PKG Contracting, Inc. v. Smith & Loveless, Inc.
| Decision Date | 06 April 2022 |
| Docket Number | 20-CV-2646-JAR-KGG |
| Court | U.S. District Court — District of Kansas |
| Parties | PKG CONTRACTING, INC., Plaintiff, v. SMITH & LOVELESS, INC., Defendant. |
Plaintiff PKG Contracting, Inc. (“PKG”) filed this promissory estoppel action, alleging that it reasonably relied upon a subcontractor bid submitted by Defendant Smith & Loveless, Inc. (“Smith & Loveless”) to provide wastewater treatment equipment as part of a construction project for a new wastewater treatment plant and facility. Before the Court is Smith & Loveless' Motion for Summary Judgment (Doc. 117). The motion is fully briefed and the Court is prepared to rule. For the reasons stated below, the Court denies Smith & Loveless' motion.
Summary judgment is appropriate if the moving party demonstrates “that there is no genuine dispute as to any material fact” and that it is “entitled to judgment as a matter of law.”[1]In applying this standard, the Court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party.[2] “There is no genuine [dispute] of material fact unless the evidence construed in the light most favorable to the non-moving party, is such that a reasonable jury could return a verdict for the non-moving party.”[3] A fact is “material” if, under the applicable substantive law, it is “essential to the proper disposition of the claim.”[4] A dispute of fact is “genuine” if “there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way.”[5]
The moving party initially must show the absence of a genuine dispute of material fact and entitlement to judgment as a matter of law.[6] Once the movant has met the initial burden of showing the absence of a genuine dispute of material fact, the burden shifts to the nonmoving party to “set forth specific facts showing that there is a genuine issue for trial.”[7] The nonmoving party may not simply rest upon its pleadings to satisfy its burden.[8] Rather, the nonmoving party must “set forth specific facts that would be admissible in evidence in the event of trial from which a rational trier of fact could find for the nonmovant.”[9] In setting forth these specific facts, the nonmovant must identify the facts “by reference to affidavits, deposition transcripts, or specific exhibits incorporated therein.”[10] A nonmovant “cannot create a genuine issue of material fact with unsupported, conclusory allegations.”[11] A genuine issue of material facts must be supported by “more than a mere scintilla of evidence.”[12] Finally, summary judgment is not a “disfavored procedural shortcut”; on the contrary, it is an important procedure “designed to secure the just, speedy and inexpensive determination of every action.”[13] “At the same time, a summary judgment motion is not the chance for a court to act as the jury and determine witness credibility, weigh the evidence, or decide upon competing inferences.”[14]
As an initial matter, PKG has failed to comply with D. Kan. Rule 56.1(b)(1), which requires the nonmovant to state for each numbered statement whether the fact is controverted or uncontroverted. PKG ignores Smith & Loveless' statement of uncontroverted facts and asserts its own. Smith & Loveless requests the Court deem its statement of uncontroverted facts as admitted pursuant to D. Kan. Rule 56.1(a), and responds to PKG's statement of facts in its reply as required by the Rule 56.1(c). Although burdensome, the Court will not deem all of Smith & Loveless' facts uncontroverted but will keep in mind the applicable summary judgment standards in determining the facts for purposes of this motion, many of which the parties have stipulated to or are evidenced by the documents at issue.
The following material facts are either uncontroverted, stipulated, or viewed in the light most favorable to PKG. The Court does not consider facts presented by the parties that the record does not support or that are not relevant to the legal issues presented. Nor does the Court consider legal arguments included in the parties' statements of fact.
PKG is a water and wastewater treatment general contractor, located in Fargo, North Dakota. Smith & Loveless is a manufacturer and seller of wastewater treatment equipment, including package wastewater treatment plants, located in Lenexa, Kansas.
Former defendant/third-party plaintiff MNX, Inc. (“MNX”), is an independent manufacturer's sales representative for roughly thirty different manufacturers of wastewater treatment equipment, including Smith & Loveless.[15] The November 11, 2016 Private Development Sales Representation Agreement between MNX and Smith & Loveless provides in relevant part that MNX acted as the “sales representative for the sale of [Smith & Loveless] products described in Exhibit A and AA attached . . .” for Minnesota, South Dakota, and North Dakota, and that “[a]s to [Smith & Loveless], [MNX ] is strictly an independent contractor and is not an employee or agent for any purposes whatsoever.”[16]
The Powder House Pass Wastewater Treatment Project (the “Project”) is located in Lead, South Dakota. Powder House Pass is a new, private residential development near Deadwood, South Dakota. The Project included the construction and installation of a new wastewater treatment plant and facility, along with other infrastructure. PKG was one of four bidding contractors on the Project.
On July 18, 2017, MNX provided a cover letter and copy of the five-page Smith & Loveless proposed Sales Agreement for the sale of one packaged Smith & Loveless Aerobic FAST® Treatment System (“Sales Agreement”) to PKG and other bidding contractors for the project.[17] The MNX cover letter states: “[t]his proposal/quotation is void at our option unless accepted by you in accordance with our terms and conditions of sale within 30 days from the bid date.”[18]
The proposed Sales Agreement sets forth Smith & Loveless' scope of supply and the terms and conditions of the sale of the FAST® Treatment System, which differed in various respects from the June 2017 Project Specifications, [19] including: (1) no provision for two-year warranty; (2) FOB factory rather than job site; (3) no provision for certain equipment features; and (4) standard rather than high-performance painting and coating.[20] The Sales Agreement states that “[p]ricing is firm for 60 days from the date of this proposal.”[21] The Sales Agreement further states in relevant part, that the agreement is not binding on Smith & Loveless unless signed by PKG and that the agreement constitutes the entire contract between the parties.[22]Other provisions of the Sales Agreement include: (1) start-up/training one trip; (2) payment terms of 10% with order; 20% upon submission of submittal documentation; 20% on release to production; 40% Net 30 days from shipment; 10% at start up not to exceed 90 days; and (3) manufacturing completion estimated at 28 weeks after receipt of approved submittals.[23] On July 20, 2017, MNX emailed PKG stating the purchase price for the Smith & Loveless treatment equipment was $325, 416.[24] That afternoon, PKG submitted a bid to the owner of the Project for $1, 569, 000.
A series of emails was subsequently exchanged between Mike Sikorski, PKG's project engineer, Michael Mathers, PKG's project manager, and Mark Enochs at MNX. On July 31, 2017, Sikorski emailed Enochs to inquire whether there were “money saving avenues” to reduce the price for the Smith & Loveless FAST® Treatment System, specifically whether it would cost less to put a catwalk down the center of each tank instead of covering the entire system with grating.[25] Enochs responded on August 4, 2017 that they were looking into this option and would get back to him.[26] On August 9, Sikorski emailed Enochs to inquire whether Smith & Loveless would give PKG a price for adding handrail to the perimeter and to again ask if Smith & Loveless had any cost saving ideas.[27]
On August 14, 2017, PKG was awarded the contract for the Project.[28] At 4:45 p.m. on August 15, 2017, Enochs emailed Sikorski: [29] Sikorski immediately replied, “I just heard yesterday, that they recommended award of the project, so you may just want to hold tight.”[30] Enochs replied at 4:53 p.m,, stating and asked for a production schedule “so we can be sure to meet your timeline.”[31] The next day, Enochs emailed Sikorski to inform him that Smith & Loveless could do the handrails on the tanks for $9, 500, and that they were still looking into the controls.[32] On August 26, 2017, Enochs emailed Sikorski to thank him for the call that morning confirming that the Smith & Loveless treatment system would be used in the Project.[33]Enochs requested a purchase order be sent to Smith & Loveless, care of MNX, requested a desired delivery date, installation date, and any other schedule items they should be aware of, and said that he would get back to Sikorski to confirm production schedules and to answer his question about whether welding to the top of the tank wall is acceptable.[34] Later that day, Enochs emailed Mathers to state that Smith & Loveless noted that welding to the top of the tanks can damage the factory paint coating...
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