Avalanche Equipment, LLC v. Williams-Southern Company, LLC
Filing
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FINDINGS, CONCLUSIONS, AND ORDER FOR JUDGMENT by Magistrate Judge Boyd N. Boland on 12/31/14. Judgment shall enter in favor of the plaintiff, Avalanche Equipment, LLC, and against the defendant, Williams-Southern Company, LLC, as follows: For rent on equipment in the amount of $161,646.80; For interest on the past due balance for rental charges at the rate of 1.5% per month through the date of these Findings, Conclusions, and Order for Judgment, to be established by an affidavit to be submitted on or before January 14, 2015; For reasonable attorneys' fees to be awarded on the submission of a fee application, to be submitted on or before January 14, 2015; For its costs, to be awarded pursuant to Fed. R. Civ. P. 54(d)(1) and D.C.COLO.LCivR 54.1; and For post-judgment interest as provided by law. (bsimm, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Boyd N. Boland
Civil Action No. 13-cv-02827-BNB-MJW
AVALANCHE EQUIPMENT, LLC,
Plaintiff,
v.
WILLIAMS-SOUTHERN COMPANY, LLC,
Defendant.
______________________________________________________________________________
FINDINGS, CONCLUSIONS, AND ORDER FOR JUDGMENT
______________________________________________________________________________
Plaintiff, Avalanche Equipment, a Colorado limited liability company with its principal
place of business in Englewood, Colorado, commenced this action in the District Court of
Jefferson County, Colorado. The defendant, Williams-Southern, a Mississippi limited liability
company with a principal place of business in Laurel, Mississippi, removed the action based on
diversity of citizenship, 28 U.S.C. §1332. The case was tried to the court on December 15-16,
2014.
The dispute is summarized by Avalanche Equipment as follows:
Avalanche Equipment, LLC rented equipment to WilliamsSouthern Company, LLC for use at two oil and gas project sites in
North Dakota: Watford City, ND . . . and 56th St. NW, Epping,
ND. . . . The terms for the rentals were under a December 27,
2012 credit application. The projects are operated by Gadeco,
LLC. Various pieces of equipment were rented on account from
January 2013 to May 2013. Williams-Southern did not make any
payments on its rental account with Avalanche. Therefore,
Avalanche picked up the remaining rented equipment from the two
sites in April and May, 2013.
Final Pretrial Order [Doc. # 27] at ¶3(a).
Based on these allegations, Avalanche Equipment asserts four claims for relief:
(1) Breach of Contract; (2) Unjust Enrichment; (3) Breach of Implied Contract; and (4) Open
Account. Complaint [Doc. # 3]. At trial, however, Avalanche Equipment pursued only its claim
for breach of contract.
I.
The facts largely are undisputed. Based on the testimony and documentary evidence
presented at trial, I find the following by a preponderance of the evidence:
(1)
Williams-Southern was hired by Gadeco to perform work at the Epping well site
located near Watford City, North Dakota.
(2)
Avalanche Equipment is in the business of leasing equipment for use at drilling
sites for oil and gas wells, including sites located in North Dakota.
(3)
Bernard Hunt is an account manager for Avalanche Equipment. His
responsibilities include selling, picking up new customers, and taking care of existing customers,
including taking orders for equipment rentals and making sure that the equipment is delivered in
the field.
(4)
In December 2012, Mr. Hunt was contacted by Travis Hibley. At that time, Mr.
Hibley was employed by Williams-Southern as a supervisor/tool pusher. A tool pusher “is the
most knowledgeable person on a location for a rig and they are the immediate supervisor for that
crew.” Trans. Vol. 1 [Doc. # 52] at p. 44 lines12-15. Mr. Hibley wanted to rent a generator and
a towable heater in connection with work being performed by Williams-Southern in North
Dakota.
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(5)
Prior to renting equipment, Mr. Hunt required Williams-Southern to submit a
Credit Application.
(6)
Williams-Southern submitted a Credit Application, Ex. 1, on December 27, 2012.
The Credit Application is signed by Scott Williams, the owner of Williams-Southern.
(7)
Avalanche Equipment approved the Williams-Southern Credit Application. The
Credit Application provides:
The undersigned agrees to the following terms:
• All invoices are NET 30.
• Past due interest is 1.5% per month on all past due balances.
• In the event of non-payment, customer will pay all costs of
collection, including reasonable attorney fees and costs.
Ex. 1.
(8)
Following the approval of Williams-Southern’s Credit Application and at the
request of various Williams-Southern employees, Avalanche Equipment leased the following
equipment to Williams-Southern, which was accepted and used by Williams-Southern in
connection with the work it performed for Gadeco at the Epping well site and in the man camp in
Watford City, North Dakota:
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Equipment
Date Rented
Date Returned
Amount Billed
(Inv. # 6224)
12/29/2012
04/24/2013
$ 35,377.50
Towable Heater (Inv. # 6245)
01/01/2013
05/02/2013
52,817.97
Towable Heater (Inv. # 6246)
01/12/2013
02/22/2013
13,919.79
4 Heater Hoses
(Inv. # 6247)
01/12/2013
02/22/2013
2,862.00
Towable Heater (Inv. # 6250)
01/13/2013
03/29/2013
22,821.80
Towable Heater (Inv. # 6248)
01/19/2013
02/08/2013
8,710.02
Towable Heater (Inv. # 6249)
01/19/2013
02/07/2013
8,732.81
Towable Heater (Inv. # 6345)
01/24/2013
03/15/2013
15,391.20
Towable Heater (Inv. # 6346)
01/24/2013
03/29/2013
19,530.50
Generator
TOTAL
$180,163.59
Ex. 3.
(9)
Despite repeated requests from Avalanche Equipment, Williams-Southern never
signed the Rental Agreement Additional Terms And Conditions form provided by Avalanche
Equipment. Ex. 25 at AVALANC 00195.
(10)
Although Williams-Southern disputes the authority of Mr. Hibley and its other
employees to bind Williams-Southern to any lease contract with Avalanche Equipment, Mr.
Williams testified:
Q [by Mr. Janiszewski] Did you authorize--well, did you
authorize anybody-A
Not on William--
Q
up there to order heaters?
A
Okay. Not on Williams’ behalf.
Q
What do you mean by that?
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A
That William--the only way you could order a heater that
Williams was responsible for is you had to have a PO and you had
to have authorization from the main office. Now, if the company
[man] with Gadeco advised you to get heaters that is the company
[man]. That’s part of Gadeco. You’re working for him so you do
what he says.
* * *
THE COURT: Mr. Williams, did any representative of WilliamsSouthern ask Avalanche to provide equipment at the direction of
the Gadeco company man?
THE WITNESS:
From my understanding, yes.
THE COURT: And is the equipment that they asked Avalanche
to supply, that--those nine pieces that are listed in Exhibit . . . 28?
THE WITNESS: --what I was advised by one of our company
field reps was Mr. Joe Bernard, the company man for Gadeco, the
representative, advised for our guys to get heaters on everything
Gadeco had out there immediately. And they asked who do you
want to get heaters from and he said find them, I don’t care. He
said well, there’s a heater out here with Avalanche on it. I don’t
care. Get heaters on location now. And so my guys at that point in
time done what Mr.--the company man from Gadeco represented
by them to do.
THE COURT: Is it your understanding that representatives of
Williams-Southern, that is who contacted Avalanche for the
heaters?
THE WITNESS: From my under--from my understanding that is
how it initially was started. Yes, sir.
Trans. Vol. 1 [Doc. # 52] at p. 245 lines 9-23 and p. 265 line19 through p. 266 line 18.
II.
Williams-Southern’s first defense is that its tool pusher, Travis Hibley, and its other
employees who contacted Avalanche Equipment and ordered the delivery of equipment lacked
authority to bind Williams-Southern to a lease. The argument is contrary to the evidence and is
without merit. Mr. Williams, the owner of Williams-Southern, testified that (1) Williams5
Southern’s employees were to do as the Gadeco company man directed; (2) Joe Bernard,
Gadeco’s company man, “advised for our [Williams-Southern’s] guys to get heaters on
everything Gadeco had out there immediately”; and “my guys at that point in time done what
Mr.--the company man from Gadeco represented by them to do.” Under these facts, WilliamsSouthern’s employees had express authority to follow the instructions of Joe Bernard, the
Gadeco company man, and to rent the generator, towable heaters, and heater hoses as he
instructed. See Willey v. Mayer, 876 P.2d 1260, 1264 (Colo. 1994)(holding that “[e]xpress
authority exists whenever the principal directly states that its agent has the authority to perform a
particular act on the principal’s behalf”); Johnson v. Chilcott, 658 F. Supp. 1213, 1219 (D. Colo.
1987)(applying Colorado law and holding that “the principal and agent, through written or verbal
agreement or by conduct, may agree between themselves that the agent may act on behalf of the
principal”).
Williams-Southern also argues that Avalanche Equipment’s breach of contract claim fails
because the lease is not in writing and is unenforceable under section 4-2.5-201, C.R.S. That
provision states in relevant part:
Statute of Frauds. (1) A lease contract is not enforceable by way
of action or defense unless:
(a) The total payments to be made under the lease contract,
excluding payments for options to renew or buy, are less than one
thousand dollars; or
(b) There is a writing, signed by the party against whom
enforcement is sought or by that party’s authorized agent,
sufficient to indicate that a lease contract has been made between
the parties and to describe the goods leased and the lease term.
* * *
(4) A lease contract that does not satisfy the requirements of
subsection (1) of this section, but which is valid in other respects,
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is enforceable:
* * *
(b) If the party against whom enforcement is sought admits in
that party’s pleading, testimony or otherwise in court that a lease
contract was made, but the lease contract is not enforceable under
this provision beyond the quantity of goods admitted; or
(c) With respect to goods that have been received and accepted
by the lessee.
(5) The lease term under a lease contract referred to in
subsection (4) of this section is:
(a) If there is a writing signed by the party against whom
enforcement is sought or by that party’s authorized agent
specifying the lease term, the term so specified.
(b) If the party against whom enforcement is sought admits in
that party’s pleading, testimony, or otherwise in court a lease term,
the term so admitted; or
(c) A reasonable lease term.
Here, there is a partial writing--the Credit Application--which contains certain terms
between the parties. There is no writing signed by Williams-Southern, however, sufficient to
describe the goods leased or the lease term.
Mr. Williams admitted in his testimony that, at the direction of the Gadeco company
man, his employees leased the generator, towable heaters, and heater hoses identified by
Avalanche Equipment in its Exhibit 28. Consequently, Mr. Williams has admitted that
Williams-Southern leased from Avalanche Equipment the equipment at issue here for the term
stated, and the lease is enforceable under section 4-2.5-201(b), C.R.S.
In addition, the evidence establishes that Avalanche Equipment delivered the generator,
towable heaters, and heater hoses to Williams-Southern and that Williams-Southern accepted
and used that equipment. Consequently, the lease is enforceable under section 4-2.5-201(c),
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C.R.S.
Avalanche Equipment’s total claim is for $180,163.59. Of that amount, $161,646.80 is
for rental, delivery, and pickup. Ex. 4. Avalanche Equipment also claims $18,216.79 for parts,
labor, and service of damaged equipment. Id. at AVALANC 00010, 00011, 00014, 00015,
00017, 00026, and 00033. Avalanche Equipment also claims $300.00 for “DIESEL PER
GALLON.” Id. at AVALANC 00033.
The $300.00 charge for diesel is unexplained and finds no basis in the signed Credit
Application or testimony. Consequently, I will not award that amount.
The $18,216.79 for parts, labor, and service is based on paragraphs 7-9 of the Rental
Agreement Additional Terms And Conditions form to which Williams-Southern never agreed.
Although Williams-Southern is bound to the written terms of the Credit Application, which it
signed, and to pay for the rental of the equipment leased by it at the direction of the Gadeco
company man, there is no basis to hold Williams-Southern responsible for the charges
attributable to parts, labor, and service, to which it never agreed.
Avalanche Equipment also seeks interest on the past due balance at the rate of 1.5% per
month, as agreed in the signed Credit Application. Exhibit 30 contains Avalanche Equipment’s
interest calculation, but it includes interest calculated on the charges for diesel, parts, labor, and
service of damaged equipment, which I have disallowed. Avalanche Equipment may submit a
revised past due interest calculation which omits these disallowed items.
Avalanche Equipment also requests an award of its costs of collection, including
reasonable attorney fees and costs, as provided in the signed Credit Application. I will award
reasonable attorneys’ fees on the submission of an application which complies with the
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requirements of Fed. R. Civ. P. 54(d)(2) and D.C.COLO.LCivR 54.3. Avalanche Equipment
may recover its costs, other than attorneys’ fees, in the manner provided by Fed. R. Civ. P.
54(d)(1) and D.C.COLO.LCivR 54.1.
III.
For the reasons stated, judgment shall enter in favor of the plaintiff, Avalanche
Equipment, LLC, and against the defendant, Williams-Southern Company, LLC, as follows:
(1)
For rent on equipment in the amount of $161,646.80;
(2)
For interest on the past due balance for rental charges at the rate of 1.5% per
month through the date of these Findings, Conclusions, and Order for Judgment, to be
established by an affidavit to be submitted on or before January 14, 2015;
(3)
For reasonable attorneys’ fees to be awarded on the submission of a fee
application, to be submitted on or before January 14, 2015;
(4)
For its costs, to be awarded pursuant to Fed. R. Civ. P. 54(d)(1) and
D.C.COLO.LCivR 54.1; and
(5)
For post-judgment interest as provided by law.
DATED December 31, 2014.
BY THE COURT:
s/ Boyd N. Boland
United States Magistrate Judge
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