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Lone Star Industries, Inc v. Besser Company

April 17, 2013

LONE STAR INDUSTRIES, INC., PLAINTIFF,
v.
BESSER COMPANY, DEFENDANT.



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

MEMORANDUM OPINION

April ___, 2013

Presently before the Court is Defendant's Motion for Summary Judgment (Doc. 23), Plaintiff's Response in Opposition (Doc. 25), and Defendant's Reply (Doc. 26). Upon consideration of the parties' motions with briefs and exhibits, and for the reasons set forth below, Defendant's motion will be granted.

I.FACTUAL AND PROCEDURAL BACKGROUND

In 2001, Plaintiff Lone Star Industries, Inc. ("Lone Star"), a cement manufacturer, entered into a contract with an entity called "Besser Appco Division" ("Besser Appco") for the engineering, design, and construction of a cement storage silo (the "Silo") in Cincinnati, Ohio.*fn1

The Aggregate Plant Products Company ("APPCO") was then in the business of producing, among other things, "bins and batching" equipment, including cement storage silos such as the Silo at issue here. At the time the contract was executed, APPCO was a wholly owned subsidiary of Defendant Besser Company ("Besser Company"), and did business under the names "Besser Appco" and "Besser Appco Division." The relationship between these companies is at the heart of this litigation.

The present dispute arises out of the alleged failure of the Silo in August 2007. According to Lone Star, this failure was caused by a faulty pipe strut that had fallen from a compartment partition wall it was intended to support. Lone Star avers that it was its understanding that Besser Company, through a written or implied agreement with APPCO, would ultimately be responsible for the engineering and designing the Silo. Thus, according to Lone Star, Besser Company failed to properly engineer and design the partition wall.

On April 4, 2011, Lone Star filed an Amended Complaint against Besser Company asserting two claims: (1) a breach of contract claim premised on the theory that Lone Star was the third party beneficiary of an alleged contract between Besser Company and APPCO, and (2) breach of an implied warranty of fitness for a particular purpose implied in that alleged contract. Lone Star seeks to recover from Besser Company $182,769.97 in costs it allegedly incurred in repairing the Silo, an unspecified amount in business interruption losses, and the costs of this action.

On January 13, 2012, this Court denied Besser Company's motion to dismiss Lone Star's Amended Complaint. Specifically, this Court found that: (1) "[i]f Plaintiff Lone Star's statement [that Besser Company and APPCO entered into the alleged Besser-APPCO contract for the benefit of Lone Star] proves true," Lone Star may be able to sustain a third-party beneficiary claim under that alleged contract; and (2) "[i]f, as Plaintiff expressly alleges in its Amended Complaint, there exists an Engineering Agreement between Appco and Defendant Besser Co. such that Plaintiff was an intended third party beneficiary, then the implied warranty of fitness could be found to extend to Plaintiff in the same manner it would protect a party to [the alleged Besser-APPCO contract]." (Doc. 15.)

Given this threshold issue regarding whether the alleged Besser Company-APPCO contract upon which Lone Star bases its claims even exists, the Court, with the express agreement of the parties, granted the parties until June 1, 2012 to conduct "limited fact discovery to determine: (1) the identity of the proper entity responsible for construction of the allegedly defective Silo, and (2) the entity which entered into the written contractual agreement, dated 2001, with Plaintiff for construction of the Silo." (Doc. 20.)

Consistent with the Court's order, the parties produced documents and interrogatory responses; Lone Star deposed Timothy Farley, a representative of Besser Company designated pursuant to Federal Rule of Civil Procedure 30(b)(6); and Lone Star subpoenaed documents directly from APPCO. As will be discussed in greater detail below, Besser Company now argues that such discovery has left no genuine dispute that Besser Company did not, as Lone Star alleges, enter into a contract with APPCO "made for the benefit of [Lone Star], to engineer, design and manufacture" the Silo. (Am. Compl. ¶ 8.) Accordingly, Besser Company now moves this Court to grant summary judgment in its favor and to dismiss the Amended Complaint.

II.STANDARD OF REVIEW

Summary judgment is appropriate where the moving party establishes that "there is no genuine issue as to any material fact and that [it] is entitled to a judgment as a matter of law." Fed R. Civ P. 56(c). See Levy v. Sterling Holding Co., LLC, 544 F.3d 493, 501 (3d Cir. 2008). A factual dispute between the parties will not defeat a motion for summary judgment unless it is both genuine and material. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); Dee v. Borough of Dunmore, 549 F.3d 225, 229 (3d Cir. 2008). A factual dispute is genuine if a reasonable jury could return a verdict for the non-movant, and it is material if, under the substantive law, it would affect the outcome of the suit. See Anderson, 477 U.S. at 248; Fakete v. Aetna, Inc., 308 F.3d 335, 337 (3d Cir. 2002).

The moving party must show that if the evidentiary material of record were reduced to admissible evidence in court, it would be insufficient to permit the non-moving party to carry its burden of proof. See Celotex v. Catrett, 477 U.S. 317, 327 (1986). Once the moving party has carried its burden under Rule 56, "its' opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Scott v. Harris, 550 U.S. 372, 380 (2007). Under Fed. R. Civ. P. 56(e), the opposing party must set forth specific facts showing a genuine ...


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