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One Court of Justice Blog

April 13, 2017

COA holds that a party cannot imply a contract with consignee liability when express contracts exist on the issue; likewise there can be no unjust enrichment without an implied contract

A party cannot conjure up an implied contract and create new liabilities when there are already express contracts specifically allocating liabilities among the parties, the Michigan Court of Appeals held in Landstar Express v. Nexteer, No. 328334. Likewise, without an implied contract, unjust enrichment is not a valid claim.
 
Defendants Nexteer and Steeringmex contracted with Contech for automotive parts. Contech expressly assumed liability for shipping costs. Struggling to keep up with orders, Contech contracted with Plaintiff Landstar Express to deliver its parts to Defendants expeditiously.  Contech again expressly agreed to pay the costs. Landstar Express satisfied its end of the bargain.  Contech failed to pay, and Plaintiff sued Contech in federal court.  Landstar Express was awarded $6 million. Contech, however, only paid $1 million.
 
Landstar Express subsequently brought the present case in state court, seeking to recover its unpaid $5 million from Defendants. Landstar Express argued that Nexteer and Steeringmex were liable under an implied contract theory and consignee liability because they received the goods that were unpaid for. However, the trial court held that there was no implied contract because the existing express contracts both specifically stated that Contech was responsible for shipping costs: the contract between Nexteer and Steeringmex and Contech, and the contract between Contech and Landstar Express. Contech twice expressly took responsibility for shipping costs; therefore, there could be no implied contract saying otherwise.  The Court of Appeals agreed.
 
The Court also rejected Landstar Express’s unjust enrichment claim.  Unjust enrichment requires an implied contract which, again, was not present here. The Court of Appeals, therefore, affirmed the trial court’s dismissal of this claim. 

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