EPLET, LLC; RACER PROPERTIES LLC v. DTE PONTIAC NORTH, LLC; DTE ENERGY SERVICES, INC. - Articles

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EPLET, LLC; RACER PROPERTIES LLC v. DTE PONTIAC NORTH, LLC; DTE ENERGY SERVICES, INC.

Posted by: Karen Belcher on Jan 5, 2021

Court: 6th Circuit Court (Published Opinions)

Attorneys 1: ARGUED: Richard B. Phillips, Jr., THOMPSON & KNIGHT LLP, Dallas, Texas, for Appellants.

Attorneys 2: ARGUED: Peter S. Partee, Sr., HUNTON ANDREWS KURTH LLP, New York, New York, for Appellees.

Attorneys 3: ON BRIEF: Richard B. Phillips, Jr., Michael V. Blumenthal, Bruce J. Zabarauskas, THOMPSON & KNIGHT LLP, Dallas, Texas, Frances Belzer Wilson, DAWDA, MANN, MULCAHY & SADLER, PLC, Bloomfield Hills, Michigan, for Appellants.

Attorneys 4: ON BRIEF: Peter S. Partee, Sr., Robert A. Rich, HUNTON ANDREWS KURTH LLP, New York, New York, Joel C. Bryant, MILLER, CANFIELD, PADDOCK & STONE, P.L.C., Ann Arbor, Michigan, for Appellees.

Judge(s): MOORE, GILMAN, and GRIFFIN, Circuit Judges

Court Appealed: Appeal from the United States District Court for the Eastern District of Michigan at Detroit

GRIFFIN, Circuit Judge. This alleged breach-of-contract case arises out of General Motors’s (“GM”) bankruptcy. In 2007, GM sold a power plant to an energy company, DTE Energy Pontiac North, LLC (“DTEPN”). GM also leased the land under the plant to DTEPN for ten years. For its part, DTEPN agreed to sell utilities produced at the plant to GM, to maintain the plant according to specific criteria, and to take care of any environmental issues caused by the plant. DTEPN’s parent company, DTE Energy Services, Inc., (“DTE Energy”)1 guaranteed that DTEPN would meet GM’s utility needs and its environmental and maintenance responsibilities, or DTE Energy itself would step in to fulfill DTEPN’s obligations.

The trust’s claims against DTEPN are not before us. Instead, we focus on the trust’s attempts to hold DTE Energy responsible for its subsidiary’s alleged wrongs. As relevant here, the district court dismissed the claims against DTE Energy because (1) the trust’s allegations did not support piercing the corporate veil under Michigan law, and (2) DTE Energy’s guaranty terminated after GM rejected the associated contracts in bankruptcy. We conclude that the district court erred in both of its rulings. Accordingly, we REVERSE the district court’s dismissal of Plaintiffs’ amended complaint regarding DTE Energy; REVERSE the district court’s dismissal of Plaintiffs’ breach-of-Associated-Agreements claim regarding DTE Energy; and REMAND to the district court for proceedings consistent with this opinion.

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