GE Mobile Water, Inc. v. Red Desert Reclamation, LLC

6 F. Supp. 3d 195, 2014 DNH 54, 2014 U.S. Dist. LEXIS 34415, 2014 WL 1056938
CourtDistrict Court, D. New Hampshire
DecidedMarch 17, 2014
DocketCase No. 13-cv-357-PB
StatusPublished
Cited by12 cases

This text of 6 F. Supp. 3d 195 (GE Mobile Water, Inc. v. Red Desert Reclamation, LLC) is published on Counsel Stack Legal Research, covering District Court, D. New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
GE Mobile Water, Inc. v. Red Desert Reclamation, LLC, 6 F. Supp. 3d 195, 2014 DNH 54, 2014 U.S. Dist. LEXIS 34415, 2014 WL 1056938 (D.N.H. 2014).

Opinion

MEMORANDUM AND ORDER

PAUL BARBADORO, District Judge.

In February 2012, GE Mobile Water, Inc. entered into a contract with Red Des[197]*197ert Reclamation, LLC to lease water treatment equipment for use at its Wyoming facility. After Red Desert failed to make payments required under the contract, GE Mobile sued it and two affiliated entities, Clean Runner, LLC and Cate Street Capital, Inc. In an earlier order, I denied Red Desert’s motion to dismiss for lack of personal jurisdiction. GE Mobile Water, Inc. v. Red Desert Reclamation, LLC, 2014 DNH 049, 14, 2014 WL 900715. I now consider Clean Runner and Cate Street’s motion to dismiss for failure to state a claim.

I. BACKGROUND1

In 2012, Red Desert operated a facility in Rawlins, Wyoming for recycling water used in the hydraulic fracturing of natural gas reserves. Red Desert used water treatment technology at its Wyoming facility that was developed by Clean Runner. Red Desert and Clean Runner are managed by Cate Street Capital, Inc., a Delaware corporation with an office in Portsmouth, New Hampshire. Cate Street planned to use the Wyoming facility as a platform to showcase Clean Runner’s technology, with the goal of operating similar hydraulic fracturing water treatment facilities throughout the country. Doc. Nos. 18-2,18-4,18-5,18-6.

Beginning in September 2011, Steven Fischer, a GE Mobile employee, began working with Judson J. Cleveland on a proposed contract under which GE Mobile would lease water processing and treatment equipment for use at the Red Desert facility. At the time, Cleveland was a Managing Director of Cate Street, Chief Operating Officer of Red Desert, and President of Clean Runner. Barry Gli-chenhaus and Samuel Olson of Cate Street were also involved in negotiating the contract. During negotiations, Cate Street’s representative told Fischer that Cate Street was paying for the project and was the ultimate decision maker. Cleveland also represented “that Cate Street, being funded with $40 million for the Project, would be able ‘to make good’ on the invoices issued by [GE Mobile] for the Project.”

Negotiations culminated in a Proposal from GE Mobile and a $8.264 million Purchase Order from Red Desert (collectively the “Contract”). Cleveland signed the Purchase Order on behalf of Red Desert on February 28, 2012. Under his signature, Cleveland wrote, “President, Clean Runner.” Cleveland similarly signed the Proposal, writing “For: Red Desert Reclamation” by “Judson Cleveland, President, Clean Runner.” Doc. No. 1-1. A representative of GE Mobile accepted the Purchase Order by signing it and the Proposal the next day.

The Contract includes an integration clause, a no oral modification clause, and a choice of law clause. The integration clause states: “The parties intend this Agreement, with any attached Exhibits and Addenda, as a final expression of their agreement and a complete and exclusive statement of its terms.” It provides that “no representations ... have been made” other than those “expressly set forth,” and notes that the parties’ course of previous dealings, usage, or trade shall be inadmissible in any judicial proceeding. The no oral modification clause provides that any modifications to the Contract must be reduced to writing and signed by the parties. The choice of law clause specifies that the Contract is governed by Virginia law. Doc. No. 1-1.

Pursuant to the Contract, GE Mobile delivered equipment to Red Desert’s Wyoming facility in April 2012. GE Mobile subsequently sent several invoices to Red [198]*198Desert at Cate Street’s Portsmouth, New Hampshire address, the address specified in the Purchase Order. In August 2012, Cleveland emailed Fischer a proposal to address Red Desert’s failure to make payments required under the Contract. Cleveland asked Fischer in the email: “[i]f I can get CSC to cut you a check for $100K on Monday to be applied to RO Invoices will that help you?” Doc. No. 1-4. Cleveland’s email identifies him as “Judson J Cleveland/President/CEO/Clean Runner, Inc., One Cate Street, Portsmouth, NH 03801-7108.” Approximately one week later, GE Mobile received a check from Red Desert for $20,000. The check was drawn on an account that listed the account holder as “Red Desert Reclamation, LLC/ 1 Cate Street, Suite 100, Portsmouth, NH 03801.” Doc. No. 18-10.

On September 4, 2012, representatives of GE Mobile and Cate Street met at Cate Street’s offices to discuss the status of outstanding payments on the Contract. In attendance were Cate Street’s president/CEO, its compliance director, and GE Mobile’s North American sales director. GE Mobile warned Red Desert that its failure to make additional required payments risked a shutdown of operations. Cate Street’s president acknowledged that Red Desert could not currently pay its invoices, but he assured GE Mobile that Cate Street was finishing work on a $1 million contract and would be able to pay once the contract was satisfied. He further explained that Cate Street would have to recapitalize Red Desert and that it planned on doing so by going “to its investors to obtain more money to pay off Red Desert’s debts, including the amount owed to GE.” Doc. Nos. 18, 18-9.

Discussions between GE Mobile and Cate Street continued in the ensuing weeks over telephone and email. GE Mobile agreed to adjust the balance due under the Contract, giving Red Desert a credit of $172,050 to account for technologies that were not utilized at the facility. On September 20, 2012, Cate Street confirmed by phone its “continued interest in keeping the Project operational.” Doc. No. 18. The next day, Cate Street’s president emailed GE Mobile, stating “I want[ ] to reiterate our position and confirm Red Desert Reclamation, LLC’s commitment to its vendors.” Doc. No. 1-5. He acknowledged that Cate Street would have to make a serious decision regarding whether to close the facility, but “[wjhether we close the facility or keep it open Red Desert will pay its bills to GE.” On October 1, 2012, GE Mobile emailed Cate Street’s president, saying “[a]s I understand, it is your intent to shut down the facility and move forward with resolving all outstanding commitments.” Doc. No. 1-5.

GE Mobile received no further payments, and the parties agreed to shut down the project. After giving notice, GE Mobile removed its equipment and technicians in early October 2012. The removal coincided with the closing of operations for the winter, so GE Mobile’s actions did not compromise production at the site. Up to that point, GE Mobile had provided everything contractually required of it and was owed $996,000.

On October 16, 2012, GE Mobile emailed Cate Street’s president to again request his assistance in expediting payments. The email outlined the September conversations between the two companies and noted that Red Desert planned to close its books by October 15 and pay GE Mobile by November 15. It proposed a payment schedule and expressed “concern[] about the continued delay in payment, and diminution of clear communication between us.” On October 26, 2012, Cleveland stated in a telephone call with a GE Mobile official that he was “confident” that Cate Street would come through for GE Mobile [199]*199and explained that Cate Street was raising equity to pay its outstanding invoices. Doc. No. 18-8.

On February 27, 2018, GE Mobile received a letter from Clean Runner on Red Desert letterhead.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Laurie Ortolano v. City of Nashua et al.
2023 DNH 072P (D. New Hampshire, 2023)
Ortolano v. City of Nashua, NH
D. New Hampshire, 2023
Kiarie v. Dumbstruck, Inc.
S.D. New York, 2020
Rodger v. USA
2017 DNH 055 (D. New Hampshire, 2017)
Gasparik v. FNMA
2016 DNH 215 (D. New Hampshire, 2016)
Allan Bald v. PCPA, LLC, et al.
2016 DNH 081 (D. New Hampshire, 2016)
Moulton v. Bane, et al.
2015 DNH 204 (D. New Hampshire, 2015)
Derry & Webster v. Bayview
2014 DNH 264 (D. New Hampshire, 2014)
GE Mobile v Red Desert Reclamation
2014 DNH 054 (D. New Hampshire, 2014)

Cite This Page — Counsel Stack

Bluebook (online)
6 F. Supp. 3d 195, 2014 DNH 54, 2014 U.S. Dist. LEXIS 34415, 2014 WL 1056938, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ge-mobile-water-inc-v-red-desert-reclamation-llc-nhd-2014.