Goodrich Corp. v. BaySys Technologies, LLC

873 F. Supp. 2d 736, 2012 WL 2120010, 2012 U.S. Dist. LEXIS 80747
CourtDistrict Court, E.D. Virginia
DecidedJune 11, 2012
DocketCivil Action No. 2:11cv529
StatusPublished
Cited by10 cases

This text of 873 F. Supp. 2d 736 (Goodrich Corp. v. BaySys Technologies, LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Goodrich Corp. v. BaySys Technologies, LLC, 873 F. Supp. 2d 736, 2012 WL 2120010, 2012 U.S. Dist. LEXIS 80747 (E.D. Va. 2012).

Opinion

MEMORANDUM OPINION AND ORDER

RAYMOND A. JACKSON, District Judge.

Before the Court is Plaintiffs Motion to Dismiss Counts III and TV, as well as the portion of Count I involving Breach of the Implied Covenant of Good Faith and Fair Dealing, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Having carefully considered the parties’ pleadings and the arguments of counsel at the hear[739]*739ing on the instant motion, the Court finds that this matter is now ripe for judicial determination. For the reasons stated herein, Plaintiffs Motion to Dismiss is GRANTED in part and DENIED in part.

I. FACTUAL AND PROCEDURAL HISTORY

Plaintiff,1 Goodrich Corporation (“Goodrich”), is a corporation organized and existing under New York state laws with its principal place of business located in Charlotte, North Carolina. Compl. ¶ 2. Defendant, BaySys Technologies, LLC (“Baysys”), is a Virginia limited liability company with its principal place of business located in Accomack, Virginia. Compl. ¶ 3; see also Def.’s Ans. ¶ 3.2 BaySys provides remodeling and restoration services for private aircrafts. Def.’s Counterclaim ¶ 9. On or about January 28, 2008, BaySys entered into a purchase order (“Initial Purchase Order”) with Precision Pattern, Inc. (“PPI”), in which PPI would provide materials and labor for the fabrication of cabinetry for a privately owned airplane, Saudi Royal Flight Airbus A340-200 (“SRF A340”). Compl. ¶ 6. At the time of the initial Contract, PPI was a wholly owned subsidiary of DeCrane Aerospace, Inc. (“DeCrane”).

On or about September 22, 2012, Goodrich acquired assets of Decrane, including all amounts due to PPI under the BaySys agreement. Compl. ¶ 10. Goodrich alleges that PPI performed and provided all required labor and materials for the fabrication of cabinetry on SRF A340 and submitted periodic invoices to BaySys outlining payment obligations. Compl. ¶ 7. Goodrich claims PPI completed its work by June 2010 and issued its final invoice for work and materials on July 2, 2010. Compl. ¶ 8. Goodrich further asserts that BaySys has only paid a portion of its obligations under the agreement, despite several demands for payment dating to August 2010. Compl. ¶ 11.

BaySys denies Goodrich’s claims by alleging that PPI “woefully failed to perform its obligations to fabricate on time and free from defects in workmanship customized cabinetry for installation on a VIP renovation of an Airbus A340 ordered by Saudi Royal Flight.” Counterclaim ¶ 1. BaySys alleges PPI failed to meet deadlines set by the parties, causing serious delays to the overall renovation of SRF A340 resulting in “significant damages.” Id. BaySys suggests that the Initial Purchase Order established a final deadline of November 2009, and that Goodrich admits that work was not completed until July 2010. Id.

BaySys concluded that part of the reason work was never completed was because DeCrane closed PPI’s Savannah facility, forcing BaySys to pick up raw, unfinished components and parts to complete the job itself using substitute cabinet manufacturers and their own personnel. Id. According to BaySys, after PPI’s Savannah facility closed, PPI refused to finish its work unless BaySys paid overtime and additional fees for its personnel to travel to BaySys’ Wallops Island facility. Id.

BaySys alleges PPI’s substandard work caused it significant damages. Counterclaim ¶ 2. BaySys maintains that the Initial Purchase Order required PPI to provide: labor to manufacture and finish the cabinetry, materials for fabrication, inlays on cabinetry and tables, composite counter tops, laminated interior of cabinetry, installation [740]*740of electrical components in the cabinetry, and installation and testing of cabinet plumbing. Id. ¶ 13. As part of this order, BaySys alleges PPI warranted that at the time of delivery and up to twenty-four months thereafter, each item of cabinetry would be free from any defects in workmanship and would conform to the Initial Purchase Order’s specifications. Id. ¶ 14.

BaySys claims PPI agreed to strictly comply with manufacturing specifications including PPI’s own detailed High Gloss Finish Procedures. Id. BaySys asserts that PPI promised the fabrication time for each cabinetry product would be 20 weeks from the date of data approval by BaySys. Id. ¶ 15. Based on this promise, BaySys claims to have paid PPI a $1,127,963 down payment on February 4, 2008 and began providing drawings for cabinets in June 2008. Counterclaim ¶ 16. Throughout the summer and fall of 2008, BaySys claims to have devised a system through which PPI could provide reports of the status of each cabinet, including a cabinet schedule, and in which BaySys could schedule other modifications based on the timing of receipts of PPI. Id. ¶ 17. BaySys claims PPI agreed to have a number of cabinets finished by mid-December 2008. Id. Despite no delivery by that time, BaySys asserts PPI granted assurances of completion. Based on those assurances, BaySys paid the second installment of $488,784.14 on December 16, 2008. Id. ¶ 18.

However, BaySys contends that PPI failed to meet this deadline and instead delivered a “limited number of cabinets” in March 2009. Id. ¶ 19. Despite this, BaySys approved PPI’s Overtime Labor Charges of over $41,000, allegedly to “keep PPI’s production moving forward to meet the now mid-May deadline.” Counterclaim ¶ 20. However, BaySys claims that the April/May deliveries had “finishing issues so severe that BaySys could not fix them itself,” resulting in BaySys sending the cabinets back to PPI for repair. Id. ¶ 21. Afterwards, BaySys President Steve Walton ventured to the PPI facilities in Georgia to discuss the continued delays at the PPI factory and to inform PPI that the delays adversely affected BaySys’ redelivery time for the SRF A340. Id. BaySys subsequently approved additional overtime labor payments and paid another installment of $350,000. Id. ¶ 22.

For approximately five weeks from June to July 2009, BaySys was forced to close its Wallops Island plant based on cash flow problems caused by “delinquencies by another BaySys customer.” Id. ¶ 23. PPI then shut down its work on SRF A340 and following BaySys’ return to operation, refused to continue work until BaySys paid all pending overtime and contract change orders PPI issued. Id. BaySys claims PPI further demanded early payments of the next two installments under the initial performance order, which otherwise would not have been due until performance was 80% complete. BaySys asserts that it made this payment in the amount of $834,993.29 on August 26, 2009. Def.’s Counterclaim ¶ 23.

In September 2009, the parties decided to modify the Initial Purchase Order. Id. ¶ 24. BaySys agreed to send an on-site manager and additional engineers to PPI’s Savannah facility. Id. In exchange for PPI’s commitment to complete its work by November 11, 2009, BaySys paid 50% of the remaining balance due, a portion of the PPI cost overruns to date, and PPI’s estimated overtime charges to complete the balance of the cabinetry work by the agreed final deadline of November 11, 2009. Id. Additionally, PPI promised to devote sufficient manpower to the cabinetry and provide daily and weekly reports. Id. ¶25.

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873 F. Supp. 2d 736, 2012 WL 2120010, 2012 U.S. Dist. LEXIS 80747, Counsel Stack Legal Research, https://law.counselstack.com/opinion/goodrich-corp-v-baysys-technologies-llc-vaed-2012.