518 F. App'x 343
6th Cir.2013Background
- Creelgroup sues NGS American for breach of contract related to broker fees.
- Oakwood Healthcare and NGS entered into contracts governing medical administration and commissions.
- First and Second Amendments respectively authorized Creelgroup as commission agent and set $2 per employee per month.
- Creelgroup argues it was a party to the contract; district court dismissed for lack of contractual privity.
- Court sua sponte considered third-party beneficiary and implied-contract theories; held they fail as Creelgroup was not a party to the contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Creelgroup a party to the Oakwood–NGS contract? | Creelgroup brokered the deal and was intended beneficiary. | Contract between Oakwood and NGS; Creelgroup not a party. | Creelgroup not a party; claim fails. |
| Can the contract be implied by conduct? | Implied contract exists where conduct indicates agreement. | Michigan requires no express contract or mutual intent; here express contract exists. | Implied-contract theory rejected. |
| Can Creelgroup enforce as a third-party beneficiary? | Creelgroup at best an incidental beneficiary; cannot enforce. | ||
| Does the contract language itself defeat Creelgroup’s claim? | Exhibit shows Creelgroup to receive fees as agent. | Agreement was between Oakwood and NGS only; Creelgroup not a signatory. | Written instruments contradict plaintiff’s theory; exhibit prevails. |
Key Cases Cited
- McInerney v. Detroit Trust Co., 271 N.W. 545 (Mich. 1937) (breach suit requires plaintiff be a party to the contract)
- Hallett v. Gordon, 87 N.W. 261 (Mich. 1901) (party status required for contract claim)
- Loyer Constr. Co. v. Novi, 446 N.W.2d 364 (Mich. Ct. App. 1989) (contractual privity required for breach claims)
- Wilkie v. Auto-Owners Ins. Co., 664 N.W.2d 776 (Mich. 2003) (read contracts as a whole; harmonize terms)
- Contship Containerlines v. Howard Industries, 309 F.3d 910 (6th Cir. 2002) (implied contract exists only where no express contract)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading standard requires plausible claims)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for pleaded claims)
- Fayetteville Investors v. Commercial Builders, Inc., 936 F.2d 1462 (4th Cir. 1991) (exhibit controls when conflict with complaint)