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DAK Americas Mississippi, Inc. v. Jedson Engineering, Inc.

United States District Court, S.D. Mississippi, Southern Division

June 6, 2019

DAK AMERICAS MISSISSIPPI, INC. PLAINTIFF
v.
JEDSON ENGINEERING, INC. and ROB'T J. BAGGETT, INC. DEFENDANTS JEDSON ENGINEERING COUNTER-CLAIMANT
v.
DAK AMERICAS MISSISSIPPI, INC. COUNTER-DEFENDANT

          MEMORANDUM OPINION AND ORDER DENYING DEFENDANT/ COUNTER-CLAIMANT JEDSON ENGINEERING'S MOTION [205] FOR RECONSIDERATION OF ORDER [204] OR, IN THE ALTERNATIVE, LEAVE TO FILE ADDITIONAL EVIDENCE

          HALIL SULEYMAN OZERDEN, UNITED STATES DISTRICT JUDGE.

         BEFORE THE COURT is Defendant/Counter-Claimant Jedson Engineering's Motion [205] for Reconsideration of the Court's Order [204], which denied Jedson Engineering's Motion [60] for Partial Summary Judgment on its Counterclaim against Plaintiff/Counter-Defendant DAK Americas Mississippi, Inc. Jedson Engineering asks the Court to reconsider its ruling and Jedson's earlier Motion [60] for Partial Summary Judgment. Alternatively, Jedson Engineering seeks leave to file a new Motion for Summary Judgment or submit additional evidence to support its request for summary judgment. After due consideration of the record, the Motion, related pleadings, and relevant legal authority, the Court is of the opinion that Jedson Engineering's Motion [204] for Reconsideration and its alternative requests for relief should be denied.

         I. BACKGROUND

         A. Brief factual background

         This dispute arises out of the design and construction of a concrete storage slab at DAK Americas Mississippi, Inc.'s (“DAK”) PET resin manufacturing facility located in Bay St. Louis, Hancock County, Mississippi. See Compl. [1] at 2. To facilitate design and construction of the slab, DAK issued several purchase orders to Jedson Engineering (“Jedson”). Jedson has submitted the final October 15, 2014, Purchase Order # 4500426907 issued for the work, which contained certain Terms and Conditions, including a limitation-of-liability clause. See Ex. “3” [60-3] at 4.[1]

         B. Procedural background

         Invoking the Court's diversity jurisdiction pursuant to 28 U.S.C. § 1332, DAK filed this lawsuit on January 31, 2018, against Defendants Jedson and Rob't J. Bagget, Inc. (“RJB”), which was the contractor selected to construct the slab. DAK alleged negligent design, negligent construction management, and breach of contract claims against Jedson, and negligent construction and breach of contract claims against RJB. See Compl. [1] at 6-10. Jedson filed a Counterclaim [15] against DAK seeking a declaratory judgment determining DAK's rights and Jedson's responsibilities under the limitation-of-liability clause contained in section 6(A) of the Purchase Order [15-1], and limiting DAK's remedies against Jedson accordingly. Jedson also advanced claims for specific performance and bad faith breach of contract. Countercl. [15] at 18-21. RJB filed a Cross-claim [43] against Jedson, see Cross-cl. [43] at 12-16, which RJB has voluntarily dismissed, see Order [203] at 1-2.

         1. Jedson's Motion [60] for Partial Summary Judgment

         Jedson filed a Motion [60] for Partial Summary Judgment on its Counterclaim, seeking a declaration from the Court that “the Terms and Conditions attached to the final purchase order are valid and enforceable and operate [to] limit DAK's recovery to 1) refund of the purchase price or 2) rework of services.” Mot. [60] at 3. Jedson also asked the Court to enter “an Order directing DAK to elect its remedy pursuant to the Terms and Conditions.” Id.

         DAK responded that the limitation-of-liability clause does not unambiguously apply because Jedson damaged DAK's property due to Jedson's own negligence or breach of contract. See Resp. [79] at 3-5. DAK maintained that section 6(B)(ii) of the Terms and Conditions renders the limitation-of-liability clause inapplicable. Id.

         Jedson countered that a plain reading of the contract demonstrates that “the damage to property of Article 6(B) does not apply to property which was the subject of Jedson's contract.” Rebuttal [86] at 1. According to Jedson, the “damage to property” mentioned in section 6(B)(ii) means

damage to existing property, not damage to property created by Jedson's work or work being performed by Jedson. Otherwise, the warranty would mean nothing and would be superfluous, given the object of Jedson's scope was to design property.

Id. at 8 (emphasis in original).[2] Additionally, Jedson maintained that section 6(B) is clearly “meant to be a defense and indemnification clause for claims made by third parties against the services provided pursuant to the order, ” and that this section only applies to claims brought by third parties. Id. at 10.

         2. The Court's Order [204] denying Jedson's Motion for Partial Summary Judgment

         In its March 28, 2019 Order, the Court determined that Jedson had not carried its burden as the movant of demonstrating that the limitation-of-liability clause unambiguously applies to DAK's claims against it. See Order [204] at 13. The Court found that even if Jedson is correct that the contract is unambiguous, such that damage to preexisting property is necessary to trigger the exclusion in section 6(B)(ii), DAK had presented evidence creating a question of fact on whether Jedson's actions “caused damage to DAK's property, ” specifically whether Jedson “caused the slab, and DAK's property, to be unsuitable for DAK's intended purpose . . . .” Id. at 12 (quoting Aff. of Colvin D. Mann [79-1] at 3-4). The Court further noted that Jedson had not addressed DAK's argument that under North Carolina law, “[a]lthough ambiguous contracts are generally construed against the drafter, ambiguous limitation of liability clauses are disfavored and strictly construed.” Id. at 12 (quoting Resp. [79] at 4 n.1). The Court then denied Jedson's Motion [60]. Id. at 13-14.

         3. Jedson's Motion [205] to Reconsider

         Jedson's present Motion [205] asks the Court to reconsider its prior Order [204], or alternatively, permit it to either file a new dispositive motion or submit additional evidence in support of its request for partial summary judgment. Jedson contends that the Court did not find the limitation-of-liability clause ambiguous and “misapprehended” certain evidence in the summary judgment record, specifically the Declaration [79-1] of Colvin D. Mann, P.E. See Mot. [205] at 2-3. According to Jedson, the Court improperly “speculate[d]” that “DAK's property” in the Declaration is something other than the slab itself, which resulted in a “critical error” in the Court's analysis. Id. Jedson maintains that “the only damage to DAK's property is the slab Jedson designed, ” id. at 3, and requests that the Court reconsider its Order and find the limitation-of-liability clause valid and ...


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