Wiseco, Inc. v. Johnson Controls, Inc.

Johnson Controls, Inc. (JCI) (defendant) produced headrest stays for certain DaimlerChrysler vehicles. In December 1998, JCI made an oral requirements agreement with Wiseco, Inc. (Wiseco) (plaintiff), a tool-and-die company, to produce certain parts. The work involved bending metal rods into a staple shape and rounding the ends, forming part 684F. Wiseco was to prepare the necessary equipment at its own expense and maintain a capacity to manufacture 4,000 parts per day. The number ordered would depend on the needs of DaimlerChrysler. The parts were to last at least four years, and Wiseco understood that period of time to be the contract term. For six months, Wiseco produced approximately 4,000 parts per day at JCI’s request. Such parts were then sent to JCI’s plant in Kentucky for finishing before being sent to JCI’s plant in Canada for final assembly. After the first six months, JCI’s orders for part 684F decreased substantially. At the same time, however, JCI requested Wiseco to perform the finishing work on part 684F, creating a part known as 684B. Eventually, that work fell off as well. JCI attributed the decline to changes in the headrests used by DaimlerChrysler. The newer headrests required a longer rod with additional notches and a pointed end. The manufacture of such parts was performed by a Canadian company near JCI’s final assembly plant. In May 2001, Wiseco filed suit against JCI for breach of contract. The trial court granted summary judgment to JCI on the grounds that JCI had reduced its requirements for part 684 in good faith and had otherwise complied with the agreement. Wiseco appealed.