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Global Recycling, SA v. Montclair Technology LLC

United States District Court, D. Utah

December 18, 2017

GLOBAL RECYCLING, SA, a Haitian corporation; Plaintiff;
v.
MONTCLAIR TECHNOLOGY, LLC, a Utah limited liability company; MICHAEL WILLIAMS, an individual; and DOES I-X; Defendants.

          ORDER GRANTING IN PART PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

          Jill N. Parrish, United States District Court Judge.

         Before the court is Plaintiff's Motion for Partial Summary Judgment (ECF No. 34), filed on September 15, 2017. The court heard oral argument on December 7, 2017. Having considered the parties' briefs, the arguments of counsel, and the relevant law, the court hereby grants Plaintiff's motion in part and denies it in part.

         I. FACTUAL BACKGROUND

         Global Recycling is a Haitian corporation managed by Cyrille Turnier and Peter de Gier. In the summer of 2014, Global contacted Michael Williams, the sole member of Montclair Technology (a Utah LLC). Global expressed a desire desire to build a motor oil refinery in Haiti. On July 11, 2014, the parties entered into a Non-Circumvention, Non-Disclosure and Working Agreement pertaining to the venture. And on August 31, 2014, the parties entered into a Purchase Order Agreement (the “Agreement”).

         The Agreement lies at the heart of this action. It is a sparse, four-page document under which Montclair agreed to “build and deliver to Global Recycling SA at its Spanish Fork, Utah, USA facility, a working R&D prototype of a continuous batch operating test unit capable of processing a minimum of 15 gallons of a finished diesel product per hour, converted from Used Lubricating Oil (Test Unit).” Agreement ¶ 1. The Test Unit would be “a turnkey project, consisting of equipment to operate the unit in a continuous mode of operation.” Id. ¶ 4B.

         The Agreement describes the process by which the Test Unit will accomplish its design: “The process uses elements of sub and supercritical pressures through a high pressure reactor followed by vacuum distillation. This process is known as ‘Hydrothermal Upgrading' using proprietary know how [sic], equipment, and methods developed by Montclair and is confidential and personal to Global Recycling SA.” Id. ¶ 2. The same paragraph indicates that “[t]he Test Unit process and operating parameters used in the Test Unit will be demonstrated upon the delivery and demonstration of Test Unit as set forth in paragraph 4 hereof.” Id.

         Under the Agreement, the parties agreed to a purchase price of “$60, 000 U.S. dollars for a completely mechanically skidded fully operational Test Unit.” Id. ¶ 3. That price was to be paid in three installments: $30, 000 on or before September 1, 2014; $25, 000 on or before September 10, 2014; and $5, 000 payable “upon delivery, inspection, acceptance and B/L of shipment to Haiti by Global Recycling SA of the Test Unit at Montclair's Spanish Fork, Utah facility.” Id. Notably, Montclair guaranteed the price and operation of the Test Unit. Id. ¶ 4A. And Williams personally guaranteed the final construction costs of the Test Unit, promising that if the Test Unit cost more than $60, 000, he would “as an individual, apart from his ownership in Montclair Technology LLC, . . . make up the difference to insure Global will take ownership of the finished unit free and clear of any financial encumbrances.” Id.

         Once Montclair produced the Test Unit, it was required to “notify Global Recycling SA that it can come to Montclair's facility to see a demonstration of the Test Unit operation and process.” Id. ¶ 4. The paragraph continues: “In connection with the Test Unit operation, Montclair will deliver written information and process descriptions of the Unit operation, controls, temperatures, and chemicals needed for Global Recycling SA to operate the Test Unit in Haiti.” Id.

         While the Agreement specifies dates for payment, it does not set a hard-and-fast deadline by which Montclair was to deliver the Test Unit. The only indication regarding timing is Montclair's commitment to “use its best efforts to complete the test unit within 45 days of receipt of the partial purchase price set forth in paragraph 3 hereof.” Id. ¶ 4. Forty-five days after the second installment of the purchase price was October 18, 2014.

         Finally, the Agreement addresses the issue of ownership: “The unit is paid for by Global Recycling SA and upon final payment shall be the sole property of Global Recycling SA. Montclair will not use the unit for its own purposes or to demonstrate its processes using the Global test unit to unaffiliated parties.” Id. ¶ 6.

         To date, Global has paid Montclair $87, 600. But Global has not received the Test Unit from Montclair.

         II. PROCEDURAL BACKGROUND

         On October 6, 2016, Plaintiff filed a complaint against Defendants. The complaint alleges six claims for relief: (1) breach of contract, (2) breach of express warranty, (3) violation of the Defend Trade Secrets Act, (4) misappropriation of trade secrets under the Utah Uniform Trade Secrets Act, (5) fraudulent inducement, and (6) declaratory judgment.

         On November 10, 2016, Defendants had not answered Plaintiff's complaint. The court ordered Defendants to answer the complaint by November 29, 2016 and to inform the court regarding the status of the case and their intentions to proceed. See ECF No. 7. Defendants answered the complaint on November 29, 2016 and brought two counterclaims against Global for declaratory judgment and breach of contract.

         Plaintiff has moved for summary judgment on three of its claims: breach of contract, breach of express warranty, and declaratory judgment.

         III. LEGAL STANDARD

         A. Summary Judgment

         Federal Rule of Civil Procedure 56(a) provides that “[t]he court shall grant summary judgment if 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.” In applying this standard, courts must “construe the evidence and the reasonable inferences drawn therefrom in the light most favorable to the nonmovant.” Sally Beauty Co. v. Beautyco, Inc., 304 F.3d 964, 972 (10th Cir. 2002). However, the nonmovant “is entitled to only those inferences that are ‘reasonable.'” Hornady Mfg. Co. v. Doubletap, Inc., 746 F.3d 995, 1004 (10th Cir. 2014) (quoting Water Pik, Inc. v. Med-Systems, Inc., 726 F.3d 1136, 1143 (10th Cir. 2013)). “[S]ummary judgment cannot rest on purely conclusory statements either in pleading or affidavit form.” Morgan v. Willingham, 424 F.2d 200, 201 (10th Cir. 1970).

         B. Contract Interpretation

         The interpretation of a contract is a legal question. Mind & Motion Utah Invs., LLC v. Celtic Bank Corp., 367 P.3d 994, 999 (Utah 2016). This court's task in interpreting a contract “is to ascertain the parties' intent.” Id. at 1001. “And the best indication of the parties' intent is the ordinary meaning of the contract's terms.” Id. Therefore, the court first looks to the language of the contract, which it reads as a whole in order to construe various clauses consistently. See Utah Const. & Dev. Co. v. Reynolds Elec. & Eng'g Co., 951 F.2d 1261, at *2 (10th Cir. 1991) (table opinion). “[I]f the language within the four corners of the contract is unambiguous, the parties' intentions are determined from the plain meaning of the contractual language, and the contract may be interpreted as a matter of law.” Mind & Motion, 367 P.3d at 1001 (citation omitted). On the other hand, “[a] contract is facially ambiguous if its terms are capable of more than one reasonable interpretation because of uncertain meanings of terms, missing terms, or other facial deficiencies.” Id. (citation omitted). When the parties' intentions are not apparent from the face of the contract, the court must also consider extrinsic evidence. Id.

         IV. DISCUSSION

         A. ...


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