiff because of the retention of the benefit by the

defendant.” Morris Pumps v. Centerline Piping, Inc., 273 Mich. App. 187, 195 (Mich. App.

2006); see also First Presbyterian Church of Ypsilanti v. H.A. Howell Pipe Organs, Inc., 2010

WL 419972, *9 (E.D. Mich. 2010).

“Whether a claim for unjust enrichment can be maintained is a question of law.” Morris

Pumps, 273 Mich. App at 193 (citing Dumas v. Auto Club Ins. Ass’n., 168 Mich. App. 619, 637

(Mich. App. 1988); Liggett Restaurant Group, Inc. v. Pontiac, 260 Mich. App. 127, 137 (Mich.

App. 2003)).
6

II. Did Linamar Receive A Benefit From McNaughton?

The first inquiry of an unjust-enrichment claim is whether the defendant received a

benefit from the plaintiff. Morris Pumps, 273 Mich. App. at 195.

McNaughton argues that its claims are analogous to those of the plaintiff in Morris

Pumps, while Linamar argues that Morris Pumps is distinguishable.

Morris Pumps involved the following facts. The City of Detroit contracted with the

defendant, EBI-Detroit, Inc, a general contractor, to construct a wastewater-treatment facility. 

The defendant subcontracted the mechanical portion of the project to Centerline Piping. 

Centerline Piping, in turn, entered into an agreement with the plaintiff, Morris Pumps, to supply

equipment and materials. 

Shortly after the plaintiff delivered the equipment to project site, Centerline went out of

business. Neither Centerline, nor the defendant ever paid the plaintiff. 

The defendant retained a replacement subcontractor to finish the work that Centerline had

left unfulfilled. That subcontractor used the equipment and materials that the plaintiff had

delivered to the project site. The subcontractor did not bill the defendant for those items, nor did

it ever pay the plaintiff for them. 

The plaintiff filed suit against Centerline for breach of contract, and against the defendant

for unjust enrichment. The plaintiff moved for summary disposition against the defendant, and

the trial court granted the motion, noting that Centerline had gone out of business. 

The defendant appealed. It first argued that the unjust-enrichment claim was barred by

the existence of an express contract between the plaintiff and Centerline. 
7

The court of appeals noted that “[g]enerally, an implied contract may not be found if there

is an express contract between the same parties on the same subject matter.” Id. at 194 (citation

omitted) (emphasis in original). In Morris Pumps, however, the court recognized that the

“defendant was not a party to . . . the express contract[]. Therefore, the contract[] did not exist

between the same parties. Because there [was] no express contract[] between the same parties on

the same subject matter, [the] defendant’s argument with respect to this issue must fail.” Id. at

195.

Linamar argues that Morris Pumps is distinguishable from this case. In Morris Pumps,

the defendant retained and used the plaintiff’s parts. Here, however, both parties agree that while

Linamar had a right to take possession of the special-purpose machines built by Ann Arbor

Machine, it never actually took possession. (Def.’s Br. at 13). Rather, Ann Arbor Machine’s

creditor seized and auctioned the machines.

McNaughton counters, “Whether Linamar actually possessed the . . . [m]achines is not

relevant to the facts of Morris Pumps nor to the outcome of this Motion. The use of the

McNaughton parts and components to build the . . . [m]achines, which caused Linamar to receive

a substantial cancellation payment, resulted in benefit to Linamar. Obviously, the mere existence

of the machines was sufficient benefit for Linamar to receive all of the benefits it did.” (Pl.’s

Reply at 4). 

As noted above, the primary inquiry for unjust-enrichment claims is not whether the

defendant possessed a tangible object, but whether the defendant received a benefit from the

plaintiff, and an inequity resulted to the plaintiff because of the retention of the benefit. Id. at

195; see also First Presbyterian Church of Ypsilanti, 2010 WL 419972, *9. 
At oral argument, McNaughton’s counsel argued that the defendant in Morris Pumps 3

never took “possession” of the plaintiff’s materials. Regardless, in discussing the second

element of unjust enrichment, the Morris Pumps court stated that the defendant retained and

used the plaintiff’s materials. Id. at 197, (“We simply cannot classify defendant’s act of retaining

and using the materials, without ever ensuring that plaintiffs were compensated for the materials,

as innocent, just, or equitable.”) 

8

Notably, in Morris Pumps, the defendant received a benefit from the defendant by

“retaining and using” the plaintiff’s materials. Morris Pumps, 273 Mich. App. at 197. Here, 3

however, it is uncontested that Linamar did not retain or use the special-purpose machines built

by Ann Arbor Machine.

In light of this, McNaughton argues that Linamar had the right to take possession of the

machines, and that the right alone was a benefit. Even if this right could be construed as a

benefit, Linamar did not receive the right from McNaughton. Rather, it received the right from

Ann Arbor Machine. (Pl.’s Ex 33 “Settlement Agreement” at ¶ 7(a)); see also (Pl.’s Br. at 8). 

Further, McNaughton alleges that Linamar received a benefit by virtue of having received

a cancellation fee from Chrysler. To the extent that Chrysler’s cancellation fee was a benefit, it

came from Chrysler, not McNaughton. 

The language of Morris Pumps is clear: “in order to sustain a claim of unjust enrichment,

a plaintiff must establish (1) the receipt of a benefit by the defendant from the plaintiff . . . .” Id.

at 195 (emphasis added). Here, McNaughton has failed to present any evidence that Linamar

received a benefit from McNaughton. 

McNaughton claims that the benefit received by Linamar does not have to be “tendered

‘directly’ by McNaughton.” (Pl.’s Reply at 5). “Numerous cases have held that a benefit may be

unjustly obtained by a defendant through an intermediary, especially if there is some wrongdoing
The bond was invalid and unenforceable because the company that purportedly issued 4

the bond did not actually exist. 

9

on the defendant’s part.” Hoving v. Transnation Title Ins. Co., 545 F.Supp.2d 662, 670 (E.D.

Mich. 2008) (citing Kammer, 443 Mich. at 186 (1993) and Morris Pumps, 273 Mich. App. 187). 

The Michigan cases which are cited in support of this proposition, however, are distinguishable

from this case. 

In Kammer, the plaintiffs were subcontractors who contracted with a general contractor to

renovate athletic facilities in the East China School District. The plaintiffs completed the

renovations, but were never paid by the general contractor or by the holder of the construction

bond. The court allowed the plaintiff’s unjust-enrichment suit to proceed against the school 4

district, after finding that the plaintiff indirectly provided the school district with a benefit

(asphalt paving). Kammer, 443 Mich. at 187. 

As noted above, in Morris Pumps, the plaintiff provided materials which the defendant

later retained and used to complete its contract with the City of Detroit. 

In both Kammer and Morris Pumps, the plaintiff’s provided an intermediary with a

benefit, which the intermediary in turn provided to the defendant. In both cases, the defendant

received the same benefit that the plaintiff initially provided to the intermediary. This case is

distinguishable, however, because Linamar never received the benefit (electrical components)

that McNaughton provided to Ann Arbor Machines. 

There is no genuine issue of material fact as to whether Linamar received a benefit from

McNaughton. Accordingly, the Court shall deny McNaughton’s motion for summary judgment

and grant Linamar’s motion.
10

CONCLUSION & ORDER

For the reasons stated above, the Court DENYS McNaughton’s motion for summary

judgment and GRANTS Linamar’s motion for summary judgment. 

IT IS SO ORDERED.

s/Sean F. Cox 

Sean F. Cox

United States District Judge

Dated: August 11, 2010

I hereby certify that a copy of the foregoing document was served upon counsel of record on

August 11, 2010, by electronic and/or ordinary mail.

s/Jennifer Hernandez 

Case Manager