Andersons, Inc. v. Consol, Inc.

• Citation: 348 F.3d 496
• Decision Date: 31 October 2003
• Docket Number: No. 02-3417.,02-3417.
• Parties: The ANDERSONS, INC., Plaintiff-Appellant, v. CONSOL, INC., Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

348 F.3d 496

The ANDERSONS, INC., Plaintiff-Appellant, v. CONSOL, INC., Defendant-Appellee.

No. 02-3417.

United States Court of Appeals, Sixth Circuit.

Argued: July 31, 2003.

Decided and Filed: October 31, 2003. Pursuant to Sixth Circuit Rule 206

COPYRIGHT MATERIAL OMITTED

ARGUED: James R. Jeffery, SPENGLER NATHANSON, Toledo, Ohio, for Appellant.

Rodger L. Puz, DCIKIE, McCAMEY & CHILCOTE, Pittsburgh, Pennsylvania, for Appellee.

ON BRIEF: James R. Jeffery, SPENGLER NATHANSON, Toledo, Ohio, for Appellant.

Rodger L. Puz, James R. Miller, DICKIE, McCAMEY & CHILCOTE, Pittsburgh, Pennsylvania, for Appellee.

Before: KENNEDY, GILMAN, and GIBBONS, Circuit Judges.

OPINION

KENNEDY, Circuit Judge.

Plaintiff The Andersons, Inc. (plaintiff) appeals the district court's award of summary judgment for defendant Consol, Inc. (defendant) on plaintiff's claims of unjust enrichment, promissory estoppel, and intentional and/or negligent misrepresentation on the ground that genuine issues of material fact exist to support such claims. Because we find that, taking plaintiff's factual allegations as true, no genuine issues of material fact exist to support any of those claims, we affirm the district court's award of summary judgment to defendant.

I. Jurisdiction and Procedural History

Plaintiff filed this action against defendant in the Lucas County Court of Common Pleas. Defendant removed the case to the United States District Court for the Northern District of Ohio based on diversity jurisdiction. Plaintiff's complaint alleged claims of breach of commitments and understandings, unconscionable conduct, unjust enrichment, reasonable reliance/promissory estoppel, and intentional and/or negligent misrepresentation arising out of the parties' negotiations for defendant's lease of rail cars from plaintiff. On January 25, 2001, the district court granted defendant's renewed motion for summary judgment on all of plaintiff's claims. Plaintiff appeals the grant of summary judgment only with respect to its claims of unjust enrichment, promissory estoppel, and intentional and/or negligent misrepresentation.

II. Facts

The following is plaintiff's version of the facts in support of its claims. Defendant is currently a publicly-held corporation that mines, processes, and markets coal from various locations throughout the United States. During the relevant period for purposes of this litigation, defendant was a privately-held corporation. Plaintiff is a publicly-held corporation that, among other business activities, sells, leases, and repairs railroad cars.

NationsBank, a lender of plaintiff, notified plaintiff of defendant's need to lease rail cars. On July 21, 1998, plaintiff's representatives met with James Dillon, defendant's employee, to discuss defendant's possible lease of plaintiff's rail cars. Dillon informed plaintiff's representatives that defendant was interested in lease pricing for up to 240 rail cars because defendant wished to bid on a coal requirements contract with Potomac Electric Power Company (PEPCO), which would require defendant to furnish the rail cars necessary for coal transportation. On August 13, 1998, plaintiff sent defendant a lease proposal for 240 rail cars at a rental rate of $395 per rail car per month. On September 2, 1998, per Dillon's request, Thomas Connolly, plaintiff's employee, sent Dillon a copy of plaintiff's standard, full-service lease agreement and rider. In reviewing the lease agreement to determine if it contained any provisions that would affect the coal's transportation, Gerald Rutka, defendant's employee, found none. Rutka used the pricing information in plaintiff's lease agreement to calculate defendant's requirements regarding the lease of the rail cars for the PEPCO bid. In mid-September of 1998, Dillon informed Charles Brown, plaintiff's employee, that defendant had not received the PEPCO bid but that defendant intended to bid on another PEPCO coal contract requiring up to 131 rail cars.

Plaintiff submitted a new lease rate of $389 per rail car per month, which defendant used in formulating its second bid to PEPCO. In early November of 1998, defendant learned that it had received the PEPCO contract. On November 18, 1998 Dillon sent Brown a letter confirming defendant's intent to lease 131 specified rail cars from plaintiff for a term of six years at a rental rate of $389 per rail car per month, with an option to end the lease after three years. However, in that same letter of intent, Dillon expressly conditioned any such lease transaction upon PEPCO's formal execution of its agreement with defendant, giving rise to defendant's need to lease the rail cars, and "upon the successful negotiation of a definitive lease agreement containing terms and conditions ... [that] are acceptable to" defendant's senior management. At this point, Dillon still retained plaintiff's standard, full-service lease agreement and rider. Plaintiff began to prepare for placing the rail cars into defendant's service. Dillon declined plaintiff's offer to allow defendant to inspect the rail cars at their storage site in Indiana. Per Dillon's request, plaintiff sent some rail cars to a shop in Altoona, Pennsylvania to repair them before they went into service. Plaintiff also moved some rail cars to various shops throughout Ohio and Pennsylvania.

At defendant's request, plaintiff agreed to allow defendant to inspect the rail cars at the Altoona repair shop. Dillon testified that defendant desired this inspection before the rail cars' repair because PEPCO and defendant were concerned that the rail cars would be in poor condition. On December 11, 1998, plaintiff leased an airplane, flew to Pittsburgh, Pennsylvania to pick up defendant's representatives, and then flew to Altoona. During the inspection, plaintiff first learned that defendant intended to rotary dump the rail cars rather than unload them from the bottom—a process that would require plaintiff to bolt the bottoms of the rail cars shut. Although plaintiff reasonably believed that the rail cars only needed patching, defendant demanded that plaintiff re-sheet the rail cars, a repair which is considerably more expensive than patching. Plaintiff ultimately agreed to bolt the bottoms and re-sheet the rail cars without raising defendant's lease rate. Because of this work, defendant agreed to extend the lease's start date from January 1, 1999 to March 1, 1999.

While plaintiff and defendant were working through the "mechanical issues" regarding the 131 rail cars, they were negotiating a written lease. On November 23, 1998, Dillon sent plaintiff defendant's requested changes to the standard, full-service lease and rider. On December 10, 1998, after reviewing these proposed changes, plaintiff sent Dillon "a revised lease incorporating a number of those [requested] changes which were acceptable to" plaintiff. Dillon and Connolly spoke over the telephone concerning the December 10, 1998 lease revisions. In mid-December of 1998, defendant learned that the Public Utility of New Hampshire, Bow Terminal, was not renewing its contract with defendant and, consequently, that the 100 rail cars that defendant leased from GATX at the rate of $315 per car per month for coal transportation to the public utility would become available on December 31, 1998. According to plaintiff, when defendant learned that 100 rail cars were available at a cheaper lease rate from GATX, defendant no longer desired to lease the 131 rail cars from plaintiff and, thus, frustrated and then unilaterally terminated its on-going lease negotiations with plaintiff. To accomplish this alleged end, Dillon faxed a letter dated December 18, 1998 to plaintiff stating:

On two occasions, CONSOL has had phone conversations with The Andersons to elaborate on one another's positions rectifying some points but leaving CONSOL with the impression that The Andersons will not acceptably alter or remove several provisions to which CONSOL will not agree.

If this impression is correct, we need to recognize this fact, part company and go our separate ways. If this impression is not correct, we need to come to agreement by December 24, 1998.

On December 23, 1998, Connolly faxed Dillon a revised version of the lease, incorporating additional changes, but not all of those that defendant requested. After being unable to reach Dillon to discuss these revisions, Connolly left Dillon a message that the department was closing at noon on December 24, 1998, but provided his home phone number so that Dillon could reach him. On December 24, 1998, after 4:00 pm, Dillon left a message in Connolly's voice mail that a deal no longer existed due to plaintiff's December 23, 1998 version of the lease that left several of its provisions still in dispute. Four of the lease provisions that defendant disputed involved OT-5 approval,¹ tax liability indemnification, property and liability insurance, and change in defendant's ownership. According to plaintiff, defendant fabricated these issues, which should not have been in dispute at all, by misrepresenting and withholding facts so as to "frustrate any reasonable chance to reach agreement between the parties."

III. Analysis

We review the district court's order granting summary judgment de novo. Williams v. Mehra, 186 F.3d 685, 689 (6th Cir.1999). Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c). We must believe the non-moving party's evidence, and draw all justifiable inferences in his favor. Anderson v. Liberty Lobby, 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Moreover, we must view the inferences that we draw from those underlying facts in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith...