H&H Wholesale Services, Inc. et al v. Kamstra International, B.V. d/b/a Holland Trading Group et al
Filing
54
OPINION AND ORDER denying 51 Motion for Reconsideration. Signed by District Judge Laurie J. Michelson. (WBar)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
H&H WHOLESALE SERVICES, INC.,
HOWARD GOLDMAN, and
DAVID GULAS,
Case No. 2:17-cv-13422-LJM-APP
Honorable Laurie J. Michelson
Plaintiffs,
v.
KAMSTRA INTERNATIONAL, B.V. d/b/a
HOLLAND TRADING GROUP,
Defendant.
OPINION AND ORDER
DENYING DEFENDANT’S MOTION FOR RECONSIDERATION [51]
The old saying, “if at first you don’t succeed, try, try, try again,” William Edward Hickson,
The Singing Master (1836), is not always the best way to proceed in litigation. Here, Kamstra
International filed a motion to dismiss on a host of grounds. Although H&H Wholesale Services’
Vendor Agreement explicitly stated that this Court was an appropriate forum for H&H to sue
Kamstra, Kamstra argued that the Vendor Agreement was not enforceable, and, if that were not
the case, then H&H abandoned the Vendor Agreement, and, if that were not the case, then Kamstra
terminated the Vendor Agreement, and, if that were not the case, then the parties reached a later
agreement that superseded the Vendor Agreement. This Court thoroughly studied and explicitly
addressed those and other issues. H&H Wholesale Servs., Inc. v. Kamstra Int’l, B.V.,
— F. Supp. 3d —, No. 217CV13422, 2019 WL 78892 (E.D. Mich. Jan. 2, 2019). As relevant for
present purposes, the Court found that H&H had made a prima facie showing that the Vendor
Agreement permitted this Court to exercise personal jurisdiction over Kamstra and that it was
plausible that the Vendor Agreement was enforceable. Now Kamstra asks this Court to reconsider
those determinations and, in doing so, again makes a host of arguments. As is detailed below,
Kamstra has not only failed to show that that this Court’s prior decision rests on an indisputable
mistake that, if corrected, would result in a different outcome, see E.D. Mich. LR 7.1(h)(3), many
of Kamstra’s arguments for reconsideration are mistaken.
Start with Kamstra’s claim that this Court “erred in finding that the Vendor Agreement is
a distribution/distributorship agreement that is not ‘a contract for the sale of goods.’” (ECF No.
51, PageID.1048.) This argument relates to Kamstra’s belief that the Vendor Agreement is “a
contract for the sale of goods” as that phrase is used in the statute-of-frauds provision, Mich. Comp.
Laws § 440.2201, yet does not meet that statute’s demand for a written quantity term. In support
of this basis for reconsideration, Kamstra distinguishes the Vendor Agreement from the
distribution agreements in Wolverine World Wide, Inc. v. Wolverine Canada, Inc., 653 F. Supp.
2d 747 (W.D. Mich. 2009), and Lorenz Supply Co. v. Am. Standard, Inc., 300 N.W.2d 335 (Mich.
Ct. App. 1980). (See ECF No. 51, PageID.1048–1049.)
This argument does not warrant altering this Court’s prior opinion and order. Contrary to
Kamstra’s characterization of this Court’s opinion (ECF No. 51, PageID.1048), the Court never
held that the Vendor Agreement was (or was not) a “distribution/distributorship agreement.” And
this Court did not cite Wolverine. And this Court never claimed that the Vendor Agreement made
Kamstra a “preferred” distributor like the contract in Lorenz. This Court cited Lorenz to show that
absence of an obligation to sell or buy suggests that an agreement is not “a contract for the sale of
goods” under § 440.2201. See Lorenz Supply Co. v. Am. Standard, Inc., 300 N.W.2d 335, 338
(Mich. Ct. App. 1980) (finding contract was not one for the sale of goods under § 440.2201 where
it did not require the plaintiff “to buy a certain quantity of goods or, indeed, to buy any goods from
the defendant in the future”).
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Moreover, this Court explained the nature of the Vendor Agreement. As indicated from the
text of the agreement (e.g., “in consideration of being considered a Vendor for H&H”), H&H
wanted to ensure that if it bought goods from one of its vendors, the goods would be accompanied
by certain warranties (e.g., “in original manufacturer’s packaging”). For each vendor that agreed
to the terms of the Vendor Agreement, H&H could add that vendor to its “rolodex” assured that
the vendor had agreed to all representations and warranties in the Vendor Agreement. That way
when H&H was looking to source a product, it only needed to flip through its rolodex and ask
about availability and price. H&H could make that streamlined inquiry knowing that any vendor
it chose from its rolodex had already agreed to, for example, sell products “in original
manufacturer’s packaging” and litigate disputes in Michigan.
As another grounds for reconsideration, Kamstra says that in finding that the Vendor
Agreement was not “a contract for the sale of goods” under § 440.2201, this Court failed to
“distinguish between the ‘transaction in goods’ criteria for the general of Article 2 and the more
specific finding of a ‘contract for the sale of goods.’” (ECF No. 51, PageID.1053–1054.) Kamstra’s
argument proceeds this way: Article 2 of the UCC “applies to transactions in goods,” the Vendor
Agreement was a “transaction in goods,” the Vendor Agreement was thus subject to the provisions
of Article 2, one of the provisions of Article 2 is the statute-of-frauds provision, and so the Vendor
Agreement was subject to the statute-of-frauds provision.
This argument is flawed. Article 2 of the UCC broadly applies to “transactions in goods”
while Article 2’s statute-of-frauds provision more narrowly applies to “a contract for the sale of
goods.” Kamstra acknowledges as much. (See ECF No. 51, PageID.1054 (citing Great Lakes
Exteriors, Inc. v. Dryvit Sys. Canada Ltd., No. 01-73173, 2002 WL 34381134, at *3 (E.D. Mich.
Sept. 12, 2002)).) Because “a contract for the sale of goods” is a subset of those contracts that are
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“transactions in goods,” a contract may fall within the latter but without the former. See Monetti,
S.P.A. v. Anchor Hocking Corp., 931 F.2d 1178, 1185 (7th Cir. 1991) (“The fact that Article 2 . . .
[applies] to ‘transactions in goods,’ § 2–102, while its statute of frauds is limited to ‘contract[s]
for the sale of goods,’ § 2–201(1), could be thought to imply that the statute of frauds does not
cover every transaction that is otherwise within the scope of Article 2.”). Indeed, the Michigan
Supreme Court has expressly acknowledged this possibility. In Lorenz, the Michigan Supreme
Court found that the agreement at issue was not “a contract for the sale of goods” as that phrase is
used in the statute-of-frauds provision while noting that the “agreement may fall within the broader
category of ‘transactions in goods.’” Lorenz Supply Co. v. Am. Standard, Inc., 358 N.W.2d 845,
847 n.8 (Mich. 1984); see also Lorenz, 358 N.W.2d at 853 (Brickely, J.) (“I have no difficulty in
finding the distributorship agreement in question to be subject to Article 2 of the UCC. The more
difficult and separate question is the applicability of the Statute of Frauds . . . . I see it as a separate
question because the term ‘contract for the sale of goods’ is clearly more restrictive than the term
‘transaction in goods’.”). Thus, it might follow that all “contract[s] for the sale of goods” are
“transactions in goods”; but it does not follow that all contracts that are “transactions in goods”
are “contract[s] for the sale of goods.” The Court’s logic was based on the former. Indeed, the
Court never said one way or the other whether Article 2 provisions other than the statute of frauds
might apply to the Vendor Agreement.
In resisting this relationship between “transaction in goods” and “a contract for the sale of
goods,” Kamstra cites Imaging Fin. Servs., Inc. v. Lettergraphics/Detroit, Inc., 178 F.3d 1294
(table), 1999 WL 115473 (6th Cir. Feb. 9, 1999). While Imaging could be read to say that if a
contract concerns a “transaction in goods” it is also a “contract for sale” (Kamstra’s desired
relationship), it appears that the appellant in Imaging argued that Article 2—in its entirety—did
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not apply to the lease agreement at issue. See 1999 WL 115473, at *4 (“Lettergraphics claims that
the transaction at issue is a lease and not a sale, thus removing it from the ambit of the U.C.C. and
allowing application of the longer statute of limitations under Michigan general contract law.”
(emphasis added)). It is thus unclear whether the Court of Appeals was forced to draw a distinction
between “transactions in goods” and a “contract for sale”—it only had to decide whether the lease
was a “transaction in goods” to address the appellant’s argument. In any event, Imaging is nonbinding precedent so it cannot possibly show a “palpable defect” in this Court’s opinion. Carhartt,
Inc. v. Innovative Textiles, Inc., 356 F. Supp. 3d 657, 661 (E.D. Mich. 2018) (“A ‘palpable defect’
is a defect that is obvious, clear, unmistakable, manifest or plain.”).
Kamstra next claims that “[t]his case is not any different than Acemco, Inc. v. Olympic Steel
Lafayette, Inc., 2005 WL 2810716, at *3 (Mich. Ct. App. Oct. 27, 2005) which the Court
acknowledges, but does not distinguish.” (ECF No. 51, PageID.1051.)
But, again, a non-binding decision cannot possibly show that this Court’s decision rested
on unmistakable error that, if corrected, would result in a different outcome. More importantly, the
contract at issue in Acemco specified the products that would be purchased, the price at which they
would be sold, and provided that the seller would sell to buyer whatever quantities the buyer
specified. 2005 WL 2810716, at *1. As explained, the Vendor Agreement mentioned no products,
mentioned no prices, and did not obligate Kamstra to sell H&H anything. Thus, the fact that the
agreement in Acemco was “a contract for the sale of goods” subject to § 440.2201 does nothing to
undermine this Court’s decision that the Vendor Agreement was not such a contract.
Before turning to Kamstra’s other arguments for reconsideration, the Court notes that not
one of the above arguments addresses this Court’s alternate holding. In particular, this Court found
that “the Vendor Agreement is not a ‘contract for the sale of goods’ as that phrase is used in
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Michigan Compiled Laws § 440.2201 or, if it is such a contract, it is not one that is unenforceable
for lack of a quantity term.” 2019 WL 78892, at *7 (emphasis added). So even if the above
arguments were persuasive, none would justify changing the outcome.
Kamstra next claims that the Vendor Agreement is not enforceable because H&H never
signed it. (ECF No. 51, PageID.1058.) According to Kamstra, Hamilton Foundry & Mach. Co. v.
Int’l Molders & Foundry Workers Union of N. Am., 193 F.2d 209 (6th Cir. 1951), says “‘the
general rule is settled that an unsigned contract can not be enforced by either of the parties.’” (ECF
No. 51, PageID.1058 (quoting Hamilton Foundry, 193 F.2d at 213–14).)
Kamstra misquotes Hamilton Foundry. More completely, it says, “the general rule is settled
that an unsigned contract can not be enforced by either of the parties, however completely it may
express their mutual agreement, if it was also agreed that the contract should not be binding until
signed by both of them[.]” 193 F.2d at 213–14 (emphasis added). Or, restated, the general rule is
that if the parties agree that there will not be a binding contract until the contract is signed by both
of them, the unsigned contract cannot be enforced by either of the parties. See Laurence C. Smith
& Laura C. Smith v. Onyx Oil & Chem. Co., 218 F.2d 104, 108 (3d Cir. 1955); Loloee v. Ali, No.
284881, 2010 WL 1330663, at *5 (Mich. Ct. App. Apr. 6, 2010).
Indeed, it is well settled that a contract merely requires offer and acceptance (and
consideration) and thus can be formed without signatures—indeed, a contract can be formed
without any writing at all.
And here, H&H made a prima facie showing of offer and acceptance. Gulas sent a copy of
H&H’s Vendor Agreement to Haaijer, the Kamstra sales manager with whom he had been
working. The Vendor Agreement was not a draft. And no evidence suggests that Gulas invited
negotiation of the Vendor Agreement’s terms. The first line of the Vendor Agreement states, “By
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signing below, the Vendor [Kamstra] agrees to all of the following in consideration of being a
Vendor for H&H, sales to H&H and other good and valuable consideration . . . .” (ECF No. 40,
PageID.827.) And the Vendor Agreement is bookended with a similar statement:
(ECF No. 40, PageID.829.) So a reasonable fact finder could find that the Vendor Agreement was
an offer. See Kloian v. Domino’s Pizza L.L.C., 733 N.W.2d 766, 770 (Mich. Ct. App. 2006) (“An
offer is defined as the manifestation of willingness to enter into a bargain, so made as to justify
another person in understanding that his assent to that bargain is invited and will conclude it.”
(internal quotation marks omitted)).
And a reasonable fact finder could find acceptance. See Brown Mtg. Co. v. Ziomek, 692
N.W.2d 388 (Mich. Ct. App. 2004) (“[A]n acceptance sufficient to create a contract arises where
the individual to whom an offer is extended manifests an intent to be bound by the offer, and all
legal consequences flowing from the offer, through voluntarily undertaking some unequivocal act
sufficient for that purpose.”). Haaijer wrote his name under the “all of the Terms and Conditions
contained herein are accepted and affirmed” language and then emailed a copy of the agreement
back to Gulas. (ECF No. 15, PageID.177.) Kamstra makes much of the fact that Haaijer name is
printed rather than cursive. But Haaijer printed his name on the very line asking for his assent.
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This case is analogous to Remark, LLC v. Adell Broadcasting Corporation. There, Adell
drafted a settlement agreement and Remark signed and returned it to Adell; Adell never signed the
agreement; but Adell’s draft was an offer and Remark’s signature and return an acceptance; so
there was a binding contract. See Remark, LLC v. Adell Broad. Corp., 702 F.3d 280, 284 (6th Cir.
2012); see also Loloee, 2010 WL 1330663, at *5.
As a related basis for reconsideration, Kamstra argues that the Vendor Agreement was not
an offer that could be accepted but a mere “invitation to deal.” (ECF No. 51, PageID.1043, 1057.)
The prior paragraph on offer and acceptance addresses this argument. And, in any event, just about
the only thing Kamstra does to develop its mere-invitation-to-deal argument is cite Compass Auto.
Grp., LLC v. Denso Mfg. Tennessee, Inc., No. 12-10919, 2013 WL 655112 (E.D. Mich. Feb. 22,
2013). But again, non-binding decisions cannot establish a palpable defect—and that is doubly
true for non-binding decisions that are readily distinguishable. In Compass, the document in
question was labeled “request for quotation” and explicitly stated “inquiry only” and “not an
order.” Id. at *1. Here, the document in question was labeled “Vendor Agreement” and, as
discussed, starts and ends with the language expressly asking for Kamstra’s assent.
Kamstra next argues that even if the parties at one point agreed to the terms and conditions
of H&H’s Vendor Agreement, the parties later agreed to Kamstra’s terms and conditions. (See
ECF No. 51, PageID.1059–1063.) Kamstra acknowledges that H&H’s Vendor Agreement states,
“No waiver, alteration or modification of these terms and conditions . . . shall be valid unless
accepted in writing and signed by an authorized representative of H&H.” (ECF No. 40,
PageID.829 (emphasis added).) But, Kamstra argues, Gulas, as H&H’s authorized representative,
signed three documents containing a reference to Kamstra’s terms and conditions: “To all
agreements whereby we [Kamstra] act as seller our general terms and conditions of sale, delivery
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and payment apply, and to all agreements whereby we act as buyer our general terms and
conditions of purchase apply, which you have received from us, and which are also deposited at
the commercial register and published at www.hollandtradinggroup.com. We expressly reject the
applicability of your [H&H’s] terms and conditions.” The three signed documents to which
Kamstra refers are (1) a 2014 customer form, (2) a 2016 customer form, and (3) a sales order
confirmation.
Start with the sales order confirmation. Kamstra is correct that the sales order confirmation
was for an order of Abbott strips and that mispackaged Abbott strips are at the root of this case.
And Kamstra is correct that Gulas signed the sales order confirmation. And Kamstra is correct that
the document contained the two-sentence boilerplate quoted in the prior paragraph, i.e.,
“Kamstra’s Terms.”
But, as this Court already explained in its prior opinion, the order reflected in the signed
sales order confirmation was never fulfilled. In particular, H&H explicitly pled that the Abbott
strips referenced in the signed sales order confirmation were never delivered. (ECF No. 22,
PageID.380–381, ¶¶ 26, 27.) Relying on H&H’s unequivocal factual assertion, this Court stated,
“H&H correctly points out that the Abbott strips covered by the signed sales order confirmation
were never shipped and never paid for. In other words, H&H correctly asserts that the transactions
covered by the two sales order confirmations that Gulas signed did not give rise to this case,” 2019
WL 78892, at *8.
Kamstra says (no less than three times) this was error. In particular, it stresses that it
submitted an affidavit in connection with its Rule 12(b)(2) motion and the affidavit stated that the
order reflected in the signed sales order confirmation had been completed. (See ECF No. 51,
PageID.1045.)
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But Kamstra has confused the date format on the signed sales order confirmation. The sales
order confirmation for Abbott strips that Gulas signed bears the date “11-07-2016.” (ECF No. 15,
PageID.217.) Consistent with other sales order confirmations and invoices prepared by Kamstra
(see ECF No. 15, PageID.185 (“21-02-2014”), ECF No. 23, PageID.457 (“21-1-2017”), ECF No.
23, PageID.458 (“26-1-2017”)), “11-07-2016” was in day-month-year format. That format is
common outside the U.S. and, notably, Kamstra is a Dutch company. So the signed sales order
confirmation for Abbott stirps was dated July 11, 2016 (and not November 7, 2016). And it is this
July 2016 order that the Court stated was not fulfilled. Kamstra’s argument for reconsideration
appears to stem from the fact that there are invoices for Abbott strips bearing “7/11/2016” and
those orders were fulfilled. (See ECF No. 22, PageID.381 ¶ 30; ECF No. 23, PageID.452, 453.)
But those invoices were again in day-month-year format and thus were dated November 7, 2016.
As such, while Kamstra fulfilled those orders, that was not fulfillment of the “11-07-2016” sales
order confirmation that Gulas signed. So this Court’s statement that “the transactions covered by
the two sales order confirmations that Gulas signed did not give rise to this case,” 2019 WL 78892,
at *8, was not error.1
That leaves the two customer forms—one from 2014 and one from 2016—as Kamstra’s
grounds for asserting that after the parties agreed to H&H’s terms and conditions, the parties agreed
to Kamstra’s terms and conditions. The problem with this argument is that neither Gulas nor
anyone else at H&H ever signed the 2014 or 2016 customer form. Kamstra disagrees and points
1
Even if Kamstra understandably confused “7/11/2016” with “11-07-2016,” that there
were separate July 2016 and November 2016 orders is evidenced by the fact that the orders are for
different quantities and for different total cost. In November 2016, H&H ordered and Kamstra
delivered 1,445 boxes of Abbott strips for a total of $79,475; in contrast, the signed July 2016 sales
order confirmation was for 10,000 boxes of Abbott strips for a total of $550,000. (Compare ECF
No. 23, PageID.452, 453, with ECF No. 15, PageID.217, 218.)
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to Gulas’ printed or typed his name on these forms. (See ECF No. 51, PageID.1044, 1061–1063.)
After all, says Kamstra, Haaijer’s name on the Vendor Agreement was merely printed just like
Gulas’ on the two customer forms. (See ECF No. 51, PageID.1043.)
This argument overlooks significant, material differences in H&H’s Vendor Agreement
and Kamstra’s customer forms. The 2014 customer form was just that—a form. True, at the
bottom, in fine print, it contained Kamstra’s Terms. But it was still much more a form than an
agreement. (See ECF No. 15, PageID.179–180.) The 2014 customer form asked for H&H’s
address, its email, its bank, a contact in the purchase department, and a contact in the financial
department. (See id.) Gulas’ hand-printed name appears in the box for the purchase-department
contact. (See id.) In contrast, Haaijer’s hand-printed name was under a block of text stating that
“Vendor [Kamstra] certifies that the undersigned is authorized to execute this Agreement on behalf
of Vendor and that the foregoing statements are true and correct, accepted and agreeable to the
undersigned Vendor and all of the Terms and Conditions contained herein are accepted and
affirmed.” (ECF No. 40, PageID.829.) Haaijer’s printed name on the Vendor Agreement is thus
very different than Gulas’ printed name on the 2014 customer form.
The 2016 customer form is an even weaker grounds for reconsideration. True, as Kamstra
asserts, Gulas typed his name in response to the field “Operational contact person, name.” (ECF
No. 15, PageID.211.) But the end of the 2016 customer form looks like this:
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(ECF No. 15, PageID.212.) As is apparent, Gulas left the portion of the form asking for his and
H&H’s assent to Kamstra’s “terms and conditions of sale” completely blank. And given that Gulas
completed other portions of the 2016 customer form, the omission was likely intentional. So it is
more reasonable to infer that Gulas was rejecting, rather than accepting, any offer that Kamstra
was making. Just the opposite is true of Haaijer and the Vendor Agreement.
In sum, none of the three documents that Kamstra claims Gulas signed—the 2014 customer
form, the 2016 customer form, or the sales order confirmation—show that this Court made an
“incorrect assumption,” was “incorrect,” or was “not correct.” (ECF No. 51, PageID.1043–1046.)
Having considered another round of extensive arguments by Kamstra, the Court adheres to
its prior determination that “at this stage of the case, H&H may rely on the Vendor Agreement to
establish personal jurisdiction,” H&H Wholesale, 2019 WL 78892, at *10. And, insofar as Kamstra
has sought reconsideration of this Court’s Rule 12(b)(6) ruling, the Court adheres to its prior
determination “that it is at least plausible that the Vendor Agreement is enforceable, that H & H
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did not abandon that agreement, Kamstra did not terminate it, and the parties did not mutually
agree to terms that supersede it,” id. at *10.
Kamstra’s motion for reconsideration is DENIED.
SO ORDERED.
s/Laurie J. Michelson
LAURIE J. MICHELSON
UNITED STATES DISTRICT JUDGE
Date: May 21, 2019
CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing document was served upon counsel of record
on this date, May 21, 2019, using the Electronic Court Filing system.
s/William Barkholz
Case Manager
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