United States District Court, E.D. Pennsylvania
J. CURTIS JOYNER, District Judge
This civil action was tried non-jury before the undersigned on January 26, 2015. The parties have since submitted their proposed factual findings and legal conclusions and the matter is now ripe for adjudication. To that end, we now make the following:
Findings of Fact
1. Plaintiff is Metal Partners Rebar, LLC, an Illinois limited liability company with its principal place of business at 55 S. Main Street, Suite 394, Naperville, Illinois.
2. Defendant is Carson Concrete Corporation, a Pennsylvania corporation with its principal place of business at 5 Creek Parkway, Boothwyn, Pennsylvania.
3. Anthony J. Samango, Jr. is an individual, a citizen of Pennsylvania and the sole owner and President of Carson Concrete.
4. Anthony J. Samango, III, is the Vice President of Carson Concrete.
5. Carson Concrete is a construction company specializing in large-scale concrete construction. In the course of that business, it purchases, inter alia, concrete and steel products, including steel rebar.
6. Metal Partners is a steel rebar distributor and fabricator and a re-seller of various types of concrete-related products. Although it sells its products all over the country, Metal Partners has just three fabrication shops - one each in Bakersfield, California, Chicago, Illinois and Bala Cynwyd, Pennsylvania.
7. Metal Partners was formed in January, 2008 and has two partners - Frank Bergren and Doug Anderson. Frank Bergren is the managing partner who oversees the overall operation of the business including anything relating to accounts receivable, accounts payable, operation of the fabrication shops and the some 52 company employees. Mr. Bergren also has some sales responsibilities. Doug Anderson is primarily an investment partner.
8. Metal Partners has several sales representatives, one of whom is Michael Actman, who has worked as a 1099 employee for Metal Partners for the past 3 ½ years. Mr. Actman's primary duties as a sales representative are to find customers who will buy fabricated and/or stock steel rebar and pay their bills in a timely manner.
9. Mr. Actman has 30-plus years of experience in the steel industry and prior to his employment with Metal Partners, was a partner/principal in several other steel and steel fabrication businesses. He had become acquainted with Anthony Samango, Jr. when one of his prior businesses, Brussels Pipe, rented space in a building owned by Mr. Samango in Conshohocken, Pennsylvania. In 2003, while a principal in another company, Steel Services, Mr. Actman had sold steel to Carson Concrete thereby enabling Carson to complete a job that it was then doing in Philadelphia.
10. In large part because of their prior relationship, on or about November 14, 2011, Anthony Samango, III (hereafter "Samango III") contacted Mr. Actman about purchasing rebar for Carson Concrete. At Metal Partners' request, Anthony Samango, Jr., (hereafter "Samango Jr.") on behalf of Carson Concrete, signed an Application for an Open Line of Credit (the "Credit Agreement"), denoting on the line next to his signature that his title was "President."
11. The Credit Agreement states, in relevant part that:
I(we) hereby apply for business credit with Metal Partners Company, Inc. and agree to payment within established credit terms (Net 30 Days). In consideration of extending credit to the applicant, I(we) agree to be personally, jointly and severally responsible for the payment of all sums due and owing and do unconditionally and irrevocably guarantee the applicant's payments. I(we) understand that all past due amounts are subject to an administrative collection fee of $50.00. I(we) also agree to pay all court costs and reasonable attorneys fees if litigation is necessary to collect past sums....
12. Mr. Samango Jr. was presented with the credit agreement by Carson's controller, who told him that they were about to do business with a new vendor who wanted a credit application. He did not read the credit agreement before he signed it. Because the word "President" was on the line next to his signature, it was Mr. Samango Jr.'s understanding that he was signing the application for and/or on behalf of Carson Concrete.
13. Following the execution of the credit application, the parties would separately negotiate the price terms for the steel-related products and the orders for shipment for a particular project or job for which Carson Concrete was involved. These negotiations were confirmed in a series of emails between Michael Actman and Mr. Semango, III. Although Mr. Semango specified due dates for preparation of shop drawings and Metal Partners agreed to guarantee Vector Shades' representation that it could have the elevator pit, foundation mat and dowels detailed by November 15, 2012 for the 1910 Spring Garden Street job and by November 21, 2012 for the 3737 Market Street job, no other mention of delivery or other due dates appears in the parties' emails.
14. Between November, 2011 and April, 2013, Metal Partners sold and delivered steel-related products and services (primarily rebar and detailing/fabrication services) to Carson Concrete and invoiced Carson Concrete for the same. Metal Partners' invoices to Carson included a description of the goods ordered, the quantity of the goods, the negotiated and agreed-upon unit price for the goods and the amount owed on each to arrive at a sum total. Each invoice also stated at the bottom that the terms for payment were "Net 30, " and gave a Payment Due Date.
15. Similar to the invoices, each corresponding Shipping Statement issued by Metal Partners to Carson Concrete also indicated at the bottom that the terms were "Net 30."
16. Despite the language of the invoices and shipping statements, over the course of time that Metal Partners provided steel products and related services to Carson Concrete, on average it took Carson seventy-one (71) days from the date of invoice to pay. Metal Partners never objected to Carson's payment practices before April 19, 2013.
17. The steel products and services which Metal Partners delivered to Carson Concrete between November, 2011 and April, 2013 were for four construction projects, the first of which was in Bucks County (the Bucks County Justice Center), while the other three were in Center City Philadelphia (at 3737 Market Street, 30th and Chestnut Streets and 1910 Spring Garden Street).
18. The agreed prices and quantities for the steel and steel-related products for the Market Street and Spring Garden Street projects were negotiated by the parties on or about November 7, 2012. For the Spring Garden Street project, the negotiated price was $.43 per lb or $860 per ton. For the Market Street project, the agreed-upon price was initially $.44 per pound or $880 per ton but this was later reduced to $.43 per pound or $860 per ton. The agreed price for the steel-related products for the Chestnut Street project was $.4395 per pound or $879 per ton.
19. Metal Partners was also to provide detailing services to Carson Concrete on the Market Street, Chestnut Street and Spring Garden Street projects and it hired Vector Shades of McLean, Virginia to do the detailing for all three jobs.
20. Generally speaking, detailing is the first step in fabricating steel rebar. In this case, Vector Shades would generate shop drawings, which are in essence a map for where the fabricated rebar is to go. Shop drawings also specify size, shapes, bar marks and lengths and are done for each specific portion of a project designating what rebar is to be installed in that specific section.
21. Fabricated rebar is cut, bent and machined from stock lengths according to plans. Usual stock lengths are 20, 30, 40 and 60 feet. Rebar is graded according to its tensile yield, which is the amount of load it will bear before breaking.
22. At various times throughout the parties' business relationship and as early as March, 2012 while the Bucks County Justice Center project was underway, Carson had complaints with respect to the quality and accuracy of the rebar shop drawings, fabrication of the rebar and the timeliness of the deliveries by Metal Partners. Beginning in February, 2013 and continuing through April, 2013, Metal Partners had numerous problems getting correctly fabricated rebar delivered on time to Carson at the 3737 Market and Chestnut Street projects.
23. At one point in April, 2013, Carson Concrete was delayed from working on the Market Street job for a period of 11 days because it didn't receive the correctly fabricated rebar which it had ordered from Metal Partners.
24. Although Carson repeatedly informed Metal Partners that it was on a very tight schedule, that Metal Partners' delays and errors were costing Carson money, and it did return several portions of the shipments to Metal Partners to be re-fabricated correctly, at no time did it cancel any of its orders with Metal Partners.
25. As a consequence of the delays caused by Metal Partners' incorrect fabrication and untimely deliveries of rebar to the various job sites, Carson Concrete was forced to incur higher labor costs, crane, scaffolding, forms and other equipment rental expenses, and general contractor backcharges than it would have otherwise.
26. On April 16, 2013, Mr. Samango, III sent an email to Michael Actman reciting the recent problems that Carson had been having getting correctly fabricated rebar from Metal Partners in a timely fashion and informing him that "this is unacceptable and is going to result in deducts from MOP invoices." Mr. Samango went on to tell Mr. Actman that he "would like to speak to the owner tomorrow as this issue is serious." This was not the first time that Mr. Samango III had asked to speak with Mr. Bergren.
27. Mr. Bergren finally called Mr. Samango, III on April 19, 2013, in response to the several requests that he do so from Mr. Actman. This was the first time that Mr. Bergren became personally involved in the Carson Concrete account. While Mr. Bergren did not know a lot about or fully understand the problems that Carson was experiencing, he did say that he would look into it and would get back to Mr. Samango.
28. In that same conversation, Mr. Bergren then told Mr. Samango that they needed to discuss the matter of unpaid invoices that were past 60 days, and that he wouldn't be able to ship more steel unless he received payment from Carson. In response, Mr. Samango told Mr. Bergren that he wouldn't get his money until Mr. Samango got ...