Pro-Spec Corporation v. Chester Water Authority et al

MOTION for Summary Judgment

E.D. Pa.May 24, 2017

1 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA PRO-SPEC CORPORATION T/D/B/A : PRO-SPEC INDUSTRIAL PAINTING SERVICES : Plaintiff : : v. : Docket No. 2:16cv4728-MAK : CHESTER WATER AUTHORITY and DN TANKS : Defendants : : DN TANKS : Third-Party Plaintiff : : v. : : INTERNATIONAL FIDELITY : INSURANCE COMPANY : Third-Party Defendant : : DN TANKS’ MOTION FOR SUMMARY JUDGMENT Pursuant to Fed. R. Civ. P. 56, the Defendant / Plaintiff-in-Counterclaim / Third-Party Plaintiff, DN Tanks (“DNT”), by and through its undersigned counsel, hereby moves for summary judgment on all Counts asserted against it by the plaintiff Pro-Spec Corporation t/d/b/a Pro-Spec Industrial Painting Services (“Pro-Spec”) in Pro-Spec’s Complaint (Document No. 1). DNT also moves for summary judgment on Counts I (Breach of Contract against Pro-Spec) and V (Setoff against Pro-Spec) of DNT’s Counterclaims (Document No. 5). I. SUMMARY OF ARGUMENT A. Background Pro-Spec entered into a contract (the “Contract”) with Chester Water Authority (“CWA”) to perform certain rehabilitation work at two water tanks. The Contract required, among other things, the installation of two manholes in one of the large water storage tanks at the Project. In Case 2:16-cv-04728-MAK Document 53 Filed 05/24/17 Page 1 of 4 2 January 2015, DNT sent Pro-Spec a proposal (the “Proposal”) to perform the manhole work. Rather than unequivocally accept all of the terms of DNT’s Proposal, however, Pro-Spec sent DNT a draft subcontract that contained many terms that were either in addition to or contrary to the terms of the Proposal. DNT rejected Pro-Spec’s draft subcontract, and for the next several months Pro-Spec refused to include DNT’s required terms in a mutually agreeable subcontract document. Consequently, no agreement was reached until November 20, 2015, when DNT signed a mutually acceptable subcontract for the manhole work. This was the only subcontract signed by DNT. After signing the November 20, 2015 Subcontract, DNT performed the manhole work on-time and with no workmanship issues. In April 2016, CWA’s representative authorized Pro- Spec to bill for DNT’s work as 100% complete, which Pro-Spec has done. Nonetheless, Pro- Spec has refused to pay DNT in full for its work. On June 30, 2016, CWA terminated the Pro-Spec Contract due to Pro-Spec’s inability to perform the other Contract work in accordance with the specifications. B. Pro-Spec’s Claims Pro-Spec asserts counts for breach of contract and civil conspiracy against DNT. Both counts fail as a matter of law. Pro-Spec’s breach of contract claims fail because they are predicated on the existence of an enforceable subcontract between DNT and Pro-Spec prior to November 20, 2015. As discussed above, however, no pre-November 20, 2015 subcontract was ever agreed to. Pro-Spec’s conspiracy claims fail because Pro-Spec cannot offer evidence of any specific unlawful acts performed in concert by CWA and DNT (or lawful acts undertaken for an unlawful purpose). C. DNT’s Claims Case 2:16-cv-04728-MAK Document 53 Filed 05/24/17 Page 2 of 4 3 DNT seeks payment from Pro-Spec for work DNT performed at the Project. The undisputed facts show that DNT provided all services and materials required of it under the November 20, 2015 Subcontract, and that there are no issues with any of DNT’s work. Indeed, Pro-Spec has billed the Owner in full for DNT’s work. DNT is entitled to payment of $337,750 for its unpaid requisitions.1 II. SUPPORTING MATERIALS In support of this Motion, DNT relies on the following documents filed simultaneously herewith which are incorporated as if set forth fully herein: (1) DN Tanks’ Memorandum of Law in Support; (2) DNT’s Statement of Undisputed Material Facts; and (3) DNT’s Appendix of Exhibits. III. REQUESTED RELIEF WHEREFORE, for the reasons set forth more fully in the pleadings filed simultaneously herewith, DNT respectfully requests that this Court: (1) grant summary judgment in its favor dismissing with prejudice Counts III and IV of Pro-Spec’s Complaint against it, and (2) grant summary judgment in its favor on Counts I and V of DNT’s Counterclaim.2 1 DNT is also entitled to interest, penalties, and attorney fees under the Pennsylvania Contractor and Subcontractor Payment Act (“CASPA”). Due to the probable existence of material issues of fact regarding the timing and amount of payments received by Pro-Spec for DNT’s work, however, DNT is not moving for summary judgment on its claims under CASPA, and instead reserves these claims for trial. 2 Subject to footnote 1, above, Case 2:16-cv-04728-MAK Document 53 Filed 05/24/17 Page 3 of 4 4 LOCAL RULE 7.1(d) REQUEST FOR ORAL ARGUMENT DNT hereby requests a hearing on its motion for summary judgment. In furtherance of this request, DNT states that oral argument on its motion for summary judgment will be of assistance to this Court and will facilitate the proper disposition of the motion. By: FLASTER/GREENBERG P.C. /s/ Harry J. Giacometti Harry J. Giacometti, Esq. 1835 Market Street, Suite 1050 Philadelphia, PA 19103 Phone: (215) 587-5680 harry.giacometti@flastergreenberg.com HINCKLEY, ALLEN & SNYDER LLP /s/ Kirk J. McCormick Kirk J. McCormick, Esq. (pro hac vice) Chad L. Hershman, Esq. (pro hac vice) 28 State Street, 29th Floor Boston, MA 02190 Phone: (617) 345-9000 kmccormick@hinckleyallen.com chershman@hinckleyallen.com Counsel for DN Tanks CERTIFICATE OF SERVICE The undersigned hereby certifies that on this 24th day of May, 2017, a true and correct copy of the foregoing pleading was served on all counsel for all parties of record receiving notice by electronic means via the Electronic Case Filing System (“ECF”) as reflected on the Notice of Electronic filing. /s/ Chad L. Hershman #56847971 Case 2:16-cv-04728-MAK Document 53 Filed 05/24/17 Page 4 of 4 1 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA PRO-SPEC CORPORATION T/D/B/A : PRO-SPEC INDUSTRIAL PAINTING SERVICES : Plaintiff : : v. : Docket No. 2:16cv4728-MAK : CHESTER WATER AUTHORITY and DN TANKS : Defendants : : DN TANKS : Third-Party Plaintiff : : v. : : INTERNATIONAL FIDELITY : INSURANCE COMPANY : Third-Party Defendant : : DN TANKS’ MEMORANDUM OF LAW IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT I. INTRODUCTION AND SUMMARY OF RELEVANT FACTS A. Background On or about March 16, 2015, Pro-Spec Corporation T/D/B/A Pro-Spec Industrial Painting Services (“Pro-Spec”) entered into a contract (the “Contract”) with Chester Water Authority (“CWA”) for work known as “Rehabilitation of the Village Green Tanks No. 2 and No. 9, CWS Contract No. 14-030” (the “Project”). International Fidelity Insurance Company (“IFIC”) issued performance and payment bonds on Pro-Spec’s behalf. The Contract required, among other things, the installation of certain manholes in one of the large water storage tanks at the Project. In January 2015, DN Tanks (“DNT”) sent Pro-Spec a proposal (the “Proposal”) to perform the manhole work. Rather than unequivocally accept all of the terms of DNT’s Proposal, however, Pro-Spec sent DNT a draft subcontract that contained Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 1 of 25 2 many terms that were either in addition to or contrary to the terms of the Proposal. The record is clear that for the next several months, Pro-Spec refused to accept many of DNT’s required terms for a subcontract, and consequently no agreement was reached until November 2015. On November 20, 2015, DNT signed a mutually acceptable subcontract (the “November 20, 2015 Subcontract”) for the manhole work. This was the only subcontract signed by DNT. After signing the Subcontract in November 2015, DNT performed the manhole work on- time and with no workmanship issues. In April 2016, CWA’s representative authorized Pro- Spec to bill for DNT’s work as 100% complete, which Pro-Spec did. Nonetheless, Pro-Spec has refused to pay DNT in full for its work. On June 30, 2016, CWA terminated the Pro-Spec Contract due to Pro-Spec’s inability to perform the other Contract work in accordance with the specifications. Pro-Spec brought this action against CWA and DNT. DNT filed counterclaims against Pro-Spec and a Third-Party Complaint against IFIC. B. Pro-Spec’s Claims Pro-Spec alleges that DNT is liable for breach of contract. More specifically, Pro-Spec alleges that by refusing to perform any work until an acceptable subcontract was signed, DNT caused delays that led to Pro-Spec’s termination. In other words, Pro-Spec’s breach of contract claims against DNT are predicated on the existence of an enforceable subcontract between DNT and Pro-Spec prior to November 20, 2015. As discussed herein, however, no pre-November 20, 2015 subcontract was ever agreed to by DNT, and Pro-Spec’s breach claims against DNT are unsupportable as a matter of law. Pro-Spec also alleges a civil conspiracy between CWA and DNT. According to Pro- Spec, DNT and CWA conspired to bring about Pro-Spec’s termination so that DNT could then Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 2 of 25 3 be awarded the remaining Contract work. However, Pro-Spec cannot offer evidence of any specific acts performed in concert by CWA and DNT for the purpose of harming Pro-Spec, to say nothing of the other elements of a valid civil conspiracy claim. As such, Pro-Spec’s conspiracy claims fail as a matter of law. C. DNT’s Claims DNT seeks payment from Pro-Spec for the work DNT completed at the Project. The undisputed facts show that DNT provided all services and materials required of it under the November 20, 2015 Subcontract, and that there are no issues with any of DNT’s work. Moreover, it is undisputed that Pro-Spec has billed the Owner in full for DNT’s work. Notwithstanding these facts, Pro-Spec continues to wrongfully withhold payment from DNT. DNT is entitled to the payment of $337,750 for its unpaid requisitions.1 D. Requested Relief DNT hereby seeks an order dismissing all of Pro-Spec’s claims against DNT with prejudice. DNT also seeks an order entering judgment in DNT’s favor on Counts I and V of its Counterclaim against Pro-Spec. II. STATEMENT OF UNDISPUTED FACTS DNT hereby incorporates its Statement of Undisputed Material Facts, filed herewith, as if fully restated herein. III. APPLICABLE LEGAL PRINCIPLES A. Summary Judgment Standard Summary judgment is to be granted 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.” Fed. R. Civ. P. 1 Pursuant to the Pennsylvania Contractor and Subcontractor Payment Act, 73 P.S. §501 et seq., DNT is also entitled to interest, penalties, and attorney fees. DNT reserves all rights to prove entitlement and the amount of these statutory damages at trial. Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 3 of 25 4 56(C); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). “An issue is ‘genuine’ only if there is sufficient evidence on which a reasonable jury could find for the non-movant.” Kazar v. Slippery Rock Univ. of Pa., No. 16-2161, 2017 U.S. App. LEXIS 2581, at *9 (3d Cir. Feb. 14, 2017) (citations omitted). “[A] fact is ‘material’ if it ‘might affect the outcome of the suit under the governing law.’” Malibu Media, LLC v. Doe, 82 F. Supp. 3d 650, 652 (E.D. Pa. 2015) (citations omitted). “That is, ‘only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude’ summary judgment.” Malibu Media, 82 F. Supp. 3d at 652 (quoting Boyle v. County of Allegheny Pennsylvania, 139 F.3d 386, 393 (3d Cir. 1998)). B. Contract Formation under Pennsylvania Law Under Pennsylvania common law, formation of an enforceable contract requires an offer, consideration, and acceptance. Bilt-Rite Contractors, Inc. v. Patriot Roofing, Inc., 1999 WL 124465, at *4 (E.D. Pa. Mar. 4, 1999); Jenkins v. County of Schuylkill, 441 Pa. Super. 642, 658 A.2d 380, 383 (Pa.Super. 1995) (“It is black letter law that in order to form an enforceable contract, there must be an offer, acceptance, consideration or a mutual meeting of the minds.”) (citations omitted). Plaintiff bears the burden of proving each element by a preponderance of the evidence. Bilt-Rite Contractors, 1999 WL 124465, at *4; Viso v. Werner, 471 Pa. 42, 369 A.2d 1185, 1187 (Pa. 1977). Of particular relevance to this motion, an acceptance must be identical with the terms of the offer. See Hedden v. Lupinsky, 405 Pa. 609, 176 A.2d 406, 408 (Pa. 1962) (hereinafter “Hedden”) (“To constitute a contract, the acceptance of the offer must be absolute and identical to the terms of the offer.”) (citations omitted). “A reply to an offer, though purporting to accept it, which adds qualifications or requires performance of conditions, is not an acceptance but a Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 4 of 25 5 counteroffer.” Id. (citing 1 Restatement, Contracts, § 60 (1932)). Furthermore, a counteroffer operates as a rejection which terminates the original offer. Webb v. City of Philadelphia, 2000 WL 502711, at *2 n. 4 (E.D. Pa. Apr. 27, 2000) (citation omitted); see also Bair v. Purcell, 2007 WL 2219306, at *6 (M.D. Pa. Aug. 2, 2007) (counter-offer has effect of terminating original offer); Mazzella v. Koken, 559 Pa. 216, 739 A.2d 531, 536 (Pa. 1999) (same); Temple Univ. Hosp., Inc. v. Healthcare Mgmt. Alternatives, Inc., 764 A.2d 587, 593 (Pa. Super. Ct. 2000) (same). Stated differently, an acceptance must be unconditional and absolute, and so long as any condition is not agreed to by both parties, “the dealings are mere negotiations and may be terminated at any time by either party.” Alexanian v. Fidelity-Philadelphia Trust Co., 152 Pa. Super. 23, 30 A.2d 651, 652 (Pa. Super. 1943). Several cases have applied the foregoing principles of Pennsylvania law to the construction industry. In those cases, courts have held that when a subcontractor submits a proposal to a general contractor, the general contractor must accept the terms of the proposal without change in order to form a binding agreement. If the general contractor responds to the proposal by providing a subcontract document that differs in any way from the subcontractor’s proposal, the courts routinely find that the general contractor has not accepted the subcontractor’s offer, but instead provided a counteroffer. See Hedden, 405 Pa. at 612, 176 A.2d at 408; Spinola v. Kelley, 2016 WL 5172670, *4 (Pa. Comm. Ct. Sept. 21, 2016) (unpub’d); Neshaminy Constructors, Inc. v. Concrete Bldg. Sys., 2007 WL 2728870, *15 (E.D. Pa. Sept. 18, 2007); Bilt-Rite Contractors, 1999 WL 124465, at *5. In addition, Pennsylvania law is clear that the mere “submission of a bid by a subcontractor to a general contractor does not create a binding contract even if the bid is used by the general contractor in making its bid on the project.” Neshaminy Constructors, Inc. v. Concrete Bldg. Sys., 2007 WL 2728870, at *14. Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 5 of 25 6 In summary, “[a] meeting of the minds requires the concurrence of both parties to the agreement, or they have failed to execute an enforceable contract.” City of Erie v. Fraternal Order of Police, Lodge 7, 977 A.2d 3, 12 (Pa. Cmwlth. 2009) (citing Dep't of Transp. v. Pa. Indus. for Blind & Handicapped, 886 A.2d 706 (Pa. Cmwlth. 2005). “Further, there must be a meeting of the minds on all terms of the contract.” Id. C. Civil Conspiracy under Pennsylvania Law “The essential elements of a claim for civil conspiracy [under Pennsylvania law] are as follows: (1) a combination of two or more persons acting with a common purpose to do an unlawful act or to do a lawful act by unlawful means or for an unlawful purpose, (2) an overt act done in pursuance of the common purpose, and (3) actual legal damage.” Phillips v. Selig, 959 A.2d 420, 437 (Pa. Super. Ct. 2008) (citing Goldstein v. Phillip Morris, Inc., 854 A.2d 585, 590 (Pa. Super. 2004)). “It has long been the settled rule in this Commonwealth that proof of conspiracy must be made by full, clear and satisfactory evidence. The mere fact that two or more persons, each with the right to do a thing, happen to do that thing at the same time is not by itself an actionable conspiracy.” Id. (citations omitted). “In addition, ‘absent a civil cause of action for a particular act, there can be no cause of action for civil conspiracy to commit that act.’” Id. (citations omitted). Furthermore, the plaintiff must establish malice, i.e., that the alleged conspirators intended to injure the plaintiff. See, e.g., Barmasters Bartending School, Inc. v. Authentic Bartending School, Inc., 931 F.Supp 377, 387 (E.D. Pa. 1996). IV. ARGUMENT A. Pro-Spec’s breach of contract claims against DNT fail as a matter of law. 1. Any Pro-Spec claims allegedly arising before November 20, 2015 are invalid due to the absence of an enforceable agreement. Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 6 of 25 7 The undisputed facts show that there was no meeting of the minds between Pro-Spec and DNT until November 20, 2015. This is fatal to nearly all of Pro-Spec’s claims, simply because Pro-Spec concedes that its claims are based on DNT’s failure to perform until after that date. Simply put, Pro-Spec is suing DNT for failing to perform under a contract that did not yet exist, and Pro-Spec’s claims are therefore invalid as a matter of law. a. There was never a “meeting of the minds” between Pro-Spec and DNT before November 20, 2015. Pennsylvania law is clear that, absent a meeting of the minds, no enforceable contract can come into existence. More specifically, “[a] reply to an offer, though purporting to accept it, which adds qualifications or requires performance of conditions, is not an acceptance but a counteroffer.” Hedden, 405 Pa. at 612, 176 A.2d at 408. In addition, when a general contractor responds to a subcontractor’s proposal by providing a subcontract document that differs in any way from the subcontractor’s proposal, the general contractor has not accepted the subcontractor’s offer, but instead provided a counteroffer. See id.; see also Neshaminy Constructors, Inc. v. Concrete Bldg. Sys., 2007 WL 2728870, *15 (E.D. Pa. Sept. 18, 2007); Bilt-Rite Contractors, 1999 WL 124465, at *5 (citing Hedden). In this case, the record establishes that there was no meeting of the minds between Pro- Spec and DNT until November 20, 2015. As discussed in greater detail below, DNT sent Pro- Spec a proposal to perform the manhole work in January 2015. Even assuming that DNT’s Proposal constituted an “offer,”2 Pro-Spec’s response to the Proposal contained many terms that were either not included in DNT’s Proposal or were unambiguously contrary to the terms proposed by DNT. As such, Pro-Spec did not accept the Proposal, and no contract was formed at 2 DNT’s Proposal contained many provisions that were expressly subject to future negotiations. Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 7 of 25 8 that time. Furthermore, the parties continued to disagree regarding several terms until November 20, 2015, when DNT signed a mutually acceptable subcontract. (1) Pro-Spec did not accept DNT’s Proposal. On January 9, 2015, DNT sent Pro-Spec a Proposal (the “Proposal”) to perform the manhole work and other work required under Contract Item B6. App. at 96a - 99a. The Proposal included DNT’s exclusions and other material terms that DNT required to be included in any subcontract agreement. For example, the Proposal stated that “[a]ll licenses, permits, fees, etc. shall be paid for and obtained by the General Contractor.” The Proposal also required that the General Contractor (Pro-Spec) provide a dumpster for the disposal of construction waste. App. at 97a. Other material terms of the Proposal were: • “No provisions are included in our price for winter work or extreme cold-weather protection.” • “A condition of any agreement shall provide for DN Tanks being able to complete its work in one continuous operation without interference and/or interruptions.” • “DN Tanks billing breakdown shall be part of any agreement.” • The Proposal also stated as follows: Our prices are based on an award of the contract within 30 days after the general contractor has received an award from the owner, and/or the general contractor shall enter into a mutually agreeable contract with DN Tanks within 30 days after the general contractor has entered into a contract with the Owner. The subcontract form for any agreement shall be the Standard Form of Agreement between Contractor and Subcontractor, published by the American Institute of Architects’ most recent edition (AIA Document A401). • The Proposal also stated that “[a]ny additions, deletions, or changes to this proposal will subject our proposal price to change.” Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 8 of 25 9 App. at 97a - 99a. 3 On April 8, 2015, Pro-Spec sent a draft subcontract (the “First Proposed Subcontract”) to DNT.4 App. at 113a - 132a. Rather than unconditionally accepting the terms of the Proposal, the First Proposed Subcontract included many terms that contradicted or were in addition to the terms of DNT’s Proposal. App. at 113a - 132a. For example, although the Proposal expressly required the Contractor (Pro-Spec) to pay for and obtain all “licenses, permits, fees, etc.,” the First Proposed Subcontract stated that DNT would be required to “secure and pay for permits, fees, licenses and inspections…” App. at 118a. (§4.2.1). Other material differences between the Proposal and the First Proposed Subcontract include: • The First Proposed Subcontract did not exclude winter or cold weather work. See generally App. at 113a - 132a. • The First Proposed Subcontract did not state that DNT would be able to complete its work in one continuous operation without interference and/or interruptions. See generally App. at 113a - 132a. • The First Proposed Subcontract did not include a DNT billing breakdown. See generally App. at 113a - 132a. • The First Proposed Subcontract included an attached “Schedule A” that was not referenced in the Proposal. App. at 130a. • Schedule A to the First Proposed Subcontract required DNT to clean up and dispose of waste and did not indicate that the dumpster would be provided by Pro-Spec. App. at 130a. • The First Proposed Subcontract included an attached “Schedule B” that was not referenced in the Proposal. App. at 131a. 3 The Proposal also expressly contemplated that the parties would subsequently negotiate and enter into a final subcontract. See App. at 98a (“A condition of any agreement shall provide for DN Tanks being able to complete its work in one continuous operation …); App. at 98a (“DN Tanks billing breakdown shall be part of any agreement.”); App. at 98a (“Our prices are based on an award of the contract within 30 days after the general contractor has received an award from the owner, and/or the general contractor shall enter into a mutually agreeable contract …”); App. at 98a (“The subcontract form for any agreement shall be the Standard Form of Agreement between Contractor and Subcontractor…”). As such, the Proposal is more properly considered a nonbinding invitation to negotiate. 4 No one from Pro-Spec wrote to DNT and indicated that Pro-Spec accepted the Proposal. App. at 634a. Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 9 of 25 10 • Schedule B to the First Proposed Subcontract was a “preliminary schedule” that was expressly “subject to acceptance by the Owner.” App. at 131a. • Schedule B to the First Proposed Subcontract indicated that manhole installation would begin on June 2, 2015 and end on August 10, 2015. App. at 131a. • The First Proposed Subcontract included an attached “Schedule C” that was not referenced in the Proposal. App. at 132a. • Schedule C to the First Proposed Subcontract listed certain insurance requirements that were “supplementary to the requirements listed in the prime contract.” App. at 132a. • The First Proposed Subcontract did not incorporate DNT’s Proposal. See generally App. at 113a - 132a. It is therefore clear that Pro-Spec did not provide an acceptance of DNT’s Proposal that was “absolute and identical to the terms” of the Proposal. See Hedden, 405 Pa. at 612, 176 A.2d at 408. Indeed, during discovery Pro-Spec has clearly indicated that it did not assent to the terms of the Proposal. App. at 104a. (indicating that the Proposal “improperly excludes terms and conditions required by subcontractors and lower tier suppliers.”). Accordingly, the First Proposed Subcontract was a rejection of the Proposal and a counteroffer. No binding agreement was formed. See Hedden; see also Spinola v. Kelley, 2016 WL 5172670, *4 (Pa. Comm. Ct. Sept. 21, 2016) (unpub’d) (“Rather than assenting to the terms of Appellant’s latest proposed agreement, Kelley’s July 21, 2013 email proposed substantially different terms and thus is more properly considered a counter-offer than an acceptance.”); Neshaminy Constructors, Inc. v. Concrete Bldg. Sys., 2007 WL 2728870, *15 (E.D. Pa. Sept. 18, 2007) (“Here, no contract was formed between the parties. The parties exchanged a series of offers and counter-offers. Each counter-offer served to reject any outstanding offer. Plaintiff’s claim for breach of contract must fail.”); Bilt-Rite Contractors, 1999 WL 124465, at *5 (recognizing that “because the proposed subcontract’s terms were different from Patriot’s November 15, 1996 proposal, the subcontract … constituted a counter-offer”) (citing Hedden). Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 10 of 25 11 (2) The parties continued to disagree regarding the subcontract terms until November 20, 2015. On April 29, 2015, DNT rejected the First Proposed Subcontract and returned it with revisions to Pro-Spec.5 App. at 133a - 158a. Among other things, DNT required that the First Proposed Subcontract be modified to include a revised schedule for performing the manhole work. DNT also required that the subcontract document incorporate the Proposal by reference. App. at 151a, 156a. Pro-Spec refused to incorporate DNT’s Proposal by reference. App. at 168a, 192a, 196a, 200a, 201a, 203a. Indeed, Ronald Yarbrough, Pro-Spec’s President and founder, testified that DNT’s request to incorporate DNT’s Proposal was a “deal breaker.” App. at 168a. (“The No. 1 deal breaker, as I recall, after it was all said and done was that DN Tanks really wanted a reference to their subcontract proposal … We would never permit a reference to a subcontract or a proposal to that subcontract.”).6 Accordingly, it is clear that the parties never agreed to the terms of the First Proposed Subcontract. App. at 171a, 197a. (Q: “So you sent the standard form subcontract, and the problem was that DNT wouldn’t agree to the standard form subcontract?” A: “Exactly.”). Despite the clear disagreement regarding the terms of any subcontract, on April 30, 2015, Pro-Spec requested design submittals from DNT. App. at 232a. DNT responded to Pro-Spec’s April 30, 2015 request by advising Pro-Spec that no subcontract was in place between the 5 Pro-Spec admits that on April 29, 2015 DNT returned the April 8, 2016 Proposed Subcontract “with proposed modifications.” App. at 105a. 6 Internally, Pro-Spec also acknowledged that it would not include DNT’s Proposal. On May 8, 2015, Mr. Yarbrough confirmed to Pro-Spec’s Robert Hughes that Pro-Spec “[would] not agree to be bound by the DN Proposal.” App. at 242a. Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 11 of 25 12 parties. App. at 233a. (“DN Tanks does not have a contract with Pro-Spec at this time. Until a contract is executed between DN Tanks and Pro-Spec submittals will not be provided.”)7 Ignoring DNT’s admonition that there was no subcontract between DNT and Pro-Spec, on May 5, 2015, Pro-Spec sent DNT a purported Letter of Intent (“LOI”) and again requested design submittals. App. at 234a - 237a. Pro-Spec’s cover email enclosing the May 5, 2015 LOI stated that “issue[s] related to the Subcontract will proceed but should not delay the non-site work.” App. at 234a. During his deposition, Mr. Yarbrough acknowledged that aspects of the subcontract were still being negotiated as of May 5, 2015, the day he sent the LOI. App. at 196a. In addition, Pro-Spec’s purported LOI indicated that no formal subcontract was yet in place. App. at 236a. (“Pro-Spec will issue a formal subcontract…”) (emphasis added). Furthermore, Pro-Spec’s purported LOI did not include all of DNT’s required terms. App. at 234a - 237a. For example, Pro-Spec’s May 5 LOI required that DNT dispose of waste, rather than Pro-Spec, and also failed to incorporate DNT’s Proposal by reference. App. at 234a - 237a. Accordingly, DNT rejected Pro-Spec’s LOI and returned a marked-up copy of the same. App. at 238a - 241a. By letter dated May 11, 2015, Pro-Spec rejected DNT’s markups to the LOI. App. at 245a, 196a. (“Pro-Spec will not agree to any changes to the Letter of Intent”). In Pro-Spec’s May 11, 2015 letter, Mr. Yarbrough acknowledged that no agreement had yet been reached. (“I trust that an amicable subcontract will include any concerns of both parties and an amicable subcontract will be agreed to.”) (emphasis added). App. at 245a. 7 In its responses to DNT’s request for admissions, Pro-Spec has stated the following regarding DNT’s April 30, 2015 email: “Admitted in part that ‘DN Tanks does not have a contract with Pro-Spec Painting at this time.’ Denied that no subcontract is in place and ‘it would be prudent to review our subcontract, make the necessary revisions and send us a copy to execute.’” App. at 105a. Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 12 of 25 13 On May 19, 2015, DNT requested an update due to the continued disagreement regarding the terms of a subcontract and the LOI. App. at 246a. DNT also inquired whether Pro-Spec would send a revised LOI soon. App. at 246a. On June 18, 2015, Pro-Spec acknowledged that it had not received an executed subcontract from DNT. App. at 249a. DNT responded the next day. In its response, DNT again reminded Pro-Spec that no agreement was in place (“Once the subcontract comments are discussed and settled we will be happy to execute it.”). App. at 251a. DNT also indicated that the delayed start date would push DNT’s work into cold weather and that Pro-Spec would need to make provisions to protect DNT’s work. App. at 251a. On July 1, 2015, DNT received a revised subcontract agreement from Pro-Spec. App. at 253a - 273a. Pro-Spec’s July 1, 2015 proposed agreement again failed to address many of DNT’s concerns and failed to incorporate several of DNT’s material terms, including DNT’s Proposal and DNT’s schedule. App. at 274a - 296a. Accordingly, DNT rejected the July 1, 2015 proposed agreement and returned a list of those material terms to Pro-Spec on July 15, 2015. App. at 274a - 296a, 199a - 200a. Among the terms that the parties continued to disagree on as of July 15, 2015 were: • Pro-Spec had not agreed to exempt DNT from providing “permits, fees and inspections”; • Pro-Spec had not updated the schedule to match DNT’s most recent schedule; • Pro-Spec had not incorporated DNT’s Proposal by reference; • Pro-Spec had not incorporated DNT’s most recent schedule by reference; and • Pro-Spec had not indicated that it would bear the costs associated with protection of winter work. App. at 274a. Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 13 of 25 14 On July 23, 2015, Pro-Spec sent DNT another proposed subcontract. App. at 297a - 316a. The cover letter to this proposed agreement reiterated that Pro-Spec would not include DNT’s Proposal as part of any subcontract. App. at 297a, 201a. On July 27, 2015, DNT rejected this latest proposed subcontract document because it did not include DNT’s required revisions. App. at 342a - 346a. (“I am sorry but the subcontract agreement revised 7-20-158 is not acceptable.”). DNT again requested certain revisions to the document, including a new schedule for the manhole work. App. at 342a - 346a. As confirmed during the Pro-Spec corporate deposition, Pro-Spec found DNT’s proposed schedule unacceptable. App. at 202a. (“I’m not going to agree to a subcontractor with hard dates that they’re proposing in a subcontract”) (discussing Deposition Ex. 23). Although the Parties continued to disagree on the terms of a subcontract, on July 28, 2015, Pro-Spec purported to send DNT a Notice to Proceed. App. at 347a - 348a. DNT responded that day by reminding Pro-Spec that DNT did not have an executed subcontract. App. at 349a. Pro-Spec has admitted that DNT had not signed a subcontract as of July 31, 2015. App. at 203a. Frustrated that DNT refused to sign a subcontract until Pro-Spec agreed to DNT’s revisions, in August 2015 Pro-Spec purported to “terminate” the many proposed subcontracts that Pro-Spec had sent to DNT in spring and summer 2015. App. at 352a. Pro-Spec then turned to another contractor, Preload Inc. (“Preload”), in an effort to subcontract the manhole work. App. at 205a. Importantly, in explaining to CWA the decision to approach Preload, Mr. Yarbrough admitted that Pro-Spec had been unable to reach an agreement with DNT. App. at 8 The cover letter is dated July 20, 2015. It is unclear why Pro-Spec waited until July 23 to send the letter and proposed subcontract. Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 14 of 25 15 350a. (“I know DN is working with Chester and you probably have a great relation [sic] with them but we just couldn’t get a fair agreement with them as a Subcontractor.”) (emphasis added). Negotiations with Preload ultimately fell through. Among other reasons, Preload was unwilling to sign a Pro-Spec’s proposed subcontract because Pro-Spec refused to include key components of Preload’s proposal. App. at 360a. Having been rebuffed by Preload, in October 2015 Pro-Spec again approached DNT, and on October 27, 2015, DNT and Pro-Spec attended a Project meeting. App. at 637a. During this meeting, CWA, Pro-Spec and DNT discussed the subcontract revisions that DNT required. App. at 637a. After several more discussions and revisions, Pro-Spec ultimately made the necessary changes to the subcontract on or about November 20, 2015. App. at 389a - 409a, 637a. DNT signed the November 20, 2015 Subcontract and emailed a copy of the same to Pro-Spec on November 24, 2015. App. at 637a, 389a - 409a. The record is therefore clear that no agreement was reached until November 20, 2015. The November 20, 2015 Subcontract is the only subcontract signed by DNT concerning the Project (App. at 170a), and the parties’ correspondence before that date constituted nothing more than prolonged negotiations. DNT never performed any work or provided any deliverables to Pro-Spec before the agreement was signed on November 20, 2015. App. at 637a. DNT and Pro- Spec had never worked together before and there was no “course of dealing” between the parties before this Project. App. at 637a. Moreover, Pro-Spec admits that it did not have a fully executed subcontract with DNT until “some time in November 2015.” App. at 439a. Consequently, any claims based on DNT’s alleged nonperformance before November 20, 2015 are legally unsupportable. See, e.g., Bilt-Rite Contractors, 1999 WL 124465, at *7 (entering Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 15 of 25 16 judgment in favor of subcontractor on general contractor’s claims because “no binding subcontract existed” between the parties). b. The vast majority of Pro-Spec’s claims are legally invalid because they concern DNT’s refusal to perform any work before a binding agreement was formed. The absence of an enforceable agreement until November 20, 2015 is fatal to nearly all of Pro-Spec’s claims because these claims are based on DNT’s refusal to perform any work before that date. (1) General allegations of breach of contract and conspiracy. Pro-Spec’s Complaint contains two counts against DNT: (1) breach of contract (Count III), and (2) civil conspiracy (Count IV). App. at 7a - 8a. Both counts are based on delays allegedly caused by DNT’s refusal to execute a subcontract until November 2015. App. at 7a - 8a, 170a, 172a - 173a, 176a. Pro-Spec’s allegations are legally unsupportable, however, simply because no binding contractual obligations existed until November 2015. Stated differently, because DNT was not obligated to perform any work until after November 20, 2015, Pro-Spec’s claims fail as a matter of law. See, e.g., Hedden, supra (recognizing that there is no breach of contract without an enforceable agreement); Phillips v. Selig, supra (conspiracy count invalid if not predicated upon unlawful act). (2) Specific claims for damages. Pro-Spec also claims that DNT is liable for several specific categories of delay damages. Nearly all of these claims are based DNT’s refusal to perform any work until the parties agreed to the November 20, 2015 Subcontract. Again, however, DNT was under no obligation to begin working before November 20, 2015, and these claims fail as a matter of law: Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 16 of 25 17 Field supervision. Pro-Spec claims $138,300 in additional field supervision costs. App. at 526a. Pro-Spec admits that its claim in this regard is based on the fact that DNT did not perform any work at the Project until after November 20, 2015. App. at 177a. Hotel and expenses. Pro-Spec claims $24,460 in alleged Pro-Spec hotel expenses. App. at 526a. Pro-Spec concedes that this claim is based on DNT’s refusal to perform any work at the Project until after November 20, 2015. App. at 179a. Truck expenses. Pro-Spec claims that DNT is responsible for $16,800 in Pro-Spec truck expenses. App. at 526a. Pro-Spec acknowledges that this claim is based on DNT’s refusal to work until after November 20, 2015. App. at 180a. Cleaning and pumping winter work. According to Pro-Spec, DNT is responsible for $33,750 in costs associated with cleaning and pumping during winter. App. at 526a. Pro-Spec admits that this claim is based on the fact that DNT did not sign a subcontract until November 2015. App. at 181a, 503a. Demobilization/Remobilization. Pro-Spec asserts that DNT is responsible for $40,000 in costs associated with demobilizing from the site in July 2015 and remobilizing in March 2016. App. at 526a. According to Pro-Spec, DNT is liable for these costs because DNT did not perform any work at the Project until after November 20, 2015. App. at 184a. Contractor equipment. Pro-Spec claims $105,000 in additional equipment costs. App. at 526a. Pro-Spec concedes that this claim is predicated on the fact that DNT did not perform any work at the Project until after November 20, 2015. App. at 184a - 185a. Indirect costs. Pro-Spec also asserts that DNT is responsible for $101,446 in Pro-Spec “indirect” costs. App. at 526a. Again, Pro-Spec’s claim in this regard is unsupportable because Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 17 of 25 18 it is based on the fact that DNT did not perform any work at the Project until after November 20, 2015. App. at 185a - 186a. Liquidated damages. Pro-Spec believes that DNT is responsible for $437,500 in liquidated damages assessed by the Owner due to delayed performance. App. at 526a. As with the other claims discussed above, this claim is based on the fact that DNT did not perform any work at the Project until after November 20, 2015. App. at 186a.9 (3) Summary of Pro-Spec breach claims allegedly arising before November 20, 2015. The aforementioned claims are based on a legally untenable premise: i.e., that DNT is liable for failing to perform under a subcontract that did not yet exist. No enforceable subcontract was formed until November 20, 2015. DNT was under no legal obligation to perform any work until that date. Because the Pro-Spec claims discussed above are entirely based on DNT’s refusal to perform until after November 20, 2015, those claims are invalid as a matter of law. 2. Pro-Spec’s other breach claims are also legally deficient. Pro-Spec’s claim includes two other items of damages that are legally unsupportable. First, Pro-Spec has asserted a claim for $100,000 against DNT for allegedly failing to provide a design submittal for the manhole work, which Pro-Spec would then provide to the Owner. App. at 526a. This claim is unsupportable simply because the necessary design was provided to the Owner based on a previous manhole project that DNT had performed. App. at 619a. David Averso, the Project Manager for the Owner’s representative, has confirmed that the required design submittal was identical to a design for manhole work performed by DNT on a separate 9 Pro-Spec’s claim for liquidated damages is also invalid because the November 20, 2015 Subcontract does not provide for the assessment of liquidated damages. App. at 399a. Furthermore, a portion of Pro-Spec’s liquidated damages claim against DNT concerns a period before the Project was required to have been complete. Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 18 of 25 19 CWA tank. App. at 618a - 619a. Mr. Averso uploaded the required design submittal based on the previous identical design. App. at 619a - 620a; 630a - 631a. As such, CWA received the exact design submittal it needed, and Pro-Spec’s claims in this regard are utterly meritless. Furthermore, neither the termination notice to Pro-Spec nor any of the documents referenced in the termination notice indicate that the termination concerned a lack of a manhole design. App. at 497a, 516a - 523a. Pro-Spec admits that CWA never complained to Pro-Spec about the lack of a design. App. at 174a - 175a. Pro-Spec further admits that CWA has never asked for a credit from Pro-Spec regarding the allegedly missing design, nor has CWA issued a deductive change order based on the alleged lack of a design. App. at 187a. Most importantly, Pro-Spec has not incurred any legally cognizable costs due to the alleged lack of a design. App. at 187a. Without any damages, this claim fails as a matter of law. See Parexel Int’l Corp. v. Feliciano, 2008 WL 2704569, *7 (E.D. Pa. July 3, 2008) (granting summary judgment where plaintiff was unable to prove damages); Arrowroot Natural Pharmacy v. Standard Homeopathic Co., 1998 WL 57512, *12 (E.D. Pa. Feb. 10, 1998) (refusing to award plaintiff damages in excess of defendant’s offered amount because plaintiffs “failed to meet their burden of proving damages”). Second, Pro-Spec has asserted that DNT is responsible for $12,996 in costs associated with a “flood” at one of the tanks. App. at 526a. According to the record, Pro-Spec asserts that DNT caused this flood event on April 7, 2016. App. at 529a. However, Pro-Spec also asserts that CWA had previously caused a separate flood, and the only documents that arguably support flood cleanup costs concern work performed before April 7, 2016. App. at 532a - 539a. DNT consequently cannot be responsible for those costs. As such, Pro-Spec cannot prove the amount Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 19 of 25 20 of any alleged flood damages caused by DNT, and this claim fails as a matter of law. See Parexel Int’l Corp., 2008 WL 2704569, *7; Arrowroot Natural Pharmacy, 1998 WL 57512, *12. B. Pro-Spec cannot establish the elements of its civil conspiracy count. In order to prove the existence of an actionable civil conspiracy under Pennsylvania law, the plaintiff must prove: (1) a combination of two or more persons acting with a common purpose to do an unlawful act (or to do a lawful act by unlawful means or for an unlawful purpose), (2) an overt act done in pursuance of the common purpose, and (3) actual legal damage. Phillips v. Selig, 959 A.2d 420, 437 (Pa. Super. Ct. 2008) (citing Goldstein v. Phillip Morris, Inc., 854 A.2d 585, 590 (Pa. Super. 2004)). Furthermore, the plaintiff must establish malice, i.e., that the alleged conspirators intended to injure the plaintiff. See, e.g., Barmasters Bartending School, Inc. v. Authentic Bartending School, Inc., 931 F.Supp 377, 387 (E.D. Pa. 1996). Pro-Spec generally alleges that DNT and CWA conspired to cause delays to the Project. App. at 7a - 8a. According to Pro-Spec, DNT and CWA caused these delays for the purpose of causing Pro-Spec’s contract to be terminated so that DNT could then complete the work. App. at 7a - 8a. However, Pro-Spec’s claims fail as a matter of law because Pro-Spec cannot show that DNT and CWA acted “with a common purpose” to perform any unlawful acts or lawful acts by unlawful means. In addition, Pro-Spec cannot establish any specific overt act performed in furtherance of the alleged conspiracy. Finally, Pro-Spec cannot establish malice, i.e., intent to injure. First, Pro-Spec cannot show that DNT and CWA agreed to perform any unlawful acts (or lawful acts by unlawful means). According to Pro-Spec, the only specific act taken by DNT in furtherance of the conspiracy was DNT refusing to perform its work until a subcontract was Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 20 of 25 21 signed in November 2015. App. at 172a - 173a. As discussed above, DNT had no obligation to perform any work until after the November 20, 2015 Subcontract was signed. Consequently, there was nothing unlawful about DNT’s refusal to start work before then, and Pro-Spec’s conspiracy claim fails for this reason alone. See generally Phillips v. Selig, supra (no conspiracy without unlawful act). Second, Pro-Spec cannot show any overt acts in furtherance of the alleged conspiracy, nor can Pro-Spec show malice, i.e., intent to harm Pro-Spec. Mr. Yarbrough was asked repeatedly to identify the specific acts taken by DNT in concert with CWA for the purposes of harming Pro-Spec. His responses are best exemplified by the exchange below: Q. What specifically did DN Tanks do together with the Owner to harm Pro-Spec? * * * A. Well, I’m not in the room, but I heard a saying one time, if it walks like a duck, and quacks like a duck, it must be a duck. App. at 172a. Mr. Yarbrough also conceded that he has no evidence in support of Pro-Spec’s conspiracy claim. During his deposition, Mr. Yarbrough was asked to identify any documents or conversations in support of his contention that DNT and CWA worked together to harm Pro- Spec: Q. Did you see any documents that said DN Tanks and the Water Authority are working together to harm Pro-Spec? A. Did I see - no, I didn’t see a document. App. at 172a. Q. Any conversations? Did you ever talk with someone at the Water Authority or at DN Tanks that led you to believe yeah, they’re working together to harm my company? Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 21 of 25 22 A. The Water Authority would never speak. The Water Authority at their meetings would be silent and they would only speak through their engineer. Another issue why it stunk. App. at 173a. Indeed, Mr. Yarbrough essentially acknowledged that Pro-Spec’s conspiracy count is based on nothing more than his subjective belief that something was amiss: Q. Okay. So no documents and no conversations, right? Mr. Landes: Objection. A. Again, I don’t have a document that is a specific criminal conspiracy document that I can point to, but I have the belief that DN Tanks and Chester Water Authority did conspire together to have DN Tanks on the job and have Pro-Spec terminated. I don’t have a specific criminal document. App. at 173a. Based on the above, it is clear that Pro-Spec’s conspiracy claim rests entirely upon a foundation of pure speculation. Pro-Spec cannot identify any agreement between DNT and CWA to perform unlawful acts (or lawful acts by unlawful means). Pro-Spec cannot identify any overt acts taken in furtherance of the alleged conspiracy (other than DNT refusing to perform without a subcontract, which it was legally entitled to do), nor can Pro-Spec prove malice. Finally, Pro-Spec admits that it has no evidence in support of its conspiracy claim. Pro- Spec’s conspiracy claim fails as a matter of law. See Rutherford v. Presbyterian-University Hosp., 417 Pa. Super. 316, 334, 612 A.2d 500, 509 (1992) (dismissing conspiracy counts where, inter alia, there was neither an unlawful act nor any showing of malice); see also Phillips v. Selig, 959 A.2d 420, 437 (“It has long been the settled rule in this Commonwealth that proof of conspiracy must be made by full, clear and satisfactory evidence.”) (citations omitted). C. The undisputed facts show that DNT’s claims are valid and should be paid. Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 22 of 25 23 The undisputed facts show that DNT is entitled to payment on its claims against Pro- Spec. DNT fully performed its work at the Project. Despite this fact, Pro-Spec has wrongfully withheld payment in the amount of $337,750. 1. DNT fully performed its obligations under the November 20, 2015 Subcontract. The record establishes that DNT fully performed all of its obligations in accordance with the November 20, 2015 Subcontract.10 After signing, DNT immediately began its work by mobilizing on November 30, 2015. App. at 637a. After demobilizing for the winter (as agreed in the Subcontract), DNT remobilized on March 14, 2016 and completed the work on April 13, 2016. App. at 637a, 515a. Pro-Spec concedes that DNT performed its work in accordance with the November 20, 2015 Subcontract schedule. App. at 505a.11 Furthermore, DNT’s complete and satisfactory performance is independently established by two additional factors: (1) Pro-Spec billed CWA for 100% of DNT’s work, and (2) CWA approved Pro-Spec to bill for 100% of DNT’s work. a. Pro-Spec billed for 100% of DNT’s work. Contemporaneously, Pro-Spec acknowledged that DNT had completed its work by certifying to CWA that DNT’s work was 100% complete. On or about June 23, 2016, Pro-Spec submitted its Payment Application No. 11. App. at 550a - 552a. Payment Application No. 11 showed that Line Item B6 - which corresponded to DNT’s work - was 100% complete. App. at 551a. Mr. Yarbrough conceded that by signing Payment Application No. 11, he was certifying 10 Pro-Spec does not dispute that the November 20, 2015 agreement is valid. 11 According to Pro-Spec, the only aspect of DNT’s work that DNT failed to provide is the design submittal for the manholes. App. at 526a. However, as discussed above, the record shows that the Owner received an acceptable design submittal. Moreover, the Owner never complained about the lack of design, nor has the Owner asserted any backcharge or requested any credit from Pro-Spec of the design. Finally, Pro-Spec has incurred no damages concerning this issue (nor can it in light of the Owner’s acceptance of the design documents uploaded by Gannett Fleming). Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 23 of 25 24 to the Owner that the work for Item B6 was 100% complete, and Pro-Spec billed CWA accordingly. App. at 189a, 495a. b. The Owner has approved 100% of DNT’s work. David Averso of Gannett Fleming reviewed Pro-Spec’s payment applications. App. at 620a. Mr. Averso authorized Pro-Spec to bill for 100% of DNT’s work (Item B6). App. at 620a. (Averso Dec). Mr. Averso has acknowledged that DNT satisfactorily completed all of its work at under Item B6. App. at 620a.12 2. Pro-Spec has breached the November 20, 2015 Subcontract by refusing to pay $337,750 for work performed. Despite billing for 100% of DNT’s work, Pro-Spec admits that it has refused to pay DNT $337,750. App. at 541a. Breach (nonpayment) and damages ($337,750) are therefore clear. 3. Pro-Spec’s claims for setoff are invalid. Pro-Spec concedes that it has refused to pay DNT $337,750. Pro-Spec claims that its withholding is justified based on its claims against DNT. As set forth above, however, Pro- Spec’s claims are unsupportable as a matter of law, and Pro-Spec’s withholding of this money is therefore unjustified. V. CONCLUSION For the foregoing reasons, DNT respectfully requests that this Court enter an Order dismissing all of Pro-Spec’s claims against DNT with prejudice. DNT also respectfully requests an Order entering judgment in DNT’s favor on Counts I and V of its Counterclaim against Pro- Spec, with the amount of interest, penalties, and attorney fees under CASPA (if any) to be determined at trial. 12 In his declaration, Mr. Averso described Pro-Spec Payment Application No. 10. The percentage complete for Item B6 remained 100% from Payment Application 10 to Application No. 11. Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 24 of 25 25 Respectfully submitted on May 24, 2017. By: FLASTER/GREENBERG P.C. /s/ Harry J. Giacometti Harry J. Giacometti, Esq. 1835 Market Street, Suite 1050 Philadelphia, PA 19103 Phone: (215) 587-5680 harry.giacometti@flastergreenberg.com HINCKLEY, ALLEN & SNYDER LLP /s/ Kirk J. McCormick Kirk J. McCormick, Esq. (pro hac vice) Chad L. Hershman, Esq. (pro hac vice) 28 State Street, 29th Floor Boston, MA 02190 Phone: (617) 345-9000 kmccormick@hinckleyallen.com chershman@hinckleyallen.com CERTIFICATE OF SERVICE The undersigned hereby certifies that on May 24, 2017, a true and correct copy of the foregoing pleading was served on all counsel for all parties of record receiving notice by electronic means via the Electronic Case Filing System (“ECF”) as reflected on the Notice of Electronic filing. /s/ Chad L. Hershman #56829580 Case 2:16-cv-04728-MAK Document 53-1 Filed 05/24/17 Page 25 of 25 1 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA PRO-SPEC CORPORATION T/D/B/A : PRO-SPEC INDUSTRIAL PAINTING SERVICES : Plaintiff : : v. : Docket No. 2:16cv4728-MAK : CHESTER WATER AUTHORITY and DN TANKS : Defendants : : DN TANKS : Third-Party Plaintiff : : v. : : INTERNATIONAL FIDELITY : INSURANCE COMPANY : Third-Party Defendant : : DN TANKS’ STATEMENT OF UNDISPUTED MATERIAL FACTS IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT DN Tanks (“DNT”), in accordance with Local Rule 56.1 of the Local Rules of the United States District Court for Eastern District of Pennsylvania, hereby sets forth the following Undisputed Material Facts in Support of its Motion for Summary Judgment. 1. On or about March 16, 2015, Pro-Spec Corporation T/D/B/A Pro-Spec Industrial Painting Services (“Pro-Spec”) and the Chester Water Authority (“CWA” or the “Owner”) entered into a contract (the “Pro-Spec Contract” or the “Contract”) for work at the Rehabilitation of the Village Green Tanks No. 2 and No. 9, CWA Contract No. 14-030 (the “Project”). App. at 3a (Pro-Spec Complaint, Doc. No. 1, ¶ 15). 2. International Fidelity Insurance Company (“IFIC”) issued performance and payment bonds on Pro-Spec’s behalf. App. at 68a - 72a (DNT Third-Party Complaint, Doc. No. 11, Ex. A). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 1 of 25 2 3. The Contract required, among other things, the coring and installation of two manholes in one of the large water storage tanks at the Project. App. at 3a (Pro-Spec Complaint, Doc. No. 1, ¶ 14). 4. The Contract set forth certain line items for individual portions of the work. App. at 634a (Pappo Dec. ¶ 7). 5. The coring and installation of the manholes was encompassed in Contract Item B6. App. at 634a (Pappo Dec. ¶ 8). DNT and Pro-Spec did not enter into a Binding Subcontract until November 2015 6. On January 9, 2015, DNT sent a proposal (the “Proposal”) to Pro-Spec. Under DNT’s Proposal, DNT would core and install the manholes and other work included in Contract Item B6. App. at 96a - 99a (Yarbrough Dep. Ex. 9). 7. The Proposal included DNT’s scope of work, exclusions, and other material terms. App. at 96a - 99a (Yarbrough Dep. Ex. 9). 8. For example, the Proposal stated that “[t]he General Contractor shall be responsible for removing from the site approximately 5 cubic yards of concrete rubble from chipping and shotcrete operations. DN Tanks shall be responsible for cleanup and trash removal resulting from our work to a dumpster provided by the General Contractor.” (emphasis added). App. at 97a (Yarbrough Dep. Ex. 9). 9. The Proposal stated that “[a]ll licenses, permits, fees, etc. shall be paid for and obtained by the General Contractor.” App. at 97a (Yarbrough Dep. Ex. 9). 10. The Proposal stated that “[n]o provisions are included in our price for winter work or extreme cold-weather protection.” App. at 97a (Yarbrough Dep. Ex. 9). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 2 of 25 3 11. The Proposal also stated that “[a] condition of any agreement shall provide for DN Tanks being able to complete its work in one continuous operation without interference and/or interruptions.” App. at 98a (Yarbrough Dep. Ex. 9). 12. The Proposal stated that “DN Tanks will not be liable for any penalties or liquidated damages.” App. at 98a (Yarbrough Dep. Ex. 9). 13. The Proposal stated that “DN Tanks billing breakdown shall be part of any agreement.” App. at 98a (Yarbrough Dep. Ex. 9). 14. The Proposal also stated as follows: Our prices are based on an award of the contract within 30 days after the general contractor has received an award from the owner, and/or the general contractor shall enter into a mutually agreeable contract with DN Tanks within 30 days after the general contractor has entered into a contract with the Owner. The subcontract form for any agreement shall be the Standard Form of Agreement between Contractor and Subcontractor, published by the American Institute of Architects’ most recent edition (AIA Document A401). App. at 98a (Yarbrough Dep. Ex. 9). 15. The Proposal also stated that “[a]ny additions, deletions, or changes to this proposal will subject our proposal price to change.” App. at 99a (Yarbrough Dep. Ex. 9). 16. Pro-Spec has averred that the Proposal “improperly excludes terms and conditions required by subcontractors and lower tier suppliers.” App. at 104a (Pro-Spec Responses to DNT Requests for Admission (“RFA Responses”), Response No. 5 [Yarbrough Dep. Ex. 4]). 17. On April 8, 2015, Pro-Spec sent a draft subcontract (the “First Proposed Subcontract”) to DNT. App. at 113a - 132a (Yarbrough Dep. Ex. 10). 18. Between January 9, 2015 and April 8, 2015, no one from Pro-Spec wrote to DNT to indicate that Pro-Spec accepted DNT’s Proposal or was using the Proposal in Pro-Spec’s bid to the Owner. App. at 634a (Pappo Dec. ¶ 12). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 3 of 25 4 19. The First Proposed Subcontract included many terms that contradicted or were in addition to the terms of DNT’s Proposal. App. at 113a - 132a (Yarbrough Dep. Ex. 10). 20. For example, the First Proposed Subcontract stated that DNT would be required to “secure and pay for permits, fees, licenses and inspections…” App. at 118a (Yarbrough Dep. Ex. 10) (§ 4.2.1). 21. The First Proposed Subcontract did not exclude winter or cold weather work. App. at 113a - 132a (Yarbrough Dep. Ex. 10). 22. The First Proposed Subcontract did not state that DNT would be able to complete its work in one continuous operation without interference and/or interruptions. App. at 113a - 132a (Yarbrough Dep. Ex. 10). 23. The First Proposed Subcontract did not include a DNT billing breakdown. App. at 113a - 132a (Yarbrough Dep. Ex. 10). 24. The First Proposed Subcontract included an attached “Schedule A” that was not referenced in the Proposal. App. at 130a (Yarbrough Dep. Ex. 10). 25. Schedule A to the First Proposed Subcontract required DNT to clean up and dispose of waste and did not indicate that the dumpster would be provided by Pro-Spec. App. at 130a (Yarbrough Dep. Ex. 10). 26. The First Proposed Subcontract included an attached “Schedule B” that was not referenced in the Proposal. App. at 131a (Yarbrough Dep. Ex. 10). 27. Schedule B to the First Proposed Subcontract was a “preliminary schedule” that was expressly “subject to acceptance by the Owner.” App. at 131a (Yarbrough Dep. Ex. 10). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 4 of 25 5 28. Schedule B to the First Proposed Subcontract indicated that manhole installation would begin on June 2, 2015 and end on August 10, 2015. App. at 131a (Yarbrough Dep. Ex. 10). 29. The First Proposed Subcontract included an attached “Schedule C” that was not referenced in the Proposal. App. at 132a (Yarbrough Dep. Ex. 10). 30. Schedule C to the First Proposed Subcontract listed certain insurance requirements that were “supplementary to the requirements listed in the prime contract.” App. at 132a (Yarbrough Dep. Ex. 10). 31. The First Proposed Subcontract did not incorporate DNT’s Proposal. App. at 113a - 132a (Yarbrough Dep. Ex. 10). 32. DNT rejected the First Proposed Subcontract and returned it with revisions to Pro- Spec on April 29, 2015. App. at 133a - 158a (Yarbrough Dep. Ex. 11). 33. Pro-Spec admits that on April 29, 2015 DNT returned the First Proposed Subcontract “with proposed modifications.” App. at 105a (Pro-Spec RFA Responses, Response No. 9 [Yarbrough Dep. Ex. 4]). 34. Among the revisions demanded by DNT in its April 29, 2015 Revisions were (a) inclusion of a modified schedule for performing the manhole work, and (b) incorporation of DNT’s Proposal by reference. App. at 151a, 156a (Yarbrough Dep. Ex. 11). 35. Regarding the schedule for the manhole work, DNT’s April 29, 2015 Revisions indicated that manhole installation would begin on September 17, 2015 and end on November 11, 2015, roughly three and a half months later than contemplated by the First Proposed Subcontract. App. at 156a - 157a (Yarbrough Dep. Ex. 11). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 5 of 25 6 36. Regarding incorporation of DNT’s Proposal, Pro-Spec has made clear that it would never incorporate DNT’s proposal into a subcontract. App. at 168a, 192a, 196a, 200a, 201a, 203a (4/18/17 Yarbrough Dep. Tr., p. 34:20 - p. 36:13; p. 133:6-12; p. 146:12-15; p. 164:15-24; p. 166:9-22; p. 174: 3-19). 37. Mr. Yarbrough has testified that DNT’s request to incorporate DNT’s Proposal into a subcontract was a “deal breaker.” App. at 168a (4/18/17 Yarbrough Dep. Tr., p. 34:20 - p. 35:2 (“The No. 1 deal breaker, as I recall, after it was all said and done was that DN Tanks really wanted a reference to their subcontract proposal … We would never permit a reference to a subcontract or a proposal to that subcontract.”). 38. Ron Yarbrough is Pro-Spec’s founder and President. App. at 162a (4/18/17 Yarbrough Dep. Tr., p. 11:9-17). 39. Pro-Spec has confirmed that DNT never agreed to the terms of the First Proposed Subcontract. App. at 171a, 197a (4/18/17 Yarbrough Dep. Tr., p. 46:12-18; p. 152:4-7) (Q: “So you sent the standard form subcontract, and the problem was that DNT wouldn’t agree to the standard form subcontract?” A: “Exactly.”). 40. On April 30, 2015, Pro-Spec requested design submittals from DNT. App. at 232a. 41. DNT responded to Pro-Spec’s April 30, 2015 request by advising Pro-Spec that no subcontract was in place between the parties. App. at 233a (Yarbrough Dep. Ex. 12) (“DN Tanks does not have a contract with Pro-Spec at this time. Until a contract is executed between DN Tanks and Pro-Spec submittals will not be provided.”) 42. In its responses to DNT’s request for admissions, Pro-Spec has stated the following regarding DNT’s April 30, 2015 email: “Admitted in part that ‘DN Tanks does not Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 6 of 25 7 have a contract with Pro-Spec Painting at this time.’ Denied that no subcontract is in place and ‘it would be prudent to review our subcontract, make the necessary revisions and send us a copy to execute.’” App. at 105a (Pro-Spec RFA Responses, Response No. 11 [Yarbrough Dep. Ex. 4]). 43. On May 5, 2015, Pro-Spec sent DNT a purported Letter of Intent (“LOI”) and again requested submittals. App. at 234a - 237a (Yarbrough Dep. Ex. 13). 44. Pro-Spec’s cover email enclosing the May 5, 2015 LOI stated that “issue[s] related to the Subcontract will proceed but should not delay the non-site work.” App. at 234a (Yarbrough Dep. Ex. 13). 45. Mr. Yarbrough acknowledged that “issues” concerning the subcontract were still being negotiated as of May 5, 2015. App. at 196a (4/18/17 Yarbrough Dep. Tr., p. 148:12-16). 46. Pro-Spec’s purported LOI indicated that no formal subcontract was yet in place. App. at 236a (Yarbrough Dep. Ex. 13) (“Pro-Spec will issue a formal subcontract…”) (emphasis added). 47. Pro-Spec’s purported LOI did not include all of DNT’s required terms. App. at 234a - 237a (Yarbrough Dep. Ex. 13). 48. For example, Pro-Spec’s May 5 LOI required that DNT dispose of waste, rather than Pro-Spec. App. at 236a (Yarbrough Dep. Ex. 13). 49. Pro-Spec’s May 5, 2015 LOI also failed to incorporate DNT’s Proposal by reference. App. at 234a - 237a (Yarbrough Dep. Ex. 13). 50. By email dated May 7, 2015, DNT rejected Pro-Spec’s LOI and returned a marked-up copy of the LOI that included certain material terms upon which DNT insisted, including incorporation of DNT’s Proposal and Pro-Spec’s disposal of waste. App. at 238a - 241a (Yarbrough Dep. Ex. 14). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 7 of 25 8 51. On May 8, 2015, Ron Yarbrough confirmed to Pro-Spec’s Robert Hughes that Pro-Spec “[would] not agree to be bound by the DN Proposal.” App. at 242a (Yarbrough Dep. Ex. 93). 52. By letter dated May 11, 2015, Pro-Spec rejected DNT’s markups to the LOI. App. at 245a (Yarbrough Dep. Ex. 15) (“Pro-Spec will not agree to any changes to the Letter of Intent”); App. at 196a (4/18/17 Yarbrough Dep. Tr., p. 149:20-22). 53. In Pro-Spec’s May 11, 2015 letter, Mr. Yarbrough acknowledged that no agreement had yet been reached. App. at 245a (Yarbrough Dep. Ex. 15) (“I trust that an amicable subcontract will include any concerns of both parties and an amicable subcontract will be agreed to.”) (emphasis added). 54. By email dated May 19, 2015, DNT requested an update due to the continued disagreement regarding the terms of a subcontract and the LOI. DNT also inquired whether Pro- Spec would send a revised LOI soon. App. at 246a (Yarbrough Dep. Ex. 16). 55. By letter dated June 18, 2015, Pro-Spec acknowledged that it had not received an executed subcontract from DNT. App. at 249a (Yarbrough Dep. Ex. 17). 56. By email dated June 19, 2015, DNT responded and again asked Pro-Spec to incorporate DNT’s requirement into an acceptable subcontract. App. at 251a (Yarbrough Dep. Ex. 18). 57. DNT’s June 19, 2015 email again reminded Pro-Spec that no agreement was in place. App. at 251a (Yarbrough Dep. Ex. 18) (“Once the subcontract comments are discussed and settled we will be happy to execute it.”). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 8 of 25 9 58. DNT’s June 19, 2015 email also indicated that the delayed start date would push DNT’s work into cold weather and that Pro-Spec would need to make provisions to protect DNT’s work. App. at 251a (Yarbrough Dep. Ex. 18). 59. As of June 19, 2015, there was still a disagreement between Pro-Spec and DNT regarding DNT’s insistence that the Proposal be made part of any subcontract. App. at 198a - 199a (4/18/17 Yarbrough Dep. Tr., p. 157:13 - p. 158:3). 60. On July 1, 2015, DNT received a revised subcontract agreement from Pro- Spec. App. at 253a - 273a (Yarbrough Dep. Ex. 19). 61. Pro-Spec’s July 1, 2015 proposed agreement again failed to address many of DNT’s concerns and failed to incorporate several of DNT’s material terms, including DNT’s Proposal and DNT’s schedule. App. at 274a - 296a (Yarbrough Dep. Ex. 20). 62. DNT rejected the proposed agreement and returned a list of those material terms to Pro-Spec on July 15, 2015. App. at 274a - 296a (Yarbrough Dep. Ex. 20). 63. Among the terms that the parties had not reached agreement on as of July 15, 2015 were: • Pro-Spec had not agreed to exempt DNT from providing “permits, fees and inspections” • Pro-Spec had not updated the schedule to match DNT’s most recent schedule • Pro-Spec had not incorporated DNT’s Proposal by reference • Pro-Spec had not incorporated DNT’s most recent schedule by reference • Pro-Spec had not indicated that it would bear the costs associated with protection of winter work App. at 274a (Yarbrough Dep. Ex. 20). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 9 of 25 10 64. Although the cover-letter is dated July 20, 2015, on July 23, 2015 Pro-Spec sent DNT another proposed subcontract. App. at 297a - 316a (Yarbrough Dep. Ex. 21). 65. The cover letter enclosing the July 20, 2015 proposed subcontract reiterated that Pro-Spec would not include DNT’s Proposal as part of a subcontract. App. at 297a (Yarbrough Dep. Ex. 21); App. at 201a (4/18/17 Yarbrough Dep. Tr., p. 166:10-22). 66. By email dated July 23, 2017, Pro-Spec sent DNT what Pro-Spec referred to as a “final executed subcontract.” App. at 317a - 341a (Yarbrough Dep. Ex. 22). 67. On July 27, 2015, DNT rejected the proposed subcontract document sent by Pro- Spec because that proposed subcontract did not include DNT’s required revisions. App. at 342a - 346a (Yarbrough Dep. Ex. 23) (“I am sorry but the subcontract agreement revised 7-20-15 is not acceptable.”). 68. DNT again requested that DNT’s material revisions (pertaining primarily to inclusion of DNT’s proposal and schedule) be made to the document. App. at 342a - 346a (Yarbrough Dep. Ex. 23). 69. Pro-Spec made clear during its deposition that it could not agree to the schedule proposed by DNT. App. at 202a (4/18/17 Yarbrough Dep. Tr., p. 170:7 - p. 171:10) (“I’m not going to agree to a subcontractor with hard dates that they’re proposing in a subcontract … It’s not something that we can agree to or the owner can agree to…”) (discussing Ex. 23). 70. On July 28, 2015, Pro-Spec purported to send DNT a Notice to Proceed. App. at 347a - 348a (Yarbrough Dep. Ex. 24). 71. As of July 28, 2015, Pro-Spec still had not revised the subcontract agreement to address DNT’s concerns. App. at 349a (Yarbrough Dep. Ex. 25). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 10 of 25 11 72. On July 28, 2015, DNT responded to Pro-Spec by reminding Pro-Spec that DNT did not have an executed subcontract and requesting that Pro-Spec correct several unacceptable provisions in the proposed agreement. App. at 349a (Yarbrough Dep. Ex. 25). 73. Pro-Spec has admitted that DNT had not signed a subcontract as of July 31, 2015. App. at 203a (4/18/17 Yarbrough Dep. Tr., p. 176:18-21). 74. On August 19, 2015, Ronald Yarbrough wrote an email to David Averso of Gannet Fleming. In that email, Mr. Yarbrough admitted that Pro-Spec had not been able to come to an agreement with DNT. App. at 350a (Yarbrough Dep. Ex. 27) (“I know DN is working with Chester and you probably have a great relation [sic] with them but we just couldn’t get a fair agreement with them as a Subcontractor.”) (emphasis added). 75. In his deposition, Mr. Yarbrough explained that he felt DNT was giving him the “shaft” by not agreeing to Pro-Spec’s subcontract: Q. Okay. So, why do you say “we just couldn’t get a fair agreement with them”? What did you mean by that? A. They wouldn’t start the job. Q. Well, you don’t say - A. They wouldn’t start the job. Q. Well, you’re not saying to Mr. Averso they wouldn’t perform. You’re saying we couldn’t get a fair agreement. Is that what you mean? A. They wouldn’t perform so we didn’t have an agreement. They should have submitted their - I mean, back in May, they should have submitted their certificates of insurance and design. This is like in August. This is May, June, July, August - three, four months later. They didn’t even do a certificate of insurance submittal because they’re waiting on a subcontract. I don’t call it a fair agreement. I call it a shaft from DN Tanks. A shaft of Pro-Spec Painting, Chester Water Authority, the customers of Chester Water Authority, and everyone else involved with the job. It was a royal shaft. Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 11 of 25 12 App. at 204a (4/18/17 Yarbrough Dep. Tr., p. 179:13 - p. 180:11). 76. In August 2015, Pro-Spec purported to terminate its “agreement” with DNT. App. at 352a (Yarbrough Dep. Ex. 28). 77. Pro-Spec claimed that it subsequently reached multiple agreements with another contractor (Preload) for the same manhole work. App. at 205a (4/18/17 Yarbrough Dep. Tr., p. 183:22 - p. 184:20). 78. On September 18, 2015, CWA sent Pro-Spec a letter regarding Pro-Spec’s delays. Among other things, that letter reminded Pro-Spec that the Contract allows the Owner to assess liquidated damages against Pro-Spec for late completion. App. at 354a - 355a (Yarbrough Dep. Ex. 38). 79. On September 20, 2015, Mr. Yarbrough authored an internal email regarding the Owner’s September 8, 2015 letter. In that email, Mr. Yarbrough stated, in part: Karen, Please see letter and send copy to Preload. The Pro-Spec cover letter should echo the liquidated damages issue and their work as critical to the completion of the project…I think Pro-Spec needs to apply maximum pressure. Preload is NOT delivering and now the project is potentially delayed. It is Pro-Spec’s position that issues related to scope and the limits of the design and work covered by the owners agreement need to be resolved through the construction administrative process. I think we are faced with a serious risk and we need to state this in writing. I think using the letter from the Owner is a good way to pass this responsibility off to Preload. App. at 353a (Yarbrough Dep. Ex. 38). 80. By letter dated September 21, 2015, Mr. Yarbrough forwarded CWA’s September 18, 2015 letter from CWA to Preload. Mr. Yarbrough’s September 21, 2015 letter to Preload stated, in part: Preload is aware of the construction schedule as well as the timely completion of the required work. A Letter of Intent … was issued to Preload on August 14, 2015 and a formal AIA Contract dated August 18, 2015 followed. To date Preload has yet to begin the specified work. Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 12 of 25 13 * * * With regard to the subcontract agreement, it is Pro-Spec’s position that issues related to scope and the limits of the design and work covered by the Owners Agreement need to be resolved through the construction administration process… As you know, time is of the essence and Liquidated Damages will be assessed if work goes beyond the date of Substantial Completion. This letter shall serve as notice that Pro- Spec will hold Preload responsible for all direct and indirect costs incurred by Pro-Spec Corporation and all other parties to the Contract. App. at 357a - 359a (Yarbrough Dep. Ex. 39). 81. Ultimately, Preload declined to enter into a contract with Pro-Spec. Among the reasons was Pro-Spec’s failure to include components of Preload’s proposal in the proposed subcontract document. App. at 360a (Yarbrough Dep. Ex. 40). 82. In October 2015, Pro-Spec again approached DNT regarding entering into an agreement for the manhole work at the Project. App. at 637a (Pappo Dec. ¶ 34). 83. On October 27, 2015, DNT attended a Project meeting and discussed the necessary subcontract revisions with Pro-Spec. App. at 637a (Pappo Dec. ¶ 35). 84. In early November 2015, DNT and Pro-Spec still disagreed regarding the terms for a subcontract. App. at 206a (4/18/17 Yarbrough Dep. Tr., p. 188:22 - p. 189: 14); App. at 363a - 388a (Yarbrough Dep. Ex. 29). 85. On November 2, 2015, Pro-Spec sent DNT another proposed subcontract. By letter dated November 3, 2015, DNT advised Pro-Spec that certain agreed-upon revisions were not made in the most recent draft subcontract. App. at 363a - 388a (Yarbrough Dep. Ex. 29). 86. DNT’s November 3, 2015 letter set forth the revisions that needed to be made to the subcontract agreement, including revisions concerning the schedule. App. at 363a - 388a (Yarbrough Dep. Ex. 29). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 13 of 25 14 87. After November 4, 2015, DNT and Pro-Spec participated in several conference calls and exchanged several emails regarding the subcontract revisions. App. at 637a (Pappo Dec. ¶ 38). 88. Pro-Spec ultimately made the necessary changes to the subcontract on or about November 20, 2015. App. at 637a (Pappo Dec. ¶ 39). 89. DNT emailed a signed version of the November 20, 2015 Subcontract to Pro-Spec on November 24, 2015. App. at 637a (Pappo Dec. ¶ 39); 389a - 409a (Yarbrough Dep. Ex. 30). 90. DNT never performed any work or provided any deliverables to Pro-Spec before the agreement was signed on November 20, 2015. App. at 637a (Pappo Dec. ¶ 40). 91. DNT and Pro-Spec had never worked together before and there was no “course of dealing” between the parties before this Project. App. at 637a (Pappo Dec. ¶ 41). 92. Mr. Yarbrough acknowledges that the November 20, 2015 Subcontract (sent by DNT to Pro-Spec on November 24, 2015) is the only subcontract signed by DNT concerning the Project. App. at 170a (4/18/17 Yarbrough Dep. Tr., p. 45:2-9). 93. Pro-Spec admits that it did not have a fully executed subcontract with DNT until “some time in November 2015.” App. at 439a (4/19/17 Yarbrough Dep. Tr. (Day 2), p. 115:10- 14). 94. Prior to November 2015, Pro-Spec and DNT were in disagreement as to whether DNT’s Proposal would be part of the subcontract. App. at 168a (4/18/17 Yarbrough Dep. Tr., p. 36:8-13) (“That was absolutely a stopping point on that, yes.”). 95. The schedule is a very important part of any construction contract. App. at 505a (4/27/17 Yarbrough Dep. Tr. (Day 3), p. 376:3-7). Once the Subcontract was agreed to, DNT fully performed all of its obligations in accordance with the Subcontract’s Schedule Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 14 of 25 15 96. DNT mobilized on Monday, November 30, 2015. App. at 637a (Pappo Dec. ¶ 42). 97. DNT subsequently cut the openings in the tank wall and prepared other areas. App. at 637a (Pappo Dec. ¶ 43). 98. On December 18, 2015, as agreed by the parties in the November 20, 2015 Subcontract, DNT demobilized for the winter. App. at 637a (Pappo Dec. ¶ 44). 99. DNT remobilized on March 14, 2016 and completed the work on April 13, 2016. App. at 637a (Pappo Dec. ¶ 45). 100. The November 20, 2015 Subcontract contained an updated schedule for the performance of the manhole work. App. at 407a (Yarbrough Dep. Ex. 30). 101. DNT performed its work in accordance with the schedule attached to the November 20, 2015 Subcontract. App. at 505a (4/27/17 Yarbrough Dep. Tr. (Day 3), p. 375:1- 19). 102. Tommie Bell was Pro-Spec’s Supervisor at the Project. App. at 177a (4/18/17 Yarbrough Dep. Tr., p. 72:16-24). 103. Tommie Bell acknowledged that DNT had completed its work at the Project as of April 13, 2016. App. at 515a (Yarbrough Dep. Ex. 95). CWA’s Termination of Pro-Spec’s Contract had nothing to do with DNT 104. On June 30, 2016, CWA sent a letter to Pro-Spec in which CWA terminated the Pro-Spec contract (the “Termination Notice”). App. at 516a - 517a (4/26/17 Maloney Dep. Ex. 71). 105. The Termination Notice indicated that CWA was terminating Pro-Spec’s contract so that CWA could “correct the deficiencies of Pro-Spec Painting, Inc., and complete the work Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 15 of 25 16 set forth in the Contract, including remediation or corrective action required by the misapplication of the coating to the interior surfaces of Tank No. 2 by Pro-Spec Painting, Inc.” App. at 516a (4/26/17 Maloney Dep. Ex. 71). 106. DNT did not perform any of the work alleged to be deficient in the Termination Notice. App. at 638a (Pappo Dec. ¶ 48). 107. The Termination Notice referenced several other letters and notices to Pro-Spec regarding Pro-Spec’s performance (collectively, the “Pre-Termination Notices”). App. at 638a (Pappo Dec. ¶ 49); 516a - 523a (4/26/17 Maloney Dep. Exs. 71-74). 108. DNT did not perform any of the work alleged to be deficient in the Pre- Termination Notices. App. at 638a (Pappo Dec. ¶ 50). Pro-Spec’s Claims - The Complaint 109. On August 31, 2016, Pro-Spec filed suit against DNT and CWA. App. at 1a - 61a (Pro-Spec Complaint, Doc. No. 1). 110. Pro-Spec’s complaint against DNT is based on DNT not performing its manhole work during the summer of 2015. App. at 176a (4/18/17 Yarbrough Dep. Tr., p. 69:4-7). 111. In its Complaint, Pro-Spec alleges that DNT breached a subcontract with Pro- Spec by causing delays at the Project. App. at 7a (Pro-Spec Complaint, Doc. No. 1, ¶ 53). 112. Pro-Spec has also asserted that it was terminated due to delays caused by DNT. App. at 170a (4/18/17 Yarbrough Dep. Tr., p. 42:18 - p. 43:1). 113. Pro-Spec admits that these alleged delays were caused by DNT’s refusal to enter into a subcontract until November 2015. App. at 170a - 171a (4/18/17 Yarbrough Dep. Tr., p. 42:18 - p. 43:1; p. 48:4-12). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 16 of 25 17 114. In its complaint, Pro-Spec also alleges that DNT and CWA engaged in a conspiracy to cause harm to Pro-Spec. App. at 7a (Pro-Spec Complaint, Doc. No. 1, ¶ 57). 115. Pro-Spec alleges that DNT’s contribution to this alleged conspiracy was “caus[ing] unnecessary and unreasonable delays.” App. at 8a (Pro-Spec Complaint, Doc. No. 1, ¶ 58). 116. Pro-Spec’s conspiracy claim against DNT is based on DNT’s refusal to execute a subcontract until November 2015. App. at 173a (4/18/17 Yarbrough Dep. Tr., p. 56:20 - p. 57:12). 117. According to Pro-Spec, the only specific action taken by DNT with the Owner to harm Pro-Spec was DNT not performing its manhole work until a subcontract was signed. App. at 172a - 173a (4/18/17 Yarbrough Dep. Tr., p. 51:16-21; p. 57:7-12). 118. Pro-Spec cannot identify any other specific acts taken by DNT in concert with CWA for the purposes of harming Pro-Spec: Q. What specifically did DN Tanks do together with the Owner to harm Pro-Spec? * * * A. Well, I’m not in the room, but I heard a saying one time, if it walks like a duck, and quacks like a duck, it must be a duck. App. at 172a (4/18/17 Yarbrough Dep. Tr., p. 52:9-17). 119. Pro-Spec cannot identify any documents or conversations that indicate that DNT and CWA worked together to harm Pro-Spec: Q. Did you see any documents that said DN Tanks and the Water Authority are working together to harm Pro-Spec? A. Did I see - no, I didn’t see a document. * * * Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 17 of 25 18 Q. Any conversations? Did you ever talk with someone at the Water Authority or at DN Tanks that led you to believe yeah, they’re working together to harm my company? A. The Water Authority would never speak. The Water Authority at their meetings would be silent and they would only speak through their engineer. Another issue why it stunk. Q. Okay. So no documents and no conversations, right? Mr. Landes: Objection. A. Again, I don’t have a document that is a specific criminal conspiracy document that I can point to, but I have the belief that DN Tanks and Chester Water Authority did conspire together to have DN Tanks on the job and have Pro-Spec terminated. I don’t have a specific criminal document. App. at 172a - 173a (4/18/17 Yarbrough Dep. Tr., p. 53:9-12; p. 54:8 - p. 55:3). Pro-Spec’s Itemized Claims 120. On April 17, 2017, Pro-Spec provided supplemental interrogatory responses in which it itemized the damages it seeks from DNT. App. at 524a - 528a (Yarbrough Dep. Ex. 6). Field supervision 121. Pro-Spec has asserted that DNT is responsible for $138,300 in Pro-Spec field supervision costs. App. at 526a (Yarbrough Dep. Ex. 6, Response No. 6). 122. Pro-Spec’s claim for these alleged field supervision costs is based on the fact that DNT did not perform any work at the Project until after November 20, 2015. App. at 177a (4/18/17 Yarbrough Dep. Tr., p. 71:1-10). Hotel and expenses 123. Pro-Spec has asserted that DNT is responsible for $24,460 in Pro-Spec hotel expenses. App. at 526a (Yarbrough Dep. Ex. 6, Response No. 6). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 18 of 25 19 124. Pro-Spec’s claim for these alleged hotel expenses is based on the fact that DNT did not perform any work at the Project until after November 20, 2015. App. at 179a (4/18/17 Yarbrough Dep. Tr., p. 78:23 - p. 79:6). Truck expenses 125. Pro-Spec has asserted that DNT is responsible for $16,800 in Pro-Spec truck expenses. App. at 526a (Yarbrough Dep. Ex. 6, Response No. 6). 126. Pro-Spec’s claim for these alleged truck expenses is based on the fact that DNT did not perform any work at the Project until after November 20, 2015. App. at 180a (4/18/17 Yarbrough Dep. Tr., p. 85:7-23). Cleaning and pumping winter work 127. Pro-Spec has asserted that DNT is responsible for $33,750 in costs associated with cleaning and pumping during winter. App. at 526a (Yarbrough Dep. Ex. 6, Response No. 6). 128. Pro-Spec’s claim for these alleged winter cleaning and pumping costs is based on the fact that DNT did not sign a subcontract until November 2015. App. at 181a (4/18/17 Yarbrough Dep. Tr., p. 87:15 - p. 88:18); App. at 503a (4/27/17 Yarbrough Dep. Tr. (Day 3), p. 367:3:16). Flooding and repumping 129. Pro-Spec has asserted that DNT is responsible for $12,996 in costs associated with a flood at one of the tanks. App. at 526a (Yarbrough Dep. Ex. 6, Response No. 6). 130. Pro-Spec has alleged that CWA caused a flood at the tank and that DNT caused a second flood at the tank. App. at 183a (4/18/17 Yarbrough Dep. Tr., p. 94:19 - p. 96:6). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 19 of 25 20 131. Pro-Spec never provided DNT with a notice that it was withholding any money due to this alleged second flood. App. at 504a (4/27/17 Yarbrough Dep. Tr. (Day 3), p. 372:3 - p. 373:24). 132. According to Pro-Spec’s correspondence, DNT caused the alleged second flood on April 7, 2016. App. at 529a (4/7/16 Bell letter). 133. Pro-Spec cannot prove that it incurred any damages concerning this alleged second flood because it has not produced any documents supporting such alleged damages. More specifically, the only records produced by Pro-Spec in support of alleged flooding damage are additional work authorization forms for work occurring prior to April 7, 2016 (i.e., the first flood, allegedly caused by CWA). App. at 530a -539a. Demobilization/Remobilization 134. Pro-Spec has asserted that DNT is responsible for $40,000 in costs associated with demobilizing and remobilizing at the site. App. at 526a (Yarbrough Dep. Ex. 6, Response No. 6). 135. Pro-Spec’s claim for these alleged demobilization and remobilization costs is based on the fact that DNT did not perform any work at the Project until after November 20, 2015. App. at 184a (4/18/17 Yarbrough Dep. Tr., p. 98:14 - p. 99:17). Contractor equipment 136. Pro-Spec has asserted that DNT is responsible for $105,000 in additional equipment costs. App. at 526a (Yarbrough Dep. Ex. 6, Response No. 6). 137. Pro-Spec’s claim for these alleged equipment costs is based on the fact that DNT did not perform any work at the Project until after November 20, 2015. App. at 184a - 185a (4/18/17 Yarbrough Dep. Tr., p. 101:15 - p. 102:3). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 20 of 25 21 Indirect costs 138. Pro-Spec has asserted that DNT is responsible for $101,446 in Pro-Spec “indirect” costs. App. at 526a (Yarbrough Dep. Ex. 6, Response No. 6). 139. Pro-Spec’s claim for these alleged “indirect” costs is based on the fact that DNT did not perform any work at the Project until after November 20, 2015. App. at 185a - 186a (4/18/17 Yarbrough Dep. Tr., p. 105:10-13; p. 107:15-18). Liquidated damages 140. Pro-Spec has asserted that DNT is responsible for $437,500 in liquidated damages. App. at 526a (Yarbrough Dep. Ex. 6, Response No. 6). 141. Pro-Spec’s claim for these alleged liquidated damages is based on the fact that DNT did not perform any work at the Project until after November 20, 2015. App. at 186a (4/18/17 Yarbrough Dep. Tr., p. 107:19 - p. 108:21). 142. The November 20, 2015 Subcontract does not provide for the assessment of liquidated damages. App. at 399a (Yarbrough Dep. Ex. 30, § 9.3). 143. Some portion of Pro-Spec’s liquidated damages claim against DNT concerns a period before the Project was required to have been complete. App. at 187a (4/18/17 Yarbrough Dep. Tr., p. 110:14-18). Credit due for manhole design 144. Pro-Spec has asserted a claim for $100,000 against DNT for allegedly failing to provide a design for the manhole work. App. at 526a (Yarbrough Dep. Ex. 6, Response No. 6). 145. CWA has never complained to Pro-Spec about the lack of a design. App. at 174a - 175a (4/18/17 Yarbrough Dep. Tr., p. 61:22 - p. 62:1). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 21 of 25 22 146. CWA has never asked for a credit from Pro-Spec regarding the allegedly missing design. App. at 187a (4/18/17 Yarbrough Dep. Tr., p. 110:19 - p. 111:20). 147. CWA has never issued a deductive change order based on the alleged lack of a design. App. at 187a (4/18/17 Yarbrough Dep. Tr., p. 111:21 - p. 112:15). 148. Pro-Spec has not incurred any actual out-of-pocket costs due to the alleged lack of a design. App. at 187a (4/18/17 Yarbrough Dep. Tr., p. 112:16 - p. 113:14). 149. Gannett Fleming served as the engineer and owner’s representative. App. at 618a (Averso Dec. ¶ 2). 150. David Averso was a Project Manager for Gannett Fleming. App. at 618a (Averso Dec. ¶ 1). 151. DNT had previously performed essentially the same shell manhole work required at the Project on other CWA tanks. App. at 619a (Averso Dec. ¶ 10). 152. At the time DNT performed its work for Pro-Spec under the Contract, Gannett Fleming was already in possession of the necessary design documents (shop drawings) concerning DNT’s previous shell manhole work. App. at 619a (Averso Dec. ¶ 11). 153. The design for the shell manhole work for Tank #2 at the Project was the same design as the shell manhole previously installed by DNT at CWA tank #3 at the same site as the Project. App. at 619a (Averso Dec. ¶ 12). 154. Because Gannett Fleming previously reviewed the required shop drawings for the shell manholes for CWA Tank #3 and DNT provided a letter to Pro-Spec dated January 27, 2016 stating DNT intends to use the same materials and design at CWA Tank #2, there was no need for DNT to provide those shop drawings again to Gannett Fleming for review. App. at 619a (Averso Dec. ¶ 13). App. at 621a - 631a (Yarbrough Dep. Exs. 31-34). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 22 of 25 23 155. For Project administration purposes, on February 11, 2016, Mr. Averso directed Gannett Fleming employees under his supervision to upload the required shop drawings from CWA Tank #3 to the Project’s electronic database. App. at 620a (Averso Dec. ¶ 14). 156. Pro-Spec acknowledges that the design issue for which it seeks a credit is the same issue discussed in Deposition Exhibits 31-34. App. at 503a (4/27/17 Yarbrough Dep. Tr. (Day 3), p. 368:15 - p. 369:2); App. at 621a - 631a (Yarbrough Dep. Exs. 31-34). 157. Neither the termination notice to Pro-Spec nor any of the documents referenced in the termination notice indicate that the termination concerned a lack of a manhole design. App. at 516a - 523a (4/26/17 Maloney Dep. Exs. 71-74); App. at 497a (4/27/17 Yarbrough Dep. Tr. (Day 3), p. 346:2-22). 158. Pro-Spec did not provide DNT any specific notice that it was withholding any of the money it now claims from DNT. App. at 504a (4/27/17 Yarbrough Dep. Tr. (Day 3), p. 372:3 - p. 373:24). DNT Claims against Pro-Spec 159. DNT and Pro-Spec entered into a binding subcontract on November 20, 2015. App. at 541a (Pro-Spec Answer to Counterclaim, Doc. No. 12, ¶ 7). 160. The November 20, 2015 Subcontract references the entire scope of DNT’s work. App. at 498a - 499a (4/27/17 Yarbrough Dep. Tr. (Day 3), p. 350:11 - p. 351:1). 161. Contract Item B6 represents DNT’s work at the Project. App. at 498a - 499a (4/27/17 Yarbrough Dep. Tr. (Day 3), p. 350:11 - p. 351:23; p. 354:21-24). 162. DNT’s subcontract price for performing the work under Contract Item B6 is $475,000. App. at 400a (Yarbrough Dep. Ex. 30). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 23 of 25 24 163. DNT has invoiced Pro-Spec in the amount of $475,000 for DNT’s work at the Project. App. at 541a (Pro-Spec Answer to Counterclaim, Doc. No. 12, ¶ 11). 164. Pro-Spec has paid DNT $137,250. App. at 541a (Pro-Spec Answer to Counterclaim, Doc. No. 12, ¶ 12). 165. On or about June 23, 2016, Pro-Spec submitted its Payment Application No. 11. App. at 550a - 552a (Yarbrough Dep. Ex. 64). 166. When Ronald Yarbrough signed Payment Application No. 11, he certified to the Owner that the work for each line item had been completed to the percentage indicated on the application. App. at 491a (4/27/17 Yarbrough Dep. Tr. (Day 3), p. 321:23 - p. 322:3) (discussing Exhibit 64). 167. Pro-Spec Payment Application No. 11 includes a line item for Item B6 in the amount of $475,000. App. at 550a - 552a (Maloney Dep. Ex. 64). 168. All of DNT’s work was encompassed by Item B6. App. at 468a - 514a (4/27/17 Yarbrough Dep. Tr. (Day 3), p. 350:11 - p. 351:23; p. 354:21-24). 169. By submitting Payment Application No. 11, Pro-Spec certified that Item B6 was 100% complete as of June 23, 2016. App. at 498a - 499a (4/27/17 Yarbrough Dep. Tr. (Day 3), p. 322:12-18). 170. Stated differently, Pro-Spec billed for DNT’s work (Item B6) as being 100% complete. App. at 188a (4/18/17 Yarbrough Dep. Tr., p. 116:22 - p. 117:1) (discussing Yarbrough Dep. Ex. 7); App. at 495a (4/27/17 Yarbrough Dep. Tr. (Day 3), p. 335:11-14) (discussing Ex. 64). 171. David Averso is familiar with the work required under Item B6. App. at 619a (Averso Dec. ¶¶ 5-9). Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 24 of 25 25 172. Mr. Averso personally reviewed Pro-Spec’s Payment Application No. 10. App. at 620a (Averso Dec. ¶ 16). 173. Pro-Spec Payment Application No. 10 includes a line item for Item B6 in the amount of $148,500 bringing the total amount of work performed to date for Item B6 to $475,000. App. at 620a (Averso Dec. ¶ 17). 174. By letter dated April 28, 2016, Gannett Fleming authorized Pro-Spec to bill for 100% of Item B6. App. at 620a (Averso Dec. ¶ 18); App. at 553a - 561a (Yarbrough Dep. Ex. 7). 175. All work under Item B6 was performed satisfactorily by DNT. App. at 620a (Averso Dec. ¶ 19). By: /s/ Harry J. Giacometti Harry J. Giacometti, Esq. 1835 Market Street, Suite 1050 Philadelphia, PA 19103 Phone: (215) 587-5680 harry.giacometti@flastergreenberg.com HINCKLEY, ALLEN & SNYDER LLP /s/ Kirk J. McCormick Kirk J. McCormick, Esq. (pro hac vice) Chad L. Hershman, Esq. (pro hac vice) 28 State Street, 29th Floor Boston, MA 02190 Phone: (617) 345-9000 kmccormick@hinckleyallen.com chershman@hinckleyallen.com CERTIFICATE OF SERVICE The undersigned hereby certifies that on this 24th day of May, 2017, a true and correct copy of the foregoing pleading was served on all counsel for all parties of record receiving notice by electronic means via the Electronic Case Filing System (“ECF”) as reflected on the Notice of Electronic filing. /s/ Chad L. Hershman #56829577 Case 2:16-cv-04728-MAK Document 53-2 Filed 05/24/17 Page 25 of 25 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA PRO-SPEC CORPORATION T/D/B/A : PRO-SPEC INDUSTRIAL PAINTING SERVICES : Plaintiff : : v. : Docket No. 2:16cv4728-MAK : CHESTER WATER AUTHORITY and DN TANKS : Defendants : : DN TANKS : Third-Party Plaintiff : : v. : : INTERNATIONAL FIDELITY : INSURANCE COMPANY : Third-Party Defendant : : ORDER GRANTING DN TANKS’ MOTION FOR SUMMARY JUDGMENT This matter was heard before the Court, Honorable Mark A. Kearney presiding, on , 2017, on DN Tanks’ Motion for Summary Judgment; and after hearing thereon and consideration thereof, it is hereby ORDERED, ADJUDGED and DECREED that DN Tanks’ Motion is Granted and (1) Count Nos. III and IV of Plaintiff’s Complaint are dismissed with prejudice; and (2) Judgment shall enter in favor of DN Tanks as to Count Nos. I and V of DN Tanks’ Counterclaim. All other claims are reserved for trial. Entered as an Order of this Honorable Court this ___th day of ____, 2017. ENTER: PER ORDER: Case 2:16-cv-04728-MAK Document 53-3 Filed 05/24/17 Page 1 of 2 Presented by: By: FLASTER/GREENBERG P.C. /s/ Harry J. Giacometti Harry J. Giacometti, Esq. 1835 Market Street, Suite 1050 Philadelphia, PA 19103 Phone: (215) 587-5680 harry.giacometti@flastergreenberg.com HINCKLEY, ALLEN & SNYDER LLP /s/ Kirk J. McCormick Kirk J. McCormick, Esq. (pro hac vice) Chad L. Hershman, Esq. (pro hac vice) 28 State Street, 29th Floor Boston, MA 02190 Phone: (617) 345-9000 kmccormick@hinckleyallen.com chershman@hinckleyallen.com Counsel for DN Tanks CERTIFICATE OF SERVICE The undersigned hereby certifies that on this 24th day of May, 2017, a true and correct copy of the foregoing pleading was served on all counsel for all parties of record receiving notice by electronic means via the Electronic Case Filing System (“ECF”) as reflected on the Notice of Electronic filing. /s/ Chad L. Hershman #56849017 Case 2:16-cv-04728-MAK Document 53-3 Filed 05/24/17 Page 2 of 2