Hesco Parts Corporation LLC v. Ford Motor Company

The Honorable R. Leon Jordan, United States District Judge for the Eastern District of*
Tennessee, sitting by designation.
NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 10a0289n.06
No. 09-5520
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
HESCO PARTS CORPORATION LLC,
Plaintiff-Appellant,
v.
FORD MOTOR COMPANY,
Defendant-Appellee.
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ON APPEAL FROM THE
UNITED STATES DISTRICT
COURT FOR THE WESTERN
DISTRICT OF KENTUCKY
O P I N I O N
BEFORE: KENNEDY and COLE, Circuit Judges, and JORDAN, District Judge.*
COLE, Circuit Judge. Plaintiff-Appellant Hesco Parts Corporation LLC (“Hesco”) filed
a complaint against Defendant-Appellee Ford Motor Company (“Ford”) under diversity jurisdiction
in federal district court alleging claims of (1) breach of contract; (2) breach of implied covenants of
good faith and fair dealing; (3) unjust enrichment and quantum meruit; (4) promissory estoppel; (5)
fraud and equitable estoppel; and (6) tortious interference with a contract and prospective economic
advantage. The district court issued an order granting Ford summary judgment on all of Hesco’s
claims, from which Hesco appeals. We AFFIRM the district court’s judgment.
We review de novo a district court’s grant of summary judgment. Barrett v. Whirlpool
Corp., 556 F.3d 502, 511 (6th Cir. 2009). Summary judgment is appropriate “if the pleadings, the

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discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as
to any material fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(c). When reviewing a grant of summary judgment, this Court construes factual evidence in the
light most favorable to the non-moving party and makes all reasonable inferences in that party’s
favor. Barrett, 556 F.3d at 511; see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 587 (1986). The central issue in considering a motion for summary judgment is “whether
the evidence presents a sufficient disagreement to require submission to a jury or whether it is so
one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 251-52 (1986). “The availability of summary judgment in diversity actions is governed by the
federal standard, . . . rather than by state law.” Biegas v. Quickway Carriers, Inc., 573 F.3d 365, 374
(6th Cir. 2009). Further, in diversity cases, we review de novo a district court’s determination of
state law. Andrews v. Columbia Gas Transmission Corp., 544 F.3d 618, 624 (6th Cir. 2008).
Hesco is a former remanufacturer and distributor of auto parts for Ford. Hesco’s claims arise
out of a series of contracts between Hesco, Ford, and Visteon Corporation, which was a division of
Ford until 2000. There are four contracts central to this appeal: (1) a 1995 agreement between Hesco
and Ford that established Hesco as a Ford Authorized Remanufacturer and a distributor of Ford
products (“1995 FAR Agreement”); (2) a 1998 agreement between Hesco and Ford that established
Hesco as a Ford Authorized Distributor (“1998 FAD Agreement”); (3) a 1998 supply agreement
between Hesco and Visteon, executed when Visteon was still a division of Ford, and which
established Hesco as a remanufacturer of alternators and starters for Visteon (“1998 Supply
Agreement”); and (4) a 2002 agreement between Hesco and Visteon (after Visteon had been spun

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off as an independent entity), under which Hesco distributed heating and climate control parts
manufactured by Visteon.
Hesco’s breach of contract claims concern the 1995 FAR Agreement and the 1998 FAD
Agreement. Hesco argues that Ford breached the 1995 FAR Agreement by serially deauthorizing
product lines rather than formally terminating the contract under the termination provision. Hesco
argues that Ford breached the 1998 FAD Agreement by forcing Hesco to choose between distributing
only Motortrend or only Powertrain products, rather than both. The district court concluded that
both contracts clearly and unambiguously authorized Ford to carry out product and product-line
deauthorizations, and the court therefore granted Ford summary judgment on Hesco’s contract
claims. Hesco’s claims that Ford breached implied covenants of good faith and fair dealing rest on
the same factual allegations. The district court concluded that these claims also failed as a matter
of law because Ford was exercising its express contractual rights in deauthorizing products and the
exercise of express contractual rights cannot give rise to a breach of good faith and fair dealing.
Hesco’s unjust enrichment and quantum meruit claims rest on allegations that Ford
surreptitiously took remanufacturing “know-how” from Hesco without compensation. The claims
are rooted in a provision in the 1998 supply agreement which stated that Hesco and Visteon were
negotiating terms whereby Hesco would provide Visteon with assistance in launching a Visteon
remanufacturing facility, but which also stated that specifics regarding compensation and what
services Hesco would provide would be set forth in an appendix to the contract “[t]o the extent that
[the parties] determine[d] specifics.” (R.E. 194, Attachment #122 (Exhibit 112), at 4.) The district
court determined that Hesco’s unjust enrichment and quantum meruit claims failed because the

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In addition, the district court determined that this provision was eliminated from what1
became the final, integrated, and executed version of the supply agreement between Hesco and
Visteon. While the provision in the earlier draft was more specific in that it stated that the
potential remanufacturing facility would be located in Mexico, the final agreement retained the
same, basic terms. However, this is of no moment because Hesco’s claims still fail, for the other
reasons stated in the district court’s opinion.
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provision was not a definite promise but simply a statement that Hesco would be compensated for
any such assistance to the extent the parties agreed upon specifics and memorialized their agreement.
Further, the court concluded that an implied-contract claim is not available when the subject matter
of the claim was specifically provided for in an actual contract. On appeal, Hesco’s promissory1
estoppel claim rests entirely on the same allegations as its unjust enrichment and quantum meruit.
The district court determined that this claim failed because Hesco and Visteon never reached a final
agreement on these terms and there was no definite promise by Ford to compensate Hesco.
Hesco’s fraud and equitable estoppel claims are based on allegations that Ford concealed a
scheme to stop doing business with Hesco while making misrepresentations to Hesco about their
future remanufacturing relationship. The district court determined that all of the alleged
misrepresentations documented by Hesco dealt with future events and thus could not serve as
grounds for a cognizable fraud claim or Hesco’s related equitable estoppel claim.
Finally, Hesco alleges that Ford inappropriately interfered with the distribution arrangement
between Hesco and Visteon that lasted from 2002 to 2003, after Visteon had been spun off as an
independent entity. The district court concluded that Hesco’s claims for tortious interference failed
because Hesco did not have a valid contract or business expectancy with Visteon at the time Visteon
ended its relationship with Hesco. Further, Hesco had not put forth sufficient evidence that Ford’s

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interference was improper.
After carefully reviewing the record, the applicable law, and the parties’ briefs, we conclude
that the district court was correct in its conclusion that Ford was entitled to summary judgment on
all of Hesco’s claims. As the district court’s opinion correctly sets out the law governing the issues
raised and clearly articulates the reasons underlying its decision, issuance of a full written opinion
by this Court would serve no useful purpose. Accordingly, for the reasons stated in the district
court’s memorandum opinion, we AFFIRM.

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