The opinion of the court was delivered by: Arthur J. Schwab United States District Judge
On December 30, 2005, this Court issued a memorandum opinion and order denying plaintiff's motions for summary judgment against defendants United States Steel International, Inc. (USSI) and Rulewave, Inc. (Rulewave) (doc. nos. 52 and 53). At that time, the Court also permitted defendants to file motions for summary judgment on or before January 10, 2006, with responses due on or before January 20, 2006. On the same day the Court issued its memorandum opinion and order, December 30, 2005, plaintiff filed a motion for reconsideration regarding the memorandum opinion and order on its motion for summary judgment (doc. no.54), arguing inter alia that although the Court permitted plaintiff to file a reply brief (doc. no. 51), the Court issued its memorandum opinion and order before the reply was received. The Court, however, believed that because the motion for leave to file a reply contained approximately five (5) pages of both legal and factual arguments, that said motion, if granted, would constitute the reply and there would be no further reply filed.
On January 10, 2006, plaintiff filed additionalmotions: to amend/correct complaint (doc. no. 59); to appoint expert and for leave to depose witness Mindy Fleishman (doc. no. 65); and to modify the pretrial schedule (doc. no. 62).
On January 23, 2006, this Court issued an order granting the motion for reconsideration and ruling that the Court would deem the pending substantive motions as cross-motions for summary judgment. Accordingly, currently pending before this Court are the parties cross-motions for summary judgment (doc. nos. 18, 19, 52 and 53), as well as motions filed by plaintiff as listed above (doc. nos. 59, 62 and 65).
After considering the briefs submitted by all parties, and after hearing oral argument (on January 26, 2006) on the pending cross-motions for summary judgment, this Court will DENY plaintiff's motions for summary judgment (doc. nos. 18 and 19) and GRANT defendants' motions for summary judgment (doc. nos. 52 and 53). Further, this Court will DENY plaintiff's motion to amend/correct the complaint (doc. no. 59) as untimely, will DENY plaintiff's motion to appoint an expert and to depose Ms. Fleishman (doc. no. 65) as untimely, and will DENY AS MOOT the motion to modify the pretrial schedule (doc. no. 62).
This case arises from a failed business deal between plaintiff, Al Makaaseb General Trading Co. (AMGT) and Vijaya Gajapathy Engineers PVT Ltd. (VG) for the shipment of 756 metric tons of seamless steel pipes to a client with whom VG had previously contracted in Doha, Qatar. VG forged a contract of sale with United States Steel International, Inc. (USSI) for the purchase and transport of the steel pipes to be delivered to the dock at the Port of Mobile, Alabama. VG also contracted with Rulewave, Inc. (Rulewave), who was the designated freight forwarder of this material from the Port of Mobile to Doha, Qatar and other points abroad. However, on the eve of delivery of the these pipes to the dock at the Port of Mobile, Alabama, VG discovered that it was unable to obtain a letter of credit (L/C).*fn1 VG then made a deal with plaintiff for plaintiff to act as the financier on the L/C. Although plaintiff's name was listed on the L/C, VG still maintained the prior contracts with USSI and Rulewave. At some point during the process, plaintiff became dissatisfied that it did not have ultimate control over the contracts VG had forged with USSI and Rulewave. Rather than seeking redress against VG, plaintiff brought the instant action against USSI and Rulewave.
Plaintiff alleges that it is entitled to summary judgment because defendant USSI:
(1) breached its warranties of presentation under Section 5109 of the Pennsylvania Uniform Commercial Code when it presented false and fraudulent documents to obtain payment on plaintiff's L/C; (2) breached its contract of sale for certain steel pipes by failing to deliver the pipes to the Mobile, Alabama Port Authority, as bailee for plaintiff; (3) defrauded plaintiff when, with the intent to deceive both the issuer of plaintiff's L/C and plaintiff, presented and delivered to plaintiff documents that falsely represented USSI had delivered the pipes to the Mobile Port Authority, when in fact they had not; and (4) breached its implied contract as bailee for the steel pipes when it negligently failed to exercise due care to prevent unauthorized removal of the steel pipes from the Port of Mobile. Plaintiff also argues that it is entitled to summary judgment as to defendant Rulewave for: (1) negligence per se, as a result of Rulewave's violations of its duties as a licensed freight forwarder subject to the regulations of the United States Federal Maritime Commission; and (2) conversion, as a result of the Rulewave's intentional interference with AMGT's property rights in the steel pipes by "lifting them" from the port of Mobile and exporting them to Holland, Qatar, and the United Arab Emirates, and, conversion, as a result of Rulewave's refusal to surrender the pipes to AMGT.
Defendant USSI argues that summary judgment should be granted in its favor because:
(1) plaintiff has no viable claim for breach of contract; (2) the record is devoid of any material fact which would support a finding that USSI's draw on the L/C constituted a breach of any "presentation warranty" under 13 Pa.C.S.A. § § 5110, 5109 because there is no factual or legal for plaintiff's contention that the dock receipts were "forged" or constituted a "material fraud"; (3) plaintiff cannot demonstrate the requisite elements for negligent misrepresentation, intentional misrepresentation and/or fraud because there was no fraud and there was no harm that was proximately caused by the alleged fraudulent conduct; and (4) plaintiff has no claim for breach of a bailment contract or for tortious conversion.
Defendant Rulewave argues that summary judgment should be granted in its favor because: (1) plaintiff did not plead or provide Rulewave with fair notice that a negligence per se claim was being asserted against it and that an amendment at this late stage would severely prejudice Rulewave, (2) that Rulewave had legal justification to ship the steel pipes and to require that freight charges be paid and because VG's customer (Manco) remained willing to transact business with plaintiff and therefore, plaintiff's conversion and tortious interference claims fail as a matter of law.
For the reasons that follow, this Court finds that there was no contract of sale between plaintiff and USSI, that USSI and Rulewave did not breach the terms of the contracts they formed with VG, and that the L/C did not alter the terms of the contractual relationship that was formed between VG and USSI, and VG and Rulewave.
A. Joint Undisputed Material Facts Submitted by the Parties
1. AMGT is a company headquartered in the United Arab Emirates (UAE).
2. USSI is a wholly-owned subsidiary of United States Steel Corporation with offices in Pittsburgh, Pennsylvania.
3. Rulewave is a freight forwarder licensed by the U.S. Federal Maritime Commission and has an office in Houston, Texas.
4. Vijaya Gajapathy Engineers Pvt. Ltd. ("VG") was an Indian company.
5. Shoukat Ali Sandila is the director of AMGT.
6. Hartmut Stuhldreier is the president of Rulewave in Houston, Texas.
7. In July 2003, VG contacted Rulewave regarding the rates for shipment of steel pipes.
8. In August of 2003, VG issued a Purchase Order and an Amended Purchase Order to USSI for the purchase of approximately 756 metric tons of seamless steel pipes for delivery to the Port of Mobile.
9. VG's Purchase Order stated it would pay for the steel pipes by way of an irrevocable L/C, payable at sight.
10. On September 2, 2003, USSI issued a proforma invoice to VG for the steel pipes.
11. VG was unable to open an L/C in its own name to pay for the steel pipes.
12. In October 2003, VG approached AMGT to open an L/C to pay for the 756 metric tons of seamless steel pipes.
13. On November 14, 2003, USSI was advised that a letter of credit would be opened to pay for the steel pipes.
14. On December 30, 2003, an L/C in the amount of $656,756 payable to USSI was issued by Mashreqbank in UAE upon the application of AMGT (the "L/C"). Some of the terms of that L/C were not acceptable to USSI.
15. On January 13, 2004, USSI notified VG that USSI was "canceling" VG's order and diverting the pipe at Mobile to other customers, because "you have not been able to provide us with an adequate L/C in order to ensure a timely shipment of your order."
16. On January 14 and 15, 2004, there were communications about the steel pipes.*fn2
17. On January 20, 2004, the L/C was amended.
18. USSI caused 20-inch and 24-inch seamless pipe to be transported by rail to the Port of Mobile, Alabama.
19. The Steel Pipes were unloaded from railcars at the Port of Mobile.
20. On February 23, 2004, as supplemented on February 25, 2004, USSI submitted documents to Mellon Bank to draw on the L/C for partial payment on the steel pipes.
21. On March 5, 2004, as supplemented on March 9, 2004, USSI submitted documents to Mellon Bank to draw on the L/C for the balance of payment on the steel pipes.
22. In mid-April 2004, in correspondence to USSI and copied to Rulewave, AMGT requested that the steel pipes not be delivered to anyone without the proper instruction of AMGT.
23. Subsequent to the correspondence from AMGT, Rulewave had communications with VG in which VG asserted its ownership of the steel pipes.
24. On May 1, 2004, Premier Stevedore ("Premier") began stuffing the steel pipes into containers at the direction of ...