Kingsley Associates, Inc. v. Moll Plasticrafters, Inc., Moll Plasticrafters, Inc. (Del), and Moll Plasticrafters Limited

65 F.3d 498, 1995 U.S. App. LEXIS 26007, 1995 WL 545065
CourtCourt of Appeals for the Sixth Circuit
DecidedSeptember 15, 1995
Docket94-1633
StatusPublished
Cited by111 cases

This text of 65 F.3d 498 (Kingsley Associates, Inc. v. Moll Plasticrafters, Inc., Moll Plasticrafters, Inc. (Del), and Moll Plasticrafters Limited) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kingsley Associates, Inc. v. Moll Plasticrafters, Inc., Moll Plasticrafters, Inc. (Del), and Moll Plasticrafters Limited, 65 F.3d 498, 1995 U.S. App. LEXIS 26007, 1995 WL 545065 (6th Cir. 1995).

Opinion

*501 ECHOLS, District Judge.

This case is on appeal from the United States District Court for the Eastern District of Michigan. Plaintiff, Kingsley Associates, Inc. (“Kingsley”), initially filed this action against Defendant, Moll PlastiCrafters, 1 contending that Moll PlastiCrafters breached a contract entered into between Kingsley and National Lock Corporation’s PlastiCrafters Division (“National Lock”) and later allegedly ratified by Moll PlastiCrafters. Alternatively, Kingsley has brought a claim seeking damages under a theory of unjust enrichment. Kingsley later amended its Complaint to add a claim under the Michigan Revised Judicature Act of 1961, Mich. Comp. Laws §§ 600.101-600.9947, which provides that an aggrieved party may recover treble damages for intentional failure to pay commission.

Moll PlastiCrafters subsequently filed a Motion for Partial Summary Judgment, arguing that the Michigan statute under which Kingsley sought treble damages violated the title-object clause of the Michigan Constitution. After initially denying Moll Plasti-Crafters’ motion, the district court reversed its previous decision, agreeing that the statute violated the title-object clause of the Michigan Constitution.

A jury trial was held from November 16, 1993 to November 18, 1993. Three issues were presented to the jury: (1) whether Moll PlastiCrafters had ratified the contract between Kingsley and National Lock, thereby obligating Moll PlastiCrafters to pay post-termination commissions to Kingsley; (2) if not, whether Moll PlastiCrafters had been unjustly enriched by retaining the benefit of Kingsley’s efforts without compensation; and (3) whether Moll PlastiCrafters’ failure to pay Kingsley commission was intentional. 2 The jury returned a verdict for Kingsley on its breach of contract claim, and thus, did not address Kingsley’s claim of unjust enrichment. The jury further found Moll Plasti-Crafters’ failure to pay commission to be intentional. Accordingly, the district court entered judgment for Kingsley.

After the trial, Moll PlastiCrafters renewed its Motion for Judgment as a Matter of Law and, in the Alternative, for a New Trial, arguing that Kingsley had not produced sufficient evidence upon which a reasonable jury could find that Moll PlastiCraft-ers could be charged with knowledge of a post-termination commission provision in the contract between Kingsley and National Lock or had agreed to pay such commissions. Moll PlastiCrafters also disputed the submission to the jury of Kingsley’s claim of unjust enrichment and intentional failure to pay commission. On February 1, 1994, the district court entered an order in which it: (1) granted in part Moll PlastiCrafters’ Motion for Judgment as a Matter of Law, finding no evidence upon which a jury could reasonably conclude that Moll PlastiCrafters ratified the contract between Kingsley and National Lock; (2) conditionally granted Moll Plasti-Crafters’ Motion for a New Trial on Kings-ley’s breach of contract claim in the event that its holding is reversed on appeal; (3) struck the jury’s finding of “intentionality”; and (4) ordered a new trial on Kingsley’s unjust enrichment claim.

On March 22, 1994, Moll PlastiCrafters filed a Motion for Summary Judgment on Kingsley’s remaining claim of unjust enrichment, arguing, among other things, that Moll PlastiCrafters had an implied-in-faet contract with Kingsley which barred a claim of unjust enrichment. On May 3, 1994, the district court found for Moll PlastiCrafters on that ground and granted its motion, entering final judgment for Moll PlastiCrafters. Kingsley timely appealed to this Court.

I.

Kingsley is an independent sales representative that specializes in promoting and sell *502 ing manufacturers’ component parts to the automobile industry. In 1968, John O’Neill (“O’Neill”), the founder and then president of Kingsley, 3 orally agreed with Norman Yet-terberg (“Yetterberg”) of National Lock to represent National Lock and sell its plastic components to automobile manufacturers. For these services, Kingsley would receive a five percent (5%) commission 4 on all sales it procured for the “life of the part.” Both Yetterberg and O’Neill testified that they understood the “life of the part” provision to mean that after Kingsley made an initial sale of a component part to an automobile company, it would receive commissions on all future sales of that part to that company, even if Kingsley was terminated as sales representative. 5

In 1989, George Votis (“Votis”) and Richard Fackler (“Fackler”) 6 acquired the assets of National Lock’s PlastiCrafters Division from National Lock’s owner, Keystone Consolidated Industries (“Keystone”). Before purchasing the assets, Votis conducted a due diligence search in which he learned that Kingsley was National Lock’s sales representative but stated that he learned nothing of an agreement between Kingsley and National Lock or any “life of the part” contract. At the time of the purchase, Kingsley was responsible for seventy-five percent (75%) of the sales of National Lock. The Asset Purchase and Sales Agreement between the parties provided that Votis and Fackler would assume the obligations and liabilities of National Lock’s PlastiCrafters Division. In addition, Section 2.05 of the agreement provided:

Schedule 2.05 is a complete and accurate list and compilation of all:
(i) contracts (written or unwritten) relating to the Businesses with respect to which the Seller has any liability or obligation involving more than $25,000, contingent or otherwise, or which may otherwise have any continuing effect after the date of this Agreement, or which place any material limitation on the method of conducting or scope of the Businesses.

Schedule 2.05 did not identify a contract with Kingsley.

The Bill of Sale, Assignment and Assumption Agreement, another one of the closing documents of the sale, however, stated that Votis and Fackler assumed not only those contracts listed in Schedule 2.05 but also all contracts with National Lock’s suppliers that were outstanding as of closing. Specifically, it provides that the purchaser agrees to perform and discharge in accordance with the terms thereof:

(i) all purchase orders and contracts with the Divisions’ suppliers and customers that relate to the Businesses and are outstanding as of the Closing (as each such term is defined in the Purchase Agreement) and all obligations of Seller for further performance under all contracts that are outstanding as of the Closing and listed in Schedule 2.05 to the Purchase Agreement

(emphasis added).

After the acquisition, Votis and Fackler retained several of National Lock’s top management employees. Among these was Ste *503 ven Erickson (“Erickson”), whose job as Sales Manager required that he oversee independent sales representatives.

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65 F.3d 498, 1995 U.S. App. LEXIS 26007, 1995 WL 545065, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kingsley-associates-inc-v-moll-plasticrafters-inc-moll-ca6-1995.