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Valley View Agri LLC v. Producers Cooperative Oil Mill

United States District Court, W.D. Oklahoma

March 31, 2017

VALLEY VIEW AGRI, LLC, Plaintiff,
v.
PRODUCERS COOPERATIVE OIL MILL, Defendant.

          ORDER

          TIMOTHY D. DeGIUSTI, UNITED STATES DISTRICT JUDGE

          Before the Court is Defendant's Motion for Summary Judgment [Doc. No. 28] filed pursuant to Fed.R.Civ.P. 56. Defendant seeks judgment as a matter of law regarding Plaintiff's breach of contract and unjust enrichment claims. Plaintiff has responded in opposition [Doc. No. 46], and Defendant has replied [Doc. No. 48]. For the reasons set forth below, the Court denies Defendant's Motion.

         Factual Background

         On May 29, 2009, Plaintiff (“Valley View”)[1] and Defendant (“PCOM”) entered into a contract (“Contract”) originally proposed by Valley View, but revised and finalized by PCOM. See Mot. [Doc. No. 28] at 3-4; Resp. [Doc. No. 46] at 2. The Contract involves pre-construction design and engineering services[2] for an oil mill that was to be located at 2500 S. Council Rd. in Oklahoma City, Oklahoma (“Project”). Contract [Doc. No. 1-1] at 1. The “Terms of payment” provision detailed the following states:

Valley View Agri, Inc. agrees to provide all of the design and engineering services described herein for the actual costs incurred, not to exceed, under any condition whatsoever, the sum of Seven Hundred and Thirty-one Thousand and One Hundred Dollars ($731, 100.00).
Valley View Agri, Inc. further agrees no payment shall be due and owed by PCOM for the design and engineering services provided by Valley View Agri, Inc. until PCOM has received all bids submitted for the construction of the Project and PCOM has made its determination of which bidder it will retain to perform construction of the Project. If Valley View Agri, Inc. is the bidder chosen by PCOM for the contract for construction of the Project, then no payment shall be required for the engineering and design services performed by Valley View Agri, Inc. and which are described herein. However, should the contract for construction of the Project be awarded to a bidder or contractor other than Valley View Agri, Inc., then Valley View Agri, Inc. shall submit its invoice for the actual costs incurred for the design and engineering services provided to PCOM and described herein, not to exceed, under any condition whatsoever, the sum of Seven Hundred and Thirty-one Thousand One Hundred Dollars ($731, 100.00). PCOM's payment of the invoice in full shall be due on or before [f]orty-five (45) days from date of invoice.

Id. at 2. Valley View completed its design and engineering work as specified in the Contract, with the following requested modifications: “(1) changed from 20 meal-pellet tanks to 9 meal-pellet tanks, (2) added aeration to 2 of the 105' diameter tanks, (3) added aeration to all nine of the meal-tanks, (4) eliminated the 4 - 60, 000 bushel day storage tanks and replaced them with one small surge tank (approximately 20, 000 bushels) for surge into the plant.” Resp. [Doc. No. 46] at 18; Email [Doc. No. 46-22] at 1. PCOM's requested modifications “represented major changes to the design of the Project and required [Valley View] to perform extensive redesign work.” Compl. [Doc. No. 1] at 6. PCOM abandoned the Project prior to bidding it out. Mot. [Doc. No. 28] at 6; Resp. [Doc. No. 46] at 18. To date, Valley View has received no payment for its services.

         Valley View brought suit on November 23, 2015, alleging breach of contract and unjust enrichment, and asserting its services - including all requested modifications - amount to $1, 234, 068. Compl. [Doc. No. 1] at 1; Invoice [Doc. No. 1-2] at 1. PCOM moved for summary judgment on July 28, 2016, contending that the “Contract simply provides no right of payment” to Valley View, and that it precludes Valley View's ability to sue for unjust enrichment. See Mot. [Doc. No. 28] at 2.

         Standard of Decision

         A court shall grant summary judgment only when the undisputed material facts establish that “the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); McKinzy v. Union Pacific R.R., 349 F.App'x 303, 305 (10th Cir. 2009) (finding that even if all facts are deemed admitted, “the district court still has to determine whether . . . the movant is entitled to judgment as a matter of law”) (citing Murray v. City of Tahlequah, 312 F.3d 1196, 1200 (10th Cir. 2002)). In applying this standard, all facts and reasonable inferences must be viewed in the light most favorable to the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         Discussion

         Oklahoma law[3] requires, and Valley View has pled, three elements for breach of contract: (1) the formation of a contract; (2) a breach thereof; and (3) actual damages suffered from the breach. See Digital Design Grp., Inc. v. Info. Builders, Inc., 24 P.3d 834, 844 (Okla. 2001); Compl. [Doc. No. 1] at 4, 8. The parties raise no challenge regarding formation of the Contract, therefore the Court finds this element established. Determining whether a breach has occurred, however, initially requires the Court to interpret the contract as a whole, which presents a question of law. See Edwards v. Doe, 331 F.App'x 563, 571 (10th Cir. 2009) (unpublished opinion) (“Under Oklahoma law, the interpretation of a contract is a question of law.”) (citing May v. Mid-Century Ins. Co., 151 P.3d 132, 140 (Okla. 2006)).

         The Oklahoma statutory rules of construction establish the following: the language of a contract governs its interpretation, if the language is clear and explicit and does not involve an absurdity (Okla. Stat. tit. 15, § 154); a contract is to be taken as a whole, giving effect to every part if reasonably practicable, each clause helping to interpret the others (Okla. Stat. tit. 15, § 157);[4] a contract must receive such an interpretation as will make it operative, definite, reasonable, and capable of being carried into effect (Okla. Stat. tit. 15, § 159); words of a contract are to be given their ordinary and popular meaning (Okla. Stat. tit. 15, § 160); and a contract may be explained by reference to the circumstances under which it was made, and the matter to which it relates (Okla. Stat. tit. 15, § 163).

         Here, the “Terms of payment” provision in the Contract covers two payment scenarios: (1) Valley View “is the bidder chosen by PCOM for the contract for the construction of the Project, ” or (2) “the contract for construction of the Project [is] awarded to a bidder or contractor other than Valley View.” Contract [Doc. No. 1-1] at 2. The express language of the Contract contemplates that, if Valley View is selected to construct the project, PCOM will not have to pay Valley View for its design and engineering services. The Contract fails to address payment in the event PCOM abandons the Project prior to bidding it out.[5] PCOM argues that the ...


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