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Essroc Cement Corp. v. CTI/D.C.

September 27, 2010


The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge


Plaintiff Essroc Cement Corp. ("Plaintiff") brings the present action against Defendant CTI/D.C., Inc. ("Defendant") (together, the "Parties"), asserting causes of action for breach of contract, unjust enrichment, and fraud in connection with Plaintiff's extension of credit and provision of goods, materials, and services to Defendant in the spring and fall of 2008. Presently before the Court is Plaintiff's [26] Motion for Summary Judgment, which Defendant has failed to oppose or respond to in any fashion. After reviewing Plaintiff's submissions, including the attachments thereto, the relevant authorities, and the record as a whole, the Court shall GRANT-IN-PART and DENY-IN-PART Plaintiff's Motion for Summary Judgment, for the reasons set forth below.


A. Factual Background

1. The Parties and their Contractual Relationship

Plaintiff, a Pennsylvania corporation with its principal place of business within that state, is engaged in the business of producing and providing cement to clients throughout the United States, Canada, and Puerto Rico.*fn1 Pl.'s Stmt., Docket No. [26], ¶¶ 1, 3. Defendant, incorporated and operating at least in part in the District of Columbia, is in the business of providing readymix concrete to commercial and residential developers. Pl.'s Stmt. ¶¶ 2, 4; V. Answer, Docket No. [10-2], ¶¶ 2, 5.

On or about January 23, 2008, the Parties entered into an agreement, the primary purpose of which was to enable Defendant to purchase goods, materials, and services -- most notably, cement -- on credit from Plaintiff (the "Credit Agreement"). Pl.'s Stmt. ¶¶ 5-6 and Ex. A (Credit Agreement).*fn2 The terms of the Credit Agreement itself are relatively sparse, contemplating that individual sales of concrete would be governed by more specific terms and conditions to accompany such sales. Specifically, the Credit Agreement provides, in relevant part:

All sales will be subject to further Terms and Conditions as provided, as revised from time to time without notice to [Defendant], and such revised Terms and Conditions shall prevail on all shipments after the date of revision regardless of when the related orders were received.

Pl.'s Stmt. Ex. A (Credit Agreement) at 1.

Subsequently, as contemplated by the Credit Agreement, each individual delivery of cement products from Plaintiff to Defendant was followed by an invoice covering one or more deliveries, which set forth the terms and conditions of the sale (the "Terms and Conditions").*fn3 Pl.'s Stmt. ¶ 10 and Ex. C (Pl.'s Req. for Admis.) Sub-Exs. A-AA (Invoices and Bills of Lading). The Terms and Conditions accompanying each sale supplemented the Credit Agreement, and fleshed out the contours of the Parties' contractual relationship. Specifically, with respect to payment, the Terms and Conditions provided that invoices were "payable in full not later than the last day of the month following the month in which shipments were made."*fn4 Pl.'s Stmt. Ex. B (Terms and Conditions) at 1. Balances past due would be "subject to a service charge of one and one half percent (1-1/2%) per month or the highest rate permissible by law." Id. And, in the event Defendant failed to comply with the terms of payment, the Terms and Conditions reserved to Plaintiff the right to terminate deliveries and to exercise its right to recover for all unpaid accounts. Id.

2. The Deterioration of the Parties' Commercial Relationship

Beginning in April 2008, Plaintiff periodically supplied to Defendant various cement products pursuant to the Credit Agreement and the Terms and Conditions. Id. ¶¶ 12-28. From the outset, the relationship was a troubled one, as Defendant never paid any of the invoices issued by Plaintiff. Id. ¶ 43. On or about September 8, 2008, prompted by the ballooning number of invoices that remained unpaid by Defendant (at least sixteen invoices had been issued, with a total amount outstanding approaching $500,000), Plaintiff advised Defendant that, going forward, Plaintiff would be required to purchase cement on a cash-on-delivery basis.*fn5 Id. ¶¶ 13-28, 44-45.

Thus, beginning on September 8, 2008 and continuing at least through September 17, 2008, Plaintiff supplied Defendant with cement exclusively on a cash-on-delivery basis. Id. ¶¶ 29-34. Despite this arrangement, between September 11, 2008 and September 18, 2008, Defendant proceeded to issue to Plaintiff a series of bad checks.*fn6 All in all, Defendant issued a total of four checks to Plaintiff in the aggregate amount of $27,224.01, purportedly in payment of six separate invoices issued by Plaintiff. Id. ¶¶ 47, 49, 52. All four checks were returned for insufficient funds. Id. And, in all four instances, it is undisputed that Defendant knew that it held insufficient funds in its bank account to cover the amounts designated at the time the checks were issued. Id. ¶¶ 48, 50-51, 53.

3. The Defendant's Assurances and Plaintiff's Demand

On or about September 29, 2008, "[f]or purposes of inducing [Plaintiff] to supply it with additional cement," Defendant told Plaintiff that it would convert a certificate of deposit ("CD") to pay Plaintiff $240,000 towards its past-due balance. Id. ¶ 56. However, Defendant actually had no intention of converting the CD at the time these representations were made to Plaintiff. Id. ¶ 57. Plaintiff nevertheless supplied to Defendant approximately $33,153.96 worth of cement between September 30, 2008 and October 9, 2008.*fn7 Id. ¶¶ 38-39. It is undisputed that Plaintiff never received payment for these goods. Id. ¶¶ 42-43, 59; V. Answer ¶ 21.

On November 11, 2008, apparently having had its fill, Plaintiff sent to Defendant a certified letter demanding full payment of the unpaid invoices, as well as accrued service charges on past-due invoices. Pl.'s Stmt. ¶ 58. As of that date, Defendant was delinquent in its payments in the principal amount of $552,577.77 and had incurred service charges in the amount of $33,925.72, for a total of $586,503.49. Pl's Stmt. Ex. C (Pl.'s Req. for Admis.) Sub-Ex. EE (Certified Letter) at 1-2. Defendant received the letter, but failed to respond or remit payment in any amount. Pl.'s Stmt. ¶¶ 58-59. It is undisputed that Defendant has received a copy of each of the invoices underlying these figures and, prior to Plaintiff's filing of the Complaint in this action, has never disputed or questioned their validity. Id. ¶¶ 41-42. To date, Defendant has never paid any of the invoices. Id. ¶¶ 43-44, 59.

B. Procedural History

Plaintiff filed this action against Defendant on December 17, 2008, asserting three causes of action based upon Defendant's alleged failure to pay for the cement supplied by Plaintiff. See Compl., Docket No. [1]. A copy of the Summons and Complaint was served on Defendant, via its registered agent, on December 19, 2008. See Return of Serv./Aff., Docket No. [4]. Having received no response in the time allotted by the Federal Rules of Civil Procedure, Plaintiff requested an entry of default, see Pl.'s Req. for Entry of Default, Docket No. [5], which the Clerk of the Court subsequently entered on or about February 3, 2009, see Clerk's Entry of Default, Docket No. [6]. Thereafter, Plaintiff moved this Court for entry of judgment by default. See Pl.'s Mot. for Default J., Docket No. [7]. Before the Court had an opportunity to consider and rule upon Plaintiff's motion, Defendant filed a Motion to Set Aside Entry of Default and Opposition to Motion for Entry by Default, asserting that it did not have actual notice of the lawsuit prior to learning of Plaintiff's motion. See Def.'s Mot. to Set Aside Default, Docket No. [10].*fn8 On November 9, 2009, finding, inter alia, that Defendant had sufficiently demonstrated a lack of willfulness on its part, the Court granted Defendant's Motion to Set Aside Entry of Default and denied Plaintiff's Motion for Entry of Judgment by Default. See Nov. 9, 2009 Mem. Op., Docket No. [14].

Unfortunately, Defendant's active participation in this action was short lived. Prior to making any meaningful inroads into discovery, the Court referred this case to the Court's Mediation Program pursuant to the Parties' request. See Dec. 14, 2009 Order, Docket No. [17]. When Defendant's counsel failed to participate in the Court's Mediation Program, and also failed to appear at a Court-ordered Initial Scheduling Conference, Defendant was ordered to file written notice explaining why Defendant's counsel should not be held in contempt.*fn9 See Mar. 5, 2010 Order, Docket No. [19]. In so doing, the Court noted that the aforementioned conduct "continue[d] a pattern of indifference towards the defense of this lawsuit that began with ...

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