The Crain’s Detroit Business article “Judge awards auto supplier $3.5M in dispute with wide implications” discussed Warner’s latest victory on behalf of client, AirBoss Flexible Products Co. in its pricing dispute with customer MSSC Inc.
In 2023, the Michigan Supreme Court issued a precedent-setting ruling that MSSC’s contract with AirBoss was nonbinding. The more recent circuit court decision went a notch further, finding that MSSC’s refusal to pay AirBoss’ price increases resulted in unjust enrichment.
According to Michael Brady, who co-led Warner’s AirBoss team, the Supreme Court’s decision, coupled with the lower court’s award of damages, could give sellers more leverage in contract negotiations traditionally tipped in the buyer’s favor.
Brady said his client’s meticulous record-keeping of written correspondence with MSSC, as well as its prompt assertion of its rights and counterclaims helped win the case. “At the very least, the decisions affirm that suppliers can win disputes if they take the proper steps before, during and after execution of a contract,” he said.
The case arose out of a fairly typical pricing dispute centered on a "blanket" purchase order between the two companies. MSSC argued that the blanket order was a requirements contract binding AirBoss to fulfill its orders. AirBoss disagreed and successfully argued that because there was no quantity listed, it was a “release-by-release” contract and not binding long-term.
AirBoss sought to pass on the roughly $1 million in annual losses to its customer. While MSSC eventually agreed to a price increase, AirBoss continued to lose money on the business and ceased taking orders in 2020. The recent decision awarded AirBoss a judgment totaling the full gap between its desired prices and those it had been paid — approximately $3.5 million — plus interest accrued since 2020.
Crain’s Detroit Business subscribers can read the complete story here.
Warner’s appellate and litigation teams that represented AirBoss were led by Michael Brady, Gaëtan Gerville-Réache and Adam Ratliff. The firm’s Automotive Industry Group attorneys stand ready to assist suppliers in assessing their current contracts and terms as a result of these decisions.
About Warner
By providing discerning and proactive legal advice, Warner Norcross + Judd LLP builds a better partnership with our clients. One of Michigan’s largest law firms, we’re focused on providing the best legal solutions and exceptional client service to organizations throughout the world. Connect with us on wnj.com, LinkedIn, Twitter or Facebook.
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