Opinion
CASE NO 99-CV-70449-DT.
August 16, 2000.
I. INTRODUCTION
This matter is before the Court on Dryvit's Motion for Summary Judgment pursuant to Fed.R.Civ.P. 56(c). Great Lakes Exteriors has responded and Dryvit has replied. The Court finds the facts and the legal arguments are adequately presented in the briefs and the decisional process would not be significantly aided by oral argument. Accordingly, the motion before this Court will be disposed of upon the briefs that the parties have submitted. See E.D. Mich. Local R. 7.1(e)(2). For the reasons stated below, Dryvit's motion is granted.
II. BACKGROUND
The Court is presented with the last dispositive motion in this case, Dryvit's Motion for Summary Judgment that seeks to dismiss GLE's case with prejudice. GLE claims that Dryvit breached the Agreement when it provided lower pricing to Atlas Building Supply ("Atlas"), a distributor of Dryvit' s products and services in Western Pennsylvania. Specifically, GLE alleges that Dryvit breached paragraph 7(c) of the Agreement that states in full:
Notwithstanding anything herein to the contrary, Company [Dryvit] shall at a minimum provide Distributor [GLE] with the lowest pricing available to any distributor of the Company in a contiguous territory, unless the contiguous territory pricing is negotiated on a particular job for sale only in the contiguous territory.
Dryvit produces a warehouse price list for each distributor that is based on the distributor's market territory. Dryvit's warehouse price list is not fixed, but flexible in meeting the competitive pricing demands of each distributor's market. For example, Dryvit will provide its distributors with lower prices for particular jobs or for specific large contractors.
In this case, Atlas was competing for contracts with a limited number of large contractors in the Pittsburgh, Pennsylvania area. Atlas's competitors were giving large contractors special blanket pricing for jobs within Atlas's territory. Since Atlas and Dryvit were not competitive in their pricing, Dryvit agreed to provide Atlas with a special large contractor price list, which Atlas would use to sell product to those listed contractors who used the product only within Atlas' territory. Prior to this blanket exception, Dryvit would only provide a price exception upon a written request for a specific job.
Dryvit offered the same special pricing to GLE shortly after it was provided to Atlas. GLE acknowledges that it also received the special pricing, but argues that the pricing was not the same as Atlas' but consistently and substantially higher.
Recently, the Court denied GLE's motion for partial summary judgment on the issue of whether Dryvit breached the Distributor Agreement when Dryvit did not provide GLE with the same prices as it provided to Atlas. (See June 16, 2000 Order and Opinion.) In its Opinion and Order, the Court found that GLE's evidence of the damages arising from the alleged breach of contract was insufficient. Additionally, the Court found that paragraph 7(c) was ambiguous, and that there was a question of fact as to whether Dryvit's conduct constituted a breach of paragraph 7(c).
Dryvit's present motion arises from the same facts as stated in the Court's June 16th Opinion, but puts before the Court the issue of whether GLE has any evidence that GLE is entitled to damages. First, Dryvit claims that GLE has cited no evidence that it sustained any damages if the price protection provision of paragraph 7(c) required a comparison of GLE's and Atlas's standard prices. Second, Dryvit argues the evidence presented by GLE which purports to show that Dryvit provided Atlas with lower prices than were provided to GLE is without foundation. Third, Dryvit argues that GLE has failed to differentiate the pricing provided in Michigan, Ohio, and Pennsylvania. Fourth, Dryvit claims that GLE has failed to produce evidence to support its claim that it lost jobs as a result of pricing differences. Finally, Dryvit claims that even if GLE could support its claim of lost jobs, it has failed to mitigate its damages by reducing its retail price to compete for these jobs when it had an excessive profit margin.
GLE has responded to Dryvit's motion and states that there is ample evidence that Dryvit breached the Agreement, that the summaries provided are admissible under Federal Rule of Evidence 1006 and are being audited by GLE's expert, and finally, that GLE will be showing that it lost sales as a result of Dryvit's breach.
III. SUMMARY JUDGMENT
Under Rule 56, summary judgment is appropriate, after adequate time for discovery, only where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." See e.g. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2552 (1986). A genuine issue of material fact exists when "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2511 (1986) (citations omitted). The Supreme Court has stated that the standard the Court must apply in determining whether summary judgment is appropriate is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, at 2512.
In applying this standard, the Court must view all materials offered in support of a motion for summary judgment in the light most favorable to the nonmoving party. Id. at 2510. Where the non-moving party has failed, however, to present evidence on an essential element of their case, they have failed to meet their burden and all other factual disputes are irrelevant and thus summary judgment is appropriate. Celotex, 106 S.Ct. 2548, 2553 (1986); Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 1356 (1986). In Anderson, the Supreme Court also noted that "[b]y its very terms, the standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Id at 2510.
IV. ANALYSIS
Under Michigan law, a plaintiff may recover damages for breach of contract by proof of the following elements; (1) a contract existed; (2) plaintiff fulfilled its contractual obligations; (3) defendant breached its contractual obligations; and (4) plaintiff suffered injury as a result of defendant's breach of the contract. Platsis v. E.F. Hutton and Co., 642 F. Supp. 1277, 1309 (W.D. Mich. 1986), aff'd, 829 F.2d 13 (6th Cir. 1987), cert. denied, 485 U.S. 962 (1988). In this motion, the issue is whether GLE suffered injury assuming Dryvit's breach of the contract.
The measure of damages in a breach of contract suit is to place the injured party in as good a position as he would have been in if the promised performance had been rendered. Lawton v. Gorman Furniture Corp., 90 Mich. App. 258, 282 N.W.2d 797, 801 (1979); Parmet Homes, Inc. v. Republic Insurance Co., 111 Mich. App. 140, 314N.W.2d453, 458 (1981); Allen v. Michigan Bell Telephone Co., 61 Mich. App. 62, 68, 232 N.W.2d 302, 305 (1975). Damages recoverable for breach of contract are those that arise naturally from the breach or those that were contemplated by the parties at the time the contract was made. Kewin v. Massachusetts Mutual Lfe Ins. Co., 409 Mich. 401, 295 N.W.2d 50 (1980). Where appropriate, such damages may include lost revenues, lost profits, and future loss of revenues and profits. American Anodco, Inc. v. Reynolds Metal Co., 743 F.2d 417, 423 (6th Cir. 1984); Lorenz Supply Co. v. American Standard, Inc., 100 Mich. App. 600, 611 300 N.W.2d 335, 340 (1980), aff'd, 419 Mich. 610 (1984); Fera v. Village Plaza, Inc., 396 Mich. 639, 242 N.W.2d 372 (1976).
The burden is upon the plaintiff to prove damages. Benfield v. H.K. Porter Co., 1 Mich. App. 543, 137 N.W.2d 273, 274 (1965). All breach of contract damages must be proven with a reasonable degree of certainty. Lorenz Supply Co., 300 N.W.2d at 340. When plaintiffs proof of damages is based upon conjecture and speculation, and is unsupported by a reasonable factual basis of record, no recovery may be had. Lawton, 282 N.W.2d at 802; The Vogue v. Shopping Centers, Inc., 402 Mich. 546, 266 N.W.2d 148, 150-151 (1978).
As stated above, the burden is upon GLE to prove damages. Dryvit has sought to compel GLE to produce evidence of damages. On December 29, 1999, the Court ordered GLE to produce all evidence of alleged damages by January 27, 2000. GLE filed a sparse response to the Court's Order, and Dryvit filed a motion to dismiss for failure to comply with discovery orders. The Court denied Dryvit's motion, but ordered GLE to provide supplemental responses to the discovery ordered on December 29, 1999. Now, Dryvit has offered GLE one last opportunity to "put up or shut up." See Street v. J.C. Bradford Co., 886 F.2d 1472, 1478 (6th Cir. 1989).
Recently, the Court denied GLE's motion for partial summary judgment because GLE's evidence of the damages arising from the alleged breach of contract was insufficient. In that motion, GLE offered two exhibits that were summaries, which purported to show the damages incurred by GLE. The Court was unable to authenticate the exhibits origin, accuracy, or relevance because GLE did not provide an affidavit in support of the exhibits. Additionally, the Court found that the exhibits in their present form may not have been admissible at trial under the Federal Rules of Evidence.
"Before a summary is admitted, the proponent must lay a proper foundation as to the admissibility of the material that is summarized and show that the summary is accurate." Needham v. White Laboratories, Inc., 639 F.2d 394, 403 (7th Cir. 1981).
Now, in response to Dryvit's motion, GLE still has not laid a proper foundation for the exhibits nor shown that they are accurate, and has failed to offer any other documents, depositions, or affidavits that show there is a genuine issue of material fact that GLE is entitled to damages if Dryvit was found to have breached the agreement. Rather, GLE makes the following statements:
• "the summaries are being audited by plaintiffs expert and will be presented by the expert at trial," (GLE's Response Brief at 9);
• ... plaintiff will be showing contracts, invoices, and other documents to support its lost sales, ( id. at 10);
• [GLE] is still in the process of collecting information. . . ( id. at 11); and
• [GLE] will be relying upon the testimony of its sales persons and documents produced so far and documents that will be produced in the future to support it lost profits claims," ( id.)
GLE has not offered an expert witness's opinion on whether GLE incurred any damages. GLE's expert has not been deposed, and the discovery cut-off date in this case was June 10, 2000. GLE's failure to timely comply with discovery and provide Dryvit with evidence of damages is grounds for dismissing this case as a sanction pursuant to Fed.R.Civ.P. 37.
The discovery cut-off was already extended from January 21, 2000.
Furthermore, GLE has not produced any sales persons or customers who would testify to lost jobs or sales. No affidavits or deposition testimony by sales persons or customers is offered by GLE to show that customers would have purchased products and services from GLE but for Atlas's lower prices, which resulted from the pricing Dryvit extended to Atlas. Additionally, GLE has not shown how GLE is entitled to damages arising from lost jobs in Ohio as distinct from damages that may have arisen from lost jobs in Michigan, which resulted from the pricing Dryvit extended to Atlas.
GLE claims that William John's deposition supports its claim for damages. A nonmovant must present evidence that would be sufficient to require submission to the jury of the dispute over the fact. Lucas v. Leaseway Multi Trans. Serv.. Inc., 738 F. Supp. 214, 217 (E.D. Mich. 1990). Further, the evidence must be more than plaintiffs own pleadings and affidavits. Ashbrook v. Blook, 917 F.2d 918, 921 (6th Cir. 1990). In this case, GLE has basically offered no other evidence other than its own pleadings, an affidavit of Mr. Johns, and the deposition of Peter Balint, GLE's president. After reviewing Mr. Johns affidavit and deposition testimony, the Court finds that his knowledge of damages is based upon conjecture and speculation, and is unsupported by a reasonable factual basis supported by any documentary evidence. See Grantham and Mann, Inc., v. American Safety Products, Inc., 831 F.2d 596 (6th Cir. 1987)(self-serving assertions were insufficient to establish Lost profits). Moreover, Mr. Balint's personal acknowledge is limited to events occurring after the Agreement expired, and his testimony does not offer any evidence of the damages sustained by GLE from Dryvit's alleged breach. Therefore, the Court finds that GLE has failed to provide a sufficient basis to submit the question of damages to a jury. Since GLE has had a sufficient opportunity for discovery and has no evidence to support the essential element of damages, summary judgment is appropriate. See Street v. J.C. Bradford Co., 886 F.2d 1472, 1479 (6th Cir. 1989).
V. CONCLUSION
Accordingly, for the reasons stated above, Dryvit's Motion for Summary Judgment is
HEREBY GRANTED.
IT IS FURTHER ORDERED that GLE's complaint be DISMISSED WITH PREJUDICE.
IT IS SO ORDERED.