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E W Wylie Corporation, A North Dakota Corporation v. Hard Rock Specialized LLC

April 30, 2013

E W WYLIE CORPORATION, A NORTH DAKOTA CORPORATION,
PLAINTIFF,
v.
HARD ROCK SPECIALIZED LLC, A MISSISSIPPI LIMITED LIABILITY COMPANY; HARD ROCK HEAVY HAUL LLC, A MISSISSIPPI LIMITED LIABILITY COMPANY, DEFENDANTS.



The opinion of the court was delivered by: Ralph R. Erickson, Chief Judge United States District Court

MEMORANDUM OPINION & ORDER ON MOTIONS FOR PARTIAL SUMMARY JUDGMENT

I.INTRODUCTION AND BACKGROUND

Before the Court are Plaintiff E W Wylie Corporation's (hereafter "Wylie") motion for partial summary judgment (Doc. #78) and Defendants Hard Rock Specialized LLC (hereafter "Specialized") and Hard Rock Heavy Haul LLC's (hereafter "Heavy Haul") motion for partial summary judgment (Doc. #85). The matter came regularly on for a hearing on March 13, 2013. A bench trial is set for May 28, 2013. The Court, having carefully considered the evidence and the arguments of the parties, now issues this memorandum opinion and order.

II.SUMMARY OF DECISION

This dispute arises out of a contractual relationship pertaining to the transport of windmill parts from the east coast to Utah. Wylie submitted a proposal to Specialized, which was rejected by Specialized. Specialized submitted a counterproposal that was rejected by Wylie. After negotiating for several more weeks, the parties reached an agreement on pricing. A new contract was sent to Specialized by Wylie. Specialized made some changes to the contract that Wylie drafted. Wylie agreed to the changes. One of those changes reincorporated into the contract the assumptions and clarifications initially proposed by Specialized. The plain language of the contract is clear: the parties agreed that the document entitled "Hard Rock Specialized's Assumptions and Clarifications" controls the payment obligations that are in dispute. Wylie's motion for partial summary judgment to limit the damages to the outstanding line haul invoices is DENIED.

Specialized's motion for partial summary judgment is GRANTED, IN PART and DENIED, IN PART. Specialized may present evidence of its damages for nonpayment of detention and standby costs, police escort fees, crane costs, bucket truck expenses, and flat bed expenses at trial. While there appears to be only a remote likelihood of success, Specialized may also present evidence of its alleged special damages for the loss of two trailers and the loss of a down payment on two trailers. Likewise, Wylie may present evidence of alleged damages relating to damaged components and payments made to third parties.

Specialized also seeks dismissal of Wylie's claim for attorney fees. Because the claim for attorney fees arises from a contractual obligation that Wylie incurred as a result of Specialized's breach of the contract, the attorney fees may be recoverable as an element of damages. See Barsness v. Gen. Diesel & Equip. Co., Inc., 422 N.W.2d 819, 827 (N.D. 1988).

III.RELEVANT FACTS

First Wind Energy, LLC (hereafter "First Wind") was developing a wind generating project in Milford, Utah ("the Milford Project"). On September 15, 2010, Wylie entered into a Transportation Facilitation Agreement with First Wind. Wylie agreed to move wind tower components from New York and Maine to Milford, Utah (Doc. #47-1, p. 15 of 71). The deliveries were to occur between November 1, 2010, and January 21, 2011. Id. at p. 25. The contract set a fixed price per delivered component with limited and defined extra costs to be paid by First Wind. Id. at p. 27. After change orders, First Wind paid Wylie $15,477,812 for transportation services in moving the components (Doc. #80, Aff. Gast ¶5).*fn1

Wylie subcontracted a portion of the Milford Project, $2,290,876, to Specialized (Doc. #1-1).*fn2 The parties began negotiating the terms of a transportation contract in April 2010 (Doc. #80, Aff. Gast ¶ 2). The undisputed details surrounding the formation of the contract are set forth as follows. On April 9, 2010, Wylie sent Specialized its pricing for transporting base sections and mid tower sections out of New York and Maine (Doc. #80-6, p. 25). Specialized rejected the proposal on April 12, 2010, reasoning that after determining its cost per load, including permit fees, escorts, state escorts, and fuel expenses, it could not "make the mid tower sections line haul rate work out." (Doc. #80-6, pp. 20-21). Wylie then requested Specialized's rate for transporting the mid tower sections "as far as" Manly, Iowa. Id. at 19. Specialized provided its rate, and Wylie responded: "That is getting closer. . ." Id. at 17.

Wylie also inquired about Specialized's rates for transporting the bases. Specialized informed Wylie: "We did run the numbers on the base[s] and sharpened our pencils but we could not find a way for it to pencil out. Please do keep us in mind on future work as we would like to work with you." Id. at 12. On April 26, 2010, Wylie notified Specialized that the project had been delayed and the shipping destination changed. Id. at 11. It inquired whether Specialized was interested in requoting. Id. On April 27, 2010, Specialized sent a proposal, indicating "This is the best I can do on bases." Id. at 8. Wylie wondered whether the pricing was "all inclusive". Id. at 7. Specialized's responded: "I am thinking yes but have a few questions before I answer." Id. at 6.

On April 29, 2010, Wylie sent its carrier agreement to Specialized. Id. at 4. Specialized told Wylie to "see attached for comments and questions?" Among other questions, attached was a revised contract with a change made to Paragraph 15 that was highlighted in red. (Doc. #87, Aff. Roberts ¶ 15; Doc. #81-1, Dep. Roberts pp. 20-21 of 54). The paragraph drafted by Wylie read:

15. Taxes and Assessments & Other Fees. Carrier [Specialized] shall pay all taxes and assessments arising out of the transportation of Goods by Carrier [Specialized], including all required permits, escorts [sic] cars, police escorts, bridge monitors, electrical contractors, and any other costs of transporting the Goods. The paragraph revised by Specialized read:

15. Taxes and Assessments & Other Fees. Carrier [Specialized] shall pay all taxes and assessments arising out of the transportation of Goods by Carrier [Specialized], including all required permits, escorts [sic] cars, police escorts, bridge monitors, electrical contractors, and any other costs of transporting the Goods, that was included in carriers assumptions and clarifications at the time of bid.

On May 3, 2010, Wylie informed Specialized that "We are fine with your requested changes." (Doc. #80-6, p. 2). Scott Hoppe ultimately signed the contract on behalf of Wylie (Doc. #88-2, Dep. Hoppe p. 21). Hoppe believes the change to Paragraph 15 was "approved through the legal process with our attorney." Id.

On May 3, 2010, Wylie also asked Specialized to "confirm that you can still support and we will update the contract language and send out rate addendums for your review." Id. On September 15, 2010, Specialized inquired whether the parties had a contract. Id. at 1. Wylie said, "Yes, we will get the exhibits together and send over for your signature." Id. Wylie and Specialized entered into a contract for the transportation of both mid tower and base sections on or about September 25, 2010 (Doc. #80-3, Transportation Brokerage Agreement; Doc.# 80, Aff. Gast ¶ 13). Both sides agree that this is the contract governing the parties's dispute in this action.

Specialized began shipping components in October 2010. The 2010-2011 winter in the Northeast was cold and snowy, causing difficulties, delays, and extra costs for transportation carriers. Specialized notified Wylie by email of the additional costs it was incurring on the Milford Project (Doc. #80-20; 80-21; 80-22). Because of the higher-than-expected costs, Specialized advised Wylie that it could not "afford any more hits." (Doc. #80-20). Wylie agreed to modify the contract to address some of Specialized concerns. Wylie agreed to increase component rates to Mattawamkeag, Maine and also Buffalo, New York (Doc. #80, Aff. Gast ¶ 24; Doc. #80-11; Doc. #80-12; Doc. #80-13). Wylie also agreed to pay for police escorts through Vermont after November 19, 2010. Id. At times, Wylie also agreed to pay limited additional costs (Doc. #80, Aff. Gast ¶ 30).

By late February/early March 2011, Specialized had completed all of the loads it was to haul. By this time, Heavy Haul had completed most, but not all, of the loads it had arranged through second-tier subcontractors. On March 7, 2011, Heavy Haul submitted a "stop work notice" to Wylie (Doc. #80-14). This notice advised Wylie that all third-party subcontractors retained by Heavy Haul would stop shipping until the payment issues were resolved. Id.

On March 11, 2011, Wylie and Heavy Haul executed a settlement agreement, addressing the loads Heavy Haul handled (Doc. #26-12). The settlement pertained to "all remaining carrier pay and ancillary charges for transportation loads subcontracted to Hard Rock in regards to the First Wind Milford II project." Id. Hard Rock agreed to complete the "in progress" loads to the job site, and Wylie agreed to pay the "in progress" loads upon delivery and the remaining "open" balances immediately. Id. A scheduled of payments was included in the settlement agreement. The parties disagree about whether the settlement agreement also encompasses the loads handled by Specialized; however, this factual dispute is not before the Court in these pending motions.

Under the terms of the settlement agreement, Wylie concedes it owes $510,300.00 to Heavy Haul for the in-progress loads. According to Wylie, it has paid $390,500.00, leaving a balance of $119,800.00. Wylie also contends it is entitled to deductions for alleged damaged components, alleged payments made directly to third parties, and for alleged expenses incurred in resolving claims against First Wind. (Doc. #80, Gast Aff. ¶ 44). Heavy Haul, however, contends that Wylie owes it $131,800.00 on the outstanding line haul invoices, plus interest for the loads that were in progress.*fn3 The exact amount of the damages for the outstanding line haul invoices, if any, is a factual dispute the parties agree must be resolved at trial.

Specialized initially claimed that Wylie owed $75,300.00 for outstanding line haul invoices.

Wylie believes the amount is $67,300.00, less certain deductions for alleged payments to third parties, alleged damaged components, and alleged expenses incurred in claims made against First Wind. Following summary judgment briefing, Specialized concedes that, at most, it is owed $67,300.00, plus interest for the outstanding line haul invoices. ...


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