Court Opinion

ID: 2980539
Source: CourtListenerOpinion
Date Created: 2015-09-22 19:12:05.506897+00
Date Added: 2024-06-11T12:46:23.428128
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                          File Name: 12a0096n.06

                                         No. 10-2162

                         UNITED STATES COURT OF APPEALS
                              FOR THE SIXTH CIRCUIT
                                                                                   FILED
                                                                               Jan 26, 2012
McNAUGHTON-McKAY ELECTRIC                          )
COMPANY,                                           )                     LEONARD GREEN, Clerk
                                                   )
                      Plaintiff-Appellant,         )       ON APPEAL FROM THE
                                                   )       UNITED STATES DISTRICT
v.                                                 )       COURT FOR THE EASTERN
                                                   )       DISTRICT OF MICHIGAN
LINAMAR CORPORATION,                               )
                                                   )
                      Defendant-Appellee.          )

BEFORE: SUHRHEINRICH, GIBBONS and McKEAGUE; Circuit Judges.

       PER CURIAM. This case arises from the cancellation and subsequent settlement of a

manufacturing contract between Chrysler, LLC (Chrysler) and Defendant Linamar Corporation

(Linamar). In 2008, Chrysler contracted with Linamar to produce four “special purpose machines”

for the manufacture of dual-clutch transmissions at Chrysler’s Kokoma, Indiana facility. Linamar

subcontracted with Ann Arbor Machine (AAM) to build the machines. AAM agreed to pay Plaintiff

McNaughton-McKay Electric Company (McNaughton) $424,015.42 to supply the electrical

components necessary for construction.

       After McNaughton supplied the electrical components but before AAM paid it, Chrysler

cancelled its contract with Linamar. Chrysler paid Linamar $10.25 million in satisfaction of its

claims; Linamar, in turn, paid AAM $5 million. AAM filed for bankruptcy and never paid

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No. 10-2162
McNaughton-McKay v. Linamar Corporation

McNaughton under the parties’ supplier contract. AAM’s creditor took possession of the special

purpose machines, which were subsequently sold at auction.

       McNaughton sued Linamar under a theory of unjust enrichment alleging, inter alia, that the

Michigan Court of Appeals’ decision in Morris Pumps v. Centerline Piping, Inc., 273 Mich. App.
187 (Mich. Ct. App. 2006) supported a general contractor’s liability for materials provided by a

subcontractor’s unpaid supplier.     The parties filed cross-motions for summary judgment.

Distinguishing Morris Pumps, the district court denied McNaughton’s motion and granted Linamar’s

motion for summary judgment. McNaughton appeals the district court’s order.

       After carefully reviewing the district court’s opinion, the record, and the applicable law, we

are satisfied that the issues were thoroughly and correctly resolved by the district court and that

summary judgment in favor of Linamar was proper. We are similarly satisfied that the instant case

is factually dissimilar from Morris Pumps, wherein the general contractor retained and used the

materials of its subcontractor’s supplier despite constructive knowledge that the supplier had not

been paid. See id. at 195-96. Accordingly, we AFFIRM the judgment of the district court on the

grounds stated in its well-reasoned opinion dated August 11, 2010.

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