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STI Oilfield Services, Inc. v. Access Midstream Partners

United States District Court, M.D. Pennsylvania

March 6, 2017

STI OILFIELD SERVICES, INC., Plaintiff,
v.
ACCESS MIDSTREAM PARTNERS, et al., Defendants.

          MEMORANDUM OPINION

          Robert D. Mariani United States District Judge

         I. Introduction and Procedural History

         Presently before the Court is a Motion for Summary Judgment, (Doc. 78), filed by two of the four Defendants in this case. As a result of this Court's ruling on Defendants' prior Joint Motion to Dismiss, (Docs. 49, 50), Plaintiff's Complaint, (Doc. 1), has five of the original eleven counts remaining, all concerning a series of contracts for natural gas pipeline construction. Count I, a breach of contract claim, and Count V, a claim pursuant to Pennsylvania's Contractor and Subcontractor Payment Act, 73 P.S. § 501 et seq. ("CASPA"), are against Defendants Chesapeake Operating, Inc. and Chesapeake Energy Corporation (collectively "the Chesapeake Defendants"). Count VI, a breach of contract claim, Count X, a claim pursuant to CASPA, and Count XI, a fraud claim, are against Defendants Access Midstream Partners, L.P., and Appalachia Midstream Services, LLC, (collectively "the Access Defendants"). The Chesapeake Defendants have brought the present Motion for Summary Judgment on the basis that (1) they are not parties to the Rome and Oilcan agreements on which Plaintiff seeks damages for breach, and (2) the claim for breach is itself deficient. For the reasons that follow, the Court will deny their Motion.

         II. Statement of Undisputed Facts

         In accordance with Local Rule 56.1, the Chesapeake Defendants submitted a Statement of Material Facts in Support of its Motion for Summary Judgment, (Doc. 79), as to which it contends that there is no genuine dispute for trial, and Plaintiff submitted a response, (Doc. 100).[1] Unfortunately, both parties seem to have disregarded the purpose of Local Rule 56.1, with the Chesapeake Defendants making inferential leaps with their facts that would have been more appropriate in the argument section of their brief, and Plaintiff refusing to admit statements that are undeniable. Nevertheless, the Court has gleaned the following undisputed facts from the record:

         A. Corporate Relationships between Defendants

         Chesapeake Midstream Partners filed paperwork with the U.S. Securities and Exchange Commission in early 2012 in which it stated that Chesapeake Energy Corporation and Affiliates had a 45.2% limited partner interest in Chesapeake Midstream Partners.[2](Doc. 79, Ex. 42 at 7). Chesapeake Energy Corporation's 2013 annual report to the U.S. Securities and Exchange Commission lists Chesapeake Operating, Inc. as a subsidiary of Chesapeake Energy Corporation. (Doc. 79, Ex. 39). Therefore, it appears from these two filings that, at least at some point, Chesapeake Energy Corporation owned some or part of both Chesapeake Operating and Chesapeake Midstream Partners. The record, however, is unclear about when either of these ownership interests were originally acquired.

         Then, sometime in mid-2012, Chesapeake Energy Corporation sold all of its interest in Chesapeake Midstream Partners. (Doc. 79 at ¶ 19; Doc. 79, Ex. 39; Doc. 100 at ¶ 19). On July 24, 2012, Chesapeake Midstream Partners changed is corporate name to Access Midstream Partners, LP. (Doc. 79 at¶¶ 18, 20; Doc. 100 at ¶ 18, 20).

         B. Plaintiff's Contracts

         Plaintiff, STI Oilfield Services, Inc., is a pipeline contractor. (Doc. 79 at ¶ 4; Doc. 100 at ¶ 4). In 2011, Plaintiff entered into a Master Service Agreement ("MSA") with Chesapeake Operating, Inc. (Doc. 79, Ex. 3). The front page of the MSA stated that it was between "CHEASPEAKE OPERATING, INC. and any present or future subsidiaries or affiliates named directly or indirectly by Chesapeake Operating, Inc. (herein collectively 'Company')" and "STI Group: Southeast Texas Industries Inc., STIS, Inc., STI-Oilfield Services Inc., and any present or future subsidiaries or affiliates named directly or indirectly by STI Group: Southeast Texas Industries Inc., STIS, Inc., STI-Oilfield Services Inc., (herein collectively 'Contractor')." [Id.).

         By its terms, the MSA did several things. First, the "Company... maintained] an approved list of Contractors and ... offer[ed] work or contracts only to those Contractors" on the approved list. (Id. at 4). Executing the MSA added Plaintiff to this "approved list of Contractors." (Id.). Second, the terms of the MSA "control[ed] and govern[ed] any and all performance of services and/or supply of materials and equipment by Contractor for Company." (Id.).

         Then, in February and April of 2012, before Chesapeake Energy Corporation sold all of its interest in Chesapeake Midstream Partners, Plaintiff entered into a series of Pricing and Scheduling Agreements to perform construction work on a series of natural gas pipelines projects. (Doc. 79 at¶¶ 1, 14, 16, 18; Doc. 100 at¶¶ 1, 14, 16, 18). Although there was a total of eighteen Pricing and Scheduling Agreements, they concerned two larger projects: the Rome project and the Oilcan project. (Doc. 79 at ¶¶ 14, 16, 43, 94; Doc. 100 at ¶¶ 14, 16, 43, 94). The seven Rome project Pricing and Scheduling Agreements were Dated: February 17, 2012. (Doc. 79 at ¶ 14; Doc. 100 at ¶ 14). The eleven[3] Oilcan project Pricing and Scheduling Agreements were signed on April 19, 2012, (Doc. 79 at¶ 16;Doc. 100at¶ 16).

         All of the seven Rome project Pricing and Scheduling Agreements have the Chesapeake Energy logo on the front of the Agreement. (Doc. 79, Exs. 4-10). Opposite this logo, is several lines of information which identifies the company as "Chesapeake Midstream Energy" to the attention of Andrew Bischoff of 1001st Center, Horseheads, NY 14845. (Id.). On the last page of the seven Rome project Agreements is a signature line where Jerrod Gill signed for "STI Group." (Id.). Below Mr. Gill's signature is the words "Chesapeake Approval" followed by signature lines for the following; CMD Construction Superintendent, Jimmy Rowell, CMD Project Manager, Andrew Bischoff, CMD Manager of Engineering & Construction, Joel Moore, and CMD Development & Operations Manager, Patrick Myers. (Id.). Six of the seven Agreements appear to be signed by Jimmy Rowell, Andrew Bischoff and Patrick Myers. (Doc. 79, Exs. 4-9). The final Agreement appears to be signed by Jimmy Rowell and Andrew Bischoff. (Doc. 79, Ex. 10).

         There are also eleven similar Pricing and Scheduling Agreements for the Oilcan project. (Doc. 79, Ex. 11). Each has a similar page that has the Chesapeake Energy logo and lists the company as "Chesapeake Midstream Energy." (Id.). They differ from the Rome contracts, however, in two respects. First, they are to the attention of Fernando Rodriguez-not Andrew Bischoff-but lists the same address: 100 1st Center, Horseheads, NY 14845. (Id.). Second, they have a single signature page for all eleven Agreements. (Id.). The signature page again contains the words "Chesapeake Approval" followed by signature lines for the following: CMD Construction Superintendent, Jimmy Rowell, CMD Project Manager, Fernando Rodriguez, CMD Manager of Engineering & Construction, Joel Moore, and CMD Development & Operations Manager, Patrick Myers. (Id.). Each signature line is signed. (Id.).

         Between September and December of 2012, several of Plaintiff's employees sent several emails to Tim Peck-at an email address ending in "@chk.com"-regarding various aspects of the Rome and Oilcan projects. (Doc. 79, Exs. 31-35). Tim Pecks' email signature line listed him as "Project Manager, Access Midstream Partners, LP." (Id.). Then, in May of 2013, one of Plaintiff's employees sent Tim Peck an email-this time at an email address ending in "@AccessMidstream.com"-inquiring about the status of "the move around change orders." (Doc. 79, Ex. 36). In addition, Plaintiff sent several invoices from the Rome and Oilcan projects to 100 1st Center, Horseheads, NY 14845. (Doc. 79, Exs. 14-28). These invoices were addressed to "Chesapeake Midstream Mgmt, LLC, " "Chesapeake Midstream Energy, "[4] or "Access Midstream Partners." (Id.).

         III. Standard of Review

         Through summary adjudication, the court may dispose of those claims that do not present a "genuine dispute as to any material fact." Fed.R.Civ.P. 56(a). "As to materiality, [o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 422 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

         The party moving for summary judgment bears the burden of showing the absence of a genuine issue as to any material fact. Celotex Corp. v. Catrett, 477 U.S.317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once such a showing has been made, the non-moving party must offer specific facts contradicting those averred by the movant to establish a genuine issue of material fact. Lujan v. Natl Wildlife Fed'n,497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990). Therefore, the non-moving party may not oppose summary judgment simply on the basis of the pleadings, or on conclusory statements that a factual issue exists. Anderson, 477 U.S. at 248. "A party asserting that a fact cannot be or is genuinely disputed must support the assertion by citing to particular parts of materials in the record ... or showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed.R.Civ.P. 56(c)(1)(A)-(B). In evaluating whether summary judgment should be granted, "[t]he court need consider only the cited materials, but it may consider other materials in the record." Fed.R.Civ.P. 56(c)(3). "Inferences should be drawn in the light most favorable to ...


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