United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER DENYING PLAINTIFF'S
“EMERGENCY” MOTION FOR DECLARATORY JUDGMENT OR,
IN THE ALTERNATIVE, FOR PRELIMINARY INJUNCTION (DKT.
A. GOLDSMITH, UNITED STATES DISTRICT JUDGE
matter is before the Court on Plaintiff Metaldyne, LLC's
“emergency” motion for a declaratory judgment or,
in the alternative, a preliminary injunction (Dkt. 10), to
which Defendant JD Norman Industries, Inc. filed a response
(Dkt. 19). A hearing on the motion was conducted on April 4,
2017. For the reasons stated below, the Court denies the
manufactures and supplies certain automotive parts to JD
Norman pursuant to the parties' contracts. 2d Am. Compl.
¶¶ 8, 10; Pl. Br. at 2, 7-9; Def. Resp. at 4. JD
Norman performs certain machining services on these parts and
then delivers them to General Motors Corporation for use in
the 6.6L Duramax, Gen V 5.3L and 6.2L and L850 programs
(“GM programs”), as well as to Fiat Chrysler
Automobiles for use in the Tigershark 2.0L and 2.4L programs
(“FCA programs”). Id. The payment terms
for goods supplied for the Gen V 5.3L GM program are Net-45,
while the payment terms under the other GM programs are
Net-47. 2d Am. Compl. ¶ 9. The payment terms for goods
supplied for the FCA programs are Net-70. Id. ¶
alleges that, within the last several months, JD Norman
“has repeatedly failed to make timely payments for the
shipment of parts delivered under the GM programs and the FCA
programs.” Id. ¶ 13; Pl. Br. at 9
(“[S]ince November 2016, JD Norman has paid 141 of 152
invoices late, with days delinquent ranging from 1 to 27 (18
invoices were paid more than 16 days late).”).
Metaldyne claims that JD Norman's failure to make timely
payments amounts to a breach of the parties' contracts
and, as of March 8, 2017, JD Norman owed Metaldyne
approximately $2, 785, 385. 2d Am. Compl. ¶¶ 13,
further states that it sent a letter to JD Norman on March 6,
2017 demanding that JD Norman would: “(1) pay its past
due arrearage to Metaldyne of $475, 251.00; (2) provide
adequate assurances that it would make full payment for all
future amounts owed as such payments became due; (3) agree to
Net-20 payment terms going forward; and (4) provide
sufficient financial information to demonstrate it was not
suffering financial difficulties.” Id. ¶
17; see also 3/6/2017 Demand Letter, Ex. A to Am.
Compl., at 2 (Dkt. 9-1). Metaldyne claims that JD Norman
rejected the Net-20 proposal, as well as the demand to
provide financial information. 2d Am. Compl. ¶ 19; Pl.
Br. at 17 (“Late in the day on March 8th, and again via
letter received from its counsel on March 9th, JD Norman
rejected Metaldyne's demand for Net- 20 payment terms and
rejected its demand that JD Norman provide Metaldyne with any
financial information.” (emphasis omitted)). Metaldyne
alleges that, by failing to respond to the demand letter, JD
Norman “repudiated the contract pursuant to [Mich.
Comp. Laws §] 440.2609(4).” 2d Am. Compl. ¶
20; Pl. Br. at 17-21.
breach-of-contract claim, Metaldyne alleges that JD Norman
breached the parties' contracts by: (i) repeatedly
failing to timely pay in accordance with the contracts'
terms; (ii) failing to provide adequate assurance, which
amounts to repudiation of the contracts; and (iii) breaching
its obligation of good faith and fair dealing. 2d Am. Compl.
¶¶ 27-29. Because of this purported breach and
repudiation, Metaldyne asserts in its declaratory-judgment
claim that it is entitled to exercise its rights as an
aggrieved seller pursuant to Mich. Comp. Laws § 440.2703
and the common law. Id. ¶ 38.
filed the present “emergency” motion on March 17,
2017, claiming that “there is a reasonable risk that JD
Norman is financially distressed and therefore will fail to
pay Metaldyne millions of dollars that are owed for goods
already delivered and to be delivered to JD Norman.”
Pl. Br. at 1-2. Metaldyne seeks a declaratory judgment or, in
the alternative, a preliminary injunction. The Court
addresses each request in turn.
requests a declaratory judgment that it may exercise its
rights as an aggrieved seller under both Mich. Comp. Laws
§ 440.2703 and the common law. Pl. Br. at 1; Am. Compl.
¶ 42. This request is premised entirely on JD
Norman's purported breach and repudiation of the
parties' contracts. See Am. Compl. ¶ 38
(“As a result of [JD Norman's] breach and its
repudiation of the contracts, Metaldyne is entitled to
exercise its rights as an aggrieved seller pursuant to [Mich.
Comp. Laws §] 440.2703 and the common law.”).
Declaratory Judgment Act provides that, “[i]n a case of
actual controversy within its jurisdiction . . . any court of
the United States, upon the filing of an appropriate
pleading, may declare the rights and other legal relations of
any interested party seeking such declaration, whether or not
further relief is or could be sought.” 28 U.S.C. §
2201(a); Fed.R.Civ.P. 57 (“These rules govern the
procedure for obtaining a declaratory judgment under 28
U.S.C. § 2201.”). The exercise of jurisdiction in
a declaratory judgment action is consigned to the court's
discretion. Wilton v. Seven Falls Co., 515 U.S. 277,
286 (1995). In exercising that discretion, courts consider
(1) Whether the declaratory action would settle the
(2) Whether the declaratory action would serve a useful
purpose in clarifying the ...