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Magna Electronics Technology Inc. v. Dynacast Inc.

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

July 17, 2018

MAGNA ELECTRONICS TECHNOLOGY INC., Plaintiff,
v.
DYNACAST INC. and TEK-CAST INC., Defendants.

          OPINION AND ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT [15] AND GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT [16]

          LAURIE J. MICHELSON U.S. DISTRICT JUDGE.

         For a time, Defendant Dynacast Inc. made automotive parts for Plaintiff Magna Electronics Technology, Inc. and Magna paid Dynacast for its work. But the arrangement broke down and the parties' dispute ended up in court. Before the litigation got going, counsel for Magna and Dynacast engaged in settlement negotiations. Magna has filed a motion for summary judgment, asserting that the parties did not merely negotiate a settlement but actually agreed to one. Dynacast has filed a motion for summary judgment, asserting just the opposite. For the reasons set forth below, the Court finds that the parties did not reach agreement on a walkaway.

         I.

         A.

         When both parties move for summary judgment there should be no material facts in dispute. That is the case here, as the lawyers' email communications set forth the material facts.

         1.

         For a time, Dynacast made covers and housings for car camera systems for Magna and Magna paid Dynacast for its work. But Magna became unsatisfied with the quality of the parts manufactured by Dynacast and, in September 2016, told Dynacast that it was going to transition to a new supplier. During the transition period, Dynacast would continue to make parts and Magna would continue to pay for them.

         The transition did not go smoothly. In March 2017, Magna demanded that Dynacast return tooling that Magna owned. (R. 1, PageID.29.) But Dynacast refused to return to the tooling until Magna paid all that was owed for the parts it had supplied. (Id.) That prompted Magna to file this lawsuit. In particular, on April 7, 2017, Magna sued Dynacast in state court for breach of contract and conversion. (See R. 1, PageID.30-31.)

         2.

         Typically, once a plaintiff files suit, the relevant facts have already occurred; but just the opposite is true here.

         On May 2, 2017, Magna (through counsel) and Dynacast (through counsel) reached an agreement regarding the tools in Dynacast's possession. Magna wrote, “Dynacast/Tek-Cast will send today all of Magna's tools for delivery to Magna. In exchange, upon delivery, Magna agrees to waive the conversion claims regarding the tools. All other claims between our clients, including breach of contract claims regarding the tools, are preserved.” (R. 17, PageID.298.) Dynacast responded in part, “On the basis of this agreement, can I assume that you will withdraw the claim already filed in Michigan.” (R. 17, PageID.297.) Magna's counsel replied in part, “We still have the contract element of the complaint, but let me talk with my client about withdrawing the complaint as a whole.” (R. 17, PageID.297.)

         A week later, May 9th, Magna's counsel emailed Dynacast's: “With regard to the remaining claims, between our clients, Magna has instructed me to either: (i) obtain a walk-away agreement on all claims between our clients by Friday or (ii) amend the complaint next week to add Magna's additional claims . . . associated with Dynacast's refusal to comply with its contractual obligations. I hope we can accomplish the former, but please let me know if you don't think that will be possible.” (R. 17, PageID.297.)

         Two days later, on May 11, Dynacast's counsel responded: “Dynacast's position is that [it] did not refuse to comply with [its] contractual obligations. . . . [Dynacast's] accounts receivable that remain outstanding were part of the negotiated solution between the parties to try to resolve the challenges and assist with a transition to a new supplier. Under these circumstances, it is difficult for Dynacast to simply forgive the agreed payment amounts.” (R. 17, PageID.296.) The email continued, “In order to get this matter resolved, however, Dynacast is willing to accept a final payment of $300, 000 in full settlement of the accounts receivable and all other claims.” (R. 17, PageID.296.)

         Magna was not willing to pay Dynacast $300, 000. The next day, Magna's counsel emailed Dynacast's: “[Magna] ha[s] instructed me to proceed with amending the pending litigation to add the ...


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