United States District Court, E.D. Michigan, Southern Division
ORDER: 1. DENYING DEFENDANT PERCEPTRON, INC.'S
MOTION FOR SUMMARY JUDGMENT [DOC. #34]; AND 2. GRANTING IN
PART AND DENYING IN PART 3CEMS' MOTION FOR SUMMARY
JUDGMENT [DOC. #35]
Victoria A. Roberts United States District Judge
2007, Perceptron Inc. (“Perceptron”), 3Cems, and
non-party Odyssey Electronics, Inc. (“OEI”)
entered into a supply agreement (“Agreement”) for
the OS6 project. The OS6 was a hand-held inspection camera
with an optical scope attached to a flexible cable. Under the
Agreement, 3Cems was to purchase components and manufacture
the OS6, which Perceptron would then supply to its customers.
was to pay for any parts 3Cems purchased and manufactured on
its behalf. Perceptron issued a purchase order for 100, 000
units, but only paid for 30, 000 units; - 70, 000 units
remain idle in 3Cems' warehouse. 3Cems filed a
single-count breach of contract complaint against Perceptron.
3Cems alleges that Perceptron breached the Agreement and the
Guarantee Letter when it failed to pay for the ordered parts.
Perceptron says that it does not owe 3Cems damages because
3Cems has no right to sue since its suppliers and not 3Cems
purchased the units. 3Cems and Perceptron filed cross-motions
for summary judgment.
Court GRANTS 3Cems' motion in part and
DENIES it in part. The Court DENIES Perceptron's motion.
the lowest price, 3Cems utilized its parent companies, such
as Prime Foundation Inc., i-CEMS, and Prime Technology as
suppliers. Prime Foundation shares the same board as 3Cems
and controls cash flow. Prime Technology operates the
facility that manufactured the OS6.
and Prime Technology issued purchase orders to its suppliers
in the United States and Asia for the OS6 component parts
ordered by Perceptron. They directly paid their suppliers for
parts. While Prime Foundation, Inc. reimbursed the suppliers,
3Cems was ultimately responsible to purchase and manufacture
the parts for the OS6 under the Agreement.
Section 11.4 of the Agreement, 3Cems “may assign this
Agreement without the other party's prior written consent
to an entity it controls, is controlled by, or is under
common control with.” In addition, it may
“subcontract with other parties to satisfy any of its
obligations under the Agreement.” Paul Eckhoff, Senior
Vice President for Perceptron and Hongji Shieh, Vice
President of Prime Technology and Prime Foundation, signed
the Agreement. Eckhoff reported directly to Perceptron's
Chief Executive Officer and was the highest-ranking
Perceptron representative with direct contact with 3Cems.
Shieh manages the OS6 project for 3Cems and is an employee of
all of its subsidiaries.
forecasted that it would sell 125, 000 OS6 units. In February
2008, Perceptron had OEI issue a purchase order to Prime
Technology for 100, 000 units.
wanted assurance that Perceptron would pay the $18, 874, 000
purchase order, so 3Cems required Perceptron to sign a
Guarantee Letter. In June 2008, Eckhoff signed a Guarantee
Letter for Perceptron; Perceptron agreed to pay for any
“tooling cost [and] idle material costs on the OS6
series projects between Odyssey Electronics Inc. and Prime
Foundation Inc.” 3Cems ordered the 100, 000 parts.
Perceptron only accepted and paid for 30, 000 parts. In 2008,
3Cems contacted Perceptron to let it know 70, 000 parts
remained stored in 3Cems' warehouse and Perceptron needed
to pay. Eckhoff reassured 3Cems that he would work to get the
parts paid for.
refused to pay 3Cems. 3Cems filed suit in 2013. In 2014,
Perceptron and 3Cems signed a tolling agreement
(“Tolling Agreement”); they agreed to toll the
statute of limitations from July 2013 until December 2014.
3Cems voluntarily dismissed its 2013 suit, and refiled the
suit in 2014.
material facts set forth above are not in dispute.
STANDARD OF REVIEW
reviewing cross-motions for summary judgment, the Court must
assess each motion on its own merits. Federal Ins. Co. v.
Hartford Steam Boiler Insp. and Ins. Co., 415 F.3d 487,
493 (6th Cir. 2005).
Court will grant summary judgment if “the movant shows
that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). A genuine issue of material fact exists
"if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party." Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The
movant has the initial burden to demonstrate the absence of a
genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91
L.Ed.2d 265 (1986). The burden then shifts to the nonmovant,
who “must set forth specific facts showing that there
is a genuine issue for trial.” Anderson, 477
U.S. at 256, 106 S.Ct. at 2514 (discussing Fed.R.Civ.P.
56(e)). “The court must view the evidence in the light
most favorable to the non-moving party, drawing all
reasonable inferences in that party's favor.”
Sagan v. U.S., 342 F.3d 493, 497 (6th Cir. 2003)
(citing Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538
parties must support their assertions “that a fact
cannot be or is genuinely disputed” by “citing to
particular parts of materials in the record, including
depositions, documents, electronically stored information,
affidavits or declarations, stipulations (including those
made for purposes of the motion only), admissions,
interrogatory answers, or other materials.”
Fed.R.Civ.P. 56(c)(1)(A). Alternatively, either party may
carry its burden by “showing that the materials cited
do not establish the absence or presence of a genuine
dispute, or that an adverse party cannot produce admissible
evidence to support the fact.” Id.
not enough for the nonmovant to “simply show that there
is some metaphysical doubt as to the material facts.”
Matsushita, 475 U.S. at 586, 106 S.Ct. at 1356, 89
L.Ed.2d 538 (1986). Rather, the nonmovant must sufficiently
allege a fact that, if proven, “would have [the] effect
of establishing or refuting one of the essential elements of
a cause of action or defense asserted by the parties.”
Midwest Media Prop., L.L.C. v. Symmes Twp., Ohio,
503 F.3d 456, 469 (6th Cir. 2007) (alteration in original)
(quoting Kendall v. Hoover Co., 751 F.2d 171, 174
(6th Cir. 1984)) (internal quotation marks omitted). The
non-movant cannot rely upon bare assertions, conclusory
allegations, or suspicions to substantiate his claims.
Columbia Natural Res., Inc. v. Tatum, 58 F.3d 1101,