Ordos City Hawtai Autobody Co. v. Dimond Rigging Co.
695 F. App'x 864
| 6th Cir. | 2017Background
- Plaintiffs Ordos City Hawtai Autobody and Inner Mongolia OED (Hawtai subsidiaries) contracted with Absolute Rigging & Millwrights (ARM) to dismantle, rig, pack, insure, and arrange overseas transport of two sets of auto‑manufacturing equipment (Line‑7 and Line‑15) bought from a Chrysler plant.
- ARM performed some rigging/packing; a cargo shipment in Jan 2012 resulted in an elevator from Line‑7 being lost at sea; ARM received a $975,000 insurance payment but did not rebuild the elevator or remit funds to Plaintiffs.
- Performance problems and missed shipping dates led to an Amended Transportation Agreement (Mar 2013) obligating ARM to arrange remaining shipments and acknowledging insurance approval to reconstruct the elevator; Plaintiffs paid part of the amended fee.
- Plaintiffs sued (Nov 2013) for claim and delivery, conversion, declaratory relief, breach of contract, negligence, unjust enrichment; ARM asserted multiple counterclaims.
- District court struck ARM’s untimely and nonconforming summary‑judgment response, granted Plaintiffs summary judgment on breach claims and dismissed ARM’s counterclaims; a jury later awarded $239,000 (Line‑15 breach) and $975,000 (lost elevator).
- ARM appealed; Sixth Circuit affirmed (finding no abuse of discretion in the strike, summary judgment proper, and jury verdict/supporting damages sustained).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court abused discretion by striking ARM’s late/nonconforming summary‑judgment response | Plaintiffs: strike appropriate given repeated rule violations and missed deadlines | ARM: excusable (vacation, ambiguous rules, minor font error, court should use least‑restrictive sanction) | No abuse of discretion; repeated violations and failure to cure warranted striking the filing |
| Whether contracts were void for illegality (kickbacks) | Plaintiffs: contracts valid; no evidence of illegality | ARM: contracts void ab initio due to kickbacks to Hawtai agents | Forfeited/not pleaded; no record evidence to support illegality; defense rejected |
| Whether ARM breached obligations (replacement of lost elevator and transport obligations) | Plaintiffs: contracts (risk of loss, insurance provisions, amended agreement) make ARM responsible to replace elevator and arrange transport | ARM: contested (arguments mostly in struck brief or waived) | Contract language unambiguous; ARM breached by failing to rebuild/forward insurance funds and by late/incomplete shipments; summary judgment for Plaintiffs affirmed |
| Whether ARM waived or forfeited insurance/force majeure defenses and whether evidence of such should be admitted at trial | Plaintiffs: ARM omitted these defenses from the final pretrial order and thus waived them | ARM: Plaintiffs had notice from contract; defenseable at trial | Defenses not included in final pretrial order were forfeited; trial exclusion proper |
Key Cases Cited
- Seay v. Tenn. Valley Auth., 339 F.3d 454 (6th Cir.) (district court strike reviewed for abuse of discretion)
- Guarino v. Brookfield Twp. Trs., 980 F.2d 399 (6th Cir.) (where a summary‑judgment motion is unopposed, court may rely on movant's facts but must carefully review the record)
- F.T.C. v. E.M.A. Nationwide, Inc., 767 F.3d 611 (6th Cir.) (failure to present an issue to the district court forfeits appellate review of that argument)
- Stryker Corp. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 842 F.3d 422 (6th Cir.) (standard of review for summary judgment)
- Michelson v. Voison, 658 N.W.2d 188 (Mich. Ct. App.) (contracts founded on unlawful acts are void; illegality is an affirmative defense)
- Meek v. Wilson, 278 N.W. 731 (Mich.) (illegality apparent from contract/evidence may be raised late, but requires supporting record evidence)