Texas Judiciary Online - HTML Opinion

MEMORANDUM OPINION

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Anaheim Industries, = Inc.=20 (Anaheim) and Frank Gilchrist, Inc. d/b/a Texas Stagecoach of = Houston=20 (Stagecoach) (collectively, the upfitters) appeal the trial = court=92s grant=20 of summary judgment in favor of General Motors (GM), claiming = that, under=20 Michigan law, the trial court erred in granting GM summary = judgment on=20 their claims for (1) breach of contract; (2) breach of the = covenant of=20 good faith and fair dealing; (3) unconscionability; (4) economic = duress;=20 (5) promissory estoppel; (6) negligent misrepresentation; and (7)=20 fraud. Because the trial court properly concluded that the = upfitters=20 failed to raise a genuine issue of material fact in support of any = of=20 these claims, we affirm.

Background

The upfitters are = engaged in=20 the business of customizing vans, trucks, and other vehicles by = removing=20 factory-installed seating and other fixtures and installing = premium=20 products and materials in their place. The upfitters = performed=20 custom conversions for GM as well as other vehicle manufacturers = and=20 dealers.

GM provided its = vehicles to=20 upfitters, also known as converters, through its Approved = Converters=20 Program. GM provided these converters with its Approved = Converters=20 Program Manual, which sets forth policies and procedures to follow = to=20 qualify as an approved converter as well as for ordering and = processing=20 the GM vehicles. If an upfitter qualified and GM selected it = as an=20 approved converter, they executed a =93pool converter agreement=94 = with the=20 converter.

=20 The converter agreement:

=B7 =20 reserves to GM the = right to=20 change the manual in writing at any time;

=B7 =20 reserves to GM the = absolute=20 right to accept or reject orders;

=B7 =20 does not require GM = to provide=20 any particular number or any specific model of vehicle; =

=B7 =20 allows for = termination at any=20 time by either party with written notice;

=B7 =20 provides notice that = =93no=20 waiver or modification of any term of this agreement or the = creation of=20 additional terms shall be valid or binding upon [GM] unless made = in=20 writing, executed on its behalf=94; and

=B7 =20 contains a merger = clause=20 providing that the documents constituted the sole and complete = agreement=20 of the parties and that they had no other agreements, either oral, = or=20 written, between them with respect to their subject matter. =20

Stagecoach and = Anaheim entered=20 their first pool converter agreements with GM in approximately = 1988. =20 GM from time to time asked the upfitters to execute new agreements = with=20 revised terms, and they did so.

Over the years, = consumer demand=20 and industry developments led GM to upgrade the interior seating = and other=20 features available as factory-installed in its standard vehicle=20 packages. As the formerly custom details became standard = features=20 installed on the GM assembly line, the demand for custom = conversion=20 dwindled, and the number of vehicles supplied to the upfitters=20 declined. Also, without notice to the upfitters, GM began = installing=20 newly designed standard seating with integrated seatbelts in its = vehicles.=20 This change in seat design made the installation of custom seating = unprofitable, which, until then, had been a popular custom=20 feature.

As GM made fewer = numbers and=20 models of vehicles available to the upfitters, the upfitters could = not=20 meet the preferred volume of 300 vehicles set forth in the = manual. =20 In December 1998, GM put Stagecoach on probation in part because = it had=20 not converted the preferred volume of vehicles. Around the = same=20 time, GM had a new computer system installed at Stagecoach for = ordering=20 vehicles. The system did not work, though, and Stagecoach = was unable=20 to order vehicles for four months. GM terminated its = relationship=20 with Stagecoach in May 1999.

Throughout this = period, Anaheim=20 continued its relationship with GM, but found it increasingly = difficult to=20 turn a profit with the limited number and types of vehicles made = available=20 for conversion. As a result, Anaheim voluntarily terminated = its=20 agreement with GM in 2001.

In 2002, both = upfitters sued GM=20 for breach of contract, breach of a covenant of good faith and = fair=20 dealing, economic duress, promissory estoppel, negligent=20 misrepresentation, and fraud. GM moved for summary judgment = under=20 both the traditional and no-evidence standard on the upfitters=92 = claims,=20 which the trial court granted. This appeal = followed.

Discussion

A. = Standards of=20 Review

GM moved for summary = judgment=20 against the upfitters under both traditional and no-evidence=20 grounds. See=20 Tex.=20 R. Civ. P. = 166a(c),=20 (i). The traditional standard for summary judgment requires = a movant=20 to show that no genuine issue of material fact exists and that the = trial=20 court should grant judgment as a matter of law. =20 Tex. R. Civ. P. = 166a(c);=20 KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 = S.W.2d=20 746, 748 (Tex. 1999). We=20 view all evidence in a light favorable to the nonmovant and = indulge every=20 reasonable inference in the nonmovant=92s favor. = Provident Life=20 & Accid. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. = 2003). =20 We review a no-evidence summary judgment de novo by construing the = record=20 in the light most favorable to the nonmovant and disregarding all = contrary=20 evidence and inferences. Merrell Dow Pharms., Inc. v. = Havner,=20 953 S.W.2d 706, 711 (Tex. 1997). A nonmovant meets its = burden and=20 defeats a no-evidence motion by bringing forth more than a = scintilla of=20 probative evidence that raises a genuine issue of material = fact. =20 See Tex. R. Civ. = P.=20 166a(i); Coastal Conduit & Ditching, Inc. v. Noram Energy=20 Corp., 29 S.W.3d 282, 284 (Tex. App.=97Houston [14th Dist.] = 2000, no=20 pet.). When, as here, the = trial=20 court=92s order does not specify the grounds for granting = summary=20 judgment, we affirm if any of the grounds raised by the movant is=20 meritorious. FM Props. Operating co. v. City of = Austin, 22=20 S.W.3d 868, 872 (Tex. 2000); Oliphint v. Richards, = 167 S.W.3d=20 513, 516 (Tex. App.=97Houston [14th Dist.] 2005, pet. = denied).

B. Choice = of=20 Law

Both converter = agreements=20 contain choice of law clauses specifying that Michigan law applies = to any=20 dispute arising under them.

C. =20 Michigan Law on Commercial Contracts

Initially, we = determine=20 whether, as the upfitters claim, the converter agreements are = ambiguous=20 and, to the extent they are not, the manner in which they define = the=20 parties=92 relationship.

We depend on both the = common=20 law and the UCC in making these determinations. Among other = goals,=20 the UCC aims =93to make uniform the law among various = jurisdictions.=94=20 Power Press Sales Co. v. MSI = Battle Creek=20 Stamping, 238 Mich. App. = 173, 180,=20 604 N.W.2d 772, 776 (1999) (quoting Mich. Comp. Laws Ann. = =A7=20 440.1102(c) (West 1994). Accordingly, Michigan courts have = found it=20 appropriate to =93seek guidance from the decisions of other = jurisdictions=94=20 when interpreting UCC provisions. Id.; see = Conagra, Inc.=20 v. Farmers State Bank, 237 Mich. App. 109, 121, 602 N.W.2d = 390, 396=20 (1999). In keeping with Michigan=92s judicial policy, we, = too, look to=20 other jurisdictions for guidance in interpreting the UCC = provisions at=20 issue.

=93In=20 ascertaining the meaning of a contract, we give the words used in = the=20 contract their plain and ordinary meaning that would be apparent = to a=20 reader of the instrument.=94 = Rory v. = Cont=92l=20 Ins. Co., 473 = Mich. 457,=20 464, 703 N.W.2d 23, 28 (2005). =20 Further, = =93[w]e=20 read contracts as a whole, giving harmonious effect, if possible, = to each=20 word and phrase.=94 Wilkie v. Auto-Owners Ins. Co., = 469 Mich.=20 41, 50 n.11, 664 N.W.2d 776, 781 n.11 (2003); see also = Klapp v.=20 United Ins. Group Agency, Inc., 468 Mich. 459, 468, 663 N.W.2d = 447,=20 453 (2003) (declaring that courts must =93give effect to every = word, phrase,=20 and clause in a contract and avoid an interpretation that would = render any=20 part of the contract surplusage=94).

1. =20 Ambiguity

The upfitters contend = that the=20 following manual provision renders the converter agreements=20 ambiguous:

Annual Volume: The preferred annual = volume is 300=20 units. An exception would be low volume manufacturers for = which=20 special consideration is required due to a strong reputation for = customer=20 satisfaction, special geographic locations or strong and long = standing=20 relationships with local Chevrolet dealers. Facilities and = sales=20 support should be adequate to grow over time =96 with minimum = inventory turn=20 rates of 6 times per year.

Specifically, the = upfitters=20 claim that this provision potentially conflicts with the express=20 disclaimer that GM is not obligated to deliver any particular = number or=20 type of vehicles to its upfitters, and urge us to allow the jury = to find=20 whether the annual volume provision imposes a requirement that the = upfitters customize at least 300 vehicles per year and, in turn, a = corresponding requirement that GM provide sufficient = vehicles. =20

The threshold issue = of whether=20 contract language is clear or ambiguous is a question of law for = the=20 court. Wilkie, 469 Mich. at 61, 664 N.W.2d at 787; = Port=20 Huron Educ. Ass=92n v. Port Huron Area Sch. Dist., 452 Mich. = 309, 323,=20 550 N.W.2d 228, 237 (1996). Contract language is ambiguous = if it=20 =93may reasonably be understood in different ways.=94 = Raska v. Farm=20 Bur. Ins. Co., 412 Mich. 355, 362, 314 N.W.2d 440, 441 (1982), = quoted in UAW-GM Human Res. Ctr. v. KSL Recreation Corp., = 228 Mich.=20 App. 486, 491, 579 N.W.2d 411, 414 (1998). Courts must not = create=20 ambiguity where none exists. Mahnick v. Bell Co., = 256 Mich. App. 154, 159, 662 N.W.2d 830, = 833=20 (2003). Even if a contract is inartfully worded, it is not = ambiguous=20 if it =93fairly admits of but one interpretation.=94 = Meagher v. Wayne=20 State Univ., 222 Mich. App. 700, 722, 565 N.W.2d 401, 415=20 (1997).

Parol evidence may = not be used=20 to contradict or vary the terms of an unambiguous contract. =20 Schmude Oil Co. v. Omar Operating Co., 184 Mich. App. 574, = 580, 458=20 N.W.2d 659, 663 (1990), quoted in UAW-GM Human Res. Ctr., = 228 Mich.=20 App. at 492, 579 N.W.2d at 414. It may be used to = prove the=20 existence of a latent ambiguity, but is otherwise admissible only = to=20 clarify the meaning of an ambiguous contract. = Meagher, 222=20 Mich. App. at 722, 565 N.W.2d at 415.

The converter = agreements allow=20 the upfitters to order vehicles, subject to GM=92s acceptance or=20 rejection. The manual provision language relied on by the = upfitters=20 contains no language making the annual volume required or = mandatory. =20 To the contrary, it expressly refers to the =93preferred = annual=20 volume=94 of vehicles. We may not rewrite this provision by = discarding=20 one word and replacing it with one that has a wholly different = meaning.=20

Accepting the = upfitters=92=20 proposed interpretation would also render ineffective the = provision in the=20 converter agreement expressly reserving to GM =93absolute = discretion=94 over=20 whether to accept or reject an upfitter=92s order. We may = not change=20 the plain meaning of a term to create an ambiguity where none=20 exists. See Glenwood = Shopping Ctr.=20 Ltd. v. K Mart Corp., 136 Mich. App. 90, 99, 356 N.W.2d 281, 286=20 (1984); cf. Lytle v. = Malady, 458 Mich. 153, 166, 579 N.W.2d 906, 911 (1998) = (explaining=20 that written policy in employee handbook that =93[n]o employee will be terminated without = proper cause or=20 reason and not until management has made a careful review of the = facts=94=20 was insufficient to overcome express disclaimer that =93[t]he = contents of=20 this booklet are not intended to establish . . . any = contract=20 between . . . [the employer] and any employee, or group = of=20 employees=94) (alteration in original); Fed. = Express Corp.=20 v. Dutschmann, 846 S.W.2d 282, 283 (Tex. 1993) (determining = that=20 express disclaimer in employee handbook negated any implication = that=20 =93Guaranteed Fair Treatment Procedure=94 outlined in personnel = procedures=20 manual placed restriction on company=92s right to terminate = employment at=20 will). Thus, we conclude that the converter agreements do = not=20 contain any ambiguity concerning GM=92s unfettered discretion over = whether=20 to accept vehicle orders from the upfitters.[1]

2. = Quantity=20 term

=20 The UCC statute of frauds provides:

Except as otherwise provided in this = section, a=20 contract for the sale of goods for the price of $1,000.00 or more = is not=20 enforceable by way of action or defense unless there is a writing=20 sufficient to indicate that a contract for sale has been made = between the=20 parties and signed by the party against whom enforcement is sought = or by=20 his or her authorized agent or broker. A writing is not = insufficient=20 because it omits or incorrectly states a term agreed upon but the = contract=20 is not enforceable under this subsection beyond the quantity of = goods=20 shown in the writing.

Mich.=20 Comp. Laws Ann. =A7=20 440.2201(1) (West Supp. 2007). A party may not use course of = performance or other parol evidence to supply a quantity = term. In=20 re Estate of Frost, 130 Mich. App. 556, 559, 344 N.W.2d 331, = 333=20 (1983). Moreover, the quantity term may not be = inferred, and=20 must be written. Lorenz Supply Co. v. Am. Standard, = 419 Mich.=20 610, 614=9615, 358 N.W.2d 845, 847 (1984).

Brooklyn Bagel Boys, = Inc. v.=20 Earthgrains Refrigerated Dough Products, Inc., 212 F.3d 373 (7th = Cir. 2000),=20 is helpful in determining the legal effect of the converter=20 agreements. In that case, Earthgrains contracted with = Brooklyn=20 Bagel, a producer of bagels for third parties, to be a co-packer = for the=20 distribution of bagels out of its regional facility in = Alabama. =20 Id. at 375-76. The agreement provided that Brooklyn = Bagel=20 would process and package bagels for Earthgrains under its brand = and would=20 purchase all of the raw materials and packaging supplies necessary = to=20 produce bagels at Earthgrains=92 regional facility in = Illinois. =20 Id. at 376. The agreement also defined a pricing = structure,=20 but did not require Earthgrains to purchase any specific quantity = of=20 bagels from Brooklyn Bagel. Id. Instead, it = obligated=20 Brooklyn Bagel to process and pack the =93ordered quantity=94 of = bagels. =20 Id.

The court of appeals = determined=20 that the agreement, standing alone, did not expressly obligate = Earthgrains=20 to buy all or any specified quantity of its bagel requirements = from=20 Brooklyn Bagel. Id. at 379. Rather, the court = observed,=20 the agreement gave Earthgrains complete discretion concerning = whether to=20 order any or all of its bagel needs from Brooklyn Bagel. The = agreement did not contain any language indicating that it would be = a=20 breach of contract for Earthgrains either to (1) stop ordering = from=20 Brooklyn Bagel, (2) use another manufacturer, or (3) manufacture = its own=20 bagels. Id. at 379=9680. The court concluded = that,=20 =93[u]nder the [agreement], Earthgrains clearly had no obligation = to buy=20 all, let alone any quantity, of its bagel requirements from = Brooklyn=20 Bagel.=94[2] = Id. at=20 379.

Similarly, here, the = converter=20 agreements confer absolute discretion on GM concerning whether to = accept=20 any, all, or part of the upfitters=92 vehicle orders. They = also=20 outline the requirements that the upfitters must satisfy so that = they may=20 qualify as =93approved converters=94 to order vehicles from = GM. =20 Like the agreement in Brooklyn Bagel, the converter = agreements do=20 not, standing alone, constitute enforceable contracts. They=20 expressly state that a =93Manufacturer=92s orders for Vehicles are = not binding=20 on Chevrolet until accepted by Chevrolet, and may be cancelled by=20 Manufacturer until that time.=94 Consequently, no = enforceable contract=20 exists until GM accepts an upfitter=92s purchase order. Each = of the=20 accepted purchase orders specifies a quantity term which, together = with=20 the converter agreement, forms a contract that satisfies the UCC = statute=20 of frauds. We thus view the relationship between each = upfitter and=20 GM as governed by a series of contracts.[3] = See=20 id. at 379 n.4 (approving = district=20 court=92s view of parties=92 relationship as series of separate = contracts,=20 with added element that several of terms would relate back to = original=20 agreement, on theory that each time Earthgrains placed order for = bagels,=20 contract was created); Benedict Mfg. Co. v. Aeroquip Corp., = No.=20 242563, 2004 WL 1532280, at *4=966 (Mich. App. Jul. 8, 2004) (per = curiam)=20 (finding that parties=92 course of performance substantiated = existence of=20 contract because plaintiff manufactured parts and supplied them to = defendant on demand at negotiated price when it received purchase = orders=20 and releases; purchase orders supplied statement of = quantity). =20

D. The = Upfitters=92=20 Claims

1. = Breach of=20 contract

The upfitters contend = that the=20 trial court erred in granting summary judgment on their breach of = contract=20 claims, asserting that the evidence raises a fact issue concerning = whether=20 GM breached the converter agreements. The upfitters=92 = request that we=20 consider the parties=92 course of performance in determining = whether GM=20 limited or modified its rights in a way that is not reflected in = the=20 agreements. Course of performance may be relevant to show = waiver or=20 modification of a written term. Mich. Comp. Laws Ann. = =A7=20 440.2208(3) (West 1994); accord Tex. Bus. & Com. Code Ann. = =A7=20 1.303(f) (Vernon Supp. 2007).

Both the UCC and the = converter=20 agreements prohibit consideration of the parties=92 course of = performance to=20 the extent that it is not consistent with the language of the=20 agreements. When an alleged course of performance conflicts = with the=20 express terms governing a contractual relationship, the express = terms=20 prevail. Mich. = Comp. Laws=20 Ann. =A7 440.1205(4) (West 1994); accord Tex. Bus. & Com. = Code =A7=20 1.303; see Blalock Mach. & Equip. Co. v. Iowa Mfg. Co., = 576 F.=20 Supp. 774, 777-78 (N.D. Ga. 1983). Further, =93[a] signed = agreement=20 which excludes modification or rescission except by a signed = writing=20 cannot otherwise be modified.=94 Mich. Comp. Laws Ann. = =A7=20 440.2209(2) (West 1994); accord Tex. Bus. & Com. Code = Ann. =A7=20 2.209(b) (Vernon 1994). The converter agreements = specifically=20 provide that =93no waiver or modification of any term of this = agreement or=20 creation of additional terms shall be valid or binding upon [GM] = unless=20 made in writing, executed on its behalf.=94 =

Our conclusion that = converter=20 agreements alone do not constitute enforceable contracts under = Michigan=20 law until GM accepts an order for vehicles is dispositive of this=20 claim. The upfitters do not allege that GM failed to satisfy = any=20 term of the converter agreement after committing to fulfill a = purchase=20 order. Absent an accepted purchase order, the = upfitters cannot=20 demonstrate that GM breached the only obligation that would bind = it under=20 the converter agreements. The trial court, therefore, = correctly=20 granted summary judgment on the upfitters=92 breach of contract=20 claims.

2. = UCC=20 claims

a. = Breach of=20 the implied covenant of good faith and fair dealing

The upfitters contend = that the=20 trial court erred in summarily dismissing their claim that GM = breached the=20 duty of good faith and fair dealing implied under Michigan = law. They=20 specifically allege that GM breached that duty by:

=B7 =20 modifying the = contract=20 language to expand GM=92s discretionary authority;

=B7 =20 releasing new SUV = models that=20 incorporated new standard features that previously had been = available only=20 through customization and altering the seat belt mounts so that it = was=20 infeasible for the upfitters to install high value seat packages, = both of=20 which effectively shut the upfitters out from work they previously = had=20 performed;

=B7 =20 failing to provide = the number=20 of vehicles and the particular vehicle models the upfitters = requested and=20 requiring them to accept less marketable vehicles in order to = obtain=20 other, more marketable, vehicles; and

=B7 =20 terminating its = agreement with=20 Stagecoach for failure to customize the =93preferred annual = volume=94 of=20 customized vehicles when the agreement gave GM absolute discretion = over=20 the number and type of vehicles it would provide to = Stagecoach.

Neither the converter = agreements nor the duty of good faith obligated GM to perform=20 otherwise. The UCC imposes a good faith = duty of=20 =93honesty in fact in the conduct or transaction = concerned.=94 Mich. Comp. Laws Ann. = =A7=A7=20 440.1201(119), 440.1203 (West 1994 & Supp. 2007). = This=20 good faith duty extends to the performance, enforcement, and = modification=20 of an agreement. Id. The official comment to = this=20 section explains the duty=92s function as follows:

This section does not support an = independent cause=20 of action for failure to perform or enforce in good faith. Rather, = this=20 section means that a failure to perform or enforce, in = good=20 faith, a specific duty or obligation under the contract, = constitutes a=20 breach of that contract or makes unavailable, under the particular = circumstances, a remedial right or power. This = distinction=20 makes it clear that the doctrine of good faith merely directs a = court=20 towards interpreting contracts within the commercial context in = which they=20 are created, performed, and enforced, and does not = create a=20 separate duty of fairness and reasonableness which can be = independently=20 breached.

Mich.=20 Comp. Law =A7=20 440.1203 (emphasis added), quoted in Whirlpool v. = Grigoleit, No.=20 1:06-CV-195, 2007 WL 397030, *5 (W.D. Mich. Feb. 1, 2007). = The=20 implied covenant of good faith and fair dealing thus =93serves to = supply=20 limits on the parties=92 conduct when their contract defers = decision on a=20 particular term, omits terms or provides ambiguous terms.=94 = Hubbard Chevrolet Co. v. Gen. Motors Corp., 873 F.2d 873, = 876=9677=20 (5th Cir. 1989) (applying Michigan law); accord N. Nat. Gas Co. = v.=20 Conoco, Inc., 986 S.W.2d 603, 606=9607 (Tex. 1998) (=93In the = absence of a=20 specific duty or obligation [in the contract] to which the = good-faith=20 standard could be tied, section 1.203 will not support [the = plaintiff=92s]=20 claim for damages.=94); Fetter v. Wells Fargo Bank Tex., = 110 S.W.3d=20 683, 689 (Tex. App.=97Houston [14th Dist.] 2003, no pet.) (same); = Adolph=20 Coors Co. v. Rodriguez, 780 S.W.2d 477, 482, 482 (Tex. = App.=97Corpus=20 Christi 1989, writ denied) (explaining that UCC =93duty of good = faith and=20 fair dealing is aimed at making effective the agreement=92s = promises=94),=20 cited with approval in N. Nat. Gas, 986 S.W.2d at = 606. =20

Conversely, Michigan = law does=20 not imply a covenant of good faith and fair dealing when the = parties to an=20 agreement have =93unmistakably expressed=94 their respective = rights. =20 Hubbard Chevrolet Co., 873 F.2d at 877. Existing only = in the=20 interstices of a contract=92s provisions, the good faith duty = cannot=20 override or replace express contractual terms. = Aetna=20 Cas. & Sur. Co. v. Dow Chem. Co., 883 F. Supp. 1101, 1111 = (E.D.=20 Mich. 1995); Van Arnem Co. v. Mfrs. Hanover Leas. Corp., = 776 F.=20 Supp. 1220, 1223 (E.D. Mich. 1991); accord Blalock = Mach.,=20 576 F. Supp. at 777=9678; Adolph Coors Co., 780 S.W.2d at = 482=20 (warning that if fact-finder may write into contract other terms = it=20 believes are fair under circumstances, any contract is subject to = being=20 rewritten to better suit court=92s or jury=92s view of what = parties should in=20 =93good faith=94 have included in agreement, regardless of what = parties=20 actually did or did not provide).

The converter = agreements=20 contain specific, =93unmistakably expressed=94 terms addressing = and=20 authorizing the conduct about which the upfitters complain, and = compel=20 dismissal of this claim as a matter of law. The agreements = expressly=20 authorize GM to modify agreement from time to time in writing; = grant GM=20 absolute discretion to accept or reject the upfitters=92 vehicle = orders; and=20 allow either party to terminate the agreement on notice to the=20 other. By acceding to the converter contracts, the upfitters = agreed=20 that GM=92s exercise of discretion over the identified subjects = would=20 constitute good faith, regardless of its motivation for doing = so. =20 For example, the termination provision of the converter agreements = expressly provides:

This Agreement may be terminated by = either party=20 at any time by written notice thereof to the other party. = Written=20 notice of termination shall be delivered personally or by = certified mail,=20 return receipt requested; termination shall be effective at the = end of the=20 third business day after the day of receipt of such written notice = or at=20 such later time as may be set forth in such notice.

In executing this = provision,=20 the parties mutually agreed that no showing of cause for = termination was=20 necessary and no reason for exercising that right would amount to = bad=20 faith. See Hubbard Chevrolet, 873 F.2d at = 877=9678. When=20 a termination notice complies with the terms of the parties=92 = contract, it=20 is reasonable. Adv. Plastics Corp. v. White Consol. = Indus.,=20 Inc., 828 F. Supp. 484, 491 (E.D. Mich. 1993), aff=92d, = 47 F.3d=20 1167 (6th Cir. 1995).[4] = Consequently,=20 GM=92s reasons for exercising its right to terminate its = relationship with=20 Stagecoach does not raise any issue of fact supporting the = upfitters=92=20 breach claim. See Corenswet, Inc. v. Amana Refrigeration, = Inc., 594 F.2d 129, 138 (5th Cir. 1979) (=93When a contract = contains a=20 provision expressly sanctioning termination without cause there is = no room=20 for implying a term that bars such a termination.=94); cf. Tex. = Farm Bur.=20 Mut. Ins. Co. v. Sears, 84 S.W.3d 604, 609 (Tex. 2002) = (reasoning=20 that, because employment-at-will doctrine does not require = employer to be=20 reasonable in making termination decisions and allows employer to=20 discharge employee for bad reasons without liability, employer = cannot=20 incur liability when it terminates employee for carelessly formed=20 reasons).

Likewise, the = converter=20 agreements have no provision either restricting GM=92s own ability = to modify=20 vehicles and upgrade the available standard options to enhance = their=20 appeal and improve GM=92s profit margin, or requiring GM to accept = the=20 upfitters=92 orders for any particular type or number of = vehicles. To=20 conclude that GM acted in bad faith for its conduct would require = GM to=20 waive its contractual rights, contrary to Michigan law. = See=20 Van Arnem Co., 776 F. Supp. at 1223 (holding that defendant = was=20 entitled to advance own interests by enforcement of contract terms = and was=20 not required to forgo enforcement to put plaintiff=92s interests = ahead of=20 its own).

b. =20 Unconscionability

The upfitters next = contend that=20 GM=92s actions in either actually or effectively terminating the = converter=20 agreements and in modifying the contract language expanding GM=92s = discretion in accepting vehicle orders are unconscionable. = The party=20 seeking to prove unconscionability must show that the challenged = contract=20 or term is both procedurally and substantively = unconscionable. =20 Clark v. DaimlerChrysler Corp., 268 Mich. App. 138, 143, = 706 N.W.2d=20 471, 474 (2005).

=93Procedural = unconscionability=20 exists where the weaker party had no realistic alternative to = acceptance=20 of the term.=94 Id.; see also In re Halliburton = Co., 80=20 S.W.3d 566, 571 (Tex. 2002) (explaining that procedural = unconscionability=20 relates to actual making or inducement of contract = provision). =20 Whether the contract is one of adhesion has no bearing on whether = it is=20 procedurally unconscionable. Clark, 268 Mich. App. at = 143,=20 706 N.W.2d at 474; accord In re Halliburton Co., 80 S.W.3d = at 572=20 (observing that contract provision is not procedurally = unconscionable=20 simply because party with superior bargaining power makes =93take = it or=20 leave it=94 offer, leaving weaker party with no opportunity to=20 negotiate). If the circumstances surrounding the contract = formation=20 show that the weaker party could have freely accepted or rejected = the=20 contract, it is not procedurally unconscionable. = Clark, 268=20 Mich. App. at 144, 706 N.W.2d at 475.

In defining = substantive=20 unconscionability, the Clark court explained that=20 it

exists where the challenged term is not=20 substantively reasonable. However, a contract or contract = provision is not=20 invariably substantively unconscionable simply because it is = foolish for=20 one party and very advantageous to the other. Instead, a = term is=20 substantively unreasonable where the inequity of the term is so = extreme as=20 to shock the conscience.

Id. (citing Allen v. = Mich. Bell=20 Tel. Co., 18 Mich. App. 632, 637=9638, 171 N.W.2d 689, 692 = (1969), and=20 Gillam v. Mich. Mtg.-Inv. Corp., 224 Mich. 405, 409, 194 = N.W. 981,=20 982 (1923)); accord In re FirstMerit Bank, N.A., 52 S.W.3d = 749, 757=20 (Tex. 2001) (=93The principle [of allowing relief for = unconscionability] is=20 one of preventing oppression and unfair surprise and not of = disturbing=20 allocation of risks because of superior bargaining = power.=94).

=20 The court decides as a matter of law whether a contract term is=20 unconscionable. See Mich. Comp. Laws Ann.=20 =A7 440.2302(1) (West 1994). The high threshold a = party=20 must meet in proving unconscionability stems from the strong = policy=20 favoring freedom of contract. As the Michigan Supreme Court=20 declared:

The general rule of contracts is that = competent=20 persons shall have the utmost liberty of contracting and that = their=20 agreements voluntarily and fairly made shall be held valid and = enforced in=20 the courts. Under this legal principle, the parties are = generally=20 free to agree to whatever they like, and, in most circumstances, = it is=20 beyond the authority of the courts to interfere with the = parties=92=20 agreement.

Wilkie, 469 Mich. at = 62=9663, 664=20 N.W.2d at 787=9688 (quotations, citations, and footnotes omitted); = see=20 also WXON-TV, Inc. v. A.C. Nielsen Co., 740 F. Supp. 1261, = 1264 (E.D.=20 Mich. 1990) (=93The law presumes that business people are fully = competent to=20 enter into contracts and obligate themselves to perform in any = manner they=20 wish. The courts have no authority to rewrite the terms of a = contract because they might feel that it was an unwise agreement = for a=20 party to have entered into.=94). Neither of the upfitters=92 = challenges=20 approaches this threshold.

=20 The upfitters=92 first claim of unconscionability, which concerns = GM=92s=20 conduct leading to the termination of the parties=92 = relationships, does not=20 raise a fact issue for the same reason it does not support a claim = for=20 breach of the duty of good faith and fair dealing. In their = second=20 claim, the upfitters assert that GM=92s alteration of the = converter=20 agreement language addressing the scope of GM=92s discretion was=20 unconscionable. The upfitters point out that the converter=20 agreements originally provided that =93[GM] shall have no = obligation to=20 deliver to [the upfitter] any model or number of vehicles, but may = deliver=20 to [the upfitter] such number and type of vehicles as requested by = [the=20 upfitter] as it deems appropriate,=94 but that GM later changed = that=20 provision to state that =93[t]here are numerous factors which = affect the=20 availability of vehicles to [GM] and [GM] reserves to itself = discretion in=20 accepting orders and distributing vehicles and its judgment in = such=20 matters shall be final.=94 We do not construe the former = language as=20 limiting GM=92s discretion as to the quantity of vehicles ordered = and=20 consequently, do not view the alteration, which expressly confers = absolute=20 discretion to GM, as material. Even if it were, the change = in=20 language is not unconscionable. Procedurally, we note = that the=20 upfitters agreed at the outset that GM would have unrestricted = power to=20 modify the terms of the converter agreement. The upfitters = could=20 either accept the modification by continuing to perform under the=20 agreements or notify GM that they were terminating the = relationship. =20 See Mich. Comp. = Laws=20 Ann. =A7 440.2208(1) (West 1994) (providing that, where = =93contract for=20 sale involves repeated occasions for performance by either party = with=20 knowledge of the nature of the performance and opportunity for = objection=20 to it by the other, any course of performance accepted or = acquiesced in=20 without objection shall be relevant to determine the meaning of = the=20 agreement=94); see also Hathaway v. Gen. Mills, = Inc., 711 S.W.2d 227, 229 (Tex. = 1986)=20 (explaining that employer may enforce changes to at-will = employment=20 contract if it unequivocally provides notice of definite change = and=20 employee accepts change by continuing employment). = Accordingly, the=20 trial court properly granted summary judgment on this claim. =

3. =20 Extracontractual claims

&= nbsp; =20 a. Economic = duress

The upfitters=92 = economic duress=20 claim rests on their allegations that GM threatened to further = reduce the=20 number of more marketable vehicle models available to them if they = failed=20 to accept less marketable models and also imposed minimum volume=20 requirements after the upfitters had already entered into = converter=20 agreements and begun performance. To succeed on a claim of = duress=20 and void an otherwise valid contract under Michigan law, a = plaintiff must=20 prove that the defendant illegally compelled or coerced the = plaintiff to=20 act by fear of serious injury to it, its reputation, or its fortune. = Norton v.=20 Mich. State Hwy. Dep=92t, 315 Mich. 313, 319=9620, 24 N.W.2d = 132, 135=20 (1946).

No evidence raises a = fact issue=20 that GM threatened to do anything it did not have a legal right to = do. Either party had the power to terminate the contract at = will=20 with notice. At no time did any alleged action by GM impair = the=20 upfitters=92 ability to terminate their expressly at-will = relationship with=20 GM if they considered it to be unfair or oppressive. =

The upfitters also = fail to show=20 that GM had any legal duty to continue provide them with certain = types and=20 numbers of vehicles, or forgo its own modification of its vehicle = line as=20 a means of maximizing its profit. =93[E]conomic duress = requires a=20 showing of illegal conduct.=94 Whirlpool, 2007 WL = 397030, at=20 *4. The upfitters allege that GM attempted to coerce them = into=20 accepting less marketable vehicles by tying their delivery to the = more=20 marketable ones, but fail to provide any evidentiary support that = GM=92s=20 actual conduct violated their agreement or any law. = Consequently,=20 the trial court correctly granted summary judgment dismissing the=20 upfitters=92 economic duress claim.

b. = Promissory=20 estoppel, negligent misrepresentation, and fraud

The upfitters base = their=20 promissory estoppel, negligent misrepresentation, and fraud claims = on GM=92s=20 alleged oral assurances that they would receive a reasonable = allocation of=20 marketable product, allocations would return to normal, GM = products would=20 remain suitable for conversion, GM would not compete with them, = and GM=20 would require its dealers to use approved converters = exclusively. =20 All three claims, however, require upfitters to show that their = reliance=20 on GM=92s alleged oral representations was reasonable. = See Adv.=20 Plastics Corp., 828 F. Supp. at 491 (promissory estoppel); = Novak v.=20 Nationwide Mut. Ins. Co., 235 Mich. App. 675, 688, 599 N.W.2d = 546, 553=20 (1999) (misrepresentation and fraud). =20 Because the converter agreements expressly prohibit = reliance on any=20 waiver or modification of any term or creation of additional terms = unless=20 made in writing and executed by GM, and the upfitters=92 reliance = conflicts=20 with the plain language of the agreement reserving full discretion = to GM,=20 the upfitters cannot demonstrate the reasonableness of their = reliance on=20 any of GM=92s oral assurances as a matter of law. See = Novak,=20 235 Mich. App. at 689=96691, 599 N.W.2d at 553=9654 (holding that = plaintiff=92s reliance is unreasonable as = matter of law=20 when terms of parties=92 contract specifically contradict = representations on=20 which plaintiff claims to have relied). =

Moreover, GM did not = owe any=20 special duty to the upfitters to disclose its own business = plans. GM=20 and the upfitters were parties to commercial relations defined by = their=20 respective agreements, not by any independent duty owed by GM to = act for=20 the benefit of the upfitters or refrain from=20 acting in its own interest at the upfitters=92 expense. = See Central=20 Cartage Co. v. Fewless, 232 Mich. App. 517, 524=9625, 591 = N.W.2d 422,=20 426 (1998); see also McDerment v. Biltmore = Props.,=20 Inc., No. 257155, 2005 WL = 3556147, at *6=20 (Mich. App. Dec. 29, 2005) (per curiam) (declaring that = person may=20 not reasonably place trust and confidence in another when their = interests=20 are adverse). Because these reasons support the trial = court=92s grant=20 of summary judgment on the upfitters=92 fraud, promissory = estoppel, and=20 misrepresentation claims, we need not examine the remaining = grounds. =20

Conclusion

We agree with the = trial court=20 that the upfitters did not present any genuine issue of material = fact=20 supporting their claims for breach of contract, breach of the = covenant of=20 good faith and fair dealing, unconscionability, economic duress,=20 promissory estoppel, negligent misrepresentation, or fraud. = We=20 therefore affirm the judgment of the trial court.

Jane Bland

&= nbsp; &n= bsp; &nb= sp; &nbs= p; =20 Justice

Panel consists of Chief Justice Radack = and=20 Justices Alcala and Bland.