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ISObunkers, L.L.C. v. Easton Coach Co.

February 8, 2010

ISOBUNKERS, L.L.C.
v.
EASTON COACH COMPANY



The opinion of the court was delivered by: Juan R. Sanchez, J.

MEMORANDUM

Plaintiff ISObunkers, L.L.C. (ISObunkers) is a wholesaler of petroleum fuel. Defendant Easton Coach Company (Easton) is a private company that provides transportation services in Pennsylvania, New Jersey, and the surrounding area. This case arises from a contract dispute over Easton's purchase of fuel from ISObunkers. Easton moves for summary judgment on ISObunkers's breach of contract and promissory estoppel claims. For the following reasons, the Court will grant Easton's motion.

FACTS

Easton works with Metro Plus, a division of the Lehigh and Northampton Transportation Authority (LANTA), to provide transportation services for individuals unable to access the regular transit system. In spring 2008, Easton and LANTA jointly requested bids for the purchase of diesel fuels. The request called for fixed-price bids on both clear diesel fuel and red dye diesel fuel.

The Easton and LANTA bid requests were included in a single document, entitled Request for Bids, issued from the LANTA office. The LANTA office had additional copies of the Request for Bids forms and was designated as the location for the receipt of bid submissions. The Request for Bids, however, had distinct sections for LANTA and Easton bids. The LANTA portion of the bid request was labeled "Section - A - LANTA," and the Easton portion was labeled "Section B -Easton Coach Company." Additionally, in the section detailing the general conditions of the Request for Bids, the Request indicated bids were "for two (2) different companies and [could] be awarded to different bidders based upon the price submitted." Def.'s Req. for Bids at 6.

ISObunkers, working through its agent Phoenix Petroleum, submitted a proposal on May 12, 2008, containing two separate bids for the Easton and LANTA contracts. On May 13, 2008, Easton's President, Joseph Scott, called Thomas Hagan of Phoenix Petroleum to confirm that Easton would be accepting the red dye portion of ISObunkers's bid. During that conversation, Scott and Hagan acknowledged and briefly discussed a termination provision included in the contract attached to the Request for Bids.*fn1 The provision reads: "Upon thirty (30) days written notice, either party may terminate this contract." Def.'s Req. for Bids at 23. On the same day, Scott sent ISObunkers a letter and an e-mail confirming Easton's acceptance of the red dye diesel fuel bid. The following day, May 14, 2008, Scott sent ISObunkers a letter confirming that Easton had accepted ISObunkers's clear diesel fuel bid as well.

The resultant contract between Easton and ISObunkers was for June 1, 2008, until May 31, 2009. After being awarded the contract, ISObunkers secured fuel futures contracts on the New York Mercantile Exchange to ensure it would have the diesel fuel necessary to supply Easton. The business relationship between Easton and ISObunkers continued as planned until September 2, 2008, when Easton faxed ISObunkers a letter providing thirty days written notice that Easton intended to exercise the contract's termination clause and withdraw from the purchase agreement, effective October 2, 2008. Easton revoked this termination notice on September 9, 2008, after ISObunkers argued terminating the contract before the expiration date would render Easton liable for ISObunkers's costs incurred purchasing the fuel futures contracts on the Mercantile Exchange. After attempts to resolve this dispute failed, however, Easton sent ISObunkers another letter on October 23, 2008, again providing notice of Easton's intent to terminate effective November 23, 2008. Easton subsequently terminated the contract on that date.

ISObunkers filed this action on February 27, 2009, asserting breach of contract and promissory estoppel claims against Easton. Easton moved for summary judgment, arguing (1) Easton did not breach any duty owed to ISObunkers, and (2) ISObunkers is unable to maintain a promissory estoppel claim because the parties entered into an enforceable contract.

DISCUSSION

A moving party is entitled to summary judgment in its favor "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." Fed. R. Civ. P. 56(c)(2). When addressing a motion for summary judgment, "facts must be viewed in the light most favorable to the nonmoving party only if there is a genuine dispute as to those facts." Ricci v. DeStefano, 129 S.Ct. 2658, 2677 (2009) (citation and internal quotation marks omitted). "Where 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." Id. (citation and internal quotation marks omitted).

To withstand a motion for summary judgment on a breach of contract claim under Pennsylvania law, the non-moving party must establish the existence of a genuine issue of material fact regarding the "(1) existence of a binding contract; (2) breach of a duty imposed by the contract; and (3) damages."*fn2 Harry Miller Corp. v. Mancuso Chems. Ltd., 469 F. Supp. 2d 303, 322 (E.D. Pa. 2007) (citation omitted); see also Omicron Sys. Inc. v. Weiner, 860 A.2d 554, 564 (Pa. Super. 2004) (same). To withstand a motion for summary judgment on a claim of promissory estoppel under Pennsylvania law, the non-moving party must establish the existence of a genuine issue of material fact as to whether "(1) the promisor made a promise that he should have reasonably expected to induce action or forbearance on the part of the promisee; (2) the promisee actually took action or refrained from taking action in reliance on the promise; and (3) injustice can be avoided only by enforcing the promise." Crouse v. Cyclops Indus., 745 A.2d 606, 610 (Pa. 2000); Burton Imaging Group v. Toys "R" Us, Inc., 502 F. Supp. 2d 434, 438-39 (same).

Easton maintains it is entitled to summary judgment on ISObunkers's breach of contract claim because ISObunkers is unable to establish a genuine issue of material fact as to whether Easton breached a duty imposed by the contract. In response, ISObunkers asserts there is a genuine issue of material fact as to whether Easton breached such a duty by failing to pay costs ISObunkers incurred as a result of termination. ISObunkers makes two arguments in support of the existence of such a duty.

First, ISObunkers argues the fixed price term of the contract between it and Easton required Easton to pay ISObunkers's costs in the event Easton exercised its rights under the termination clause. To determine whether this duty exists, the Court will look to the terms of the contract.

"When a written contract is clear and unequivocal, its meaning must be determined by its contents alone. It speaks for itself and a meaning cannot be given to it other than that expressed." E. Crossroads Ctr., Inc. v. Mellon-Stuart Co., 205 A.2d 865, 866 (Pa. 1965); see also Prudential Prop. & Cas. Ins. Co. v. Colbert, 813 A.2d 747, 750 (Pa. 2002) ("Generally, courts must give plain meaning to a clear and unambiguous contract provision unless to do so would be contrary to a clearly expressed public policy."). The express terms of a contract can be modified by industry custom only when those terms are unclear. See Gallizzi v. Scavo, 179 A.2d 638, 642 (Pa. 1962) ("Where the terms are clear and unambiguous, they cannot be varied or contradicted by evidence of usage."); Smith v. Pennbridge Assocs., Inc., 655 A.2d 1015, 1020 (Pa. Super. 1995) ("[C]ustom cannot prevail where the terms of a contract are clear and unambiguous.") (internal quotation marks omitted). Courts are permitted to imply conditions not included in a contract only in rare circumstances. Solomon v. U.S. Healthcare Sys. of Pa., Inc., 797 A.2d 346, 350 (Pa. Super. 2002). Implication of terms must be necessary to prevent injustice, and it must be clear the parties intended to be bound by the terms the court implies. Id. If a contract does not address an issue, a ...


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