## Facts

- John Johnson served as Manutec Steel Industries, Inc.’s exclusive U.S. sales representative under a 1985 agreement providing a 5% commission on sales.
- The contract had an automatic-renewal provision intended to provide a two-year termination notice and selected Ontario law to govern disputes.
- Manutec terminated Johnson’s contract in 1988 without notice; Johnson alleged the termination avoided paying commissions owed under the notice arrangement.
- Johnson sued Manutec in Ontario for breach of contract and obtained a 1990 default judgment for about $1.5 million.
- Ventra-related entities were not parties to the Ontario action; Johnson later alleged Ventra Group, Inc. and Ventratech Limited were Manutec’s successors after corporate transactions and reorganizations.
- Manutec became insolvent or unable to satisfy the judgment; Johnson sued Ventra Group and Ventratech in federal court in Michigan seeking to collect on the Ontario judgment and asserting theories including successor liability, fraudulent conveyance, and unjust enrichment.
- The district court applied Ontario law, granted summary judgment for defendants on all claims, and denied Johnson’s motions for summary judgment and for leave to amend.

## Issues

1. Whether Michigan choice-of-law rules required enforcement of the contract’s Ontario choice-of-law clause or permitted applying Michigan law on public-policy grounds.
2. Whether Ontario law imposed successor liability on Ventra Group or Ventratech for Manutec’s judgment debt absent an express assumption of liabilities.
3. Whether Johnson’s alternative claims (including fraudulent conveyance and unjust enrichment) could survive summary judgment under Ontario law.
4. Whether the district court abused its discretion by denying leave to amend and related procedural requests.

## Decision

- The Sixth Circuit affirmed in full.
- Ontario law governed under Michigan choice-of-law principles, and the public-policy exception did not apply.
- Under Ontario law, defendants were not liable as successors because Johnson did not show an express assumption of Manutec’s liabilities or another recognized basis to impose liability.
- Johnson’s other claims failed for lack of evidentiary support, lack of a viable theory under Ontario law, or applicable time bars.
- Denial of leave to amend was affirmed because the proposed amendments were futile or would not cure the dispositive defects.

## Legal Principles

- A federal court sitting in diversity applies the forum state’s choice-of-law rules; Michigan generally enforces contractual choice-of-law clauses unless applying the chosen law would violate a fundamental Michigan public policy.
- A difference between Michigan remedies and the chosen jurisdiction’s narrower remedial scheme, standing alone, does not establish a fundamental public-policy conflict sufficient to override a valid choice-of-law clause.
- Under Ontario law as applied, a corporation acquiring another’s business or assets is not liable for the seller’s debts absent an express assumption of liabilities or another recognized legal basis.
- A foreign judgment against a debtor generally cannot be enforced against nonparties without a legally recognized ground to bind them (such as an express assumption of the judgment debtor’s obligations under the governing law).
- Fraudulent conveyance and unjust enrichment claims must be supported by admissible evidence and must fit within recognized causes of action under the governing law; otherwise, summary judgment is proper.

## Conclusion

The Sixth Circuit enforced the parties’ Ontario choice-of-law clause and held that, under Ontario law, Johnson could not collect his Ontario judgment from Ventra-affiliated entities on a successor-liability or related theory absent proof of an express assumption of Manutec’s liabilities or another valid basis to impose liability, and it affirmed summary judgment and the denial of leave to amend.


Johnson v. Ventra Grp., Inc., 191 F.3d 732 (6th Cir. 1999)