MEMORANDUM OF DECISION AND ORDER
In early 2010, one of Caldwell-Baker's employees was making calls to companies who, he hoped, might want to lease some railcars. He directed one of those calls to Coshocton Grain Company—an Ohio-based grain company. This was a cold-call, as Coshocton Grain and Caldwell-Baker had not done business with one another before. As it turned out, the Ohio company was in the market for more railcars. Things moved quickly and by March 10, 2010, Coshocton Grain and Caldwell-Baker had agreed to a 14-page lease for 25 railcars.
Over the next year, the relationship expanded. The parties twice agreed to add more cars to the lease. They also extended it. Then, things started to unravel. In the summer of 2013, Coshocton Grain and Caldwell-Baker discovered they had conflicting views about a key provision in the lease. This disagreement blossomed, and Coshocton Grain sued in Ohio federal court. That court transferred the case to Kansas shortly before Thanksgiving 2014. Since then, the parties' disputes with one another have grown to titanic proportions.
Unable to resolve their many disagreements, the parties tried the case in a bench trial last November. Their presentations consumed five trial days, memorialized in more than 1,400 pages of trial transcript and 3,900 pages of exhibits. But there was more. Post-trial, the parties submitted 198 pages of proposed factual findings and legal argument. The court has reviewed this record and done its best to understand Caldwell-Baker's many overlapping and interlocking legal theories. Some of these theories are relatively straightforward. Others are not. The court is now ready to rule.
For reasons explained in this Decision, the court finds in Caldwell-Baker's favor on five claims. Those five claims assert that Coshocton breached: (1) Lease § 13(b)(i) by failing to reimburse Caldwell-Baker for cleaning the railcars at lease end; (2) § 13(b)(i) by failing to reimburse Caldwell-Baker for patching leaks in some of the railcars' roofs at lease end; (3) § 4(d) by failing to pay late fees on Caldwell-Baker's cleaning costs; (4) § 4(d) by failing to pay late fees on Caldwell-Baker's roof-leak repair costs; and (5) § 5(c) by failing to pay for RFMX 464595. The court awards Caldwell-Baker a total of $40,881.50 in damages on these five claims. The court also finds that Caldwell-Baker is contractually entitled to recover its attorneys' fees and litigation expenses, but only those incurred on these five claims. In addition, the court awards Caldwell-Baker $3,584 in damages for Coshocton Grain's breach of the lease's forum-selection clause, for a total of $44,465.50. On the rest of Caldwell-Baker's claims, the court finds for Coshocton Grain and against Caldwell-Baker.
After providing a Table of Contents that summarizes this Decision's content, the court rules two evidentiary issues that it took under advisement when the trial concluded. The court then presents its findings of fact, followed by its analysis of Caldwell-Baker's claims.
Evidentiary Rulings ....................................................................................................................... 5
Findings of Fact .............................................................................................................................. 6
I. The Terminology ................................................................................................................ 6
II. The Operative Facts ........................................................................................................... 9 How the Parties' Relationship Began ................................................................................. 9
The Disagreement .............................................................................................................. 14 The Litigation Begins ........................................................................................................ 15
The Final Return ................................................................................................................ 16
III. The Parties' Method for Handling Repairs and Costs During the Lease ................... 18
IV. The Alleged Subleases ...................................................................................................... 19
V. The Bench Trial and Subsequent Events ....................................................................... 21 The Trial's Mechanics ........................................................................................................ 21
The Witnesses .................................................................................................................... 22
Analysis and Conclusions of Law ............................................................................................... 23
I. Guiding Principles of Kansas Contract Law ................................................................. 27
II. Forum-Selection Clause Claim ....................................................................................... 29 A. CBC's Shifting Theories .............................................................................................. 30
B. Attorneys' Fees That CBC May Recover ..................................................................... 32
III. Sublease Provision Claims .............................................................................................. 35 A. Breach of Contract ....................................................................................................... 36
B. Duty of Good Faith and Fair Dealing ........................................................................... 40
IV. Return Condition Claims ................................................................................................. 41 A. Section 13(b) ................................................................................................................ 42
B. CBC's Theories of Liability and Damages .................................................................. 43
C. Return Condition Claim ............................................................................................... 45
1. Section 13(b)(i)'s First Sentence: "Specifications Previously Imposed" ........ 45
a.Lessee Maintenance Items, Cleaning Costs, and Suitable for Grain Product Loading ........................................................................... 46
i. Lessee Maintenance Items and Cleaning Costs ......................... 50
ii. Suitable for Any Grain and Grain Product Loading .................. 59
b.Corrosion ............................................................................................... 63
c.All Damage ............................................................................................ 67
i. Section 15 .................................................................................. 68
ii. Section 17 .................................................................................. 71
iii. Section 3(a) ............................................................................... 73
iv. Combined Effect of § 15 and § 17 ............................................ 76
d.Conclusion: "Specifications Previously Imposed" .............................. 76
2. Section 13(b)(i)'s Second Sentence: Liability on Return Only ........................ 77
3. Conclusion ........................................................................................................ 81
D. Prior Damage Claim ..................................................................................................... 81
1. Responsibility for Damage and Repairs During the Lease ............................... 82
a. Section 6(b): "Good Working Order and Repair" ................................ 82
b. Section 13(b)(i)'s Second Sentence, Again .......................................... 84
2. Payment Deferred Until the Cars Are Returned ............................................... 84
E. Extrinsic Evidence Would Not Alter the Court's Conclusions .................................... 86
1. One Lease or Two? ........................................................................................... 87
2. CBC's All-Damage, "Specifications Previously Imposed" Theory .................. 89
3. CBC's All-Damage, Return-Condition Theory ................................................. 90
4. CBC's Prior-Damage Theory ........................................................................... 94
5. Conclusion ........................................................................................................ 95
F. Lost Rent Claim ............................................................................................................ 95
V. Insurance Provision Claims ............................................................................................ 97 A. Failure to File Claims for Damage ............................................................................... 98
B. Failure to Submit a Claim for the Derailment of RFMX 464595 ............................. 99
C. Failure to Carry Insurance Continuously Throughout the Lease ........................... 99
D. Failure to Produce an Insurance Certificate Annually ............................................... 101
E. Failure to Name CBC as an Additional Insured ......................................................... 101
F. Conclusion .................................................................................................................. 103
VI. Indemnification Claims...
