Whitesell Corporation v. Whirlpool Corporation et al

Filing 653

MEMORANDUM OPINION AND ORDER denying 607 Defendant's motion in limine to exclude evidence of any alleged breach of the 1995 Strategic Alliance Agreement ("SAA") and evidence pertaining to Defendant's treatment of other suppliers; signed by Judge Robert Holmes Bell (Judge Robert Holmes Bell, kcb)

UNITED STATES DISTRICT COURT F O R THE WESTERN DISTRICT OF MICHIGAN S O U T H E R N DIVISION

W H I T E S E L L CORPORATION, P l a in tif f , C a se No. 1:05-CV-679 v. H O N . ROBERT HOLMES BELL W H I R L P O O L CORPORATION, W H IR L P O O L MEXICO S.A. de C.V., a n d JOSEPH SHARKEY, D e f e n d a n ts , and W H I R L P O O L CORPORATION, C o u n te r- P l a in tif f , v. W H I T E S E L L CORPORATION, C o u n ter -D e f e n d a n t. / M E M O R A N D U M OPINION & ORDER T h is matter comes before the Court on Defendant Whirlpool Corporation's motion in limine to exclude (1) evidence of any alleged breach of the 1995 Strategic Alliance A g ree m en t ("SAA") and (2) evidence pertaining to Defendant's treatment of other suppliers (D k t. No. 607). For the reasons that follow, this motion will be denied. In this motion, Defendant asks the Court to preclude Plaintiff from introducing any

a n d all evidence pertaining to Defendant's performance under a prior contract between the p a rtie s and to Defendant's treatment of suppliers other than Plaintiff. Defendant argues that t h e s e two categories of evidence are not relevant to any of the claims or defenses still in c o n te n tio n in this matter. The Court does not agree that all evidence of the parties' prior contractual relationship a n d of Whirlpool's arrangements with other suppliers is conclusively irrelevant to the matter a t hand. Several questions of fact remain unresolved with respect to the interpretation of a m b ig u o u s contractual provisions. For instance, the jury will be asked to determine

P laintiff's obligations under the TCP provision, Defendant's obligations during the phase-out p e rio d , Defendant's obligations under the "trial parts" provision, Defendant's right to p u rc h a se safety-stock from suppliers other than Plaintiff, and Defendant's obligations under E x h ib it C-1 of the 2002 SAA. When contractual language is ambiguous, a fact-finder's primary objective is to a s c e rta in the intentions of the parties. Klapp v. United Ins. Group Agency, Inc., 663 N.W.2d 4 4 7 , 454 (Mich. 2003). A fact-finder is permitted to consider a wide variety of evidence that m a y shed light on the meaning of an ambiguous provision, including extrinsic evidence that te n d s to reflect the shared understanding of the parties. Id. ("In resolving such a question of f a ct, i.e., the interpretation of a contract whose language is ambiguous, the jury is to consider re lev a n t extrinsic evidence."); Penzien v. Dielectric Prods. Eng'g Co., Inc., 132 N.W.2d 130, 1 3 2 (Mich. 1965). To the extent evidence of prior arrangements between the two parties and

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b e tw e e n Defendant and other suppliers sheds light on the meaning of the ambiguous p ro v is io n s of the 2002 SAA, that evidence is relevant and admissible, unless disqualified by a n o th e r rule of evidence. F u r th e r, under the Michigan Commercial Code, evidence of a course of dealing or u sa g e of trade is permitted, not only to clarify ambiguous contractual terms, but to s u p p le m e n t the terms of a contract. Mich. Comp. Laws § 440.1205(3). A course of dealing is "a sequence of previous conduct between the parties to a particular transaction which is f a irly to be regarded as establishing a common basis of understanding for interpreting their e x p re ss io n s and other conduct." Mich. Comp. Laws § 440.1205(1). Evidence of a prior c o n tr a c tu a l arrangement between Plaintiff and Defendant can be used to establish a course o f dealing between the two parties. Dart Bank v. Byrum, No. 277581, 2008 WL 2514183, a t *2 (Mich. Ct. App. June 24, 2008) (unpublished) ("[T]he UCC provides that when parties h a v e previously been involved in `a particular transaction,' `a sequence of previous conduct' b e tw e e n them can serve `as establishing a common basis of understanding' and as a tool for `in te rp re tin g their expressions' embodied in a new or subsequent contract.") (citations o m itte d ). A usage of trade is "any practice or method of dealing having such regularity of o b s e rv a n c e in a place, vocation or trade as to justify an expectation that it will be observed w ith respect to the transaction in question." Mich. Comp. Laws § 440.1205(2). Contractual a rra n g e m e n ts between Defendant and other suppliers can be used to establish a usage of trade w ith in the appliance production industry. See Ambassador Steel Co. v. Ewlad Steel Co., 190 N .W .2 d 275, 279 (Mich. Ct. App. 1971). 3

T h e Court also disagrees with Defendant that Rule 403 of the Federal Rules of E v id e n c e requires the categorical exclusion of all evidence pertaining to the prior agreement b etw ee n the parties and to agreements between Defendant and other suppliers. The Court is confident that the jury will be able to adequately compartmentalize the issues, but if a p a rtic u la r piece of evidence does, in fact, run the risk of violating Rule 403, the Court invites D e f en d a n t to make a proper objection contemporaneous to the introduction of that evidence. I T IS HEREBY ORDERED that Defendant's motion in limine to exclude (1) ev iden ce of any alleged breach of the 1995 SAA and (2) evidence pertaining to Defendant's tr e a tm e n t of other suppliers (Dkt. No. 607) is DENIED.

Dated: October 27, 2009

/s/ Robert Holmes Bell ROBERT HOLMES BELL UNITED STATES DISTRICT JUDGE

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