Contract Design Group, Incorporated et al v. Wayne State University et al

Filing 126

Amended Order Granting in Part and Denying in Part 109 Motion for Summary Judgment . Signed by District Judge Victoria A. Roberts. (LVer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

CONTRACT DESIGN GROUP, INC., and
ROBERT MURRAY,
Plaintiffs,

Case No: 10-14702

v.

Hon. Victoria A. Roberts

WAYNE STATE UNIVERSITY, THE WAYNE
STATE UNIVERSITY BOARD OF GOVERNORS,
JAMES R. SEARS, JOAN M. GOSSMAN, and
JOHN L. DAVIS,

Defendants.
/
AMENDED ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT (Doc. 109)
I.

INTRODUCTION
This is an action for alleged constitutional violations under the United States and

Michigan constitutions and claims based on tort and contractual theories, between a
contractor and a public university and its employees and agent.
Before the Court is Defendants’ motion for summary judgment pursuant to
Federal Rule of Civil Procedure 56. Defendants move for summary judgment on
Plaintiffs’ claims for due process and equal protection violations, intentional interference
with business relations, account stated, and breach of contract.
Defendants’ motion is GRANTED IN PART and DENIED IN PART. Summary
judgment for Defendants is granted on Plaintiffs’ substantive due process and equal

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protection claims under the U.S. and Michigan constitutions; there are no issues of fact
regarding these claims. Summary judgment is also granted on Plaintiffs’ claim for
intentional interference of business relations, but only on Plaintiffs’ assertion of
Defendants’ malice; it will proceed to trial on defamation. Summary judgment is denied
on Plaintiffs’ other claims; issues of material fact remain.
II.

BACKGROUND
Contract Design Group, Inc. (“CDG”) is a flooring contractor; Robert Murray is its

president (collectively, “Plaintiffs”). Wayne State University is a Michigan non-profit
corporation and a state educational institution; James R. Sears, Joan M. Gossman, and
John L. Davis were employed by it during the times relevant to this action. Wayne State
University Board of Governors (“Board”) is a state agency which conducts the affairs of
Wayne.
CDG provided flooring work for Wayne under lump sum contracts. CDG then
also entered into contracts with Wayne to provide an indefinite amount of floor covering
work (“blanket contracts”). The blanket contracts carried time-and-material and unitpriced components, and included prevailing wage requirements for compensation of
workers in Wayne’s projects. The last blanket contract was entered into in 2008.
The crux of this litigation relates to Wayne’s decision in 2009 to suspend CDG’s
work and terminate its contracts for alleged fraudulent behavior, breach of contract, and
noncompliance with Michigan’s Prevailing Wage and Projects Act, P.A. 166 of 1965
(“PWA”). Whistleblowers informed Wayne of CDG’s alleged noncompliance. In October,
2009, Wayne notified CDG that it was considering debarring it from participation in any
of Wayne’s bid processes or awards, and gave it twenty days to submit information in
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opposition to the proposed debarment and a written request for a meeting to discuss it.
A hearing was held on December 7, 2009, and on December 16, 2009, Plaintiffs were
notified that they were debarred for three years. They unsuccessfully protested the
debarment.
Plaintiffs say the hearing was a “kangaroo court” proceeding; it was conducted
without proper notice of the allegations against them, it was done without following
Wayne’s debarment policies, it was not recorded, and it did not afford Plaintiffs an
opportunity for argument or presentation of evidence and testimony. They also say that
they were de facto debarred prior to the hearing.
Plaintiffs claim that Wayne has refused to pay them for work they continued to
perform on a lump sum basis up to the time of debarment, outside of the blanket
contracts proceedings.
On July 8, 2011, Plaintiffs filed this lawsuit, claiming that Defendants assumed
the State’s function when prosecuting the prevailing wage law, and violated their
substantive and procedural due process and equal protection rights protected by the
Fourteenth Amendment to the United States Constitution. Plaintiffs also allege state law
claims; they say that Defendants violated the Michigan Constitution for the same
reasons as the United States Constitution, and intentionally interfered with business
relations and prospective business relations, and that their account with Wayne is
stated and that their lump sum contracts were breached because they were not
compensated.
III.

STANDARD OF REVIEW
The Court will grant summary judgment if “the movant shows that there is no
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genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
250-57 (1986). A fact is material if it could affect the outcome of the case based on the
governing substantive law. Anderson, 477 U.S. at 248. A dispute about a material fact is
genuine if on review of the evidence, a reasonable jury could find in favor of the
nonmoving party. Id.
The moving party bears the initial burden to demonstrate the absence of a
genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the
movant meets this burden, the nonmoving party must “go beyond the pleadings and …
designate specific facts showing that there is a genuine issue for trial.” Id. at 324. The
Court may grant a motion for summary judgment if the nonmoving party who has the
burden of proof at trial fails to make a showing sufficient to establish the existence of an
element that is essential to that party's case. See Muncie Power Prods., Inc. v. United
Tech. Auto., Inc., 328 F.3d 870, 873 (6th Cir. 2003).
In reviewing a summary judgment motion, the Court must view the evidence and
all inferences drawn from it in the light most favorable to the nonmoving party. Kochins
v. Linden–Alimak, Inc., 799 F.2d 1128, 1133 (6th Cir. 1986). “The court need consider
only the cited materials, but it may consider other materials in the record.” Fed. R. Civ.
P. 56(c)(3). The Court’s function at the summary judgment stage “is not to weigh the
evidence and determine the truth of the matter but to determine whether there is a
genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).
IV.

ANALYSIS

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Defendants move for summary judgment on Plaintiffs’ claims for: (A) violations to
the U.S. Constitution; (B) violations to the Michigan Constitution; (C) intentional
interference with business relations; (D) account stated; and, (E) breach of contract.
A. Violations of Plaintiffs’ Rights Under the U.S. Constitution
Plaintiffs allege 42 U.S.C. § 1983 claims against Defendants for violations of their
procedural and substantive due process and equal protection rights under the
Fourteenth Amendment to the U.S. Constitution.
"Where any person acting under color of state law abridges rights secured by the
Constitution or United States laws . . . § 1983 provides civil redress." Miller v. Calhoun
County, 408 F.3d 803, 812 (6th Cir. 2005) (citing 42 U.S.C. § 1983; City of Canton, Ohio
v. Harris, 489 U.S. 378, 388-89 (1989)). "To state a claim under 42 U.S.C. § 1983,
Plaintiff must allege: (1) a deprivation of a right secured under the Constitution or
federal law; and (2) that a person acting under color of state law subjected him to the
deprivation or caused him to be subjected to the alleged deprivation." Alford v. City of
Detroit, 657 F. Supp. 2d 847, 852-53 (E.D. Mich. 2009) (citing Alkire v. Irving, 330 F.3d
802, 813 (6th Cir. 2003)).
1. Procedural and Substantive Due Process Claims
In Counts One and Two, Plaintiffs claim substantive and due process violations.
Plaintiffs say that Defendants’ prosecution of Plaintiffs with a premeditated malicious,
bad faith intent to debar them, violated their substantive due process rights. They also
say they were denied due process in that the prosecutorial and adjudicatory functions of
Wayne were mixed.

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Both procedural and substantive due process claims require a showing that a
constitutionally protected property or liberty interest has been infringed. Hahn v. Star
Bank, 190 F.3d 708, 716 (6th Cir. 1999) (“To establish a procedural due process claim
pursuant to § 1983 . . . [plaintiffs] must establish . . . that they have a life, liberty, or
property interest protected by the Due Process Clause of the Fourteenth Amendment to
the United States Constitution . . . .”); Braun v. Ann Arbor Charter Twp., 519 F.3d 564,
573 (6th Cir.2008) (“‘To state a substantive due process claim ... a plaintiff must
establish that (1) a constitutionally protected property or liberty interest exists, and (2)
the constitutionally protected interest has been deprived through arbitrary and
capricious action.’ ”) (citation omitted).
Defendants argue that a contractor does not have a property or liberty right to be
awarded a government contract or to bid on public projects.
Defendants’ argument is unavailing; they mischaracterize CDG’s claimed
property and liberty interests. A constitutionally protected property interest in a publicly
bid contract exists when a bidder can show that it was actually awarded the contract
and then deprived of it. Expert Masonry, Inc. v. Boone Cnty., Ky., 440 F.3d 336, 348
(6th Cir. 2006) (citing Enertech Electrical, Inc. v. Mahoning County Comm'rs, 85 F.3d
257, 260 (6th Cir.1996)). In addition, although the right to bid on government contracts
is not a property interest, a contractor's liberty interest is implicated when denial of a
government contract is based on a charge of fraud or dishonesty. Lasmer Indus., Inc. v.
Def. Supply Ctr. Columbus, 2:08-CV-0286, 2008 WL 2457704 (S.D. Ohio June 13,
2008) (citing Transco Security, Inc. v. Freeman, 639 F.2d 318, 321 (6th Cir.1981).

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CDG was awarded a publicly bid blanket contract in 2008, which was later
terminated--and CDG was debarred from future bids--based on, inter alia, allegedly
fraudulent behavior. Accordingly, Plaintiffs have a protected property interest in the
terminated blanket contract and a protected liberty interest in their debarment from
Wayne’s projects.
I. Procedural Due Process Violations
To establish a procedural due process claim under § 1983, plaintiffs must satisfy
three elements. They must show that: (1) they have a life, liberty, or property interest
protected by the Due Process Clause of the Fourteenth Amendment to the United
States Constitution; (2) they were deprived of this protected interest within the meaning
of the Due Process Clause; and (3) the state did not afford them adequate procedural
rights prior to depriving them of their protected interest. Hahn v. Star Bank, 190 F.3d at
716.
The fundamental requirement of due process is the opportunity to be heard “at a
meaningful time and in a meaningful manner.” Mathews v. Eldridge, 424 U.S. 319, 333
(1976) (internal quotation marks omitted). In situations of potential debarment, courts
hold that sufficient notice and an opportunity to respond are due. See Gonzalez v.
Freeman, 334 F.2d 570, 578 (D.C. Cir. 1964) (“Considerations of basic fairness require
administrative regulations establishing standards for debarment and procedures which
will include notice of specific charges, opportunity to present evidence and to
cross-examine adverse witnesses, all culminating in administrative findings and
conclusions based upon the record so made.”); Highview Eng'g, Inc. v. U.S. Army Corps

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of Engineers, 864 F. Supp. 2d 645, 648 (W.D. Ky. 2012) (“The Fifth Amendment entitles
. . . a bidder to certain procedural safeguards, including notice of the charges, an
opportunity to rebut them, and sometimes a hearing.); Lasmer Indus., Inc. v. Def.
Supply Ctr. Columbus, 2:08-CV-0286, 2008 WL 2457704 (S.D. Ohio June 13, 2008)
(the sufficiency of a hearing is relevant to a procedural due process claim).
Furthermore, de facto debarment is also subject to due process requirements.
See Hellenic Am. Neighborhood Action Comm. v. City of New York, 101 F.3d 877 (2d
Cir. 1996) (recognizing that due process requirements apply to a de facto debarment
when a state employee's letter instructed agencies to reject all proposals by the
plaintiff); Leslie & Elliott Co. v. Garrett, 732 F. Supp. 191, 195, 198 (D.D.C.1990)
(stating that de facto debarment occurs where there is either “a statement that the
agency will not award a contract to the disappointed bidder in the future” or “conduct of
the agency” that indicates the existence of a de facto debarment).
Defendants argue that they are entitled to summary judgment on Plaintiffs’ claim
for procedural due process violations because Wayne held numerous meetings with
CDG representatives and provided ample notice and an opportunity to be heard.
Plaintiffs say they were not afforded due process because, prior to the hearing,
they were de facto debarred without notice or opportunity to rebut. Regarding the
hearing, they say: (1) notice was defective; (2) the decision-maker was not neutral; (3)
they had a right to be represented by counsel and that right was denied; (4) they did not
have an opportunity to present evidence and cross-examine adverse witnesses; and (5)
it was not recorded.

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The Court believes there are numerous genuine issues of material fact
precluding summary judgment in favor of Defendants. Summarily, these include, but are
not limited to:
•

Whether Plaintiffs were de facto debarred prior to the hearing; and

•

Whether Plaintiffs were given a meaningful opportunity to rebut the
charges against them.

Plaintiffs meet their burden to raise genuine issues of material fact.
Defendants also argue that this Court may not award compensatory damages for
a procedural violation absent proof that Plaintiffs were injured. In essence, Defendants
argue that Plaintiffs cannot recover damages on their procedural due process claim
because any “technical violation” of the debarment hearing would be harmless in light of
the alleged factual basis for debarment, and because they were not entitled to future bid
awards.
This argument is unavailing, especially considering that Defendants’ “technical
violation” may amount to a crucial infringement on a constitutionally-protected right.
First, assuming that Defendants’ argument is valid, the Court finds there are genuine
issues of material fact surrounding the basis for debarment as well as Plaintiffs’
damages. Second, the Court notes that “a procedural error is not made harmless simply
because [the aggrieved party] appears to have had little chance of success on the
merits anyway.” Wilson v. Comm'r of Soc. Sec., 378 F.3d 541, 546 (6th Cir. 2004); see
also WJR, The Goodwill Station v. FCC, 174 F.2d 226, 241 (D.C. Cir.1948) (“Denial of a
procedural right guaranteed by the Constitution—in this instance denial of a hearing

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guaranteed by the due process clause—is never ‘harmless error.’”), rev'd on other
grounds, 337 U.S. 265 (1949).
Accordingly, summary judgment for Defendants on Plaintiff’s procedural due
process claim is denied.
ii. Substantive Due Process Violations
“[E]xecutive action violates substantive due process only when it shocks the
conscience but ... the meaning of this standard varies depending on the factual context.”
UA Theatre Circuit v. Twp. of Warrington, 316 F.3d 392, 399–400 (3d Cir. 2003).
Conduct most likely to support a substantive due process claim is “conduct intended to
injure in some way unjustifiable by any government interest is the sort of official action
most likely to rise to the conscience-shocking level.” County of Sacramento v. Lewis,
523 U.S. 833, 849 (1998) (“Historically, this guarantee of due process has been applied
to deliberate decisions of government officials to deprive a person of life, liberty, or
property”)).
Defendants argue that CDG’s debarment does not rise to the conscienceshocking level required to support a substantive due process claim. They say that there
is no evidence that Wayne intended to put Plaintiffs out of business.
Plaintiffs say that Wayne interfered in bad faith with CDG’s ability to work on
present and future public work projects, and employed a sham meeting to cover up its
bad-faith debarment. They say these acts are conscience-shocking behavior which
implicates substantive due process.
The interests protected by substantive due process are much narrower than

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those protected by procedural due process. Bell v. Ohio State Univ., 351 F.3d 240,
249-50 (6th Cir. 2003). Substantive due process protects those rights that are “so
rooted in the traditions and conscience of our people as to be ranked as fundamental.”
Local 342 v. Town Bd. of Huntington, 31 F.3d 1191, 1196 (2d Cir.1994) (internal
quotation marks omitted). Traditionally, the types of interests recognized under
substantive due process are those “‘deeply rooted in this Nation's history and tradition,
and implicit in the concept of ordered liberty, such that neither liberty nor justice would
exist if they were sacrificed.’” Johnson v. City of Cincinnati, 310 F.3d 484, 495 (6th Cir.
2002) (quoting Washington v. Glucksberg, 521 U.S. 702, 721 (1997)).
The Sixth Circuit holds that “[m]ost, if not all, state-created contract rights, while
assuredly protected by procedural due process, are not protected by substantive due
process. . . . Routine state-created contractual rights are not so vital that neither liberty
nor justice would exist if [they] were sacrificed . . . and protection of these rights does
not fall within the ambit of the Substantive Due Process Clause.” Willie McCormick &
Associates, Inc. v. City of Detroit, 61 F. App'x 953, 957 (6th Cir. 2003) (internal
quotation marks omitted).
While important, Plaintiffs’ concerns “simply are not sufficiently weighty to
warrant their protection under the substantive due process rubric.” Empire Transit, 37 F.
Supp. 2d at 340 (finding that city's de facto debarment of contractor from working on city
projects did not violate substantive due process). Plaintiffs cannot show that
Defendants’ actions are “conscience-shocking or oppressive in a constitutional sense
that they threaten fundamental notions of liberty and justice.” See, e.g., John Gil Const.,

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Inc. v. Riverso, 72 F. Supp. 2d 242, 256 (S.D.N.Y. 1999).
Accordingly, Defendants demonstrate that there is no genuine issue of fact, and
they are entitled to judgment as a matter of law. Summary judgment on Count 1-substantive due process--is granted in favor of Defendants.
2. Equal Protection Claim
In Count Three, Plaintiffs allege that Defendants are treating them differently
from other similarly situated union contractors in that Defendants are maliciously
prosecuting them because CDG’s employees chose to exercise their rights to remain
union free under Section 7 of the National Labor Relations Act, 29 U.S.C. § 151. They
say this violates their equal protection rights under the Fourteenth Amendment to the
U.S. Constitution.
Defendants argue that they are entitled to summary judgment on Plaintiffs’ equal
protection claim because there is no genuine issue of material fact surrounding this
claim, given that the constitutionality of the PWA--pursuant to which Defendants
allegedly found that Plaintiffs breached their agreement and debarred them--has been
upheld by the Michigan Court of Appeals.
Plaintiffs did not respond to Defendants’ motion for summary judgment on this
claim and its analogous claim under the Michigan Constitution.
Plaintiffs’ failure to respond amounts to abandonment, especially in light of their
extensive responses to Defendants’ arguments on other claims. See Hicks v. Concorde
Career Coll., 449 F. App'x 484, 487 (6th Cir. 2011) (a district court properly declines to
consider the merits of a claim when a plaintiff fails to address it in a response to a

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motion for summary judgment); Clark v. City of Dublin, 178 F. App'x 522, 524–25 (6th
Cir. 2006) (failure to respond properly to motion for summary judgment arguments
constitutes abandonment of a claim); Conner v. Hardee's Food Sys., 65 Fed. Appx. 19,
24–25 (6th Cir.2003) ( “[b]ecause Plaintiffs failed to brief the issue before the district
court ... Plaintiffs abandoned their ... claim.”); Anglers of the Au Sable v. United States
Forest Serv., 565 F. Supp. 2d 812, 839 (E.D. Mich. 2008) (“It is well settled that
abandonment may occur where a party asserts a claim in its complaint, but then fails to
address the issue in response to an omnibus motion for summary judgment.”).
Because Plaintiffs abandoned their equal protection claim, summary judgment on
Count Three in favor of Defendants is appropriate.
B. Violations of Plaintiffs’ Rights Under the Michigan Constitution
In Count Four, Plaintiffs claim that Defendants’ acts also deprived them of their
liberty and property interests without due process of law, and denied them equal
protection under the law, in violation of Article 1, §§ 2 and 17 of the Michigan
Constitution.
The Court’s analysis on Plaintiffs’ due process claims under the federal
constitution applies equally to their claims under the Michigan Constitution. See Lucas
v. Monroe Cnty., 203 F.3d 964, 972 (6th Cir. 2000) (“Because Plaintiffs' rights under the
Michigan Constitution essentially track those guaranteed by the United States
Constitution, the same analysis that governs their federal constitutional claims applies to
their corresponding state claims.”); Gradisher v. Cnty. of Muskegon, 255 F. Supp. 2d
720, 731 (W.D. Mich. 2003) (citing In re CR, 250 Mich.App. 185, 204, 646 N.W.2d 506,

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516 (2002) (per curiam)); Johnson v. City of Kalamazoo, 124 F. Supp. 2d 1099, 1106
(W.D. Mich. 2000) (“The due process protections afforded by the Michigan Constitution
are co-extensive with those afforded under the United States Constitution.”)
In addition, Plaintiffs also fail to respond to Defendants’ argument on their equal
protection claim under the Michigan Constitution.
Accordingly, partial summary judgment is granted in favor of Defendants on
Count Four as to Plaintiffs’ substantive due process and equal protection claims under
the Michigan Constitution. Plaintiffs’ procedural due process claim under the Michigan
constitution will proceed to trial.
C. Intentional Interference with Business Relations
In Count Five, Plaintiffs claim that Defendants intentionally interfered with their
business relations by wrongfully asserting to persons and entities that Plaintiffs were
subject to debarment. They say Defendants’ intent was to harm and prevent them from
entering into future public works projects.
Under Michigan law, to prove intentional interference with business relations,
Plaintiffs must establish: (1) a valid business relationship or expectancy; (2) knowledge
of the relationship or expectancy on the part of the interferer; (3) an intentional
interference inducing or causing a breach or termination of a relationship or expectancy;
and (4) damages. Compuware Corp. v. Int'l Bus. Machines, 259 F. Supp. 2d 597, 604
(E.D. Mich. 2002) (citing Michigan Podiatric Medical Ass'n v. National Foot Care
Program, Inc., 175 Mich. App. 723, 735, 438 N.W.2d 349 (1989)).
Only a third party to a contractual or business relationship may be sued for

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tortious interference. See Aioi Seiki, Inc. v. JIT Automation, Inc., 11 F. Supp. 2d 950,
954 (E.D. Mich.1998); Murphy v. Birchtree Dental, P.C., 964 F. Supp. 245, 250 (E.D.
Mich.1997); Reed v. Metro Michigan Girl Scout Council, 201 Mich. App. 10, 506 N.W.2d
231, 233 (1993). Corporate agents are generally not liable for tortious interference with
regard to the corporation's contracts or business relationships, unless the agent acted
purely for personal gain with no benefit to the corporation. Murphy, 964 F. Supp. at 250;
Reed, 506 N.W.2d at 233.
Defendants’ ground for summary judgment on this count relates exclusively to
the third element of Plaintiffs’ claim--whether there was intentional interference reflected
in a per se wrongful act or malicious purpose--and the Court therefore limits its analysis
to this issue.
To make out a claim for tortious interference with business relations, Plaintiffs
“‘must allege the intentional doing of a per se wrongful act or the intentional doing of a
lawful act with malice and unjustified in law for the purpose of invading [P]laintiff's
contractual rights or business relationship.’” Chrysler Int'l Corp. v. Cherokee Export Co.,
134 F.3d 738, 745 (6th Cir.1998) (quoting Feldman v. Green, 138 Mich. App. 360, 368,
360 N.W.2d 881 (1984)). “‘To establish that a lawful act was done with malice and
without justification, the plaintiff must demonstrate, with specificity, affirmative acts by
the defendant that corroborate the improper motive of the interference.’” Ritten v.
Lapeer Reg'l Med. Ctr., 611 F. Supp. 2d 696, 729-30 (E.D. Mich. 2009) (quoting Mino v.
Clio School District, 255 Mich. App. 60, 661 N.W.2d 586, 597 (2003).
Tortious interference with business relations may be grounded on defamatory

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statements. Lakeshore Cmty. Hosp., Inc. v. Perry, 212 Mich. App. 396, 401 (1995).
Defendants argue that Plaintiffs cannot succeed on this claim because there are
no third parties to the 2008 blanket contract, and that the debarment of a contractor to
bid on university contracts is not a per se wrongful act.
Defendants mischaracterize Plaintiffs’ claim. Plaintiffs’ theory--as pled in Count
Five--is that Defendants somehow interfered with their expectancy to enter into future
public works projects in Michigan, not only the projects of Wayne. Accordingly,
Defendants’ argument regarding university projects and third parties is inapplicable.
In conclusory fashion, Plaintiffs say that Defendants acted with malice. They also
say that Defendants’ acts are wrongful per se because they were defamatory.
Defendants say that Plaintiffs failed to demonstrate specific affirmative acts which
corroborate a malicious purpose, and that their statements were not defamatory
because they were true.
Plaintiffs failed to provide factual evidence on Defendants’ alleged malice. Their
claim of intentional interference of business relations based on malice fails.
Nonetheless, there remain genuine issues of material fact on whether
Defendants’ statements were defamatory or whether they were true, based, in part, on
the alleged reasons for debarment.
Accordingly, summary judgment on Count Five is denied in part and granted in
part. Plaintiffs’ claim will proceed based on defamation.
D. Account Stated
In Count Six, Plaintiffs claim that CDG invoiced Wayne under the lump sum

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contracts for work on a lump sum basis, outside of the blanket contracts. They say the
account is stated because Wayne has not paid the balance due.
Defendants claims they are entitled to dismissal of this claim because CDG has
not provided information on a time and material basis to substantiate any outstanding
invoices, which it says it is required under the 2008 blanket contract.
Plaintiffs say they have provided all documentation evidencing its right to
payment.
There remain issues of fact on which agreement controls the work performed,
whether the requirements of such agreements are as Defendants assert, and,
ultimately, whether the account is stated.
Summary judgment on Plaintiffs’ claim for account stated is denied.
E. Breach of Contract
In Count Seven, Plaintiffs claim that Wayne breached the lump sum contracts by
failing to pay CDG the amount due for the work performed under them.
Defendants argue that because the account is not stated, Plaintiffs’ breach of
contract claim fails, given that no payment is due until Plaintiffs satisfy the contractual
conditions. Their argument is--like that against the account stated claim--grounded on
the time and materials requirements under the 2008 blanket contract, and also on the
prevailing wage requirements under it.
Defendants’ argument fails. Plaintiffs’ claim for breach of contract is grounded
upon the lump sum contracts and breach for failure to pay under them. Genuine issues
of material fact remain regarding the contractual obligations--and breach of them--under

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the applicable, valid agreements for the services rendered.
Summary judgment on Plaintiffs’ claim for breach of contract is denied.
V.

CONCLUSION
Defendants’ motion is GRANTED IN PART and DENIED IN PART. The Court

grants summary judgment to Defendants on Counts One and Three. The Court grants
summary judgment on Count Four with respect to the substantive due process and
equal protection claims under the Michigan Constitution. The Court also grants
summary judgment on Count Five only with respect to Plaintiffs’ assertion of malice.
The claims that will proceed to trial are:
(a) Count Two: Procedural Due Process under the U.S. Constitution;
(b) Count Four: Procedural Due Process under the Michigan Constitution;
(c) Count Five: Interference with Business Relations based on defamation;
(d) Count Six: Account Stated; and
(e) Count Seven: Breach of Contract.
IT IS ORDERED.

S/Victoria A. Roberts
Victoria A. Roberts
United States District Judge
Dated: May 20, 2013
The undersigned certifies that a copy of this
document was served on the attorneys of record
by electronic means or U.S. Mail on May 20,
2013.
S/Linda Vertriest
Deputy Clerk

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