Morsey Constructors LLC v. JMN Rebar LLC

448 F.Supp.3d 812

MORSEY CONSTRUCTORS LLC, Plaintiff,

v.JMN REBAR LLC, Defendant.

Case No. 3:18-00758

United States District Court, M.D. Tennessee, Nashville Division.

Filed March 23, 2020

David L. Kelly, Keuler, Kelly, Hutchins, Blankenship & Sigler, LLP, Paducah, KY, Heather Howell Wright, Bradley Arant Boult Cummings LLP, Nashville, TN, for Plaintiff.

Eric Geoffrey Evans, William B. Hawkins, III, Hawkins Hogan, PLC, Nashville, TN, Terry A. White, for Defendant.

MEMORANDUM OPINION

WAVERLY D. CRENSHAW, JR., CHIEF UNITED STATES DISTRICT JUDGE

This lawsuit arose after JMN Rebar LLC walked off the job at the Chemours Air Separation Plant in New Johnsonville, Tennessee on August 1, 2017. Morsey Constructors LLC, which had contracted with Air Products & Chemicals Inc. to construct the foundation of the plant and subcontracted JMN to perform a portion of that work, sued JMN for breach of contract. It has now filed a Motion for Summary Judgment (Doc. No. 25) on that claim in the amount of $287,991.69, plus attorney's fees. Because the motion raises more questions than it provides answers, summary judgment will be denied.

I.

In support of its summary judgment motion, and in accordance with this Court's local rules, Morsey submitted a statement of undisputed fact. Those facts are based largely upon the declaration of Eric McLean. JMN disputes all but one of those 23 paragraphs of facts because "the declaration of Eric McLean was verified upon ‘the best of his knowledge and belief.’ " (Doc. No. 335-1, passim ). This approach was risky because it presumed – incorrectly as it turns out – that the Court would agree with JMN's position that McLean's declaration is "incompetent to establish any fact on summary judgment." (Id.).

Even though McLean indicated that the statements in his declaration were to the "best of his knowledge and belief," this was prefaced with his averment that he was "personally familiar with the facts and statements made below[.]" (Doc. No. 25-1 at 1). Moreover, McLean's declaration is largely devoted to authenticating email communications and correspondence between the parties, and JMN does not claim that the documents McLean references are inauthentic. Nor does JMN assert, as required by Rule 56(c), "that the material cited to support ... a fact cannot be presented in a form that would be admissible in evidence." Fed. R. Civ. P. 56(c)(2). Perhaps this is because "an email can qualify as an admissible record of a regularly conducted business activity as long as the proponent satisfies the requirements of Rule 803(6)," United States v. Daneshvar, 925 F.3d 766, 777 (6th Cir. 2019), or the proponent can simply call the author of the email to authenticate it. Beyond identifying the emails, the statements made in McLean's declaration appear to be based on his personal knowledge as Morsey's Director of Projects.¹

As a consequence, the statements made by McLean stand virtually undisputed. Fortunately for JMN, however, those facts, in conjunction with the other facts marshaled by Morsey, do not warrant the entry of summary judgment.

II.

In an email dated July 25, 2017, Mitch Jacobs at Morsey invited Richard Wallace at JMN, to submit a quote for the installation of rebar in the foundation of Chemours' new air separation plant. Attached to the email was a copy of the Construction Specification 600.002, Project Scope of Work for Civil and Underground Construction. The Specification provided that "at least two (2) weeks prior to mobilization, the Contractor shall submit for every person entering the site a letter confirming" that background checks and negative drug and alcohol test had been secured for each prospective employee.

The following two days resulted in the exchange of a flurry of emails between the parties. On July 26, 2017, Roger Struble, JMN's Vice President of Operations, sent Jacobs a "Proposal Contract" that quoted a price for installation of rebar at the rate of $415.66 per ton. Specifically excluded from that figure was the cost of "moving or double-handling of reinforcing steel and materials from lay-down yard or area." (Doc. No. 25-4 at 4). The "Proposal Contract" also contained the following provision:

If accepted, the terms and conditions of this Subcontract Proposal, as mutually agreed upon, shall be incorporated into any final contract if one is provided to Subcontractor. Otherwise, Contractor's notice to proceed, whether by mail, phone, facsimile, or by any other means of communication shall constitute an acceptance of this offer and shall bind the Contractor to the terms and conditions as set forth herein, and not other writing shall be required by Subcontractor.

(Id. ).

Later that same day, Jacobs emailed Struble and attached the following documents that needed to be completed before mobilization: (1) Authorization to Release Criminal Information as a Condition to Access Site form; (2) Applicant's Disclosure & Authorization for Background Screening form; (3) Informed Consent for Drug/Alcohol Testing form; and (4) Disclosure and Authorization form for obtaining a consumer report. JMN was also informed by phone conversation and a separate email that it needed to provide an EMR (Experience Rating Modification History) letter as a prerequisite to being accepted as a qualified subcontractor on the project, and that it should provide a time and material ("T&M") rate, as well as a quote for installation of wire mesh. (Doc. No. 25-6 at 12).

In response, JMN provided Morsey a T&M rate of $59 per hour and a price for installation of wire mesh of .15 per square foot. (Doc. No. 25-8 at 2). JMN, through Struble by a separate email, also informed Morsey that it "would need a price of $450 a ton" for the rebar because of the background checks. (Doc. No. 25-9 at 2). This was confirmed in a revised "Proposal Contract" that indicated the cost for rebar installation would be $449.96 per ton. That "Proposal Contract" contained the same language as before regarding the movement of rebar and acceptance of the terms and conditions. (Doc. No. 25-10 at 5). In a response email, Jacobs wrote Struble: "Approved, will get you a subcontract tomorrow." (Doc. No. 25-11 at 2).

On July 27, 2017, Greg Byant, a representative of Air Products informed Morsey that JMN was approved as a subcontractor for the project. In turn, Jacobs wrote Struble that (1) "Angel [Little] is writing up a subcontract as we speak"; (2) "[t]his is your notice to proceed on this job"; and (3) "[p]lease begin to send background authorization paperwork ASAP so we can get you all on site ASAP." (Id.). A half-hour later, Little emailed Morsey's Contractor's Subcontract No. 174281-06 ("Subcontract") to Struble.

Jean Nachreiner, the owner of JMN, signed the Subcontract on July 27, 2017. She also provided Morsey a Certificate of Liability Insurance dated July 27, 2017, naming Morsey as the certificate holder and identifying Morsey as an additional insured for the Project. That same day and the next, JMN began submitting authorization forms for the employee drug/alcohol screens.

On August 1, 2017, JMN workers mobilized at the construction site and attended an orientation required by Air Products. They then began working. However, a few hours later, JMN workers were pulled of the work site. Nachreiner, by letter, explained that JMN had "decided to pass on the Air Products & Chemicals Inc. Project" because "[t]here were a number of project conditions" of which JMN was not aware, including (1) "many obstacles with background checks and security requirements"; (2) "the requirement to have a respirator attached to the waist [that] prevented our employees from wearing their tool belts"; (3) "the rebar was not stored in a systematic format to identify which rebar was to be used where"; and (4) "our quote excluded our employees from double handling or moving rebar from the lay down yard," but they were told on site that they would have to move the rebar, as well as provide "flagging equipment operators." (Doc. No. 25-18 at 1).

Once JMN exited the site, it fell to Morsey to perform the rebar work. As a result, Morsey claims that it "incurred damages of $287,991.69." This figure is based upon difference between what it actually cost Morsey for the rebar work – $479,915.29, and what it would have cost JMN to complete the work – $191,923.60 (based on installing 410 tons of rebar at $449.96 per ton and 49,600 square feet of wire mesh at .15 per square foot). Morsey also claims that it is entitled to its attorney fees under the plain terms of the Subcontract.

III.

"Summary judgment is proper if the evidence shows that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." City of Wyandotte v. Consol. Rail Corp., 262 F.3d 581, 585 (6th Cir. 2001) (citing, Davis v. Sodexho, Cumberland Coll. Cafeteria, 157 F.3d 460, 462 (6th Cir. 1998) ). In determining whether the moving party is entitled to judgment, "all facts and inferences drawn therefrom" are "consider[ed] ... in the light most favorable to the nonmovant." Id.

"[U]nder Tennessee law, which governs this case, contract interpretation is a question of law," Ray Bell Constr. Co. v. Tenn., 356 S.W.3d 384, 386 (Tenn. 2011), and very often "the appropriate procedural device" for resolving "matters of contract interpretation" is summary judgment, Highland Mining Co. v. United Mine Workers of Am., Dist. 12, 105 F. App'x 728, 730 (6th Cir. 2004). See also Estate of Brown, 402 S.W.3d 193, 197 (Tenn. 2013) ("Summary judgments are appropriate in virtually any civil case that can be resolved solely on issues of law.'). This is because "[t]he literal meaning of the contract language controls if the language is clear and unambiguous." Dick Broad. Co., Inc. of Tenn. v. Oak Ridge FM, Inc., 395 S.W.3d 653, 659 (Tenn. 2013) ; see also Franklin Am. Mortg. Co. v. Univ. Nat'l Bank of Lawrence, 910 F.3d 270, 282 (6th Cir. 2018) (observing that where the contract language is clear and...