McNAUGHTON-McKAY ELECTRIC COMPANY v. Linamar Corporation

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 12a0096n.06
No. 10-2162
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
McNAUGHTON-McKAY ELECTRIC )
COMPANY, )
)
Plaintiff-Appellant, ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
v. ) COURT FOR THE EASTERN
) DISTRICT OF MICHIGAN
LINAMAR CORPORATION, )
)
Defendant-Appellee. )
BEFORE: SUHRHEINRICH, GIBBONS and McKEAGUE; Circuit Judges.
PER CURIAM. This case arises from the cancellation and subsequent settlement of a
manufacturing contract between Chrysler, LLC (Chrysler) and Defendant Linamar Corporation
(Linamar). In 2008, Chrysler contracted with Linamar to produce four “special purpose machines”
for the manufacture of dual-clutch transmissions at Chrysler’s Kokoma, Indiana facility. Linamar
subcontracted with Ann Arbor Machine (AAM) to build the machines. AAM agreed to pay Plaintiff
McNaughton-McKay Electric Company (McNaughton) $424,015.42 to supply the electrical
components necessary for construction.
After McNaughton supplied the electrical components but before AAM paid it, Chrysler
cancelled its contract with Linamar. Chrysler paid Linamar $10.25 million in satisfaction of its
claims; Linamar, in turn, paid AAM $5 million. AAM filed for bankruptcy and never paid
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No. 10-2162
McNaughton-McKay v. Linamar Corporation
McNaughton under the parties’ supplier contract. AAM’s creditor took possession of the special
purpose machines, which were subsequently sold at auction.
McNaughton sued Linamar under a theory of unjust enrichment alleging, inter alia, that the
Michigan Court of Appeals’ decision in Morris Pumps v. Centerline Piping, Inc., 273 Mich. App.
187 (Mich. Ct. App. 2006) supported a general contractor’s liability for materials provided by a
subcontractor’s unpaid supplier. The parties filed cross-motions for summary judgment.
Distinguishing Morris Pumps, the district court denied McNaughton’s motion and granted Linamar’s
motion for summary judgment. McNaughton appeals the district court’s order.
After carefully reviewing the district court’s opinion, the record, and the applicable law, we
are satisfied that the issues were thoroughly and correctly resolved by the district court and that
summary judgment in favor of Linamar was proper. We are similarly satisfied that the instant case
is factually dissimilar from Morris Pumps, wherein the general contractor retained and used the
materials of its subcontractor’s supplier despite constructive knowledge that the supplier had not
been paid. See id. at 195-96. Accordingly, we AFFIRM the judgment of the district court on the
grounds stated in its well-reasoned opinion dated August 11, 2010.
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