v. Bangor Hydro Electric Company et al
Filing
96
OPINION & ORDER: Plaintiffs motion to lift the stay 88 is GRANTED and Plaintiff's motion for partial summary judgment 62 is DENIED. Oral argument is unnecessary. See 8-page opinion & order attached. Signed on 3/30/2012 by Judge Marco A. Hernandez. (mr)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION
BANGOR HYDRO ELECTRIC COMPANY,
No. 3:10-CV-726-HZ
Plaintiff,
OPINION & ORDER
v.
BRIDGEWELL RESOURCES, LLC,
JOSEPH PASSADORE,
JUSTIN THELIN,
and EDWARD HOSTMANN, INC.,
Defendants.
Benjamin J. Miller
Craig J. Capon
HARRANG LONG GARY RUDNICK P.C.
360 E. 10th Avenue, Suite 300
Eugene, OR 97401
Christian Chandler
CURTIS THAXTER, ATTORNEYS AT LAW
PO Box 7320
Portland, ME 04112
Attorneys for Bangor Hydro Electric Company
1 - OPINION & ORDER
George J. Cooper , III
DUNN CARNEY ALLEN HIGGINS & TONGUE, LLP
851 SW Sixth Ave., Suite 1500
Portland, OR 97204-1357
Attorney for Bridgewell Resources, LLC
Stephen C. Voorhees
KILMER VOORHEES & LAURICK, PC
732 NW 19th Avenue
Portland, OR 9720
Attorney for Joseph Passadore
Peter R. Mersereau
MERSEREAU & SHANNON, LLP
1 SW Columbia Street, Suite 1600
Portland, OR 97258
Attorney for Justin Thelin
David A. Foraker
Sanford R. Landress
GREENE & MARKLEY, PC
1515 SW Fifth Avenue, Suite 600
Portland, OR 97201
Attorneys for Edward Hostmann, Inc.
HERNANDEZ, District Judge:
This matter comes before me on Plaintiff‟s Notice of Development (“Plaintiff‟s Notice”)
(doc. #88) filed by Bangor Hydro Electric Company (“Bangor” or “Plaintiff”). Plaintiff‟s Notice
urges this court to lift the stay entered July 20, 2011, and to address Plaintiff‟s fully-briefed
motion for partial summary judgment (doc. #62).
I construe Plaintiff‟s Notice as a motion to lift the July 20, 2011, stay. Plaintiff‟s motion
to lift the stay is GRANTED; however, for the reasons set forth below, Plaintiff‟s motion for
partial summary judgment is DENIED.
2 - OPINION & ORDER
BACKGROUND
This action arises out of a purchase order made on October 7, 2009 (the “Purchase
Order”), between Bangor, an electric transmission and distribution company, and North Pacific
Group, Inc. (“NPG”) for the production and delivery of 3,000 timber mats. See Pl.‟s First Am.
Compl. (“Am. Complaint”), ¶¶ 9, 10, 13. Bangor alleges that pursuant to the Purchase Order, it
wired $1,164,750 to NPG as payment in full for the 3,000 timber mats, and to date has yet to
receive 1,708 timber mats as promised under the Purchase Order. See id., ¶ 26. Because this
action is related to a pending proceeding before the Honorable Garr M. King, specifically Wells
Fargo Capital Finance, Inc. v. North Pacific Group, Inc. et al, No. CV-10-65-KI (the “Wells
Fargo Action”), I find it useful to briefly illuminate the relationship between the Wells Fargo
Action and the action presently before me.
On January 20, 2010, Wells Fargo Capital Finance, Inc. (“Wells Fargo”) filed the Wells
Fargo Action against four defendants, including NPG, in the United States District Court for the
District of Oregon. Wells Fargo alleges that the four defendants defaulted on loans Wells Fargo
made to them and seeks to recover the outstanding portions of the loans. The same day Wells
Fargo filed its action, January 20, 2010, Judge King issued an order appointing Edward
Hostmann, Inc. as the receiver (the “Receiver”) in the Wells Fargo Action, entitling it with “the
exclusive and broad power and authority to manage and control the businesses and properties of
[defendants] in order to preserve the value of the Collateral.” Declaration of Edward C.
Hostmann (“Hostmann Decl.”), Ex. 1, p. 3 (doc. #41). Under the authority of the Receiver,
NPG sold and assigned “certain identified” assets of NPG to Atlas Trading Acquisitions, LLC
(“Atlas”) pursuant to an Asset Purchase Agreement (“APA”) dated February 10, 2010.
Declaration of George J. Cooper (“Cooper Decl.”), ¶ 2 (doc. #68); Id., Ex. 2, pp. 1-2. Atlas
3 - OPINION & ORDER
subsequently assigned the assets it had acquired from NPG to Bridgewell Resources, LLC
(“Bridgewell”), essentially making Bridgewell the acquirer of NPG‟s assets. See Pl.‟s Mem. of
Law, p. 4 (doc. #61); Cooper Decl., Ex. 2, p. 1. On February 25, 2010, Judge King issued an
order approving the APA (“Order Authorizing Sale”) and retaining jurisdiction “to resolve any
disputes, controversies or claims arising out of or relating to the [APA.]” Cooper Decl., Ex., 2,
pp. 1-2, 14-15.
On June 24, 2010, Bangor filed this action in the United States District Court for the
District of Oregon against Bridgewell, the Receiver, and two Bridgewell employees, Joseph
Passadore (“Passadore”) and Justin Thelin (“Thelin”). Am. Compl., ¶¶ 4, 5, 7, 8. Bangor alleges
the following five claims for relief against defendants: (1) a claim against the Receiver for
conversion or in the alternative, for violation of Bangor‟s special property interest in the timber
mats pursuant to the Uniform Commercial Code (“UCC”) § 2-502; (2) a claim against
Bridgewell for breach of contract; (3) a claim against Bridgewell, Passadore, and Thelin for
fraud; (4) a claim against Bridgewell, Passadore, and Thelin for negligent misrepresentation; and
(5) a claim for promissory estoppel against Bridgewell. See id., ¶¶ 28-59.
On February 18, 2011, Bangor filed a Proof of Claim with the Receiver in the Wells
Fargo Action, claiming that pursuant to UCC § 2-502 it had a special property interest in the
1,708 timber mats owed to it and was therefore entitled to approximately $664,000 from the
Receiver. Hostmann Decl., Ex. 3, pp. 1-2 (doc. #41). The same day, February 18, 2011, the
Receiver filed a motion for summary judgement in this action against Bangor‟s first claim for
relief. I issued an Opinion and Order on April 28, 2011, granting the Receiver‟s motion for
summary judgment on the basis that Bangor‟s claims against the Receiver were barred by the
doctrine of quasi-judicial immunity. In my April 28, 2011, Opinion and Order, I also stated that
4 - OPINION & ORDER
“[t]he proper venue for Bangor[‟s] . . . grievance [was] in the [Wells Fargo Action], where it
should pursue its proof of claim.” Cooper Decl., Ex. 5, p. 7.
On May 10, 2011, Bangor filed a motion for summary judgment in this action on its
second claim for relief, which alleges breach of contract by Bridgewell for failing to deliver the
remaining 1,708 timber mats owed to it under the Purchase Order. Am. Compl., ¶ 34. On June
10, 2011, Bridgewell filed a motion to stay this proceeding pending resolution of Bangor‟s Proof
of Claim in the Wells Fargo Action. I granted Bridgewell‟s motion to stay on July 20, 2011.
In an Opinion and Order issued on December 21, 2011, Judge King concluded Bangor
maintained only a general unsecured claim in the 1,708 timber mats owed to it and denied
Bangor‟s request that the Receiver release funds to pay Bangor‟s Proof of Claim.1 Bangor
subsequently filed Plaintiff‟s Notice requesting this court to “lift the stay in this case, have the
parties proceed with any outstanding discovery, and . . . decide Bangor[„s] pending motion for
partial summary judgment.”
STANDARD
Summary judgment is proper if the pleadings, the discovery and disclosure materials on
file, and any affidavits show that there is no genuine issue as to any material fact and that the
movant is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c). The moving party
bears the initial burden of demonstrating the absence of a genuine issue of material fact. E.g.,
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A fact is material if it could affect the
outcome of the suit under the governing substantive law. Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). The moving party need only demonstrate that there is an absence of
evidence to support the non-moving party‟s case. Celotex Corp., 477 U.S. at 325. The burden
Bangor contends that to date, the Receiver has only paid it $26,000, well below the $663,131 it
is allegedly owed for the undelivered timber mats.
1
5 - OPINION & ORDER
then shifts to the nonmoving party to establish, beyond the pleadings, that there is a genuine
issue for trial. Id. at 324.
Once the moving party has met its burden, the burden shifts to the non-moving party to
“set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at
248 (quotation omitted). The non-moving party must come forward with more than “the mere
existence of a scintilla of evidence.” Anderson, 477 U.S. at 252. Thus, “[w]here the record taken
as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no
genuine issue for trial.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574,
587 (1986) (citation omitted). “Credibility determinations, the weighing of the evidence, and the
drawing of legitimate inferences from the facts are jury functions, not those of a judge . . . ruling
on a motion for summary judgment .” Id. However, conclusory, speculative testimony in
affidavits and moving papers is insufficient to raise genuine issues of fact and defeat summary
judgment. See Thornhill Publ‟n Co., Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979).
Lastly, “in ruling on a motion for summary judgment, the nonmoving party‟s evidence „is to be
believed, and all justifiable inferences are to be drawn in [that party‟s] favor.‟” Hunt v.
Cromartie, 526 U.S. 541, 552 (1999) (quoting Anderson, 477 U.S. at 255).
DISCUSSION
Bangor asks this court to interpret the language of the APA and contends that under the
plain language of the APA, Bridgewell is the purchaser and assignee of certain NPG assets,
including the Purchase Order. Bangor argues that even if this court were to find the language of
the APA ambiguous, the extrinsic evidence establishes that Bridgewell intended to assume all the
obligations under the Purchase Order, including the obligation to deliver 3,000 timber mats to
Bangor.
6 - OPINION & ORDER
In response, Bridgewell makes a number of arguments, the most persuasive of which is
that Bangor‟s avenue of redress for its breach of contract claim lies with Judge King in the Wells
Fargo Case. Notably, Bangor makes no argument to the contrary.
I agree with Bridgewell that the redress Bangor seeks pursuant to its breach of contract
claim lies in the Wells Fargo Case. The record demonstrates that pursuant to his February 25,
2010, order, Judge King retained jurisdiction over all disputes, controversies, and claims arising
out of the APA. Specifically, Judge King‟s February 25, 2010, order states:
[T]his Court retains jurisdiction (i) to enforce and implement the terms and
provisions of the [APA], all amendments thereto, any waivers and consents
thereunder, and of each of the agreements executed in connection therewith, (ii) to
resolve any disputes, controversies or claims arising out of or relating to the
[APA], (iii) to interpret, implement and enforce the provisions of [the court‟s
February 25, 2010, order], and (iv) to protect the [Bridgewell] against any
Excluded Liabilities or the assertion of any lien, claim, encumbrance, or other
interest, of any kind or nature whatsoever, against the [assets purchased under the
APA].
Cooper Decl., Ex. 2, p. 14.
Clearly, interpreting the provisions of the APA–as Bangor would have me do here–falls
squarely within Judge King‟s jurisdiction to resolve disputes, controversies, or claims “arising
out of or relating” to the APA. The issues presented in Bangor‟s motion for summary judgment
should therefore be made to Judge King in the Wells Fargo Case, not this court. Indeed, this
conclusion is consistent with my April 28, 2011, Opinion and Order in which I recognized that
Judge King “retained jurisdiction to resolve „any disputes, controversies or claims arising out of
or relating to the [APA]‟” and stated that “[t]he proper venue for Bangor[‟s] . . . grievance [was]
in the Wells Fargo [Case], where it should pursue its proof of claim.” Cooper Decl., Ex. 5, p. 7
(citing Judge King‟s February 25, 2010, Order Authorizing Sale).
7 - OPINION & ORDER
CONCLUSION
Based on the foregoing, Plaintiff‟s motion to lift the stay (doc. #88) is GRANTED and
Plaintiff‟s motion for partial summary judgment (doc. #62) is DENIED. Oral argument is
unnecessary.
IT IS SO ORDERED.
Dated this 30th day of March, 2012.
/s/ Marco A. Hernandez
MARCO A. HERNANDEZ
United States District Judge
8 - OPINION & ORDER
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