United States District Court, E.D. Missouri, Southeastern Division
ROBINSON MECHANICAL CONTRACTORS INC. d/b/a ROBINSON CONSTRUCTION CO., Plaintiff,
PTC GROUP HOLDINGS CORP., and PTC SEAMLESS TUBE CORP., Defendants.
MEMORANDUM AND ORDER
STEPHEN N. LIMBAUGH, JR. UNITED STATES DISTRICT JUDGE.
September 1, 2017, in light of the approaching September 24,
2017 trial date and the voluminous motions and briefing filed
with the Court, this Court denied defendant PTC's summary
judgment motion (#113) in a Docket Text Order with memorandum
to follow. This memorandum accompanies that Docket Text Order
and amends the September 1 Order to grant summary judgment to
PTC on Counts V and VI. Summary judgment is denied on each of
the remaining counts.
following facts are undisputed except where indicated. PTC
Group Holdings Corp. (“PTC”) is the parent
company of its wholly-owned subsidiary PTC Seamless Tube
Corp. (“Seamless”). PTC created Seamless as part
of a plan to build a steel pipe manufacturing plant in
Hopkinsville, Kentucky. Seamless was converted from a limited
liability company known as PTC Alliance Pipe Acquisition
Company, LLC into a corporation in 2013. In December 2012,
before these companies existed, PTC executed agreements with
Credit Suisse and Wells Fargo to borrow up to $195 million.
Seamless would later become obligated under those agreements
upon its creation.
2012, PTC's board authorized PTC to purchase used
equipment from a Croatian plant for $6.5 million. Alliance
was created for the purpose of acquiring the Croatian assets
and relocating them to North America. In June 2013, Alliance
was converted into a corporation, and Seamless was formed by
issuing $10.00 of capital stock at $0.01 per share to PTC.
Seamless became an obligor under the $195 million in debt at
that point. PTC directed another subsidiary to transfer the
real estate for the Hopkinsville, Kentucky plant project to
Seamless. Doug Wilkins, a PTC Vice President, oversaw the
Hopkinsville plant construction.
early 2013, plaintiff Robinson Mechanical Contractors Inc.
d/b/a Robinson Construction Company (“Robinson”)
performed removal work at the Hopkinsville facility. Robinson
entered into a Professional Services Agreement
(“PSA”) and additional statements of work
(“SOWs”) with Seamless (or, initially, Alliance),
through which it was agreed that Robinson would be
compensated for its work on a time and materials basis.
Robinson's invoices were to be paid within 30 days of
the parties dispute when exactly the construction project was
supposed to be completed, the construction was ongoing in
November 2014. At that time, PTC's Wilkins traveled to
Robinson's main office in Perryville, Missouri and met
with Robinson officials. Robinson's October 17 invoice
for $1, 749, 974 was then past due. By November 30,
Robinson's October 31 invoice for $2, 299, 579 would be
past due. The parties continued negotiating into December.
Although the negotiations were complicated, PTC essentially
offered to pay the due invoices, but it wanted additional
time to pay and sought 90 days in which to pay all future
invoices. Robinson, for its part, wanted its past-due
invoices paid by the start of the year so as not to affect
its credit status with lenders.
parties began negotiating a “Letter Agreement”
between PTC and Robinson as Robinson's invoices mounted.
Robinson admits that its Vice President, Paul Findlay, at
first wanted a formal written guaranty from PTC stating that
PTC would pay Seamless's invoices. But Robinson says that
PTC representatives said the parties did not have time to do
that because it would require action by the PTC board.
Robinson states (though PTC disagrees) that PTC Chief
Financial Officer Thomas Crowley assured Robinson that PTC
would stand behind the payments if Robinson agreed to extend
the payment terms. The final terms of the Letter Agreement
As we agreed, you released payment of $1, 749, 974 on Friday
12-12-14, receipt of which is hereby acknowledged and we will
accept payment of the balance of $6, 190, 472.42 on January
2, 2015 by wire transfer in return for the concessions below.
As part of this agreement we would also be willing to extend
your payment terms for all invoices sent after December 1,
2014 to 90 days.
We need you to understand that this extension of credit to
PTC does require the commitment of a significant portion of
our available line of credit for your use and that failure to
pay on the part of PTC would be disastrous to Robinson
Construction. As a result our offer is contingent upon the
1) Your acknowledgement that the amount that we have agreed
to postpone receipt of ($6, 190, 472.42) is due and payable
prior to December 31, 2014 per the terms of our existing
agreement, and that we have extended this credit and any
future credit by way of payment terms allowed beyond 30 days
expressly in return for the following considerations.
assurance that Robinson:
a. Will complete Phase 1 construction under the terms of our
existing agreement, except as the payment terms have been
modified by this agreement for invoices sent after December
b. Robinson will perform the phase 2 project for PTC on the
same terms as we have executed Phase 1 (except as the payment
terms have been modified by this agreement for invoices sent
after December 1, 2014) if PTC elects to construct the Phase
2 portion in the next 36 months….
burn rate (cost incurred per week) must be reduced effective
Jan 1, 2015 to a level below $750K per week and remain at
that or below that level for the duration of both phase 1 and
Payments made on behalf of PTC Group Holdings Corp. and its
subsidiaries, including PTC Seamless Tube Corp., are paid by
PTC Group Holdings through its central cash management
system. It is our intention that the payment of the remaining
amount of $6, 190, 472.42 will be paid to Robinson
Construction by wire transfer on January 2, 2015.
there is any delay in payment beyond the terms agreed to
above Robinson shall have the right to cease work immediately
until the payments are brought back to terms.
Agreement at 1-2.) Robinson contends that Crowley replaced
Robinson's request for a separate written guaranty with
the condition shown in Paragraph 4, above, and that Crowley
told Findlay that the language would provide the assurance
Findlay needed to agree to the 90-day extension of credit. By
that time (December 16), the December 12 payment had already
been made, so there was only one other defined payment due
(the $6, 190, 472.42 due on January 2). Crowley stated in his
deposition that the word “payments” (plural) in
that Paragraph 4 refers to that single $6 million payment,
but he says he does not know why he inserted that provision.
first invoice after the Letter Agreement covered work between
November 23, 2014 and December 6, 2014 and was dated December
12, 2014. Under the terms of the Letter Agreement, payment
was due in 90 days --- on March 12, 2015.
contends that PTC decided it would put the Hopkinsville
project “on hold, ” but PTC allowed Robinson to
continue working after making that decision. Then, Robinson
claims, PTC planned to “start a war” to
“delay the invoices” according to PTC's own
March 11, one day before Seamless's payment was due,
Seamless sent a letter to plaintiff advising plaintiff that
Seamless disputed plaintiff's invoice and that it would
not make the payment. The letter did not refer to any
particular invoice and did not explain what Seamless disputed
within the invoice. Robinson ceased work and removed its
equipment from the job site on March 12. Since then, neither
Seamless nor PTC has paid Robinson for its work done after
November 23, 2014. Seamless applied for bankruptcy on April
26, 2015 and was dissolved, pursuant to Delaware law, on
January 29, 2016.
meantime, Robinson filed this lawsuit against PTC. PTC moved
to dismiss plaintiff's first amended complaint for
failure to state a claim. The Court partially granted
PTC's motion on March 31, 2016 --- dismissing three of
plaintiff's claims including breach of contract, breach
of duty of good faith and fair dealing, and quantum meruit
(#27). Plaintiff filed a motion to file a second amended
complaint on October 31, 2016, seeking to add Seamless as a
defendant, to add a new count to pierce the corporate veil
between Seamless and PTC, and to reassert counts previously
dismissed based upon new allegations in light of facts
discovered since the filing of the first amended complaint
(#40). The Court granted the plaintiff's motion on
January 27, 2017 (#65).
that time, the Court has denied PTC's subsequent motion
to dismiss. Further, the Court entered default judgment
against Seamless, as Seamless failed ...