PCE Constructors, Inc. v. Bristol Metals, LLC et al

Filing 35

RULING denying the 20 Motion for Partial Summary Judgment filed by plaintiff PCE Constructors, Inc. The 26 Motion for Partial Summary Judgment filed by defendant Bristol Metals, LLC is granted, in part. The motion is granted to the extent the cou rt finds that (1) the contract consists of the Proposal, the Pipe Fabrication Pre-Award Meeting notes, and the Purchase Order, and (2) the liability of Bristol Metals is limited to the remedies in paragraphs 12 and 13 of the Proposal. In all other respects, the Motion for Partial Summary Judgment filed by defendant Bristol Metals, LLC is denied. Signed by Magistrate Judge Stephen C. Riedlinger on 8/11/2014. (SMG) Modified to edit typo on 8/11/2014 (SMG).

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

PCE CONSTRUCTORS, INC.
CIVIL ACTION
VERSUS
NUMBER 14-13-SCR
BRISTOL METALS, LLC
RULING ON MOTIONS FOR PARTIAL SUMMARY JUDGMENT
Before the court is a Motions for Partial Summary Judgment
filed by plaintiff PCE Constructors, Inc. (“PCE”), and a Motion for
Partial Summary Judgment filed by defendant Bristol Metals, LLC,
(“Bristol

Metals”).

respectively.
All

of

considered.

Record

document

numbers

20

and

26,

Both motions are opposed.1
the

parties’

arguments

and

exhibits

have

been

Based on the applicable law and the analysis that

follows, the Motion for Partial Summary Judgment filed by PCE is
denied, and the Motion for Partial Summary Judgment filed by
Bristol Metals is granted, in part.
Background and Undisputed Facts
A series of emails, some with documents attached, went back
and forth between Marc Lafferty of PCE and Mark Randall of Bristol

1

Record document number 26, Bristol Metals’ Opposition to the
Motion for Partial Summary Judgment of Plaintiff; record document
number 29, Plaintiff’s Response to Defendant’s Motion for Partial
Summary Judgment.
Bristol Metals filed a Reply Memorandum in
Support of Motion for Partial Summary Judgment. Record document
number 33.

Metals on November 10, 2011.2

The first email on November 10 shows

that PCE received an attached Proposal from Bristol Metals to
furnish, fabricate and deliver steel piping to PCE for use in the
construction of a urea and nitric acid plant in Coffeyville,
Kansas.3

Paragraph 15 of the Proposal stated in part:

“Acceptance

of this offer must be made in writing and forwarded to our office
in Bristol, Tennessee. We cannot make any shipments until your
purchase

order

is

received

and

we

have

5

working

days

to

acknowledge receipt.”
After receipt of the Proposal, Lafferty of PCE sent an email
to Randall of Bristol Metals, which stated as follows:
I am in agreement with the proposal. Is there a person
to put the PO to the attention of and to whom do I e-mail
the copy of the PO to? If required, I will need a credit
application to get to my financial people. I will make
our meeting minutes a part of the PO as well so let me
know if there are any discrepancies in that document.
In his return email Randall stated he approved the meeting
minutes, and told Lafferty to send the Purchase Order to his
attention.
with

the

Later that afternoon, Lafferty sent Randall an email
Purchase

Order

for

the

pipe

fabrication

attached.4

Lafferty told Randall that he would need an acceptance copy of the

2

3

Record document number 26-4, Exhibit C.

Record
“Proposal”).

document

number

4

26-3,

Exhibit

B

(hereafter,

Record document number 26-5, Exhibit D (hereafter, “Purchase
Order”).
2

Purchase Order sent back to him, and also stated that the Purchase
Order was the go-ahead to purchase material.

Lafferty concluded:

“I would like to thank you for your offer and I look forward to
working with you all.”
The Purchase Order was attached to the final email from
Randall to Lafferty. The first page of the Purchase Order contains
the following language:
ONE LOT OF PIPE FABRICATION PER ATTACHED QUOTATION
0711CB11 & 0911CBT12R-1 DATED 10 NOVEMBER 2011. BRISTOL
IS TO SUPPLY ALL LABOR, SUPERVISION, MATERIALS, DETAILING
CONSUMABLES AND DELIVERY TO OUR JOBSITE IN COFFEYVILLE,
KS
BRISTOL WILL MAINTAIN AND FURNISH ALL QA/QC DOCUMENTATION
UNTIL PROJECT COMPLETION OR UPON REQUEST
ATTACHED PRE-AWARD MEETING MINUTES BECOME A PART OF THIS
PURCHASE ORDER
The construction of the Kansas plant proceeded.

After PCE

installed most of the Bristol Metals pipe on the project, PCE
learned that some of the pipe was fabricated with improper weldfiller material and notified Bristol Metals.

In an email to PCE

dated August 15, 2012, Bristol Metals confirmed that some of the
pipe it delivered did not use proper weld-filler metal, and
explained the corrective action it would take to eliminate any
similar issues in the future.5
PCE later filed this action in state court against Bristol

5

Record document 20-2, Exhibit B, email from Roger Isbell of
Bristol Metals to Lafferty.
3

Metals to obtain relief for the substantial costs it alleges it
incurred to inspect and replace the pipe supplied by Bristol Metals
that did not contain the correct weld-filler metal.6

PCE claimed

that it is entitled to recover the total amount of damages caused
by Bristol Metals failure to supply pipe fabricated to contract
specifications in the amount of $1,446,565.00.7
Bristol Metals removed the action to this court based on
diversity jurisdiction.

Bristol Metals denied that it owes the

damages claimed by PCE, and also counterclaimed to recover the
amount of the outstanding accounts receivable it claims PCE owes
for the pipe it delivered for the project.8

The parties filed

motions for partial summary judgment on issues related to contract
formation and what provisions govern the contractual relationship
between the parties.
dismiss

all

of

In its motion Bristol Metals also moved to

PCE’s

claims

for

consequential,

indirect

and

incidental damages.
Parties’ Arguments
PCE argued that its Purchase Order was not an acceptance of
the Proposal, but a counteroffer and rejection of the terms and

6

Record document number 20-2, Exhibit A, Declaration of Mark
H. Allen.
7

8

Record document number 13, Status Report, Section E.

Bristol
interest. Id.

Metals

claimed

it
4

is

owed

$130,593.26,

plus

conditions of the Proposal.

According to PCE, the Purchase Order

it sent back to Bristol Metals contained terms and conditions that
differed significantly from the Proposal.

Therefore, PCE argued,

when the Purchase Order, which contained an integration clause, was
accepted

by

Bristol

Metals

it

controlled

the

contractual

relationship and eliminated any terms in the Proposal that put
restrictions on PCE’s recovery of damages.

Consequently, PCE

argued that the damages it seeks to recover are not limited by any
provision of Bristol Metals’ Proposal because it did not accept
those terms.

PCE argued that the final email on November 10, 2011

from Lafferty to Randall supports the conclusion that the Purchase
Order was a counteroffer because Lafferty stated that it had to be
accepted and returned. This is so, PCE argued, because there would
be no need to accept and return the Purchase Offer if it was not a
counteroffer.
PCE also argued that acceptance of its counteroffer - the
Purchase Order - was expressly limited to its terms, and there is
a material conflict between the absence of limitations of its
remedies in the Purchase Order and the limitations on liability
contained in the Proposal. Therefore, under La.Civ.Code art. 2601,
the additional limitations contained in the Proposal are not a part
of the contract.
Bristol Metals argued that when PCE unequivocally accepted its
Proposal on November 10, 2011, the Proposal, Lafferty’s acceptance

5

email, the Purchase Order and the meeting minutes together became
the written documents which evidence the existence and terms of its
contract with PCE.

According to Bristol Metals, when PCE sent the

Purchase Order back, with the incorporating language and two
documents attached, this was not a counteroffer. Instead, it was
simply a memorialization of the agreement following the email
acceptance.

Bristol Metals noted that the unqualified acceptance

email, and PCE’s incorporation of the entire Proposal, demonstrates
that PCE agreed to all of the terms contained in the Proposal.
Bristol Metals pointed out that the Purchase Order does not contain
any terms related to limitations on its liability for damages.
Therefore, Bristol Metals argued, the Proposal – which PCE accepted
and that does have such provisions – cannot be interpreted as
materially different from or inconsistent with the Purchase Order.
In addition to moving for partial summary judgment on the
issue of contract formation, Bristol Metals also moved for summary
judgment dismissing PCE’s claims for damages.

Bristol Metals

argued that it has fulfilled all of its obligations under the
contract, and under the provisions governing its warranties for
workmanship

and

materials

it

cannot

be

held

liable

for

the

consequential, indirect and incidental damages claimed by PCE.
Therefore, PCE’s entire damages claim should be dismissed.
Applicable Law
Summary judgment is appropriate when the moving party, in a
properly supported motion, demonstrates that there is “no genuine
6

issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law.”

Rule 56(c); Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2510 (1986).

The

determination of whether a contract is clear or ambiguous is a
question of law. In re Combustion, 960 F.Supp. 1076, 1079 (W.D.La.
1997).

Because

the

proper

interpretation

of

an

unambiguous

contract is a legal issue, it may appropriately be decided on a
motion for summary judgment.

Boudreaux v. Unionmutual Stock Life

Insurance Company of America, 835 F.2d 121, 123 (5th Cir. 1988).
However,

if

the

language

of

the

contract

is

ambiguous

or

susceptible to multiple interpretations, the intent of the parties
must be determined.

This ambiguity in the terms of a contract

gives rise to a fact question concerning the intent of the parties,
and the trier of fact must resolve the factual issue of intent.
Therefore, summary judgment is inappropriate.

Guidry v. American

Public Life Ins. Co., 512 F.3d 177, 181 (5th Cir. 2007).
Under Louisiana law a contract is formed by the consent of the
parties.

La.Civ.Code art. 1927.9

Mutual consent in contract

formation is covered by La.Civ.Code art. 1927:
A contract is formed by the consent of the parties
established through offer and acceptance.
Unless the law prescribes a certain formality for the
intended contract, offer and acceptance may be made

9

Under Louisiana law the formation of a valid contract
requires four elements: (1) capacity; (2) consent; (3) cause; and
(4) lawful object.
Gibbens v. Champion Industries, Inc., 547
Fed.Appx. 576 579 (5th Cir. 2013). Elements one, three and four
are not at issue in these motions.
7

orally, in writing, or by action or inaction that under
the circumstances is clearly indicative of consent.
Generally, an acceptance that is not in accordance with the
terms of the offer is deemed a counteroffer.
1943.

La.Civ.Code art.

However, additional or different terms contained in the

acceptance of an offer to sell a movable are a departure from the
general rule, and are specifically addressed in La.Civ.Code art.
2601 which states:
An expression of acceptance of an offer to sell a movable
thing suffices to form a contract of sale if there is
agreement on the thing and the price, even though the
acceptance contains terms additional to, or different
from, the terms of the offer, unless acceptance is made
conditional on the offeror's acceptance of the additional
or different terms. Where the acceptance is not so
conditioned, the additional or different terms are
regarded as proposals for modification and must be
accepted by the offeror in order to become a part of the
contract.
Between merchants, however, additional terms become part
of the contract unless they alter the offer materially,
or the offer expressly limits the acceptance to the terms
of the offer, or the offeree is notified of the offeror's
objection to the additional terms within a reasonable
time, in all of which cases the additional terms do not
become a part of the contract. Additional terms alter the
offer materially when their nature is such that it must
be presumed that the offeror would not have contracted on
those terms.
Interpretation of a contract formed by the mutual consent of
the parties is the determination of the common intent of the
parties.

La. Civ.Code art. 2045. When the words of a contract are

clear and explicit and lead to no absurd consequences, no further
interpretation may be made in search of the parties' intent.
La.Civ.Code

art.

2046.

This

8

established

rule

of

strict

construction does not allow the parties to create an ambiguity
where none exists, and does not authorize courts to create new
contractual obligations where the language of the written document
clearly expresses the intent of the parties.

Thus, if the court

finds the terms of a written contract are clear and unambiguous,
the parties’ meaning or intent must be determined from the four
corners of the contract, and parol or other extrinsic evidence
cannot be used to vary or explain the contract terms.

Only where

a contract is ambiguous can a court base its interpretation on
extrinsic evidence.

In re Liljeberg Enterprises, Inc.

304 F.3d

410, 439-440 (5th Cir. 2002). A contract is ambiguous, if after
applying established rules of construction, the terms are unclear
or susceptible to more than one interpretation, or the intent of
the parties cannot be ascertained from the language used in the
contract.

Preston

Law

Firm,

Management Co., 622 F.3d 384,
The

words

of

prevailing meaning.

a

L.L.C.

v.

Mariner

Health

Care

392 (5th Cir. 2010).

contract

must

be

given

their

generally

La.Civ.Code art. 2047. Each provision in a

contract must be interpreted in light of the other provisions so
that each is given the meaning suggested by the contract as a
whole.

La.Civ.Code art. 2050.

In case of doubt that cannot be

otherwise resolved, a provision in a contract must be interpreted
against the party who furnished its text.

La.Civ.Code art. 2056.

Klein v. Nabors Drilling USA L.P., 710 F.3d 234, 237-38 (5th Cir.
2013).

9

Analysis
The plain terms of the writings at issue in this contract
dispute do not support PCE’s arguments.

Just two days after the

November 8, 2011 Pipe Fabrication Pre-Award Meeting, which was
attended by both Lafferty and Randall, Randall sent an email to
Lafferty with Bristol Metals’ Proposal.

That email stated: “After

you review, let me know if I missed anything.”

It is undisputed

that the Proposal included all the provisions numbered 1 through 29
under

the

heading,

“Notes.”

After

receiving

the

Proposal,

Lafferty’s reply email to Randall was clear and unequivocal: “I am
in agreement with the proposal.”

Lafferty did not identify any

provision of the Proposal to which he did not agree, or that he
rejected or modified.10
It is also undisputed that a few hours later Lafferty sent a
reply email to Randall, and as promised, attached a copy of PCE’s
Purchase

Order

with

the

Proposal

and

Fabrication Pre-Award Meeting attached.11

notes

from

the

Pipe

On the face of the

Purchase Order at the bottom of the page it plainly refers to the

10

Of significance to this case, Lafferty did not express any
disagreement with the limitation of liability provisions in the
Proposal.
11

Again, Lafferty did not specifically reject or attempt to
modify the limitation of liability provisions in the Proposal to
which he has already agreed in writing. The Terms and Conditions
of the Purchase Order do not include one specifying the categories
of damages which PCE may recover, or one that is clearly contrary
to the limitation of liability provisions in the Proposal.
10

Purchase Order as “this agreement.”12

It is also apparent from the

language used on the first page of the Purchase Order that it
incorporated the entire Proposal and notes from the meeting. Under
the description section of the Purchase Order the first item
described was a specific reference to the Proposal and a notation
that it was attached.

The last description noted that the pre-

award meeting minutes were attached and were a part of the Purchase
Order.
All of this language is consistent with Lafferty’s statement
that he would email the Purchase Order and make the meeting minutes
a part of the Purchase Order, “as well.”13

Use of this phrase by

Lafferty also supports the conclusion that the
fully incorporated the terms of the Proposal.

Purchase Order

The phrase clearly

indicates that something else is also a part of the Purchase Order,
which can only be the Proposal that was referenced first and
attached.

Neither Lafferty’s emails, nor the Purchase Order with

any of its attachments, indicated any disagreement, rejection or
modification of any provision of the Proposal.

Furthermore, in

none of these emails and documents is there any sign of any

12

At the bottom of the Purchase Order it stated: “INVOICES
WILL NOT BE APPROVED FOR PAYMENT UNTIL THE ACCEPTANCE COPY OF THIS
AGREEMENT IS EXECUTED AND RETURNED.” The date of the acceptance
signature by Bristol Metals was June 25, 2012.
Neither party
explained why this date was so many months after the agreement was
reached.
13

In his reply email, Randall approved the meeting minutes
Lafferty attached to the Purchase Order, stating, “Meeting notes
are OK.”
11

negotiations, disagreement, or discussion going back and forth
about specific provisions or terms either party did not want in the
contract.14
Based on the undisputed facts, there is no basis to find that
PCE’s unequivocal acceptance was not in accordance with the terms
of Bristol Metals’ offer, i.e. the Proposal.
the

parties’

written

communications

and

Therefore, based on
PCE’s

acceptance/

transmission of the Purchase Order with the attached Proposal and
meeting minutes, there was a meeting of the minds and the contract
was formed by mutual consent of the parties.
Contrary to PCE’s argument, this conclusion is not undermined
by

Lafferty’s

returned.

statement

he

would

need

an

“acceptance

copy”

Use of the word “copy” in this context is simply a

request for Bristol Metals to acknowledge its receipt of the
agreement the parties had reached, rather than an acceptance of a
counteroffer by PCE. PCE’s arguments are essentially an attempt to
create an ambiguity where none exists.15

Conclusion
Given the analysis above, the contract between the parties is
comprised of all the terms, conditions and provisions of the

14

Bristol Metals also never gave any indication that it wanted
to reject or modify any terms contained in the Terms and Conditions
part of the Purchase Order.
15

PCE’s arguments relying on La.Civ.Code art. 2601 are also
rejected, since they are based on the premise that the Purchase
Order was a counteroffer.
12

Proposal, the Pipe Fabrication Pre-Award Meeting notes, and the
Purchase Order.16

Insofar as Bristol Metals moved for partial

summary judgment on what constitutes the contract between the
parties, its motion is granted.
Insofar as either party sought a finding on what type or
amount of damages PCE can or cannot recover under the contract,
summary judgment in favor of Bristol Metals is also granted, in
part.

The

position

of

Bristol

Metals

is

supported

by

the

contract.17 Paragraphs 12 and 13 of the Proposal collectively limit
its

liability

to,

at

most:

(1)

correction

of

(a)

errors

in

fabrication or engineering, (b) defects in materials, and (c)
faulty workmanship; (2) if, after notice and with its written
consent,

time

does

not

allow

Bristol

Metals

to

correct

a

fabrication error, giving a credit against the contract price; and
(3) the price of defective materials.

These provisions are not

contrary to any of the Terms and Conditions of the Purchase Order.18
Bristol Metals also sought a summary judgment determination
that it is not liable for consequential, indirect, or incidental

16

All of the cases cited have been reviewed. None of them are
controlling or helpful in deciding the motions.
17

Bristol Metals argued that even if the Purchase Order did
modify some terms and conditions of the contract, it is silent as
to the limitation of liability provisions of the Proposal and
therefore did not modify them.
Record document number 26-1,
supporting memorandum, p. 9-14.
18

As Bristol Metals noted, there is no apparent inconsistency
between paragraphs 12 and 13 and the guarantees of the Seller in
paragraph 9 of the Purchase Order’s Terms and Conditions.
13

damages.19

Although in general the contract does not state that it

allows recovery for consequential, indirect, or incidental of
damages, it is not clear what “damages” sought by PCE, if any, fall
into these categories.20
is

necessary

before

Further factual development of this issue

it

can

be

resolved,

whether

by

another

dispositive motion or at trial.
Accordingly, the Motion for Partial Summary Judgment filed by
plaintiff PCE Constructors, Inc. is denied. The Motion for Partial
Summary Judgment filed by defendant Bristol Metals, LLC is granted,
in part.

The motion is granted to the extent the court finds that

(1) the contract consists of the Proposal, the Pipe Fabrication
Pre-Award Meeting notes, and the Purchase Order, and (2) the
liability

of

Bristol

Metals

is

limited

paragraphs 12 and 13 of the Proposal.

to

the

remedies

in

In all other respects, the

Motion for Partial Summary Judgment filed by defendant Bristol
Metals, LLC is denied.
Baton Rouge, Louisiana, August 11, 2014.

STEPHEN C. RIEDLINGER
UNITED STATES MAGISTRATE JUDGE

19

Record document number 26-1, p. 14.

20

In the Status Report, PCE listed eight categories of
“damages.” Record document number 13, Status Report, p. 2, Sec. E,
Damages (totaling $1,446,565.)
14