                                         File Name: 05a0291n.06
                                          Filed: April 18, 2005




                                                 No. 04-1107

                              UNITED STATES COURT OF APPEALS
                                   FOR THE SIXTH CIRCUIT


DIGITAL 2000, INC., a Michigan Corporation,                      )         ON APPEAL FROM THE
JOHN WISNIEWSKI, an individual, and JOEL                         )         UNITED STATES DISTRICT
POPA, an individual,                                             )         COURT FOR THE
                                                                 )         EASTERN DISTRICT OF
        Plaintiffs-Appellants,                                   )         MICHIGAN
                                                                 )         (No. 02-74877)
v.                                                               )
                                                                 )
BEAR COMMUNICATIONS, INC., a California                          )
corporation, doing business in Michigan,                         )
                                                                 )
        Defendant-Appellee.



BEFORE:          BOGGS, Chief Judge; MARTIN, Circuit Judge; and GWIN, District Judge.*

Gwin, District Judge:

        With this appeal, Plaintiffs-Appellants Digital 2000, Inc., John Wisniewski, and Joel Popa

challenge the district court’s decision granting summary judgment to Defendant-Appellee Bear

Communications, Inc. on the Plaintiffs’ claims for (1) breach of contract, (2) unjust enrichment, and


         *
           The Honorable James S. Gwin, United States District Judge for the Northern District of Ohio, sitting by
designation.

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Digital 2000 v. Bear Communications

(3) equitable accounting. The Plaintiffs generally allege that the Defendant breached a November

1, 1999 “Assignment, Assumption, and Consent Agreement” and an oral acquisition agreement

between the two companies. Principally, the Plaintiffs say the Defendant agreed to assume certain

liabilities, but has failed to do so.

        The Assignment Agreement and the purported oral agreement emerged as part of a

transaction in which Defendant BearCom negotiated to purchase certain assets and liabilities of

Plaintiff Digital. The parties disagree over the range of assets and liabilities covered by the

Assignment Agreement, and whether the parties reached an additional oral agreement. The district

court granted summary judgment to the Defendants on all claims. For the reasons that follow, we

AFFIRM IN PART AND REVERSE IN PART the decision of the district court.

                                          I. Background

A. The Parties

        Plaintiffs John Wisniewski and Joel Popa incorporated Digital on June 18, 1998. Wisniewski

and Popa are former Nextel Communications employees who went into business for themselves as

authorized dealers for Nextel. In addition to Nextel, Digital was an authorized dealer for other

cellular telephone providers, including LDMI, OMNI Point, Sprint PCS, AT&T Wireless, and Page

Net. Under the terms of its August 1998 Authorized Independent Sales Representative Agreement

with Nextel (the “ISP Agreement”), Digital solicited and serviced Nextel customers in exchange for

payments from Nextel. Nextel was Digital’s largest and most important client. In return for

securing new Nextel customers, Digital received commissions and the rights to residual payments

if the customers remained with Nextel. Although it received payments from Nextel and the other

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providers, Digital never earned a net profit.

       The Nextel ISP Agreement provided that (1) Nextel controlled the rates Digital charged to

subscribers, (2) Nextel determined final acceptance or rejection of potential subscribers, (3) the

subscription relationship was between Nextel and the subscribers, (4) all subscriber information and

lists belonged to Nextel, and (5) Digital would return all subscriber information and sales materials

to Nextel upon termination of the ISP Agreement.

       Like Plaintiff Digital, Defendant BearCom is a marketer of cellular telephone products and

services. BearCom is also an authorized independent sales representative for Nextel. Dave Wilkins

oversaw BearCom’s Digital Division, while Craig Wilkins was BearCom’s Director of Digital

Division, East Coast.

B. Initial Negotiations And The Assignment Agreement

       BearCom initially approached Popa about coming to work for BearCom. This evolved into

negotiations for BearCom’s purchase of various Digital assets and liabilities. Plaintiff Popa testified

that in September 1999, BearCom’s Dave Wilkins asked if Popa “might be considering selling

[Digital’s] Nextel business.” [J.A. 87-88]. Popa testified that he understood BearCom’s intention

was to purchase all of Digital’s assets and assume all of its liabilities. BearCom requested and

received information on Digital’s assets and liabilities. Digital’s primary asset was its right to the

residual profit stream from its relationship with Nextel. The revenue stream had a potential value

of $250,000 over three years.

       On November 1, 1999, Digital and BearCom executed the Assignment, Assumption, and

Consent Agreement. Popa and Wisniewski signed the document on Digital’s behalf, while John

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Watson, BearCom’s Vice President, signed for BearCom. The Assignment Agreement identified

Digital as “Assignor” and BearCom as “Assignee.” Nextel was also a party to the Assignment

Agreement. The Assignment Agreement was split into two sections: (1) recitals and (2) specific

contract provisions.

       As described above, the parties principally disagree regarding whether BearCom agreed to

assume certain Digital liabilities. In Recital B, the Assignment Agreement provides: “Assignor has

requested Nextel’s written consent to assign the ISP Agreement to Assignee . . . . The assignment

has been requested in furtherance of an acquisition of all of Assignor’s assets and liabilities by

Assignee.” [J.A. 248] (emphasis added). Recital C states: “Assignee desires to take assignment of

the ISP Agreement and acquire all the rights and be subject to and responsible for all of the

obligations under the ISP Agreement.” Id. (emphasis added).

       In Provision 1, “Assignor [Digital] hereby assigns, transfers, sells and conveys to Assignee

[BearCom], its successors and assigns, all of Assignor’s rights, title and interest in and to the ISP

Agreement.” Id. (emphasis added). In Provision 2, “Assignee, for itself and its successors and

assigns, hereby assumes and agrees to perform any and all obligations of Assignor under the ISP

Agreement arising from and after this date.” Id. (emphasis added). In Provision 4(D), BearCom

agreed to pay “all amounts owed to Brightpoint by Assignor, as arranged with Brightpoint, upon

execution of this Agreement.” [J.A. 249].

       Although the Assignment Agreement does not mention the price BearCom paid for Digital’s

assets, the parties agree that the purchase price was $160,000.

C. Subsequent Negotiations

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       Digital characterizes the Assignment Agreement as only the first part of a two-part

transaction. In the first part of the transaction, the Plaintiffs say BearCom agreed to pay $160,000

to purchase the Nextel residual payment stream and the assets and liabilities outlined in the

Assignment Agreement. The Plaintiffs say in the second part of the transaction, BearCom agreed

to purchase Digital’s non-Nextel assets and assume the non-Nextel liabilities. According to Popa,

BearCom agreed to provide final approval of the second part after the parties signed the Assignment

Agreement on November 1, 1999. Popa says that after November 1, the parties still had to work

out the manner in which BearCom would pay Digital’s liabilities.

       Not surprisingly, Defendant BearCom disagrees with Popa’s account. BearCom says there

was no larger transaction. Instead, says BearCom, the Assignment Agreement stood alone and the

parties continued to negotiate after November 1, 1999, over the purchase of other Digital assets and

liabilities, including contracts with other cellular providers, office equipment, furniture, and office

leases. BearCom points to Popa’s testimony that after November 1, the parties had not yet finalized

the terms of BearCom’s purchase of the entire Digital enterprise:

       Q:      What was the purpose of discussing these issues at these meetings [with
               Craig and Dave Wilkins]?

       A:      That they had not finalized, not come into town to see us to finalize these
               issues and we needed to get them finalized in writing to finalize the Digital
               2000 purchase.

[J.A. 93]. Popa also testified that “[t]here was no other finalized agreement,” besides the

Assignment Agreement. [J.A. 91].

       After closing the Assignment Agreement, BearCom submitted two drafts of another purchase



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agreement to Digital. Popa testified that the Plaintiffs did not sign BearCom’s draft agreements

because the terms were not consistent with the purported oral agreement. In particular, BearCom’s

draft agreements stated that BearCom did not assume Digital’s liabilities and included a covenant

not to compete.

D. Asset Transfers And The Payment To Brightpoint

        On November 2, 1999, Popa wrote Dave Wilkins a letter regarding Digital’s debt to

Brightpoint. Popa wrote: “Per our agreement dated Nov. 1,” “Digital 2000 allows Bearcom to

deduct from our proceeds the amount of $45,870.17 to send directly to Brightpoint regarding

account number 129577.” [J.A. 434]. BearCom paid that amount to Brightpoint, deducting it from

Digital’s $160,000 in proceeds from the Assignment Agreement. BearCom paid the remaining

$114,129.83 to Digital.

        After November 1, 1999, the Plaintiffs say Digital transferred more assets to BearCom than

the Assignment Agreement required. The Plaintiffs point to these transfers as evidence of an

overriding oral agreement between the parties. Among the assets transferred were the business name

“Digital 2000,” Digital’s three business phone numbers, and customer lists for subscribers to Nextel

and other service providers. Popa testified that Digital also transferred its contractual rights with

cellular providers other than Nextel. Digital completed this transfer by sending BearCom its

computer files and hard copies of documents. The Plaintiffs say that BearCom did not pay anything

for the non-Nextel contract assets. By the end of 1999, Plaintiffs Popa and Wisniewski and five

other Digital employees began to work for BearCom. Popa and Wisniewski worked there until mid-

2000.

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        BearCom separately paid approximately $10,000 to Digital for certain office equipment and

furniture. BearCom assumed leases for additional office furniture from Digital. BearCom also

purchased Digital’s inventory of cellular phone equipment in a separate cash transaction for

$5,113.60.

        The Plaintiffs say that by failing to assume all of Digital’s liabilities, BearCom left them with

$100,000 in debts to Comerica Bank and Standard Federal Bank. The Plaintiffs also had to pay

$11,841.06 to terminate their lease with Digital’s landlord when BearCom failed to assume the lease.

The Plaintiffs entered into a payment plan with Comerica, and Standard Federal sued the Plaintiffs

in state court to collect on Digital’s debt.

        The Plaintiffs sued BearCom in Michigan state court on November 7, 2002. BearCom

removed the case to the district court on December 9, 2002. After discovery, BearCom filed its

motion for summary judgment. Judge Victoria Roberts granted BearCom’s motion on December

22, 2003.

                                          II. Legal Standard

        This Court reviews a district court’s grant of summary judgment de novo. Holloway v.

Brush, 220 F.3d 767, 772 (6th Cir. 2000). Summary judgment is appropriate when the evidence

submitted shows “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.” Fed. R. Civ. P. 56(c). In seeking summary judgment, the

moving party has the initial burden of showing the absence of a genuine issue of material fact as to

an essential element of the nonmoving party’s case. Waters v. City of Morristown, 242 F.3d 353,

358 (6th Cir. 2001). A fact is material if its resolution will affect the outcome of the lawsuit.

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Digital 2000 v. Bear Communications

Daughenbaugh v. City of Tiffin, 150 F.3d 594, 597 (6th Cir. 1998) (citing Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248 (1986)). In deciding whether the moving party has met this burden,

a court must view the facts and all inferences drawn from them in the light most favorable to the

nonmoving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970). However, “a

complete failure of proof concerning an essential element of the nonmoving party’s case necessarily

renders all other facts immaterial.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

       Once the moving party satisfies this burden, the burden shifts to the nonmoving party to set

forth specific facts showing a triable issue. Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S.

574, 587 (1986). It is not sufficient for the nonmoving party merely to show that there is some

metaphysical doubt as to the material facts. See id.

       A factual dispute precludes summary judgment only if it is material, that is, if it relates to

a matter essential to adjudication. The dispute must concern facts that, under the substantive law

governing the issue, might affect the outcome of the suit. Anderson, 477 U.S. at 248. The factual

dispute also must be genuine. The facts must be such that if proven at trial a reasonable jury could

return a verdict for the nonmoving party. Id. at 248. “The disputed issue does not have to be

resolved conclusively in favor of the non-moving party, but that party is required to present

significant probative evidence which makes it necessary to resolve the parties’ differing versions

of the dispute at trial.” 60 Ivy St. Corp. v. Alexander, 822 F.2d 1432, 1435 (6th Cir. 1987) (citing

First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968)); see also Celotex, 477

U.S. at 322.

                                          III. Discussion

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Digital 2000 v. Bear Communications

A. Breach Of Contract

        In granting summary judgment to Defendant BearCom on the contract claim, the district

court found (1) the recitals in the Assignment Agreement were not binding on BearCom, (2) there

was insufficient evidence of an oral agreement for BearCom to acquire all of Digital’s assets and

liabilities, and (3) the Plaintiffs waived their right to enforce the purported oral agreement. The

Plaintiffs contend that the district court failed to view the evidence in their favor and applied the

incorrect legal standard on the waiver issue. Alternatively, the Plaintiffs argue that even if there

were no oral agreement between the parties, BearCom failed to pay the full amount due under the

Assignment Agreement.

        1. The Assignment Agreement Recitals

        Recital B to the Assignment Agreement states that Digital requested Nextel’s consent to

assign the ISP Agreement to BearCom “in furtherance of an acquisition of all of [Digital’s] assets

and liabilities by [BearCom].” [J.A. 248] (emphasis added). Digital views the recital as evidence

that BearCom and Digital had an oral agreement for BearCom to purchase all of Digital’s assets and

assume all of Digital’s liabilities. But for Recital B, the Assignment Agreement indicates that

BearCom would acquire only Digital’s assets and liabilities that arose out of the Nextel ISP

Agreement. BearCom argues that the recital does not reflect an express agreement to acquire all of

Digital’s assets and liabilities.

        Under Michigan law, recitals “serve as a preface or preliminary statement introducing the

subject in relation to which the parties contract, indicating to a greater or less[er] degree the reasons

for and intent of what follows.” Acme Cut Stone Co. v. New Center Dev. Corp., 274 N.W. 700, 705

                                                  -9-
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Digital 2000 v. Bear Communications

(Mich. 1937) (citation omitted). Recitals may be either general or particular. Particular recitals

involve statements of fact and are “treated as conclusive evidence of the facts stated,” while “general

recitals may not be. ” Id. (citation omitted). In Acme, the Michigan Supreme Court characterized

contract recitals such as “it was agreed in said contracts,” and “the parties have agreed” as particular

recitals. The district court characterized Recital B as a general recital, and thus not conclusive

evidence of the facts stated. The Plaintiffs ask that we view Recital B as a particular recital.

        We agree with the district court that Recital B is a general recital, and is insufficient evidence

of any oral contract. Unlike the particular recital language in Acme, Recital B does not say that the

parties had reached an agreement for BearCom to acquire all of Digital’s assets and liabilities. In

the absence of particular language reflecting a completed oral acquisition agreement, Recital B is

general.

        Even if we characterize Recital B as a particular recital, it does not help the Plaintiffs.

Recital B only states that the parties formed the Acquisition Agreement “in furtherance of”

BearCom’s acquisition of all Digital assets and liabilities. The Oxford English Dictionary defines

“furtherance” as “the fact or state of being furthered or helped forward; the action of helping

forward; advancement, aid, assistance.” The use of the term “in furtherance of” indicates that the

parties had not yet finalized an oral acquisition agreement. At most, it suggests the parties were still

negotiating. This interpretation is supported by Plaintiff Popa’s testimony that certain details of the

oral contract remained unresolved after November 1, 1999.

        2. Evidence Of An Oral Contract

        The Plaintiffs contend that the district court ignored evidence that raised a question of

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material fact as to whether the parties formed an oral acquisition agreement covering all of Digital’s

assets and liabilities. An enforceable contract is not created unless there is an offer, an acceptance,

and a mutual assent on all essential terms. Eerdmans v. Maki, 573 N.W.2d 329, 332 (Mich. Ct. App.

1997). “Mere discussions and negotiations cannot be a substitute for the formal requirements of a

contract.” Id.

       Contracting parties may enter into an oral contract. In that case, the parties’ course of

dealing and performance demonstrates the contract’s terms. H.J. Tucker & Assoc. v. Allied Chucker

& Eng’g Co., 595 N.W.2d 176, 185 (Mich. Ct. App. 1999).

       In support of their argument, the Plaintiffs offer five points supporting the existence of an

oral contract between BearCom and Digital. None of the proffered evidence shows the existence

of any final agreement.

       First, Plaintiff Wisniewski testified that Craig Wilkins of BearCom assured Wisniewski that

the Assignment Agreement “would address [his] concerns” about the assumption of all of Digital’s

liabilities. [J.A. 173]. As discussed above, the Assignment Agreement only provided that BearCom

would assume the Brightpoint debt. Wisniewski testified that he was not concerned that Digital’s

other liabilities were not itemized in the Assignment Agreement because of Recital B’s language

that referred to furthering an acquisition of all of Digital’s assets and liabilities. Whether or not

Wisniewski reasonably felt assured by the language in Recital B, Craig Wilkins’s assurances to him

are not evidence of a completed oral contract. Wilkins referred only to the terms of the written

Assignment Agreement, and not any oral agreement.

       Second, Popa testified that Dave and Craig Wilkins repeatedly promised the Plaintiffs that

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Digital 2000 v. Bear Communications

BearCom would assume all of Digital’s liabilities. Popa said that on two occasions before the

parties signed the Assignment Agreement, Dave and Craig Wilkins agreed that BearCom would

purchase both the Nextel residual payment stream and “everything else Digital 2000 had.” [J.A. 88,

90]. But Popa also testified that details of the larger acquisition by BearCom still remained

unresolved after November 1. Wisniewski offered similar testimony:

                Q.      So there were details regarding how this transaction was
                        going to occur --

                A.      Yes.

                Q.      -- that were not contained in the November 1st Assignment
                        Agreement?

                A.      That’s correct.

                Q.      And these details were going to be worked out after the
                        November 1st Assignment Agreement?

                A.      That’s right.

                Q.      Were those details ever worked out?

                A.      No.

[J.A. 180]. Even if BearCom’s representatives made a general offer to purchase all of Digital’s

assets and liabilities before signing the Assignment Agreement, it is clear that the parties never

resolved all of the essential details of the larger transaction.

        Third, the Plaintiffs say that the only issue remaining between the parties was how the

agreement would be implemented, not whether there was an agreement. Wisniewski testified that

after November 1, 1999, the parties still needed to resolve the manner in which BearCom would pay



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Digital’s liabilities. Popa also testified that at the time he signed the Assignment Agreement, he and

Wisniewski expected to receive another agreement from BearCom. Taken together, this testimony

indicates that essential elements of the agreement to assume Digital’s liabilities remained

unresolved, thereby precluding the formation of an oral contract.

       Fourth, Popa testified that after the parties signed the Assignment Agreement, BearCom

prepared two draft acquisition agreements covering the larger acquisition. Popa rejected these

documents because they were not consistent with his understanding of the oral agreement. Again,

Popa’s testimony does not indicate that the parties had reached a definite oral agreement. The more

reasonable inference is that BearCom and Digital had conflicting views on the essential terms of any

such oral agreement.

       Fifth, the Plaintiffs say BearCom never paid for Digital’s name, goodwill, business telephone

numbers, customer information, and other Digital assets. Under the Assignment Agreement,

BearCom purchased all of Digital’s rights and obligations under the Nextel ISP Agreement. The

Assignment Agreement thus included Digital’s Nextel subscriber information and lists. Wisniewski

also testified that BearCom paid for all assets it received from Digital:

               Q:      I’m interested in assets sitting here as of today [BearCom] has
                       not paid for they received from Digital 2000.

               A:      I think they paid for, you know, those assets.

[J.A. 178].

       Digital had contracts with other cellular providers, and Wisniewski testified that negotiations

as to whether BearCom would purchase those contracts continued after November 1, 1999. This



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suggests that, as of November 1, 1999, there was no overall oral agreement regarding whether

BearCom would acquire all of Digital’s assets and liabilities. Despite what the recital language may

say, Wisniewski recognized that BearCom had not yet committed to buying everything. The

Plaintiffs offer no evidence regarding the value of the non-Nextel contracts. Popa testified that

Digital received commissions upon signing new cellular customers for Sprint PCS, OMNI Point, and

AT&T Wireless, but did not have residual income streams from those providers. Those contracts

thus provided no immediate income upon transfer to BearCom. Other than Nextel, Digital received

a residual income stream only from LDMI. The LDMI income stream was only $5 per month as of

November 1999.

       BearCom purchased additional assets from Digital on a piecemeal basis. In November 1999,

BearCom paid Popa $3138 for various Digital office equipment. In January 2000, BearCom paid

Popa $3240 for other office equipment. In February 2000, BearCom paid $5113.60 for Digital’s

inventory of cellular phones.

       The only remaining assets that Digital transferred to BearCom, supposedly without receiving

payment, were Digital’s name, goodwill, and business telephone numbers. According to Popa, after

closing the Assignment Agreement BearCom began to use the Digital 2000 business name and

phone numbers. Digital transferred its office phone numbers to BearCom, and BearCom personnel

answered incoming calls by saying “BearCom-Digital 2000.” These circumstances might offer

some support for Digital’s oral contract theory, if not for Popa’s and Wisniewski’s own testimony.

Popa and Wisniewski both make clear that many issues remained unresolved after November 1,

1999, and that the parties never reached a firm oral agreement.

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         Viewing the facts in the light most favorable to the Plaintiffs, we cannot say that there is

evidence that the parties formed a final oral contract for BearCom’s purchase of all of Digital’s

assets and liabilities. For this reason, we affirm the judgment of the district court.

         3. Waiver

         The district court found that the Plaintiffs’ piecemeal negotiations and transactions after the

Assignment Agreement constituted a waiver of any oral acquisition agreement. Under Michigan

law, “[a] waiver occurs when a party ‘with full knowledge of material facts, does or forbears to do

something inconsistent with the existence of the right in question or his intention to rely on that

right.’” Kvaerner U.S., Inc. v. Hakim Plastic Co., 74 F. Supp. 2d 709, 718 (E.D. Mich. 1999)

(quoting Fitzgerald v. Hubert Herman, Inc., 179 N.W.2d 252, 253 (Mich. Ct. App. 1977)). A party

can establish a waiver “through clear and convincing evidence of a written agreement, oral

agreement, or affirmative conduct establishing mutual agreement to waive the terms of the original

contract.” Quality Prods. & Concepts Co. v. Nagel Precision, Inc., 666 N.W.2d 251, 258 (Mich.

2003).

         The Plaintiffs argue that the few “nickel and dime” transactions after November 1, 1999 are

not clear and convincing evidence that Digital waived BearCom’s obligation to acquire all of

Digital’s assets and liabilities under the supposed oral contract. We disagree. Assuming that Digital

and BearCom formed an oral contract obligating BearCom to acquire all of Digital’s assets and

liabilities, there was no need for Digital to negotiate further with BearCom. Despite BearCom’s

alleged obligations, Digital continued to negotiate the sale of specific assets to BearCom. This

constituted affirmative conduct that waived the terms of the oral acquisition agreement.

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       4. Breached Obligations Under The Assignment Agreement

       The Plaintiffs contend that the Defendant breached its obligations under the Assignment

Agreement with respect to Digital’s Brightpoint debt. They say that BearCom violated the

Assignment Agreement by deducting the amount of the Brightpoint debt from the amount it paid

Digital, and then failing to repay Digital for that amount. The district court found that BearCom had

no obligation to reimburse Digital for money paid to Brightpoint out of Digital’s proceeds.

       In paragraph 4D of the Assignment Agreement, BearCom agreed to pay all amounts that

Digital owed to Brightpoint. On November 2, Popa wrote Dave Wilkins a letter that provided:

               Per our agreement dated Nov. 1 between Digital 2000, Nextel and
               Bearcom regarding our balance with Brightpoint. Digital 2000
               allows Bearcom to deduct from our proceeds the amount of
               $45,870.17 to send directly to Brightpoint regarding account number
               129577.

[J.A. 434]. The Plaintiffs also point to Wisniewski’s testimony that he understood BearCom would

pay off Digital’s debt. But most convincing, in Provision 4(D) of the Assignment Agreement,

BearCom agreed to pay “all amounts owed to Brightpoint by Assignor, as arranged with Brightpoint,

upon execution of this Agreement.” [J.A. 249]. We find this sufficient to raise a material issue as

to whether BearCom wrongly deducted the $45,870.17 it sent to Brightpoint from the $160,000 it

was obligated to pay.

       For this reason, we reverse the district court’s grant of summary judgment to the Defendant

regarding the Brightpoint debt.

       5. Third Party Beneficiaries

       The district court granted summary judgment to BearCom on the claims of Plaintiffs Popa

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and Wisniewski, finding that they were not third party beneficiaries of the Assignment Agreement.

The Plaintiffs argue that Popa and Wisniewski were third party beneficiaries because they personally

guaranteed Digital’s debt to Comerica and Standard Federal. The Defendant responds that the

Assignment Agreement did not identify Popa and Wisniewski as third party beneficiaries. We

affirm the district court’s ruling.

        Under Michigan law, one who is not a party to a contract generally lacks standing to sue for

breach of that contract. Gianotta v. Holderid, 372 N.W.2d 326, 327 (Mich. Ct. App. 1985). An

exception applies to contract beneficiaries. Under the Michigan Compiled Laws, a person “for

whose benefit a promise is made by way of a contract . . . has the same right to enforce said promise

that he would have had if said promise had been made directly to him as the promisee.” M.C.L.A.

§600.1405. Further, a person shall be considered a contract beneficiary “whenever the promisor of

said promise had undertaken to give or to do or refrain from doing something directly to or for said

person.” Id. The test for whether someone is a beneficiary is “an objective one, determined from

the form and meaning of the contract.” Guardian Depositors Corp. v. Brown, 287 N.W. 798, 800

(Mich. 1939).

        The Assignment Agreement does not mention Popa or Wisniewski as intended beneficiaries.

Neither Digital nor BearCom specifically agreed to any obligation directly for the benefit of Popa

or Wisniewski. Although both men signed the Assignment Agreement, they did so on Digital’s

behalf, and not as parties to the contract or beneficiaries.

        The Plaintiffs argue that Popa and Wisniewski are third party beneficiaries because they

personally guaranteed Digital’s debt to Comerica and Standard Federal. The Plaintiffs cite Aiton

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Digital 2000 v. Bear Communications

v. Slater, 299 N.W. 149, 154 (Mich. 1941), for the proposition that a guaranty agreement may

provide standing for a third party. We disagree with the Plaintiffs’ analysis. In Aiton, the Michigan

Supreme Court held that the defendant’s guaranty of a bond was enforceable even after the bond was

assigned to a new owner. The plaintiff was not a guarantor, but instead sought to recover from the

guarantor. If anything, Aiton implies that Popa and Wisniewski’s guarantees would survive

assignment of Digital’s liabilities to BearCom.

         The Plaintiffs’ argument fails for an additional reason. As discussed above, the Assignment

Agreement did not cover Digital’s debts with Comerica and Standard Federal. To the extent Popa

and Wisniewski were guarantors of those debts, the Assignment Agreement did not benefit them.

We affirm the judgment of the district court.

B. Unjust Enrichment

         As an alternative to their contract claim, the Plaintiffs asserted an unjust enrichment claim

against the Defendant. The district court granted summary judgment to the Defendant on the unjust

enrichment claim, finding no issue of material fact that the Plaintiffs suffered an inequity from

BearCom’s conduct.

         Unjust enrichment requires a showing of the following: “(1) receipt of a benefit by the

defendant from the plaintiff and (2) an inequity resulting to the plaintiff because of the retention of

the benefit by the defendant.” Barber v. SMH (US), Inc., 509 N.W.2d 791, 796 (Mich. Ct. App.

1993).

         BearCom’s CEO Jerry Denham admitted that BearCom used the Digital trade name and

business phone numbers without paying for them separately. Denham testified that the $160,000

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paid under the Assignment Agreement included the payment for the trade name and the phone

numbers. As we have already discussed, and as the Defendant argues, the Assignment Agreement

only covered assets arising under the Nextel ISP Agreement. The Defendant suggests that its use

of the phone numbers and trade name “were obvious and necessary courtesies pursuant to

BearCom’s obligation under the ISP Agreement to continue to service Nextel customers who signed

up through Digital.” [Def. Br. at 39 n.22]. We disagree.

       The Assignment Agreement did not mention the trade name or phone numbers, but BearCom

used them anyway. The Defendant cannot now argue that the Assignment Agreement included the

payment for these separate assets.

       Because BearCom received and used assets from Digital, but failed to pay for them, we

reverse the district court’s judgment on the unjust enrichment claim regarding BearCom’s use of

Digital’s name and phone numbers.

C. Equitable Accounting

       The Plaintiffs include a claim for an equitable accounting of BearCom’s income from the

accounts Digital transferred. The district court granted summary judgment to BearCom. The

Plaintiffs argue that they must resort to the equitable accounting remedy because the Plaintiffs have

not cooperated in discovery. We affirm the judgment of the district court.

       Michigan’s courts traditionally allowed a party to pursue an equitable accounting action

where he was unsure of the amounts at stake and where the accounts at issue were “greatly

complicated.” Basinger v. Provident Life & Accident Ins. Co., 239 N.W.2d 735, 738 (Mich. Ct.

App. 1976). In light of the broad discovery available to litigants, accounting actions are of dubious

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Digital 2000 v. Bear Communications

utility. Id. at 738 n.15. See also Cyril J. Burke, Inc. v. Eddy & Co., 51 N.W.2d 238, 239 (Mich.

1952) (“The suit is to recover a claimed debt arising out of a contract. If Plaintiffs needed any

discovery of the amount of profits received by defendant, they could have subpoenaed witnesses or

availed themselves of the discovery rule.”).

       The Plaintiffs say that the Defendant failed to respond to discovery requests regarding the

value of the former Digital accounts. If the Plaintiffs felt dissatisfied with the Defendant’s discovery

responses, they should have filed a motion to compel in the district court. The Plaintiffs failed to

do so. We will not consider arguments not raised below. St. Marys Foundry, Inc. v. Employers Ins.

of Wausau, 332 F.3d 989, 995-96 (6th Cir. 2003).

       Additionally, the accounts at issue are not “greatly complicated.” Basinger, 239 N.W.2d at

738. The Plaintiffs essentially seek payment for all of the assets they transferred to BearCom. The

Plaintiffs are in as good a position as the Defendant to determine the value of those assets. An

equitable accounting action is not the proper mechanism to recover the money that BearCom

allegedly owes.

                                           IV. Conclusion

       For the foregoing reasons, this Court AFFIRMS the decision of the district court granting

the Defendant’s motion for summary judgment on the breach of contract and equitable accounting

claims, except as regards the obligation to pay the Brightpoint debt and REVERSES the grant of

summary judgment on the unjust enrichment claim and the contract claim involving the payment

of the Brightpoint obligation.




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