Bonfiglioli USA, Inc. v. Midwest Engineered Components, Inc.
CourtCourt of Appeals for the Sixth Circuit
Date FiledJuly 29, 2026
Docket25-5208
JudgeJane Branstetter Stranch; Rachel S. Bloomekatz; Whitney D. Hermandorfer
StatusPublished
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Full Opinion
RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 26a0210p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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BONFIGLIOLI USA, INC.,
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Plaintiff-Appellee, │
> No. 25-5208
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v. │
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MIDWEST ENGINEERED COMPONENTS, INC., A │
MINNESOTA CORPORATION, │
Defendant-Appellant. │
┘
Appeal from the United States District Court for the Eastern District of Kentucky at Covington.
No. 2:23-cv-00014—Danny C. Reeves, District Judge.
Argued: April 29, 2026
Decided and Filed: July 29, 2026
Before: STRANCH, BLOOMEKATZ, and HERMANDORFER, Circuit Judges.
_________________
COUNSEL
ARGUED: D. Clay Taylor, TAYLOR FRICTON, PLLP, Edina, Minnesota, for Appellant.
Justin L. Knappick, DRESSMAN BENZINGER LAVELLE, PSC, Covington, Kentucky, for
Appellee. ON BRIEF: D. Clay Taylor, TAYLOR FRICTON, PLLP, Edina, Minnesota, for
Appellant. Justin L. Knappick, Joseph M. Kramer, DRESSMAN BENZINGER LAVELLE,
PSC, Covington, Kentucky, for Appellee.
_________________
OPINION
_________________
BLOOMEKATZ, Circuit Judge. The parties to this appeal debate which state’s law
governs their contract dispute. Bonfiglioli USA, Inc., a Kentucky manufacturer, argues that
Kentucky law governs its attempt to terminate its sales representative agreement with Minnesota-
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based Midwest Engineered Components, Inc. (MEC). Bonfiglioli emphasizes that the parties’
contract says that Kentucky law will govern, and underscores that it manufactures its products in
Kentucky. MEC instead contends that the Minnesota Termination of Sales Representatives Act
(MTSRA) should govern the terms of the contract’s termination. MEC relies on the fact that the
MTSRA contains an aggressive anti-waiver provision that purports to void any contract term that
nullifies the statute’s protections, including the parties’ choice of Kentucky law. The district
court concluded that Kentucky law governs the contract termination and that MEC is not entitled
to the MTSRA’s protections. We agree.
We further uphold the jury’s verdict that MEC fraudulently induced Bonfiglioli to enter
the sales representative contract by misrepresenting that it would follow Kentucky law even
though—as demonstrated by a smoking-gun email—it always planned to invoke the MTSRA
upon termination. MEC has not demonstrated that the district court’s measured evidentiary
decisions and jury instructions on the fraud claim constituted an abuse of discretion. Nor has it
demonstrated that the jury’s punitive damages award was so excessive as to violate due process.
We thus affirm the district court in full.
BACKGROUND
I. Factual Background
A. The Parties’ Contract
Bonfiglioli, located in Kentucky, manufactures and sells industrial parts for machines,
including excavators and wind turbines. MEC is a sales representative company that serves as a
middleman to facilitate sales of industrial parts from manufacturers to purchasers. Its principal
office is in Minnesota, but it also operates throughout Iowa, Illinois, Wisconsin, North Dakota,
and South Dakota. Bonfiglioli engaged MEC to sell its products in those states.
Several provisions of the parties’ operative Sales Representative Agreement (SRA) merit
attention for the issues in this appeal. With respect to the duration of the contract, the SRA states
that it “shall be automatically renewed” each year on April 1st unless terminated before then.
SRA, R. 54-4, PageID 740. Regarding termination, the SRA provides that the “Agreement may
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be terminated at any time by [Bonfiglioli] at its discretion without notice and without cause.” Id.
at PageID 743. And, in case of a dispute, the SRA has a choice of law clause that selects
Kentucky law to govern the “Agreement” and “the rights of the parties.” Id. at PageID 745.
As Bonfiglioli would later discover, however, an MEC email showed that MEC never
intended to fully comply with the SRA’s choice of law provision. Ken Lastovich, MEC’s then-
current president, requested advice on the draft contract from MEC’s former owner, Charlie
Quarstad. Quarstad’s email responded, “Ken, I have briefly reviewed the contract and noticed a
few items. Looks pretty clean contract to me,” Quarstad Email, R. 54-7, PageID 761, then went
on to comment on several provisions of the contract. Critically, the email directly commented on
the draft contract’s choice of law clause. It first repeated the draft’s text—“This agreement is
made and enforced by the laws governed by the State of Kentucky”—and then added Quarstad’s
commentary: “We know MN laws supersede this. I would not make mention.” Id. (emphasis
added). Lastovich, without mentioning anything about “MN laws” to Bonfiglioli, then executed
the SRA, including its choice of Kentucky law to resolve the parties’ contract disputes.
Quarstad’s email implicitly referenced the MTSRA, which sets forth restrictions on when
manufacturers may terminate sales representatives. As relevant here, under the MTSRA a
manufacturer “may not terminate a sales representative agreement unless” the manufacturer
(1) “has good cause,” and (2) “give[s] written notice setting forth the reason(s) for the
termination at least 90 days in advance.” Minn. Stat. Ann. § 325E.37, subd. 2. The MTSRA
also has an aggressive “anti-waiver” provision, which purports to void any contract term,
including a choice of law provision, that waives the MTSRA’s protections. Id. § 325E.37, subd.
7. The anti-waiver provision is as follows:
Subd. 7. Prohibition of inclusion of certain unfair contract terms in
sales representative agreement.
(a) No manufacturer . . . shall circumvent compliance with this section by
including in a sales representative agreement a term or provision, whether
express or implied, that includes or purports to include:
(1) an application or choice of law of any other state;
(2) a choice of venue in any other state; or
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(3) a waiver of any provision of this section.
(b) Any term or provision described in paragraph (a) is void and unenforceable.
Id. The email represents MEC’s view that this anti-waiver provision in the MTSRA
“supersedes” the contract’s choice of law provision.
B. Termination
After several years of business partnership, Bonfiglioli sent MEC a written termination
notice. The notice did not explain the grounds for the termination. Although Bonfiglioli was not
required to give advance notice under the operative SRA, the notice set a termination date of 60
days out.
Almost three months after receiving the termination letter, MEC responded to Bonfiglioli
claiming that “Bonfiglioli ha[d] committed a number of violations of [the MTSRA].” Demand
Letter, R. 54-9, PageID 765. Specifically, MEC contended that Bonfiglioli had not satisfied the
MTSRA’s restriction that sales representatives may be terminated only for good cause. MEC’s
letter enclosed a draft summons and complaint charging Bonfiglioli with violating the MTSRA,
and threatened to file it in court unless Bonfiglioli paid MEC $165,000 within two weeks.
The timing of MEC’s letter is noteworthy. Although the MTSRA requires good cause to
terminate an ongoing contract, Minn. Stat. Ann. § 325E.37 subd. 2, the statute allows a party to
decline to renew a contract without showing good cause as long as the party provides written
notice of their intent not to renew at least 90 days before the renewal date, id. § 325E.37 subd. 3.
Yet, after receiving Bonfiglioli’s termination notice, MEC waited until exactly 89 days before
the contract’s autorenewal on April 1, 2023, before sending its demand letter to Bonfiglioli
invoking the MTSRA. Had MEC informed Bonfiglioli of its belief that the MTSRA applied
even a few days earlier, Bonfiglioli could have ended the business relationship while complying
with the MTSRA by merely informing MEC that it was declining to renew the contract. Instead,
MEC left Bonfiglioli no options under the MTSRA but to satisfy the Act’s stringent good cause
termination requirements, id. § 325E.37 subd. 1–2, or remain in the contract for another year.
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Bonfiglioli declined to comply with MEC’s demand of $165,000 for the alleged MTSRA
violation. Instead, it believed that per the terms of the SRA it could terminate MEC at any time
and that MEC had lied when it agreed to be bound by Kentucky law. Rather than capitulate to
MEC’s six-figure demand, Bonfiglioli brought this lawsuit in the U.S. District Court for the
Eastern District of Kentucky.
II. Procedural History
Bonfiglioli’s lawsuit was both defensive and offensive. Preempting MEC’s suit,
Bonfiglioli sought declaratory judgments that Kentucky law—not the MTSRA—governed the
terms of the contract’s termination and that it had properly terminated the SRA. Next,
Bonfiglioli asserted claims of fraudulent inducement and fraud by omission, requesting a jury
trial and damages for MEC’s misrepresenting in the SRA that it agreed to be bound by Kentucky
law.
The district court resolved several key issues before trial. The district court determined
that Kentucky law governed and thus the MTSRA was inapplicable. Applying Kentucky law,
the district court then granted Bonfiglioli declaratory judgment that it had complied with the
SRA and had legally terminated MEC. And the district court denied MEC summary judgment
on Bonfiglioli’s fraudulent inducement claim, concluding that a reasonable jury could find that
MEC “misrepresented its intent to be bound by the terms of the SRA.” D. Ct. Op. on MSJ,
R. 68, PageID 1224 (emphasis omitted). Yet the district court’s rulings were not all one-sided: It
granted MEC summary judgment on Bonfiglioli’s fraud by omission claim. It reasoned that, as a
matter of law, MEC had no duty to disclose its belief that the MTSRA applied—a required
element of the omission claim.
At trial on the fraudulent inducement claim, Bonfiglioli introduced evidence that MEC
misrepresented its intent to comply with the choice of law provision when MEC signed the SRA
and that it would not have signed the SRA but for that misrepresentation. It used testimony from
the CEOs of MEC and Bonfiglioli, as well as the Quarstad email, to prove these points. Then,
Bonfiglioli asked the jury to award significant punitive damages to punish MEC for engaging in
reprehensible conduct. It argued that the timing of MEC’s demand letter showed MEC was
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demanding a ransom. Bonfiglioli adduced testimony that MEC had demanded $165,000 because
it believed that sum would force Bonfiglioli into settling as it would be even more costly for
Bonfiglioli to defend itself through litigation.
In defense, MEC primarily argued at trial that Bonfiglioli had failed to perform basic
investigation into Minnesota’s regulatory framework for sales representatives. MEC maintained
it had done nothing wrong because Bonfiglioli could have easily discovered the MTSRA on its
own. MEC’s strategy was, in part, to emphasize that it had no legal duty to inform Bonfiglioli of
its belief that the MTSRA superseded the SRA. The district court permitted MEC to argue its
lack of a legal duty to disclose in its opening and closing statements. But, citing concerns about
juror confusion, the court prevented MEC from presenting testimony demonstrating that it had
no duty to disclose the MTSRA and refused to instruct the jury that there was no such duty.
After weighing the evidence, the jury found MEC liable for fraudulent inducement and
awarded $1 in nominal damages and $280,000 in punitive damages.
Following the trial, MEC challenged the verdict on several grounds. It moved for
judgment as a matter of law, contending Bonfiglioli’s failure to independently discover the
MTSRA rendered Bonfiglioli’s reliance on MEC’s misrepresentation categorically unreasonable.
MEC further challenged the district court’s jury instructions and evidentiary rulings. Finally,
MEC requested remittitur or vacatur of the punitive damages award on the grounds that it
violated the Fourteenth Amendment’s Due Process Clause. The district court denied each of
MEC’s post-trial motions. MEC timely appealed.
ANALYSIS
MEC contends that the district court erred in three ways. First, it argues that the district
court erred by determining that Kentucky law, rather than Minnesota law, governs this dispute.
Second, MEC challenges the jury verdict on fraudulent inducement, claiming that Bonfiglioli’s
reliance on the SRA’s choice of law provision was not reasonable and that the district court
abused its discretion in its evidentiary rulings and jury instructions. Third, MEC contends that
the $280,000 punitive damages award is unconstitutional. We affirm the district court’s ruling
on each claim.
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I. Choice of Law
We review the district court’s choice of law analysis de novo. Newberry v. Silverman,
789 F.3d 636, 643 (6th Cir. 2015). This case arises under diversity jurisdiction, so we apply the
choice of law rules of the forum state: here, Kentucky. See Uhl v. Komatsu Forklift Co., 512
F.3d 294, 302 (6th Cir. 2008); see also Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). In
other words, we apply Kentucky choice of law rules to determine whether Kentucky or
Minnesota substantive law governs this dispute. See Uhl, 512 F.3d at 302. The MTSRA applies
only if Kentucky choice of law rules instruct that it does. See Klaxon Co. v. Stentor Elec. Mfg.
Co., 313 U.S. 487, 496 (1941).
A. Kentucky Choice of Law Rules
It is well established that Kentucky uses § 188 of the Second Restatement of Conflicts to
analyze choice of law questions arising from contract disputes. Saleba v. Schrand, 300 S.W.3d
177, 181 (Ky. 2009). Section 188 instructs that the law of the state with the “most significant
relationship to the transaction and the parties” governs. Id.; Restatement (Second) of Conflict of
Laws § 188(1) (Am. L. Inst. 1971) [hereinafter Restatement of Conflicts]. It provides many
factors to determine which state has the most significant relationship, which we analyze in detail
shortly. We further note that Kentucky choice of law rules have “an extremely strong and highly
unusual preference” for applying Kentucky law to contract disputes “even in situations where
most states would decline to apply their own laws.” Osborn v. Griffin, 865 F.3d 417, 443 (6th
Cir. 2017). For example, Kentucky courts have applied Kentucky law even when the parties
agreed in their contract for another state’s law to apply. Breeding v. Mass. Indem. & Life Ins.
Co., 633 S.W.2d 717, 719–20 (Ky. 1982); Schnuerle v. Insight Commc’ns Co., L.P., 376 S.W.3d
561, 566–67 (Ky. 2012). Although MEC points out that we have previously described
Kentucky’s choice of law rules as “egocentric” and “provincial,” Wallace Hardware Co. v.
Abrams, 223 F.3d 382, 391 (6th Cir. 2000) (citation omitted), as the law of the forum state we
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are bound to apply Kentucky choice of law rules notwithstanding their preference for Kentucky
law.1
Before applying the § 188 framework to the choice of law dispute here, we pause to
consider MEC’s two objections to deploying that framework. We consider each in turn, but
neither persuades.
First, MEC argues that the MTSRA’s anti-waiver provision preempts standard Kentucky
choice of law rules such that we should apply the MTSRA without even performing a choice of
law analysis. But MEC’s argument contravenes basic choice of law principles. Every conflicts
of law analysis necessarily entails multiple states that have an interest in applying their own law.
See Peter Hay et al., Conflict of Laws, 144 § 3.2 (5th ed. 2010). Thus, a key aim of choice of
law doctrine is to provide a predictable, reasoned, and mutually beneficial way to resolve
conflicts between different states’ interests. See Restatement of Conflicts § 188 cmt. b; id. § 6
cmt. d. Yet MEC’s suggestion that anti-waiver provisions have automatic preemption power
would allow states to simply declare that their interests always win out over other states’
interests. That could lead to an anti-waiver arms race that would trample interstate comity and
the aims of measured choice of law doctrine. For instance, Minnesota has already enacted anti-
waiver provisions in legislation governing other types of contracts. Minn. Stat. Ann. § 80C.21
(franchise agreements); id. § 80F.18 (agreements marketing motor vehicle fuel); id. § 325E.064
(farm equipment dealership agreements); id. § 325E.0683 (heavy equipment dealership
agreements). Minnesota cannot announce that its law in all these areas always governs
multistate agreements and abrogate a standard choice of law analysis, under which we apply the
choice of law rules of the forum state. Allowing Minnesota to do so would undermine the aims
of choice of law doctrine. See Restatement of Conflicts § 188 cmt. b; id. § 6 cmt. d.
What these fundamental principles indicate, our precedent confirms. Consider Tele-Save
Merchandising Co. v. Consumers Distributing Co., where we addressed the conflict between the
parties’ agreement, under which New Jersey law would govern their contract disputes, and an
1
Kentucky’s choice of law rules are, of course, subject to constitutional limits, see Allstate Ins. Co. v.
Hague, 449 U.S. 302, 308 (1981), but those limits are not at issue in this case.
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Ohio statute that contained an anti-waiver provision akin to the MTSRA’s. 814 F.2d 1120,
1122–23 (6th Cir. 1987) (quoting Ohio Rev. Code § 1334.15 (1979)). Notwithstanding the anti-
waiver provision, Tele-Save deployed a standard Ohio choice of law analysis before concluding
that the New Jersey selection clause governed. Id. at 1122–24. Under Tele-Save’s approach, the
MTSRA’s anti-waiver provision does not automatically win out here. See id.; see also Volvo
Constr. Equip. N. Am., Inc. v. CLM Equip. Co., 386 F.3d 581, 607–08 (4th Cir. 2004); Takeya
USA Corp. v. PowerPlay Mktg. Grp., LLC, No. 21-cv-835, 2022 WL 17357781, at *6–8 (C.D.
Cal. Sep. 1, 2022). Therefore, rather than preempting Kentucky’s choice of law analysis, the
MTSRA’s anti-waiver provision has only as much weight as § 188 gives it.
As its second objection to applying § 188 here, MEC contends that we should instead
look to § 187 of the Restatement of Conflicts. Section 187 concerns contracts with explicit
choice of law provisions and puts a thumb on the scale in favor of the contractual choice of law.
In relevant part, it instructs that the parties’ choice of Kentucky law controls unless all of the
following requirements are met: (1) Kentucky law “would be contrary to” Minnesota’s
“fundamental policy”; (2) Minnesota “has a materially greater interest” in the dispute than
Kentucky; and (3) Minnesota has the most significant relationship to the dispute under § 188.
Restatement of Conflicts § 187(2)(b); see also Wise v. Zwicker & Assocs., P.C., 780 F.3d 710,
715–16 (6th Cir. 2015). Given that § 187 typically applies when the parties include a choice of
law provision in their contract, we understand MEC’s suggestion that it should apply here. We
need not spend much time considering MEC’s argument, however, because it runs headlong into
our precedent holding that Kentucky courts use only § 188 in a choice of law analysis, not § 187.
Osborn, 865 F.3d at 444. And, even if precedent did not bar MEC’s argument, we ultimately
conclude below that Kentucky has the “most significant relationship” to the dispute under § 188.
So MEC would fail the third requirement of the § 187 test even if that section applied.
Accordingly, we find MEC’s objections to a § 188 analysis unpersuasive.
B. Most Significant Relationship
Turning to the § 188 analysis, the central question we must answer is which state has the
“most significant relationship” to “the transaction and the parties.” Restatement of Conflicts
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§ 188(1). For this inquiry, the Restatement provides myriad factors for us to weigh. Section 188
directs us to consider the “place[] of negotiating and contracting; the place of performance; the
location of the contract’s subject matter; and the domicile, residence, place of incorporation and
place of business of the parties.” State Farm Mut. Auto. Ins. Co. v. Hodgkiss-Warrick, 413
S.W.3d 875, 878–79 (Ky. 2013) (citing Restatement of Conflicts § 188(2)). Then, § 188 also
incorporates § 6, which further instructs us to consider: “(a) the needs of the interstate . . .
system[], (b) the relevant policies of the forum, (c) the relevant policies of other interested states
and the relative interests of those states in the determination of the particular issue, (d) the
protection of justified expectations, (e) the basic policies underlying the particular field of law,
(f) certainty, predictability, and uniformity of result, and (g) ease in the determination and
application of the law to be applied.” Restatement of Conflicts § 6(2).
Kentucky courts do not appear to distinguish between the factors enumerated in § 188
and § 6 when performing a “most significant relationship” analysis. See, e.g., Grange Prop. &
Cas. Co. v. Tenn. Farmers Mut. Ins. Co., 445 S.W.3d 51, 55 (Ky. Ct. App. 2014). As such, we
analyze the factors in § 188 and § 6 together. We first examine several key factors that counsel
applying Kentucky law. We then turn to the factors that MEC relies on, and determine that they
do not outweigh the factors favoring Kentucky law. Finally, we discuss the remaining factors,
which carry little weight on these facts. We ultimately conclude that Kentucky has the most
significant relationship to this dispute.
Factors Favoring Kentucky. First, the subject matter of the contract is coordinating sales
of Bonfiglioli’s products. See Restatement of Conflicts § 188(2)(d). Given that the products
were produced in Kentucky and shipped from Kentucky, every sale was governed by Kentucky
law, and every commission to MEC was paid from Kentucky, this factor favors Kentucky. MEC
rejoins that the focus of the subject-matter inquiry is MEC’s sales coordination, not Bonfiglioli’s
products. Framed that way, MEC suggests, the SRA’s subject matter favors applying Minnesota
law. However, the record evidence shows that MEC’s sales coordination was diffuse and not
only centered in Minnesota. The vast majority of the sales that MEC arranged were in
Wisconsin and Illinois, while less than 16% were in Minnesota. Half of MEC’s work
coordinating sales took place on the road throughout its territory. The remaining work was split
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between MEC’s Minnesota office and remote workers located in Wisconsin. Therefore, even
focusing on the subject matter of the SRA as MEC’s sales coordination, MEC’s activity was so
diffuse as to not provide a strong justification to apply Minnesota law, and is outweighed by the
fact that each and every sale had a connection to Kentucky.
Next, applying Kentucky law would promote the justified expectation of the parties. See
Restatement of Conflicts § 6(2)(d). The parties negotiated the SRA and Bonfiglioli testified that
it would not have signed the SRA without the choice of law provision, showing that the choice of
law provision was an important piece of the contract. Voiding the choice of law provision and
applying Minnesota law would thus give MEC “more than it bargained for.” Banek Inc. v.
Yogurt Ventures U.S.A., Inc., 6 F.3d 357, 362 n.2 (6th Cir. 1993). It was reasonable for
Bonfiglioli to expect that Kentucky law would apply, since MEC never shared its belief that the
MTSRA would supersede the choice of law provision. So even though the choice of law
provision is not an automatic trump card under § 188, it weighs in favor of applying Kentucky
law.
Applying Kentucky law also promotes the “needs of the interstate . . . system,”
“certainty, predictability, and uniformity,” and “ease in the determination” of “the law to be
applied.” Restatement of Conflicts § 6(2)(a), (f), (g). Here, because the SRA covers many
states, honoring the parties’ choice of law provision facilitates interstate commerce, minimizes
potential for unexpected liability, and provides a straightforward way to resolve the choice of
law issue.
MEC’s Cited Factors. Attempting to rebut the above factors, MEC focuses on the
“relevant policies” and “interests” of the involved states. See id. § 6(2)(b)–(c). It champions the
MTSRA’s anti-waiver provision as evidence of Minnesota’s strong policy interest in protecting
sales representatives. Kentucky also has a policy interest in this dispute, however, so
Minnesota’s interest does not necessarily carry the day. Indeed, Kentucky courts have
repeatedly expressed the importance of freedom of contract and the ability to rely on contractual
negotiations. See, e.g., Zeitz v. Foley, 264 S.W.2d 267, 268 (Ky. 1954); United Servs. Auto.
Ass’n v. ADT Sec. Servs., Inc., 241 S.W.3d 335, 342 (Ky. Ct. App. 2006). MEC counters that
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statutory pronouncements of state interest outweigh those from common law. But even if that is
true as a general matter, “not every statutory provision constitutes a [state’s] fundamental
policy,” Volvo Constr., 386 F.3d at 607, and Minnesota has enacted multiple analogous anti-
waiver provisions, see Minn. Stat. Ann. § 80C.21; id. § 80F.18; id. § 325E.064; id. § 325E.0683.
So the MTSRA’s anti-waiver provision does not appear to be a “limited and targeted departure
from [Minnesota’s] normal policies,” which undercuts MEC’s argument that Minnesota’s
interest greatly outweighs Kentucky’s. Lakeside Surfaces, Inc. v. Cambria Co., 16 F.4th 209,
220 (6th Cir. 2021).
MEC further emphasizes that Minnesota must be able to enforce the MTSRA’s anti-
waiver provision in order to protect the economic interests of workers within its borders. While
that argument may be more salient in other cases, it is less so on these facts, where MEC’s
performance was spread between several states. In short, absent a compelling reason to consider
the MTSRA’s policy interest stronger than Kentucky’s, the states’ policy interests largely break
even. See Stone Surgical, LLC v. Stryker Corp., 858 F.3d 383, 391 (6th Cir. 2017). Even
assuming the MTSRA’s anti-waiver provision weighs somewhat in favor of applying Minnesota
law, it does not overcome the factors favoring Kentucky.
MEC next argues that the place of performance favors applying Minnesota law. See
Restatement of Conflicts § 188(2)(c). But when a contract hires a sales representative to cover a
multistate area, the place of performance generally carries little weight in a § 188 analysis. See
id. § 196 cmt. a; see also Monsanto Co. v. Manning, 841 F.2d 1126, at *3 (6th Cir. 1988) (table).
Moreover, that MEC’s performance took place across several states undermines its argument that
the place of performance requires us to apply Minnesota law.
Remaining Factors. The remaining factors do not favor either party. The record
evidence does not establish that either Kentucky or Minnesota “served as the primary forum for
negotiating and entering into the SRA.” D. Ct. Op. on MSJ, R. 68, PageID 1214; see
Restatement of Conflicts § 188(2)(a)–(b). And the residence of the parties is a wash, as
Bonfiglioli’s principal place of business is Kentucky while MEC is headquartered in Minnesota.
See Restatement of Conflicts § 188(2)(e).
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Overall, considering the factors in § 188 and § 6, we conclude that Kentucky has the most
significant relationship to this dispute. The MTSRA’s anti-waiver provision cannot overcome
the bulk of the § 188 and § 6 factors favoring Kentucky.
Other cases performing § 188 analyses bolster this conclusion. For example, Johnson v.
Ventra Group, Inc. concerned an Ontario corporation’s sales representative contract with a
Michigan-based sales representative. 191 F.3d 732, 736–38 (6th Cir. 1999). Even though all the
sales were coordinated outside of Ontario, we concluded that Ontario had the most significant
relationship to the dispute, in part because the parties had a justified expectation that Ontario law
would apply based on a choice of law provision in their contract. Id. at 736, 741–42. District
courts in our circuit have reached similar determinations. See, e.g., Q Holding Co. v. Repco,
Inc., No. 17-cv-445, 2017 WL 2787576, at *3–4 (N.D. Ohio June 28, 2017); Wallace Sales &
Consulting, LLC v. Tuopu N. Am., Ltd., No. 15-cv-10748, 2016 WL 1436585, at *5–6 (E.D.
Mich. Apr. 12, 2016). Although MEC cites District of Minnesota cases that applied the MTSRA
to interstate disputes, those cases either did not perform a choice of law analysis, e.g., Apex Tech.
Sales, Inc. v. Leviton Mfg., Inc., No. 17-cv-2019, 2017 WL 2731312, at *4 (D. Minn. June 26,
2017), or performed a Minnesota choice of law analysis, e.g., Hedding v. Pneu Fast Co., No. 18-
cv-1233, 2019 WL 79006, at *3–4 (D. Minn. Jan. 2, 2019), which does not govern here.
In sum, we conclude that Kentucky law governs this dispute, the MTSRA is inapplicable,
and thus Bonfiglioli legally terminated the SRA.
II. Fraudulent Inducement Liability
We now examine MEC’s objections to its liability for fraudulent inducement. MEC
raises two arguments. First, MEC contends it was entitled to judgment as a matter of law
because Bonfiglioli should have discovered the MTSRA on its own and, therefore, it was
unreasonable for Bonfiglioli to rely on MEC’s representation that it would be bound by
Kentucky law. Second, MEC says the district court abused its discretion by preventing it from
presenting evidence and instructing the jury that it had no duty to share its belief that the
MTSRA applied. We find neither argument convincing.
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A. Reasonable Reliance
To prevail on the fraudulent inducement claim, Bonfiglioli needed to prove it “reasonably
relied” on MEC’s misrepresentation that MEC intended to be bound by the SRA’s choice of law
provision. Yung v. Grant Thornton, LLP, 563 S.W.3d 22, 45–46 (Ky. 2018). Under Kentucky
law, Bonfiglioli’s reliance was reasonable if (1) Bonfiglioli had “reason to believe” MEC’s
misrepresentation; and (2) MEC’s misrepresentation was “material,” i.e., important to
Bonfiglioli’s decision to sign the SRA. Restatement (Second) of Torts §§ 538, 544 (Am. L. Inst.
1976) [hereinafter Restatement of Torts]; see also PCR Contractors, Inc. v. Danial, 354 S.W.3d
610, 613–15 (Ky. Ct. App. 2011) (citing the Restatement as governing law on fraudulent
inducement); Yung, 563 S.W.3d at 45–46 (same). Whether Bonfiglioli’s reliance was reasonable
is a “question of fact” that was presumptively reserved for the jury. Yung, 563 S.W.3d at 47; see
also PCR Contractors, 354 S.W.3d at 616. We will not reverse the jury’s finding unless we
conclude there was “no room for a reasonable difference of opinion.” Yung, 563 S.W.3d at 47
(quoting McColgan v. Mut. of Omaha Ins. Co., 4 F. Supp. 3d 1228, 1233 (E.D. Cal. 2014)).
MEC was not entitled to judgment as a matter of law on the reasonable reliance issue. As
to the first element, MEC admitted at trial that “by signing [the SRA],” it “represented to
Bonfiglioli it intended to comply with [the SRA’s] terms.” Trial Tr. I, R. 107, PageID 1757.
Kentucky law considers the fact that MEC signed the SRA sufficient reason to believe that MEC
would carry out its promise. See PCR Contractors, 354 S.W.3d at 613–15; see also Major v.
Christian Cnty. Livestock Mkt., Inc., 300 S.W.2d 246, 249 (Ky. 1957). Indeed, MEC’s signing
the contract was an “assertion of an intention to perform it.” Restatement of Torts § 530 cmt. c.
And as to the second element, Bonfiglioli’s CEO testified that he would not have signed the SRA
but for MEC’s misrepresentation of its intent to be bound by Kentucky law. That fact shows
MEC’s misrepresentation was material. See id. § 538. Thus, the jury was not foreclosed from
finding reasonable reliance. See Yung, 563 S.W.3d at 47.
MEC objects to that conclusion. It argues that because Bonfiglioli did not investigate
Minnesota’s regulatory scheme and independently discover the existence of the MTSRA, no
reasonable jury could find that its reliance was reasonable. But, as explained, a reasonable jury
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could find that Bonfiglioli did not need to take further action beyond securing its rights under a
contract because signing a contract is an objective manifestation of intent to abide by its terms.
See Restatement of Torts § 530 cmt. c; Furtula v. Univ. of Ky., 438 S.W.3d 303, 308–09 (Ky.
2014); cf. Burke v. Burke, No. 2021-CA-0073, 2021 WL 5141760, at *2 (Ky. Ct. App. Nov. 5,
2021) (signing a contract “evinc[es] [one’s] intent to be bound by the instrument”). Nor could
Bonfiglioli have discovered that MEC did not intend to abide by the SRA through “ordinary
vigilance.” Yung, 563 S.W.3d at 46. Even if Bonfiglioli had discovered the MTSRA, it would
not have necessarily known that MEC would sign the SRA without intending to follow the
SRA’s choice of Kentucky law.
The cases MEC relies on did not preclude the jury from finding reasonable reliance.
MEC cites Flegles, Inc. v. TruServ Corp. for the proposition that “recipients of business
representations” have “a duty to exercise common sense.” 289 S.W.3d 544, 549 (Ky. 2009).
But Flegles invoked the idea of common sense to explain why “forward-looking opinions about
investment prospects or future sales performance” are generally not actionable in a fraudulent
inducement claim. Id. That principle does not apply to this case, as MEC did not misrepresent
its “projections about future events,” id. at 550, but rather its then-present intent to be bound by
the SRA, see Christian Cnty. Livestock Mkt., 300 S.W.2d at 249; Restatement of Torts § 530
cmt. c. Similarly unavailing is Stansbury v. Hopkins Hardwoods, Inc., where the plaintiff
declined to take any steps to investigate the defendant’s appraisal even though the appraisal’s
accuracy was suspicious on its face and conflicted with a prior appraisal. 769 F. App’x 202,
205–06 (6th Cir. 2019). Here, MEC points to no record evidence showing that its representation
that it intended to abide by the SRA it negotiated and signed was suspicious on its face.
Overall, the district court properly concluded that MEC was not entitled to judgment as a
matter of law on Bonfiglioli’s fraudulent inducement claim.
B. Lack of a Duty to Disclose
MEC’s second challenge to its fraudulent inducement liability contends that the district
court erred by limiting MEC’s presentation of testimony and by refusing to give MEC’s
requested jury instruction regarding its lack of a duty to inform Bonfiglioli about the MTSRA.
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We begin our discussion of these issues with some background. Recall that Bonfiglioli
initially brought a fraud by omission claim in addition to the fraudulent inducement claim.
While they have some similarities, the two claims are distinct. As discussed above, a fraudulent
inducement claim turns on a misrepresentation of present intent. See Yung, 563 S.W.3d at 46.
By contrast, the fraud by omission claim centers around a failure to disclose a material fact. See
id. at 45 n.27. A required element of the omission claim was that MEC “had a duty to disclose”
its belief that the MTSRA applied. Id. (quoting Giddings & Lewis, Inc. v. Indus. Risk Insurers,
348 S.W.3d 729, 747 (Ky. 2011)). However, the district court concluded as a matter of law that
MEC had no such legal duty and thus granted MEC summary judgment on the omission claim.
At trial on the fraudulent inducement claim, MEC emphasized its lack of a legal duty to
disclose. The district court permitted MEC to argue this point in its opening and closing
statements, but prevented MEC from adducing testimony on the topic. And the district court
declined to instruct the jury that MEC had no duty to disclose its belief that the MTSRA applied.
MEC maintains the district court erred by barring testimony on its lack of a duty to disclose, as
well as by refusing to give its requested jury instruction. Reviewing the district court’s rulings
on both issues for an abuse of discretion, United States v. Cox, 871 F.3d 479, 486 (6th Cir. 2017)
(evidentiary rulings); Cole v. City of Memphis, 839 F.3d 530, 538 (6th Cir. 2016) (jury
instructions), we reject MEC’s arguments.
Start with t