Court Opinion

ID: 2978719
Source: CourtListenerOpinion
Date Created: 2015-09-22 18:30:12.607891+00
Date Added: 2024-06-11T11:39:18.883047
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                                   File Name: 09a0419p.06

               UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT
                                 _________________

                                                X
                                                 -
 CMACO AUTOMOTIVE SYSTEMS, INC., dba

                         Plaintiff-Appellant, --
 CMA Forging Co., a California corporation,

                                                 -
                                                     No. 08-1435

                                                 ,
                                                  >
                                                 -
         v.

                                                 -
                        Defendant-Appellee. -
 WANXIANG AMERICA CORP.,
                                                 -
                                                N
                   Appeal from the United States District Court
               for the Eastern District of Michigan at Ann Arbor.
             No. 05-60087—John Corbett O’Meara, District Judge.
                                  Argued: June 10, 2009
                         Decided and Filed: December 10, 2009
                 Before: SILER, COOK, and GRIFFIN, Circuit Judges.

                                   _________________

                                        COUNSEL
ARGUED: Timothy D. Wittlinger, CLARK HILL, Detroit, Michigan, for Appellant. Philip
J. Kessler, BUTZEL LONG, Detroit, Michigan, for Appellee. ON BRIEF: James E.
Brenner, Cynthia M. Filipovich, CLARK HILL, Detroit, Michigan, Mahesh K. Nayak,
CLARK HILL, Birmingham, Michigan, for Appellant. Philip J. Kessler, BUTZEL LONG,
Detroit, Michigan, James F. Gehrke, Michael F. Smith, BUTZEL LONG, Washington, D.C.,
for Appellee.
                                   _________________

                                        OPINION
                                   _________________

        GRIFFIN, Circuit Judge. In this diversity action brought in the Eastern District of
Michigan, plaintiff CMACO Automotive Systems, Inc. (“CMA”), a California corporation
that supplies parts to automobile manufacturers, alleges that defendant Wanxiang America
Corporation (“WAC”), a Kentucky corporation with its principal place of business in Illinois,
breached an exclusive partnership agreement to manufacture automotive parts for CMA.

                                             1
No. 08-1435        CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp.                     Page 2

CMA’s complaint against WAC avers breach of contract, unjust enrichment, unfair
competition, tortious interference with contract, and promissory estoppel.

       WAC moved for summary judgment, arguing in pertinent part that CMA’s claims
accrued in California and, by application of Michigan’s borrowing statute, MICH. COMP.
LAWS § 600.5861, were time-barred by the relevant California statutes of limitation. The
district court agreed and dismissed CMA’s action in its entirety. The court later denied
CMA’s motion for reconsideration.

       CMA now appeals, arguing that the district court erred in granting summary
judgment on its breach of contract and related equitable claims for unjust enrichment and
promissory estoppel. We conclude, however, that the district court did not err when it
invoked Michigan’s borrowing statute and held that CMA’s causes of action were untimely
filed under California law. We therefore affirm the district court’s judgment.

                                            I.

       CMA is a California corporation that supplies automotive parts to American
automakers and their Tier I and Tier II suppliers. Michael Chi is CMA’s president and
founder. In May 1998, CMA approached Visteon Corporation (“Visteon”), a Detroit-based
automotive supplier that was seeking new overseas sources of axle and drive shaft parts. In
July 1998, Visteon issued several Requests For Quotations (“RFQs”) to CMA for various
automotive components, including three different stud yoke drive shaft parts (the “disputed
parts”). CMA responded with price quotes for each of the parts. Shortly thereafter, CMA
solicited price quotes from one of its strategic partners, Wanxiang Group Company, Ltd., an
automotive parts manufacturer based in Xiaoshan, China, for the parts that were the subject
of Visteon’s RFQ. Visteon ultimately determined that CMA’s prices were competitive and
began working with CMA to source the disputed parts for production at manufacturing plants
in China.

       On September 3, 1998, CMA entered into an exclusive partnership agreement (the
“Agreement”) with Wanxiang Group Company, Ltd. to manufacture and sell automotive
No. 08-1435          CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp.                         Page 3

                                   1
parts in the United States market. Pursuant to the Agreement, which expired on July 29,
2003, Wanxiang China agreed, inter alia, to keep drawings and specifications supplied
by CMA in “absolute confidentiality,” “to sell to only [CMA] all quantity of the products
manufactured according to the drawings and specifications provided by [CMA],” and “to
go exclusively through [CMA] for the increased volume of the oversea[s] orders” for
parts identified by CMA.

        For its part, CMA agreed to use its business connections in the United States to
develop the overseas market, contract its domestic orders to Wanxiang China, provided
that other companies’ prices and products were comparable, not disclose Wanxiang
China’s trade secrets or confidential technology, and provide Wanxiang China with
technical support and training.

        On November 21, 1998, Wanxiang China notified CMA by faxed letter that it
was assigning its responsibilities with respect to business in the United States to
defendant WAC, its wholly-owned subsidiary. WAC is incorporated in Kentucky, with
its principal place of business in Elgin, Illinois. CMA and WAC both accepted the
assignment.

        Following execution of the Agreement, CMA, WAC, and Wanxiang China
worked collaboratively over an eighteen-month period to ready Wanxiang China’s
manufacturing processes for production of the stud yoke parts and to meet the quality
assurance standards of certain North American automobile manufacturers. In September
1998, in response to the earlier request from CMA for a bid, Wanxiang China furnished
quotes for seven different automotive parts, including the disputed parts that were the
subject of Visteon’s July 1998 RFQ.

        During this time period, Visteon awarded a supply contract to CMA for certain
parts unrelated to the 1998 RFQ. This supply contract led to the first purchase order

        1
        The actual signatories to the Agreement were two wholly-owned, China-based subsidiaries of
Wanxiang Group Company. The three companies are hereinafter collectively referred to as “Wanxiang
China.”
No. 08-1435          CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp.                          Page 4

between CMA and WAC under the Agreement. The purchase order, dated August 28,
2000, called for WAC to manufacture five different parts beginning in September 2000.

        CMA alleges that, sometime in late 2000, WAC approached Visteon regarding
WAC’s desire to establish a business relationship with Visteon and circumvent CMA.
On January 10, 2001, Visteon issued an RFQ directly to WAC for price quotes for four
drive train components. CMA claims that three of these components were the disputed
parts that Wanxiang China quoted to CMA in 1998; the fourth component was a “three-
legged spider part.”2 Visteon simultaneously sent an identical RFQ to CMA. According
to CMA, Visteon requested that it confirm previously quoted prices and production
volumes for the disputed parts. On January 15, 2001, and again on January 31, CMA,
in turn, asked WAC to revalidate the price quotes for the disputed parts originally
provided by Wanxiang China in September 1998. After consulting with Wanxiang
China, WAC purportedly refused to do so, claiming that the parts were not the same.

        CMA alleges that, as a result of WAC’s refusal to revalidate the price quotes for
the disputed parts, it was unable to respond to Visteon’s January 2001 RFQ by the
February 1, 2001, deadline, causing Visteon to purchase the parts elsewhere. In fact,
WAC was this other source. On January 25, 2001, WAC provided Visteon with price
quotes for the RFQ, and, on March 7, 2001, Visteon awarded WAC the contract to
produce the disputed parts and ship them directly to Visteon.3 The first shipment of the
disputed parts by WAC to Visteon occurred in December 2001. An invoice reflects a
shipping date of December 20, 2001, with a destination of Sterling Heights, Michigan.

        In January 2005, Visteon cancelled CMA’s program to supply it with parts.

        On April 21, 2005, CMA filed suit against WAC in the United States District
Court for the Eastern District of Michigan, alleging breach of contract, unjust

        2
         CMA also claims that it had previously provided Wanxiang China with a print from which to
manufacture the three-legged spider part.
        3
           The contract for the three-legged spider part was not awarded to WAC, but to Worthington
Precision Metals, an Ohio company. Two years later, in April 2003, Worthington awarded WAC a
contract to manufacture a component of the three-legged spider part.
No. 08-1435          CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp.                  Page 5

enrichment, promissory estoppel, tortious interference with contract, and unfair
competition. In its second amended complaint, CMA alleged in pertinent part that in
January 2001, WAC “refused to revalidate the Parts, falsely claiming that they were not
the same parts Wanxiang China had previously quoted[,]” and that “[a]t the same time
[WAC] refused to revalidate the Parts for CMA, [WAC] began negotiating directly with
Visteon for the sale of the same Parts.” WAC then “breached the Partnership Agreement
. . . by selling parts directly to Visteon . . . and other third parties.”

        Upon the completion of discovery, WAC filed a renewed motion to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(6) for forum non conveniens and a
motion for summary judgment. In the latter motion, which is the subject of this appeal,
WAC complained that CMA, a California corporation, was forum shopping and sued
WAC, a Kentucky corporation based in Illinois, in Michigan in an effort to avoid
California’s shorter limitations periods. WAC asserted three grounds for summary
judgment: (1) CMA’s causes of action accrued in California and, under Michigan’s
borrowing statute, were time-barred by California’s statutes of limitation; (2) WAC was
not bound by the Agreement; and (3) the disputed parts were not encompassed by the
Agreement.

        CMA responded by filing its own motion for partial summary judgment. On
September 10, 2007, the district court granted WAC’s motion for summary judgment,
but denied WAC’s motion to dismiss and CMA’s motion for partial summary judgment.
CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp., No. 05-60087, 2007 WL 2649244
(E.D. Mich. Sept. 10, 2007). The district court held that Michigan’s borrowing statute
was triggered because CMA’s causes of action accrued in another jurisdiction,
California, and, therefore, California’s shorter statutes of limitation applied and barred
No. 08-1435           CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp.                               Page 6

CMA’s claims.4 Specifically, with regard to CMA’s breach of contract claim, the court
reasoned:

         Under Michigan’s borrowing statute, “[a]n action based upon a cause of
         action accruing without this state shall not be commenced after the
         expiration of the statute of limitations of either this state or the place
         without this state where the cause of action accrued.” MICH. COMP.
         LAWS ANN. § 600.5861.
         Plaintiff CMA contends that the Michigan Court of Appeals has
         explained that “the borrowing statute applies only if an action accrued
         without any essential facts giving rise to the cause of action occurring in
         Michigan.” Scherer v. Hellstrom, 270 Mich. App. 458, 462 [716 N.W.2d
         307] (2006). Relying on Scherer, Plaintiff claims, “All of the conduct by
         WA[C] forming the basis of CMA’s claims (both in contract and in tort)
         took place in Michigan (and in this District). It was in Michigan where
         WA[C] approached Visteon, CMA’s customer, and persuaded it to
         bypass CMA. It was in Michigan where WA[C] sold the disputed stud
         yokes to Visteon in late 2001.” Plaintiff’s resp. br. at 12 (emphasis in
         original).
         As pointed out by defendant WAC, however, the court in Scherer based
         its holding on the fact that the defendant was a Michigan resident.
         “Because defendant was residing in Michigan when she failed to fulfill
         her promise, the plaintiff’s cause of action cannot be said to have accrued
         ‘without this state’ as contemplated by the borrowing statute.” Scherer,
         270 Mich. App. at 464 (emphasis added).
         In this case, plaintiff CMA is a California corporation suing WAC, a
         Kentucky corporation located in Illinois. The only Michigan connection
         is that the alleged breach involved sales of parts to Visteon in Michigan.
         The Michigan borrowing statute cited above references the place “where
         the cause of action accrued.” Likewise, the Michigan Supreme Court has
         held that “[a] claim accrues when and where the injury and damage are
         suffered.” Parish v. B.F. Goodrich, 395 Mich. 271, 276 [235 N.W.2d
         570] (1975). In this case any injury alleged by CMA would have been
         felt in California, the state in which it is incorporated and has its only
         place of business, not Michigan. Therefore, Michigan’s borrowing

         4
          The borrowing statute requires the application of whatever limitations period is shorter. Hover
v. Chrysler Corp., 530 N.W.2d 96, 98 (Mich. Ct. App. 1994). Because Michigan has a shorter limitations
period than California with regard to an action alleging unfair competition, the district court applied
Michigan’s statute of limitations to this claim and held that it was untimely. See CAL. BUS. & PROF. CODE
§ 17208 (providing a four-year limitations period); MICH. COMP. LAWS § 600.5805(10) (establishing a
three-year limitations period).
No. 08-1435           CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp.                              Page 7

        statute applies; and the court will apply California’s four-year statute of
        limitations for written contract cases. CAL. CIV. PROC., CODE § 337.
        For purposes of Michigan’s borrowing statute, the time a claim accrued
        is determined under the law of the same [state] as the statute of
        limitations that is applied. Szlinis v. Molded Fiber Glass Co., Inc., 80
        Mich. App. 55, 60 [263 N.W.2d 282] (1977). California law provides
        that a breach of contract claim accrues at the time of the breach. Doheny
        Park Terrace Homeowners Ass’n, Inc. v. Truck Ins. Exc., 132 Cal. App.
        4th 1076, 1085, 34 Cal. Rptr. 3d 157 (2005).

2007 WL 2649244, at *1-2.

        The district court then accepted CMA’s argument that California law allows for
the application of the discovery rule to breach of contract actions,5 but rejected CMA’s
claim that it was not aware of the specific facts necessary to establish a claim until 2004.
Id. at *2. The court found that the claim accrued in January or February 2001, when
Visteon sent the RFQ directly to WAC:

        At that time Chi had attempted to get [WAC] to revalidate the quote for
        the [disputed parts], but [WAC] failed to respond. It was at that point
        that if Chi had investigated, he would have known that [WAC] was not
        responding because it was giving its own quote to [Visteon]. Thus, under
        California’s four-year statute of limitations, Plaintiff’s breach of contract
        claim is time-barred.
        CMA’s unjust enrichment and promissory estoppel claims, asserted in the
        alternative to its breach of contract claim, are also barred under the
        borrowing statute analysis. The doctrine of laches presumes that quasi-
        contractual, equitable claims are barred by the corresponding statute of
        limitations for the analogous action at law. Jarrow Formulas, Inc. v.
        Nutrition Now, Inc., 304 F.3d 829, 835 (9th Cir. 2002).

Id. at *3.

        The district court subsequently denied CMA’s motion for reconsideration. CMA
now appeals that portion of the district court’s order granting summary judgment on its
breach of contract, unjust enrichment, and promissory estoppel claims. At the heart of

         5
           CMA cited Gryczman v. 4550 Pico Partners, Ltd., 107 Cal. App. 4th 1, 6, 131 Cal. Rptr. 2d 680
(2003), in support of this proposition.
No. 08-1435           CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp.                               Page 8

this appeal is whether CMA’s contract claims “accru[ed] without this state,” MICH.
COMP. LAWS § 600.5861, so as to trigger Michigan’s borrowing statute.

                                                   II.

         We review de novo the district court’s order granting summary judgment and its
denial of CMA’s motion for reconsideration of that order. Med. Mut. of Ohio v. K.
Amalia Enter. Inc., 548 F.3d 383, 389-90 (6th Cir. 2008). Summary judgment is
appropriate if, viewing the evidence and drawing all reasonable inferences in the light
most favorable to the nonmoving party, “the pleadings, the 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); Med. Mut. of Ohio, 548 F.3d at 389. “A genuine issue for trial exists only when
there is sufficient ‘evidence on which the jury could reasonably find for the plaintiff.’”
Baker v. City of Hamilton, Ohio, 471 F.3d 601, 605 (6th Cir. 2006) (quoting Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986)). The district court’s determination that
CMA’s claims were filed outside the applicable statute of limitations is a conclusion of
law that we review de novo. Bonner v. Perry, 564 F.3d 424, 430 (6th Cir. 2009).

                                                  III.

         “A borrowing statute is a legislative exception from the general rule that the
forum always applies its statute of limitation.” Combs v. Int’l Ins. Co., 354 F.3d 568,
578 (6th Cir. 2004). Although borrowing statutes vary from state to state, “all provide
that the forum state will apply the statute of limitations from the foreign jurisdiction in
which the cause of action accrued.” Id. “[I]f a cause of action arises in a foreign
jurisdiction which has a shorter statute of limitations than [the forum] for the same cause
of action, [the forum’s] courts must ‘borrow’ the foreign jurisdiction’s statute of
limitations.” Id.6

         6
           We apply the law of the state of the borrowing statute to make the initial determination where
the cause of action accrued. Willits v. Peabody Coal Co., 188 F.3d 510, 1999 WL 701916, at *12 (6th Cir.
1999) (unpublished table decision) (citing Cope v. Anderson, 331 U.S. 461, 466-67 (1947)); see also Mun.
High Income Fund, Inc. v. Goldman, Sachs & Co., No. 264224, 2006 WL 361149, at *7 (Mich. Ct. App.
Feb. 16, 2006) (unpublished) (“Where a claim accrued for purposes of [the borrowing statute] is
No. 08-1435            CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp.                                 Page 9

         Borrowing statutes serve several functions. Most importantly, they impede
forum shopping. Id. at 589-90; Hall v. Gen. Motors Corp., 582 N.W.2d 866, 871 (Mich.
Ct. App. 1998) (Michigan’s borrowing statute “evidences, at a minimum, legislative
intent to discourage suits in Michigan that would be time-barred in other states.”);
Szlinis, 263 N.W.2d at 288 (the purpose of Michigan’s borrowing statute “is to resolve
possible conflicts of laws that may arise when a plaintiff’s claim arises outside the forum
and to limit forum shopping.”) (citing Parish, 235 N.W.2d at 572).                             Moreover,
“[b]orrowing statutes embody the idea that the foreign jurisdiction’s law should control
out of respect for that jurisdiction’s territorial sovereignty.” Combs, 354 F.3d at 591.

         We must proceed with caution in interpreting a state’s borrowing statute. Combs,
354 F.3d at 577. “Sitting in diversity, we are ‘not commissioned to take a position
regarding the advisability or fairness of the state rule to be applied, but [must] determine
the issue as would the highest court of the state.’” Id. (quoting Kurczi v. Eli Lilly & Co.,
113 F.3d 1426, 1429 (6th Cir. 1997) (alteration in original)). “Furthermore, ‘[w]hen
given a choice between an interpretation of [state] law which reasonably restricts
liability, and one which greatly expands liability, we should choose the narrower and
more reasonable path.’” Id. at 577 (quoting Todd v. Societe Bic, S.A., 21 F.3d 1402,
1412 (7th Cir. 1994) (en banc) (alteration in original)).

                                                    IV.

         In Michigan, a breach of contract action must be brought within six years of the
time the claim first accrues. MICH. COMP. LAWS § 600.5807(8). California’s similar
limitations period for breach of a written contract is four years. CAL. CIV. PROC. CODE
§ 337; Doheny Park Terrace Homeowners Ass’n, 34 Cal. Rptr. 3d at 162. Michigan’s
borrowing statute provides:

         An action based upon a cause of action accruing without this state shall
         not be commenced after the expiration of the statute of limitations of

determined under Michigan law because this issue does not present a conflict of laws question, but rather
a matter of legislative intent.”). We then borrow the law of the jurisdiction where the cause of action
accrued for purposes of interpreting that state’s statute of limitation. Hover, 530 N.W.2d at 97-98; Szlinis,
263 N.W.2d at 287.
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         either this state or the place without this state where the cause of action
         accrued, except that where the cause of action accrued in favor of a
         resident of this state the statute of limitations of this state shall apply.

MICH. COMP. LAWS § 600.5861 (emphasis added).

         Under this statute, “[a] cause of action accruing in another state or jurisdiction
commenced in Michigan by a nonresident of this state is barred upon expiration of either
the applicable Michigan limitation period or the applicable limitation period of the other
state or jurisdiction. In other words, if the statute of limitations of either state or
jurisdiction bars the plaintiff’s claim, the action should be dismissed.” Hover, 530
N.W.2d at 98 (citation omitted); see also Bechtol v. Mayes, 499 N.W.2d 439, 440 (Mich.
Ct. App. 1993). Thus, Michigan’s borrowing statute necessarily requires a determination
of where and when the action accrued. Parish, 235 N.W.2d at 571; Scherer, 716 N.W.2d
at 310.7

         There is scant authority from the Michigan courts interpreting the borrowing
statute in the context of a breach of contract action. Indeed, the Michigan Court of
Appeals’ decision in Scherer provides the only guidance on this precise issue.

         In Scherer, the plaintiff brought a breach of contract action against his ex-wife,
stemming from a post-divorce loan made to her in 1993. Scherer, 716 N.W.2d at 309.

         7
          As we have noted previously, the elements of time and place of accrual are inextricably
intertwined:
         The time when a cause of action arises and the place where it arises are necessarily
         connected, since the same act is the critical event in each instance. The final act which
         transforms the liability into a cause of action necessarily has both aspects of time and
         place.
Willits, 1999 WL 701916, at *12 (quoting Helmers v. Anderson, 156 F.2d 47, 51 (6th Cir. 1946), aff’d sub
nom Cope v. Anderson, 331 U.S. 461 (1947)).
           Moreover, pinpointing where a breach of contract accrues can be problematic in certain
circumstances, like the present case, in which the place of performance is not of essence to the contract.
See, e.g., Willits, 1999 WL 701916, at *13 (noting the challenges in ascertaining where a breach of contract
action accrued for purposes of Kentucky’s borrowing statute, where the contract for the payment of
royalties “[did] not specify a place of payment, and the locations of the Plaintiffs were immaterial to the
obligation to pay the royalties. [The defendant] was required to pay the Plaintiffs whether the Plaintiffs
showed up at [the defendant’s] Missouri office, or were living in Kansas or had just moved to China.”)
(footnote omitted). Likewise, WAC’s agreement “to sell to only [CMA] all quantity of the products
manufactured according to the . . . specifications provided by [CMA],” and “to go exclusively through
[CMA] for the increased volume of the oversea[s] orders” – demands performance irrespective of
customer, destination, or geographic location.
No. 08-1435        CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp.                   Page 11

At the time the loan was made, the plaintiff resided in Georgia and the defendant lived
in Florida. Id. Pursuant to the written loan agreement, the plaintiff was not obligated
to pay off the loan until the first of three specified events occurred: (1) the sale of the
defendant’s house in Florida, (2) the refinancing of the Florida house, or (3) on
December 1, 1995. Id. The defendant subsequently left Florida and, on November 21,
1994, while residing in Michigan, sold the Florida house but failed to pay off the loan
or contact the plaintiff. Id. On January 20, 2000, the plaintiff commenced a breach of
contract action in Michigan. The defendant argued that the claim accrued in Florida and,
therefore, under Michigan’s borrowing statute, Florida’s shorter five-year statute of
limitations applied and barred the action. The Michigan Court of Appeals disagreed and
explained:

       The phrase “without this state” is not defined in the [borrowing] statute.
       We observe, however, that the word “without” is commonly defined as:
       “1. with the absence, omission, or avoidance of; not with; with no or
       none of; lacking . . . . 2. free from; excluding . . . . 3. not accompanied
       by . . . .” Random House Webster’s College Dictionary (1997). Giving
       these words used in Michigan’s borrowing statute their plain meaning,
       it is clear that the borrowing statute applies only if an action accrued
       without any essential facts giving rise to the cause of action occurring in
       Michigan.
       Consistent with this interpretation, our Supreme Court observed in
       Parish v. B F Goodrich Co., 395 Mich. 271, 277-278, 235 N.W.2d 570
       (1975):
       “Most states have enacted ‘borrowing statutes’ to resolve the possible
       conflicts of laws that may arise when a plaintiff’s claim accrues outside
       of the forum. Borrowing statutes, including Michigan’s, typically
       confine a plaintiff whose claim accrues outside the forum to the
       limitational period – of the forum or the state where the claim accrued –
       allowing the least time to commence the action.”
       We therefore must determine both when and where plaintiff’s cause of
       action accrued. In Michigan, a breach of contract claim accrues “at the
       time the wrong upon which the claim is based was done regardless of the
       time when damage results.” MCL 600.5827. To determine what
       constituted the “wrong upon which the claim is based,” we look first to
       the parties’ agreement. . . . On the basis of the parties’ agreement,
       defendant did not have to pay off the loan until the first of the three
       specified events occurred.      Here, the first event occurred on
No. 08-1435             CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp.                                Page 12

         November 21, 1994, when defendant sold the Florida house. Upon the
         sale of the house, defendant was immediately obligated to pay plaintiff
         the money he had loaned to her. Thus, plaintiff’s breach of contract
         claim accrued on November 21, 1994.

Id. at 310-11 (emphasis added) (footnote omitted).8

         The Scherer court then rejected the defendant’s argument that the claim accrued
in Florida because her house was located there:

         [W]hen the Florida house was sold, defendant was residing in Michigan.
         The parties’ agreement did not require defendant to satisfy her obligation
         to plaintiff with the proceeds from the sale of the Florida house. In fact,
         the latest payment date contemplated by the parties . . . required the loan
         to be paid regardless of whether the Florida house was sold or refinanced.
         Generally, if performance is dependent on a condition precedent, the
         cause of action does not accrue until the condition is fulfilled and the
         promise is not performed. Here, the condition was fulfilled when the
         Florida house was sold, but defendant was residing in Michigan when her
         obligation to perform on the contract arose. Because defendant was
         residing in Michigan when she failed to fulfill her promise, the plaintiff’s
         cause of action cannot be said to have accrued “without this state” as
         contemplated by the borrowing statute. Therefore, the borrowing statute
         . . . does not apply and plaintiff’s claim was timely filed under
         Michigan’s six-year statute of limitations for breach of contract.

Id. at 311 (citations omitted).

         CMA argues that, like Scherer, essential facts giving rise to its contract claim
occurred in Michigan, and therefore the borrowing statute does not apply. CMA cites
WAC’s first shipment of the disputed parts to Visteon’s Sterling Heights facility in
December 2001 as the crucial accrual event. It further points out that it was in Michigan
where WAC contacted Visteon and persuaded it to bypass CMA, and it was CMA’s

         8
           The Scherer court disagreed with the trial court’s finding that the cause of action did not accrue
until December 1, 1995, when the plaintiff discovered the breach. The Scherer court noted that under
Michigan law, “‘a plaintiff need not know of the invasion of a legal right in order for the claim to accrue.’”
Id. at 311 n.2 (quoting Dewey v. Tabor, 226 Mich. App. 189, 193, 572 N.W.2d 715 (1997)). See also
Seyburn, Kahn, Ginn, Bess, Deitch & Serlin, P.C. v. Bakshi, 771 N.W.2d 411, 417 (Mich. 2009) (“For a
breach of contract action, the limitations period generally begins to run on the date that the breach
occurs.”) (footnote omitted); Mich. Millers Mut. Ins. Co. v. West Detroit Bldg. Co., Inc., 494 N.W.2d 1,
4 n.1 (Mich. 1992) (“A breach of contract claim accrues on the date of the breach, not the date the breach
is discovered.”).
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business with Visteon in Michigan that was harmed by WAC’s breach. Accordingly,
CMA maintains that Michigan’s six-year statute of limitations controls, and that the
April 2005 complaint was timely filed. We disagree, however, that these Michigan
connections constitute “essential” or operative facts giving rise to the cause of action in
this case.

         The Agreement between the parties does not prohibit WAC’s direct sale of the
disputed parts to an entity in Michigan; it prohibits the direct sale of such parts to a third
party, regardless of the location of the client or the destination of the shipment. Thus,
as WAC argues, the fact that nonparty Visteon has offices in Michigan “has no
substantive impact on CMA’s claim – it would be the same if Visteon’s offices were in
any of the 50 states.” This valid point is underscored by CMA’s allegation in its second
amended complaint that WAC “breached the Partnership Agreement by selling the Parts
. . . directly to Visteon . . . and other third parties,” presumably Worthington Precision
Metals in Ohio. (Emphasis added.) Thus, Visteon’s involvement and the shipment of
parts to Michigan are of only peripheral importance to the accrual of this breach of
contract action involving nonresident corporations.

         Our conclusion that CMA’s contract claim accrued “without this state” requires
that we view Michigan’s borrowing statute jurisprudence from a broad perspective.
“Michigan generally looks to the state of injury under its borrowing statute to determine
where the claim accrued.” Mun. High Income Fund, 2006 WL 361149, at *7 (citing
Parish, 235 N.W.2d at 575). In Parish, the Michigan Supreme Court considered
“whether a product liability claim of a consumer against a manufacturer accrues [under
the borrowing statute] in the state where the product is sold or the state where the alleged
defect in the product becomes apparent, causing injury and damage.” Parish, 235
N.W.2d at 571. The Parish court held “that the claim accrues when and where injury
and damage are suffered.” Id.9 Otherwise stated, “the product liability claim of a

         9
           The plaintiffs in Parish were injured in an automobile accident in Ohio caused by the blowout
of a defective tire. They brought suit against the tire manufacturer in Michigan, where the tire was sold.
235 N.W.2d at 571. The Michigan Supreme Court held that under a prior, but substantively similar,
version of the borrowing statute, the plaintiffs’ claim accrued in Ohio at the time of the accident and, by
application of Michigan’s borrowing statute, was governed by Ohio’s shorter statute of limitations. Id. at
No. 08-1435            CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp.                               Page 14

consumer for personal injury against a manufacturer . . . does not accrue for purposes of
the borrowing statute until all elements of the cause of action are present.” Id. at 575-76.
See also Hover, 530 N.W.2d at 98 (products liability action accrued in Canada, where
automobile accident took place and injuries were sustained); Szlinis, 263 N.W.2d at 287
(wrongful death action “accrued on the date of death, and, following Parish, . . . it
accrued where injury (death) and damage were suffered.”).

         In Mun. High Income Fund, the Michigan Court of Appeals extended Parish’s
accrual analysis to circumstances involving economic, rather than physical, injury. 2006
WL 361149, at *7-8. The plaintiffs, various municipal bond funds with their principal
place of business in New York, brought suit in Michigan, where the bonds were issued
by a nonparty, alleging that the nonresident corporate defendants were liable for losses
to their bond funds on theories of innocent and negligent misrepresentation. Id. at *1.
Noting that in accordance with Parish, “Michigan generally looks to the state of injury
under its borrowing statute to determine where the claim accrued[,]” id. at *7, the
Michigan Court of Appeals held that the plaintiffs’ injury occurred “without this state,”
in New York, “because the economic impact on a plaintiff from a misrepresentation of
mutual funds is felt at the plaintiff’s principal place of business.” Id. (citing Maiden v.
Biehl, 582 F. Supp. 1209, 1214 (S.D.N.Y. 1984)).

         In light of the Michigan courts’ adherence to the general rule that a cause of
action accrues at the place of injury, we find the “economic impact” analysis of Mun.
High Income to be particularly useful in the present action which, albeit not a tort claim,
involves economic injury. Although this rationale is not without its pitfalls,10 we note
that it has been utilized by the New York courts to determine where a cause of action
accrues for purposes of New York’s similarly worded borrowing statute. See Global

572.
         10
             In Combs, in the course of interpreting Kentucky’s borrowing statute, we surveyed the different
definitions of accrual used by other states and noted that the economic impact analysis “is troubling
because one can easily envision a situation where the plaintiff resides in a different forum than the one in
which he sustains the economic impact of the loss; for instance, a business incorporated in one jurisdiction
but with its principal place of business in another.” Combs, 354 F.3d at 582 n.5. We further observed that
“[i]f a breach of contract causes [a corporation’s] stock to decline, determining where the company ‘got
hurt’ is not so easy.” Id. at n.6.
No. 08-1435         CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp.                  Page 15

Fin. Corp. v. Triarc Corp., 715 N.E.2d 482, 485 (N.Y. 1999) (holding that where the
alleged injury was “purely economic,” the nonresident corporate plaintiff’s breach of
contract claims accrued in the jurisdiction in which it sustained the economic impact of
the alleged breach – either the state of incorporation or its principal place of business –
rather than New York, thus requiring application of the borrowing statute); see also Bank
Brussels Lambert v. Credit Lyonnais (Suisse), S.A., No. 93 CIV. 6876(LMM), 2001 WL
492363, at *4 (S.D.N.Y. May 9, 2001) (unpublished) (following Global Financial and
holding that under New York’s borrowing statute, the conversion claims of the banking
corporation plaintiffs accrued at their principal places of business in Europe where they
suffered economic injury); Maiden, 582 F. Supp. at 1212-14 (applying New York
borrowing statute to a fraudulent misrepresentation claim and holding that “[w]here a
cause of action accrues still depends on the facts of each case, but the question is always
where the plaintiff felt the economic impact of the fraud” and, therefore, “the place of
injury for a mutual fund is the principal place of business. . . .”).

        CMA does not dispute that it is a nonresident California corporation and that the
putative economic impact of WAC’s alleged breach of the Agreement was in California,
where CMA has its principal place of business. The events that transpired in Michigan
are certainly causally related to CMA’s contractual claims; however, as we have already
found, these Michigan connections are merely tangential and not “essential facts giving
rise to the cause of action.” Scherer, 716 N.W.2d at 310.

        Because the economic injury suffered by CMA as a result of WAC’s alleged
direct dealings with Visteon and other third parties was clearly felt at its corporate
headquarters, the district court did not err in holding that CMA’s contract claim accrued
“without the state” – in California – thereby triggering Michigan’s borrowing statute and
requiring application of California’s four-year statute of limitations for written contract
cases, CAL. CIV. PROC. CODE § 337. A contrary conclusion would contradict the
underlying priority of the Michigan borrowing statute: to impede forum shopping.
No. 08-1435         CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp.                   Page 16

                                            V.

        Next, we must borrow California’s substantive law to interpret its statute of
limitations and determine when CMA’s claim accrued and whether it is time-barred.
Hover, 530 N.W.2d at 98.

        “California courts have often stated the maxim that ‘[i]n ordinary tort and
contract actions, the statute of limitations . . . begins to run upon the occurrence of the
last element essential to the cause of action. The plaintiff’s ignorance of the cause of
action . . . does not toll the statute.’” April Enters., Inc. v. KTTV, 147 Cal. App. 3d 805,
826, 195 Cal. Rptr. 421 (1983) (quoting Neel v. Magana, Olney, Levy, Cathcart &
Gelfand, 6 Cal. 3d 176, 187, 98 Cal. Rptr. 837 (1971) (alteration in original)). However,
unlike Michigan, California allows for application of a discovery rule “to breaches which
can be, and are, committed in secret and, moreover, where the harm flowing from those
breaches will not be reasonably discoverable by plaintiffs until a future time.” April
Enters., Inc., 147 Cal. App. 3d at 832. The discovery rule postpones accrual “until a
plaintiff knew or should have known of the wrongful conduct at issue.” Id. (citation
omitted). Typically, the discovery rule has been applied by the California courts to
“unique” breach-of-contract cases in which (1) the injury or act causing injury (or both)
has been difficult for the plaintiff to detect; (2) the defendant was in a far superior
position to comprehend the act and the injury; or (3) the defendant had reason to believe
the plaintiff remained ignorant that he had been wronged. El Pollo Loco, Inc. v. Hashim,
316 F.3d 1032, 1039 (9th Cir. 2003). See also Gryczman, 107 Cal. App. 4th at 6
(applying discovery rule in breach of contract action where “the act causing the injury
would have been ‘difficult for the plaintiff to detect’ because . . . the failure to give
plaintiff notice of the happening of a certain event is both the act causing the injury and
the act that caused plaintiff not to discover the injury.”).

        Giving CMA the benefit of the doubt and applying the discovery rule to this
seemingly “typical contract breach where accrual logically begins at the time of
injury[,]” April Enters., Inc., 147 Cal. App. 3d at 831, we conclude that WAC’s alleged
breach of the Agreement accrued no later than March 7, 2001, when Visteon accepted
No. 08-1435         CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp.                   Page 17

WAC’s bid in response to the January 2001 RFQ and awarded WAC the business for the
disputed parts. On this date, Visteon authorized WAC “to officially begin production
efforts in the absence of purchase orders for the [disputed parts].” It was at this point in
time that WAC circumvented CMA and contracted directly with Visteon for the
manufacture of the disputed parts, which were later shipped to Visteon’s facilities in
Michigan in December 2001. Certainly this event was a material breach of the
Agreement – “a failure to do something that is so fundamental to a contract that the
failure to perform that obligation defeats the essential purpose of the contract or makes
it impossible for the other part to perform under the contract.” 23 Richard A. Lord,
Williston on Contracts § 63:3 (4th ed. 2009).

        Given the events in January and February 2001, CMA, through reasonable
diligence, knew or should have known of WAC’s wrongful conduct in contracting
directly with Visteon for production of the disputed parts. “It is plaintiff’s burden to
establish facts showing that he was not negligent in failing to make the discovery sooner
and that he had no actual or presumptive knowledge of facts sufficient to put him on
inquiry.” April Enters., Inc., 147 Cal. App. 3d at 833 (citation and internal quotation
marks omitted). The evidence of record shows that in early 2001, Visteon informed Chi
that WAC was going to quote new business directly to Visteon. Chi understood that
CMA would keep its current parts program with WAC, but that new programs could go
directly to WAC. Visteon expected CMA to provide a quote for this new business (the
January 2001 RFQ) through one of its other strategic partners in China. Moreover, on
February 5, 2001, in the course of responding to CMA’s revalidation request, WAC
informed Chi in writing that WAC had received Visteon’s January 2001 RFQ for the
disputed parts. Chi admitted that CMA knew it had lost the business for the disputed
parts in January when it did not respond to Visteon’s RFQ. Thus, the injury or act
causing injury was not difficult for Chi to detect. He was aware that WAC was dealing
directly with Visteon in February 2001, and WAC’s failure to revalidate the quote for
the 1998 parts was only confirmation of this fact. The ensuing production order entered
into by Visteon and WAC in March 2001 therefore was, with the exercise of reasonable
diligence, no surprise.
No. 08-1435        CMACO Auto. Sys., Inc. v. Wanxiang Am. Corp.                Page 18

       In sum, CMA’s breach of contract cause of action accrued no later than March 7,
2001, and, under California’s four-year statute of limitations, is time-barred. CMA’s
quasi-contractual, equitable claims of unjust enrichment and promissory estoppel claims
are time-barred under the same analysis. As the district court accurately held, the
doctrine of laches presumes that such quasi-contractual claims are barred by the
corresponding statute of limitations for the analogous action at law. Jarrow Formulas,
Inc. v. Nutrition Now, Inc., 304 F.3d 829, 835 (9th Cir. 2002).

                                          VI.

       For these reasons, we affirm the judgment of the district court.