Shane v. Bunzl Distribution USA, Inc.

200 F. App'x 397
CourtCourt of Appeals for the Sixth Circuit
DecidedAugust 25, 2006
DocketNo. 05-5381
StatusPublished
Cited by28 cases

This text of 200 F. App'x 397 (Shane v. Bunzl Distribution USA, Inc.) 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
Shane v. Bunzl Distribution USA, Inc., 200 F. App'x 397 (6th Cir. 2006).

Opinion

OPINION

KAREN NELSON MOORE, Circuit Judge.

Plaintiff-Appellant Joe Shane brought this lawsuit against Defendant-Appellee Bunzl Distribution, USA, Inc. alleging breach of contract, quasi-contractual claims, and fraud. The dispute arose out of an agreement whereby Shane agreed to assist Bunzl in securing Wal-Mart as a client for Bunzl’s paper and packaging supplies in exchange for payment of a commission to Shane on any products sold to Wal-Mart. The district court dismissed nearly all of Shane’s claims, first through a Federal Rule of Civil Procedure 12(b)(6) motion to dismiss and later by granting Bunzl’s motion for summary judgment. Shane’s remaining claims were submitted to a jury, which ultimately found for Bunzl. Shane now appeals several final orders of the district court, arguing that the court erred in dismissing the bulk of his claims and also abused its discretion in its rulings about discovery and pleadings. For the following reasons, we AFFIRM the district court’s dismissal of Shane’s contract, fraud, and quasi-contractual claims, as well as the district court’s denial of Shane’s motion for additional discovery time. We conclude that the district court’s summary denial of Shane’s motion for leave to file a third amended complaint was an abuse of discretion, and so we VACATE that order and REMAND this issue to the district court for further consideration.

I. BACKGROUND

Joe Shane is a citizen of Kentucky. Bunzl Distribution USA, Inc. is a Delaware corporation with its principal place of business in St. Louis, Missouri. Bunzl supplies “disposable paper and plastic packaging supplies to an array of businesses and industries, including supermarket retailers, self distributing chains, and wholesalers, as well as food processors, restaurants, institutions, airline and industrial markets.” Joint Appendix (“J.A.”) at 46 (Second Amd. Compl. at 117). Shane and Bunzl entered into an agreement whereby Shane, who had connections with Wal-Mart, would introduce Bunzl to WalMart executives and assist Bunzl in obtaining Wal-Mart as a purchaser of its packaging supplies in exchange for a percentage of any business that Bunzl secured with Wal-Mart. On May 5, 1995, Bunzl executed and sent a letter to Shane that “eonfirm[ed] [their] brokerage arrangement going forward.” J.A. at 224 (May 5, 1995 Letter at 1). In the letter, Bunzl stated that it would pay Shane a commission of .75% of any Mexico sales to WalMart on items carrying a 12% gross margin or less. Bunzl agreed to pay Shane a commission of 1.25% of sales on items carrying a gross margin of over 12%. J.A. at 224 (May 5,1995 Letter at 1); J.A. at 46 (Second Amd. Compl. at II9). The May 1995 letter did not specify a commission rate for domestic sales to Wal-Mart Super Centers, though it stated that Bunzl believed “the commission rate would be the same” for domestic sales but needed to have more discussion on the subject with Shane “before any commitments can be made.” J.A. at 225 (May 5, 1995 Letter at 2).

Bunzl paid Shane commissions on its sales to Wal-Mart on a monthly basis between 1994 and January 15, 2001. J.A. at 47 (Second Amd. Compl. at 111110-11). Bunzl states that it has paid Shane $1 .6 million in commissions pursuant to the May 1995 agreement. Appellee Br. at 9. In a letter dated October 27, 2000, Bunzl notified Shane that his commission rate on domestic and Mexican net sales would drop from .75% to .50% effective January 1, 2001, and stated that Bunzl would continue to pay Shane’s commissions “on a [400]*400monthly basis per the current arrangement.” J.A. at 285 (Oct. 27, 2000 Letter from Bunzl to Shane). In December 2000, Bunzl sent Shane a Representative Agreement with this new .50% commission rate, to be effective for the year 2001. J.A. at 286-87 (Rep.Agreement). Shane did agree to the reduced commission rate stated in the October 27, 2000 letter, but Shane alleges that this agreement “was made under duress or by coercion and without consideration,” and that, in the alternative, “the terms of the October 27, 2000 correspondence created a novation or a modification of the terms of the existing agreement.” J.A. at 48 (Second Amd. Compl. at HIT 18-19). Shane “refused to execute the Representative Agreement.” Id. at 47 (Second Amd. Compl. at 1f 17).

In early April 2001, Shane filed suit in Kentucky state court alleging that Bunzl was in breach of its contract with Shane and that Bunzl was unjustly enriched. On May 4, 2001, Bunzl filed a notice of removal, and the case was subsequently removed to the United States District Court for the Western District of Kentucky. On May 9, 2001, Bunzl sent Shane a letter terminating its relationship with Shane, citing Shane’s refusal to sign the December 2000 Representative Agreement and Shane’s recently-filed lawsuit. Bunzl informed Shane that it would pay him commissions through April 2, 2001, which it claimed “was the final date on which [Shane] corresponded to Bunzl that [he] would not sign the Representative Agreement.” J.A. at 288 (May 9, 2001 Letter from Bunzl to Shane). Bunzl stated, “[j]ust as [we] could not force you to continue to work for Bunzl in perpetuity, Bunzl has no obligation to pay you commissions in perpetuity.” J.A. at 288 (May 9, 2001 Letter).

Shane obtained leave to file a first amended complaint and then a second amended complaint. Bunzl filed a motion to dismiss the second amended complaint on January 25, 2002. On January 30, 2002, the district court extended the discovery deadline through March 31, 2002. On February 21, 2002, the district court denied Shane’s motion to compel discovery, finding that Shane’s discovery requests were “significantly overbroad.” J.A. at 226-28 (Feb.2002 Discovery Order). On August 7, 2002, the district court granted Bunzl’s motion to dismiss in part and dismissed the majority of Shane’s claims. On November 12, 2002, the district court denied Shane’s motion to alter, amend, or vacate the August 2002 judgment, or, in the alternative, for leave to file a third amended complaint. The magistrate judge conducted an oral argument by telephone in January 2003 on the issue of whether further discovery was needed, and after the parties briefed the issue, the magistrate judge denied Shane’s motion to extend the discovery deadline in June 2003. In November 2003, the district court denied Shane’s motion for summary judgment on his fraud and equitable-estoppel claims and also affirmed the magistrate judge’s order denying an extension of discovery. On July 22, 2004, the district court granted Bunzl’s motion for summary judgment on Shane’s fraud and equitableestoppel claims. On December 21, 2004, the district court denied Bunzl’s motion for summary judgment on Shane’s breach-of-contract claim contained in Count III of Shane’s second amended complaint and defined two issues of fact that remained for the jury to consider.1 After a six-day trial, the jury returned a verdict for Bunzl. On January 31, 2005, the court entered judgment for Bunzl, and Shane was later or[401]*401dered to pay Bunzl’s court costs. Shane filed a notice of appeal, citing seven final orders that he wished to challenge on appeal.

II. ANALYSIS

When we are sitting in diversity, “we apply the law, including the choice of law rules, of the forum state,” which is in this instance Kentucky. Himmel v. Ford Motor Co., 342 F.3d 593, 598 (6th Cir.2003).

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