JOHN A. WOODCOCK, JR., Chief Judge.
This diversity case arose in the wake of the well-publicized Deepwater Horizon oil spill. When the oil began to spill, Packgen, a Maine producer of packaging products, saw an opportunity to manufacture and sell oil containment boom. Packgen worked to negotiate a sale to BP for several months, altering its boom design based on BP's input, and subjecting its boom to field tests and third-party assessments. Ultimately, however, Packgen was not added to BP's list of approved vendors until after the oil had stopped spilling, and BP never purchased any boom from Packgen. Packgen was able to sell 60,000 feet of boom to another purchaser at a depressed price, but claims that BP reneged on an oral agreement and seeks recovery for its losses under a variety of legal theories. BP raises a statute of frauds defense and moves for summary judgment. The Court concludes that there is no genuine issue of material fact and grants summary judgment for BP on all counts.
On October 19, 2011, Packgen filed a complaint in this Court against BP Exploration & Production, Inc., BP America Production Company, and BP, p.l.c., alleging misrepresentation, breach of contract, and other claims related to an alleged oral contract for the sale of oil containment
BP moved for summary judgment and requested oral argument on September 10, 2012. Defs. BP Exploration & Production, Inc., and BP America Production Co.'s Mot. for Summ. J. and Request for Oral Argument (ECF No. 41); Defs.' Mem. in Support of Its Mot. for Summ. J. (ECF No. 42-1) (Defs.' Mot.); Statement of Undisputed Facts and Defs.' Suppl. Facts (ECF No. 42-2) (DSMF). Packgen responded on October 2, 2012. Pl. Packgen's Mem. in Opp'n to Def. BP's Mot. for a Summ. J. (ECF No. 79) (Pl.'s Opp'n); Packgen's Objections and Resps. to Defs.' Statement of Undisputed Facts and Pl.'s Suppl. Facts (ECF No. 80) (PRDSMF and PSAMF). BP replied on October 15, 2012. Reply Brief in Support of Defs.' Mot. for Summ. J. (ECF No. 97) (Defs.' Reply); Defs.' Objections and Resps. to Pl.'s Suppl. Facts (ECF No. 98) (DRPSAMF).
Packgen filed a supplemental memorandum on October 16, 2012. Pl. Packgen's Suppl. Mem. in Opp'n to Def. BP's Mot. for a Summ. J. (ECF No. 99) (Pl.'s Suppl. Opp'n); Packgen's Additional Statement of Material Facts Pursuant to Local Rule 56(c) (ECF No. 99-1) (PSAMF). BP responded on October 19, 2012. Suppl. Reply Brief in Support of Defs.' Mot. for Summ. J. (ECF No. 104) (Defs.' Suppl. Reply); Defs.' Objections and Resps. to Packgen's Additional Statement of Material Facts (ECF No. 105) (DRPSAMF). Packgen responded to BP's objections on October 29, 2012. Packgen's Resp. to BP's Objections to Packgen's Additional Statements of Material Fact, Pursuant to Local Rule 56(e) (ECF No. 107) (Pl.'s 56(e) Sur-Reply).
With the Court's leave, Order (ECF No. 113), Packgen filed another statement of material facts on June 10, 2013. Packgen's Additional Statement of Material Facts Pursuant to Local Rule 56(c) (ECF No. 115) (PSAMF). BP responded on June 17, 2013. Defs.' Objections and Resps. to Packgen's Additional Statement of Material Facts Pursuant to Local Rule 56(c) (ECF No. 117) (DRPSAMF). Packgen replied on June 26, 2013. Packgen's Resp. to BP's Objections to Packgen's Additional Statements of Material Fact, Pursuant to Local Rule 56(e) (ECF No. 118) (Pl.'s Second 56(e) Sur-Reply).
The Court heard oral argument on June 26, 2013. Minute Entry (ECF No. 119). On June 27, 2013, Packgen submitted additional caselaw in response to the Court's questions at oral argument. Notice/Correspondence (ECF No. 120). In response to Packgen's post-argument submission and with the Court's approval, Order (ECF No. 123), BP filed a supplemental brief directed to the new caselaw that Packgen presented after oral argument. Defs.' Suppl. Br. (ECF No. 124).
An oil drilling rig called Deepwater Horizon caught fire on April 20, 2010, sank, and began spilling an estimated 5000 barrels of oil a day into the Gulf Coast. DSMF ¶ 1; PRDSMF ¶ 1; PSAMF ¶ 1; DRPSAMF ¶ 1. By April 30, 2010, the oil spill spanned 600 square miles. PSAMF ¶ 2; DRPSAMF ¶ 2. Oil washed ashore on the Chandeleur Island of Louisiana on or about May 7, 2010. DSMF ¶ 2; PRDSMF ¶ 2. Federal and local officials declared
BP's response to the oil spill was multi-faceted and included the deployment of oil containment boom. DSMF ¶ 3; PRDSMF ¶ 3. Following the spill, BP had a critical need for millions of feet of 18" oil containment boom, but encountered challenges related to availability, production, and interconnectivity. PSAMF ¶ 4; DRPSAMF ¶ 4; DSMF ¶ 4; PRDSMF ¶ 4. BP explored numerous avenues for procuring containment boom. DSMF ¶ 5; PRDSMF ¶ 5. BP had no standard specification for boom at the time of the Gulf Spill.
Given its critical need, BP placed large orders for boom with companies that were new to the boom manufacturing industry.
Packgen is a small Maine business that employs approximately thirty workers in its headquarters in Auburn, Maine.
Prior to April 2010, Packgen had never manufactured oil containment boom. DSMF ¶ 8; PRDSMF ¶ 8; PSAMF ¶ 10; DRPSAMF ¶ 10. Packgen's president and owner John Lapoint saw an opportunity both to help Packgen's business and to assist the necessary remediation in response to the national disaster. PSAMF ¶ 12; DRPSAMF ¶ 12. Packgen realized that it could manufacture boom by modifying its manufacturing operations for packaging containers. PSAMF ¶ 9; DRPSAMF ¶ 9.
In April and May 2010, Packgen applied its expertise using woven polypropylene in making packaging containers to create a manufacturing process that produced boom at a daily production rate far exceeding that of other boom manufacturers. PSAMF ¶ 11; DRPSAMF ¶ 11; DSMF ¶ 22; PRDSMF ¶ 22. Packgen began constructing boom manufacturing equipment no later than April 28, 2010 — prior to discussions with BP.
By early May 2010, Dan Forte, a marketing consultant for Packgen, called Mario Araya, a BP employee who worked to procure boom for BP.
On May 11, 2010, almost three weeks after the explosion and oil spill, BP's Max Lyoen, a Supplier Quality Control Specialist, inspected Packgen's facility in Auburn, Maine, and met with several individuals, including Dan Forte, John Lapoint, and Don Roberts; Mr. Lyoen had no experience working with or evaluating boom.
DSMF ¶ 30; PRDSMF ¶ 30.
On approximately May 12, 2010, Messrs. Forte and Araya spoke again by phone. PSAMF ¶ 31; DRPSAMF ¶ 31. Mr. Araya reiterated BP's need for 1000 miles of boom and reaffirmed BP's commitment to purchase all the boom that Packgen could produce: "I'm placing an order. We'll take it all."
DSMF ¶ 31; PRDSMF ¶ 31. No later than May 13, 2010, Packgen informed BP that it was "moving forward" with the sale and delivery.
On May 18, 2010, Mr. Forte sent an email to Matt Pavlas, BP's boom sourcing lead, stating:
DSMF ¶ 34; PRDSMF ¶ 34. BP provided Packgen with a copy of Mr. Lyoen's report on or about May 19, 2010.
As of May 21, 2010, Mr. Pavlas was under pressure from the Unified Area Command Center for more boom.
On Saturday, May 22, 2010, Mr. Roberts sent Mr. Pavlas the following email:
DSMF ¶ 39; PRDSMF ¶ 39; PSAMF ¶ 45; DRPSAMF ¶ 45.
On May 24, 2010, Mr. Roberts sent Mr. Pavlas an email stating, "I spoke with the owner of our company this morning in reference to our conversation last evening. He asked if I would reach out to you to schedule a conference call with the three of us to discuss possible working relationship." DSMF ¶ 40; PRDSMF ¶ 40. Mr. Pavlas responded, "I appreciate the request but first I would like to receive the information requested yesterday such as qty in inventory, etc." DSMF ¶ 41; PRDSMF ¶ 41. On May 24, 2010, Mr. Roberts offered pricing terms for a trial order of 42,000 feet of boom. DSMF ¶ 42; PRDSMF ¶ 42.
On May 26, 2010, Deenan Arcot told Mr. Roberts, in an email requesting the specifications for Packgen's boom — which would need to be approved prior to an order —
DSMF ¶ 45; PRDSMF ¶ 45. The same day, Mr. Arcot sent Packgen another email:
DSMF ¶¶ 47-48; PRDSMF ¶¶ 47-48. Referring to an email from BP to Packgen sent in late May 2010, Mr. Roberts testified, "This was the first time that any type of ... resemblance of a spec. was issued.... They didn't even understand what the specs. were. They were being taught as I informed them.... They didn't have any definition to a boom. They were making it up as they went along."
As of May 26, 2010, Packgen believed that BP would purchase its entire boom manufacturing capacity and inventory.
On May 29, 2010, Mr. Bigi sent Mr. Lyoen and Brian Miller an email containing a brief description of his discussions with Packgen and the statement, "I do not understand why we keep placing orders with suppliers like this?"
In late May or early June, Packgen secured universal slide connectors from Pierce Aluminum. PSAMF ¶ 56; DRPSAMF ¶ 56. As of June 3, 2010, BP's demand for boom continued to increase. PSAMF ¶ 58; DRPSAMF ¶ 58. By June 4, 2010, BP began to organize a second visit to Packgen's facility because Packgen had obtained the new connectors. PSAMF ¶ 57; DRPSAMF ¶ 57. BP began to institute a new approval process for boom manufacturers.
At some point, BP hired technical authorities on boom.
On June 11, 2010, BP sent Luis Suarez, a Supplier Quality Control Specialist, to conduct a quality assessment of Packgen's manufacturing processes, including its "quality management system, production capacity and the product conformance with BP requirements and applicable industry standards." DSMF ¶ 52; PRDSMF ¶ 52; PSAMF ¶ 65; DRPSAMF ¶ 65. Mr. Suarez visited Packgen's facility, watched boom production, and viewed a nearby warehouse containing Packgen's boom inventory.
After his visit to Packgen, Mr. Suarez told Mr. Bigi that he believed that Packgen's boom manufacturing capacity could reach as high as 100,000 feet per week with two shifts.
On June 15, 2010, Mr. Suarez requested that Packgen send 500-600 feet of its boom for evaluation by BP. DSMF ¶ 54; PRDSMF ¶ 54. Mr. Suarez issued a report regarding Packgen's boom on June 16, 2010, in which he proposed three new modifications that he had not discussed with Packgen in Maine.
As of June 14, 2010, BP was developing a written draft specification for 18" boom, but the specification was kept internal at that time.
On June 21, 2010, Mr. Suarez reiterated his request that Packgen ship "6 x 100 ft" to the Patriot Staging Yard # 3 for a field test.
At this same time, the Houston Boom Team began creating a "mitigation emergency plan" that included "the expansion of domestic and international [boom] production," because of the upcoming hurricane season and the risk that a hurricane could severely damage the boom that was deployed. PSAMF ¶ 82; DRPSAMF ¶ 82.
BP conducted its first field test of Packgen's boom on June 30, 2010, at a BP logistics site near Mobile, Alabama.
While in Alabama, Mr. Roberts spoke with Mr. Bigi, who explained that BP had recently taken control of the procurement process for all boom from the contracted environmental companies, and confirmed that BP needed more than 1,500,000 feet of boom in the near future.
Following the field test, BP raised two new concerns regarding Packgen's boom. PSAMF ¶ 89; DRPSAMF ¶ 89. First, because Packgen's boom was constructed with a fold of polypropylene material, the boom filled with water while being towed for deployment by boats; BP was concerned that Packgen's boom would therefore be too heavy for small boats to tow. PSAMF ¶ 89; DRPSAMF ¶ 89; DSMF ¶ 57; PRDSMF ¶ 57. The boat captains, however, thought that the extra water made the boom more stable, and allowed it to perform better than traditional boom in rough water.
Second, on July 7, 2010, BP indicated that Packgen's boom did not meet its decontamination standards; however, BP had no decontamination procedure of its own at this time and was unaware of the procedure used by its subcontractor, Patriot Environmental Services (Patriot).
Packgen contacted Patriot directly to understand the decontamination process and modify the boom design accordingly. PSAMF ¶ 90; DRPSAMF ¶ 90. Packgen learned that Patriot's decontamination technique of placing a power washer nozzle two inches away from the boom was responsible for damage to Packgen's boom. PSAMF ¶ 91; DRPSAMF ¶ 91. Packgen immediately worked to address the two new issues raised at the June 30, 2010 field test. PSAMF ¶ 91; DRPSAMF ¶ 91; DSMF ¶ 60; PRDSMF ¶ 60.
As of July 6, 2010, BP knew that 90% of the qualified domestic boom production was committed to BP. PSAMF ¶ 129; DRPSAMF ¶ 129. As of July 7, 2010, BP needed one million linear feet of 18" boom for the Incident Command Posts (ICPs) by August 7, 2010, and 500,000 to 750,000 feet of boom for the "hurricane warehouse" in Memphis, Tennessee. PSAMF ¶ 130; DRPSAMF ¶ 130. As of July 7, 2010, the average daily supply of new boom to BP was 30,000 linear feet.
On July 7, 2010, Mr. Suarez forwarded the latest specification for 24" boom to Packgen.
On July 12, 2010, internal BP communications demonstrate that BP needed 1.7 million feet of boom.
The Deepwater Horizon well was capped on July 15, 2010. DSMF ¶ 63; PRDSMF ¶ 63. By July 20, 2010, a day before BP's second field test of Packgen's boom, BP began trying to wind down its boom purchases. PSAMF ¶ 134; DRPSAMF ¶ 134. BP's Critical Resources Unit Leader, Lou Weltzer, began working with BP's procurement group and the ICPs to see how many contracts could be severed early to save money. Id.
Despite the capping of the well on July 15, 2010, BP conducted a second field test of Packgen's boom at its test site in Alabama on July 21, 2010. PSAMF ¶ 97; DRPSAMF ¶ 97. BP's summary of the field test results show that Packgen's boom performed well: "[t]he 200ft tested performed better than desired. Even though this was only an 18" boom. It did hold under high currents. And without a top cable the fabric held the load with[out] fatigue. The issue with water ballasting was gone."
Following the field test on July 21, 2010, Mr. McFadden gave verbal approval to Packgen's boom.
On August 18, 2010, Mr. Roberts emailed BP, stating, "I understand that there is not a need right now for Boom, but if in the future there is I would like to think that we are on your approved vendor list and could have the opportunity to supply boom." DSMF ¶ 64; PRDSMF ¶ 64. On August 21, 2010, BP sent an email to Mr. Roberts stating that Packgen had been added to BP's approved vendor list for containment boom. DSMF ¶¶ 16, 65; PRDSMF ¶¶ 16, 65; PSAMF ¶ 105; DRPSAMF ¶ 105.
Packgen sold a small portion of boom to PCI Products in May 2010, but only after consulting with legal counsel to have specific terms drafted for the sale of the boom and proposing a written agreement; Packgen did not use these terms for its normal transactions involving packaging products.
BP has not paid Packgen for any of the boom that Packgen manufactured. DSMF ¶ 17; PRDSMF ¶ 17. Packgen was left with 60,000 feet (approximately 12 miles) of completed boom in its warehouse, as well as materials that had been purchased but could not be used for Packgen's core business. PSAMF ¶ 110; DRPSAMF ¶ 110. Packgen made significant, good faith efforts to mitigate its damages after BP failed to honor its commitments. PSAMF ¶ 111; DRPSAMF ¶ 111. Packgen sold 60,000 feet of completed boom in September 2010 to the only purchaser it was able to find for $2 per linear foot. PSAMF ¶ 112; DRPSAMF ¶ 112; DSMF ¶¶ 68-69; PRDSMF ¶¶ 68-69. Packgen sold the remainder of its inventory at a reduced selling price because it believed that there was an overabundance of boom in the market. DSMF ¶ 71; PRDSMF ¶ 71.
Packgen was unable to return several of the materials it purchased to manufacture boom for BP, including polypropylene, webbing, chain, and liner. PSAMF ¶ 114; DRPSAMF ¶ 114. Packgen was only able to return the foam and foam injector to its supplier for a loss. PSAMF ¶ 115; DRPSAMF ¶ 115. Packgen has made several attempts to sell the chain and liner to no avail. Id. Packgen has found ways to use portions of the webbing in some of its ordinary business activities. Id. In 2012, Packgen found a way to use the heavier polypropylene material it purchased for boom in its containers; however, Packgen had to spend considerable time, money, and resources to incorporate the heavier polypropylene material. Id. Since the resolution of the Gulf Coast spill, Packgen has not purchased raw materials to make boom nor has it manufactured any boom. PSAMF ¶ 116; DRPSAMF ¶ 116.
Packgen filed a claim with the Gulf Coast Claims Facility on November 5, 2010. DSMF ¶ 18; PRDSMF ¶ 18.
For its oil spill response, BP kept a supplier log, and awarded a $275,000 figure for each assessment performed. PSAMF ¶ 124; DRPSAMF ¶ 124. Mr. Suarez explained, "that number reflected estimated benefits in terms of cost avoidance, I think, related to completing a QMS audit to a supplier." Id. The $275,000 was the "cost avoidance amount" for each supplier assessment completed during the oil spill, and factored into employee bonuses. PSAMF ¶ 125; DRPSAMF ¶ 125. Mr. Bigi explained:
PSAMF ¶ 122; DRPSAMF ¶ 122.
On November 15, 2012, the United States Department of Justice filed an Information with the United States District Court for the Eastern District of Louisiana charging BP with violations of 18 U.S.C. § 1115 (Seaman's Manslaughter), 18 U.S.C. §§ 1319(c)(1)(A), 1321(b)(3) (Clean Water Act Violation), 16 U.S.C. §§ 703, 707(a) (Migratory Bird Treaty Act Violation), and 18 U.S.C. § 1505 (Obstruction of Congress). PSAMF ¶ 136. All of these charges related to the April 20, 2010 explosion on the Deepwater Horizon and its aftermath. PSAMF ¶ 137. On November 15, 2012, BP agreed to plead guilty to charges in the Information, including Count XIV for Obstruction of Congress in violation of 18 U.S.C. § 1505. PSAMF ¶ 138.
BP's guilty plea and allocution were accepted on January 29, 2013. PSAMF ¶ 147. In its allocution, BP admitted that it made false and misleading statements regarding the amount of oil flowing from the Macondo well in its May 24, 2010 response to an inquiry and investigation by the Committee on Energy and Commerce of the United States House of Representatives. PSAMF ¶¶ 139-40. BP admitted withholding information and documents prepared by BP engineers, including estimates prepared using the Bonn Agreement analysis, that showed flow rates far higher than 5,000 BOPD, including as high as 96,000 BOPD; BP also admitted falsely representing that its flow-rate estimates were the product of the generally-accepted ASTM methodology when in fact they were based on a Wikipedia entry. PSAMF ¶¶ 141-43. BP admitted falsely representing that internal flow-rate estimates played an important part in Unified Command's decision on April 28, 2010, to raise its own flow-rate estimate to 5,000 BOPD. PSAMF ¶¶ 144-45. BP admitted falsely stating in a letter to Congressman Markey on or about June 25, 2010, that BP's worst case discharge estimate was raised from 60,000 to 100,000 BOPD based on "pressure data obtained from the BOP stack," when BP
BP maintains that even if it made the oral statements alleged by Packgen, all of Packgen's claims would still fail. Defs.' Mot. at 1. BP argues that the statute of frauds precludes enforcement of the alleged oral contract. Id. at 3-7. In BP's view, the specially manufactured goods exception does not apply because oil containment boom is not a specially manufactured good. Id.
BP contends that Packgen's negligent and intentional misrepresentation claims must be dismissed because the alleged misrepresentations were promises of future actions rather than statements of fact and because there is no evidence that Packgen justifiably relied upon the alleged misrepresentations to its detriment. Id. at 7-11. BP argues that Packgen's unjust enrichment claim must be dismissed because Packgen conferred no benefit on BP. Id. at 12-15. BP urges the Court to dismiss Packgen's promissory estoppel claim for three reasons: (1) the alleged comments were oral statements of a contract which is barred by the statute of frauds; (2) Packgen's reliance on the alleged oral statements was not reasonable; and (3) the alleged oral statements are not specific enough to enforce. Id. at 15-19.
Packgen responds that the alleged oral contracts are valid and enforceable under the specially manufactured goods and admission exceptions to the statute of frauds. Pl.'s Opp'n at 10-19. Packgen argues that the admission exception applies because BP has admitted the existence of a contract in a deposition. Id. at 12-14. Packgen argues that the specially manufactured goods exception applies because its boom was "specially manufactured for BP." Id. at 14-16. Packgen contends that its five sales of boom to purchasers other than BP between late May 2010 and late September 2010 did not occur in the ordinary course of its business. Id. at 16-18. Packgen argues that it made a "substantial beginning" only after speaking with BP's representatives, and denies that BP provided any notice of repudiation. Id. at 18-19.
Packgen calls BP's arguments for dismissal of its negligent and intentional misrepresentation claims "legally incorrect" and "factually inapposite." Id. at 19. Packgen argues that BP "made repeated and conflicting representations regarding its standards for boom manufacture" and promised to purchase Packgen's boom "as soon as the `standards' were achieved." Id. at 20-21. Packgen says that this Court "has recognized that alleged opinions or promises of future performance can support a misrepresentation claim," and argues that this Court "looks to the full relationship of the parties to determine whether the plaintiff was justified in relying on certain factual statements." Id. at 21-22. Packgen claims that "the focus of the inquiry is on BP's conduct." Id. at 23.
Packgen denies that the statute of frauds bars its promissory estoppel claim under Maine law. Id. at 24-27. For support, Packgen cites Chapman v. Bomann, 381 A.2d 1123 (Me.1978), as a case in which the Law Court allowed a promissory estoppel claim to defeat a statute of frauds defense if "it would be grossly unjust and, therefore, tantamount to a fraud on the plaintiffs to allow defendant to assert the Statute of Frauds...." Pl.'s Opp'n at 26 (quoting Chapman, 381 A.2d at 1129). Packgen distinguishes cases to the contrary as limited to the employment context.
Packgen contends that its unjust enrichment claim should not be dismissed because the benefit it conferred on BP was "technical information about Packgen's boom and the general standards for boom." Id. at 27-29. Packgen claims that BP's practice of assigning a cost avoidance amount to its manufacturer assessments supports this argument. Id. at 29-30.
BP replies that its conduct does not fit within the admission exception to the statute of frauds because a personal deponent's authentication of an email does not constitute a testimonial admission. Defs.' Reply at 1-3. BP reiterates its argument that Packgen's boom was not a specially manufactured good. Id. at 3-7.
BP contends that allowing Packgen to go forward on its misrepresentation claims would "expand the law of misrepresentation into areas never previously found by Maine courts." Id. at 7. BP discusses the caselaw and attempts to distinguish the cases relied on by Packgen, arguing in particular that Packgen was not "at the mercy" of BP and had a meaningful opportunity to investigate BP's statements. Id. at 7-10. BP argues that its statements about how much boom it would need are too vague to be actionable. Id. at 10-11. BP contends that Packgen did not detrimentally rely on its statements regarding specifications because it had already purchased the raw materials. Id. at 11-12.
BP denies that a promissory estoppel claim can be used to circumvent the statute of frauds, distinguishing the cases cited by Packgen. Id. at 12-13. BP maintains that, in any case, Packgen's reliance was not reasonable, and claims that policy favors granting summary judgment on the promissory estoppel claim. Id. at 14-15. BP reiterates that summary judgment should be granted on Packgen's unjust enrichment claim, denying that Packgen conferred any benefit on BP. Id. at 15-17.
Packgen contends that BP's acknowledgement that 90% of domestic boom production was committed to BP supports Packgen's claim that its boom was specially manufactured for BP. Pl.'s Suppl. Opp'n at 1-2. Packgen maintains that genuine issues of material fact preclude summary judgment on its misrepresentation and promissory estoppel claims. Id. at 2-3.
BP replies that the amount of domestic boom production committed to BP is immaterial to the specially manufactured goods question. Defs.' Suppl. Reply at 1. BP maintains that this evidence does not support Packgen's claims. Id. at 1-2. BP argues that conducting a field test does not imply any misrepresentation and provided a benefit only to Packgen. Id. at 2. BP notes that Packgen never produced any 24" boom other than for testing nor purchased raw materials after July 20, 2010, rendering any statements relating to 24" boom non-actionable. Id.
Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED.R.CIV.P. 56(a). For summary judgment purposes, "genuine" means that "a reasonable jury could resolve the point in favor of the nonmoving party," and a "material fact" is one whose "existence or nonexistence has the potential to change the outcome of the suit." Tropigas de Puerto Rico, Inc. v. Certain Underwriters
"The party moving for summary judgment must demonstrate an absence of evidence to support the nonmoving party's case." Phair v. New Page Corp., 708 F.Supp.2d 57, 61 (D.Me.2010) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). "In determining whether this burden is met, the Court must view the record in the light most favorable to the nonmoving party and give that party the benefit of all reasonable inferences in its favor." Phair, 708 F.Supp.2d at 61 (citing Santoni v. Potter, 369 F.3d 594, 598 (1st Cir.2004)). However, the Court is not "required to `accept as true or to deem as a disputed material fact, each and every unsupported, subjective, conclusory, or imaginative statement' made by a party." Bonefont-Igaravidez v. International Shipping Corp., 659 F.3d 120, 123 (1st Cir.2011) (quoting Torrech-Hernandez v. Gen. Elec. Co., 519 F.3d 41, 47 (1st Cir.2008)). The summary judgment standard "is favorable to the nonmoving party, but it does not give him a free pass to trial." Nieves-Romero v. United States, 715 F.3d 375, 378 (1st Cir. 2013) (quoting Hannon v. Beard, 645 F.3d 45, 48 (1st Cir.2011)).
To prevail on a claim for intentional misrepresentation under Maine law, Packgen must prove by clear and convincing evidence that: (1) BP made a false representation, (2) of a material fact, (3) with knowledge of its falsity or in reckless disregard of whether it was true or false, (4) for the purpose of inducing Packgen to act in reliance upon it, and, (5) that Packgen justifiably relied upon the representation as true and acted upon it to Packgen's damage. See Berry v. Worldwide Language Resources, Inc., 716 F.Supp.2d 34, 47 (D.Me.2010) (citing Rand v. Bath Iron Works Corp., 2003 ME 122 ¶ 9, 832 A.2d 771, 773 (Me.2003)).
Maine looks to the Restatement (Second) of Torts to define the tort of negligent misrepresentation:
RESTATEMENT (SECOND) OF TORTS § 552(1) (1977); see St. Louis v. Wilkinson Law Offices, P.C., 2012 ME 116 ¶ 18, 55 A.3d 443, 447 (Me.2012). In St. Louis, the Law Court wrote:
St. Louis, 2012 ME 116 ¶ 19, 55 A.3d at 447 (internal citations and punctuation omitted).
"Claims for fraudulent and negligent misrepresentation, although distinct, both require that the defendant make a false representation of present fact and that the plaintiff justifiably rely on the representation as true." Berry, 716 F.Supp.2d at 48 (citing Kearney v. J.P. King Auction Co., 265 F.3d 27, 34 n. 8 (1st Cir.2001)). In general, "statements of opinion, promises of future performance,
"In appropriate circumstances," however, a plaintiff may proceed based on statements of opinion or promises of future performance that are "sufficiently akin to averments of fact." Kearney, 265 F.3d at 35. The Maine Law Court long ago explained the basis for this exception in a passage that has become a touchstone:
Shine v. Dodge, 130 Me. 440, 444, 157 A. 318, 319 (1931); see also Wildes v. Pens Unlimited Co., 389 A.2d 837, 840 (Me. 1978) (quoting this passage); Schott, 976 F.2d at 65 (same); Veilleux v. NBC, 206 F.3d 92, 120 (1st Cir.2000) (same); Kearney, 265 F.3d at 34-35 (same); Uncle Henry's, 399 F.3d at 43 (same); Berry, 716 F.Supp.2d at 48 (same). Packgen maintained at oral argument that this exception applies here.
The Shine exception applies "under circumstances in which the plaintiff is `at the mercy of the defendant,' such as in employment situations where an employer, with full knowledge of imminent corporate downsizing, nevertheless promises a position to a new salesperson." Kearney, 265 F.3d at 35 (quoting Wildes, 389 A.2d at 840-41). By contrast, the First Circuit held in Schott that the exception does not apply to "puffing" or "trade talk" between sophisticated commercial parties. Schott, 976 F.2d at 65. At oral argument, the Court asked Packgen if it could cite any case that had applied the Shine exception to communications between two businesses. Following oral argument, Packgen submitted such a case. Notice/Correspondence (ECF No. 120). In Greenell Corporation v. Penobscot Air Service, Ltd., No. 99-31-PC, 1999 WL 33117116 (D.Me. Aug. 19, 1999), Greenell Corporation, a family-owned company, bought an airplane and entered into an agreement with Penobscot Air Service, Ltd., an air charter business, pursuant to which Penobscot Air would manage Greenell's airplane.
Packgen claims that three types of representations made by BP qualify as actionable statements of material fact: "(1) what, at a particular point in time during the oil spill saga, BP required for its specification, (2) its intention to purchase Packgen's boom, and (3) how much boom it needed at any particular time." Pl.'s Opp'n at 22. Packgen emphasized at oral argument that the Court must analyze these representations together, in the context of the full record.
Packgen contends that "BP made repeated and conflicting representations regarding its standards for boom manufacture." Id. at 20. Reviewing the evidence in the light most favorable to Packgen, BP's Supplier Quality Control Specialist Max Lyoen visited Packgen on May 11, 2010, less than a month after the beginning of the oil spill, and told Packgen that Packgen's end connectors met BP's requirements and that Packgen needed to have its boom evaluated by a third party for ASTM compliance. On May 26, 2010, after receiving Packgen's specifications, BP's Deenan Arcot emailed Packgen to express concern about Packgen's "[v]ery different construction." Also on May 26, 2010, BP first raised concerns about Packgen's end connectors. BP began drafting a written specification for 18" boom in June 2010, and completed it on June 18, 2010. At some point thereafter, BP began requesting that boom manufacturers complete a deviation form showing differences from the written specification; in late June 2010, BP made a number of specific requests for technical changes to Packgen's boom.
Although the evidence supports Packgen's assertion that BP made conflicting representations regarding its specification, an action for negligent or intentional misrepresentation requires something more: a "false representation of present fact." Berry, 716 F.Supp.2d at 48. There is no evidence that BP's representations to Packgen regarding its requirements were false at the time they were made. As may be expected in an emergency, BP's standards and requirements developed over time, as it scrambled to contain the oil spill. The Court concludes that none of BP's statements regarding its specifications is actionable for negligent or intentional misrepresentation.
Second, Packgen asserts that BP's representations regarding its intention to purchase Packgen's boom are actionable for tortious misrepresentation. Reviewing the evidence in the light most favorable to Packgen, in early May 2010 BP's Mario Araya made an oral commitment to Packgen's Dan Forte to purchase all present and future boom that Packgen produced for $21.75 per square foot, subject to a visit by BP personnel to inspect Packgen's facility and to certify Packgen's boom capacity. When Mr. Lyoen visited Packgen's facility on May 11, 2010, he said that BP would purchase Packgen's full capacity as soon as Packgen provided third-party testing results showing compliance with ASTM standards and BP's specifications. Mr. Araya confirmed BP's intentions the next day: "I'm placing an order. We'll take it all." On May 23, 2010, BP's Matt Pavlas stated that BP intended to purchase Packgen's entire stock of boom, and would immediately purchase Packgen's current inventory of 42,000 linear feet of boom. On June 30, 2010, BP's Charles Bigi told Packgen that it would be BP's supplier for 24" boom if it "could adapt its manufacturing process." On July 21, 2010 — after the well had been capped — BP notified Packgen that it was an approved supplier for 24" boom and informed Packgen
That BP did not purchase any boom from Packgen does not mean that its expressions of intent to purchase Packgen's boom were false when made. There is no evidence that BP told Packgen it intended to purchase Packgen's boom when BP had no such intention. To the contrary, BP's purchase of over two million feet of boom from twenty-six different manufacturers strongly implies that BP's interest in Packgen was genuine. BP had nothing to gain from stringing Packgen along, and spent resources to send representatives to Packgen's facility and conduct field tests of Packgen's boom. The evidence permits no reasonable inference other than that BP fully intended to purchase boom from Packgen as soon as Packgen's design was acceptable (assuming its need for boom persisted). The expressions of intention were usually contingent on the acceptability of Packgen's design. As indicated by an email sent by Packgen's Dan Forte on May 12, Packgen understood that negotiations were ongoing: "[T]hank you for discussing the details of a possible transaction with Packgen.... What remains is the issue concerning the acceptability [of] our design...." Shortly after Mr. Pavlas reiterated BP's intention to purchase on May 23, 2010, Mr. Roberts emailed Mr. Pavlas about scheduling a conference call with Packgen's owner "to discuss possible working relationship." By the time BP was finally comfortable enough with Packgen's design to designate Packgen as an approved supplier of 24" boom, the well had been capped. As there is no evidence that BP's expressions of intention to purchase Packgen's boom were false when made, they cannot support an action for negligent or intentional misrepresentation.
Third, Packgen asserts that BP's representations regarding its critical need for boom are actionable for tortious misrepresentation. These representations, at least those made prior to the well's capping on July 15, 2010, were not only not false, but were borne out by BP's purchase of over two million feet of boom from twenty-six different manufacturers. BP apparently informed Packgen that even after the well was capped, BP expected the cleanup efforts to continue at least until the end of 2010 and that boom would be needed for these efforts. The evidence, viewed in the light most favorable to Packgen, does not suggest that this statement misrepresented BP's expectations at the time it was made. The Court grants summary judgment for BP on Counts I and II.
Maine's statute of frauds provides that a contract for the sale of goods for the price of $500 or more is generally not enforceable "unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent." 11 M.R.S. § 2-201(1). Packgen does not argue that any of its communications with BP constitute the signed writing required for enforceability under ¶ M.R.S. § 2-201(1). Packgen instead argues that two exceptions to the signed writing requirement apply.
The "specially manufactured goods" exception to the statute of frauds applies:
11 M.R.S. § 2-201(3)(a); see generally Corbin on Contracts § 4.21 (Dec. 2012). The Fifth Circuit explained the exception in Impossible Electronic Techniques, Inc. v. Wackenhut Protective Systems, Inc., 669 F.2d 1026 (5th Cir.1982):
Id. at 1036-37. "Unsalability ... must be based on the characteristics of special manufacture, rather than on such tests as lost market opportunities or a seller's unrelated inability to dispose of the goods." RIJ Pharm. Corp. v. Ivax Pharm., Inc., 322 F.Supp.2d 406, 417 (S.D.N.Y.2004). "[W]hether the undisputed facts satisfy the requirements of the specially manufactured goods exception to the Statute of Frauds, is a question of law." Chambers Steel Engraving Corp. v. Tambrands, Inc., 895 F.2d 858, 860 (1st Cir.1990).
Here, the undisputed evidence establishes that Packgen sold to another buyer the 60,000 feet of boom it claims to have manufactured for BP. There is no evidence that Packgen modified the boom in any way to make it salable. Although the purchase price of $2 per foot was much lower than the $18.75 Packgen claims to have negotiated with BP, the undisputed evidence establishes that the reduced price resulted from market conditions rather than from any "characteristics of special manufacture." RIJ Pharm., 322 F.Supp.2d at 417. Packgen modified its design based on input from BP, but there is no evidence that these modifications rendered the boom "not suitable for sale to others in the ordinary course of the seller's business." 11 M.R.S. § 2-201(3)(a).
Packgen emphasized in its brief and at oral argument the phrase "in the ordinary course of the seller's business," arguing that "Packgen never manufactured boom until after an environmental disaster in 2010, oral communications with Araya about BP's critical need for boom, and Lyoen's immediate visit to Packgen on May 11, 2010." Pl.'s Opp'n at 15. However, the undisputed evidence establishes that Packgen decided to enter the boom market on its own, that it began constructing boom manufacturing equipment before beginning discussions with BP, that it initiated contact with BP, and that it sold boom to two other purchasers in May and June 2010. Although Packgen was new to the boom industry, Packgen has presented no evidence or authority that would support a conclusion that the boom it allegedly manufactured for BP was "not suitable for sale to others in the ordinary course of its business. 11 M.R.S. § 2-201(3)(a).
At oral argument, Packgen maintained that whether its boom was suitable for sale to others in the ordinary course of its business is a disputed question of fact that warrants trial, noting that the Impossible Electronic Court held that summary judgment was inappropriate. The goods in Impossible Electronic, however, were closed-circuit television security cameras that "had been specially adapted to adjust automatically to the extreme nighttime darkness at the Wackenhut residence and to the glaring daytime sunlight reflecting off the beach and the sea." 669 F.2d at 1037. In holding that summary judgment was inappropriate, the Impossible Electronic Court wrote that "the term `specially manufactured' ... refers to the nature of the particular goods in question and not to whether the goods were made in an unusual, as opposed to the regular, business
Packgen also argued in its brief and at oral argument that actual resale does not necessarily foreclose the specially manufactured goods exception. Pl.'s Opp'n at 17-18. The two cases it cites offer little support for this contention and are factually distinguishable. In R.M. Schultz & Assoc., Inc. v. Nynex Computer Servs. Co., No. 93 C 386, 1994 WL 124884 (N.D.Ill. Apr. 11, 1994), the Plaintiff manufactured specialized multi-media advertising display systems. Id. at *1. The Schultz Court stated that "the test for specially manufactured goods is ... whether the Plaintiff could make only `slight,' as opposed to `essential,' changes to make the goods marketable to others." Id. at *6. The goods in Schultz were not resold, and the Court denied summary judgment because there was evidence "that at least one of the major components of the Head End System, the 286 AT computer, had no other alternative uses and could only be sold for scrap value" and that several other system components "could not be reconfigured." Id. In Balfour & Co., Inc. v. Lizza & Sons, Inc., 1969 WL 11070 (N.Y.Sup. June 10, 1969), the trial court found that certain "tailor-made" "steel rolling doors... fabricated with specific dimensions to fit designated openings" were specially manufactured. Id. The trial court found that it would have been "impractical to cut or adjust the doors for use at another site" and that their resale value was limited to their scrap value. Id.
In both Schultz and Lizza, there was a genuine question whether the goods, which were custom-made and specialized, could be resold without significant alterations. In this case, by contrast, the goods — boom manufactured to an international standard — were basically a commodity and were in fact resold without any alterations. Although the resale price was far below the price Packgen claims to have negotiated with BP, it is undisputed that the depressed price was caused by an overabundance of boom in the market. The Court concludes that there is no genuine issue of material fact as to whether Packgen's boom was a specially manufactured good under 11 M.R.S. § 2-201(3)(a).
The statute of frauds contains a "judicial admission" exception that applies:
11 M.R.S. § 2-201(3)(b); see generally Corbin on Contracts § 14.2 (Dec. 2012). The Maine Law Court explained:
Gruen Industries, Inc. v. Biller, 608 F.2d 274, 278 (7th Cir.1979). Similarly, a leading treatise advises:
CORBIN ON CONTRACTS § 14.2[4].
Although the statute explicitly requires that the admission be made "in [the defendant's] pleading, testimony or otherwise in court," a treatise reports that "[t]he majority of courts" has nonetheless held "that a person who makes a non-judicial admission of a contract cannot plead noncompliance with the statute of frauds as a defense to its enforcement. Thus, it is said that, when the defendant admits making an oral contract, it may be enforced, although the requirements of the statute of frauds have not been satisfied." Lawrence's Anderson on the Uniform Commercial Code 2-201:310.
Packgen argues that the judicial admission exception is satisfied by BP's Charles Bigi's authentication in his personal deposition of an internal email he wrote to Brian Miller on May 29, 2010, stating, "I do not understand why we keep placing
BP counters that Packgen "attempts to contort the evidence," observes that "while Mr. Bigi may have authenticated the document in question, that document does not state that BP had placed an order with Packgen, and Mr. Bigi clearly stated under oath that he was not aware of any oral orders to purchase boom from Packgen," and denies that Mr. Bigi's testimony represents an admission of BP. Defs.' Reply at 3. BP contends that "the plain purpose behind the Statute of Frauds" favors dismissal.
Packgen claims that in its initial conversation with BP in early May 2010, BP's Mario Araya "made an oral commitment" to purchase all present and future boom Packgen produced for $21.75 per square foot, subject to a visit by BP and certification. The record citations for this fact, however, are to the depositions of two Packgen employees, and there is no indication that Mr. Araya or anyone from BP admitted making such a commitment. As BP contests the "critical fact" of Mr. Araya's alleged statement — rather than its possible legal implications — this statement does not count as an admission that could satisfy the judicial admission exception to the statute of frauds. DRPSAMF ¶ 15 ("BP denies that Mr. Araya agreed to a price of $21.75 per square foot and denies that Mr. Araya committed to purchase all present and future boom"); see Corbin on Contracts § 14.2[4].
Packgen claims that during Max Lyoen's May 11, 2010 visit to Packgen's facility, Mr. Lyoen stated "that BP would purchase Packgen's full capacity as soon as Packgen provided third-party testing results showing compliance with ASTM standards and established that its procedures and boom met BP's specifications." Again the record support for this statement comes from Packgen employees, and there is no indication that Mr. Lyoen or anyone from BP has admitted that Mr. Lyoen made this statement. As BP contests the "critical fact" of Mr. Lyoen's alleged statement — rather than its possible legal implications — this statement does not count as an admission that could satisfy the judicial admission exception to the statute of frauds. DRPSAMF ¶ 30 ("BP denies that Mr. Lyoen stated that BP would purchase Packgen's capacity"); see CORBIN ON CONTRACTS § 14.2[4]. Moreover, Packgen admits that its president and owner John Lapoint sent an email later that day that casts serious doubt on Packgen's assertions, as Mr. Lapoint wrote that Packgen was "just waiting on BP to make their decision one way or [an]other." DSMF ¶ 30; PRDSMF ¶ 30.
Packgen claims that the next day, May 12, 2010, Mr. Araya stated by phone, "I'm placing an order. We'll take it all." Again, however, BP has not admitted this "critical fact," and Packgen has admitted that its employee Dan Forte sent an email
Packgen claims that on May 23, 2010, Mr. Pavlas contacted Mr. Roberts by phone and stated "that BP intended to purchase Packgen's entire stock of boom, and would immediately purchase Packgen's current inventory of 42,000 linear feet of boom." PSAMF ¶ 47. Again, however, Mr. Pavlas has not admitted making this statement, testifying instead that he "did not recall what we talked about, if there was a conversation." DRPSAMF ¶ 47. And again, Packgen admits the existence of a subsequent email from Mr. Roberts to Mr. Pavlas that casts doubt on Packgen's assertions, as it refers to a "possible working relationship" rather than an existing binding agreement. DSMF ¶ 40; PRDSMF ¶ 40. The Court concludes that BP has made no admissions that would support a reasonable inference that a binding agreement was reached on May 23, 2010.
Packgen claims that "Bigi's phone call with Packgen on May 26, 2010" satisfies the exception. Pl.'s Opp'n at 13-14. In that phone call, however, Mr. Bigi expressed concerns about Packgen's end connectors, and on the same day, BP sent Packgen an email stating that there was a "definite CANNOT USE, on this product at this time." PSAMF ¶¶ 50-51; DRPSAMF ¶¶ 50-51; DSMF ¶¶ 49-50; PRDSMF ¶¶ 49-50. The Court concludes that, even when viewed in the light most favorable to Packgen, these statements do not support a reasonable inference that a binding agreement existed between Packgen and BP.
Packgen pins its greatest hopes on two internal emails from Charles Bigi, one sent May 29, 2010, and another June 6, 2010. Pl.'s Opp'n at 13. In the first, sent to Brian Miller, Mr. Bigi writes, "I do not understand why we keep placing orders with suppliers like this." PSAMF ¶ 117. Mr. Bigi's authentication of this email during his deposition amounts to an admission by BP that he made this statement. The question is whether, as Packgen contends, the statement supports a reasonable inference that a contract existed. The Court concludes that, viewing the statement in the context of the rest of the undisputed evidence, and viewing the entire record in the light most favorable to Packgen, Mr. Bigi's email does not support such an inference. Viewed in a vacuum, the email arguably does permit an inference that BP had placed an order with Packgen. But to what order does this email supposedly refer?
Packgen also claims that BP's John McFadden's July 13, 2010 statement, "[p]lease work on getting the material to make 24" boom," supports a reasonable inference that a contract existed. Pl.'s Opp'n at 13-14. Again the Court disagrees. The statement supports an inference that BP was interested in purchasing boom from Packgen, not that it had entered into a binding agreement to do so; in addition, the statement does not refer to quantity, which it must to satisfy 11 M.R.S. § 2-201(3)(b).
At oral argument, Packgen focused on its statement of material fact number 71:
PSAMF ¶ 71. BP responded:
DRPSAMF ¶ 71. Packgen contends that BP's response "violates Rule 56" because it is not supported with a record citation. Given the lack of a record citation to support a denial, Packgen urges the Court to deem the statement admitted and to hold that it satisfies the judicial admission exception.
The Second Circuit rejected a similar argument in Radix Organization, Inc. v. Mack Trucks, Inc., 602 F.2d 45 (2d Cir. 1979):
Id. at 48. In other words, an admission for purposes of summary judgment is not an admission for purposes of the statute of frauds.
Typically, the failure of a party to properly controvert a statement of material fact is deemed an admission of that fact. D. ME. LOC. R. 56(f); see Cormier v. Fisher, 404 F.Supp.2d 357, 362 n. 2 (D.Me. 2005); Cosme-Rosado v. Serrano-Rodriguez, 360 F.3d 42, 45 (1st Cir.2004) ("[F]ailure to present a statement of disputed facts, embroidered with specific citations to the record, justifies the court's deeming the facts presented in the movant's statement of undisputed facts admitted") (quoting Ruiz Rivera v. Riley, 209 F.3d 24, 28 (1st Cir.2000)). However, in the unique circumstances of the judicial admission exception to the statute of frauds, the rule is different because the typical process stands on its head. Here, Packgen failed in discovery to establish a BP admission that would qualify under the judicial admission exception. Instead, it posited assertions of its own employees as statements of material fact and attempted to place the onus on BP not only to deny them, but also to proffer evidence justifying the denial. In these unusual circumstances, the Court holds Packgen to what Packgen itself found during discovery.
Another federal district court has observed that "if there has been an opportunity for an admission, courts have found the Judicial Admissions exception inapplicable and dismissed the action as barred by the Statute of Frauds." Marvin Inc. v. Albstein, 386 F.Supp.2d 247, 252 (S.D.N.Y. 2005). The Seventh Circuit, in a similar case, noted that "[a] plaintiff cannot withstand summary judgment by arguing that although in pretrial discovery he has gathered no evidence of the defendant's liability, his luck may improve at trial." DF Activities Corp. v. Brown, 851 F.2d 920, 922 (7th Cir.1988). In Albstein and Brown, the defendant submitted a sworn affidavit denying having entered into an oral agreement. Here, BP has not submitted an affidavit from Mr. Suarez, but it has consistently denied that it entered into an oral agreement, and has supported its denial with the sworn statements of other employees. Moreover, Mr. Suarez was deposed, giving Packgen an opportunity to ask him whether he made the statements Mr. Lapoint claims he did. Packgen apparently did not ask him this question. In the face of BP's consistent denial that it entered into an oral agreement, Packgen's failure to ask Mr. Suarez whether he made the statements Packgen alleges he did does not generate a triable issue of fact as to whether BP has made a judicial admission that would satisfy the statute of frauds.
Having reviewed all of the statements that Packgen claims satisfy the judicial admission exception to the statute of frauds, the Court concludes that BP has not admitted facts that would support a reasonable inference that it entered into a contract with Packgen. Accordingly, summary judgment is appropriate for BP on Count III.
Under Maine law, "[a] claim for unjust enrichment requires the complaining
Paffhausen, 1998 ME 47 ¶¶ 6-7, 708 A.2d at 271 (internal punctuation and citations omitted).
Regarding unjust enrichment, Packgen contends that it "provided BP with technical information about Packgen's boom and the general standards for boom, and this information contributed, in part, to BP's ability to develop a general specification for boom and to realize cost savings." Pl.'s Opp'n at 28.
The first element of an unjust enrichment claim is that the plaintiff conferred a benefit on the defendant. Here, it is far from clear that technical information about boom that BP did not purchase or use counts as a "benefit" under the law. In Forrest Associates v. Passamaquoddy Tribe, 2000 ME 195, 760 A.2d 1041, the Maine Law Court considered an unjust enrichment claim following contractual negotiations that did not result in a contract. A consultant, Forrest Associates, had discussed with the Passamaquoddy Tribe the possible development of a high stakes bingo operation. Id., 2000 ME 195 ¶ 2, 760 A.2d at 1042. Forrest conducted a market assessment of the operation and submitted it, along with a description of Forrest's proposed involvement in the project, in the form of an engagement letter; the Tribe did not sign the engagement letter. Id., 2000 ME 195 ¶ 2, 760 A.2d at 1042-43. Forrest and the Tribe continued to discuss the project, and, at the Tribe's request, Forrest completed additional market assessments and developed a comprehensive business plan. Id., 2000 ME 195 ¶ 3, 760 A.2d at 1043. The parties orally agreed that Forrest would not be paid for its work unless the Tribe decided to go forward with the project. Id., 2000 ME 195 ¶ 5, 760 A.2d at 1043. The Tribe ultimately decided not to, and never paid Forrest for any work. Id., 2000 ME 195 ¶ 6, 760 A.2d at 1043-44. Forrest sued for breach of contract, unjust enrichment, and quantum meruit. In reversing the trial court's
Id., 2000 ME 195 ¶ 15, 760 A.2d at 1046.
Packgen cites APG, Inc. v. MCI Telecommunications Corporation, 436 F.3d 294 (1st Cir.2006), as the primary authority for its unjust enrichment claim.
This case is closer to Forrest than to APG. In APG, the benefit conferred upon the defendant was the marketing and promotion of a specific, lucrative business contract won by the defendant. The defendant in APG arguably acted in bad faith in refusing to compensate a middleman that had "focused CVS's attention on the benefits of the MCI card" and made a "compelling" presentation. Id. at 306. APG was a close case, as the district court granted summary judgment for MCI on the unjust enrichment claim and the First Circuit noted in vacating that judgment that "[i]t may be, of course, that a jury would not find unjust enrichment, concluding, as did the magistrate judge, that what transpired was simply a matter of one competitor prevailing over another. But we think there is enough in the record to warrant a jury's determination on whether appellant conferred a benefit that MCI ought to pay for." Id.
If APG was a close case, this is not. Here, the benefit Packgen claims to have conferred on BP was not a specific, lucrative business contract but was, at best, the type of marginal, non-specific benefit that often accompanies failed negotiations. Indeed, this arguable benefit appears to be even less significant than that in Forrest, where the plaintiff's market assessments and comprehensive business plan might have been considered valuable information whether or not the Tribe decided to go forward with the project. Nevertheless, the Law Court described the plaintiff's work as an "elaborate marketing proposal" that was ultimately rejected and "fail[ed] to satisfy the central element of proving a benefit conferred." Forrest, 2000 ME 195 ¶ 15, 760 A.2d at 1046. Packgen has provided no basis for distinguishing this case from Forrest. Evidence that BP assigned a "cost avoidance amount" to its manufacturer assessments shows only that BP might have conferred some benefit on itself (at a cost, given the expense BP incurred to visit Packgen's facility and conduct field tests of its boom) by conducting an assessment of Packgen, not that Packgen conferred any benefit on BP.
Packgen contends that "[b]ecause BP requested Packgen to manufacture boom, the facts also support a claim for quantum meruit." Pl.'s Opp'n at 29. Concerning the first element, which requires that "services were rendered to the defendant by the plaintiff," Packgen argues that it "provided BP with exactly the service it was looking for: a large amount of domestically produced boom." Id. at 30. The only boom Packgen provided BP was approximately 600 feet for a field test. The evidence, viewed in the light most favorable to Packgen, does not support the existence of an implied contract obligating BP to pay for a sample of boom provided for testing. Quantum meruit provides no basis for requiring BP to pay for the 60,000 feet of boom that Packgen manufactured but sold to a purchaser other than BP. The Court grants summary judgment for BP on Count IV.
Maine law contains the doctrine of promissory estoppel as set forth in the Restatement (Second) of Contracts § 90. Chapman v. Bomann, 381 A.2d 1123, 1127 (Me.1978). The Restatement provides:
RESTATEMENT (SECOND) CONTRACTS § 90(1) (1981). BP argues that Packgen's promissory estoppel claim fails as a matter of law for three reasons: "(i) the alleged comments were oral statements of a contract which is barred by the statute of frauds, (ii) Packgen's reliance on any alleged oral statements was not reasonable, and (iii) the alleged oral statements upon which Packgen states it relied are not specific enough to enforce." Defs.' Mot. at 15.
Under Maine law, it remains an open question whether promissory estoppel may be used to defeat a statute of frauds defense in a sale of goods case. See Chapman, 381 A.2d at 1130 ("at this time we refrain from deciding whether we should adopt the broad formulation of principle... contained in the Restatement (Second) of Contracts §§ [139 and] 197"); Stearns v. Emery-Waterhouse Co., 596 A.2d 72 (Me.1991) ("In Chapman ... we adopted promissory estoppel as a substitute for consideration, Restatement (Second) of Contracts § 90, but did not decide whether it would permit a direct avoidance of the statute of frauds. Id. § 139"). In Stearns, the Law Court declined "to accept promissory
RESTATEMENT (SECOND) OF CONTRACTS § 139 (1981). Although a leading treatise commends the "`flexible' balanced approach of § 139," it has received a mixed response from the courts, and it would be difficult to predict the Maine Law Court's likely position on its applicability to sales of goods. See Corbin on Contracts § 12.8 (Dec. 2012). Packgen argued orally that the employment context is "very different" from the sale of goods; BP maintained that allowing promissory estoppel to defeat a statute of frauds defense would run counter to the Maine Legislature's intent in enacting the statute of frauds and providing for three specific exceptions, none of which is promissory estoppel.
Even if Maine law permitted it, however, the Court would not invoke its equitable powers to set aside the statute of frauds. Equitable relief may be warranted where there is evidence that the defendant's invocation of the statute is itself a fraud. See Chapman, 381 A.2d at 1128 (acknowledging "the general equitable principle that since it is the purpose of the Statute of Frauds to prevent fraud, that Statute cannot be permitted to be itself an instrument of fraud"); cf. Dehahn, 356 A.2d at 717 (noting that the judicial admission exception is intended "to limit the use of the statute of frauds as a shield against unfounded fraudulent claims resting in parol, while removing from the arsenal of an unscrupulous litigant an unrighteous defense against a just claim"). Here, however, BP's denials that it entered into a binding agreement with Packgen are supported by Packgen's own statements indicating that Packgen understood the discussions to be no more than preliminary negotiations, and there is no evidence that BP is an "unscrupulous litigant" raising "an unrighteous defense against a just claim." The evidence does not explain why, if Packgen entered into a binding agreement with BP, Packgen did not propose a written agreement as it did to PCI Products. In addition, the promises Packgen insists BP made are broad and vague, and give little indication of the terms of the alleged contract, making it less reasonable for Packgen to have relied on them as indicative of a binding agreement. The Court grants summary judgment for BP on Count V.
The Court GRANTS Defendants BP Exploration & Production, Inc., and BP America Production Company's Motion for Summary Judgment (ECF No. 41).
SO ORDERED.
BP denies that Packgen's statement regarding BP's specification for the decontamination of boom is supported by the record citation. DRPSAMF ¶ 19. Having reviewed the citations, the Court rejects this contention. See McFadden Dep. (Ex. 18), 104:20-22 (ECF No. 81-7).
Packgen also proposed as a statement of material fact that "[a]t the time of Lyoen's visit, BP had no specification or protocol for deploying boom." PSAMF ¶ 20. BP denied that this statement is supported by the record citation. DRPSAMF ¶ 20. Packgen did not submit to the Court the page of John McFadden's deposition testimony that it cites to support this statement, but BP did, and upon review, the Court agrees with BP. See Oral Dep. of John McFadden (June 11, 2012), 105:3-7 (ECF No. 98-2).
BP "admits it had no specification for the type of fabric that was required for boom at the time of Mr. Lyoen's visit," but proceeds to qualify this statement. DRPSAMF ¶ 21. The Court disregards the qualification.
Finally, BP challenges Packgen's statement that "[a]t the time of Lyoen's visit, BP had no field testing requirement or protocol for boom." PSAMF ¶ 22; DRPSAMF ¶ 22. Packgen did not submit to the Court the page it cites to support this statement, but BP did, and it reveals that Mr. McFadden testified that he was not aware of any field testing of boom prior to June 2010. Oral Dep. of John McFadden (June 11, 2012), 106:7-21 (ECF No. 98-2). Drawing a reasonable inference in Packgen's favor, the Court has amended the statement to indicate that BP had not performed any field tests on boom at the time of Mr. Lyoen's visit.
BP also makes a hearsay objection, arguing that "[g]iven the position of Mr. Bigi, his knowledge and the context of the email and the deposition Mr. Bigi's e-mail is not admissible as an admission of BP pursuant to [FED.R.EVID.] 801(d)(2)." DRPSAMF ¶ 55. The Court overrules this objection, as — assuming it would otherwise be hearsay — Mr. Bigi's email fits within Rule 801(d)(2)(D), which provides that a statement is not hearsay if it "is offered against an opposing party and was made by the party's agent or employee on a matter within the scope of that relationship and while it existed." FED.R.EVID. 801(d)(2)(D).
In PSAMF ¶ 117, Packgen asserts that Mr. Bigi's email "is an admission by BP that BP had agreed to purchase Packgen's boom." PSAMF ¶ 117. To the extent Packgen intends a legal conclusion under the statute of frauds, the Court considers the statement argument rather than a statement of material fact.
BP seeks to qualify the rest of PSAMF ¶ 79 by proposing additional facts. Additional facts belong in a statement of material facts.
In PSAMF ¶ 107, Packgen states, "This same thing happened to other boom manufacturers," citing a Wall Street Journal article. PSAMF ¶ 107. BP objected on hearsay grounds and asserted that this statement is irrelevant to the issues before the Court. The Court excludes this statement from the summary judgment record because it is too vague and unsubstantiated to be considered a material fact.
Packgen proposed in PSAMF ¶ 123 the statement that Mr. Bigi "testified that the bonus based on `preventing failures' was `an excellent motivator for the team.'" PSAMF ¶ 123. BP interposed a qualified response, noting that the quoted testimony does not refer to or discuss bonuses. DRPSAMF ¶ 123. Having reviewed the quoted testimony, the Court agrees with BP that PSAMF ¶ 123 is unsupported by the record.
Packgen explains that these statements are relevant because BP's misrepresentations to congressional officials about the amount of oil that was spilling make it more likely that BP would have entered into an oral rather than written contract to purchase boom to avoid the existence of "written purchase orders for containment boom that were at variance with the statements it was making to Congress." Pl.'s Reply Mem. in Support of Request to File Supplemental Statement of Facts at 3 (ECF No. 112); see also Pl.'s Second Rule 56(e) Sur-Reply.
Because BP is entitled to summary judgment whether or not evidence related to its guilty plea is considered, it is not necessary to resolve this dispute, and the Court includes the statements in its recitation of the facts. That said, if relevant, this evidence is at best marginally so. There is no evidence in Packgen's submission that the individuals at BP who were involved in making the misrepresentations to Congress had anything to do with Packgen, or conversely that the individuals at BP who were dealing with Packgen had anything to do with BP's misrepresentations to Congress. Thus, the asserted causal connection between BP's congressional misrepresentations and BP's dealings with Packgen is speculative. Unless Packgen presented evidence to fill this gap, this evidence would likely be excluded as either irrelevant under Rule 401 or prejudicial or confusing under Rule 403 were this case to go to trial. FED. R.EVID. 401, 403.
BP distinguishes all four cases as involving alleged misrepresentations that induced plaintiffs to enter into written contracts, whereas here the alleged misrepresentation is a "promise to contract in the future for commercial goods." Defs.' Suppl. Br. at 2.
The Court accepts Packgen's point that the Shine exception has occasionally been applied to transactions between businesses. In Greenell, the Magistrate Judge reviewed Maine caselaw applying the Shine exception to at-will employment situations and implicitly drew an analogy to those cases based on the undisputed fact that "Greenell trusted Clinton Demmons and Penobscot Air's expertise in the aviation industry and relied heavily on [them] as Greenell knew nothing about aviation." Greenell, 1999 WL 33117116 at *8. It is true that the Magistrate Judge in Greenell concluded that for Shine to apply, a business need only be "at the mercy of the defendant with respect to the specific representation at issue," not "entirely at the mercy of the defendant", id., and later applied the same principle to a lawsuit between two sophisticated entities. See Forum Fin. Grp. v. President and Fellows of Harvard Coll., No. 00-306-P-C, 2002 WL 31175454 (D.Me. Sept. 30, 2002).
Nevertheless, even though the Shine exception has, in a few cases, been extended to promises between businesses, it remains an exception, not the rule, and for good reason. Were the Shine exception commonly available, plaintiffs would be encouraged to maintain a tort action for what is really a breach of contract, and by this formalistic maneuver to avoid inconvenient aspects of contract law — for instance, the statute of frauds. The law of contracts is premised on the notion that contractual promises warrant special rules. Here, BP's oral promises to purchase Packgen's boom were neither unusual nor "akin to averments of fact."
The Court is troubled by the wholesale extension of Shine to what would otherwise be a straightforward contractual dispute. Were the Court to hold that tort law provides a basis for recovery for the breach of BP's alleged promises, it would undermine the basic premise of contract law and the statute of frauds. It is rare in any contractual dispute that one party cannot make a plausible claim that it was at the mercy of the other, particularly with regard to representations of intention. In a manufactured goods context, for example, the buyer depends upon the expertise and skill of the seller to produce a suitable product and, once the product is made, the seller depends upon the willingness and ability of the buyer to accept the goods and pay the price.
This extension is even more problematic in the context of a motion for summary judgment. If a motion for summary judgment could be defeated by making a Shine argument and presenting it as a disputed question of fact, the exception would become the rule and the salutary purposes of the statute of frauds would effectively be judicially nullified. The Court remains skeptical that Shine would apply in the circumstances of this case.
The Court does not reach the Shine question, however, given its conclusion that there is no evidence that any of BP's statements were false when made. Cf. Greenell, 1999 WL 33117116 at *9 ("Waters' testimony can be construed to support a finding that the defendant knew at the time the alleged representation was made that it did not and would not have sufficient pilot crews to make the plaintiff's plane available whenever a customer asked to charter it"); Forum Fin. Grp., 2002 WL 31175454 at *12 ("the evidence ... would allow a factfinder to conclude that [the representations] were false when made").
