Cranpark, Inc. v. Rogers Group, Inc.

821 F.3d 723, 2016 FED App. 0101P, 94 Fed. R. Serv. 3d 518, 2016 U.S. App. LEXIS 7290, 2016 WL 1612825
CourtCourt of Appeals for the Sixth Circuit
DecidedApril 22, 2016
Docket14-3753, 14-3832
StatusPublished
Cited by94 cases

This text of 821 F.3d 723 (Cranpark, Inc. v. Rogers Group, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cranpark, Inc. v. Rogers Group, Inc., 821 F.3d 723, 2016 FED App. 0101P, 94 Fed. R. Serv. 3d 518, 2016 U.S. App. LEXIS 7290, 2016 WL 1612825 (6th Cir. 2016).

Opinion

OPINION

CLELAND, District Judge.

This case is grounded in a story all too familiar to jurists (and to busiriess interests, we suspect): a promising joint venture gone wrong. Following the breakdown of the parties’ busiriess relationship, Cranpark, Inc. (“Cranpark”) sued and won a $15.6' million jury verdict based on a *728 promissory-estoppel claim against Rogers Group, Inc. (“RGI”)- That jury verdict, however, was set aside when the district court granted RGI’s renewed motion for judgment as a matter of law on the ground that Cranpark did not prove standing at trial. Cranpark now seeks review of that decision. RGI files a cross-appeal as well on a number of issues. We reverse the district court’s decision, reinstate the jury’s verdict, and remand the case to the district court for calculation of interest on the verdict.

I.

Cranpark is the successor-in-interest to Hardrives Paving and Construction, Inc. (“Hardrives”). Hardrives was an asphalt paving company based near Youngstown, Ohio that was owned and operated by James Sabatine. Asphalt production requires crushed stone. In the 1990s, the main crushed-stone supplier in the Youngstown area decided to discontinue its stone product. Seeing an opportunity, RGI, a supplier with a quarry in Sandusky, Ohio, approached Hardrives. RGI was interested in growing its business into the Youngstown area and wanted to partner with a large purchaser like Hardrives. The two parties began discussing the possibility of jointly establishing a large facility in Youngstown that would serve as a distribution center for RGI and a new asphalt production plant for Hardrives.

The parties began to develop plans for a joint venture. On September 1,1998, Tom Stump (RGI’s lead on the Youngstown project), Greg Gould (Stump’s boss and second in command at RGI), and Sabatine met to outline their plan for the distribution and production facility. A document produced at the meeting established the basic terms of their agreement and included certain contingencies that would need to be met for the venture to be profitable, such as the minimum amount of stone Hardrives was to buy from RGI, low-cost railroad transportation rates, and the need for certain incentives from the city. The document also stated that it was subject to RGI senior management approval. Both parties signed the document once all the key terms were in place.

A critical component of RGI and Har-drives’ plan was affordable railroad access to and from the distribution center. Rail transportation was the least expensive way to transport stone from the Sandusky quarry to the distribution center, and without low transportation costs the venture could not succeed. However, Sabatine was not having any luck convincing Norfolk Southern, the railroad company, to establish rail access. So, in 1998, while RGI and Hardrives were developing plans for their joint venture, Sabatine enlisted Congressman James Traficant to help him convince Norfolk Southern to establish rail access at the contemplated Youngstown distribution center. The plan worked, and Sabatine, Traficant, and representatives from Norfolk Southern met and began discussions that, after subsequent meetings, resulted in RGI and Hardrives arriving at an acceptable rail rate with Norfolk Southern.

Throughout 1998 Hardrives and RGI moved forward with their joint plans, and that year they selected a site for the facility on Center Street in Youngstown. Based on the belief that its deal with RGI was progressing according to plan, Har-drives began bidding on larger paving projects and purchasing equipment for its soon-to-be expanded business. By December, all the contingencies that RGI and Hardrives agreed upon in September were fulfilled, except RGI had arguably not given explicit senior management approval. Also by December, Sabatine was ready to place an order for a large asphalt plant that would be installed at the Center Street location. Because the plant was a *729 large investment — more than $1.5 million — Sabatine called Tom Stump before making the final purchase. During that phone conversation, according to Sabatine, Stump was enthusiastic about Sabatine’s plans to purchase the plant and gave him the go ahead. Sabatine then purchased the plant.

However, a few months later in February of 1999, RGI told Hardrives that it would no longer be participating in the joint venture. Soon after the deal failed, Hardrives began losing money, and by 2001 Sabatine decided to sell the business and signed an asset purchase agreement with McCourt Construction Company (“McCourt”). As part of the asset sale, Hardrives agreed not to use its name, and so the company became Cranpark, Inc.

Also relevant, during the time the deal between RGI and Hardrives was breaking down, Sabatine was the subject of an FBI investigation into public corruption concerning, among others, Congressman Traficant. Unbeknownst to RGI, after his initial meeting with Norfolk Southern, .Sa-batine paid Congressman Traficant a $2,400 bribe. In 2001, a few years after the Youngstown deal collapsed, Sabatine pleaded guilty to bribery and was sentenced to spend time in a halfway house, followed by housé arrest during two years’ probation, and pay fines and restitution.

On September 8,. 2004, Cranpark filed suit against RGI alleging breach of contract and promissory estoppel. The parties consented to have all proceedings in the district court conducted by a magistrate judge. 28 U.S.C. § 636(c).

In 2010, the district court granted summary judgment in favor of Defendant RGI, holding that the breach of contract' claim was governed by a four-year statute of limitations in the Ohio Commercial Code and that Cranpark had filed suit after this statutory deadline. The court also held that the promissory estoppel claim should be dismissed because RGI’s representations were not unambiguous promises on which Sabatine and Hardrives could have reasonably relied.. We. reversed the grant of summary judgment on both grounds and remanded the case. Cranpark, Inc. v. Rogers Grp., Inc., 498 Fed.Appx. 563 (6th Cir.2012).

In November 2013, the parties presented the case to a jury. When James Saba-tine testified about selling the Hardrives business to McCourt he said that he sold everything and agreed that he sold “the site, the plant, the accounts, the contracts, the books, the record, the documents, everything[.]” At the close of evidence, RGI orally moved for judgment as a matter of law under Federal Rule of Civil Procedure 50(a). RGI argued that Cranpark was not the “proper party to .[the] case” because it had sold everything, including the right to bring the cause . of action,. to McCourt, The district court denied the motion, orally ruling, “I think there’s enough in there that it’s Cranpark’s claim.”

The case was then submitted to the jury, which returned a verdict in favor of Cran-park on the promissory-estoppel claim, awarding $15.6 million in damages. On December 2, 2013,. the court entered judgment for Cranpark.

"Among other post-trial motions, RGI filed a Rulé ■ 50(b) renewed motion for judgment as a'matter of law.

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821 F.3d 723, 2016 FED App. 0101P, 94 Fed. R. Serv. 3d 518, 2016 U.S. App. LEXIS 7290, 2016 WL 1612825, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cranpark-inc-v-rogers-group-inc-ca6-2016.