Ross Island Sand & Gravel CO. v. Lehigh Southwest Cement Company

Filing 103

OPINION & ORDER: Plaintiff's Motion for Judgment on Sixth Claim for Relief 94 is Denied. Signed on 7/26/17 by Magistrate Judge Paul Papak. (gm)

THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION
ROSS ISLAND SAND & GRAVEL CO.,
No. 3:15-cv-01369-PK
Plaintiff,

OPINION AND ORDER

v.
LEHIGH SOUTHWEST CEMENT CO.,
Defendant.

PAPAK, Magistrate Judge:
Plaintiff Ross Island Sand & Gravel Co. (Ross Island) brought this action against
Defendant Lehigh Southwest Cement Co. (Lehigh), claiming that Lehigh sold it defective cement
and that Lehigh agreed to expand the parties' price protection agreement to include additional
construction projects. This court granted Lehigh's motion for summary judgment as to the price
protection claims and denied it as to the defective cement claims. Ross Island Sand & Gravel

Co. v. Lehigh Southwest Cement Co., 2016 WL 6398799 (D. Or. Oct. 27, 2016) (the Opinion).
The pmiies then resolved their remaining disputes, except for Ross Island's claim for attorney's
fees.
Ross Island now moves for judgment on its claim for attorney's fees. For the reasons that
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follow, I deny the motion.

BACKGROUND
In January 2015, before Ross Island filed this action, Lehigh filed an action against Ross
Island in Multnomah County Circuit Court, seeking amounts due under its agreements to sell
cement to Ross Island. Later that month, the parties executed a settlement agreement (the 2015
Settlement Agreement), in which Ross Island agreed that it owed Lehigh $1.3 million. The 2015
Settlement Agreement is the basis for Ross Island's claim for attorney's fees here.
The 2015 Settlement Agreement includes the following release:
5. RELEASES
Subject to the complete and timely performance of all obligations set forth
in this Agreement, the Parties, on behalf of themselves and their subsidiaries,
parent companies, affiliates, owners, members, shareholders, agents, officers,
attorneys, directors, employees, contractors, and representatives hereby release
and discharge each other from all claims, counterclaims, cross-claims, causes of
action, liens, damages, charges, penalties, and obligations whether known or
unknown, or which the Parties have ever had or now have, arising at any time up
to the Effective Date of this Agreement (the "Released Claims"). Except as
expressly set forth herein, the Pmiies shall each pay their own attorney fees
incutTed in connection with the Litigation and this Agreement.
Explicitly excluded from the Released Claims are any and all: (i)
claims arising from or in any way related to the enforcement of this Agreement;
(ii) claims made by Ross Island against Lehigh arising out of the quality of
the Product; and (iii) claims that are not otherwise released in this Agreement.
Notwithstanding anything to the contrary herein, Lehigh's obligations, if any,
under any warranty or warranty exclusion or limitation applicable to any of the
Product shall remain unchanged.
Opinion at **3-4 (quoting 2015 Settlement Agreement with emphasis added).
In Lehigh's answer in this action, it asse1ied as an affirmative defense that the 2015
Settlement Agreement "released in part [Ross Island's] right to pursue ce1iain claims against
Lehigh. To the extent that [Ross Island's] claims ... are covered under the release in the
Settlement Agreement, those claims are ba1Ted." Def. 's Answer & Affirm. Defenses i! 44, ECF
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No. 36.
Ross Island now argues that the release in the 2015 Settlement Agreement does not bar its
claims here because the claims all arise out of the quality of Lehigh's cement, including the price
protection claims. Based on this assertion, Ross Island now contends it should be considered the
prevailing pmiy on Lehigh's affirmative defense of release, and therefore is entitled to fees based
on the following provision in the 2015 Settlement Agreement:

If any arbitration, action, suit, or proceeding is instituted to interpret,
enforce, or rescind this Agreement, or is otherwise in connection with the subject
matter of this Agreement, including but not limited to any proceeding brought
under the United States Bankruptcy Code, the prevailing patiy on a claim will be
entitled to recover with respect to the claim, in addition to any other relief
awarded, the prevailing party's reasonable attorney fees and other fees, costs, and
expenses of every kind, including but not limited to the costs and disbursements
specified in ORCP 68 A(2), incurred in connection with the arbitration, action,
suit, or proceeding, any appeal or petition for review, the collection of any award,
or the enforcement of any order, as determined by the arbitrator or comi.
Anderson Deel., Ex. 10, at 13, ECF No. 47.
A few months after the 2015 Settlement Agreement, Ross Island brought this action
against Lehigh, alleging both that Lehigh sold it defective cement and that Lehigh had agreed to
expand the patiies' price protection agreement to offer discounted cement prices for additional
construction projects. Lehigh moved for summary judgment on all of Ross Island's claims, and
Ross Island moved for patiial summary judgment on its claim for attorney's fees based on 2015
Settlement Agreement. This couti granted Lehigh's motion for summary judgment as to Ross
Island's price protection claims, concluding that the price protection claims were barred by the
Statute of Frauds. This court denied Lehigh's motion for summaiy judgment as to Ross Island's
defective cement claims, concluding that disputed issues of material fact remained on those
claims. This court expressly declined to address whether the release in the 2015 Settlement
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Agreement barred Ross Island's price protection claims:
Alternatively, Lehigh contends that it is entitled to summary judgment on
Ross Island's price protection claims because of the 2015 Settlement Agreement,
which releases all claims except, as relevant here, "claims made by Ross Island
against Lehigh arising out of the quality of the Product [i.e., cement]." Lehigh
argues that Ross Island's price protection claims are based on the quantity of
Lehigh's cement, not its quality.
Because I conclude that the Statute of Frauds bars the price protection
claims, I need not address the effect of the 2015 Settlement Agreement.
Opinion at *7. This court also denied Ross Island's motion for partial summary judgment as to
Lehigh's affirmative defense based on the release of claims in the 2015 Settlement Agreement,
stating, "The affirmative defense may apply to Ross Island's claims related to the Price
Protection Agreement." Opinion at *11. This court concluded that "it would be premature to
address entitlement to attorney's fees under the 2015 Settlement Agreement." Id.
Ross Island now moves for judgment on its Sixth' Claim for Relief, which states:
[Lehigh] has asse1ted an affirmative defense of release, alleging that Ross
Island's claims should be denied in whole or in part based on the fact that Ross
Island and [Lehigh] executed a Settlement Agreement dated January 23, 2015.
[Lehigh] alleges that Ross Island released, in part, its right to pursue certain
claims against [Lehigh], including some or all of the claims alleged by Ross Island
in this matter.
Under the Settlement Agreement, Ross Island is entitled to recover its
reasonable attorney fees and other fees and costs incurred in connection with the
subject matter of the Settlement Agreement if Ross Island prevails on [Lehigh]'s
affirmative defense of release.
Third Am. Comp!.

~~

89-90, ECF No. 31.

LEGAL STANDARDS
The parties agree that in resolving Ross Island's claim for attorney's fees, this court may

1

Because the Third Amended Complaint, which is the operative complaint, includes two claims
each labeled "Second Claim," the Sixth Claim is actually Ross Island's seventh claim.
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make findings of fact and conclusions oflaw without a ju1y. Fed. R. Civ. P. 52. Ross Island has
the burden of proving its claim by a preponderance of the evidence.
In construing the 2015 Settlement Agreement, I apply Oregon law. "Oregon subscribes to
the objective theory of contracts." Fogg v. Wart, 06-cv-160-ST, 2006 WL 3716745, at *5 (D.
Or. Dec. 14, 2006). "In Oregon, contract interpretation is a question of law for the court." Id.
(citing Anderson v. Jensen Racing, Inc., 324 Or. 570, 575, 931P.2d763, 765 (1997)).
DISCUSSION
In the 2015 Settlement Agreement, the patiies released all possible claims against each
other, with the exception, as relevant here, of"claims made by Ross Island against Lehigh arising
out of the quality of the Product [i.e., cement]." Lehigh asserted this release as an affirmative
defense, alleging that "[t]o the extent that [Ross Island's] claims ... are covered under the
release in the Settlement Agreement, those claims are baned." Def.'s Answer & Affirm.
Defenses~

44. In response, Ross Island claimed it would be entitled to attorney's fees under the

Settlement Agreement ifit prevailed on Lehigh's affirmative defense of release.
Ross Island has not shown that it is a prevailing pmiy on any claim for purposes of the
attorney's fee provision of the 2015 Settlement Agreement. This comi granted Lehigh's motion
for summary judgment in pmi on the price protection claims, denied Ross Island's motion for
pmiial summary judgment on Lehigh's affirmative defense of release, and declined to address
entitlement to attorney's fees. Ross Island is not entitled to attorney's fees under the Settlement
Agreement as a prevailing pmiy.
Ross Island contends that it now may show that it qualifies as a prevailing pmiy. I
conclude, however, that the issue is moot in light of this court's summmy judgment rulings and

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the parties' subsequent settlement.
Even if I were to address the merits of Ross Island's claim for attorney's fees, I would
conclude that Ross Island could not show it would prevail on Lehigh's affirmative defense. To
prevail, Ross Island would have to show that the release's exception for claims arising out of the
quality of cement applies to all of Ross Island's claims, including the price protection claims. I
agree with Lehigh that the price protection claims concern the price and quantity of the cement,
not its quality.
CONCLUSION

Ross Island's Motion for Judgment on Sixth Claim for Re·

D'1od<hi•

Q

~oly,

017

Ho rable Paul Papak
United States Magistrate Judge

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