Hansen v. AM General LLC

Filing 24

OPINION AND ORDER granting 16 Motion for Summary Judgment. Signed by District Judge Laurie J. Michelson. (DTof)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
TAYLOR HANSEN,
Plaintiff,

Case No. 13-cv-12750
Honorable Laurie J. Michelson

v.
AM GENERAL, LLC,
Defendant.
OPINION AND ORDER GRANTING DEFENDANT AM GENERAL, LLC’S
MOTION FOR SUMMARY JUDGMENT [16]
This breach of contract case is before the Court on Defendant AM General’s Motion for
Summary Judgment. (Dkt. 16.) Plaintiff Taylor Hansen (formerly Taylor Holland) worked for
nonparty General Engine Products, LLC (“GEP”), a subsidiary of Defendant AM General, LLC,
as an engineer. After being admitted for an Executive Masters of Business Administration
program at the Northwestern University Kellogg School of Business, Hansen applied to receive
tuition reimbursement through GEP’s Education Financial Assistance Program (“EFAP”). GEP’s
EFAP is governed by the same policy as AM General’s. Kelly Burton, a Human Resources
Manager for both AM General and GEP, informed Hansen that he was approved for “about
$25,000” worth of funding. Hansen was disappointed with this cap as he claims he was under the
impression that he would be reimbursed for full tuition based on prior conversations with his
supervisors. Hansen decided to pursue his degree at Northwestern and incurred tuition expenses
of approximately $130,000. GEP reimbursed him for $21,970.
Hansen now seeks the rest of his Northwestern tuition from AM General, citing the
EFAP Policy as an alleged contract that offers unlimited reimbursement for salaried employees’

education expenses. In the alternative, Hansen asks the Court to apply promissory estoppel based
on GEP’s alleged promise to pay his entire tuition and his alleged detrimental reliance on that
promise in completing the EMBA program.
Hansen faces a threshold issue on the breach of contract claim: he sued AM General,
GEP’s parent company, rather than GEP itself. Yet the contractual relationship he alleges is with
GEP. Because he has not demonstrated facts that would allow him to pierce through GEP to AM
General, his breach of contract claim fails. Sensing this defect, Hansen requested leave to amend
to add GEP as a defendant in his response to AM General’s Motion for Summary Judgment. But
the Court finds that Hansen has acted with undue delay in making this request, allowing
amendment now would create prejudice, and that granting leave to amend would be futile.
Hansen’s promissory estoppel claim does not depend on his status as an employee, but rather on
representations made by AM General employees to him. Nonetheless, this claim also fails
because there was no clear and definite promise to reimburse him for the entirety of his
Northwestern tuition. The Court will therefore GRANT AM General’s Motion for Summary
Judgment and DENY Hansen leave to amend the Complaint.
I. FACTUAL BACKGROUND
The following facts are undisputed for the purpose of AM General’s motion unless
otherwise indicated.
Plaintiff Taylor Hansen, an engineer, began working at General Engine Products, LLC in
Livonia, Michigan, in 2001. (Dkt. 16-2, Taylor Hansen Deposition [hereinafter “Hansen Dep.”],
at 9.) GEP, which is not a party to this case, is a wholly owned subsidiary of Defendant AM
General, LLC. (Dkt. 16-4, Mark Minnie Declaration [hereinafter “Minnie Decl.”], at ¶ 4.) AM
General and GEP maintain separate financial records and bank accounts and have separate

2

operating agreements. (Id. at ¶¶ 5, 15–17.) But AM General provides certain administrative
services to GEP through a management agreement and GEP adopted AM General’s Education
Reimbursement Program policy (“the Policy”) for its employees. (Id.) The Policy was “designed
to benefit both the employee and AM General by encouraging participation in approved courses
of study offered by accredited educational institutions.” (Hansen Dep. Ex. 20, AM General
Policy Manual [hereinafter “the Policy”], at 1.) Any reimbursement through this program for
GEP employees, however, came from GEP’s budget and not AM General’s. (Minne Decl. at ¶
14.)
The Policy states, in relevant part:
AM General will refund tuition and compulsory fees in those instances where
courses meet the requirements stated in this policy. . . . All regular, full-time
employees are eligible to participate in the Education Reimbursement Program.
(Hansen Dep. Ex. 20, Policy, at 1.)
The Policy places restrictions on funding approval. Most importantly, employees who
seek reimbursement for courses must apply for it in advance of each academic term:
Eligible employees must complete the Application for Approval – Education
Financial Assistance program Form (Exhibit A) and submit it to the Vice
President, Human Resources prior to registration. All courses must receive
approval by Human Resources prior to registration or reimbursement will not be
made at time of course completion.
(Policy at 3.)
Further, under the Policy, “Participants pursuing graduate study are limited to two
courses per academic term. . . . Requests for exceptions to the above guidelines should be made
in writing to the Vice President Human Resources.” (Policy at 2.) The Vice President of Human
Resources at AM General is currently Mark Minne. (Minne Decl. ¶ 2.) AM General’s “Statement
of Conditions,” as it existed during the relevant time period, added that “salaried employees have

3

no refund limit for approved courses completed during a calendar year at an accredited college,
university, or institution organization having professionally accredited standards approved by the
Company.” (Policy at 6.) The “Statement of Conditions” says that the “Company shall make all
decisions relating to the interpretation and administration of this Program.” (Policy at 7.) The
Policy does not define the term “Company.” (See generally id.)
The usual application of the Policy is somewhat in dispute. AM General HR Director
Mark Minne states that typically, AM General would provide to individual employees about
$25,000 in reimbursement for MBA degree programs near the company’s Livonia, Michigan and
South Bend, Indiana facilities. (Minne Decl. at ¶ 11.) AM General also provided consistent
payroll records of tuition reimbursements made to employees from December 2001 through
December 2013. (See Minne Decl. Ex. 1.) Hansen counters by pointing to HR representative
Kelly Burton’s testimony that “no salaried employee before or since [Hansen] has ever been
subjected to any predetermined cap on a tuition reimbursement claim or ‘average cost’
reimbursement.” (Pl.’s Resp. Br. at 10 (citing Dkt. 20-2, Kelly Burton Deposition [hereinafter
“Burton Dep.”] at 48–49).)1
In 2007, Hansen applied and was accepted to Northwestern University’s Kellogg School
of Business and the University of Michigan’s Ross School of Business. (Hansen Dep. at 11, 93.)
He applied to Executive MBA programs rather than part-time MBA programs at both schools
because the “EMBA” programs offered more flexibility due to their more compressed schedule
of weekend classes. (Hansen Dep. at 58.) The application requirements included a “letter of
support” from his employer. Hansen provided a sample “letter of support” to Minne and noted

1

Hansen also asserts that Gary Wuslich, a former Vice President of Human Resources,
attended Northwestern University for a program and received full reimbursement. (Pl.’s Resp.
Br. at 9.) However, he does not cite any record support for this assertion.
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that Minne should “modify the letter as necessary. For example, instead of indicating full tuition
support, you could instead indicate, equivalent tuition of the evening MBA program.” (Dkt. 20-3,
Note to Mark Minne, at 1.) Burton mailed a “letter of support” to both institutions that read as
follows:
I have reviewed material describing the Executive Master’s Program at
Northwestern University’s Kellogg School of Management and wish to verify that
AM General LLC would like to support Taylor [Hansen] in your class to be
admitted in July of 2007. As Manager of Human Resources for AM General LLC
– Livonia, I certify that AM General2 will work with Mr. [Hansen] to allow time
away from work as described in the Kellogg brochure and to reimburse Taylor
[Hansen] for tuition and fees pursuant to our Tuition Reimbursement policy.
(Dkt. 20-4, Fax to Julie Cisek Jones, at 2.)
While Hansen was applying to these programs, he was under the impression that AM
General would cover his entire tuition for an EMBA. (E.g. Dkt. 20-3, Nov. 3, 2005 E-mail to
Renee Lewandowski, at 1.) He had been discussing the reimbursement program with Kelly
Burton, but Minne (now Vice President of Human Resources) got involved when it became
apparent that Hansen was seeking “an extremely high amount of tuition reimbursement–about
$130,000–to attend a school [Kellogg] that AM General and GEP employees do not usually
attend.” (Minne Dep. ¶ 13.)
On June 20, 2007, before Hansen’s acceptance to Kellogg, Kelly Burton called to inform
him that Mark Minne would be placing a $25,000 limitation on his tuition reimbursement.
(Hansen Dep. at 33, 48; Hansen Dep. Ex. 3, E-mail to Jeff Dowell , at 1 (“Kelly informed me
this morning that Mark Minne told her my EMBA sponsorship amount will be a flat $25,000.”).)
On August 7, 2007, Burton confirmed to Kellogg staff that “General Engine Products will

2

Burton clarified in a subsequent e-mail to Kellogg staff that GEP, rather than AM
General, would pay the reimbursement. (Burton Dep. Ex. 15, Aug. 7, 2007 E-mail to [e-mail] [hereinafter Kellogg E-mail], at 1.)
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support Taylor in his endeavor for an EMBA by allowing him the time needed for class, as well
as a monetary contribution of what we would contribute for a part time MBA. That is the
equivalent of about $25,000.” (Burton Dep. Ex. 15, Aug. 7, 2007 E-mail to [e-mail] [hereinafter Kellogg E-mail], at 1.) Burton and Minne say that
this amount was based on the average cost of MBA programs in the Livonia and South Bend
areas. (Burton Dep. at 25; Minne Decl. at ¶ 12.)
Hansen did not feel that a cap on tuition was consistent with the company’s written
policy. (Id. at 36.) As a result, Hansen sought more information regarding the cap. He asked his
direct supervisor, Jeff Dowell, and Bob Gula, Vice President of Engineering at AM General and
GEP, to discuss the cap with him. (Hansen Dep. at 38.) These discussions would continue
through 2011. (Id. at 39.) Hansen admits that at no time did Gula tell him that the company
would pay more than $25,000. (Id. at 43.)
Though he had submitted deposits to both Ross and Kellogg, Hansen eventually decided
to attend Kellogg. (Hansen Dep. at 59, 97.) The cost for an EMBA through Kellogg was then
$135,000. (Dkt. 20-4, Kellogg Admission Letter.) Kellogg followed the trimester system.
Documents in the record indicate that the cost-per-course was $4,394 for the 2007–2008 and
2008–2009 academic years and $4,679 for the 2008–2009 academic year. (See Dkt. 16-2, Course
Documentation.) Hansen applied for a federal student loan for the 2007–2008 school year.
(Hansen Dep. Ex. 19.) Because the $25,000 cap seemed to him to be an “arbitrary number,” but
without receiving any assurances from his supervisors that anything more would be provided, he
wrote in his loan application to Kellogg that he expected his employer to contribute $43,940 to
his expenses that year. (Hansen Dep. at 106.) He requested a Federal Stafford Loan of $20,500 to
take care of the rest of his expenses. (Hansen Dep. Ex. 19.) At no time did Hansen follow the

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Policy’s requirement that requests for reimbursement for more than two courses in a semester be
submitted in writing to the Vice President of Human Resources. (Hansen Dep. at 113.) He felt
that Burton’s representation that the company would give him time off “trump[ed] this course
load discussion.” (Id.) He admitted, however, that no one in the company explicitly told him that
this was true. (Id.)
Hansen attended Kellogg from Fall 2007 to Spring 2009 and received his diploma on
June 19, 2009. (Dkt. 20-4, Northwestern Tr. and Diploma.) Because of his status in the EMBA
program, he took 28 credits rather than the 20 credits that would have been required for a part
time program. (Hansen Dep. at 95.) During this time, he continued to turn in applications, at the
end of each trimester, for funding approval. (Dkt. 16-10, Jones Decl., at ¶ 4.) HR Generalist
Shelby Jones received some of these forms and declares that “[e]ach time Mr. Hansen turned in
these forms, he said he knew that he would not be reimbursed, but he was turning in the forms
because he wanted Human Resources to keep track of the classes he was taking.” (Id. ¶ 5.) Jones
testified that none of the forms bore a signature by Hansen’s supervisors or any HR official. (Id.)
Throughout his enrollment, Hansen attempted to enforce what he believed to be the true
terms of the tuition reimbursement policy: that there was “no limit for salaried employees.”
(Hansen Dep. at 142.) For example, in August 2008, Hansen e-mailed his supervisor Jeff Dowell
to ask if Dowell had “gotten any feedback on [his] latest pitch regarding tuition reimbursement.”
(Id.) He proposed that GEP pay “Tuition only for all 28 courses” in the program at a rate of
$4,394 per course for the 2007–2008 term and $4,679 per course for the 2008–2009 term,
(Hansen Dep. Ex. 9), but admitted that no one at AM General or GEP agreed to this proposal.
(Hansen Dep. at 75.) In July 2010, Hansen e-mailed Gary Wuslich “seeking tuition-only
reimbursement for 28 MBA courses, paid at Northwestern U’s part-time tuition rate. That total is

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$127,022, less $26,363 already reimbursed by the Company – for a balance of $100,658.” (Dkt.
20-4, July 19, 2010 E-mail to Gary Wuslich, at 2.) It is unclear whether Wuslich responded to
this e-mail.
Despite his ongoing efforts to secure more than $25,000 in reimbursement, in a January
20, 2009 fax to Kellogg, Hansen acknowledged that “my employer is not expected to provide
any funding for the 2008/2009 school year.” (Hansen Dep. 146.) He also testified that “[t]he
most [expected reimbursement] that had been stated to me was $25,000.” (Hansen Dep. at 147.)
Nor did any AM General or GEP employee state that he would be reimbursed over $100,000,
either orally or in writing. (Id. at 159.) Finally, in May 2011, Bob Gula told Hansen that there
would be no further reimbursements. (Hansen Dep. 175.) Hansen accepted this statement and did
not pursue the matter further within AM General or GEP. (Id. at 176.)
More than 3 years after completing the Kellogg program, Hansen was laid off as part of a
reduction in force in November 2012. (Minne Decl. ¶ 18.) He filed a two-count Complaint for
breach of contract and promissory estoppel against AM General in state court, which AM
General removed to this Court on June 21, 2013. (Dkt. 1.)
II. STANDARD OF REVIEW
Summary judgment is proper “if the movant shows that there is no 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). A fact is material only if it might affect the outcome of the case under the
governing law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). On a motion for
summary judgment, the court must view the evidence, and any reasonable inferences drawn from
the evidence, in the light most favorable to the non-moving party. See Matsushita Elec. Indus.

8

Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citations omitted); Redding v. St. Eward,
241 F.3d 530, 531 (6th Cir. 2001).
The moving party may discharge its initial summary judgment burden by “pointing out to
the district court . . . that there is an absence of evidence to support the nonmoving party’s case.”
Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). If the moving party does so, the party
opposing the motion “must come forward with specific facts showing that there is a genuine
issue for trial.” Matsushita, 475 U.S. at 587. The Court must determine whether the evidence
presents a sufficient factual disagreement to require submission of the challenged claims to a
jury, or whether the evidence is so one-sided that the moving party must prevail as a matter of
law. Anderson, 477 U.S. at 252 (“The mere existence of a scintilla of evidence in support of the
plaintiff’s position will be insufficient; there must be evidence on which the jury could
reasonably find for the plaintiff.”).
III. ANALYSIS
A. Count I – Breach of Contract
To recover on a breach of contract claim under Michigan law, Hansen must prove (1) the
existence of a contract between AM General and himself; (2) the terms of the contract; (3) that
AM General breached the contract; and (4) that the breach caused his injury. Webster v. Edward
D. Jones & Co., LP, 197 F.3d 815, 819 (6th Cir. 1999). Hansen’s case falters at the first element.
While neither party has presented a coherent theory regarding what the contract is, Hansen’s
briefing does make clear that he believes the contract arises from his relationship with his
employer. He argues:
Taylor Hansen was an employee of AMG and/or GEP. AMG/GEP agreed to
compensate him for his work. There is already a contract. We are only examining
its terms and, here, whether or not there exists any genuine factual dispute as to
the same. . . . Michigan courts have long recognized that even at will employment
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relationships are contractual in nature and employer’s offers through its policies
can constitute enforceable terms of the same.
(Pl.’s Resp. Br. at 16 (emphasis added).)
The undisputed facts are that Hansen was an employee of GEP, not “AMG/GEP.” While
neither party has provided Hansen’s employment contract, HR Vice President Minne avers that
“Taylor Hansen was a GEP employee in Livonia, Michigan. Mr. Hansen was never an employee
of AM General.” (Minne Decl. at ¶ 9.) He also avers that while GEP adopted AM General’s
education reimbursement policy, it made reimbursements pursuant to the policy from GEP’s own
budget. (Id. at ¶ 5.) Hansen does not dispute that GEP, not AM General, was his employer.
Instead, he responds that “[t]here is no logical reason why AMG must also be his actual
employer for it to be deemed the promisor or contracting party.” (Pl.’s Resp. Br. at 15.) But it is
Hansen who alleges that any contractual relationship arises from his relationship with his
employer. (Id. at 16.) AM General cannot breach a contract to which it is not a party. See Hallett
v. Gordon, 81 N.W. 556, 556 modified, 82 N.W. 827 (1900) (“[I]f the defendant is correct in
saying that he was not a party to the contract, there is manifestly no liability for a breach of
warranty, when he made no warranty.”); see also Heidt v. Iosco Cnty. Hous. Comm’n, No.
252673, 2005 WL 1490022, at *1 (Mich. Ct. App. June 23, 2005) (holding that the trial court
properly dismissed a breach of contract claim on the basis that the defendant was not a party to
the contract in question). Since AM General is not Hansen’s employer, it cannot have breached a
contract that arises from Hansen’s employment.
Accordingly, AM General asserts that Hansen must pierce GEP’s corporate veil in order
to proceed on a claim against AM General. Hansen did not allege a piercing theory. But in his
response he asserts that because the “commonality of interest between AM General and General
Engine Products is abundantly clear,” AM General should be held liable for the breach of
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contract claim. (Pl.’s Resp. Br. at 16.) This is not enough to allow him to pierce GEP’s corporate
veil and hold AM General liable for GEP’s alleged breach of contract.
Piercing the corporate veil is a theory that enables plaintiffs to reach past a subsidiary in
order to hold its parent company liable for the subsidiary’s acts. This theory “is not by itself a
cause of action. Rather, it is a doctrine which fastens liability on the individual who uses a
corporation merely as an instrumentality to conduct his or her own personal business, and such
liability arises from fraud or injustice perpetuated . . . on third persons dealing with the
corporation.” In re RCS Engineered Products Co., Inc., 102 F.3d 223, 226 (6th Cir. 1996) (citing
1 Fletcher Cyclopedia on the Law of Private Corps. § 41.10 at 615 (1990)); accord Kostopoulos
v. Crimmins, No. 2010-107311-CZ, 2011 WL 6848354, at *3 (Mich. Ct. App. Dec. 29, 2011).
In Michigan, “[t]he traditional basis for piercing the corporate veil has been to protect a
corporation’s creditors where there is a unity of interest of the stockholders and the corporation
and where the stockholders have used the corporate structure in an attempt to avoid legal
obligations.” Foodland Dists. v. Al-Naimi, 559 N.W.2d 379, 381 (Mich. 1996). But the theory
has also been applied in breach of contract claims against a parent company where the plaintiff
contracted with a subsidiary. E.g., Plastics Plus, Inc. v. Fortis Plastics, LLC, No. 12-cv-10125,
2013 WL 6547866, at *3–4 (E.D. Mich. Dec. 13, 2013); City of Dearborn v. DLZ Corp., 111 F.
Supp. 2d 900, 902 (E.D. Mich. 2000).
In order to pierce, Hansen must demonstrate the following elements:
First, the corporate entity must be a mere instrumentality of another entity or
individual. Second, the corporate entity must be used to commit a fraud or wrong.
Third, there must have been an unjust loss or injury to the plaintiff.
Foodland Dists., 559 N.W.2d at 381. Factors relevant to whether a subsidiary is a “mere
instrumentality” include

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if the parent and subsidiary share principal offices, if they share board members or
executives, if all of the parent’s revenue comes from the subsidiary’s sales, if all
capital for the subsidiary is provided by the parent, if the subsidiary purchases
supplies exclusively from the parent, if the subsidiary is seriously
undercapitalized, if the parent regularly provided gratuitous services to the
subsidiary, if the parent handled the subsidiary’s payroll, if the parent directed the
policies and decisions of the subsidiary, and if the parent considered the
subsidiary’s project to be its own.
Plastics Plus, 2013 WL 6547866 at *5.
It is true that AM General and GEP appear to share common interests and even share
some corporate officers. But this fact alone is not enough to raise a genuine issue of material fact
as to the first prong of the piercing inquiry. See Precision, Inc. v. Kenco/Williams, Inc., 66 F.
App’x 1, 6 (6th Cir. 2003) (“Parents and subsidiaries frequently have overlapping boards of
directors while maintaining separate business operations.” (quoting Fletcher v. Atec, Inc., 68
F.3d 1451, 1460 (2d Cir. 1995)). Furthermore, Hansen has not alleged, and the Court has not
been made aware of, any record items indicating that AM General used GEP to perpetrate a
fraud or wrongdoing. A breach of contract could constitute “fraud or wrongdoing for the purpose
of veil-piercing liability,” Servo Kinetics, Inc. v. Tokyo Precision Instruments Co. Ltd., 475 F.3d
783, 799 (6th Cir. 2007), but as will be discussed below, Hansen has not demonstrated that there
was a breach of contract. Therefore, to the extent he seeks to assert a piercing theory, Hansen has
not met his burden.
Summary judgment for AM General on the breach of contract claim is therefore
warranted.
B. Promissory Estoppel
Hansen’s promissory estoppel claim does not rely on Hansen’s employment relationship
with GEP but instead on representations allegedly made to Hansen by AM General employees.
(Pl.’s Resp. Br. at 26.) The Court finds, however, that this claim also fails because there was no
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clear and definite promise to reimburse Hansen for full tuition for the Kellogg program, and no
reasonable jury could find Hansen’s reliance on such a representation reasonable.
“The doctrine of promissory estoppel is cautiously applied.” Marrero v. McDonnell
Douglas Capital Corp., 505 N.W.2d 275, 278 (Mich. 1993) (citation omitted). Courts “should
apply the doctrine only where the facts are unquestionable and the wrong to be prevented
undoubted.” Novak v. Nationwide Mut. Ins. Co., 599 N.W.2d 546, 552 (Mich. Ct. App. 1999).
The elements of promissory estoppel under Michigan law are,
(1) a promise, (2) that the promisor reasonably should have expected to induce
action of a definite and substantial character on the part of the promisee, (3)
which in fact produced reliance or forbearance of that nature, and (4) in
circumstances requiring that the promise be enforced if injustice is to be avoided.
Parkhurst Homes, Inc. v. McLaughlin, 466 N.W.2d 404, 406 (1991). Moreover, “[p]romissory
estoppel requires reasonable reliance on the part of the party asserting estoppel.” Northern
Warehousing, Inc. v. State of Mich. Dep’t of Ed., 714 N.W.2d 287 (Mich. 2006).
“Because promissory estoppel substitutes for the consideration required to form a
contract, the promise on which a promissory estoppel action is brought must be definite and
clear.” Lifeline Ltd. No. II v. Conn. Gen. Life Ins. Co., 827 F. Supp. 438, 442 (E.D. Mich. 1993)
(citing State Bank of Standish v. Curry, 500 N.W.2d 104, 107 (1993)). “A promise is a
manifestation of intention to act or refrain from acting in a specified manner, made in a way that
would justify a promisee in understanding that a commitment had been made.” Schmidt v.
Bretzlaff, 528 N.W.2d 760, 762 (1995). “In determining whether a requisite promise existed,
[courts] are to objectively examine the words and actions surrounding the transaction in question
as well as the nature of the relationship between the parties and the circumstances surrounding
their actions.” Novak v. Nationwide Mut. Ins. Co., 599 N.W.2d 546, 552 (1999).

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The record is devoid of any clear and definite promise by AM General to provide Hansen
with full tuition reimbursement for the Kellogg program. To the contrary, Hansen admits that
the only explicit representations made to him were (1) Burton’s phone call informing him that
the company would reimburse $25,000, and (2) subsequent affirmations of that statement from
AM General employees. Hansen’s written communications with supervisors, his girlfriend, and
Kellogg staff reflect this admission. The Court acknowledges that there may have been some
“mixed opinions” (Pl.’s Resp. Br. at 9 (quoting Dkt. 20-4, Jeff Dowell E-mail to Gary Wuslich,
at 1)), regarding the Policy and its application to Hansen. But “mixed opinions” do not constitute
a “clear and definite promise” to reimburse tuition in excess of $100,000, especially where the
AM General employees consistently stated that the maximum reimbursement would be $25,000.
Furthermore, the Policy itself does not promise unlimited tuition reimbursements. Rather, it
states that reimbursements are subject to prior approval and limited to two courses per term
unless approved by the Vice President of Human Resources. (See Policy at 1–2.) And Hansen
admits that he neither sought nor received such approval.
Hansen makes much of his own interpretation of the policy. But it is clear that he was
aware of AM General’s position limiting reimbursement to $25,000. He even informed Kellogg
staff that he did not expect AM General to make any further contributions to his tuition. And,
despite many meetings with AM General’s staff regarding the cap, Hansen never received any
assurance that he would receive more than $25,000. Hansen proceeded on the assumption that he
would be reimbursed for over $100,000 in tuition expenses based solely on his own
interpretation of the policy when the record reflects that every person he spoke with during this
time advised him otherwise. No reasonable jury could find this to be reasonable reliance.

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Moreover, AM General could not reasonably have expected that the actions of its
employees would induce Hansen to act on the belief that AM General would reimburse him for
over $100,000. AM General informed Hansen of the $25,000 limitation well before he applied
for student loans or paid a deposit to hold his seat in the Kellogg entering class. Hansen never
followed the required procedure to be reimbursed for more than two courses per term.
Furthermore, AM General points out that the highest amount ever paid to an employee through
the ERP program was $30,663.60. (Def.’s Br. at 4 n.3 (citing Minne Decl. at ¶ 8).) Hansen
asserts, without citing evidence, that Gary Wuslich received full reimbursement for the same
program. But Wuslich held an executive level position. As counsel for AM General pointed out
at oral argument, there may have been different concerns regarding Wuslich’s education because
of his executive status. But even if Hansen’s assertion about Wuslich is correct, the existence of
a single executive who was reimbursed for full tuition hardly establishes a genuine issue of
material fact that Hansen was induced to accrue over $100,000 in educational debt on the
assumption that he would be reimbursed.
In sum, the undisputed facts reflect that there was no clear and definite promise by AM
General to pay Hansen’s full tuition and that AM General through its employees would not
reasonably have expected Hansen to take definite and substantial action in response to the
alleged promise. Hansen’s promissory estoppel claim therefore fails as a matter of law.
C. Leave to Amend
In his response brief, Hansen requests leave to amend the Complaint to add GEP as a
defendant. But under this District’s local rules, motions are not to be made in response briefs.
See E.D. Mich. EFP 5(e); see also Jung v. Certainteed Corp., No. 10–2557, 2011 WL 772907,
*1 (D. Kan. Mar. 1, 2011) (“Generally, a plaintiff’s bare request in a response to a motion to

15

dismiss is not a proper vehicle for seeking leave to amend .”) (citing Calderon v. Kansas Dep’t
of Soc. & Rehab. Servs., 181 F.3d 1180, 1186 (10th Cir.1999)); Fed. R. Civ. P. 7(b)(1) (“A
request for a court order must be made by motion.”). Nonetheless, the Court will address the
motion in the interest of efficiency because, as will be explained, leave to amend is not warranted
even assuming Hansen had requested it in the proper manner.
Federal Rule of Civil Procedure 15(a)(2) provides that leave to amend should be “freely
given when justice so requires.” But a court may deny leave based on undue delay, bad faith,
dilatory motive, or futility. Foman v. Davis, 371 U.S. 178, 182 (1962). The Sixth Circuit requires
“at least some significant showing of prejudice to deny a motion to amend based solely upon
delay.” Prater v. Ohio Educ. Ass’n, 505 F.3d 437, 445 (6th Cir. 2008) (citing Moore v. City of
Paducah, 790 F.2d 557, 562 (6th Cir. 1986) (per curiam)).
“[A]llowing amendment after the close of discovery creates significant prejudice . . . .”
Duggins v. Steak ‘N Shake, Inc., 195 F.3d 828, 834 (6th Cir. 1999). Indeed, requesting leave to
amend after the passage of the discovery cutoff and the dispositive motion deadline imposes “an
unwarranted burden on the Court” and places an “unfair burden on the opposing parties.”
Crestwood Farm Bloodstock v. Everest Stables, Inc., 751 F.3d 434, 445 (6th Cir. 2014). In this
case, discovery closed on March 28, 2014, (Dkt. 14), AM General filed its motion for summary
judgment on April 25, 2014, (Dkt. 16.), and the parties engaged in mediation during the summer
of 2014. (Dkt. 15.) It is well past the appropriate time to amend the complaint.
Furthermore, by the time he requested leave to amend, Hansen had been on notice that
AM General was not his employer for nearly ten months. On July 23, 2013, in its answer to the
Complaint, AM General “admit[ted] that Hansen was an employee of General Engine Products
LLC (“GEP”), a wholly owned subsidiary of AM General, in Livonia, Michigan.” (Dkt, 6, Ans.,

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at 3.) AM General also “admit[ted] that GEP agreed to reimburse Hansen for certain educational
expenses under the terms of AM General’s Education Reimbursement Program.” (Id. at 5.) In
response to Hansen’s allegation that he was “a salaried employee . . . [of] Defendant,” AM
General stated that it “admit[ted] that Hansen was a salaried employee of GEP.” (Id. at 6.) Thus,
AM General’s motion for summary judgment (filed on May 19, 2014) did not reveal anything
new by arguing that Hansen had sued the wrong entity.
Moreover, the Court finds that Hansen’s proposed addition of GEP as a party would be
futile. “A proposed amendment is futile if the amendment could not withstand a Rule 12(b)(6)
motion to dismiss.” Rose v. Hartford Underwriters Ins. Co., 203 F.3d 417, 420 (6th Cir. 2000).
To withstand a motion to dismiss, a claim must “set forth factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). AM General and Hansen agree that if a contract exists, GEP
and Hansen are the parties. But neither party has presented a coherent theory regarding what the
contract is. At oral argument, counsel for AM General and Hansen presented an array of ideas,
but ultimately, counsel for Hansen commented that it would be up to the Court to make a
determination regarding this issue. The Court accepts the invitation and finds that GEP’s
reimbursement policy constituted an offer for a unilateral contract, but that there was no breach
of contract because GEP revoked the offer and extended a new one before Hansen accepted
through performance.
The threshold question for the breach of contract claim is when and how employment
policies create contract rights under Michigan law. Hansen seeks to analogize the EFAP to the
termination-for-cause policies at issue in Toussaint v. Blue Cross & Blue Shield of Michigan, 292
N.W.2d 880 (Mich. 1980). In Toussaint, the Michigan Supreme Court created an exception to

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the general rule of construction providing that employment contracts of indefinite duration create
an “at will” employment relationship terminable by either party. Lynas v. Maxwell Farms, 273
N.W. 315, 316 (1937); see generally Rowe v. Montgomery Ward & Co., 473 N.W.2d 268, 269
(Mich. 1991) (“In [Toussaint], this Court joined the forefront of a nationwide experiment in
which, under varying theories, courts extended job security to nonunionized employees.”). The
Toussaint exception holds that discharge-for-cause policies are enforceable, even in the absence
of mutual agreement that the policies would create contract rights, because the policies “create[]
a situation ‘instinct with an obligation.’” Id. at 892. In other words, an employee’s “legitimate
expectations grounded in an employer’s policy statements” could give rise to an enforceable
right not to be terminated without good cause. Id.
Hansen argues that the EFAP created a legitimate expectation that he would be
reimbursed for his full tuition and thereby gives rise to a contract under Toussaint. Despite the
continuing vitality of Toussaint, the Court agrees with Defendants (see Def.’s Reply Br. at 2) that
its “legitimate-expectations” holding does not apply outside the at-will employment context. See,
e.g., Dumas v. Auto Club Ins. Assoc., 473 N.W.2d 652, 655–57 (Mich. 1991) (“Previous cases
have not extended the legitimate-expectations theory to facts similar to these [where an employer
amended a sales commission policy], and we decline the opportunity to extend the theory to
compensation terms.”); Fischhaber v. Gen. Motors Corp., Buick Motor Div., 436 N.W.2d 386,
389 (Mich. Ct. App. 1988) (“Toussaint was strictly limited to instances of employee discharge,
and we find no indication in that case that the Court intended its holdings to be expanded to
include changes in job assignments.”).
But Toussaint is not the only way for an employment policy to create contract rights. E.g.
In re Certified Question, 443 N.W.2d 112, 118 (Mich. 1989) (“Without rejecting the

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applicability of unilateral contract theory in other situations, we find [the theory] inadequate as a
basis for our answer” to a certified question from the Sixth Circuit regarding when an employer
may unilaterally alter a Toussaint-type policy). In fact, Michigan courts have expressly adopted
unilateral contract theory in situations similar to Hansen’s. Holland v. Earl G. Graves Publishing
Co., Inc., 46 F. Supp.2d 681 (E.D. Mich. 1998) (holding that a year-end bonus policy was “an
announcement as to the way the company would conduct itself, and it could be accepted only by
the plaintiff’s performance,” and plaintiff’s performance under the policy created a contractual
obligation on the employer’s part); Cain v. Allen Electric & Equipment Co., 78 N.W.2d 296,
301–302 (Mich. 1956) (holding that a policy stating that ““an ‘executive’ having 5 to 10 years
employment should be entitled to 2 months termination pay” created an offer for a unilateral
contract which the plaintiff accepted by staying at the company for over five years); but see
Klein v. HP Pelzer Auto. Sys., Inc., -- N.W.2d --, 306 Mich. App. 67 (Mich. Ct. App. 2014)
(distinguishing between unilateral contracts and mere gratuities in the context of employment
policies).
“A unilateral contract is one in which the promisor does not receive a promise in return as
consideration.” Id. at 116. “In suits upon unilateral contracts, it is only where the defendant has
had the benefit of the consideration for which he bargained that he can be held bound.”
Richardson v. Hardwick, 106 U.S. 252, 255 (1882). Since the “only method of acceptance of a
unilateral contract is performance,” a promisor may properly revoke his offer prior to the
promisee’s acceptance without incurring liability for breach of contract. Cunningham v. 4-D Tool
Co., 451 N.W.2d 514, 517 (Mich. Ct. App. 1989) (finding no breach of contract where
“defendant offered a typical unilateral employment contract in which plaintiff could accept by
performance, i.e., by engaging in work at the defendant’s plant” but “was told when he arrived at

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the plant that the defendant no longer had work for him”); see also Sniecinski v. Blue Cross &
Blue Shield of Mich., 666 N.W.2d 186, 195 (Mich. 2003) (“A unilateral contract is one in which
the promisor does not receive a promise in return as consideration. . . . In such circumstances,
there is no contractual requirement that the promisee do more than perform the act upon which
the promise is predicated in order to legally obligate the promisor.”).
Here, GEP’s policy offered to reimburse employee tuition for up to two classes per
semester in exchange for the employee’s submission of certain documentation and completion of
pre-approved coursework (i.e., the performance of completing approved coursework after
applying for and receiving approval from GEP served as the consideration for the contract.) That
is, the policy constituted an offer (repayment of tuition in accordance with the policy) which
could only be accepted by performance (submission of documents and completion of course
work). Thus, the policy was an offer for a unilateral contract. See Obike v. Applied EPI, Inc., No.
02-1653, 2004 WL 74167, at *8 (D. Minn. Mar. 24, 2004) (noting that an Employee Handbook
providing that employees were “entitled to a ‘maximum of $5,000 per year’” for “approved class
work in which the employee received a grade of ‘B’ or better” was “sufficiently definite to
establish a unilateral contract”).
It is undisputed that Hansen did not properly follow the policy’s requirement to submit
requests for reimbursement before enrolling in a course. Because Hansen had not yet performed,
GEP “effectively revoked its offer prior to plaintiff’s acceptance,” Cunningham, 451 N.W.2d at
517, by telling Hansen that instead of the usual procedure, it would provide him with about
$25,000 worth of reimbursement. Therefore, a contract to reimburse Hansen pursuant to the
terms of the Policy was never formed and GEP did not breach by paying Hansen the
(approximately) $25,000 it promised. Amending the Complaint would be futile.

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IV. CONCLUSION
For the reasons stated, AM General’s motion for summary judgment is GRANTED and
Hansen’s request for leave to amend is DENIED.
s/Laurie J. Michelson
LAURIE J. MICHELSON
UNITED STATES DISTRICT JUDGE
Dated: November 26, 2014

CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing order was served upon each
attorney or party of record herein by electronic means or first class U.S. mail on November 26,
2014.
s/Deborah Tofil
Deborah Tofil
Case Manager [phone]

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