Panel Specialists, Inc. v. Tenawa Haven Processing, LLC.

• Decision Date: 28 December 2018
• Docket Number: No. 16-4140-SAC,16-4140-SAC
• Parties: PANEL SPECIALISTS, INC., Plaintiff/Counterclaim Defendant, v. TENAWA HAVEN PROCESSING, LLC., Defendant/Counterclaim Plaintiff.
• Court: U.S. District Court — District of Kansas

PANEL SPECIALISTS, INC.,Plaintiff/Counterclaim Defendant, v. TENAWA HAVEN PROCESSING, LLC., Defendant/Counterclaim Plaintiff.

No. 16-4140-SAC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

December 28, 2018

MEMORANDUM AND ORDER

This is contractual dispute over the construction of a natural gas processing plant owned by the defendant/counterclaim plaintiff Tenawa Haven, LLC ("Tenawa") for which the plaintiff/counterclaim defendant Panel Specialists, Inc. ("PSI") contracted and performed instrumentation and electrical services. The pending dispositive motions include: PSI's Motion for Partial Summary Judgment on the Issue of Breach of Contract for Delay (ECF# 100); Tenawa's Motion for Summary Judgment on PSI's Unjust Enrichment/Quantum Meruit Claim (ECF# 102); PSI's Motion for Partial Summary Judgment on Contracts (ECF# 103); Tenawa's Motion for Partial Summary Judgment on Mechanic's Lien Claim (ECF# 106); Tenawa's Motion for Summary Judgment on Attorney's Fees and Interest (ECF# 108); Tenawa's Motion for Partial Summary Judgment to Enforce Plaintiff's Published Price List (ECF# 110); and Tenawa's Motion to Strike PSI's Reply (ECF# 128) and for Leave to file a Sur-Reply (ECF# 130).

SUMMARY JUDGMENT STANDARDS

Ultimately, a court grants summary judgment "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 (1986); see Fed. R. Civ. P. 56. But first, the movant "always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Id. at 323. This does not mean the moving party must negate the other side's claims or defenses through affidavits. Id. Upon a properly supported motion for summary judgment, the nonmoving party must go beyond the pleadings, that is, mere allegations or denials, and set forth specific facts showing a genuine issue of material fact for trial, relying upon the types of evidentiary materials contemplated by Rule 56. Id.

A court decides the motion "through the prism of the substantive evidentiary burden." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254 (1986). So, a factual dispute is "material" only if it "might affect the outcome of the suit under the governing law." Id. at 248. To be genuine, a factual dispute requires more than a mere scintilla of evidence in support of a party's position. Id. at 252. This means that the purpose of Rule 56 "is notto replace conclusory allegations of the complaint or answer with conclusory allegations of an affidavit." Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990). At the same time, the summary judgment stage does not authorize the court's weighing of the evidence, crediting some over other, or determining the truth of disputed matters, but it shall decide whether a genuine issue of material fact for trial exists. Tolan v. Cotton, 572 U.S. 650, 656 (2014). The court performs this task with a view of the evidence that favors most the party opposing summary judgment. Id. at 657. Summary judgment may be granted if the nonmoving party's evidence is merely colorable or is not significantly probative. Liberty Lobby, 477 U.S. at 250-51. Essentially, the inquiry is "whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52.

SUMMARY OF UNCONTROVERTED FACTS

These facts serve as the background for the court's rulings on the pending motions. The court incorporates relevant stipulations and general facts that frame the issues central in the motions. It leaves the facts more specific to the motions for later discussion.

In 2013, Next Generation Processing, LLC ("NGP") decided to build a cryogenic natural gas processing facility in Haven, Kansas, ("Plant") to straddle Panhandle Eastern Pipe Line's interstate pipeline and to serve gasproducers throughout southwest Kansas, northwest Oklahoma, and the Texas Panhandle. NGP solicited investors and Tenawa was created to own and operate this natural gas facility. Greg Ameringer, owner of NGP, acquired an equity interest in Tenawa with its formation.

PSI's business is providing instrumentation and electrical ("I&E") services to the oil and gas industry. PSI's president is Earl Bergeron. He personally performed some of PSI's work for Tenawa in planning and estimating the work and in doing and supervising construction work at the Plant.

In 2012, Mr. Ameringer approached Mr. Bergeron about I&E work for the proposed plant and provided him with information. Working from that, PSI furnished on March 21, 2012, an initial budget estimate for I&E work totaling $6.4 million. PSI revised its estimate in September of 2013 to $4.76 million. Mr. Ameringer requested PSI to provide Tenawa with a letter laying out PSI's scope of work and estimating its price. Mr. Bergeron sent a letter dated December 7, 2013, that estimated PSI's price at $4.76 million and stated in part:

Please note that the original price of $4,760,000 dated Sept. 13, 2013 was a preliminary budget quote based on the information provided by Tenawa and work performed on similar projects. Panel Specialists Inc. will work on the Haven Project based on a cost-plus basis. Freight and any taxes will also apply to parts and/or equipment sales. I have attached a price list.

ECF# 104-1, p. 8. The attached price list was titled, "Published Price List Field Services," and was dated, "2-1-13." Id. at p. 9. The parties' understandings differ over this price list's purpose, effect and operation.

Mr. Ameringer followed up with an email to Mr. Bergeron attaching a purchase order signed and dated December 13, 2013, by Mr. Ameringer. Also attached to this email were Mr. Bergeron's letter of December 7, 2013, PSI's 2-1-13 published price list, the "Panel Scope" spreadsheet dated September 13, 2012, certain I&E design and specification documents, and the Master Service Agreement ("MSA") signed by Mr. Ameringer and also dated December 13, 2013. Mr. Ameringer's email asked PSI to review, sign, and return the MSA. This purchase order for $4.76 million, No. HAV-121313-002, identified PSI as the vendor and described its work as "Cost Plus Proposal for Haven Instrumentation and Electrical Engineering per Panel Specialist Cover Letter and Earlier Budgetary Estimate date 12/7/13." ECF# 104-1, p. 10.

Mr. Bergeron signed the MSA. The parties dispute the meaning, scope and effect of certain provisions in the MSA. The following are some of the provisions in question:

1. WORK OR SERVICES COVERED

(a) From time to time during the term hereof, Company [Tenawa], as owner and/or operator of . . . , may request, either orally or in writing, that Contractor [PSI] perform work or render services for the benefit or account of Company. If Contractor agrees to perform such work or services for Company, then, subject to the provisions of Section 20 below which addresses potential conflicts between the terms of "work orders," "service orders," "job or delivery tickets," "invoices," or othersimilar form(s) for a particular job and the terms of this Agreement, this agreement shall control and govern the performance of all such work or services and the relationship of the parties relating thereto. . . .

. . . .

(c) This Agreement does not grant Contractor an exclusive right or contract to perform all services described in Exhibit I required from time to time by Company, . . . . Neither Company nor Contractor shall be bound by the terms hereof until work or services have been authorized by Company and accepted by Contractor.

2. CONTRACTOR'S OBLIGATIONS

Contractor shall:

(a) Perform all work or services hereunder with due diligence and in a good and workmanlike manner in compliance with the provisions hereof, as well as the provisions of Exhibits I, III and IV here to. . . . .

. . . .

6. METHOD AND TIME OF PAYMENT

(a) Contractor shall furnish an invoice to Company in a form satisfactory to Company within thirty (30) days of completion of the work done pursuant hereto. Company shall pay for the work performed hereunder within thirty (30) days after the receipt of such invoices. . . . All invoices shall detail the work done, the equipment or supplies and materials furnished by Contractor for the work, and the rates applicable to each item in accordance with the schedule of rates furnished by Contractor (or with succeeding current rate schedules if approved in writing by Company), or at bid prices where applicable. If an increase in rates is not satisfactory to Company, Company shall have the right to cancel this Agreement by giving Contractor notice to that effect. Contractor shall provide Company not less than thirty (30) days written notice prior to the proposed effective date of changes in said rate schedule. . . . .

. . . .

14. NOTICES AND INQUIRIES

All notices and inquires with regard to this Agreement shall be in writing and shall be delivered either personally to the designated representative of the party being notified or sent by registered mail, return receipt requested, to the address of each party set forth on the signature pages hereof. All notices shall be effective as of the time received by the addressee.

. . . .

17. AMENDMENTS

This agreement may be amended only by an instrument in writing signed by both parties hereto.

. . . .

19. GOVERNING LAW

THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE CONSTRUED AND GOVERNED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. . . .

20. ENTIRE AGREEMENT

This instrument embodies the entire agreement of the parties as to the subject matter hereof.

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