Performance Contracting Inc. v. DynaSteel Corporation
2014 U.S. App. LEXIS 7869
6th Cir.2014Background
- Dispute between PCI and DynaSteel over unpaid funds for Karn, Sammis, and Brandon Shores projects.
- Trust Fund Act governs construction payments and whether acts by out-of-state parties trigger Michigan law.
- District court held the Trust Fund Act did not apply extraterritorially and granted summary judgment for DynaSteel.
- Parties dispute whether Act applies by its own force and, if so, whether extraterritorial application requires sufficient Michigan contacts.
- Purchase Order between DynaSteel and Consumers Energy (Michigan contract) vs. Payment Plan Proposal (no governing law) and their interplay influence choice-of-law.
- Court affirms district court: the Trust Fund Act can apply by its own force but requires sufficient Michigan contacts; here the facts do not establish those contacts; Tennessee law governs contractual relationships and the Michigan project only through a Michigan owner.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Trust Fund Act may apply by its own force extraterritorially. | PCI: Act may apply independently of contract to out-of-state transactions. | DynaSteel: Act requires a nexus/contacts with Michigan for extraterritorial application. | Act may apply by its own force under some circumstances. |
| What standard governs extraterritorial application of the Act. | PCI: any beneficiary can sue; broad extraterritorial reach. | Sufficient contacts with Michigan required. | Sufficient-contacts standard governs extraterritorial application. |
| Whether the facts establish sufficient Michigan contacts to trigger the Act here. | PCI: contacts exist via Michigan project and payments. | No sufficient Michigan contacts given out-of-state performance and mixed governing law. | Unique factual mix does not establish sufficient Michigan contacts. |
Key Cases Cited
- Gen. Ins. Co. of Am. v. Lamar Corp., 482 F.2d 856 (6th Cir. 1973) (trust-fund Act interpretation and history; protects state actors)
- Accu-Tech Corp. v. Jackson, 352 F.Supp.2d 831 (E.D. Mich. 2005) (Act may apply by its own force; sufficient contacts analysis)
- DiPonio Const. Co., Inc. v. Rosati Masonry Co., Inc., 631 N.W.2d 59 (Mich. App. 2001) (prima facie elements; applicability independent of contract)
- In re Cousino, 364 B.R. 289 (Bankr. N.D. Ohio 2006) (out-of-state contacts; project-location relevance)
- Perini/Tompkins Joint Venture v. Comerica Bank, 2012 WL 4009101 (E.D. Mich. 2012) (out-of-state project; not controlling authority here)
- Skyline, Inc. v. City of Chicago (Skyline), 528 N.W.2d 704 (Mich. 1995) (choice-of-law and material-interest framework)
- Lumber v. Smith (Lamar context), 744 F.Supp. 778 (E.D. Mich. 1990) (Nib Foods guidance on partial supersession of contracts)
- Chrysler Corp. v. Skyline Indus. Servs., Inc., 448 Mich. 113, 528 N.W.2d 698 (1995) (Restatement § 187 enforcement of contract choice of law)
- DiPonio Const. Co. v. Rosati Masonry Co., Inc., 631 N.W.2d 59 (Mich. App. 2001) (liberal construction of remedy under Act)
- Accu-Tech Corp. v. Jackson, 352 F.Supp.2d 831 (E.D. Mich. 2005) (application of Trust Fund Act with sufficient contacts)