Fleming Steel Co. v. Jacobs Eng'g Grp., Inc.

• Decision Date: 15 March 2019
• Docket Number: Civ. A. No. 16-727
• Citation: 373 F.Supp.3d 567
• Parties: FLEMING STEEL CO., Plaintiff, v. JACOBS ENGINEERING GROUP, INC., Defendant.
• Court: U.S. District Court — Western District of Pennsylvania

373 F.Supp.3d 567

FLEMING STEEL CO., Plaintiff,

v.JACOBS ENGINEERING GROUP, INC., Defendant.

Civ. A. No. 16-727

United States District Court, W.D. Pennsylvania.

Signed March 15, 2019

Alan E. Cech, Murtagh, Hobaugh & Cech, LLC, Wexford, PA, John M. Manfredonia, Pro Hac Vice, Manfredonia Law Offices, LLC, Cresskill, NJ, for Plaintiff.

David J. Berardinelli, DeForest Koscelnik Yokitis Skinner & Berardinelli, Pittsburgh, PA, Michael K. Ross, Pro Hac Vice, Paul Rauser, Pro Hac Vice, Serine Consolino, Pro Hac Vice, Aegis Law Group LLP, Washington, DC, for Defendant.

MEMORANDUM OPINION

Nora Barry Fischer, United States District Judge

I. INTRODUCTION

This diversity action arises from a business arrangement between an architectural/engineering design management company, Defendant Jacobs Engineering Group ("Jacobs"), and a manufacturer which specializes in the custom design and fabrication of hangar doors, Plaintiff Fleming Steel Company ("Fleming"), involving the procurement of two Navy projects for the construction of an aircraft hangar at Andersen Air Force Base in Guam. After the Navy failed to approve Fleming as the sole source for the manufacture of a component part—the blast-rated hangar doors, Fleming initiated this action against Jacobs seeking damages and restitution on various claims. At this juncture, the only remaining claims consist of breach of an oral contract, negligent misrepresentation, and unjust enrichment. Currently pending before the Court is Jacobs' Motion for Summary Judgment (ECF No. 75 ) as to the remaining claims. For the reasons that follow, the Court will grant Jacobs' motion in part, and deny it in part.

II. LEGAL STANDARD

Summary judgment is appropriate if, drawing all inferences in favor of the nonmoving party, "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c). Summary judgment may be granted against a party who fails to adduce facts sufficient to establish the existence of any element essential to that party's case, and for 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).

More specifically, the moving party bears the initial burden of identifying evidence which demonstrates the absence of a genuine issue of material fact. Once that burden has been met, the nonmoving party must set forth "specific facts showing that there is a genuine issue for trial" or the factual record will be taken as presented by the moving party and judgment will be entered as a matter of law. Matsushita Elec. Indus. Corp. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting FED. R. CIV. P. 56(e) ) (emphasis added by Matsushita Court). An issue is genuine only "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

III. FACTUAL BACKGROUND

In 2010, the United States Naval Facilities Engineering Command ("NAVFAC") awarded Jacobs/Burns & McDonnell (the "Joint Venture" or "Jacobs") an Indefinite Delivery Indefinite Quantity ("IDIQ") contract to provide Architectural/Engineering ("A/E") services for the construction of aviation facilities within the U.S. Pacific Command Area of Responsibility. See Dep. of Cody Hoff (Hoff Dep.) at 12-13, Def.'s App. Ex. 1 (ECF No. 75-2 )¹ ; IDIQ contract, Pl.'s App. Ex. A (ECF No. 87-1 ). In February 2011, NAVFAC-Marianas (a branch of NAVFAC within NAVFAC Pacific Command) awarded the Joint Venture a task order for Project AJJY123010, Guam Fuel Systems Maintenance Hangar ("Project 3010") to provide A/E services in connection with the design of a hangar at Andersen Air Force Base in Guam. See Ex. 2 to Hoff Dep. (ECF No. 75-2 at 52-54 ). Project 3010 is what is known as a "design-bid-build" project; in design-bid-build projects, the A/E first prepares a full set of design plans and the project specifications, and the government then releases the plans and specifications to the public so that potential contractors may submit bids for the project construction. Hoff Dep. at 25; Dep. of John DeVenecia ("DeVenecia Dep.") at 25-26, Pl.'s App. Ex. CC (ECF No. 87-29 ). The contractor is just being asked to build the facility and not do any design work for it. DeVenecia Dep. at 26.

The Project 3010 hangar required, among other components, blast-hardened hangar doors. Dep. of Chris Surles ("Surles Dep.") at 20, 36, Def.'s App. Ex. 2 (ECF No. 75-3 ). Those doors were a "performance specification" item: the doors had to meet certain operational criteria, but the means of meeting the required criteria are left up to the subcontractor who ultimately builds the doors. Hoff Dep. at 21-22.

Jacobs reached out to potential hangar door manufacturers to assist it with the design of the blast-hardened hangar doors. Hoff Dep. at 21. Jacobs contacted Fleming Steel Company ("Fleming") for design-assist type conceptual work because Fleming had designed hangar doors previously. Surles Dep. at 21-22. Manufacturers have an incentive to assist A/E firms such as Jacobs in this regard because in doing so, they will obtain cost and other information which will give them an advantage in bidding on the project. Id. at 22-23.

Cody Hoff, who was employed by Jacobs, was the project manager for Project 3010, and later for Project 3027. Hoff Dep. at 7, 10. Chris Surles, who was also employed by Jacobs Engineering Group, was the architectural intern for Project 3010 and the project architect for Project 3017. Surles Dep. at 6, 8. John DeVenecia was the NAVFAC's Design Manager for Project 3010 from August 2010 until July 2012, and Mr. Hoff's principal point of contact on Project 3010. DeVenecia Dep. at 9-10. Clarence Lagutang was NAVFAC Marianas CI, Capitol Improvement Project Manager on Project 3010. Dep. of Clarence Lagutang ("Lagutang Dep.") at 7 (ECF No. 75-5 ).

Fleming has over 90 years of experience custom designing and fabricating specialized and unique aircraft hangar door systems for the United States Military (including Air Force One). Second Am. Compl., ¶ 1 (ECF No. 34 ). Seth Kohn is the president and owner of Fleming. Dep. of Seth Kohn ("Kohn Dep.") at 9. Mr. Kohn was Jacobs' principal point of contact at Fleming on the issue of sole sourcing for the Projects. Id. at ¶ 36. Mr. Kohn has been employed at Fleming since 1967. Id. at ¶ 10.

In May of 2011, Jacobs contacted Fleming about assisting in the development of the hangar door design concept for Project 3010. Hoff Dep. at 41-42. Jacobs and its blast consultant, ARA, with whom the Joint Venture had a subcontract for Project 3010, had already come up with a design concept for the hanger doors—Option 1—which was not an optimal solution at that time. Id. at 36, 38-40. On May 9, 2011, Bernie Klein from Jacobs emailed Mr. Kohn attaching Option 1 and asked Mr. Kohn to email him some details that they discussed so that Mr. Klein could develop Option 2. Ex. P 3 to Hoff Dep., Pl.'s App. Ex. J (ECF No. 87-10 ). Shortly thereafter, a telephone conference took place in which Mr. Hoff, his architects and the blast consultant discussed with Mr. Kohn the initial concepts of the project, and generally talked about the design details of the hanger doors, particularly the bottom rail.² Hoff Dep. at 42-44, Pl.'s App. Ex. FF (ECF No. 87-32 ).

During May, June, and July of 2011, Jacobs and Fleming collaborated to develop hanger door concept designs, including designs for the hangar door head. Dep. of John Gavroy ("Gavroy Dep.") at 31-35; Various Emails between Gavroy and Surles, Exs. 6-9 to Gavroy Dep., Def.'s App. Ex. 7 (ECF No. 75-8 at 23-43 ). Mr. Kohn testified that during the May to July 2011 timeframe, Fleming provided significant design services to Jacobs:

Q: Okay. So during this time frame, based on the e-mails we looked at before the lunch break, what did this -- my math indicates that there are 609.5 hours reflected on page 1 of Exhibit 43. What did those 609.5 hours consist of?

A: Well, there was engineering and -- and -- there was a variety of things that were discussed and done. Part of it was design. Part of it was specifications. Part of it was concept. Part of it was debunking what they had already started with. I spent a tremendous amount of time when they first contacted me looking at what they thought was going to be workable. There's no way possible.

So there's a lot that goes into it. It's not all concentrated. A lot of it is interrelated. There was a lot of time spent with the structural engineer on the interface between the door head and the sill. A lot of time spent with the blast engineer. A lot of time spent with Jacobs about how to pull all this together. So there -- there was a considerable amount of work done.

Kohn Dep. at 139-140, Pl.'s Ex. GG (ECF No. 87-33 ).³

Jacobs received plans from Fleming and utilized this information when preparing the plans for the Navy's Request for Proposals ("RFP"). Hoff Dep. at 34-35, Pl.'s App. Ex. FF (ECF No. 87-32 ). Fleming's work also included preparation of fabrication drawings for the hangar doors. Kohn Dep. at 38. Mr. Hoff testified that the plans and specifications included in the solicitation for the Navy projects incorporated "useful" and "valuable" input from Fleming. Hoff Dep. at 65.

At the end of July 2011, Mr. Kohn informed Jacobs that Fleming could no longer support Jacobs without compensation. In this regard, Mr. Hoff testified:

Q: Okay. Now, in this E-mail [from Jim Brokaw of ARA dated 7/22/11], you say that Fleming has reached the end of the financial donation to the project. They asked if we could discuss a sole source to them from the government due to this being the first door of its kind and the sensitive nature of the load data. Jacobs support this stance, unless

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