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Lynchburg Steel, Inc v. O'neill Properties Group

December 1, 2010


The opinion of the court was delivered by: DuBOIS, J.



This case arises out of plaintiff Lynchburg Steel, Inc.'s ("Lynchburg") purchase of steel pursuant to a letter of intent in which defendant O'Neill Properties Group, L.P. ("OPG") formally authorized Lynchburg to initiate the placement of steel mill orders for the fabrication and erection of structural steel. Plaintiff alleges three causes of action against OPG: (1) breach of contract; (2) quantum meruit; and (3) violation of the Pennsylvania Contractor and Subcontractor Payment Act, 73 Pa. Cons. Stat. § 501 et seq. Presently before the Court is plaintiff's Motion for Partial Summary Judgment on All Elements of Count I Only, Save for the Quantum of Damages. For the reasons stated below, the motion is denied.


Lynchburg is a Virginia corporation engaged in the business of structural steel fabrication.

(Pl.'s Mot. at 2; Def.'s Resp. at 4.) In October 2007, OPG, a Pennsylvania property development limited partnership, engaged in discussions with Lynchburg about the construction of composite steel frame buildings for the Uptown Worthington Project ("the Project"), a large mixed-use development of retail, residential, and office space located in East Whiteland Township, Pennsylvania. (Id.; Def.'s Resp. at 6, Exs. A, E; Pl.'s Reply at 2.)

In a letter dated April 28, 2008, Bruce Auerbach, OPG's Vice President of Preconstruction, formally notified Lynchburg's Paul Hudnall of OPG's intent to enter into a contract with Lynchburg for Lynchburg's fabrication and erection of structural steel for the Project. (Pl.'s Mot., Ex. 3.) Auerbach further notified Hudnall that "[a]lthough the letter is solely an expression of intent subject to the execution of a formal contract----by its issuance, [OPG] formally authorizes Lynchburg . . . to initiate the placement of steel mill order(s) totaling approx $870,000 in value, and shop engineering design valued at approx $70,000." (Id.) Lynchburg subsequently purchased steel for the Project and sent invoices totaling $940,742 to OPG in July, August, and November, 2008. (Pl.'s Mot., Ex. 4.) OPG has not paid Lynchburg for the steel and Lynchburg has not delivered any steel to OPG. (Def.'s Resp. at 5, 11; Pl.'s Answers to Def.'s First Request for Admission ¶ 11, attached as Ex. D to Def.'s Resp.)

On June 16, 2008, Auerbach followed the letter of intent with a proposed Trade Construction Service Agreement ("Proposed Contract") between Malvern Hills and Lynchburg. (Def.'s Resp., Ex. I.) The Proposed Contract identifies Malvern Hills as the owner of the Project and identifies OPG's Bruce Auerbach as Malvern Hills' "authorized [r]epresentative." (Id. at C-1.) According to OPG, Malvern Hills is a real estate partnership that owns the Project, and Malvern Hills is only one of the many partnerships for which OPG acts as an agent. (Def.'s Resp. at 6; Robinson Dep. at 11:7- 17.) OPG asserts that the Proposed Contract was not to be signed until Malvern Hills obtained financing for the Project, and that Malvern Hills has been unable to obtain financing to date. (Def.'s Resp. at 9-10; Auerbach Dep. at 95:2-17.)

Lynchburg filed this action against OPG on October 14, 2009 to recover $940,742, plus interest and costs. In the Complaint, Lynchburg alleges it is owed that sum as payment for steel it purchased pursuant to the April 28, 2008 letter of intent. (Compl. ¶¶ 11-12, 18, 20-21, 24.)


In considering a motion for summary judgment, "the court is required to examine the evidence of record in the light most favorable to the party opposing summary judgment, and resolve all reasonable inferences in that party's favor." Wishkin v. Potter, 476 F.3d 180, 184 (3d Cir. 2007). The party opposing the motion, however, cannot "rely merely upon bare assertions, conclusory allegations or suspicions" to support its claim. Fireman's Ins. Co. v. DuFresne, 676 F.2d 965, 969 (3d Cir. 1982). After examining the evidence of record, a court should grant summary judgment 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); accord Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).

A factual dispute is material when it "might affect the outcome of the suit under the governing law," and genuine when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no 'genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation omitted).


To prove a breach of contract under Pennsylvania law, a plaintiff must establish: "(1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract[,] and (3) resultant damages." Ware v. Rodale Press, Inc., 322 F.3d 218, 225 (3d Cir. 2003) (citation omitted). Lynchburg seeks summary judgment only as to the liability elements of its breach of contract claim, arguing that the letter of intent is a contract authorizing it to purchase steel for the Project, and that OPG breached that contract by refusing to pay for the steel. OPG admittedly did not pay for the steel. The questions before the ...

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