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Archer Western Contractors, LLC v. Synalloy Fabrication, LLC

United States District Court, D. Maryland

March 11, 2016

ARCHER WESTERN CONTRACTORS, LLC
v.
SYNALLOY FABRICATION, LLC, et al.

MEMORANDUM

CATHERINE C. BLAKE, UNITED STATES DISTRICT JUDGE.

Archer Western Contractors, LLC (“Archer Western”) filed this suit against Synalloy Fabrication, LLC (“Synalloy”) and Travelers Casualty & Surety Company of America (“Travelers”) seeking damages for Synalloy’s purported breach of contract. (Compl., ECF No. 1; Am. Compl., ECF No. 23). Synalloy filed a counterclaim requesting (1) a declaratory judgment that no contract arose from the purchase order, (2) an order requiring Archer Western to return a performance bond, and (3) a finding of unjust enrichment. (Answer and Countercl. 14-15, ECF No. 8). Currently pending before the court are Archer Western’s motion for partial summary judgment, (Pl.’s Mot. Partial Summ. J., ECF No. 39), and Synalloy and Travelers’ joint motion for summary judgment. (Defs.’ Mot. Summ. J., ECF No. 44). The court finds oral argument unnecessary to resolve the issues. See Local R. 105.6 (D. Md. 2014). For the reasons outlined below, Archer Western’s motion for partial summary judgment will be granted, and Synalloy and Travelers’ joint motion for summary judgment will be denied.

BACKGROUND

The plaintiff, Archer Western, is the general contractor for Baltimore City’s Sanitary Contract No. 877, which pertains to renovations at the Back River Wastewater Treatment Plant (“the project”). (Pl.’s Mot. Partial Summ. J., Ex. 1, Lippert Aff. ¶ 3, ECF No. 39-3). Relevant here, the project required Archer Western to provide piping for two facilities: Activated Sludge Plant 2 and Activated Sludge Plant 3. Id. ¶¶ 5, 7. Each Activated Sludge Plant contains six reactor tanks.[1]

In anticipation of receiving this contract, Archer Western solicited quotes for fabrication of steel piping. On June 12, 2013, Synalloy submitted a quotation of $7, 850, 000. (Defs.’ Mot. Summ. J., Ex. 4, Letter Dated June 12, 2013, ECF No. 44-7). The quotation was a proposal to “furnish, fabricate and deliver” stainless steel piping in accordance with drawings provided by Archer Western. In particular, the quotation noted that “[s]cope of supply shall be per the enclosed highlighted drawing[s].” Id. The drawings portrayed the piping requirements of two reactor tanks: one in Activated Sludge Plant 2 and one in Activated Sludge Plant 3. (Defs.’ Reply, Ex. 3, Construction Drawings, ECF No. 46-5). Each drawing had a title box in the lower right-hand corner, labeled “Typical Reactor Modifications, ” which referenced the specific Activated Sludge Plant in which that reactor tank was located. Id. Next to the title box on some of the drawings was a visual key, specifying which portion of the six reactors in that particular plant was portrayed in the drawing. Id.

On the same day Synalloy transmitted this quote, another fabrication company, Felker Brothers Corp., was named as the apparent low bidder for the piping subcontract. (Defs.’ Mot. Summ. J., Ex. 8, Kulling Dep. 46:10-12, ECF No. 44-11). It appears, however, that Felker had left out certain materials in pricing its quote. Id. at 27:8-21; 36:2-21. The exact sequence of events following the receipt of the Felker and Synalloy bids is unclear from the parties’ filings; however, as of June 21, 2013, Archer Western and Synalloy were corresponding regarding the piping requirements and adjustments to Synalloy’s quoted price. (Defs.’ Mot. Summ. J., Ex. 10, Email Dated June 21, 2013, ECF No. 44-13). As a result of these discussions, Synalloy transmitted a revised quotation to Archer Western on July 12, 2013, with a quoted price of $6, 750, 000. (Defs.’ Mot. Summ. J., Ex. 11, Email Dated July 12, 2013, ECF No. 44-14). This document included the same language pertaining to scope as Synalloy’s original quotation letter. Id.

The parties continued to communicate regarding the scope of the project. (Kulling Dep. 55:17-56:23, ECF No. 44-11). Representatives from Synalloy and Archer Western met on August 1, 2013, and August 8, 2013, to discuss details of the proposed subcontract. (Defs.’ Mot. Summ. J., Ex. 5, Tidlow Dep. 82:9-87:17, ECF No. 44-8). The parties disagree, and cite conflicting deposition testimony, as to whether these meetings included a discussion of the number of reactor tanks covered by the proposed subcontract. (Defs.’ Mot. Summ. J., Ex. 12, Robinson Dep. 87:18-88:10, ECF No. 44-15; Pl.’s Reply, Ex. 17, Markhardt Dep. 179:25-181:3, ECF No. 45-17).

Following these meetings, Archer Western transmitted a letter of intent to Synalloy. (Defs.’ Mot. Summ. J., Ex. 14, Letter of Intent, ECF No. 44-17). The letter indicated Archer Western’s intent to enter into a purchase order agreement with Synalloy. It describes the scope of the project as “Fabrication & Delivery of Stainless Steel Piping as outlined on your drawings sent to Archer Western on 8/8/2013, ” followed by a list of drawings identical to those listed in Synalloy’s quotation. Id. The next paragraph states that “The Reactor Tanks will be typical of 6 each basins at Reactor Tanks 2 & 3. Synalloy will provide Victaulic Coupling on all SST Flushing Water pipe and Spay [sic] Water Pipe.” Id. The letter further authorized Synalloy to “complete the submittals and shop drawings, and schedule of values in accordance with the contract documents.” Id.

On August 28, 2013, Archer Western sent Synalloy a purchase order for fabrication of piping and related materials in accordance with its letter of intent. (Pl.’s Mot. Partial Summ. J., Ex. 6, Purchase Order, ECF No. 39-8). The purchase order included numerous exhibits and addenda, including Exhibit B, which outlined the scope of work for the project. Exhibit B also stated that “The Reactor Tanks will be typical of 6 each basins at Reactor Tanks 2 & 3.” Id.

On October 7, 2013, Synalloy responded with a letter to Archer Western and a signed copy of the purchase order. (Defs.’ Mot. Summ. J., Ex. 16, Letter Dated Oct. 7, 2013, ECF No. 44-19). In relevant part, the letter stated, “We acknowledge and accept your Purchase Order Number 213097P05 based on the attached exceptions and clarifications.” Id. In addition to the letter and purchase order, Synalloy transmitted two documents titled “General Conditions of this Quotation” and “Exceptions and Clarifications to Purchase Order Number 213097P05.” Id.[2]The letter and purchase order were signed by Carolyn Webb, Synalloy’s Director of Customer Service. Next to Ms. Webb’s signature on the purchase order is the handwritten notation “see Ack Letter w/ Exceptions.” Id. There was a space on the purchase order for a signature by David B. Casey, a Senior Vice President at Archer Western; however, neither Mr. Casey, nor any other representative from Archer Western, signed the purchase order.

From October 7, 2013, until February 11, 2014, the parties continued to discuss and exchange revisions to Synalloy’s proposed “exceptions and clarifications.” (Defs.’ Mot. Summ. J., Ex. 7, Markhardt Dep. 100:1-117:11, ECF No. 44-10; Defs.’ Mot. Summ. J., Ex. 20, Email Dated Dec. 13, 2013, ECF No. 44-23; Defs.’ Mot. Summ. J., Ex. 21, Email Dated Jan. 23, 2014, ECF No. 44-24). During this time period, Synalloy began work: it dedicated an employee to the Archer Western project and prepared shop drawings and submittals per the letter of intent and purchase order. (Pl.’s Mot. Partial Summ. J., Ex. 3, Tidlow Dep. 179:21-180:18, 216:5-9, ECF No. 39-5). Additionally, Synalloy ordered raw materials and asked its manufacturer, Bristol Metals, to begin fabricating some of the steel piping. Id. at 185:1-186:7, 198:15-18. Synalloy also sent three blind flanges to Archer Western in December 2013. (Pl.’s Mot. Partial Summ. J., Ex. 2, Tedder Aff. ¶ 8, ECF No. 39-4).

On or about October 30, 2013, Synalloy obtained performance and payment bonds from Travelers, for which it paid $100, 275. (Pl.’s Mot. Partial Summ. J., Ex. 9, Subcontractor Performance & Payment Bonds, ECF No. 39-11; Pl.’s Mot. Partial Summ. J., Ex. 10, BB&T -CIC Invoice, ECF No. 39-12). On January 25, 2014, Synalloy invoiced Archer Western for the full cost of the bonds. (Pl.’s Mot. Partial Summ. J., Ex. 11, Bristol Invoice, ECF No. 39-13).

On February 11, 2014, Dewayne Bowers, an Engineering Manager with Synalloy, sent an email to Jeffrey Tedder, Archer Western’s Assistant Project Manager for the Backwater Project. (Pl.’s Mot. Partial Summ. J., Ex. 12, Email Dated Feb. 11, 2014, ECF No. 39-14). In relevant part, it said:

There is an issue that has been brought to my attention that needs to be resolved. There is a note in the purchase order (213097P05) Exhibit B that states the following:
The Reactor Tanks will be typical of 6 each basins at Reactor Tanks 2 & 3.
Our quoted price includes only 2 basins. There was not anything noted on the drawings that tells us that each basin is times 6. Our price included only the piping actually shown on the highlighted scope drawings ...

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