Taylor Forge Engineered Systems, Inc. v. Hause Machines, Inc.

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IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
WESTERN DIVISION
TAYLOR FORGE ENGINEERED SYSTEMS,
INC.,
Plaintiff,
vs.
NEXTGEN MACHINES LLC, et al .,
Defendants.
CASE NO. 3:25-CV-01876-DAC
MAGISTRATE JUDGE DARRELL A. CLAY
MEMORANDUM OPINION AND ORDER
[ECF #30]
I NTRODUCTION
Plaintiff Taylor Forge Engineered Systems, Inc. (Taylor Forge), brought this action against
Defendants NextGen Machines LLC, d/b/a Hause Machines and Hause Machines, Inc.
(collectively, Hause). (ECF #13). Taylor Forge alleged it contracted with Hause for Hause to
produce two custom machines: an Interior Diameter Boring Machine and an Outside Diameter
Turning Machine. (Id. at ¶2). Taylor Forge alleges Hause breached the contract by not delivering
the machines. (Id. at ¶3). Taylor Forge alleges the breach damaged its ability to perform on
contracts with its customers. (Id. at ¶¶2, 4). Alternatively, Taylor Forge alleges Hause unjustly
enriched itself by retaining the progress payments Taylor Forge made without providing the two
machines. (Id. at ¶¶ 69-73).
This court has jurisdiction under 28 U.S.C. § 1332 as Taylor Forge is a corporation
incorporated in Delaware with its principal place of business in Kansas and Hause is a limited
liability company organized in Ohio and its sole member is an Ohio citizen. (ECF #14). The
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parties subsequently consented to my exercising jurisdiction pursuant to 28 U.S.C. § 636(c). (ECF
#19 at PageID 297).
Taylor Forge seeks summary judgment in its favor, asserting Hause breached the contract
to produce the two machines and caused Taylor Forge $819,227 in damages. (ECF #30 at PageID
342-43). Hause has not responded to Taylor Forge’s motion for summary judgment. In a prior
status report, it reported having shuttered its business. (ECF #26).
O PERATIVE F ACTS
Because Hause ceased business operations during this case, the discovery material is less
than usual. Thus, the fact record consists of the allegations in Taylor Forge’s complaint that Hause
admitted in its answer (ECF #13, 17), the attachments to those filings (ECF #13-1, 13-2, 17-1, 17-
2), and the attachments to Taylor Forge’s motion (ECF #30-1, 30-2), including an affidavit from
Mike Kilkenny, Taylor Forge’s president and CEO (ECF #30-3). 1
On September 22, 2023, Hause submitted a proposal to Taylor Forge to construct the
Internal Diameter Boring Machine (“ID Boring Machine”) that Taylor Forge would use to
manufacture parts of components it would deliver to its customers. (ECF #13 at ¶15; ECF #17 at
¶15). Taylor Forge accepted Hause’s proposal to build the ID Boring Machine on January 18, 2024
through Purchase Order #0055891. (ECF #13 at ¶15; ECF #17 at ¶15; see also ECF #13-1; ECF
1 At times, Taylor Forge refers to Requests for Admission it served on Hause that
went unanswered, contending those facts are conclusively established. See Fed. R. Civ. P. 36(a)(3)
& (b). Although the docket includes a notice that Taylor Forge served those requests (ECF #24),
Taylor Forge did not attach a copy of them to its motion nor do they otherwise appear in the
docket. So while the facts in the requests may be conclusively established, I cannot discern what
those “facts” may be. While I could order Taylor Forge to supplement its filing, a review of the
other supporting materials shows Taylor Forge is nonetheless entitled to summary judgment. See
Fed. R. Civ. P. 56(e)(3). Therefore, to avoid further delay in this matter, I decide the motion on
the record that is before me.
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#17-2). Purchase Order #0055891 provided Taylor Forge would pay $689,805.01 for Hause to
deliver by December 2024 (later modified to February 2025) the following:
(1) 	A small ID Boring Machine,
(2) 	A fixture plate with a 14” radius,
(3) 	A fixture plate with a 21” radius,
(4) 	A tooling head package,
(5) 	Installation and training,
(6) 	Drawing, design, use and function notes
(7) 	Additional tooling heads, and
(8) 	Tool change assist services.
(ECF #13 at ¶16; ECF #17 at ¶16; ECF #13-1 at PageID 222, 227-29; see also ECF #17-2 at PageID
282).
On April 8, 2024, Hause submitted a second proposal to Taylor Forge, this time to
construct the Outer Diameter Turning Machine (“OD Turning Machine”), also for Taylor Forge
to use in manufacturing parts of components it would deliver to its customers. (ECF #13 at ¶18;
ECF #17 at ¶18). Taylor Forge accepted Hause’s proposal to build the OD Turning Machine on
May 20, 2024 through Purchase Order #0056795. (ECF #13 at ¶18; ECF #17 at ¶18; see also ECF
#13-2; ECF #17-1). Purchase Order #0056795 provided that Taylor Forge would pay $689,805.01
for Hause to deliver a small OD Turning Machine by May 2025. (ECF #13 at ¶19; ECF #17 at
¶19; ECF #13-2 at PageID 232, 237; ECF #17-1 at PageID 273, 278).
Both purchase orders established a staggered payment schedule where Taylor Forge would
pay Hause 10% of the purchase price with the order, make four 20% progress payments at certain
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events over the life of the contract, and pay the final 10% after delivery. (ECF #13-1 at PageID
229, ECF #13-2 at PageID 238). Additionally, each purchase order contained a time-of-the-essence
clause establishing a failure to deliver conforming goods by the delivery date as a breach of
contract. (ECF #13-1 at PageID 231; ECF #13-2 at PageID 240).
Hause ultimately had issues constructing both machines and delayed their scheduled
delivery dates by several months. (ECF #13 at ¶¶34-36; ECF #17 at ¶¶34-36). On May 15, 2025,
Rob Brubaker, Hause’s CEO, had a phone call with John Lang, the employee responsible for the
contract at Taylor Forge during which Mr. Brubaker reported the parts required for the OD
Turning Machine had not been ordered. (ECF #13 at ¶34; ECF #17 at ¶34). So, Taylor Forge
withheld the progress payment for those parts. (Id.).
Mr. Lang and Mr. Brubaker met at Hause’s facility later in May and Mr. Brubaker assured
Taylor Forge that Hause would be able to deliver both the ID Boring Machine by August 27, 2025
and the OD Turning Machine by October 24, 2025. (ECF #13 at ¶¶35-36; ECF #17 at ¶¶35-36).
Mr. Brubaker called Mr. Lang again on June 19 and Mr. Brubaker informed Taylor Forge
that Hause was discontinuing operations. (ECF #13 at ¶41; ECF #17 at ¶41). Mr. Brubaker
informed Mr. Lang that Hause was planning to send Taylor Forge the design information for both
the ID Boring Machine and the OD Turning Machine, along with certain components for the ID
Boring Machine. (Id.). Taylor Forge views the ID Boring Machine design data and parts as of
“virtually no value” and claims it did not receive “anything of value related to the OD Turning
Machine.” (ECF #30-3 at ¶¶7, 9).
Taylor Forge made advance payments to Hause of $331,805 for the ID Boring Machine
and $207,102 for the OD Turning Machine. (ECF #13 at ¶46; ECF #17 at ¶46; ECF #30-3 at
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¶¶4, 8). Taylor Forge paid a total of $538,907 to Hause. (Id.). On July 17, Mr. Lang emailed Mr.
Brubaker requesting a refund of the most recent progress payments, writing:
After reviewing the parts received, I don’t believe the value we received in design
information and components is equivalent to the value in progress payments Taylor
Forge submitted to Hause Machines. I am writing to request a refund of the last 20%
progress payments made on each of the machines, or a total of $270,790 as detailed
below.
PO 55891 	210H 	20% payment 10/4/2024 	$132,722
PO 56795 	212H 	20% payment 2/7/2025 	$138,068
The refund can be submitted to myself or Carl Medlin at Taylor Forge.
(ECF #13 at ¶47; ECF #17 at ¶47). Hause did not refund such payments. (ECF #30-3 at ¶10).
Without the ID Boring Machine or the OD Turning Machine, Taylor Forge was forced to
pay employees to work night shifts and overtime to complete both machines and fulfill its
contractual obligations to its customers. (ECF #30-3 at ¶15). These internal costs totaled $280,320.
(Id.) Taylor Forge claims it has been damaged by at least $819,227. (Id. at ¶16).
STANDARD FOR SUMMARY J UDGMENT
A “court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). A material fact is one that can affect the outcome of the case, and a dispute is
genuine if a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). Notably, the moving party carries the burden of showing
there is no genuine issue of material fact, but the nonmoving party is not relieved of its burden of
producing evidence that would support a jury verdict. Id. at 256. Likewise, “Rule 56(e) itself
provides that a party opposing a properly supported motion for summary judgment may not rest
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upon mere allegations or denials of the pleading but must set forth specific facts showing that
there is a genuine issue for trial.” Id.; see also Fed. R. Civ. P. 56(e).
Summary judgment, though, is not to be equated with default judgment when a motion is
unopposed. Even where the motion is unopposed, Rule 56 requires that a court determine when
the moving party has established a right to relief as a matter of law and that no genuine issue of
material fact exists before the court may enter summary judgment. Donlin v. Watkins, 814 F.2d 273,
277 (6th Cir. 1987); Kendall v. Hoover Co., 751 F.2d 171, 173-74 (6th Cir. 1974).
D ISCUSSION
Federal courts sitting in diversity apply the substantive law of the forum state and federal
procedural law. See generally Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938). When interpreting
contracts in a diversity action, a court generally applies the parties’ contractual choice of governing
law. Savedoff v. Access Grp., 524 F.3d 754, 762 (6th Cir. 2008). Both purchase orders contain a
choice-of-law provision stating each contract is “to be construed in accordance with the laws of the
State in which the office of buyer is located”—i.e., Kansas. (ECF #13-1 at PageID 231, 228; ECF
#13-2 at PageID 240, 237; ECF #14). Thus, Kansas substantive law governs the dispute.
I. 	Counts 1 and 2: breach of contract
A. 	Taylor Forge has established all elements of its claims for breach of contract
Under Kansas law, “[t]he elements of a breach of contract claim are: (1) the existence of a
contract between the parties; (2) sufficient consideration to support the contract; (3) the plaintiff’s
performance or willingness to perform in compliance with the contract; (4) the defendant’s breach
of the contract; and (5) damage to plaintiff caused by the breach.” Stechschulte v. Jennings, 298 P.3d
1083, 1098 (Kan. 2013).
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First, there is no genuine issue about the existence of a contract. Kansas law holds a valid
contract is shown by a written agreement containing the parties’ written intent to be bound by the
agreement’s terms. See M West, Inc. v. Oak Park Mall, L.L.C., 234 P.3d 833, 845-46 (Kan. Ct. App.
2010). Here, Taylor Forge and Hause agree about the terms and validity of the two purchase
orders. (ECF #13 at ¶16, 19; ECF #17 at ¶16, 19). Purchase Order #0055891 provided that Taylor
Forge would pay $689,805.01 for Hause to provide a small ID Boring Machine alongside
additional components, information, and related services. (ECF #13 at ¶16; ECF #17 at ¶16; ECF
#13-1 at PageID 222, 227-29; see also ECF #17-2 at PageID 282). Purchase Order #0056795
provided that Taylor Forge would pay $690,340 for Hause to deliver a small OD Turning Machine
by May 2025. (ECF #13 at ¶19; ECF #17 at ¶19; ECF #13-2 at PageID 232, 237; ECF #17-1 at
PageID 273, 278). Thus, both parties agree Taylor Forge and Hause had two written agreements
showing a written intent to be bound by their terms.
Second, there is no genuine issue about consideration. Kansas law defines consideration as
“some right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss,
or responsibility, given, suffered, or undertaken by the other.” Varney Bus. Servs., Inc. v. Pottroff,
59 P.3d 1003, 1014 (Kan. 2002) (quoting 17A Am.Jur.2d, Contracts § 113). Both parties agree
Taylor Forge promised to pay $689,805.01 for the ID Boring Machine and $690,340 for the OD
Turning Machine and Hause promised to provide those machines. (ECF #13 at ¶16, 19; ECF #17
at ¶16, 19). Thus, both parties agree the two contracts are supported by consideration.
Third, there is no genuine issue about performance and breach. Under Kansas law, a party
breaches a contract when it fails to perform its contractual obligations. Peterson v. Ferrell, 349 P.3d
1269, 1274-75 (Kan. 2015). The parties agree Taylor Forge performed its obligations by making
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$538,907 in advance payments to Hause: $331,805 for the ID Boring Machine and $207,102 for
the OD Turning Machine. (ECF #13 at ¶46; ECF #17 at ¶46; ECF #30-3 at ¶¶4, 8). The parties
also agree Hause sent Taylor Forge the design information for both the ID Boring Machine and
the OD Turning Machine, along with certain components for the ID Boring Machine after
informing Taylor Forge that Hause was discontinuing operations. (See ECF #13 at ¶41; ECF #17
at ¶41). As this was less than what Hause promised to deliver (see ECF #13 at ¶16, 19; ECF #17 at
¶16, 19), there is no genuine dispute that Hause breached its promise to deliver the goods and
services for which Taylor Forge paid. See Rhythm Eng’g, LLC v. Darrel Varni Elec., Inc., No. 24-cv-
2463, 2025 WL 2107678, at *2 (D. Kan. May 23, 2025) (“As a result, [plaintiff] suffered damages
because [defendant] breached its promise to pay the for the goods and services that [plaintiff]
provided by the date its payment was due.”)
Fourth, there is no genuine issue about damages. Under Kansas law, the goal when
awarding contract damages is to put the nonbreaching party in the position it would have been in
had the breach never occurred but without allowing a windfall. State ex rel. Stovall v. Reliance Ins.
Co., 107 P.3d 1219, 1228 (Kan. 2005). Kansas law also requires there be a reasonable basis for
computation of damages and prohibits recovery of damages either “not the proximate result of the
breach” or “remote, contingent, and speculative in character.” Id. Kansas law does not require
contract damages be established with certainty but they “cannot be too conjectural and speculative
to form a sound basis for measurement.” Brown v. United Methodist Homes for the Aged, 815 P.2d 72,
86 (Kan. 1991).
The parties agree Taylor Forge paid a total of $538,907 to Hause. (ECF #13 at ¶46; ECF
#17 at ¶46). The parties also agree Taylor Forge received the design information for both the ID
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Boring Machine and the OD Turning Machine, along with certain components for the ID Boring
Machine after informing Taylor Forge that Hause was discontinuing operations. (See ECF #13 at
¶41; ECF #17 at ¶41). Through Mr. Kilkenny’s affidavit, Taylor Forge maintains that the design
data and parts for the ID Boring Machine were of “virtually no value,” it did not receive “anything
of value related to the OD Turning Machine,” Hause did not refund any payments Taylor Forge
made, and Taylor Forge incurred $280,320 in additional costs to complete the contracts for which
it needed the ID Boring Machine and the OD Turning Machine. (ECF #30-3 at ¶¶7, 9, 10, 15).
Taylor Forge’s affidavit totals the damages to be $819,227 ($538,907 + $280,320). (Id. at ¶¶15-16).
Mr. Kilkenny’s affidavit is sufficient evidence to establish Taylor Forge’s damages. Fed. R.
Civ. P. 56(c)(1)(A) and (c)(4) allows a motion for summary judgment to be supported by an
affidavit so long as it is “made on personal knowledge, set[s] out facts that would be admissible in
evidence, and show[s] that the affiant or declarant is competent to testify on the matters stated.”
Mr. Kilkenny’s affidavit sets out he is competent to testify and has personal knowledge and
involvement with Taylor Forge’s purchase of the ID Boring Machine and the OD Turning
Machine from Hause. (ECF #30-3 at ¶¶1-2). Hause had a burden to set forth specific facts showing
that there is a genuine issue for trial on damages and cannot rest solely upon the denials in its
answer. See Anderson, 477 U.S. at 256; Fed. R. Civ. P. 56(e).
The damages Taylor Forge seeks to recover would restore it to the position it would have
been in had the breach never occurred without bestowing a windfall. State ex rel. Stovall, 107 P.3d
at 1228. Nor are they “too conjectural and speculative to form a sound basis for measurement.”
Brown, 815 P.2d at 86. Though Taylor Forge’s amended complaint originally sought pre- and post-
judgment interest, and attorneys’ fees and costs (ECF #13 at PageID 219), the motion for summary
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judgment confines itself to “the $819,227 in compensatory, consequential, and/or incidental
damages that it has suffered as a direct result of Defendant Hause’s breach.” (ECF #30 at PageID
341). Taylor Forge claims $819,227 in total damages, consisting of the $538,907 in payments
made to Hause for which it received “virtually nothing of value in return” and $280,320 in
additional internal costs incurred for Taylor Forge to deliver on the contracts for which it
originally purchased the machines. (See ECF #30-3 at ¶¶ 15-16). Recovery of the $538,907 Taylor
Forge paid to Hause for two machines never delivered would restore Taylor Forge to the position it
was in before Hause’s breach. Kansas law also allows parties to recover the additional cost to
complete the contract after the breach, so Taylor Forge may recover the additional costs it incurred
to complete its own contracts that depended on Hause delivering the two machines. See State ex rel.
Stovall, 107 P.3d at 1229 (“The correct measure of damages is the cost to build the concrete trench
system, not to exceed the cost to build an earthen trench system as of the 1995 discovery date.”). I
thus find no genuine dispute that Taylor Forge was damaged by $819,227.
B. 	Hause’s affirmative defenses to breach of contract fail
In its answer, Hause raised three affirmative defenses: accord and satisfaction, waiver
and/or estoppel, and failure to mitigate damages. (ECF #17 at ¶¶51-57). I analyze the first two
defenses together because Hause contends Taylor Forge “agreed to accept the work in progress and
release [Hause] from further obligation under its contracts” and Taylor Forge “has either waived its
claims asserted herein or is estopped from denying the settlement reached by the parties as set
above.” (Id. at ¶¶51, 55).
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1. 	Accord and satisfaction/waiver/estoppel
Kansas law recognizes accord and satisfaction as an affirmative defense to breach of
contract. The party asserting the defense must show “an offer in full satisfaction of an obligation,
accompanied by such acts and declarations or made under such circumstances that the party to
whom the offer is made is bound to understand that if he accepts the offer, it is in full satisfaction
of and discharges the original obligation.” EF Hutton & Co. v. Heim, 694 P.2d 445, 451 (Kan.
1985); see also Gulick v. State Farm Mut. Auto. Ins. Co., 780 F. Supp. 3d 1169, 1204-05 (D. Kan.
2025).
Hause asserts in its answer that Taylor Forge “issued new purchase orders to [Hause] in the
amounts of the work completed and accepted by” Hause and then Taylor Forge “took possession
of the parts and equipment then available, and the transfer of the engineering data relating
thereto.” (ECF #17 at ¶¶51, 53). Hause attached copies of Purchase Orders #0055891 (the ID
Boring Machine) and #0056795 (the OD Turning Machine). (ECF #17-1 at PageID 273; ECF #17-
2 at PageID 282). They have total net values of $331,805 and $207,102, the amounts for the
progress payments for each machine. (ECF #17-1 at PageID 278; ECF #17-2 at PageID 287). The
purchase orders also each bear revision notes. The revision note on Purchase Order #0055891
stated “8/22/25– deleted all lines but line 1 per David Plucknett– company went out of business.
Adjusted invoiced amount to the work that was progress payments.” (ECF #17-2 at PageID 288).
The revision note on Purchase Order #0056795 stated “8/22/25 – adjusted pricing to what was
invoiced, company went out of business.” (ECF #17-1 at PageID 279).
Taylor Forge argues these revisions cannot serve as an accord and satisfaction because they
do not meet the procedure in the contracts for releasing a claim. (ECF #30 at PageID 356). Both
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purchase orders advanced by Hause have a section on waiver stating: “No waiver of a breach of any
provision of this order shall be effective to discharge in whole or in part any claim or right arising
out of such breach unless such waiver is in writing and signed by buyer.” (ECF #17-1 at PageID
281; ECF #17-2 at PageID 290). Neither revision note states in writing Taylor Forge was waiving
Hause’s breach nor are the purchase orders signed by Taylor Forge. Thus, by the terms of the
purchase orders, neither revision can serve as a waiver of Taylor Forge’s claims for a breach by
Hause. See Heim, 694 P.2d at 451 (the defense requires the offer of accord and satisfaction be
“made under such circumstances that the party to whom the offer is made is bound to understand
that if he accepts the offer, it is in full satisfaction of and discharges the original obligation”).
Under Kansas law, the lack of evidence supporting an agreement to waive a claim or extinguish the
contract is fatal to an accord-and-satisfaction defense. See Fed. Deposit Ins. Corp. v. Addleman,
750 P.2d 1037, 1040 (Kan. 1988) (“In the absence of documents or acts directly evidencing a
‘meeting of the minds’ between DCNB and Addleman that the guaranty contract was to be
extinguished, there is no accord and satisfaction.”). Thus, Hause’s defenses for accord and
satisfaction and waiver and/or estoppel do not prevent Taylor Forge from being entitled to
judgment as a matter of law.
2. 	Failure to mitigate damages
Hause also raises an affirmative defense that Taylor Forge has failed to mitigate its
damages. (ECF #17 at ¶¶ 56-57). Under Kansas law, a party injured by a breach of contract by
another is “under a duty to exercise reasonable care to avoid loss or to mitigate and minimize the
resulting damage.” Iseman v. Kansas Gas & Elec. Co., 567 P.2d 856, 857 (Kan. 1977), overruled on
other grounds, York v. InTrust Bank, N.A., 962 P.2d 405 (Kan. 1988). Under Kansas law, mitigation
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of damages is an affirmative defense, and the burden of proving failure to mitigate rests with the
party asserting the defense. Rockey v. Bacon, 470 P.2d 804, 808-09 (Kan. 1970). Hause does not
advance any facts to support this defense beyond the bare allegation in its answer. (See ECF #17 at
¶¶ 56-57). Without evidence to support it, this defense fails under Kansas law. See Rockey, 470 P.2d
at 809 (“Even had such a defense been interposed, the record discloses no evidence which would
have sustained it.”) Moreover, Taylor Forge advances Mr. Kilkenny’s affidavit as evidence it did
mitigate damages: Mr. Kilkenny explained Taylor Forge engaged “the best and most reasonable
alternative vendor” to complete the ID Boring Machine and the OD Turning Machine. (ECF
#30-3 at ¶¶12-14). Taylor Forge also delayed fulfillment of contracts that depended on those
machines by 6 months. (Id. at ¶11). Thus, Hause’s defense of failure to mitigate damages does not
prevent Taylor Forge from being entitled to judgment as a matter of law.
II. 	Count 3: unjust enrichment
Last, Taylor Forge seeks summary judgment on Count Three, its claim for unjust
enrichment. (ECF #30 at PageID 349, 352-53). Under Kansas law, unjust enrichment is a quasi-
contract theory, so it cannot apply when there is a valid and enforceable written contract governing
the acts at issue. See Ice Corp. v. Hamilton Sundstrand Inc., 444 F.Supp.2d 1165, 1170-71 (D. Kan.
2006); see also Midwest Asphalt Coating, Inc. v. Chelsea Plaza Homes, Inc., 243 P.3d 1106, 1110 (Kan.
Ct. App. 2010) (“Recovery for payment under the terms of a contract and quantum meruit are
mutually exclusive legal concepts.” (citing Whan v. Smith, 285 P. 589, 591 (Kan. 1930)). Thus,
because Taylor Forge and Hause had two enforceable contracts governing the purchase of the ID
Boring Machine and the OD Turning Machine, Taylor Forge cannot also recover for unjust
enrichment and thus is not entitled to judgment as a matter of law on this claim.
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CONCLUSION
After review of the record, the parties’ arguments, and the law, Taylor Forge’s motion for
summary judgment is GRANTED in part with respect to liability on Counts 1 and 2 and
DENIED in part with respect to liability on Count 3. Taylor Forge is entitled to damages of
$819,227. If Taylor Forge seeks additional payment in the form of costs and expenses incurred in
connection with this action, including reasonable attorney’s fees, or seeks post-judgment interest, it
must file an appropriate motion by October 23, 2026. Final judgment will issue following
resolution of this remaining issue.
Dated: October 9, 2026
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