Opinion ID: 8415631
Heading Depth: 2
Heading Rank: 1

Heading: History of Case

Text: Precision is solely owned by Everett Casey. Casey has a law degree and practiced law in Michigan for about twenty years prior to becoming a businessman. In 1994, Casey formed Precision, Inc. to manufacture parts for Williams. Kenco manufactured and marketed after-market accessories for light trucks and automobiles. Kenco contacted Casey about Kenco’s need for a molded part because Precision had done work for Williams. Through a series of letters, phone conversations and meetings, Casey and Henry Starr, Kenco’s executive vice president and general manager, negotiated contracts, whereby Precision agreed to design running board end caps and center accents for Kenco. Because Precision financed the tooling and front-end production costs required to make the tools, the contracts contained prices and minimum purchase quantities that would enable Precision to recoup its expenses and eventually turn a profit. The running board end caps were $6.71 per pair, and Precision required Kenco to purchase at least 50,000 sets over the course of three years. The center accents were $4.90 per pair. Kenco agreed to purchase at least 30,000 pairs by the end of the three-year period. Kenco performed the contracts through April 10, 1997, when Starr was terminated and replaced by Clarence Yahn. In a letter dated April 10, 1997, Kenco notified Casey that Kenco would no longer be selling the running board end caps and center accent pieces because Kenco did not “have channels of distribution for a line of running boards in the installer market[.]” Kenco indicated that no further delivery of these parts would be accepted. Precision then filed suit in the Eastern District of Michigan on November 12, 1997, alleging that Kenco repudiated and anticipatorily repudiated the balance of the contracts. Precision also named Williams as a defendant, stating that Williams was the parent company of Kenco, but not specifically pleading that Williams was Kenco’s alter ego. On December 2, 1997, Williams moved for summary judgment, arguing that it was not liable on the contract. On March 20, 1998, Precision moved for leave to file an amended complaint which specifically alleged an “alter ego” relationship between Wilhams and Kenco. On March 26, 1998, the district court denied Wilhams’ motion for summary judgment, and on April 7, 1998, the district court entered an order granting leave to file the amended complaint. On March 19, 1999, Wilhams filed a second motion for summary judgment. Precision filed a cross-motion for partial summary judgment, a motion pursuant to Fed. R.Civ.P. 37 to compel discovery and for other relief, and a request to serve additional interrogatories. The discovery motion was referred to the magistrate judge, who issued a report and recommendation on April 19,1999, allowing Precision to list ten more witnesses that it wished to depose. The magistrate judge also denied Precision’s motion for sanctions under Rule 37, its request for reformation of the protective order and its request to serve additional interrogatories. Finally, the magistrate judge held in abeyance Kenco’s and Williams’ motion to compel discovery and Precision’s motion for other relief. Because Precision’s motion was not included in the record on appeal, it is not clear what the relief was that Precision was requesting. The only indication of this relief is found in Precision’s objections to the magistrate judge’s report and recommendation filed on April .28, 1999, and in the motion to reconsider filed on April 3, 2001, where Precision explained that it demanded rescheduling of the discovery deadlines and trial date due to the defendants’ “wrongful delays.” The district court held a hearing on the motion for summary judgment on May 19, 1999, and granted Williams’ motion for summary judgment. In its oral decision, the district court found that there was no factual dispute as to whether Williams was a party to the contract because the parties conducted themselves as separate corporations. Further, as to the alter ego theory, the court declared that regardless of whether Michigan or Delaware law applied, the key element is fraud: [I]t still must show that the corporate structure was designed to enable Defendants to engage in fraud and that injustice required the Court to disregard the separate entities____ Plaintiff has failed to present any evidence of fraud or injustice to raise a material question of fact that would require a trial in this particular matter. The district court also denied as moot Precision’s motion for partial summary judgment and Precision’s objections to the report and recommendation of the magistrate judge regarding the discovery issues. Although the district court did not expressly address the merits of Precision’s objections to the report and recommendation, this ruling effectively denied Precision’s request for additional discovery and an extension of the discovery deadlines. On May 27, 1999, Precision moved for reconsideration of the court’s order granting summary judgment and denying Precision’s discovery motion. On June 10,1999, the magistrate judge denied Precision’s motion to comply and for other relief and Kenco’s motion to compel discovery. Although the docket entry is not clear, the magistrate judge apparently also recommended the denial of Precision’s motion for reconsideration. On July 7, 1999, the district court affirmed the order of the magistrate judge entered on June 10, 1999. On April 3, 2001, Precision filed a motion pursuant to Fed.R.Civ.P. 54(b), 59(e), and 60(b) to alter or vacate the order granting summary judgment to Williams. This was in essence a motion for reconsideration. Precision argued that the court erred in denying Precision the opportunity for discovery and in granting summary judgment in favor of Williams, and further that there was new evidence establishing that summary judgment was improper. On April 16, 2001, the district court denied Precision’s motion. Subsequently, Precision and Kenco settled their dispute through a consent judgment in favor of Precision entered on March 29, 2001. Williams was not a party to the settlement agreement. Precision timely appealed the district court’s grant of Williams’ motion for summary judgment, denial of Precision’s discovery motion, and denial of Precision’s two motions for reconsideration.