United States District Court, D. Colorado
OBERMEYER HYDRO ACCESSORIES, INC. d/b/a OBERMEYER HYDRO, INC., a Delaware corporation Plaintiff,
CSI CALENDERING, INC. d/b/a CSI CALENDERING SPECIALISTS, INC., a North Dakota corporation Defendant.
RAYMOND P. MOORE, District Judge.
This matter involves a dispute between two merchants concerning the price of rubberized fabric sold and delivered from one to the other. The purchaser, Plaintiff Obermeyer Hydro Accessories, Inc. d/b/a/Obermeyer Hydro, Inc. ("Obermeyer"), claims that Defendant CSI Calendering, Inc. d/b/a CSI Calendering Specialists, Inc. ("CSI") overcharged Obermeyer by several hundred thousand dollars for the 178, 000 pounds of rubberized fabric that Obermeyer ordered from CSI in 2012 and 2013. Obermeyer's complaint asserts various claims against CSI that ultimately seek the return of the money Obermeyer claims to have overpaid. CSI, in turn, filed counterclaims against Obermeyer alleging it is still owed $655, 187.38 for rubberized fabric that it delivered to Obermeyer but was never paid for. Before this Court are the parties' cross motions for summary judgment. (ECF Nos. 47, 59.) For the reasons explained below, CSI's motion for summary judgment is (ECF No. 47) GRANTED and Obermeyer's motion for summary judgment (ECF No. 59) is DENIED.
I. LEGAL STANDARD
Summary judgment is appropriate only if there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem Coal Co., Inc., 41 F.3d 567, 569-70 (10th Cir. 1994). Whether there is a genuine dispute as to a material fact depends upon whether the evidence presents a sufficient disagreement to require submission to a jury or is so one-sided that one party must prevail as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986); Stone v. Autoliv ASP, Inc., 210 F.3d 1132, 1136 (10th Cir. 2000). Once the moving party meets its initial burden of demonstrating an absence of a genuine dispute of material fact, the burden then shifts to the non-moving party to move beyond the pleadings and to designate evidence which demonstrates the existence of a genuine dispute of material fact to be resolved at trial. See 1-800-Contacts, Inc. v. Lens.com, Inc., 722 F.3d 1229, 1242 (10th Cir. 2013) (citation omitted). A fact is "material" if it pertains to an element of a claim or defense; a factual dispute is "genuine" if the evidence is so contradictory that if the matter went to trial, a reasonable jury could return a verdict for either party. Anderson, 477 U.S. at 248. In considering whether summary judgment is appropriate, the facts must be considered in a light most favorable to the non-moving party. Cillo v. City of Greenwood Vill., 739 F.3d 451, 461 (10th Cir. 2013) (citations omitted). However, "[t]he mere existence of a scintilla of evidence in support of the nonmovant's position is insufficient to create a dispute of fact that is genuine'; an issue of material fact is genuine only if the nonmovant presents facts such that a reasonable jury could find in favor of the nonmovant." Lawmaster v. Ward, 125 F.3d 1341, 1347 (10th Cir. 1997) (quoting Jenkins v. Wood, 81 F.3d 988, 990 (10th Cir. 1996)).
If a movant properly supports a motion for summary judgment, the opposing party may not rest on the allegations contained in her complaint, but must respond with specific facts showing a genuine factual issue for trial. Fed.R.Civ.P. 56(e); Scott v. Harris, 550 U.S. 372, 380 (2007) (holding that "[t]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact") (citation omitted).
Only admissible evidence may be considered when ruling on a motion for summary judgment. Jaramillo v. Colo. Judicial Dep't, 427 F.3d 1303, 1314 (10th Cir. 2005) (citation omitted) (holding that hearsay evidence is not acceptable in opposing a summary judgment motion); World of Sleep, Inc. v. La-Z-Boy Chair Co., 756 F.2d 1467, 1474 (10th Cir. 1985). Affidavits must be based on personal knowledge and must set forth facts that would be admissible evidence at trial. Murray v. City of Sapulpa, 45 F.3d 1417, 1422 (10th Cir. 1995) (quotations and citation omitted). "Conclusory and self-serving affidavits are not sufficient." Id. The Court will not consider statements of fact, or rebuttals thereto, which are not material or are not supported by competent evidence. Fed.R.Civ.P. 56(c)(1)(A), 56(e)(2), 56(e)(3). "[O]n a motion for summary judgment, it is the responding party's burden to ensure that the factual dispute is portrayed with particularity, without depending on the trial court to conduct its own search of the record." Cross v. The Home Depot, 390 F.3d 1283, 1290 (10th Cir. 2004) (internal quotation and citation omitted). The Court is "not obligated to comb the record in order to make [Plaintiff's] arguments for [her]." See Mitchell v. City of Moore, Okla., 218 F.3d 1190, 1199 (10th Cir. 2000). Further, Local Rule 7.1(e) provides that "[e]very citation in a motion, response or reply shall include the specific page or statutory subsection to which reference is made." D.C. Colo. L. Civ. R. 7.1(e).
II. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
The facts as recited below are based on adequate citations to the record which would be admissible at trial.
A. The Parties
CSI specializes in preparing reinforced rubber products, including specialty and industrial fabrics. (ECF No. 47-2, Decl. of Vineet Saxena at ¶1.) One of the products CSI sells is 1000/4/3/ fabric ("Fabric"), and one of the services it provides is called calendering. ( Id.; ECF No. 9, Compl. ¶10.) Calendering is a process by which rubber is married to fabric - CSI uses large rollers to apply pressure to the rubber and fabric, forcing the rubber into the gaps of the fabric and creating rubber sheets with fabric enforcement. ( Id. ) Notably, when the rubber is added to the fabric, the resulting product has a weight nearly double that of the fabric alone. (ECF No. 57-1, H. Obermeyer Decl. at ¶ 4.) There are two CSI employees who primarily interacted with Obermeyer employees during the time periods relevant to this dispute: Terry Goetz ("Mr. Goetz") works for CSI as sales manager (ECF No. 47-4, Goetz Decl.); Vineet Saxena ("Mr. Saxena") works for CSI's parent company, WCCO Belting, Inc., in the capacity of executive vice-president of supply chain, but was acting as an agent on CSI's behalf at all relevant times. (ECF No. 47-2, Saxena Decl. at ¶1.)
Obermeyer designs, manufactures, and sells hydropower and water-control equipment, including inflatable dams. (ECF No. 57-1, H. Obermeyer Decl. at ¶ 1.) To actuate its inflatable dams, Obermeyer manufactures inflatable rubber air bladders. ( Id. at ¶¶ 1-3.) One of the materials Obermeyer uses in its air bladders is rubberized, or calendered, Fabric. ( Id. at ¶ 3.) Obermeyer had purchased Fabric and calendaring services from CSI for several years prior to this litigation. (ECF No. 47-2, Decl. of Vineet Saxena, at ¶1.) Obermeyer is primarily run by three people: Henry Obermeyer ("Mr. Obermeyer") is the president of the company (ECF No. 57-1, Decl. of Henry K. Obermeyer at ¶ 1), Rob Eckman ("Mr. Eckman") holds the position of Vice President ( Id. ), and Katherine Obermeyer, Henry's wife ("Mrs. Obermeyer"), handles a range of administrative duties, including accounts receivable, account payable, payroll, rubber purchasing, logistics, safety, and field service scheduling. ( Id. )
B. Events Leading up to January 10, 2013
As early as 2010, Obermeyer purchased both Fabric and calendering services from CSI. (ECF No. 57-1, H. Obermeyer Decl. at ¶3.) CSI did not produce the Fabric, but rather would order it from CSI's vendor in China, which order would then be shipped to CSI's warehouse in Arlington, Texas. (ECF No. 47-4, Goetz Decl. at ¶3; ECF No. 47-2, Saxena Decl. at ¶3.) Up to and including the year 2012, CSI generally billed Obermeyer separately for the purchase of Fabric and for the calendering of that Fabric. (ECF No. 47-4, Goetz Decl. at ¶2; ECF No. 47-2, Saxena Decl. at ¶2; ECF No. 57-1, H. Obermeyer Decl. at ¶¶ 6, 9-12.) Thus, Obermeyer would typically order Fabric from CSI, which CSI would in turn order from its Chinese vendor. (ECF No. 47-4, Goetz Decl. ¶3; ECF No. 47-2, Saxena Decl. ¶3.) Although the parties dispute the time at which Obermeyer was obliged to pay for the Fabric, CSI generally invoiced Obermeyer for the purchase of Fabric at some time shortly after the Fabric arrived at the Arlington warehouse. ( Id. ) Obermeyer would typically order calendering services separate from the purchase of the Fabric, typically weeks or months after the Fabric was delivered to CSI's Arlington warehouse, and would be invoiced for the calendering separately from the Fabric purchased. ( Id. )
Beginning in October, 2012, various emails were exchanged between CSI and Obermeyer representatives discussing new orders and price quotations for Fabric and calendering. Specifically, on October 9, 2012, CSI representative Mr. Saxena emailed Mr. Obermeyer to inquire whether Obermeyer would like to purchase any additional Fabric, stating:
This past year we have not received any further enquiry of [Fabric] from your side. We held a big quantity of [Fabric] in our warehouse for a long time which is now exhausted. Are you ready to place more orders? Please let me know.
(ECF No. 57-1 at 13, H. Obermeyer Decl. Ex. 1, Oct. - Nov., 2012 email chain.) Mr. Obermeyer responded to this email explaining that it had placed the Fabric into its own product line and confirming that it wished to continue acquiring Fabric from CSI. ( Id. ) Mr. Obermeyer also inquired in that email about the "lead time" required for making further acquisitions. ( Id. ) In a follow-up email, also on October 9, 2012, Mr. Obermeyer expressed his desire to make new purchases of Fabric in the next 90 days and asked CSI to "get the best available price" from CSI's supplier. ( Id. at 12.)
On October 10, 2012, and in response to Obermeyer's request to obtain the best available price from CSI's vendor, Mr. Saxena responded with an email containing quotes for Fabric, without calendering, at $3.74 per pound and stated that this quote was "valid till December end." ( Id. ) Also on October 10, 2012, in response to this price quotation, Mr. Obermeyer emailed Mr. Saxena inquiring about the use of a pricing structure whereby Obermeyer would be billed both for Fabric and the calendering of that Fabric at the same time that the finished product was shipped to Obermeyer, asking: "Would CSI Calendering make the bilk [sic] purchase, with Obermeyer Hydro purchasing from CSI Calendering on an order-by-order of skimmed material basis." (ECF No. 57-1 at 16, H. Obermeyer Decl. Ex. 3, Oct. 10, 2012 email chain.) Mr. Saxena responded to this email the same day, October 10, 2012 explaining their usual billing practices, stating, among other things, that Fabric would usually be invoiced to Obermeyer within 90 days of CSI's receipt of that Fabric at its warehouse. ( Id. )
Essentially, Obermeyer's request for simultaneous billing of Fabric and calendering meant that CSI would make bulk purchases of Fabric from CSI's vendor, hold them in inventory at the Arlington warehouse, and then bill Obermeyer, at a later date and in a single invoice, for both Fabric and calendering as the Fabric was "skimmed [calendered] and shipped" to Obermeyer. (ECF No. 57-1, H. Obermeyer Decl., at ¶11; Id. at 16, H. Obermeyer Decl. Ex 3, Oct. 10, 2012 email.)
According to CSI, this new billing structure would have resulted in an increased credit risk to CSI in its relationship with Obermeyer. CSI contends that if Obermeyer decided not to order the Fabric, they were not obligated to take any of the Fabric or pay for any calendering services. (ECF No. 47-4, Goetz Decl. at ¶6.) CSI would thus take on additional risk of late payment or non-payment, rather than hedging this risk somewhat by invoicing CSI for the Fabric as it was delivered to the Arlington warehouse but before it had been calendered and sent to Obermeyer. ( Id. ) This was beneficial for Obermeyer because it only had a $25, 000 line of credit through the entirety of 2012 and 2013. (ECF No. 48-1, H. Obermeyer Dep. at 87:14-88:7.) During that time period, Obermeyer paid all bills out of cash-on-hand that accumulated through the company's cash flow. ( Id. at 89:5-10, 151:14-152:18.)
In a follow-up email later that same day, October 10, 2012, Mr. Obermeyer responded to Mr. Saxena stating that "[b]ased on your information below, we will review our requirements and determine when to release a P.O. [purchase order]." (ECF No. 57-1 at 11, H. Obermeyer Decl., Ex. 1, Oct. - Nov. 2012 email chain.) Mr. Obermeyer also requested "detailed specification for the" Fabric so that Obermeyer could "incorporate the specification into the purchase order." ( Id. )
As early as November 7, 2012, Obermeyer notified CSI that it would potentially enter into a project requiring 100, 000 pounds of Fabric. ( Id. at 10; ECF No. 57-3 at 21, Gross Decl., Ex. 7, Nov., 2012 email chain.) Obermeyer increased that estimate to as much as 176, 000 pounds of Fabric on November 28, 2012. (ECF No. 57-1 at 45, H. Obermeyer Decl., Ex. 8, Nov. 28-29, 2012 email chain.) In connection with this project, Obermeyer and CSI exchanged a series of emails regarding "lead time" for the delivery of new Fabric from CSI's vendor to CSI's Arlington warehouse in order to meet the demands required by Obermeyer's potential client. (ECF No. 57-1 at 8-10, H. Obermeyer Decl., Ex. 1, Oct. - Nov., 2012 email chain.)
On November 13, 2012, Mr. Obermeyer emailed Mr. Saxena stating that he "wish[ed] to order, under our Purchase Order 12-01-749, approximately 20, 000 lbs... of [Fabric] for earliest manufacture." ( Id. at 6.) This email also stated Obermeyer's expectation that it would order an additional 70, 000 lbs of Fabric in the near future in connection with the same project. ( Id. ) However, this email did not contain an attached purchase order, and indeed Obermeyer did not provide CSI with the actual purchase order 12-01-749 document until December 6, 2012. (ECF No. 47-4 at 15-16, Goetz Decl, Ex. E, Dec. 6, 2012 email.) In response, Mr. Saxena emailed Mr. Obermeyer confirming the order and requesting that a purchase order be sent to CSI for their records. (ECF No. 57-3 at 43, Gross Decl. Ex. 13, Nov., 2012 email chain.) Mr. Saxena emailed Mr. Obermeyer again the next day, November 14, 2012, confirming that they had placed this order with their vendor on an expedited basis, explaining predicted turnaround times for this order to be shipped, and again requesting that Obermeyer send the actual purchase order. (ECF No. 57-1 at 6, H. Obermeyer Decl. Ex. 1, Nov. 14, 2012 email chain.)
On November 29, 2012, Mr. Saxena emailed Mr. Obermeyer and other Obermeyer representatives providing updated delivery schedules. (ECF No. 57-1 at 28, H. Obermeyer Decl. Ex. 5, Nov. 29, 2012 email.) In response, Mr. Obermeyer sent an email later that day increasing the quantity Obermeyer wished to purchase under purchase order 12-01-749 "for quantity 2 approx. 20, 000 lb containers of [Fabric] for shipment the third and fourth week of December, " thus causing the total quantity being purchased under purchase order 12-01-749 to grow to 60, 000 pounds. ( Id. at 27.) However, as with the November 13, 2012 email referencing purchase order 12-01-749, this email did not contain the actual purchase Order document, and this document was not provided to CSI until December 6, 2012 (ECF No. 47-4 at 15-18, Goetz Decl. Ex. E, Dec. 6, 2012 email) and not in a form that included a price until January 10, 2013. (ECF No. 57-3 at 54-56, Gross Decl. Ex. 15, Jan. 11, 2013 email; ECF No. 77-2, Second Goetz Decl. ¶2; ECF No. 47-4 at 18, Goetz Decl. Ex. F, Purchase Order 12-01-749.) CSI responded to this email the same day, confirming that they would be "ordering another 2×20' (40, 000 lbs) immediately" from CSI's Fabric supplier. (ECF No. 57-1 at 27, H. Obermeyer Decl. Ex. 5, Nov. 29, 2012 email.) CSI documents reflect that CSI did in fact begin ordering these quantities of Fabric from their supplier that same day. (ECF No. 57-3 at 48-49, Gross Decl. Ex. 14, CSI Purchase Orders 2299 and 2230.)
On December 3, 2012, a quote for calendering services was emailed to Obermeyer by CSI representative Mr. Goetz. (ECF No. 47-4 at 5-6, Goetz Decl. Ex. A., Dec. 3, 2012 email.) In the email attaching the quote, CSI states that this pricing, at $2.23/lb, would be "for compound supplied by Kardoes via CSI, calendering, cores and poly." ( Id. ) The quote attached to the email stated essentially the same and further stated that Fabric was "to be invoiced separately." ( Id. )
On December 6, 2012, Mrs. Obermeyer emailed several CSI representatives attaching purchase order 12-01-749 and confirming that the document had not been given to CSI previously. (ECF No. 47-4 at 15-16, Goetz Decl. Ex. E, Dec. 6, 2012 email.) The body of this email acknowledges that the price is not listed on the purchase order and indicating that "[t]here may be an e-mail with the price. I didn't see it yet." ( Id. )
On January 7, 2013, CSI emailed Obermeyer that it had requested its supplier to hold on to the locked-in prices, and stressed the need to issue the remaining purchase orders as soon as possible. (ECF No. 57-1 at 48, Obermeyer Decl. Ex 9, Jan 7, 2013 email.) Regarding the "payment terms" CSI and Obermeyer had agreed to at this point regarding the timing at which Obermeyer would be billed, it appears from internal CSI correspondence that CSI was still of the impression that, as of January 7, 2013, Fabric would be billed as delivered to the Arlington warehouse. This sentiment is reflected in an email exchange among CSI representatives Terry Goetz, Jeff Brown and Vineet Saxena where, responding to Mr. Goetz's question regarding "Obermeyer current payment terms for fabric, " Mr. Saxena responded that "[o]ur terms with Obermeyer for fabric sales remain the same, i.e. 30 days after withdrawal from ware house." (ECF No. 57-3 at 18, Gross Decl. Ex. 6, Jan. 7, 2013 email chain.)
On January 8, 2013, Obermeyer emailed CSI Purchase Order 13-00-013 for 100, 000 pounds of Fabric, with the unit price for the Fabric left blank. (ECF No. 57-1 at 52-53, H. Obermeyer Decl. Ex. 10, Jan. 8, 2013 email.) CSI representative Saxena responded to this email the same day, January 8, 2013 stating "I am not clear why the unit price has not been mentioned, the unit price is # 3.74/lb." (ECF No. 57-1 at 55, H. Obermeyer Decl. Ex. 11.) Also, as with the above described purchase order 12-01-749, CSI did not receive a copy of the purchase order document including pricing information until January 10, 2013. (ECF No. 77-2, Second Goetz Decl. at ¶2; ECF No. 57-3 at 56, Gross Decl. Ex. 15, purchase order 13-00-013.)
On January 9, 2012, CSI emailed Obermeyer a delivery schedule for the 100, 000 pounds of Fabric purchased under purchase order 13-00-013 and also advised them that this order could be cancelled as late as the evening of January 10, 2013, with CSI's vendor if Obermeyer's client should fail to confirm its ...