BILLY ROY WILSON, District Judge.
Pending is Defendant's Motion for Judgment as a Matter of Law or in the alternative Motion for a New Trial (Doc. No. 119). Plaintiff filed a Response.
For the reasons set out below, Defendant's Motion for Judgment as a Matter of Law or in the alternative Motion for a New Trial is DENIED. Defendant's Motion for Attorney's Fees is also DENIED.
In 2014 Plaintiff and Defendant entered negotiations for the performance of stimulation services for Defendant's natural gas well pads in Pennsylvania and West Virginia. They finalized a Master Services Agreement ("MSA") on September 2, 2014. Under the MSA, Plaintiff worked on three gas wells owned by Defendant. The MSA did not specifically outline the services performed or materials used in each specific well site. Instead, it required the Defendant to issue Purchase Orders identifying the project and specifications for each site. After completion at the well site, Plaintiff would submit an invoice to Defendant for the services completed. The parties had a working relationship from September of 2014 to October of 2015.
In November of 2014 Defendant noticed that Plaintiff was billing for goat head services,
Plaintiff brought this action for breach of contract and violation of Pennsylvania's Contractor and Subcontractor Payment Act to recover the withheld payment of $1,651,260.00. Defendant counterclaimed for breach of the MSA and Purchase Orders for $676,250.00, which was the amount Defendant had paid for pump down services listed as escort services. Following a three-day jury trial, the jury found that both parties had breached the contract, Plaintiff had mitigated its damages and Defendant had not. The jury awarded Plaintiff $1,651,250.00 and Defendant $676,250.00.
After a jury trial, a court may grant a motion for judgment as a matter of law if it determines that there was no "legally sufficient evidentiary basis for a reasonable jury to have found for a particular party on an issue," and that, without a favorable finding on that issue, the party cannot maintain his claim under controlling law.
Granting a new trial following a jury verdict is within the discretion of the district court and such requests are disfavored.
Defendant claims judgment as a matter of law is appropriate because Plaintiff failed to show that it breached the terms of the contract, and no reasonable juror could find the terms "escort service" referred to "pump downs" on the invoices. Plaintiff produced evidence that pump down services were known by different names; pump down services were not part of the base price; and Plaintiff was permitted to charge an additional fee for the pump down services. When "viewing the evidence in the light most favorable to the non-movant and giving it advantage of every fair and reasonable inference,"
Defendant argues that if judgment as a matter of law was not granted, it is entitled to a new trial because I allowed the jury to consider course-of-dealing evidence, evidence of improper goat head charges being corrected, evidence from the pre-frac meeting, and evidence suggesting the contract allowed for charges related to pump downs.
Defendant argues that I should have excluded evidence pertaining to Defendant's payment of invoices and email containing the additional information about charges for pump down services, which constituted a course-of-dealing that modified the contract. It asserts the MSA prohibits any modifications that do not strictly comply with the MSA. Plaintiff argues that the contract contained ambiguities and the testimony provided that Plaintiff believed pump down escort services were outside the base cost.
It is well established that "[a] written contract which is not for the sale of goods may be modified orally, even when the written contract provides that modifications may only be made in writing."
Evidence at trial showed that the bids Plaintiff submitted for high rate stimulation services did not include any charge for pump down services. In the bid documents, Plaintiff provided $0 for the e-line pump down in the quantity section, but only upon issuance of a Purchase Order at each site would Plaintiff know the total scope of work the requested by Defendant. Defendant claims that Plaintiff was not allowed to charge for pump downs because it was included in the stage cost, and the charges for pump downs were only paid out of mistake.
Testimony provided by Plaintiff and Defendant showed that Plaintiff would not know whether it was to perform the pump down at any given site before being provided the Purchase Order. After receiving the Purchase Order Plaintiff would fulfill the work obligation and submit the invoice to Defendant. Plaintiff submitted hundreds of invoices to Defendant, and Mr. Graybill noticed the charges on an invoice.
In March of 2015 Mr. Graybill asked in an email, "Is the `PUMP DOWN E-LINE SERVICE' on your invoice the same thing as "30 foot escort service $1,250?' that is listed on the PO."
Defendant argues that Plaintiff should not have been able to present evidence that in November of 2014 EQT employees caught an impermissible separate line item being charged on invoices. Defendant claims that this evidence was not relevant,
Assessing probative value of proffered evidence and weighing any factors counseling against admissibility, such as danger of unfair prejudice, is matter first for the district court's sound judgment.
Defendant argues that I should have prohibited Plaintiff from introducing evidence of discussions that occurred at a "pre-frac" meeting between the parties because it is barred by the parol evidence rule and that it was inadmissible hearsay.
"Where a term in the parties' contract is ambiguous, `parol evidence is admissible to explain or clarify or resolve the ambiguity, irrespective of whether the ambiguity is created by the language of the instrument or by extrinsic or collateral circumstances.'"
The MSA contained ambiguity because it did not specify that 30 and 60 foot cluster escort services, or pump downs, were not included in the base charge for stimulation services. Plaintiff billed, as was shown on their invoices submitted to Defendant, for these services. Defendant paid Plaintiff for these services for over ten months and even noticed that they were being charged for these services as indicated by the March email. The pre-frac conversations provided clarity to the ambiguous language and the collateral circumstances. Moreover, hearsay statements at trial that an employee of Defendant notified Plaintiff that it wanted for Plaintiff to do the pump down process is admissible under Federal Rule of Evidence 801(d)(2). The hearsay statement is considered a statement offered against an opposing party was made by the party's agent or employee on a matter within the scope of relationship and while such relationship existed. This information was relevant and was properly allowed into evidence.
Defendant argues that I erroneously charged the jury on the concepts of apparent authority and imputed knowledge. Defendant contends that there was no evidence in the case that its agent or employee had the ability to modify the contract, or that it has any imputed knowledge as to any modification of the contract. Plaintiff argues I properly instructed the jury on the law of apparent authority and imputed knowledge.
The charge, taken as a whole and viewed in the light of the evidence, must fairly and adequately submit the issues in the case to the jury.
Testimony at trial showed that Mr. Graybill was acting as one of Defendant's agents in dealing with Plaintiff. He noticed that Plaintiff was charging for an escort service for which he thought was a pump down charge. The Purchase Orders and Invoices between the parties outlined the services to be provided. The evidence showed Mr. Graybill learned about the charges listed as escort service pump downs, questioned the charges, had an alleged conversation with Mr. Makepeace, and did nothing about it. Plaintiff continued to provide pump downs from March of 2015 until August of 2015. As an agent, Mr. Graybill's knowledge of the charges imputed that knowledge onto Defendant.
Defendant also argues that the mitigation instruction was inapplicable to this case. Plaintiff counters the mitigation instruction was appropriate because Defendant also breached the contract.
The injured party is not obligated to mitigate damages where both he and the liable party have an equal opportunity to reduce damages.
This was not a case in which a plaintiff breached the contract and a defendant failed to mitigate. Both parties brought a breach of contract claim. The jury found that both parties breached the contract. Plaintiff breached when they charged for services they did not provide. Defendant breached when it withheld payment for work in which Plaintiff had completed. I find that the instruction was warranted and appropriate.
Defendant claims that the jury's verdict is fundamentally inconsistent and a new trial must ordered. Plaintiff contends the jury's verdict that both parties breached does not constitute an inconsistent verdict.
The Third Circuit has held "[an] inconsistent general verdict may constitute grounds for ordering a new trial."
Defendant argues that they are entitled to attorney's fees due to Plaintiff's breach of the MSA. Plaintiff did not respond.
Attorney's fees may be awarded where there is a clear agreement of the parties.
Defendant claims that sections 6.2 and 3.2 of the MSA are controlling and it is entitled to attorney's fees. Defendant relies on United States v. Travelers Cas. & Sur. Co. of Am.,
Section 6.2 of the MSA provides Defendant with the ability "to pursue any other remedy provided under the Contract documents or available at law or equity and recover all expenses incurred by [Defendant] arising from [Plaintiff's] default... including attorney's fees and expenses."
Based on the evidence, jury's verdict, and subsequent briefing I find that both parties are to bear their own costs of litigation in this case. Defendant's Motion for Attorney's Fees is DENIED. Although Plaintiff has not filed a brief on attorney's fees in this case it could be found to be the substantially prevailing party which attorney's fees are "left to the trial court's discretion."
Plaintiff is entitled to an award of $1,651,250.00 on its breach of contract claim. Defendant is awarded $676,250.00 on its breach of contract claim. Each side must bear its own attorney's fees and costs.
IT IS SO ORDERED.