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Dakota Gasification Company v. Don Didion

July 15, 2011

DAKOTA GASIFICATION COMPANY, PLAINTIFF,
v.
DON DIDION, II, D/B/A DIDION'S MECHANICAL, DEFENDANT.



The opinion of the court was delivered by: Daniel L. Hovland, District Judge United States District Court

ORDER GRANTING THE PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

Before the Court is the Plaintiff's motion for summary judgment filed on May 2, 2011. See Docket No. 31. The Defendant filed a response in opposition to the motion on June 17, 2011. See Docket No. 37. The Plaintiff filed a reply brief on June 29, 2011. See Docket No. 38. For the reasons set forth below, the Plaintiff's motion is granted.

I. BACKGROUND

The plaintiff, Dakota Gasification Company ("DGC"), is a wholly-owned subsidiary of Basin Electric Power Cooperative and owns and operates the Great Plains Synfuels Plant located near Beulah, North Dakota. On August 27, 2008, DGC entered into a contract with Didion's Mechanical, a sole proprietorship located in Bellevue, Ohio and owned by the defendant, Don Didion, II, for the construction of three phenosolvan vessels. See Docket No. 33-1. The contract states that the "[v]essels shall be ready for delivery No Later than May 1, 2009." See Docket No. 33-1, p. 4. Paragraph 8 of the contract provides, "Time of delivery is of the essence of this Agreement." See Docket No. 33-1, p. 9.

On November 21, 2008, the parties agreed to Change Order No. 01, which required Didion to construct three additional vessels. See Docket No. 33-2, p. 1. The date by which the vessels were to be ready for delivery remained May 1, 2009. On December 22, 2008, the parties entered into Change Order No. 02, which provides:

* Company agrees to have Units "Ready to Ship" no later than

* June 1, 2009 for Unit 1631

* June 8, 2009 for Unit 1633

* June 15, 2009 for Units 1635, 1617, 1647, and 1649. Owner will accept early delivery of all units if possible.

See Docket No. 33-3.

On May 6, 2009, Jon Klein, Contract Administrator for Basin Electric Power Cooperative, indicated in an e-mail that he had communicated with Don Didion and was informed that Didion's Mechanical was "a few days behind at this point, but have been working two 10 hour shifts to maintain the original schedule." See Docket No. 33-5. During the week of May 11, 2009, Klein and Ron Webb of DGC visited Didion's job site in Ohio and it was clear the company was far behind schedule. Didion informed Klein during this visit that he would not be able to meet the contract deadlines and it would be around October 2009 before the fabrication process would be complete. On May 14, 2009, Didion outlined new proposed completion dates and a request for additional money to complete the fabrication:

HERE IS THE REVISED REQUESTED SCHEDULE DURING YOUR & RON'S VISIT.

VESSEL #: SHIP DATE: FA-1631 07-03-2009 FA-1633 07-31-2009 FA-1635 08-23-2009 TO ACHIEVE THESE DATES WE WILL BE WORKING 7 DAYS A WEEK AROUND THE CLOCK EXTRA COST ABOVE CONTRACT:

$332,480.00 . . . .

KEEP ON CURRENT WORK SCHEDULE:

SCHEDULE WE GAVE YOU DURING MEETING COULD BE IMPROVED BY 12 DAYS PER RON'S DISCUSSION ON P.W.H.T. THAT WOULD PUT THE LAST VESSEL FA-1635 OUT THE DOOR ON OCTOBER 05, 2009.

See Docket No. 33-9 (capitals in original).

Shortly thereafter, DGC entered into a contract with Arrow Tank & Engineering Company in Cambridge, Minnesota to build the phenosolvan vessels that were orginally intended to be constructed by Didion's Mechanical. See Docket No. 33-10. This contract went into effect on June 3, 2009. The vessels were to be delivered by Arrow ...


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