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Al-Kahwati Engineering, Inc. v. AGC Flat Glass North America, Inc.

United States District Court, E.D. Michigan, Southern Division

September 12, 2017



          STEPHEN J. MURPHY, III, United States District Judge

         Defendant AGC Flat Glass North America, Inc. provides, among other things, engineering services to General Motors. In 2015, Defendant entered an agreement with Plaintiff Al-Kahwati Engineering, Inc. to provide services on certain programs. A year later, Defendant terminated the agreement. Plaintiff subsequently brought suit alleging breach of contract. Now before the Court are Defendant's Motion for Summary Judgment (ECF 20) and Plaintiff's Cross-Motion for Summary Judgment (ECF 22). The Court has reviewed the briefs, and finds that a hearing is not necessary. See E.D. Mich. LR 7.1(f). For the reasons listed below, the Court will deny Plaintiff's Motion for Summary Judgment and grant Defendant's Motion for Summary Judgment.


         Plaintiff is an engineering company that provides design release services for glass components in vehicles. ECF 22-2, PgID 328. Plaintiff's sole owner, shareholder, and employee is Muhsin Al-Kahwati. Id. Plaintiff entered a contract to provide services for certain programs[1] to Defendant. ECF 22-3, PgID 334. The contract identified four programs, all to be completed for GM. Id. The parties added two additional programs for GM, and Plaintiff may have also performed around 40 hours of service for Toyota. ECF 22-2, PgID 330. Al-Kahwati was Plaintiff's only agent performing work under the contract. ECF 20-2, PgID 195.

         On at least two of the GM projects, Al-Kahwati worked with GM employee Sonja Russell. ECF 20-4, PgID 230. During the pertinent time, Russell's title was Engineering Group Manager, and her responsibilities included overseeing the Flat Glass team. ECF 20-4, PgID 230, 231. After a series of alleged communication issues with Al-Kahwati, Russell asked Defendant to remove Al-Kahwati from all GM programs. ECF 20-9; ECF 20-4, PgID 226, 238, 245. The request was rare: Russell had only done something similar one other time in her twenty-seven years at GM. ECF 20-4, PgID 247. In light of the request, Defendant gave Plaintiff a formal, two-week notice of termination due to a significant alteration to the project. ECF 20-5, PgID 253, 264; ECF 20-6.


         The Court must 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). The moving party must identify specific portions of the record "which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has met its burden, the non-moving party may not simply rest on the pleadings, but must present "specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed.R.Civ.P. 56(e)).

         A fact is material if proof of that fact would establish or refute an essential element of the cause of action or defense. Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir. 1984). A dispute over material facts is genuine "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). In considering a motion for summary judgment, the Court must view the facts and draw all reasonable inferences "in the light most favorable to the nonmoving party." 60 Ivy St. Corp. v. Alexander, 822 F.2d 1432, 1435 (6th Cir. 1987).


         The parties agreed that the contract is governed by Delaware law. ECF 20-3, PgID 221; see also DP Precise, LLC v. Phoenix Insurance Company, 2014 WL 12572733, at *4 (March 31, 2014) (parties may choose what law applies to contract claims). Under Delaware law, the elements of a breach of contract claim are: (1) a contractual obligation; (2) a breach of that obligation by the defendant; and (3) a resulting damage to the plaintiff. H-M Wexford LLC v. Encorp, Inc., 832 A.2d 129, 140 (Del. Ch. 2003).

         Contract interpretation is a question of law. Rhone-Poulenc Basic Chems. Co. v. American Motorists Ins. Co., 616 A.2d 1192 (Del. 1992). Delaware adheres to the objective theory of contract interpretation. Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1159 (Del. 2010). Thus, a contract should be interpreted as it would be understood by an objective, reasonable third party. Id. When a contract is clear and unambiguous, a court will give effect to the plain meaning of the contract's terms and provisions. Id. at 1159-60. A contract is ambiguous only if the provisions are "reasonably or fairly susceptible of different interpretations or may have two or more different meanings." Rhone-Poulenc Basic Chems. Co., 616 A.2d at 1196. Ambiguity does not exist when a court can determine the contract's meaning "without any other guide than a knowledge of the simple facts on which, from the nature of language in general, its meaning depends." Id. (internal quotations omitted).


         I. The Contract Permits Defendant's Termination

         Two portions of the contract are relevant. Paragraph 9 provides: "[i]f the Project is completed, terminated, or significantly altered before the end of the term, [Defendant] shall be entitled to terminate [the contract] with a notice of two weeks." ECF 20-3, PgID 219. The recitals provide: "[b]y this Agreement, the parties are setting forth the basis on which [Plaintiff] will provide Services to [Defendant] and [Defendant] will purchase Services from [Plaintiff] for completion of ...

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