Black Bear Energy Servs. v. Youngstown Pipe & Steel, LLC
| Decision Date | 18 March 2020 |
| Docket Number | Civil Action No. 15-50 |
| Court | U.S. District Court — Western District of Pennsylvania |
| Parties | BLACK BEAR ENERGY SERVICES, INC., Plaintiff, v. YOUNGSTOWN PIPE & STEEL, LLC d/b/a DNV ENERGY, LLC Defendant. YOUNGSTOWN PIPE & STEEL, LLC d/b/a DNV ENERGY, LLC, Counterclaim Plaintiff, v. BLACK BEAR ENERGY SERVICES, INC., JOSEPH E. KOVACIC, III, MARKWEST ENERGY PARTNERS, L.P., OHIO GATHERING COMPANY, L.L.C., MARKWEST ENERGY OPERATING COMPANY, L.L.C., MARKWEST UTICA EMG CONDENSATE, L.L.C., MARKWEST UTICA EMG L.L.C., and MARKWEST LIBERTY MIDSTREAM & RESOURCES, L.L.C. Counterclaim Defendants. |
Pending before the court in this diversity action are three motions for summary judgment. (ECF Nos. 231, 233, 238.) The claims asserted by the parties in this case, some of which are at issue in the motions for summary judgment, arise out of a contract entered into by counterclaim plaintiff Youngstown Pipe & Steel ("YPS") and counterclaim defendant Black Bear Energy Services, Inc. ("Black Bear"), pursuant to which YPS was to manufacture skid piping for Black Bear that allegedly complied with the standards set forth by counterclaim defendants MarkWest Energy Partners, L.P., Ohio Gathering Company, L.L.C., MarkWest Energy Operating Company, L.L.C., MarkWest Utica EMG Condensate, L.L.C., MarkWest Utica EMG, L.L.C., and MarkWest Liberty Midstream & Resources, L.L.C., (collectively "MarkWest"). There are material disputes of fact in this case, including whether Black Bear and MarkWest intentionally destroyed the skid piping to disrupt YPS' case.
For the reasons set forth in this opinion: the motion for summary judgment filed by MarkWest will be granted in part and denied in part; the motion for summary judgment filed by Black Bear and Kovacic will be granted in part and denied in part; and the partial motion for summary judgment filed by YPS will be denied. An appropriate order will be entered.
This case has a tortured procedural history, much of which is set forth in the court's memorandum opinion dated July 13, 2017 (ECF No. 121) and will not be repeated here. The procedural history relevant to the motions for summary judgment currently pending before the court is detailed below.
On July 11, 2019: (1) MarkWest filed its motion for summary judgment (ECF No. 231), a brief in support of the motion (ECF No. 236), and a concise statement of material facts (ECF No. 232); (2) Black Bear and Joseph E. Kovacic, III ("Kovacic") filed their motion for summary judgment (ECF No. 233), a brief in support of the motion (ECF No. 234) and a concise statement of material facts (ECF No. 235); (3) MarkWest and Black Bear filed a joint appendix to their respective concise statements of material facts (ECF No. 237); and (4) YPS filed a motion forpartial summary judgment (ECF No. 238), a brief in support of the motion (ECF No. 239), a concise statement of material facts (ECF No. 240), and an appendix (ECF No. 241).
On July 17, 2019, Black Bear filed a response in opposition to YPS' motion for summary judgment (ECF No. 243), a responsive statement of material facts (ECF No. 244), and an appendix in support of its response (ECF No. 246). On the same day, YPS filed an omnibus response to the motions for summary judgment filed by Black Bear and MarkWest (ECF No. 246), a responsive concise statement of material facts with respect to Black Bear's motion (ECF No. 247), and a responsive concise statement of material facts with respect to MarkWest's motion (ECF No. 249). On August 7, 2019, YPS filed an appendix to its responsive concise statement of material facts with respect to Black Bear's motion. (ECF No. 261).
On September 4, 2019, YPS filed a reply brief (ECF No. 262), a reply concise statement of material facts (ECF No. 263), and an appendix to its reply concise statement of material facts (ECF No. 264). On the same day, MarkWest filed a reply brief (ECF No. 265) and a reply to YPS' responsive concise statement of material facts (ECF No. 266), and Black Bear filed a reply brief (ECF No. 267), a reply to YPS' responsive concise statement of material facts (ECF No. 268), and an appendix in support of its reply (ECF No. 269). On September 12, 2019, MarkWest and Black Bear each filed a combined concise statement of material facts. (ECF Nos. 270, 271.) On September 13, 2019, YPS filed its combined concise statement of material facts. (ECF No. 272.)
The three motions for summary judgment having been fully briefed are now ripe to be decided by the court.
The factual background is derived from the undisputed evidence of record and notes the disputed facts of record. With respect to the dueling motions, each disputed fact is to be viewedin the light most favorable to the nonmoving party for each motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) ().
MarkWest had a natural gas compression station in Barnesville, Ohio, which was referred to as the "Humphreys Site." (ECF No. 237-1 ¶ 1.)
On February 19, 2013, MarkWest and Black Bear entered into a Master Services Agreement. (MarkWest Combined Concise Statement of Material Fact ("MCCSMF") (ECF No. 270) ¶ 2(a); ECF No. 261-3 at 1.) Black Bear performed "spot work on an as-needed basis" for MarkWest with the hope of doing more work for MarkWest in the future. (MCCSMF (ECF No. 270) ¶ 2(c), 2(e); ECF No. 261-4 at 2-3.) In October 2014, MarkWest awarded Black Bear two contracts with respect to the Humphreys Site: (1) to fabricate, deliver, and set one inlet separator skid ("inlet separator skid"); and (2) to fabricate, deliver, and set three header skids ("header skids"). (ECF Nos. 237-1 ¶ 36, 237-4 at 31-32, 237-4 at 8, 237-1 at 49.) Joe Greco ("Greco"), vice president of business development for Black Bear, (ECF No. 237-4 at 54), developed a relationship with MarkWest that lead to the October 2014 contract, (ECF No. 261-4 at 5). Dennis Loosli ("Loosli") was Black Bear's main point of contact at MarkWest with respect to the Humphreys Site. (ECF No. 261-4 at 4, 35.) Loosli testified that he hired Black Bear to fabricate and build the skids. (ECF No. 261-7 at 4.)
Black Bear did not believe it had the kind of welders that could perform "the type of work that was going to be done with the Humphrey[s] Site skids[.]" (MCCSMF (ECF No. 270) ¶ 2(c); ECF No. 261-4 at 2.) According to Greco, Loosli knew Black Bear did not have the experience necessary to fabricate the Skids and asked Black Bear "[t]o find a harmonious team that could compliment [sic] each other and around Black Bear's main scope of services, whichwas the field support." (MCCSMF (ECF No. 270) ¶¶ 2(c), 3(c); ECF No. 261-4 at 2.) Loosli testified,1 however, that it was his understanding that "Black Bear was a company that specialized in fabrication of...skids." (ECF No. 261-7 at 4.) According to Kovacic, Black Bear's president, (ECF No. 237-3 at 3), Loosli knew Black Bear was subcontracting the fabrication of the Skids to YPS, (MCCSMF (ECF No. 270) ¶ 3(d)).
Employees of Black Bear met employees of YPS through a business advisory group. (MCCSMF (ECF No. 270) ¶ 2(h); ECF No. 261-4 at 6.) In or around the summer of 2014, Kovacic toured YPS' facility located in Youngstown, Ohio, (MCCSMF (ECF No. 270) ¶ 2(i); ECF No. 261-4 at 8-9), as part of Black Bear's "pursuit of a quality fabrication company to team up with[,]" (ECF No. 261-4 at 9). Kovacic was "impressed" with the people he met from YPS and their "pedigree" and YPS' "quality control programs" and machinery. (Id. at 10.) His goal was for Black Bear to build "a long-term relationship with [YPS]." (MCCSMF (ECF No. 270) ¶ 2(l); ECF No. 261-4 at 16.) Kovacic took "Vince" and "Mark" from YPS to the Humphreys Site for a "walk-through" with Loosli. (MCCSMF (ECF No. 270) ¶ 2(m); ECF No. 261-4 at 18.)
Greco via email requested a quote from YPS for the skids. (ECF No. 237-4 at 65.) He informed YPS that "[a]ll welding procedures will be in accordance to MARKWEST specs and procedures." (Id.) Greco provided YPS a link to a "Dropbox[,]" and explained: "The paint specs in this drop box [sic] are the paint specs to use on all Mark West [sic] projects from this day forward." (Id.) YPS provided Black Bear quotes for work on the skids and platforms.2(MCCSMF (ECF No. 270) ¶ 2(n).) Black Bear awarded the job to YPS. (ECF No. 237-1 at 24, 26.)
In October 2014, Kovacic reached out to Mark Canter ("Canter"), general manager of operations for YPS (ECF No. 245-1 at 3), and introduced him to Harry Blain, from a company called "TEI[,]" (ECF No. 237-2 at 4). According to Canter, TEI does (Id. at 4-5.) Kovacic "wanted to provide [YPS] some expertise that [sic] knew MarkWest protocol." (ECF No. 237-2 at 32.) In October 2014, Blain met with Greco and employees of YPS, i.e., Canter, Vincent Pelini ("Pelini"), Dan Tufaro, and Scott Eaton ("Eaton"), (ECF No. 237-2 at 32), "to go over...MarkWest's procedures...for welders working on MarkWest's projects[,]" (ECF No. 237-2 at 4; ECF No. 237-4 at 7). The purpose of the meeting with Blain was to acquaint Pelini (ECF No. 237-4 at 7.)
On October 10, 2014, Greco sent an email to Kovacic that provided, in pertinent part, the following:
On October 11, 2014, at 8:20 a.m., the inlet skid...
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