Auburn Sales, Inc. v. Cypros Trading & Shipping, Inc. ( 2018 )


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  •                            RECOMMENDED FOR FULL-TEXT PUBLICATION
    Pursuant to Sixth Circuit I.O.P. 32.1(b)
    File Name: 18a0162p.06
    UNITED STATES COURT OF APPEALS
    FOR THE SIXTH CIRCUIT
    AUBURN SALES, INC.,                                      ┐
    Plaintiff-Appellant,   │
    │
    >      No. 17-2501
    v.                                                │
    │
    │
    CYPROS TRADING & SHIPPING, INC.; JOSEPH KILANI;          │
    FADI KILANI,                                             │
    Defendants-Appellees.          │
    ┘
    Appeal from the United States District Court
    for the Eastern District of Michigan at Flint.
    No. 4:14-cv-10922—Linda V. Parker, District Judge.
    Decided and Filed: August 6, 2018
    Before: MOORE, THAPAR, and NALBANDIAN, Circuit Judges.
    _________________
    COUNSEL
    ON BRIEF: Eric R. Bryen, ERIC R. BRYEN, P.C., Southfield, Michigan, Mohammed M.
    Alomari, AZIMUTH LEGAL SERVICES, PLLC, Southfield, Michigan, Stuart J. Snider, LAW
    OFFICES OF STUART J. SNIDER, Southfield, Michigan, for Appellant. Aaron J. Scheinfield,
    GOLDSTEIN BERSHAD & FRIED PC, Southfield, Michigan, for Appellees.
    _________________
    OPINION
    _________________
    NALBANDIAN, Circuit Judge. This dispute arises from Auburn Sales, Inc.’s role as a
    middleman selling Chrysler automotive parts. Auburn Sales would buy Chrysler parts and then
    resell those parts to Cypros Trading & Shipping, Inc., who would then sell those parts to
    customers in the Middle East. This business arrangement, however, came to an end when the
    No. 17-2501           Auburn Sales, Inc. v. Cypros Trading & Shipping, Inc., et al.                     Page 2
    FBI raided Cypros’ warehouse and charged its president, Fadi Kilani, with trafficking in
    counterfeit goods. Unbeknownst to Auburn Sales, Kilani had been obtaining counterfeit parts,
    mixing them with the legitimate Chrysler parts received from Auburn Sales, and then selling the
    comingled parts to customers.
    After the fallout, Auburn Sales brought tortious interference claims and a breach of
    contract claim against Cypros that the district court dismissed on summary judgment. The
    district court identified two undisputed facts that are fatal to Auburn Sales’ claims: (1) Cypros
    did not specifically intend to interfere with Auburn Sales’ relationship with Chrysler, and
    (2) Cypros and Auburn Sales did not have a written contract.                     Because we conclude that
    Michigan tortious interference law requires the specific intent to interfere with a business
    relationship, and that the Michigan statute of frauds applies here, we AFFIRM.
    I.
    Auburn Sales bought automotive parts from Chrysler, and then resold them to Cypros.1
    Cypros then resold the Chrysler parts to customers in the Middle East. The supply chain worked
    as follows: (1) Automotive Aftermarket Resources, LLC (“AAR”) obtained Chrysler parts,
    (2) that Auburn Sales purchased at a markup, then (3) Cypros would pay an additional premium
    for the parts from Auburn Sales. Despite this “three-level” system, neither AAR nor Auburn
    Sales ever took possession of the parts. Instead, Auburn acted as a middleman—getting paid
    roughly three percent to ensure that Chrysler “drop shipped” the parts directly to Cypros.
    This was a successful business model. Auburn Sales’ gross sales grew from $1 million in
    2010 to more than $3.5 million in 2012. Importantly, this entire business relationship was
    created only through oral agreements between Chrysler, AAR, Auburn Sales, and Cypros. There
    was “nothing in writing” between the parties. (Rigby Dep., R. 107-5 at 55.) No partnership
    agreement; no written contracts.
    Instead, Auburn Sales would typically provide Cypros a spreadsheet with quotes for
    various parts—which would change from time to time. Then, when Cypros required certain
    1Dorne   Rigby, the sole owner and president of Auburn Sales, ran the business out of his home in Michigan.
    No. 17-2501            Auburn Sales, Inc. v. Cypros Trading & Shipping, Inc., et al.                     Page 3
    parts, it would send Auburn Sales a purchase order based on the spreadsheet pricing. As Auburn
    Sales described the arrangement, Cypros “would order parts based on [its] requirements.” (Id. at
    128.) But if Cypros was not happy with a certain price, it did not have an obligation to buy the
    parts. And if Cypros wanted to end the business relationship altogether, it was free to do so.
    Nevertheless, from 2010 through early 2013, the parties successfully worked together.
    Everything changed in February 2013. Without Auburn Sales’ knowledge, Cypros had
    been counterfeiting automotive parts. Cypros would obtain counterfeit parts, mix them with the
    legitimate Chrysler parts received from Auburn Sales, and then sell the comingled parts to
    customers. Cypros accomplished this by placing fake Chrysler labels on parts. The FBI caught
    wind of the scheme and raided Cypros’ New Jersey warehouse on February 19, 2013. Shortly
    thereafter, Cypros’ president, Fadi Kilani, pled guilty to 18 U.S.C. § 371 and § 2320(a)—
    conspiracy to traffic in counterfeit goods and trafficking in counterfeit goods.
    When Chrysler learned of Cypros’ counterfeiting, it terminated the supply chain between
    AAR, Auburn Sales, and Cypros. It remains disputed whether, after the FBI raid, Auburn Sales
    could have obtained Chrysler parts for other potential customers, if any existed. Regardless,
    Cypros’ counterfeiting, along with the end of the “three-level” supply chain between Chrysler
    and Cypros, put Auburn Sales out of business for good.2
    In response, Auburn Sales filed this lawsuit against Cypros, bringing claims under
    Michigan law for tortious interference with a business relationship, tortious interference with a
    prospective economic advantage, breach of contract, and negligence.                          The district court
    dismissed the negligence claim at the pleadings stage. Auburn Sales does not appeal that
    decision. Then, after the parties completed discovery, Auburn Sales and Cypros filed cross-
    motions for summary judgment on the remaining tortious interference claims and breach of
    contract claim (along with Cypros’ counterclaims; not at issue here).
    The district court granted summary judgment in favor of Cypros and dismissed Auburn
    Sales’ remaining claims. Regarding the tortious interference claims, the district court explained
    2It is worth noting that, after 2009, Auburn Sales retained only a single client, Cypros, which “represented
    100 percent” of Auburn Sales’ business. (Rigby Dep., R. 107-5 at 18.)
    No. 17-2501         Auburn Sales, Inc. v. Cypros Trading & Shipping, Inc., et al.         Page 4
    that Auburn Sales “failed to demonstrate that Defendants sold counterfeit automobile parts for
    the purpose of causing Chrysler to refuse to sell parts to AAR [and Auburn Sales].” (Op.
    & Order Granting Summ. J., R. 123 at 8.) For the breach of contract claim, the district court
    determined that the Michigan statute of frauds, found at Mich. Comp. Laws § 440.2201, barred
    the claim because “[n]either party asserts that there was a written agreement” and Auburn Sales
    failed to establish that it had an exclusive requirements contract with Cypros. (Id. at 11.)
    Auburn Sales filed a motion for reconsideration, which the district court denied, and Auburn
    Sales appealed.
    II.
    Summary judgment comes down to two questions. First, whether Michigan law requires
    the specific intent to interfere with a business relationship to support a tortious interference
    claim—even where the act alleged was wrongful in itself. And second, whether the Michigan
    statute of frauds invalidates the oral agreement between the parties. The district court answered
    both questions in the affirmative. We now review this decision de novo. United Rentals
    (N. Am.), Inc. v. Keizer, 
    355 F.3d 399
    , 405 (6th Cir. 2004).
    In this diversity action, we apply Michigan tort and contract law. Maldonado v. Nat’l
    Acme Co., 
    73 F.3d 642
    , 644 (6th Cir. 1996). In doing so, our task is to apply the same law that
    Michigan state courts would apply. Kurczi v. Eli Lilly & Co., 
    113 F.3d 1426
    , 1429 (6th Cir.
    1997) (quoting Kirk v. Hanes Corp. of North Carolina, 
    16 F.3d 705
    , 707 (6th Cir. 1994)). If the
    Michigan Supreme Court has spoken on an issue, we are generally bound by that decision. 
    Kirk, 16 F.3d at 707
    . And where Michigan appellate courts have spoken in the Supreme Court’s
    absence, “we will normally treat those decisions . . . as authoritative absent a strong showing that
    the [Michigan Supreme Court] would decide the issue differently.” 
    Id. (quoting In
    re Akron-
    Cleveland Auto Rental, Inc., 
    921 F.2d 659
    , 662 (6th Cir. 1990)). In this latter scenario, we must
    also look to other available data, such as Restatements, treatises, law reviews, jury instructions,
    and any majority rule among other states. See Monette v. AM-7-7 Baking Co., Ltd., 
    929 F.2d 276
    , 280 (6th Cir. 1991).
    No. 17-2501         Auburn Sales, Inc. v. Cypros Trading & Shipping, Inc., et al.          Page 5
    A.
    Under Michigan law, a tortious interference claim “requires proof of (1) a valid business
    relationship or expectancy; (2) knowledge of that relationship or expectancy on the part of the
    defendant; (3) an intentional interference by the defendant inducing or causing a breach or
    termination of that relationship; and (4) resulting damage to the plaintiff.” Warrior Sports, Inc.
    v. Nat’l Collegiate Athletic Ass’n, 
    623 F.3d 281
    , 286 (6th Cir. 2010). The district court rejected
    Auburn Sales’ claim on the third element, i.e., whether there was an “intentional” interference by
    Cypros. Auburn Sales argues that Cypros’ intent to commit a wrongful act per se satisfies this
    element.   Said another way, Cypros did not accidently counterfeit parts—it purposefully
    counterfeited parts. But the district court correctly explained that Cypros’ intent to counterfeit is
    not enough.    Instead, to support a claim for tortious interference, Auburn Sales must also
    demonstrate that Cypros intended to interfere with Auburn Sales’ relationship with Chrysler.
    We have recognized that “[t]he third element requires more than just purposeful or
    knowing behavior on the part of the defendant.” Wausau Underwriters Ins. Co. v. Vulcan Dev.,
    Inc., 
    323 F.3d 396
    , 404 (6th Cir. 2003); Via the Web Designs, LLC v. Beauticontrol Cosmetics,
    Inc., 148 F. App’x 483, 487 (6th Cir. 2005). Instead, “the interference with a business
    relationship must be improper in addition to being intentional.” Volunteer Energy Servs., Inc. v.
    Option Energy, LLC, 579 F. App’x 319, 326 (6th Cir. 2014) (quoting Formall, Inc. v. Cmty.
    Nat’l Bank of Pontiac, 
    421 N.W.2d 289
    , 293 (Mich. Ct. App. 1988)); Weitting v. McFeeters,
    
    304 N.W.2d 525
    , 529 (Mich. Ct. App. 1981) (“The interference must be both intentional and
    improper.”). This creates two distinct requirements before Auburn Sales can satisfy the third
    element: an intentional interference and an improper interference. Formall, 
    Inc., 421 N.W.2d at 293
    ; Mich. M. Civ. JI 126.01(d)–(e) (requiring a jury to find that the defendant “intentionally
    interfered” and “improperly interfered” with a business relationship). Contrary to Auburn Sales’
    argument, a wrongful act per se—such as Cypros’ counterfeiting—satisfies the latter
    requirement (committing a crime is surely improper), but not necessarily the former (intending to
    commit a crime is not the same as intending to interfere with a contract or business relationship).
    See Badiee v. Brighton Area Sch., 
    695 N.W.2d 521
    , 539 (Mich. Ct. App. 2005) (“To the extent
    that the [conduct] by [defendant] may have constituted an act that was wrongful per se, plaintiffs
    No. 17-2501          Auburn Sales, Inc. v. Cypros Trading & Shipping, Inc., et al.        Page 6
    presented no evidence that would allow a reasonable jury to conclude that [defendant] intended
    its [conduct] to induce [a third party] to breach its contracts with [plaintiffs].”).
    First, “intentional” interference means that the defendant’s purpose or desire is to cause
    an interference with a contract or business relationship.          Knight Enters. v. RPF Oil Co.,
    
    829 N.W.2d 345
    , 348–49 (Mich. Ct. App. 2013). Indeed, “[s]ince interference with contractual
    relations is an intentional tort, it is required that . . . the injured party must show that the
    interference with his contractual relations was either desired by the actor or known by him to be
    a substantially certain result of his conduct.” Restatement (Second) of Torts § 767 cmt. d (1979);
    
    id. § 766B
    cmt. d. Michigan appellate courts describe this intent as an “essential element of a
    claim of tortious interference”—often characterizing a defendant’s intentional conduct as having
    “unjustifiably instigated or induced” a breach of contract. Knight 
    Enters., 829 N.W.2d at 280
    –
    81; Derosia v. Austin, 
    321 N.W.2d 760
    , 762 (Mich. Ct. App. 1982). But regardless of how
    Michigan courts describe this intent, “[t]he essential thing is the purpose to cause the result. If
    the actor does not have this purpose, his conduct does not subject him to liability . . . even if it
    has the unintended effect of deterring the third person from dealing with the other.” Knight
    
    Enters., 829 N.W.2d at 281
    (citations omitted); Berg v. Munoz, Nos. 321162, 321645, 
    2015 WL 4488597
    , at *2 (Mich. Ct. App. July 23, 2015) (per curiam) (“Not only must an act be ‘per se
    wrongful,’ but the plaintiff must also demonstrate that the act was done with the intention of
    inducing a breach of the contract.”).
    Second, “improper” interference means conduct that is either “(1) wrongful per se; or
    (2) lawful, but done with malice and unjustified in law.” Warrior Sports, 
    Inc., 623 F.3d at 287
    ;
    Clark v. West Shore Hosp., 16 F. App’x 421, 430 (6th Cir. 2001) (quoting Feldman v. Green,
    
    360 N.W.2d 881
    , 891 (Mich. Ct. App. 1984)). “A ‘per se wrongful act’ is an act that is
    inherently wrongful or one that is never justified under any circumstances.’” Volunteer Energy
    Servs., Inc., 579 F. App’x at 326 (quoting Formall, 
    Inc., 421 N.W.2d at 293
    ). “On the other
    hand, ‘if the defendant’s conduct was not wrongful per se, the plaintiff must demonstrate
    specific, affirmative acts that corroborate the unlawful purpose of the interference.’” Berg, 
    2015 WL 4488597
    , at *2 (quoting CMI Int’l, Inc. v. Intermet Int’l Corp., 
    649 N.W.2d 808
    , 812 (Mich.
    Ct. App. 2002)). Said another way, the “improper” nature of an interference is shown by proving
    No. 17-2501             Auburn Sales, Inc. v. Cypros Trading & Shipping, Inc., et al.                         Page 7
    either (1) conduct that is inherently wrongful, or (2) conduct that is inherently legitimate, but
    which becomes wrongful in the context of the defendant’s actions and malice.3 But either way,
    “[t]he interference must be both intentional and improper.”4 
    Weitting, 304 N.W.2d at 529
    ;
    
    Badiee, 695 N.W.2d at 539
    (requiring a showing of an “intent to induce” a breach of contract for
    both a wrongful act per se and a lawful act committed with malice).
    The Michigan Supreme Court recognizes the difference between intentional interference
    and improper interference—through the adoption of Michigan’s Model Civil Jury Instructions.
    See, e.g., Mich. M. Civ. JI 126.01(d)–(e). Before a jury can find a defendant liable for tortious
    interference, the jury must find that the defendant both (1) “intentionally interfered with the
    business relationship or expectancy,” and (2) “improperly interfered with the business
    relationship or expectancy.” Id.; Mich. M. Civ. JI 125.01(c)–(d). Indeed, Michigan’s model
    instructions provide separate definitions for intentional interference, Mich. M. Civ. JI 125.03 and
    126.03, and improper interference, Mich. M. Civ. JI 125.04 and 126.04. These definitions are
    consistent with the definitions provided by Michigan appellate courts and the Restatement.
    Thus, if Cypros did not intend to interfere with Auburn Sales’ relationship with Chrysler, then
    Defendants’ otherwise improper conduct cannot create liability for tortious interference.
    To be sure, at least under the Restatement, there is interplay between “intentional”
    interference and “improper” interference.                  This is especially true when considering the
    defendant’s motive, which can potentially overlap the two requirements:
    The relation of the factor of motive to that of the nature of the actor’s conduct is
    an illustration of the interplay between factors in reaching a determination of
    3When    determining whether otherwise lawful conduct becomes wrongful and thus improper, a court can
    consider several factors, such as the nature of the conduct, the actor’s motive, the parties’ competing interests, social
    interests and policy considerations, proximate cause, and the relationship between the parties. Restatement (Second)
    of Torts § 767 (1979); Jim-Bob, Inc. v. Mehling, 
    443 N.W.2d 451
    , 463 (Mich. Ct. App. 1989); Tata Consultancy
    Services, a Div. of Tata Sons Ltd. v. Sys. Int’l, Inc., 
    31 F.3d 416
    , 423–25 (6th Cir. 1994).
    4In  contrast, Auburn Sales would collapse these two requirements into one by relying on the “last
    antecedent” rule—arguing that “[t]his appeal turns on the lack of a comma.” (Appellant’s Br. at 8.) While we do
    not dismiss the helpfulness of this grammatical rule, Auburn Sales concedes that the rule “is not an absolute and can
    assuredly be overcome by other indicia of meaning.” (Id. at 16 (quoting Barnhart v. Thomas, 
    540 U.S. 20
    , 26
    (2003)).) This is especially true where, as here, we are not interpreting the plain language of a statute. For this
    common law tort, we instead look to Michigan appellate courts and other available data to determine Michigan law,
    all of which point in the same direction.
    No. 17-2501            Auburn Sales, Inc. v. Cypros Trading & Shipping, Inc., et al.                   Page 8
    whether the actor’s conduct was improper. If the conduct is independently
    wrongful—as, for example, if it is illegal because it is in restraint of trade or if it
    is tortious toward the third person whose conduct is influenced—the desire to
    interfere with the other’s contractual relations may be less essential to a holding
    that the interference is improper. On the other hand, if the means used by the
    actor are innocent or less blameworthy, the desire to accomplish the interference
    may be more essential to a holding that the interference is improper.
    Restatement (Second) of Torts § 767 cmt. d (1979). In other words, as the improper conduct
    becomes more egregious, the plaintiff’s burden to demonstrate the defendant’s intent to interfere
    may inversely lessen. This ultimately depends on the knowledge of the defendant.
    For example, “if there is no desire at all to accomplish the interference and it is brought
    about only as a necessary consequence of the conduct of the actor engaged in for an entirely
    different purpose, his knowledge of this makes the interference intentional.” 
    Id. This is
    because
    if a defendant “knows that the consequences are certain, or substantially certain, to result from
    his act, and still goes ahead, he is treated by the law as if he had in fact desired to produce the
    result.” Id § 8A cmt. b; Mich. M. Civ. JI 126.03 (same). But either way, there must be some
    evidence of the defendant’s intent to interfere—even if that evidence is the defendant’s
    knowledge (and decision to ignore) that his conduct would inevitably interfere with the
    plaintiff’s contract or business relationship.
    Here, however, Auburn Sales does not raise this issue. Nor does Auburn Sales argue that
    Cypros knew, or was substantially certain, that Chrysler would terminate its relationship with
    Auburn Sales because it was counterfeiting.5 Auburn Sales thus forfeited these arguments. See
    Bickel v. Korean Air Lines Co., 
    96 F.3d 151
    , 153 (6th Cir. 1996) (quoting Priddy v. Edelman,
    
    883 F.2d 438
    , 446 (6th Cir. 1989)). Rather, Auburn Sales relies solely on the argument that it
    need not prove any intent to interfere as long as it shows an act that is wrongful per se—here,
    counterfeiting. But because that argument is inconsistent with Michigan law, we agree with the
    district court’s rejection of Auburn Sales’ tortious interference claims.
    5Auburn Sales also failed to raise this argument in the district court. (Pl.’s Mot. Summ. J., R. 107 at 7
    (relying only on Defendants’ admissions of counterfeiting and a wrongful act per se).)
    No. 17-2501             Auburn Sales, Inc. v. Cypros Trading & Shipping, Inc., et al.                      Page 9
    B.
    Under Michigan’s equivalent of the Uniform Commercial Code and Statute of Frauds,
    “a contract for the sale of goods for the price of $1,000.00 or more is not enforceable . . . unless
    there is a writing sufficient to indicate that a contract for sale has been made between the
    parties.” Mich. Comp. Laws § 440.2201(1). The writing must include three requirements to
    validate the sales agreement: “First, it must evidence a contract for the sale of goods; second, it
    must be ‘signed’ . . . ; and third, it must specify the quantity.” 
    Id. cmt. 1.
    Auburn Sales admits that it agreed to sell goods to Cypros—and that the sales “via this
    agreement” exceeded millions of dollars. (Compl., R. 1 ¶¶ 13, 27–30.) Thus, Auburn Sales can
    enforce the agreement only if there is a sufficient writing under Mich. Comp. Laws
    § 440.2201(1). But Auburn Sales admits that there was no written contract with Cypros. This
    should end our inquiry.
    Instead, Auburn Sales urges that a writing is not required because the agreement with
    Cypros was a “requirements” contract. According to Auburn Sales, a requirements contract does
    not need a writing to “specify the quantity” because there is no precise quantity. For example,
    Cypros did not agree to buy a specific number of Chrysler parts from Auburn Sales—it agreed to
    generally buy all the parts needed to fill its customer orders. But even if Auburn Sales’ oral
    agreement with Cypros was a requirements contract, the result does not change. Michigan law
    still requires a writing to enforce a requirements contract for the sale of goods.6
    6Auburn   Sales’ arguments to the contrary are unavailing. First, Auburn Sales cites Miltimore Sales, Inc. v.
    International Rectifier, Inc., 119 F. App’x 697 (6th Cir. 2004), for the proposition that an “oral contract with an
    indefinite end point does not implicate the statute [of frauds].” (Reply Br. at 8 n.9.) Miltimore Sales, however,
    concerned an agreement regarding sales commissions and has no bearing on the applicability of the statute of frauds
    to contracts for the sale of goods. See 119 F. App’x at 699–700. Next, Auburn Sales argues that a party’s partial
    performance of an oral contract removes that contract from the statute of frauds. In certain circumstances, partial
    performance is an exception to the writing requirement of the statute of frauds, see Mich. Comp. Laws
    § 440.2201(3)(c), but those circumstances are not present here. The “partial performance” exception to the statute
    of frauds comes into play only “[w]ith respect to goods for which payment has been made and accepted or that have
    been received and accepted.” Id.; see also 
    id. cmt. 2
    (“‘Partial performance’ as a substitute for the required
    memorandum can validate the contract only for the goods which have been accepted or for which payment has been
    made and accepted.” (emphasis added)). As Auburn Sales’ case does not concern goods that have already been paid
    for and accepted, or received and accepted, the statute of frauds applies and bars Auburn Sales’ claim.
    No. 17-2501            Auburn Sales, Inc. v. Cypros Trading & Shipping, Inc., et al.                    Page 10
    The Michigan Supreme Court explained that “[a] requirements or output term of a
    contract, although general in language, nonetheless is, if stated in the writing, specific as to the
    quantity, and in compliance with [Mich. Comp. Laws § 440.2201].” Lorenz Supply Co. v. Am.
    Standard, Inc., 
    358 N.W.2d 845
    , 847 (Mich. 1984) (emphasis original). For example, Michigan
    appellate courts allow imprecise quantity terms to satisfy the statute of frauds in requirements
    contracts, such as a “blanket order” for units, an agreement to supply “all concrete” needed, or
    “all wood sawable.” Great N. Packaging, Inc. v. Gen. Tire & Rubber Co., 
    399 N.W.2d 408
    ,
    412–13 (Mich. Ct. App. 1986) (citing In re Estate of Frost, 
    344 N.W.2d 331
    , 333–34 (Mich. Ct.
    App. 1983)). “Once a quantity term is found to exist in the agreement, the agreement need not
    fail because the quantity term is not precise.” 
    Id. at 413.
    In other words, the term describing the
    party’s requirements is the quantity term.7 Thus, irrespective of the imprecise nature of a
    quantity term, Michigan law still instructs parties to include a “requirements” quantity term in a
    writing.8
    But here, Auburn Sales admits that there is no writing whatsoever—not even one that
    contains a general quantity term. This might have been a different case if Cypros signed a
    written agreement to “purchase all Chrysler parts as needed,” or if the parties agreed that this
    was a “distribution” agreement rather than a sale of goods agreement. See AB Prod. v. Dampney
    Co., 
    908 F.2d 972
    (6th Cir. 1990) (unpublished table decision). Instead, because it is undisputed
    that there is no written agreement between the parties, Auburn Sales’ claim for breach of the
    sales contract fails under the Michigan statute of frauds.
    7This   is consistent with Mich. Comp. Laws § 440.2306 cmt. 2, which explains that “a contract for output or
    requirements is not too indefinite since it is held to mean the actual good faith output or requirements of the
    particular party.” Thus, this comment to Mich. Comp. Laws § 440.2306 does not alleviate the need for a writing,
    but explains that a requirements quantity term satisfies the mandate in Mich. Comp. Laws § 440.2201 to “specify a
    quantity” in writing.
    8The district court reached the correct result that Mich. Comp. Laws § 440.2201 bars the breach of contact
    claim. However, we pivot slightly in our analysis. The district court determined that Auburn Sales failed to
    establish that the agreement was a requirements contract—thus, Mich. Comp. Laws § 440.2201 applied. On appeal,
    Auburn Sales argues at length that disputed issues of fact remain and a jury should decide whether its agreement
    with Cypros was indeed a requirements contract. But even if Auburn Sales is correct, it does not change the result.
    Michigan law requires a contract for the sale of goods to be in writing—even if the contract is a requirements
    contract. Lorenz 
    Supply, 358 N.W.2d at 847
    . We can affirm the district court’s decision under our analysis. See
    Hayes v. Equitable Energy Res. Co., 
    266 F.3d 560
    , 569 (6th Cir. 2001) (“[W]e may affirm [a grant of summary
    judgment] on any grounds supported by the record, even if different from the grounds relied on by the district
    court.”).
    No. 17-2501         Auburn Sales, Inc. v. Cypros Trading & Shipping, Inc., et al.       Page 11
    III.
    Although Cypros’ counterfeiting scheme is regrettable, it cannot create a per se tortious
    interference claim. And situations like this remind parties of the importance of written contracts.
    For these reasons, we affirm the district court’s grant of summary judgment dismissing Auburn
    Sales’ tortious interference claims and breach of contract claim.
    

Document Info

Docket Number: 17-2501

Judges: Moore, Thapar, Nalbandian

Filed Date: 8/6/2018

Precedential Status: Precedential

Modified Date: 10/19/2024

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