BASF Corporation v. Man Diesel & Turbo North America, Inc.
Filing
98
RULING AND ORDER denying 78 Motion for Summary Judgment and 86 Motion for Summary Judgment. Signed by Judge John W. deGravelles on 05/15/2015. (NLT)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
BASF CORPORATION
CIVIL ACTION
v.
NO. 13-42-JWD-RLB
MAN DIESEL & TURBO NORTH
AMERICA, INC.
RULING AND ORDER
This matter comes before the Court on the Reurged Motion for Summary Judgment
(Doc. 78) filed by Man Diesel & Turbo North America, Inc. (“MAN”) and the Cross-Motion for
Summary Judgment (Doc. 86) filed by BASF Corporation (“BASF”). Each motion is opposed.
Oral argument was heard on the motions on April 20, 2015.
MAN argues in its motion that its November 7, 2011, quote (the “Quote”) governs the
parties’ relationship and that, consequently, BASF cannot recover consequential damages.
BASF argues that MAN’s Quote is not an offer, that BASF’s December 28, 2011, Purchase
Order (the “Purchase Order” or “P.O.”) controls the parties’ relationship, and that, as a result,
BASF can recover both its expenses and its lost profits. MAN responds that the Purchase Order
was sent after performance began, and BASF claims that the Purchase Order was sent before
performance commenced.
MAN’s motion is easily denied. Reasonable jurors could easily conclude that MAN’s
Quote was not an offer, so summary judgment is inappropriate. Further, even if the Quote were
an offer, reasonable minds could conclude that MAN’s Quote was not expressly accepted or
accepted by silence. These are additional reasons for denying MAN’s motion.
BASF’s motion is much closer. As with MAN’s motion, the first critical question to
BASF’s motion is whether MAN’s Quote is an offer. If the Quote is not an offer, then BASF’s
motion for summary judgment should be granted; the parties clearly had a contract (either under
the Purchase Order or orally), so lost profits would be recoverable under the Purchase Order or
under La. Civ. Code art. 1995. Because the Court finds that MAN has presented enough
evidence – barely – to show that there is an issue of fact as to whether the Quote is an offer, and
because BASF conceded at oral argument that there is a question of fact as to this issue, the
Court finds that a reasonable juror could conclude that MAN’s Quote was an offer.
Assuming that the Quote is an offer (which the Court must do when construing the
evidence in a light most favorable to MAN), there are other issues of material fact that make
summary judgment for BASF inappropriate. First, there is a question of fact as to when
performance began. If performance began before the Purchase Order was sent, then the Purchase
Order was a request for a modification of the existing contract. If the Purchase Order is a request
for modification, then there is an issue of fact as to whether that request was accepted. Thus,
because the Court must construe the evidence in a light most favorable to MAN, the Court finds
that, for purposes of BASF’s motion, a reasonable juror could conclude that the Quote was an
offer, that performance began before the Purchase Order was sent, that the Purchase Order was
consequently a request for a modification of a preexisting contract based on the Quote, that the
request for modification was not accepted, and that the Quote’s clause prohibiting the recovery
of consequential damages governs. In short, BASF’s motion for summary judgment should be
denied.
Additionally, BASF’s motion for summary judgment should be denied because the Fifth
Circuit has held that summary judgment is inappropriate in cases such as this where there is
undoubtedly a contract between the parties but there are questions of fact as to what terms
govern that contract. This suit is squarely in line with those cases.
2
In short, there are simply too many issues of material fact to justify summary judgment in
favor of either party. Accordingly, both motions are denied.
I.
Relevant Factual Background
A. The C-300 Compressor Leak and the November 7, 2011, Quote
BASF owns and operates a chemical manufacturing facility in Geismar, Louisiana.
(Petition for Damages, Doc. 1-4, p. 4). In October 2011, MAN overhauled the C-300
Compressor and another machine at the Ethylene Oxide Unit at BASF’s Geismar facility.
(Affidavit of Nicholas Granier, Doc. 78-8, p.1). At that time, the Original Equipment
Manufacturer (i.e., Siemens) decided not to have the seals replaced on the C-300 Compressor,
presumably to avoid shutting down the machine and losing productivity. (Id., p. 2).
In response to a verbal request from BASF, MAN generated the Quote for the seal
replacement on November 7, 2011. (Granier Affidavit, Doc. 78-8, p. 2). The November 7, 2011,
Quote # 11-113821 states in the regarding line:
Equipment: Compressor (EO) change seals
Start Date: November 9, 2011
Duration: 2Days
(Id.). The Quote also provides as the first item under “Work Scope: Safety & Setup” - “Receive
Permits and walk tag out with the client representatives and indoctrinate all employees.” (Docs.
78-4 & 86-12, p. 1). The Quote then sets forth the remaining items of work that need to be
performed and lists the cost of the work as $26,750.00. (Id.). The Quote also states that MAN is
to provide, “Tooling required to perform scope finalized by client and MAN.” (Id.). On the
second page, the Quote provides that the tentative start date for the job is November 9; however,
1
This document and others were not originally authenticated when the parties filed their motions for summary
judgment. However, the parties subsequently filed a Joint Stipulation on Authenticity of Exhibits (Doc. 97) in
which they agreed to the authenticity of most of the exhibits.
3
the Quote then states, “We would need a purchase order before we can lock in a firm date.” (Id.,
p. 2).
The MAN Quote also includes certain “Terms and Conditions of Supply,” which “shall
be applicable to all … services performed by MAN.” (Id., p. 3). Significantly, the Quote states
that, if there is a breach of warranty, MAN “shall, in complete fulfillment of its liabilities under
this warranty, correct by repair or replacement any nonconformity which shall appear.” (Id.).
This remedy is given in lieu of all other warranties. (Id.). Further, the Quote provides that, in no
event shall MAN be liable for any special, incidental, indirect, consequential, or punitive
damages, including loss profits or revenue. (Id.).
According to a January 10, 2012, email sent from a BASF employee, the seals were not
changed around the time of the November 7, 2011, Quote because they were only a year old and
showed no signs of any issue with gas flow. (Doc. 78-11). However, the south seal “went
squiffy” immediately after start up, reseated itself in about two weeks, and was “OK until a
process upset on 12/21.” (Id.). Another BASF employee responded, “Squiffy? I take it that’s
high flow or in alarm.” (Id.).
On December 24, 2011, Kyle Frederick of BASF emailed others at BASF and said:
C300 seal flow has increased and is holding at 18-22scfm. We had a plant upset
that tripped the compressor and after restart it rose to this flow. We are hoping
the flow will stabilize but if not we are asking for availability of a rep for dec 28
to assist with the change. Please check and let me know if one is free.
(Doc. 90-6).2
B. Email Exchanges Between December 25 – 27, 2011
On December 25, 2011, at 2:11 p.m., Kyle Frederick of BASF emailed Nick Granier of
MAN asking, “Would you have a crew available to assist changing the seal on C300 Wednesday
2
A more detailed discussion on how exigent the leak was is provided below.
4
28th? Can you give me a quote?” (Doc. 86-3, p. 4). Granier replied on December 26 at 7:18
p.m., “Yes, Looks like we will have several people available. We will contact you first thing
tomorrow morning to discuss. … Sorry for the delay getting back to you.” (Id.). Frederick
responded minutes later at 7:35 p.m., “Thanks in advance for the help.” (Id.).
On December 27, 2011, at 8:35 a.m., Jerad Mitchell of MAN sent an email to Kyle
Frederick of BASF stating:
I have attached a copy of the quote that we generated for Leonard in November to
perform this job. This quote should be valid with the exception of the holiday that
we have on Friday. If this job should go into Friday our time will be billed
according to our rate sheets for holiday pay. Please work with Nick to get a P.O.
for this opportunity.
(Id., p. 1).
C. December 28, 2011 – The Day of Repairs and the P.O.
1. Arrival of the Crew
On December 28, at 6:14 a.m., Jerad Mitchell sent Kyle Frederick another email stating
in part:
We have a crew heading out to you [sic] facility this morning per your request to
begin a seal change out on C300. It is possible that the P.O. is caught up due to
the time frame we are working in to support this opportunity. Can you please
email Nick and I a confirmation P.O. which supports the efforts we a [sic] putting
forth. I forwarded the quote put together initially in November for this job as it
should be the same pending holiday work on Friday.
(Id., p. 3).
Both sides agree that MAN arrived at BASF’s premises sometime before 7:00 a.m. A
document entitled “MAN GATE PUNCHES BASF GEISMER 122811-123011” (Docs. 86-5 &
78-10) demonstrates that James Spinks and Kenneth Thompson are MAN employees that arrived
at the gates of the Geismar plant at 6:06 a.m.
5
2. BASF’s Purchase Order
The parties agree that, at some time on December 28, BASF faxed something to MAN.
But there is a dispute as to what was sent and when.
BASF contends that, at 8:50 a.m. Central Standard Time (or 15:50 Central European
Time), BASF faxed to MAN a five-page Purchase Order containing certain terms and conditions
for the job. BASF bases this on several pieces of evidence. First, BASF points to the testimony
of Jamie Latuso, a BASF employee who buys maintenance and construction services for the
Geismar site. (Deposition of Jamie Latuso, Doc. 86-6, p. 3). Latuso authenticated a screen shot
of BASF’s document system. (Id.). The screen shot reflects the transmission of the purchase
order and says when the Purchase Order was sent, to whom it was sent, and whether the
transmission was successful. (Id., p. 3-4). The time is in European time, according to Latuso.
(Id., p. 5). Latuso created the P.O. and then sent it. (Id., p. 5).
BASF also submits the screenshot itself, which states that the document was sent at
15:50. (Doc. 86-8). Further, the document states, “Successfully processed” and “Created by
LATUSOJ.”
BASF also submits the Affidavit of Scotty Owens. (Doc. 86-21). Owens was one of two
“buyers of services” at BASF’s Geismar facility in December 2011. (Id., p. 1). The other was
Jamie Latuso. (Id.). Owens attests that (1) 15:50 CET equates to 8:50 a.m. in Central Standard
Time; (2) as the P.O. was created in BASF’s system, the P.O. automatically included BASF’s
terms and conditions; (3) upon Latuso’s saving of the P.O., the P.O. (including automatically all
of BASF’s terms and conditions) immediately dispatched from BASF and was faxed to MAN;
and (4) the “successfully processed” notation means that “the purchase order - including the
terms and conditions - was, in whole successfully transmitted to [MAN’s] facsimile server.” (Id.,
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p. 4). Owens further said that no one in the procurement department received an automated
notice error indicating any issue with the transmission of the P.O. and that no one at BASF
received a communication from MAN reporting an issue with transmitting the P.O. (Id., p. 5).
MAN, on the other hand, submitted Nick Granier’s affidavit of April 3, 2013, specifically
stating that the fax was transmitted by BASF at 3:55 p.m. (Doc. 78-8, p. 3). But, in Granier’s
deposition, taken on June 17, 2014, Granier said that he did not know what time zone the
“15:55” referred to and that he would have no reason to dispute the fact that the BASF purchase
orders were issued according to European time. (Doc. 78-9, p. 17).3
Granier also attested to the fact that the P.O. was incomplete. Grannier states that, while
the P.O. stated it was a five-page document, only two pages were transmitted, and those pages
did not contain BASF’s terms and conditions. (Doc. 78-8, p. 3).
Regardless of whether the entire P.O. was transmitted, both sides agree that, at the very
least, the entire first page was transmitted. (Docs. 78-7, 86-9). This page of the Purchase Order
provides:
THIS ORDER IS SUBJECT TO THE TERMS AND CONDITIONS INCLUDED
HEREWITH, AND SELLER AGREES TO BE BOUND THEREBY, BY
SHIPPING THE GOODS, OR BY ACKNOWLEDGING RECEIPT OF THIS
ORDER SELLER AGREES TO SUCH TERMS AND CONDITIONS. ANY
DIFFERENT OR ADDITIONAL TERMS IN SELLER’S ACCEPTANCE
FORM, IF ANY, ARE HEREBY REJECTED.
(Docs. 78-7, 86-9). Notably, the Purchase Order rejects terms in the seller’s “ACCEPTANCE
FORM,” not terms predating the P.O. In any event, both copies of the P.O. contain the P.O.
/Release No. of 4901021764.
3
Significantly, in MAN’s Statement of Contested Fact, MAN does not point to the timing difference as an issue of
fact to preclude summary judgment for BASF, so MAN appears to concede that the affidavit was wrong and does
not create an issue of fact.
7
The full five-page P.O., submitted into evidence by BASF, provides important elements
of the offer in the allegedly unsent pages. The third page lists the price as $45,000. (Doc. 86-19,
p.3). This price differs from the $26,750.00 listed in the Quote. Additionally, on the fourth
page, the Purchase Order expressly states that, if it is sent in response to a quote, then the terms
of the Purchase Order supersede the terms of the quote and shall be a rejection of same. (Id.,
p. 4). Finally, the fifth page provides that any cost or damage incurred by BASF as a result of a
breach of a warranty shall be borne by MAN. (Id., p. 5).
On December 28 at 9:02 a.m., Terry Bourgeois of BASF sent Jerad Mitchell of MAN the
following e-mail:
Jerad,
Po for C-300 is as follows:
PO # 4901021764
(R.Doc. 86-3, p. 2). At 9:29 a.m., Mitchell then forwarded the email to Michael Yu and Leigh
Brashier, both of whom are MAN employees, with the message, “P.O. for the job the guys are on
today.”
Nick Granier of MAN testified that he understood that the purchase order is “basically a
contract number, as far as them [BASF] being bound to have to pay something against that
number.” (Doc. 78-9, p. 14)
Q: So you understand the purchase order is the contract?
A: Yes.
(Id.).
3. When Did Performance Begin?
The parties dispute when performance began. BASF cites to the deposition of James
Spinks, MAN’s supervisor for the job, wherein he said that he “could not start the work unless
8
[he] had a P.O.” (Deposition of James Spinks, Doc. 86-11, p. 18). Spinks also said his approval
“to start” was an e-mail that BASF sent to MAN. (Id.). Finally, Spinks testified that they
“started work after 9:00” within thirty minutes of the work permit issuing.
Nick Granier also testified that the policy at the time of the contract was that MAN would
do no work for BASF until BASF issued a purchase order: “Purchase order or, in emergency
cases, we’re told that e-mail or something like that is valid to proceed with going on a job.”
(Doc. 78-9, p. 28). Further, Granier testified that there was a “long history or a custom and
practice” between MAN and BASF regarding the issuance of quotes, issuance of purchase orders
and performance of the work, and “the procedure is, a quote is issued and BASF reviews the
quote but no work can be done until BASF issues the purchase order[.]” (Doc. 78-9, p. 12).
Conversely, MAN contends and submits evidence showing that, while they did not start
working on the compressor until around 9:00 a.m., MAN did other work after arriving at the
plant around 6:00 a.m. Spinks testified that his work included reviewing drawings of the
compressor with BASF and pointing out to BASF what had to be done on it. (Doc. 86-11, p. 5152). Further, MAN performed the “lockout/tag-out” procedure to obtain a Safe Work Permit to
begin work on the compressor. (Id.) The lockout/tag-out procedure requires them to a review of
the lockout with operations personnel, and BASF has a designated spot for MAN to hang their
lock. (Id., p. 31). This testimony confirms the Daily Report provided by MAN, which states that,
on December 28, MAN “Arrived on site 7:00am, James Spinks, James Landry, Kenny
Thompson, staged tooling, received permit, and performed lock out-tag out.” (Doc. 90-8).
Finally, Jerad Mitchell testified that MAN’s workers are typically on the clock by the time the
crew reaches the gate and that the customer would be charged by that point. The work is
“already started” “by the time they get to the gate.” (Doc 86-17, p. 51).
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BASF responds with testimony from Spink’s deposition:
Q: You said as far as the lockout and tagout was concerned, now you have to
wait until you get a Safe Work Permit to actually go lockout and tagout, correct?
A: Yes, it’s all done – it’s one process together, yes.
(Doc. 86-11, p. 52). The BASF Safe Work Permit document states in the
LOCKOUT/TAGOUT ISOLATION VERIFICATION section that the Date/Time was
12/28 at 9:00. (Doc. 86-10, p. 1). But this document does not say if that is the time the
process was completed or began, or how long the process took.
D. After Performance
Nicholas Granier attests that, by 3:55 p.m. on December 28, MAN had “performed
substantial work on the seal replacement project for more than six hours.” (Doc. 86-17, p. 51).
On December 30, the compressor failed. (Deposition of Mervin McCon, Doc. 80-6, p.
57). On the following day, MAN participated in disassembling and loading the compressor onto
a truck for shipment to Houston for repairs. (Id., 80-6, p. 15-16).
According to BASF’s expert, BASF is claiming in damages $270,212.76 per day for 47
days (December 30, 2011 to February 16, 2012) for the shutdown of the turbo compressor after
its failure. (See Doc. 90-3). This is about $12.7 million.
On February 3, 2012, MAN’s President Peter Roth sent a letter to BASF in response to a
BASF letter concerning the C-300 Compressor failure. (Doc, 86-14). The regarding line states:
“RE: BASF Purchase Order No. 4901021764.” (Id.) Also, in the letter, Roth states that MAN
“did work for BASF at the Geismar facility under the above referenced Purchase Order and our
Quote No. 11-11382 Rev. 1.” (Id.). The letter also says that MAN remains “as always, willing to
fulfill the obligations of the Purchase Order and the Terms and Conditions of Supply attached to
our quotation and under which this Order was accepted.” (Id.).
10
According to an invoice sent by MAN to BASF and dated March 16, 2012, MAN billed
BASF $40,917.00 for “CHANGE SEALS ON EOT ONSITE WORK.” (Doc. 86-15). The
document contains a section stating “Your Reference,” which says underneath “4901021764,”
which is the P.O. number. (Id.). There is no reference to the Quote number. (Id.).
Finally, in an email (Doc. 86-18) dated August 22, 2012, Jerad Mitchell of MAN appears
to send the Quote to two other MAN employees. The Quote has a comment in the “Work
Scope” section “for internal use only” stating:
Unfortunately, This scope does not reflect what is required to change the seal as
stated in the heading. The client possibly will argue that our guys enacted [sic] on
this scope until Siemens representative arrive. I have no reason to question the
credibility of the events explained by our crew. However, as the client I would
challenge our competence due to this incorrect scope as an indication of what
took place on site leading up to the OEM support arrival. Line item 7 is really
misleading and was taken from the major overhaul scope when the seals were not
changed. In actuality our crew new [sic] what was required and the quote was
only a proposal.
(Id.).
II.
Summary Judgment Standard
“The court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). If the mover bears his burden of showing that there is no genuine issue of
fact, “its opponent must do more than simply show that there is some metaphysical doubt as to
the material facts ... [T]he nonmoving party must come forward with ‘specific facts showing that
there is a genuine issue for trial.’” See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 586–587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (internal citations omitted). The nonmover's burden is not satisfied by “conclusory allegations, by unsubstantiated assertions, or by
only a ‘scintilla’ of evidence.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994)
11
(citations and internal quotations omitted). “Where the record taken as a whole could not lead a
rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial.’”
Matsushita Elec. Indus. Co., 475 U.S. at 587. Further:
In resolving the motion, the court may not undertake to evaluate the credibility of
the witnesses, weigh the evidence, or resolve factual disputes; so long as the
evidence in the record is such that a reasonable jury drawing all inferences in
favor of the nonmoving party could arrive at a verdict in that party's favor, the
court must deny the motion.
International Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1263 (5th Cir.1991).
III.
Discussion
A. MAN’s Re-Urged Motion for Summary Judgment
1. The Parties’ Arguments
MAN argues that (1) BASF expressly accepted MAN’s Quote through emails, and (2)
alternatively, BASF accepted by silence by allowing MAN to work for several hours in an
emergency before sending the P.O.
BASF responds that (1) it did not expressly accept the Quote, and (2) there was no
acceptance by silence. BASF contends that (1) there was no silence because BASF sent the P.O.
with differing terms; (2) there were no special circumstances because this was no emergency
(e.g., no chemicals leaking or anything of the like); and (3) there should be no reasonable belief
by MAN because, in the thirty-something prior transactions with BASF, BASF always sent a
five-page P.O. containing an identical number of paragraphs for terms and conditions.
MAN further argues that BASF violated the warranty by not allowing MAN an
opportunity to repair/replace the parts. BASF responds that MAN had notice (through its
employees and formal letter) that BASF was sending the parts to a facility in Houston for repairs.
MAN replies that this still violated the terms of the contract and that BASF spoilated evidence.
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2. Analysis
a. Construing the evidence in a light most favorable to BASF, was
Man’s Quote an offer?
MAN’s motion for summary judgment is denied. At the very least, reasonable minds
could conclude that MAN’s Quote was not an offer because the parties contemplated that a
purchase order would issue.
“A party who demands performance of an obligation must prove the existence of the
obligation.” La. Civ. Code art. 1831. Accordingly, a “party claiming the existence of a contract
has the burden of proving that the contract was perfected between himself and his opponent.”
Enter. Prop. Grocery, Inc. v. Selma, Inc., 38,747 (La.App. 2 Cir. 9/22/04), 882 So.2d 652, 655
(citing Pennington Constr., Inc. v. R.A. Eagle Corp., 94-0575 (La.App. 1 Cir. 3/3/95), 652 So.2d
637).
“A contract is formed by the consent of the parties established through offer and
acceptance.” La. Civ. Code art. 1927. “Unless the law prescribes a certain formality for the
intended contract, offer and acceptance may be made orally, in writing, or by action or inaction
that under the circumstances is clearly indicative of consent.” Id. Louisiana doctrine has
explained:
To constitute a true offer, a declaration of will must be sufficiently precise and
complete so that the intended contract can be concluded by the offeree's
expression of his own assent, thereby giving rise to that “mutual consent” of the
parties which, in practical terms, is indistinguishable from the contract itself.
Saul Litvinoff, Consent Revisited: Offer Acceptance Option Right of First Refusal and Contracts
of Adhesion in the Revision of the Louisiana Law of Obligations, 47 La. L.Rev. 699, 706 (1987).
“If there is a genuine dispute, it is left to the fact-finder to determine whether there has
been a ‘meeting of the minds’ between the parties so as to constitute mutual consent.”
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SnoWizard, Inc. v. Robinson, 897 F.Supp.2d 472, 478 (E.D.La. 2012) (citation omitted).
“Moreover, ‘[t]he existence or nonexistence of a contract is a question of fact and, accordingly,
the determination of the existence of a contract is a finding of fact.’” Id. (quoting Sam Staub
Enters., Inc. v. Chapital, 2011-1050 (La.App. 4 Cir. 3/14/12), 88 So.3d 690, 694).
Here, applying these standards and construing the evidence in a light most favorable to
BASF, reasonable minds could conclude that the Quote was not an offer. Specifically:
In his December 27, 2011, email attaching the Quote, MAN’s Jerad Mitchell stated,
“Please work with Nick to get a P.O. for this opportunity.” (Doc. 86-3, p. 1).
In his December 27 email at 6:14 a.m., Mitchell again stated, “It is possible that the P.O.
is caught up due to the time frame we are working in to support this opportunity. Can
you please email Nick and I a confirmation P.O. which supports the efforts we a [sic]
putting forth.” (Id., p. 3).
The Quote states, “We would need a purchase order before we can lock in a firm date.”
(Doc. 86-12, p. 2). Further, the Quote states, “Tooling required to perform scope
finalized by client and MAN,” implying that the scope needed to be finalized. (Id., p. 1).
In Jerad Mitchell’s internal email (Doc. 86-18) dated August 22, 2012, he sent the Quote
to two other MAN employees. The Quote has a comment in the “Work Scope” section
“for internal use only” stating:
Unfortunately, This scope does not reflect what is required to change
the seal as stated in the heading. The client possibly will argue that our
guys enacted [sic] on this scope until Siemens representative arrive. I
have no reason to question the credibility of the events explained by our
crew. However, as the client I would challenge our competence due to
this incorrect scope as an indication of what took place on site leading up
to the OEM support arrival. Line item 7 is really misleading and was
taken from the major overhaul scope when the seals were not changed. In
actuality our crew new [sic] what was required and the quote was only
a proposal.
(emphasis added).
Deposition testimony of MAN’s employees suggests the Quote is not an offer. James
Spinks, MAN’s supervisor for the job, testified that he “could not start the work unless
[he] had a P.O.” (Doc. 86-11, p. 18). Grannier, another MAN employee, also testified
that the “purchase order is the contract.” (Doc. 78-9, p. 14).
14
All of this evidence demonstrates that, construing the evidence in a light most favorable
to BASF, the Quote was not “sufficiently precise and complete so that the intended contract can
be concluded by the offeree’s expression of his own assent.” Thus, an issue of material fact
precludes summary judgment in favor of MAN.
b. Even if MAN’s Quote were an offer, was there acceptance?
This finding eliminates the necessity of addressing MAN’s other arguments. However,
the Court will do so in part.
The Court finds that a reasonable juror could find that, even if the Quote were an offer,
BASF did not accept its terms expressly or by silence. BASF’s December 25, 2011, email to
Nick Granier of MAN asking, “Would you have a crew available to assist changing the seal on
C300 Wednesday 28th? Can you give me a quote?” (Doc. 78-5) cannot reasonably be construed
as an acceptance of the November 7 Quote. The email does not mention the Quote, and BASF
specifically asks MAN to send him a quote, implying that he would like another quote. BASF’s
other email – “Thanks in advance for the help” – is also not an acceptance. This email was sent
in response to Granier’s December 26 email, which does not mention the Quote and only states
that MAN has “several people available” and that MAN will contact BASF the following
morning to discuss the project. In short, there is no express acceptance.
Further, a reasonable jury could conclude that there was no acceptance by silence.
“When, because of special circumstances, the offeree's silence leads the offeror reasonably to
believe that a contract has been formed, the offer is deemed accepted.” La. Civ. Code. Art. 1942.
Based on the plain text, there are three requirements to this article: (1) special circumstances,
(2) silence by the offeree, and (3) reasonable belief by the offeror that a contract has been
formed.
15
The parties argue as to whether there was emergency here which would qualify as
“special circumstances” justifying acceptance by silence. Since reasonable minds could differ on
this issue, summary judgment in favor of MAN is denied.
For MAN, Nicholas Granier testified that he considered this leak an emergency job for
BASF Corp. (Doc. 86-7, p. 14). Jerad Mitchell also testified that he considered this an
emergency:
Q. And why do you call this an emergency?
A. Do you work on Christmas? Christmas, the holiday work, and whenever we
know in our industry what equipment is vital to the plant, and they tell us that,
they -- typically an emergency is not something that says, Hey, give us a quote in
two weeks and come out on the fifth week after we give you a P.O. That's not an
emergency. An emergency is, Hey, I need somebody in two days. They don't have
to state the word "emergency." You know in your industry when he says, I need
somebody in two days. What can you do?
…
And when you call people off of vacation, right, and you say, Hey, I'll have to get
people off. This guy's at the hunting camp. Hey, BASF, we're going to help you
out. We're going to get some people out there. You have a TA coming. That's not
a planned job. You know what I mean?
(Doc. 86-17, p. 16-17).
MAN also points to certain internal emails from BASF. In a November 8, 2011, email,
BASF employee Thomas Bijtebier stated that the “high increase (in a short time) of the gas seal
flow of the second seal [was] indeed disturbing,” and he recommended that BASF “shutdown the
machine and replace the seal (in order to prevent further damage).” (Doc. 90-4, p. 1-2). In a
Nov. 11, 2011, email from Douglas Webster of BASF to others at BASF, Webster said that “The
flow has reached the alarm point” and that BASF was “considering shutting the machine down
for a seal replacement.” (Doc. 90-5). Finally, in a January 10, 2012, email, a BASF employee
said the seals “went squiffy,” to which another BASF employee said, “Squiffy? I take it that’s
high flow or in alarm.” (Doc. 78-11).
16
BASF, on the other hand, cites to BASF employee Kyle Frederic’s deposition, who says
that the compressor was still running on December 25, 2011. (Doc. 80-8, p. 8). Frederic said, “It
wasn’t an emergency for me. What I call urgent would be – where we’re losing product to the
atmosphere or, you know, somehow losing money. This was a decision to shut down in a
controlled environment.” (Doc. 80-8, p. 12). BASF further points to Jerad Mitchell’s December
28, 2011, email stating that the Quote should be sufficient for the project “as it should be the
same pending holiday work on Friday.” (R.Doc. 78-5, p.3). The “holiday work” for New Year’s
Eve was the only way that this was out of the ordinary, BASF argues.
Based on this evidence, reasonable minds could differ as to whether there were “special
circumstances” under La. Civ. Code art. 1942. On this ground alone, MAN’s motion for
summary judgment should be denied.
Reasonable minds could also differ on the issue of silence. This issue turns on when
performance began, the two sides of which are discussed above. If performance began when
MAN arrived at the plant at 6:00 a.m., then BASF was silent because the fax was not sent until
8:55 a.m. If performance began around 9:00-9:30 a.m. after work on the compressor began, then
BASF was not silent. Since there is an issue of fact as to when performance began, there is an
issue of fact as to whether there was silence. Accordingly, summary judgment for MAN should
be denied on this ground as well.
In sum, a reasonable jury could find that MAN’s Quote was not an offer. Even if it were
an offer, a reasonable jury could conclude that there was no express acceptance, and there are
issues of fact that preclude a determination of whether there was acceptance by silence.
17
c. Warranty
Because the Court finds that issues of fact preclude summary judgment on whether the
Quote was an offer, the Court declines to address whether BASF breached MAN’s warranty
provision.
B. BASF’s Cross-Motion for Summary Judgment
1. The Parties’ Arguments
BASF argues that MAN’s Price Quotation was not an offer. According to BASF, an
offer must conclude the bargain with acceptance alone, which the Quote did not do. BASF bases
its argument on the terms of the Quote, MAN’s statements and actions, and the parties’ course of
dealings. Further, BASF argues that, even if MAN’s Quotation were an offer, BASF’s P.O. was
a counteroffer which MAN accepted by performance. Acceptance must be in conformity with an
offer. Here, the P.O. had terms that were different from the quote. Further, according to BASF,
the parties’ course of dealing showed that MAN was aware of the full terms and conditions of
the P.O. Finally, BASF argues that MAN’s failure to complain or object to the P.O. as well as its
post-performance conduct show that MAN accepted the P.O.
MAN contends that its Quote was in fact an offer and that the law prescribes no
formalities for an offer. Further, MAN asserts that BASF’s deteriorating turbo compressor
created special, urgent circumstances to warrant acceptance by silence. MAN further says that it
was working for hours before the P.O. was sent. Ultimately, the P.O. was a request for a
modification that was not accepted by MAN. Finally, MAN says that their prior course of
conduct shows that MAN frequently disputed BASF’s terms and conditions.
18
2. Analysis
BASF’s motion turns on how the Purchase Order is characterized. It can be considered
an offer, a counteroffer, or an attempt to modify a preexisting contract. As will be explained
below, the different options produce different outcomes.
a. For purposes of BASF’s motion, was the Quote an offer?
The determination of how the Purchase Order is characterized turns on whether MAN’s
Quote is an offer. This issue is critical. If the Quote is not an offer, then BASF would be
entitled to summary judgment because, even if MAN did not receive the entire Purchase Order,
the parties had a valid contract from the partial Purchase Order or simply through an oral
contract.4 In either event, the contract would be silent on the issue of damages and would be
governed by La. Civ. Code art. 1995, which allows for the recovery of lost profits.5
As demonstrated above, there is considerable evidence that MAN’s Quote was not an
offer. But the key issue here is whether, construing the documents and testimony in a light most
favorable to MAN, there is evidence creating an issue of fact as to whether the MAN Quote is an
offer and whether reasonable minds could differ as to that question.
Although the question is extremely close, the Court finds that there is - barely - sufficient
evidence to create an issue of fact. Specifically, emails exchanged between BASF and MAN
from December 25 - 28, 2011, show, when construed in a light most favorable to MAN, that
MAN intended the Quote to be an offer. Jerad Mitchell stated in his December 27 email that
4
If the Quote is not an offer and if the Purchase Order was sent before work commenced, then MAN clearly
accepted the Purchase Order by commencing work. See La. Civ. Code. Art. 1939 (“When an offeror invites an
offeree to accept by performance and, according to usage or the nature or the terms of the contract, it is
contemplated that the performance will be completed if commenced, a contract is formed when the offeree begins
the requested performance.”). If the Quote is not an offer and if the Purchase Order was sent after performance
began, then BASF’s initial request for MAN to perform repair work was an oral “offer,” which MAN accepted by
performance. See id.
5
La. Civ. Code 1995 provides, “Damages [for breach of contract] are measured by the loss sustained by the oblige
and the profit of which he has been deprived.”
19
“This quote should be valid with the exception of the holiday that we have on Friday.” (Doc. 863). When construing the facts in a light most favorable to MAN, Mitchell clearly intended for
the Quote to govern the relationship between the parties and for the contract to be formed merely
by BASF’s consent. While Mitchell requested a P.O. in the same email, this is arguably (again
construing the facts in a light most favorable to MAN) merely a confirmation of payment. Even
though this evidence is weak, counsel for BASF conceded at oral argument that these emails
created a genuine issue of fact as to whether MAN’s Quote was an offer. Accordingly, the Court
finds that MAN’s Quote could be an offer for purposes of BASF’s motion.
b. Results flowing from a finding that MAN’s quote is an offer
If MAN’s Quote is an offer, then BASF’s Purchase Order can be either a request to
modify the contract formed by the Quote or a counteroffer. This question turns on when
performance began.6
The Court finds that the question of when performance began is a disputed issue of
material fact. The Court is guided by Ever-Tite Roofing Corp. v. Green, 83 So.2d 449 (La.App.
2 Cir. 1955). There, homeowners executed a document to hire a contractor to re-roof their
house. Id. at 450. The contract set forth the work that needed to be done and stated it would
become binding “only upon written acceptance hereof … or upon commencing performance of
the work.” Id. (italics in original). The job needed to be performed on credit, so the contractor
obtained credit reports and approval from a lender. Id. at 451. On the day immediately
6
For purposes of BASF’s motion, if the Quote was an offer, and if MAN began “performance” at 6:00 a.m. before
the Purchase Order was sent, then there was already a valid contract in place between MAN and BASF based on the
Quote. Thus, the P.O. would be a request for a modification of the Quote. If the Quote was an offer, and if MAN
did not begin performance prior to the Purchase Order being sent (that is, MAN began performance between 9:00 –
9:30 a.m.), then the P.O. was a counteroffer to MAN’s Quote, as the P.O. contained terms not in conformity with the
Quote. See La. Civ. Code. art. 1943 (“An acceptance not in accordance with the terms of the offer is deemed to be a
counteroffer.”); LaSalle v. Cannata Corp., 2003-0954 (La.App. 1 Cir. 4/2/04), 878 So.2d 622, 624 (“A modification
in the acceptance of an offer constitutes a new offer which must be accepted in order to become a binding
contract.”).
20
following approval, the contractor “engaged its workmen and two trucks, loaded the trucks with
the necessary roofing materials and proceeded from Shreveport to [the homeowner’s] residence”
to perform the contract. Id. The contractor’s workers discovered when they arrived that the
homeowners had hired a third party whose workers were re-roofing the house. Id. The
homeowners prevented the contractor from doing the work. Id. The contractor filed suit for
breach of contract, and the trial court held that the homeowners gave adequate notice to
withdraw from the contract. Id.
The appellate court reversed. Id. at 453. According to the Civil Code articles on timing
of acceptance, a reasonable time to accept was required. Id. at 452 (citation omitted). The
appellate court concluded:
The contract was accepted by plaintiff by the commencement of the performance
of the work contracted to be done. This commencement began with the loading
of the trucks with the necessary materials in Shreveport and transporting such
materials and the workmen to defendants’ residence. Actual commencement or
performance of the work therefore began before any notice of dissent by
defendants was given plaintiff.
Id. Accordingly, the appellate court awarded damages in accordance with the contract, including
lost profits. Id. at 453.
Ever-Tite is important, not because it definitely provides an answer to when performance
begins, but because it shows, at the very least, reasonable minds could differ as to that question.
Thus, for purposes of BASF’s motion, there is a genuine issue of material fact as to when
performance began, and there is, as a result, a question of whether the Purchase Order was a
modification or a counteroffer. Phrased another way, for purposes of BASF’s motion, the
Purchase Order can be either a modification or a counteroffer, depending on what light is more
favorable to MAN.
21
c. If the Purchase Order was a modification, there is an issue of
material fact precluding summary judgment.
The party asserting modification of an obligation must prove the facts or acts giving rise
to the nullity, modification, or extinction. La.Civ.Code art. 1831; Taita Chemical Co., Ltd. v.
Westlake Styrene Corp., 246 F.3d 377, 387 (5th Cir. 2001) (denying summary judgment on the
issue of modification, despite “a great amount of evidence favorable to” one party on the issue,
because a genuine issue of material fact existed as to whether the other party agreed to the
modification) (citations omitted). “Moreover, it is well established that even if the written
contract contains a provision requiring that all modifications be in writing … either oral
agreement or conduct can nonetheless prove modification.” Id. (citations omitted). “In all
instances, however, the party urging modification must establish that parties mutually consented
to the agreement as modified.” Id. (citations omitted). “[M]odification requires a meeting of the
minds,” so the issue is whether the other party “consented either expressly or impliedly to a
modification.” Id. (citations omitted).
Here, as in Taita, there is an issue of fact as to whether MAN consented to any
modification. As demonstrated above, there is a “great amount of evidence favorable to” BASF
from MAN’s post-performance conduct that MAN was bound by the Purchase Order. However,
in the February 3, 2012, letter (Doc. 86-14) from MAN’s President Peter Roth to BASF, Roth
states that MAN “did work for BASF at the Geismar facility under the above referenced
Purchase Order and our Quote No. 11-11382 Rev. 1.” (Id.) (italics added). The letter also states
that MAN remains “as always, willing to fulfill the obligations of the Purchase Order and the
Terms and Conditions of Supply attached to our quotation and under which this Order was
accepted.” (Id.) (italics added). Thus, MAN clearly believed the terms of its Quote were
binding. More importantly, the first page of the Purchase Order, which was undoubtedly
22
received, provided, “ANY DIFFERENT OR ADDITIONAL TERMS IN SELLER’S
ACCEPTANCE FORM, IF ANY, ARE HEREBY REJECTED.” (Docs. 78-7, 86-9). As stated
above, the Purchase Order rejects terms in MAN’s “ACCEPTANCE FORM,” not terms predating
the P.O. in the Quote. The language explicitly rejecting terms in a quote was included in the
allegedly missing pages of the Purchase Order, which, for purposes of BASF’s motion, the Court
cannot consider.
Construing this evidence in a light most favorable to MAN, the Court finds that there is
sufficient evidence to create an issue of fact as to whether MAN consented to any proposed
modification of the contract formed by the Quote. Accordingly, BASF’s motion for summary
judgment must be denied.
Further, the Court need not address what results would be reached if BASF’s Purchase
Order were a counteroffer. While BASF cites to certain case law indicating that the Court
should consider the parties’ prior history, MAN’s failure to object, and the parties’ postperformance conduct, these cases are distinguishable.7 When considering BASF’s motion, the
Court must construe the facts in a light most favorable to MAN, and, when the Court does so, the
Quote is an offer; performance began before the Purchase Order was sent; the Purchase Order is
thus a request for a modification of the existing contract governed by the Quote; the request was
7
In short, Campbell v. Sonat Offshore Drilling, Inc., 979 F.2d 1115 (5th Cir. 1992), superseded by statute on other
grounds, is an admiralty case in which the Fifth Circuit affirmed the district court’s finding that Louisiana law did
not apply under the Outer Continental Shelf Lands Act because the purchase order constituted a maritime contract.
Id. at 1123-11124, 1126. Most of the remaining cases did not involve a situation in which there were competing
“contracts” – here, a Quote and a Purchase Order – that potentially govern the parties’ relationship. While Rectec,
LLC v. Allied Erecting & Dismantling Co., Inc., No. 07-7126, 2008 WL 2067031 (E.D.La. May 14, 2008), involved
a case with two potentially governing sets of documents (a Purchase Order on the one hand and emails on the other),
that case is distinguishable in that one of the parties specifically rejected the emails as an offer and specifically
stated that the project would be governed by the Purchase Order. Id. at *5. Further, the entire purchase order was
sent in that case. Id. Here, construing the facts in a light most favorable to MAN, there is no such clarity from the
two pages of the purchase order (which refers to an “Acceptance form,” not to prior documents), and there is no
explicit rejection of the Quote.
23
not accepted; and therefore the Quote, including its clause prohibiting the recovery of
consequential damages, governs. Accordingly, summary judgment for BASF is denied.
d. Further case law on why summary judgment should be denied if
there are two potentially governing contracts
The Court further notes that, if the Quote is an offer, there is an additional reason for
denying summary judgment. Jurisprudence, including Fifth Circuit cases and a case cited with
approval by the Fifth Circuit, recognizes that summary judgment is not appropriate when there is
clearly a contract governing the parties but there is an issue of fact as to the parties’ intent and as
to which of two documents control the parties’ relationship.
First, in Jefferson Parish School Board v. Rowley Co., Inc., 305 So.2d 658, 663 (La.App.
4 Cir. 1975), the appellate court reversed the trial court’s granting of a summary judgment
because there was a material issue of fact as to the validity of a contract. A school board
publicly advertised a bid for furnishing and installing science equipment to be used in particular
science laboratory classrooms. Id. at 660. The contractor submitted a bid that was accepted. Id.
“Although the contract documents furnished included a formal contract proposed to be signed,
no contract was signed.” Id. at 661. Rather, the school board issued a purchase order to the
contractor containing certain instructions. Id. The contractor thereafter delivered the equipment
and was in the process of installing it. Id. The contractor later delivered an invoice to the school
board as its first request for payment. Id. Two days later, a fire broke out, and some of the
equipment was damaged and destroyed. Id. The trial court sided with the contractor, holding that
the contract between the contractor and school board was a contract of sale, so the title to the
property passed to the school board upon delivery. Id. (citing La. Civ. Code art. 2456).
The appellate court rejected this approach, explaining that the controlling issue was not
whether the contract was a construction contract or contract of sale. Id. Rather, the “controlling
24
issue is that, whatever it may be called, if there was a binding contract between the parties, did
that contract provide for risk of loss in the factual circumstances here?” Id.
The appellate court found that there was “a serious issue of contested fact herein” so
summary judgment was inappropriate.” Id. The school board argued that the contractor’s bid
controlled, which required the contractor to obtain insurance to cover the equipment, whereas the
contractor argued that, based on certain factors (past dealings, the lack of any formal contract,
and the lack of a performance bond), the contract in effect was the school board’s purchase
order, which did not include the terms of any other contract. Id. at 662. The Fourth Circuit then
said “it is first necessary to resolve the question of the validity of the contract containing [the
provisions regarding insurance coverage]” before examining the general law governing
contracts. Id. at 663. The court concluded:
The resolution of this question involves a consideration of the weight and
sufficiency of the testimony of the parties as well as the disputed documents.
This is not the province of motion for summary judgment but is a matter for
consideration on the merits. Motion for summary judgment should not be used as
a substitute for a trial on the merits. This is especially true where opinion or
intent are involved. Summary judgment being improperly granted, we must
remand for further proceedings.
Id. (citations omitted).
Jefferson is directly on point. There are a few differences,8 but they are distinctions
without a difference. Accordingly, summary judgment in this case is inappropriate.
Jefferson is particularly convincing authority because it was recently relied upon by the
United States Fifth Circuit in Trahan v. Scott Equipment Co., L.L.C., 493 Fed.Appx. 571, 2012
8
In Jefferson,each party was trying to enforce the other party’s contract while, in this case, each party is trying to
enforce its own contract. In Jefferson, there is no language in the contract documents rejecting conflicting terms and
conditions, but that too is irrelevant here. When construed in a light most favorable to MAN, the first two pages of
BASF’s P.O. did not reject all non-conflicting terms The P.O. said, “ANY DIFFERENT OR ADDITIONAL
TERMS IN SELLER’S ACCEPTANCE FORM, IF ANY, ARE HEREBY REJECTED.” (Docs. 78-7, 86-9). As
stated above, the conflicting terms were in a preceding quote, not an acceptance form sent after the fact. Finally,
MAN argues that BASF’s purchase order was sent after work began, but BASF presents some testimony
contradicting this and thus creating an issue of fact that makes summary judgment even more inappropriate.
25
WL 4841949 (5th Cir. 2012). In Trahan, the operator of a salt mine filed suit against its
equipment service contractor for breach of contract. Id. at 572. From 2000 to 2005, the parties’
relationship was governed by a Master Service Agreement (“MSA”) executed each year with
identical terms and conditions. Id. In 2005, the operator stopped using MSAs and started
issuing purchase orders for the desired work and providing for each service call an “individual
service contract,” the terms and conditions of which were substantially similar to those in the
earlier MSAs. Id. Because of the nature of the work, the operator’s practice was to send the
individual service contract to the contractor after each job was completed. Id. While the service
contract required the contractor to sign and return the contract to the operator, the contractor
never did so, and the operator never complained about this failure. Id.
This arrangement continued without question until December 2008, when one of the
contractor’s employees was injured on a service call. Id. at 572-73. The worker filed suit against
the operator, and the operator filed a third-party claim against the contractor based on provisions
in the service contract in which the contractor allegedly agreed to add the operator as an
additional insured. Id. at 573.
The parties filed cross-motions for summary judgment. Id. The district court granted the
contractor’s motion on the basis that the parties’ “course of dealings did not bind [the contractor]
to contract provisions in the service contracts that were unsigned and consistently sent to [the
contractor] after the work had been performed.” Id. In sum, the district court found no contract
binding between the parties.
On appeal, the operator argued that the service contract’s terms and conditions
supplemented the oral contract in which the operator engaged the contractor to perform
maintenance on salt mine equipment. Id. The operator argued that the contractor never objected
26
to hundreds of such service contracts. Id. at 574. The contractor, on the other hand, argued that
there was no evidence that the contractor ever affirmatively agreed to the terms in the service
contract and that it never signed and returned a copy. Id.
The Fifth Circuit rejected the contractor’s argument that there was no valid contract. The
appellate court explained:
The district court is correct that no written contract is created in such a situation.
A party may not supply a written contract after the contract has been performed
and then claim that the parties are bound by its terms. However, when an
enforceable oral contract is perfected between the parties, but they disagree on its
terms, writings between the parties may be relevant in discerning the terms of the
oral contract.
Though Scott [the contractor] adamantly denies the existence of any contract
whatsoever, its position is untenable. In Louisiana, “A contract is formed by the
consent of the parties established through offer and acceptance.” La. Civ.Code art.
1927. Moreover, “offer and acceptance may be made orally, in writing, or by
action or inaction that under the circumstances is clearly indicative of consent.”
Id. “A medium or a manner of acceptance is reasonable if it is the one used in
making the offer or one customary in similar transactions at the time and place the
offer is received.” Id. art.1936. “When an offeror invites an offeree to accept by
performance and, according to usage or the nature or the terms of the contract, it
is contemplated that the performance will be completed if commenced, a contract
is formed when the offeree begins the requested performance.” Id. art.1939.
Under these principles, the record in this case clearly establishes the existence of a
contract. Morton [the operator] issued a service request to Scott [the contractor];
Scott complied and completed the requested service in exchange for monetary
compensation, which Morton paid. A contract was thus formed.
Id. at 574. The Court then rejected summary judgment in favor of either party:
Though we can be sure of the existence of a contract, its terms are uncertain.
“Louisiana Civil Code article 2045 defines interpretation of a contract as ‘the
determination of the common intent of the parties.’ ” Odyssea Vessels, Inc., v. A
& B Indus. of Morgan City, Inc., 94 So.3d 182, 190 (La.Ct.App. 1st Cir.2012).
When the words and provisions of a contract are clear, “no further interpretation
may be made in search of the parties' intent.” LA. CIV.CODE art. 2046.
However, “A doubtful provision must be interpreted in light of the nature of the
contract, equity, usages, the conduct of the parties before and after the formation
of the contract, and of other contracts of a like nature between the same parties.”
Id. art.2053. Louisiana courts have not hesitated to consider evidence of past
27
dealings between parties when attempting to reconstruct the parties' mutual
intent. See, e.g., Rogers v. Restructure Petroleum Mktg. Servs., 811 So.2d 1154,
1159 (La.Ct.App. 3d Cir.2002); Charles v. Wiegand, 401 So.2d 1003, 1005
(La.Ct.App. 4th Cir.1981). However, this inquiry is inevitably a question of
fact not appropriate for summary judgment. Kemp v. Hudnall, 423 So.2d
1260, 1261 (La.Ct.App. 1st Cir.1982) (“Our Supreme Court [has] stated ...
that the terms of a particular contract are a question of fact.” (citing
Turregano v. Barnett, 127 La. 620, 53 So. 884 (1910))); see Ham Marine, Inc.
v. Dresser Indus., Inc., 72 F.3d 454, 461 (5th Cir.1995). In its role as factfinder,
a trial court is free to give appropriate weight to evidence that a party impliedly
assented to terms by not objecting over a period of years, or to any other relevant
facts.
Id. at 574-75 (emphasis added). The Trahan court then noted that Jefferson was “[p]articularly
instructive.” Id. at 575. After providing a summary of Jefferson, the Fifth Circuit concluded,
“The same principles apply to this case. Questions of fact have been presented regarding the
terms of the contract the parties agreed to be bound by. These issues of fact must be presented to
a factfinder on remand.” Id.
Trahan not only shows the importance and persuasiveness of Jefferson, but it is also
convincing authority. As in Trahan, there is no dispute here that there was a valid contract
binding the parties, either through the Quote, the Purchase Order, or an oral contract. But, as in
Trahan, there is a dispute as to what the parties intended in that contract. While Trahan shows
that BASF is correct that past dealings and the failure to object are relevant in determining the
parties’ intent, those factors do not mean that summary judgment is warranted when there are
disputed issues of material fact as to intent. Just as summary judgement was improper in
Trahan, so is it inappropriate here.
Finally, the court will also follow Brimstone Industries, Inc. v. Occidental Chemical
Corp., 37 F.3d 633, 1994 WL 558957 (5th Cir. 1994) (unpublished).9 There, the Fifth Circuit
9
While Brimstone states that it has no precedential value and is thus unpublished, the current 5th Cir.R. 47.5.2
provides that unpublished opinions issued before January 1, 1996 are binding precedent. Even if it were not
binding, however, this Court would follow the decision as it is highly persuasive.
28
vacated the district court’s granting of a motion for summary judgment. Id. at *4. The defendant
Occidental solicited bids for a project, and the plaintiff Brimstone’s vice president submitted a
written proposal. Id. at *1. According to the vice president, Occidental’s purchasing agent
verbally authorized Brimstone to begin work on the project. Id. Brimstone claimed that the
work began shortly thereafter, but Occidental claimed that work started later, after the delivery of
a purchase order by Occidental. Id. at *1 and *1 n. 2. The purchase order provided an estimated
cost of work and required Brimstone to obtain approval for work over the estimated cost. Id. at
*1. Brimstone then submitted an invoice for well over the estimated cost. Id. Occidental paid
the estimated cost but not the total value of the invoice, and Brimstone filed suit. Id. The district
court granted summary judgment for Occidental. Id.
The Fifth Circuit reversed, explaining that the “real merits issue is whether a valid
contract was formed based on Brimstone’s Proposal or whether it was formed based on
Occidental’s Purchase Order.” Id. at *4. Brimstone argued that its proposal to Occidental was an
offer which Occidental’s agent verbally accepted and that Brimstone subsequently began
performance before Occidental’s purchase order was received. Id. Occidental argued that its
Purchase Order was not in conformity with Brimstone’s offer and was thus a counteroffer, which
Brimstone accepted, thereby creating a binding contract. Id. Brimstone responded by arguing
that there was already a contract in place before the Purchase Order was received. Id. In
reversing, the Fifth Circuit noted that there were certain materially unanswered questions of fact,
including the date that Brimstone commenced work and the date on which the Purchase Order
was received. Id. Accordingly, summary judgment for Occidental was denied given these
genuine issues of material fact.
29
Brimstone is remarkably similar. As in Brimstone, there is a dispute involving
conflicting “offers” (in both cases, a bid and a purchase order), and that dispute turns in part on
when performance began. The parties raise the same arguments in Brimstone as they do here. If
summary judgment was not warranted in Brimstone, then it should not be granted here.
In sum, if the Quote is an offer, then the Court is left with two potentially valid “offers.”
Fifth Circuit precedent clearly demonstrates that such a situation involves genuine issues of
material fact that make summary judgment inappropriate. On this additional basis, summary
judgment for BASF is denied.
IV.
Conclusion
Accordingly,
IT IS ORDERED that the Reurged Motion for Summary Judgment (Doc. 78) filed by
Man Diesel & Turbo North America, Inc. is DENIED, and
IT IS FURTHER ORDERED that the Cross-Motion for Summary Judgment (Doc. 86)
filed by BASF Corporation is DENIED.
Signed in Baton Rouge, Louisiana, on May 15, 2015.
S
JUDGE JOHN W. deGRAVELLES
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
30
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