Andersons, Inc. v. Consol, Inc.

• Decision Date: 25 January 2001
• Docket Number: No. 3:00 CV 7290.,3:00 CV 7290.
• Citation: 185 F.Supp.2d 833
• Parties: THE ANDERSONS, INC., Plaintiff, v. CONSOL, INC., Defendant.
• Court: U.S. District Court — Northern District of Ohio

Page 833

185 F.Supp.2d 833

THE ANDERSONS, INC., Plaintiff, v. CONSOL, INC., Defendant.

No. 3:00 CV 7290.

United States District Court, N.D. Ohio, Western Division.

January 25, 2001.

Elizabeth J. Hall, The Andersons, Inc., Maumee, OH, James R. Jeffery, Spengler Nathanson, Toledo, OH, for Andersons, Inc., The, Plaintiff.

Brant T. Miller, Christopher J. Gagin, James R. Miller, Rodger L. Puz, Dickie, McCamey & Chilcote, Pittsburgh, PA, for Consol Inc., Defendant.

ORDER

CARR, District Judge.

Plaintiff The Andersons, Inc. brings this action against Defendant Consol, Inc. claiming breach of commitments and understandings unjust enrichment, reasonable reliance, unconscionable conduct, and intentional and/or negligent misrepresentation. This court has diversity jurisdiction pursuant to 28 U.S.C. § 1332. Pending is defendant's renewed motion for summary judgment pursuant to Fed. R.Civ.P. 56(c). For the following reasons, defendant's motion shall be granted.

BACKGROUND

On July 21, 1998, plaintiff's representatives met with defendant's representatives to negotiate a lease from plaintiff to defendant of two train sets of open-top coal cars. Defendant intended to use the cars to transport coal to various stipulated locations throughout the United States.

On October 26, 1998, plaintiff sent, via email, a proposed lease agreement to defendant. The proposed lease agreement contained a price term. On November 16, 1998, defendant provided plaintiff with a letter of intent to lease 131 railroad coal cars from plaintiff under the terms of the proposed lease agreement. Defendant's correspondence included a January 1, 1999, target date for the rail cars to be available.

On December 24, 1998, defendant unilaterally terminated negotiations and withdrew its November 16, 1998, letter of intent. Plaintiff brought this suit claiming that defendant breached the letter of intent that existed between the parties.

STANDARD OF REVIEW

Summary judgment must be entered "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the record which demonstrate the absence of a genuine issue of material fact. Id. at 323, 106 S.Ct. 2548. The burden then shifts to the nonmoving party who "must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (quoting FED. R. CIV. P. 56(e)).

Once the burden of production shifts, the party opposing summary judgment cannot rest on its pleadings or merely reassert its previous allegations. It is insufficient "simply [to] show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Rather, Rule 56(e) "requires the nonmoving party to go beyond the [unverified] pleadings" and present some type of evidentiary material in support of its position. Celotex, 477 U.S. at 324, 106 S.Ct. 2548.

In deciding the motion for summary judgment, the evidence of the non-moving party will be believed as true, all doubts will be resolved against the moving party, all evidence will be construed in the light most favorable to the non-moving party, and all reasonable inferences will be drawn in the non-moving party's favor. Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 456, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992). Summary judgment shall be rendered only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c).

DISCUSSION

I. Choice of Law

Plaintiff claims Ohio law applies; defendant argues that Pennsylvania law applies. Defendant acknowledges that, except for the statute of limitations for plaintiff's intentional and/or negligent misrepresentation claim, there is no conflict between Ohio and Pennsylvania law. Plaintiff argues that all of its claims are governed by Ohio law.

A federal court with diversity jurisdiction must apply the choice of law rules of the state in which it sits. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Barents Navigation Ltd. v. Western Overseas, Inc., No. 3:98CV7606, 1999 U.S. Dist. LEXIS 21211, at *5, 1999 WL 1490855, at *2 (N.D.Ohio Dec.13, 1999). A court must conduct conflict of laws analysis only if there is an actual conflict between local law and the law of another jurisdiction. 1999 U.S. Dist. LEXIS 21211, at *8, 1999 WL 1490855, at *3 (citing Akro-Plastics v. Drake Indus., 115 Ohio App.3d 221, 224, 685 N.E.2d 246 (1996)) (citing Canadian Overseas Ores Ltd. v. Compania De Acero Del Pacifico S.A., 528 F.Supp. 1337, 1339-40 (S.D.N.Y.1982)); Reliance Elec. Co. v. KJ Elec., No. 72424, 1998 Ohio App. LEXIS 5771, at *8, 1998 WL 842062, at *3 (Dec. 3, 1998); Stocklas v. Erie Ins. Group, No. 96-L-186, 1997 Ohio App. LEXIS 4571, at *8, 1997 WL 665980, at *3 (Oct. 10, 1997) ("A predicate to invoking choice of law principles is that the laws of different states conflict; if there is no conflict, the law of the forum state controls.") (citation omitted).

Local law governs if the party seeking the application of foreign law does not demonstrate a conflict. Barents Navigation, 1999 U.S. Dist. LEXIS 21211, at *8, 1999 WL 1490855, at *3; see also Cross v. Carnes, 132 Ohio App.3d 157, 168, 724 N.E.2d 828 (1998) ("Further, the party asserting the application of the foreign law has the initial burden to demonstrate such a conflict.") (citation omitted).

With regard to the conflict between Ohio and Pennsylvania law as to the statute of limitations for plaintiff's tort claims, defendant states, "[W]ith the exception of [sic] statute of limitations on The Andersons' tort claims, CONSOL believes that similar results would lie upon the application of Pennsylvania or Ohio law .... As such, CONSOL does not believe that there is any true conflict between the applicable state laws." (Doc. 51 at 6). Plaintiff argues local, Ohio law must govern. The only conflict of laws issue, therefore, surrounds the statute of limitations for the tort claims because neither party presents an argument in favor of applying non-local law to plaintiff's other claims.

Determination of which statute of limitations applies is, however, not necessary. Regardless of whether the Ohio or Pennsylvania statute of limitations applies, the tort claim is within either state's statute of limitations. As this court previously found, plaintiff's tort claim relates back to the date of the original complaint filing. (Doc. 49 at 2). The complaint was filed timely under either Ohio's four-year statute or Pennsylvania's two-year statute. Any conflict of laws issue is immaterial because plaintiff's claim comes within either statute of limitations.

Ohio law, therefore, governs all of plaintiff's claims because neither party has demonstrated a meaningful conflict of laws for any of plaintiff's claims.

II. Count I: Breach of Commitments and Understandings

Plaintiff's brief states plaintiff has not brought suit based on a written agreement. Plaintiff's suit is, instead, based on defendant's conduct during lease negotiations. Plaintiff's brief also states that a cause of action exists for failure to negotiate in good faith under Pennsylvania law. In response, defendant first argues that there is no enforceable agreement between the parties. Defendant also argues that neither the complaint nor the amended complaint asserts a claim for breach of an alleged duty to negotiate in good faith. I agree.

Plaintiff's amended complaint asserts five causes of action: 1) breach of commitments and understandings; 2) unjust enrichment; 3) reasonable reliance; 4) unconscionable conduct; 5) and intentional and/or negligent misrepresentation. Plaintiff's amended complaint does not assert a cause of action for failure to negotiate in good faith. Plaintiff, additionally, has not sought leave to amend its complaint to add a claim for failure to negotiate in good faith. Any putative claim for failure to negotiate in good faith, as asserted in plaintiff's brief, is not a part of this case.

In any event, had plaintiff asserted a claim for failure to negotiate in good faith, such claim would be dismissed because plaintiff has not shown that Ohio recognizes such cause of action. In support of its argument, plaintiff merely relies on a Third Circuit decision based on Pennsylvania law, Channel Home Ctrs. Div. of Grace Retail Corp. v. Grossman, 795 F.2d 291 (3d Cir.1986). Because plaintiff asserts the failure to negotiate in good faith claim under Pennsylvania law and Ohio law governs this action, plaintiff's claim shall be dismissed.

Because a claim for failure to negotiate in good faith is plaintiff's only argument in response to defendant's argument that there is no enforceable agreement and because the claim for failure to negotiate in good faith shall be dismissed, Count I of the complaint shall be dismissed. Defendant's renewed motion for summary judgment on plaintiff's breach of commitments and understandings claim shall be granted.

III. Count II: Unjust Enrichment

In its unjust enrichment claim, plaintiff asserts, "Defendant has been unjustly enriched by use of the pricing structure provided by the Agreement between the parties upon which Defendant negotiated and entered into separate agreements with other third parties for transportation of the coal as contemplated by Defendant's Agreement with Plaintiff ...." (...