National Utility Service, Inc. v. Huntsman Chemical Corp.

70 F. Supp. 2d 496, 1999 U.S. Dist. LEXIS 17693, 1999 WL 1051214
CourtDistrict Court, D. New Jersey
DecidedNovember 12, 1999
DocketNo. 97-CIV-455 (WGB)
StatusPublished

This text of 70 F. Supp. 2d 496 (National Utility Service, Inc. v. Huntsman Chemical Corp.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Utility Service, Inc. v. Huntsman Chemical Corp., 70 F. Supp. 2d 496, 1999 U.S. Dist. LEXIS 17693, 1999 WL 1051214 (D.N.J. 1999).

Opinion

OPINION

BASSLER, District Judge.

Plaintiff National Utility Service, Inc. (“NUS”) moves in limine to exclude Defendants Huntsman Chemical Corporation and Huntsman Polypropylene Corporation (collectively “Huntsman”) from introducing certain evidence.1

For the reasons discussed below, the Court grants in part and denies in part Plaintiff NUS’ motion in limine.

I. BACKGROUND

A. The Agreement

NUS is an energy and utility cost consultant. In January, 1991, NUS entered into a written agreement (“Agreement”) with Huntsman. Under the terms of the Agreement, NUS was to analyze Huntsman’s energy use and its energy and utility bills and then make recommendations to assist Huntsman “in obtaining refunds and [498]*498savings in energy supplies and utility services.” (Comply 12.)

The Agreement provides, in pertinent part:

“1. We hereby authorize you to submit recommendations for- savings and refunds on our costs of electricity, gas, ... water.... You will analyze our costs and advise where refunds and reductions can be obtained.
2. Your continuing analysis will cover our current bills, which we will send to you each month during the term of this agreement.
3. Any recommendation you make is subject to our approval. Any recommendation acted upon by us shall be deemed accepted and if implemented, we will pay you.... ”

(emphasis added.)

In exchange for its .services, Huntsman was to pay NUS an initial service fee of $12,000.00. Furthermore, Huntsman agreed to pay 50 percent of all savings realized from implementing recommendations of NUS for a period of 60 months. Payments by Huntsman to NUS were due “after such savings and refunds [were] achieved [by Huntsman],” (Agreement ¶ 3), and after Huntsman recaptured the initial service fee, (id. ¶ 5).

B. Recommendations for Savings

' When NUS and Hunstman entered into their contract, Hunstman and Unit Gas Transmission Company (“Unit Gas”)2 were parties to a five-year requirements contract dated July 1, 1989 (“Unit Gas Contract”). The Unit Gas Contract obligated Unit to supply up to 23,000 Mcf/day and Huntsman to buy, not a daily fixed amount, but all of its fuel requirements for its plant.

According to NUS, it recommended to Huntsman in June and August 1992 that Huntsman should renegotiate its contract with Unit Gas to reduce or eliminate a certain 5 cent mark-up that Huntsman was paying. NUS suggested that a “credible threat of bypass would create the proper leverage with Unit Gas in order to effect reductions in the present [Unit Gas] contract ...” (Exhibit 61 attached to NUS’ Brief in Support of Motion In Limine.)

According to Huntsman, a credible threat of bypass was nothing more than a recommendation to construct an entirely separate gas pipeline into the plant and contract with a supplier other than Unit Gas. A potential vendor identified by NUS was USA Gas. Hunstman contends that NUS went so far as to suggest that Huntsman cancel its contract with Unit Gas/En-tex. After meeting with a USA Gas representative, which was arranged by NUS, Huntsman rejected USA Gas’ proposal. It also refused to threaten to repudiate the Unit Gas Contract.

In November 1992, Huntsman allegedly began negotiating a new contract with En-tex. Then, in November 1993, Huntsman and Entex entered into a renegotiated contract that supplanted the Unit Gas Contract. The renegotiated contract eliminated gradually the 5 cent mark-up in exchange for an extended term. NUS claims, therefore, that Huntsman implemented the recommendation of NUS and that Huntsman owed NUS fifty percent of the savings achieved by this renegotiation.

On January 28, 1997, NUS filed a Complaint against Huntsman seeking its half of the savings achieved by this and other recommendations of NUS that were allegedly implemented by Huntsman.

II. DISCUSSION

A. Motion I — Extrinsic Evidence Regarding Meaning of Contract

Plaintiff NUS objects to the introduction of pre-contractual statements and documents regarding the “intent of the parties” at the time the parties entered into the Agreement. Accordingly, it seeks to ex-[499]*499elude the testimony of four of Huntsman’s witness: Peter Huntsman, Lisa Lynn Anderson, Richard Rozman, and part of the testimony of Brian Ridd. Plaintiff also seeks to exclude Huntsman Exhibits 5-8, 13, 15, 17, 204-208, 210-216, and 220 a-o. NUS asserts that the parties’ intent should be gleaned only from the writing itself and that parol evidence is not admissible because the Agreement is a fully integrated document, the terms of which are clear and unambiguous.

According to NUS, the Agreement provides that after gas, water and electric bills were forwarded to NUS for analysis, if NUS submitted an idea that Huntsman had not implemented, and that idea was thereafter acted upon and implemented, NUS would be paid its share of the savings. Under NUS’ interpretation of the plain language of the Agreement, NUS’ recommendation need not “cause” the achieved savings. In other words, NUS claims it is entitled to share in savings regardless of whether or not the savings are directly attributable to NUS’ recommendation. That is, under the Agreement, Huntsman cannot refuse to share its savings on the basis that its own prior knowledge of a particular recommendation, rather than NUS’ recommendation, was what “caused” the savings. NUS contends that Huntsman received what it bargained for and that any prior knowledge of NUS’ recommendations is therefore immaterial under the Agreement. NUS notes that the Agreement, as written, includes sharing in Huntsman’s savings when Huntsman was merely aware of but failed to act upon the same idea before NUS’ recommendation. Finally, it also suggests that if Huntsman wanted to exclude from the Agreement actions that Huntsman previously knew about or independently learned of, Huntsman could have specifically done so by amendment to the Agreement. NUS argues that parol evidence should therefore, not be permitted to extend, change, or “detract from” the scope of the Agreement.

Huntsman disagrees that it is seeking to alter or “detract from” the scope of the Agreement in any way. Rather, it asserts that parol evidence is admissible to show the intent of the parties regarding the true meaning of the terms of the Agreement. Specifically, Huntsman claims that in paragraph three of the Agreement, “acted upon” and “implemented” are “reasonably susceptible” of a different interpretation, namely, that when a customer had “prior knowledge” of a recommendation made by NUS, NUS is precluded from recovery. It is Hunstman’s contention that under the Agreement, NUS must have caused the savings in order to be entitled to any recovery. As an example, Huntsman points to the NUS brochure that states, “NATIONAL UTILITY SERVICE DOES NOT SHARE IN SAVINGS WHICH CLIENTS OBTAIN FOR THEMSELVES.” Huntsman insists that the evidence sought to be excluded by NUS is entirely consistent with Huntsman’s interpretation. As evidence that Huntsman had prior knowledge of the idea to renegotiate the Unit Gas contract, Huntsman relies on an internal memo dated April 1, 1992. That memo provides:

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70 F. Supp. 2d 496, 1999 U.S. Dist. LEXIS 17693, 1999 WL 1051214, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-utility-service-inc-v-huntsman-chemical-corp-njd-1999.