Whitesell Corporation v. Whirlpool Corporation et al

Filing 733

MEMORANDUM OPINION AND ORDER denying 726 motion for judgment as a matter of law ; 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 AND ORDER T h is matter is before the Court on Plaintiff's motion under Fed. R. Civ. P. 50 for ju d g m e n t as a matter of law on Defendant's counterclaim. (Dkt. No. 726.) Defendant has a ss e rte d a counterclaim against Plaintiff for breach of Section 6.1 of the 2002 SAA, the total c o st productivity, or TCP, provision. The TCP provision required Plaintiff to develop and p re se n t to Defendant, during each year of the 2002 SAA, verifiable cost-saving proposals

e x p e c te d to reduce Defendant's costs by 5% of the total value of the items purchased by D e f e n d a n t under the 2002 SAA each year. Defendant expressly reserved the right to " d e te rm in e whether such project[s] should be implemented." (Dkt. No. 440 Ex. 1 § 6.) P la in t if f argues that "a reasonable jury [does] not have a legally sufficient evidentiary basis" to find for Defendant on the issue of whether Defendant proved its claim for breach of the T C P provision because non-speculative damages are an element of all breach of contract c la im s and Defendant has presented only speculative evidence that it might have im p le m e n te d the TCP proposals. The Court concludes that, based on the entirety of the record, a reasonable jury does h a v e a legally sufficient evidentiary basis to find for Defendant on the issue of whether D e f en d a n t suffered non-speculative damages from any alleged breach of the TCP provision b y Plaintiff. Plaintiff is correct that "damages predicated on speculation and conjecture are n o t recoverable" under Michigan law. Health Call of Detroit v. Atrium Home & Health Care S e rv s., Inc., 706 N.W.2d 843, 852 (Mich. Ct. App. 2005). However, this does not mean that a party is required to prove damages with absolute certainty. Id. Instead, the rule is that the p a rty asserting a breach of contract must prove damages with "reasonable certainty." Alan C u s to m Homes, Inc. v. Krol, 667 N.W.2d 379, 383 (Mich. Ct. App. 2003). In support of its motion, Plaintiff presents trial testimony from Whirlpool employees T o m Egan and John Mott that Defendant did, in fact, retain sole discretion to determine w h e th e r to implement a given TCP proposal and that, on various occasions in the past,

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D e f en d a n t decided not to implement certain TCP proposals. Though this evidence would bar a conclusion that Defendant was absolutely certain to implement the TCP programs that P la in tif f allegedly failed to present, Defendant's burden of proof is not that high. Defendant m u s t only offer proof that it was reasonably certain to implement the programs that Plaintiff a lleg e d ly failed to present, and Mr. Egan and Mr. Mott's testimony is not fatal to this c o n c lu s io n . Based on the entirety of the record, it is clear that Defendant has presented s u f f ic ie n t evidence for the jury to find with reasonable certainty that Defendant would have im p le m e n te d the TCP proposals that Plaintiff allegedly failed to present. Plaintiff also argues that, even if Defendant has shown, with the requisite level of c e rta in ty, that Defendant would have implemented the TCP proposals, the amount of savings th a t would have resulted from the proposals is also speculative. Defendant is apparently a rg u in g that, even if a TCP proposal contemplates a 5% reduction in Whirlpool's costs, the a c tu a l cost reduction might turn out to be zero when the program is actually implemented, a n d for this reason the jury cannot find that Defendant has established non-speculative d a m a g e s . However, the TCP provision explicitly requires that proposals be "based on re a so n a b le , verifiable assumptions." (Dkt. No. 440 Ex. 1 § 6.1A.) The Court concludes that a proposal "based on reasonable, verifiable assumptions" is reasonably certain to result in the c o s t savings that it predicts, even if it ultimately does not. See Severn v. Sperry Corp., 538 N .W .2 d 50, 55 (Mich. Ct. App. 1995) ("[R]ecovery is not precluded simply because proof o f the amount of damages is not mathematically precise.").

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F o r the foregoing reasons, the Court concludes that based on the entirety of the record a reasonable jury does have a legally sufficient evidentiary basis to find for Defendant on the is s u e of whether Defendant was damaged by Plaintiff's alleged failure to submit TCP p ro p o s a ls . Accordingly, I T IS HEREBY ORDERED that Plaintiff's motion for judgment as a matter of law ( D k t . No. 726) is DENIED.

Dated: February 16, 2010

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

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