Opinion
1:02CV00722
August 15, 2003
MEMORANDUM ORDER
This matter is now before the court on Tiepet, Inc.'s Motion for Judgment on the Pleadings [Doc. # 6]. For the reasons stated below, the motion is DENIED.
In considering a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), facts presented in the pleadings and the inferences drawn therefrom must be viewed in the light most favorable to the non-moving party. Edwards v. City of Goldsboro, 178 F.3d 231, 248 (4th Cir.1999). A motion for judgment on the pleadings is determined by the same standard applied to a motion to dismiss for failure to state a claim, id, at 243. Furthermore, as with motions for summary judgment, a party is entitled to judgment on the pleadings when no genuine issues of material fact exist and the case can properly be decided as a matter of law. Davenport v. Davenport, 146 F. Supp.2d 770, 783 (M.D.N.C. 2001).
In the light most favorable to Eastman Chemical Company ("Eastman"), the facts are as follows: On September 11, 2000, Tiepet and Eastman executed a document entitled "Toll Conversion Agreement" ("the agreement"). This agreement "provided that Eastman would deliver specified minimum quantities of raw materials to Tiepet, that Tiepet would process those raw materials into solid stated Polyethylene Terephthalate, and that Eastman would purchase the finished PET product at a set price for further sale to its own customers," Def. Resp. Doc. # 13 at 2. In June 2001, Eastman "informed Tiepet that it was experiencing substantial financial losses under the Agreement and resulting economic hardship due to a decline in the selling price of the Product and a shrinking margin between the cost of the product and its selling price" and sought modification of the contract pursuant to section 11(c) of the agreement. Answer ¶ 12.
Section 11(c) of the agreement provides "Should EASTMAN or TIEPET encounter material, unforeseen economic hardship under the terms of this Agreement, then both parties agree to enter into good faith negotiations in an effort to provide relief to the party declaring the economic hardship." Toll Conversion Agreement at 10. The parties were unable to negotiate a successful modification, and Eastman ceased delivery of raw materials to Tiepet, effectively terminating the agreement.
Eastman contends that it properly terminated the contract pursuant to section 11(c) based on "economic hardship" and Tiepet's refused to negotiate a modification in good faith. Tiepet, on the other hand, contends that Eastman breached the contract because Eastman did not suffer an economic hardship sufficient to justify invoking section 11(c). Resolution of this dispute will require an interpretation of the "economic hardship" provision of the contract to determine the type of circumstances that would constitute "economic hardship" for purposes of section 11(c). At this point, the facts in the pleadings are not sufficient to state as a matter of law that the "financial losses" and "shrinking margins" cited by Eastman were sufficient to constitute "economic hardship" for purposes of section 11(c).
The Plaintiff's Motion for Judgment on the Pleadings is DENIED.