United States District Court, D. Kansas
MEMORANDUM AND ORDER
D. Crabtree, United States District Judge.
North Alabama Fabricating Company, Inc. brings this lawsuit,
asserting breach of contract and fraud claims, against four
defendants: (1) Bedeschi Mid-West Conveyor Company, LLC
(“Bedeschi”); (2) Dearborn Mid-West Conveyor
Company, Inc.; (3) Larry Harp; and (4) Braxton Jones.
Defendant Bedeschi responded to plaintiff's Complaint by
asserting a Counterclaim, alleging breach of contract and
breach of warranty claims and seeking a declaratory judgment
that it never breached the parties' contract.
matter comes before the court on the parties'
cross-motions for summary judgment. Defendants have filed a
Joint Motion for Partial Summary Judgment (Doc. 82).
Defendants' motion asks the court to grant summary
judgment against two of plaintiff's three claims: (1)
Count II's claim for fraud, promissory fraud, and
misrepresentation; and (2) Count III's claim for
also has filed a Motion for Partial Summary Judgment (Doc.
84). Plaintiff's motion asks the court to grant summary
judgment against: (1) Bedeschi's counterclaims for breach
of contract and breach of warranty; (2) Bedeschi's
declaratory judgment claim; and (3) Bedeschi's
affirmative defense asserting a setoff. Also, plaintiff asks
the court to enter summary judgment in its favor on
plaintiff's assertion that Bedeschi changed the
“scope of work, ” thus entitling plaintiff to
additional payment under the parties' contract.
considering the parties' arguments, the court grants
defendants' summary judgment motion in part and denies in
it part. And the court denies plaintiff's summary
judgment motion. The court explains why below.
following facts are either stipulated facts taken from the
Pretrial Order (Doc. 79), or uncontroverted for purposes of
the parties' summary judgment motions.
9, 2014, Dearborn Mid-West Conveyor Company, Inc.
(“Dearborn”) entered into a contract with Essar
Projects USA, LLC (“Essar”). Dearborn agreed to
design, manufacture, and erect one or more “Iron
Pellet” conveyor systems at iron and iron ore
processing facilities owned or operated by Essar in Minnesota
(“the Essar Project”). The contract provided that
Dearborn could engage necessary or appropriate subcontractors
to facilitate its performance under the contract, including
one or more subcontractors responsible for manufacturing,
fabricating, and delivering to Essar the parts, pieces,
components, and materials used to construct the conveyor
then subcontracted its performance under the Essar Project
contract to Bedeschi-a newly created company. Bedeschi
engages in the design, integration, and installation of
material handling systems including “conveyor
systems.” The principal consumers of conveyor systems
are companies who: generate electrical power; mine, extract,
refine, or process minerals, cement, pulp and paper; or
transport goods and commodities by sea. Bedeschi does not
manufacture conveyor systems. Instead, it engineers the
desired equipment and subcontracts the manufacturing to
outside steel fabricators.
and Bedeschi entered into an asset purchase agreement. It
provided that Dearborn would subcontract its obligations
under its contract with Essar to Bedeschi. It also provided
that Dearborn would remit to Bedeschi all amounts Essar paid
Dearborn. Bedeschi never had a contract with Essar. Instead,
as described, it served as Dearborn's subcontractor on
the Essar Project.
Contracts with NAFCO
assuming its subcontractor obligations on the Essar Project,
Bedeschi entered into written contracts with plaintiff North
Alabama Fabricating Company, Inc. (“NAFCO”) for
NAFCO to manufacture fabricated steel equipment and support
structures for use in the Essar Project's construction.
The Blanket Subcontract Agreement (Doc. 83-4) and Subcontract
Purchase Order and accompanying Terms and Conditions (Doc.
83-5) is the contract between Bedeschi and NAFCO for the
Essar Project. The court refers to these documents
collectively as “the Contract”. The parties
entered the agreements in September 2015.
it signed the Contract, NAFCO never requested Bedeschi's
financial statements or any other information about Bedeschi,
its business, assets, organization, or affiliations. In
declarations submitted on summary judgment, Larry Harp
(Bedeschi's President and CEO) and Braxton Jones (a
Dearborn project manager) attest that when the parties
entered the Contract in September 2015, neither Mr. Harp, Mr.
Jones, nor Bedeschi intended not to fulfill Bedeschi's
obligations under the Contract. Also, neither Mr. Harp, Mr.
Jones, nor Bedeschi knew any facts that would or could
prevent Bedeschi from performing its obligations under the
Contract. Mr. Harp and Mr. Jones further attest that when the
parties entered the Contract, Bedeschi intended to pay NAFCO
for its performance under the Contract in the amounts and at
the times the Contract required. Also, they knew no facts
suggesting that Bedeschi would not or could not pay NAFCO as
the Contract required. Mr. Harp and Mr. Jones attest that,
when the parties inserted the schedule for NAFCO's
performance under the contract, Bedeschi intended to keep,
follow, and adhere to the schedule. Also, they knew no facts
suggesting that Bedeschi would not keep the schedule or that
it would need to disregard the schedule. And Mr. Harp and Mr.
Jones attest that, when the parties entered the Contract,
Bedeschi intended to engage a shipper who would provide
trucks to NAFCO for loading and transporting fabricated steel
to the Essar Project jobsite. Finally, Mr. Harp and Mr. Jones
knew of no facts that would prevent Bedeschi from
establishing a shipping method for the fabricated steel.
Terms of the Blanket Subcontract Agreement
parties' Blanket Subcontract Agreement
(“Subcontract”) provided that Bedeschi would
issue one or more purchase orders to NAFCO. The purchase
orders were deemed to include the terms and provisions of the
Subcontract, to define the scope of NAFCO's work
(including its start and completion dates), and to establish
the compensation paid to NAFCO. The Subcontract required
NAFCO to furnish all labor, management, supervision,
engineering, materials, tools, equipment, construction
utilities, supplies, samples, models, temporary structures,
and facilities as well as hoisting, transportation,
unloading, storage, hauling, and all other items necessary to
perform the scope of work.
4 of the Subcontract established the subcontract price. It
provided that each purchase order issued by Bedeschi to NAFCO
would specify the full and complete compensation for
performing the work described in the purchase order. Article
4 also provided that Bedeschi is not liable for any amount
exceeding those amounts unless a written change order was
issued under Article 17.
Subcontract permitted Bedeschi to withhold all or part of any
payment if Bedeschi deemed it necessary to enforce
NAFCO's obligations or to protect Essar from loss. A
withholding of payment could include a withholding resulting
from NAFCO's performance of defective work under any
Subcontract required NAFCO to provide adequate protection,
care, and maintenance for and to bear all risk of damage to,
or loss of: all materials and equipment it furnished; all
materials, supplies, and equipment it delivered to Bedeschi
or Essar intended for incorporation or use in the performance
of any work; and all work completed or in progress until the
earlier of Bedeschi's written final acceptance or
possession of the work by Bedeschi, Essar, or one of their
other contractors. Also, the Subcontract required NAFCO to
bear the expense of all overtime and additional labor
necessary to meet the completion date established by any
purchase order if caused by NAFCO's failure to perform
according to the terms of the Subcontract.
Subcontract provided that, in the event of a dispute between
Bedeschi and NAFCO that also involved Essar in any way, the
provisions of all contract documents, including the
Bedeschi-Essar Project contract, were binding on NAFCO. Also,
it required NAFCO to complete any portion or portions of any
work within the time specified by the purchase order. And it
required NAFCO to modify the order of performance as
necessary to comply with Bedeschi or Essar's directives.
NAFCO was entitled to extra compensation or an extension of
time for completion, or both, only if it complied with the
Subcontract's Article 17. Article 17(B) permitted NAFCO
to seek changes to the agreement, including a price increase,
but it required, among other things, that NAFCO submit the
requested change in writing and Bedeschi approve the change
in writing. But Article 17(A) permitted Bedeschi to make
“minor changes” in the work (ones not involving a
material increase in cost) with no adjustments made to the
the Subcontract required that, upon receiving written notice
from Bedeschi, NAFCO would suspend shipment and delivery of
material and stop any part or all of the work or operations
performed under the contract for any periods of time Bedeschi
designated in the notice. In such cases, NAFCO's
reimbursement, if any, was limited to its actual costs and
expenses without any overhead or anticipated profit for
Subcontract provided Bedeschi the right, at any time, to
terminate NAFCO's engagement under the Subcontract and
any ensuing purchase orders by giving NAFCO written notice.
The written notice became effective 10 days after NAFCO
received it. After receiving written notice of termination,
the Subcontract required NAFCO immediately to discontinue the
work that Bedeschi had terminated and to stop placing orders
for material, equipment, and supplies in connection with the
work. But it permitted NAFCO to perform work necessary to
preserve and protect work already in progress or in transit
and to protect material and equipment on the work premises or
in transit thereto. The Subcontract provided that neither
Bedeschi nor Essar is liable for any damages or loss of
anticipated profits because of such termination. If Essar
requested or directed the termination, the Subcontract
prohibits NAFCO from recovering any costs, expenses, or other
items resulting from the termination except to the extent
that Bedeschi could recover the same from Essar for work that
the Subcontract gave Bedeschi the right to terminate the
agreement, or any portion thereof, and take possession of the
finished and unfinished work by whatever method it deems
expedient, upon 30-days' notice, in the event, among
other things, that NAFCO: failed to prosecute any work with
promptness or diligence; refused or failed to supply enough
properly skilled workers or proper materials; refused or
failed to make prompt payment for materials or labor on any
project; or otherwise violated any of its agreements with
recognized that the work and materials that it produced under
the Subcontract and any ensuing purchase order was of a
special and unique nature, and it constituted a critical part
of Bedeschi's own work for and on behalf of Essar. Also,
NAFCO recognized that Bedeschi would suffer irreparable harm
and damages, including irreparable damage to its reputation
and standing should NAFCO fail to make such work and
materials available to Bedeschi, when needed.
Subcontract provided that, in the event either NAFCO or
Bedeschi failed to comply with any term, condition,
requirement, or provision of the agreement or the purchase
orders or otherwise defaulted upon any obligation contained
in or imposed by the agreement or the purchases orders, the
defaulting party would be liable for and must pay to the
non-defaulting party all losses, damages, costs, and expenses
of every kind and nature including reasonable attorney's
fees incurred by the non-defaulting party in connection with
the Subcontract provided, if NAFCO defaulted and the unpaid
balance of the subcontract price is less than the amount by
which the Subcontract permits reduction of the subcontract
price, Bedeschi may deduct the difference from any sums
payable to NAFCO.
Terms of the Subcontract Purchase Order
October 5, 2016, NAFCO executed an acknowledgement copy of
the Subcontract Purchase Order. The Subcontract Purchase
Order provided that $4, 637, 371 was the total price for
NAFCO's performance. The Subcontract Purchase Order
required Bedeschi to pay the sum in serial payments equal to
the agreed price for all materials and goods actually
delivered within the 30-day period next-preceding such
payment, subject to a retention of 5%. The Subcontract
Purchase Order provided that Bedeschi would not consider
charges for extra or additional equipment, material, or work
without prior written authorization from Bedeschi's
Project Manager. Under the Subcontract Purchase Order, NAFCO
expressly warranted that all goods or services covered by the
agreement would be “of first class quality and . . .
conform to the specifications, drawings, samples or
descriptions furnished to or by” Bedeschi; that they
would be “merchantable, of good material and free from
defects, latent or patent;” and that since NAFCO knew
of Bedeschi's “intended use” for such
products, NAFCO “expressly warrant[ed] that all goods
covered . . . [had] been selected, designed, manufactured, or
assembled by” NAFCO “based on”
Bedeschi's “stated use and” would “be
fit and sufficient for the particular purposes intended
by” Bedeschi. Doc. 83-5 at 3.
parties' Subcontract Purchase Order and attachments
included several requirements governing NAFCO's work for
the Essar Project. One of the attachments is the Subcontract
Purchase Order 's “Terms and Conditions.”
Bedeschi drafted the “Terms and Conditions” using
a form that it uses for other projects. The Subcontract
Purchase Order required that NAFCO's work generally would
consist of all detailing, fabrication, and painting as
outlined in the “General Instructions to” NAFCO
as well as the “Level of Assembly” matrix. The
Subcontract Purchase Order required NAFCO to manufacture,
construct, and fabricate “Crusher Concentrate Area
Conveyors, ” “Pellet Plant Area Conveyors,
” and “Pellet Product Area Conveyors” as
well as an inventory of spare parts. Id. at 9-11.
The Subcontract Purchase Order's prices included: the
unloading and storage of materials; preparation of shipping
documents, efficient truck loading, dunnage, and strapping of
material for shipping to the jobsite; and trucking arranged
by NAFCO using Bedeschi's preferred carriers and third
party billing. The Subcontract Purchase Order includes the
term “FOB Origin.” This term means that,
excluding warranty, NAFCO's responsibility for its goods
ends when NAFCO loads the goods onto shipping trucks at
NAFCO's facilities in Alabama. Also, once NAFCO loads the
goods onto the shipping trucks, title to the goods passes
from NAFCO to Bedeschi.
5 of the “Terms and Conditions” provides:
[Bedeschi] reserves the right at any time to direct changes,
or cause [NAFCO] to make changes to drawings and
specifications of the goods or to otherwise change the scope
of the work covered by this [purchase] order, including work
with respect to such matters as inspection, testing or
quality control, and [NAFCO] agrees to promptly make such
changes; any difference in price or time of performance
resulting from such changes shall be equitably adjusted by
[Bedeschi] after receipt of documentation in such form and
detail as [Bedeschi] may direct. Any changes to this order
shall be made in accordance with Paragraph 27.
Id. at 2. Section 27 provides: “This Order may
only be modified by a purchase order amendment/alteration
issued by [Bedeschi].” Id. At 5.
22 of the “Terms and Conditions” provides:
In addition to any right of set-off provided by law, all
amounts due [NAFCO] shall be considered net of indebtedness
of [NAFCO] to [Bedeschi] and its subsidiaries; and [Bedeschi]
may deduct any amounts due from [NAFCO] to [Bedeschi] and its
subsidiaries from any sums due or to become due from
[Bedeschi] or its subsidiaries to [NAFCO].
Id. at 4.
Subcontract Purchase Order also contains an attached
“Table of Contents” listing additional provisions
incorporated into the parties' Contract. Section 5
incorporates the “Specifications and Codes” of
several outside authorities, including those of the American
Institute of Steel Construction (“AISC”).
Id. at 9. The AISC's Code of Standard Practice
for Steel Buildings and Bridges (“AISC Code”) is
a publication setting forth the industry “trade
practices . . . involved in the design, purchase, fabrication
and erection of structural steel.” Doc. 85-5 at 4.
1.1 of the AISC Code provides: “In the absence of
specific instructions to the contrary in the contract
documents, the trade practices that are defined in this
code shall govern the fabrication and erection of structural
steel.” Id. at 14. The Commentary Section 1.1
of the AISC Code states: “This code is not intended to
. . . change the duties and responsibilities of the
owner, contractor, architect or general engineer
of record from those set forth in the contract
documents; nor assign to the owner, architect or
general engineer of record any duty or authority to
undertake responsibility inconsistent with the provisions of
the contract documents.” Id.
9.4.1 of the AISC Code provides:
When the scope of work and responsibilities of the fabricator
and the erector are changed from those previously established
in the contract documents, an appropriate modification of the
contract price shall be made. In computing the contract price
adjustment, the fabricator and the erector shall consider the
quantity of work that is added or deleted, the modifications
in the character of the work and the timeliness of the change
with respect to the status of material ordering, detailing,
fabrication and erection operations.
Id. at 76. Section 9.4.3 of the AISC Code states:
Price-per-pound and price-per-item contracts shall provide
for additions or deletions to the quantity of work that are
made prior to the time the work is released for
construction. When changes are made to the character of
the work at any time, or when additions and/or deletions are
made to the quantity of the work after it is released for
detailing, fabrication or erection, the contract price shall
be equitably adjusted.
of the Contract
November and December 2015, NAFCO delivered eight shipments
of fabricated steel to the Essar Project, as the parties'
Contract required. Bedeschi paid NAFCO in full for those
deliveries less retainage, after it received payment itself.
fall of 2015, construction on the Essar Project stopped
because the project owner was unable to secure additional
funding needed to finish construction and commence
production. Then, in December 2015, Essar failed to provide
proof of an extension of a Letter of Credit as a method of
payment for invoices submitted for work on the Essar Project.
December 22, 2015, Bedeschi sent a letter to NAFCO. It stated
that Bedeschi had given Notice of Default to the Essar
Project owner on account of its failure to provide and
maintain letters of credit as a method for payment of
invoices submitted for work performed on the Essar Project.
The letter invoked the parties' Contract, specifically
Section 3 of the Terms and Conditions of the Subcontract
Purchase Order. And it instructed NAFCO to suspend all
further shipments to the Essar Project while Bedeschi
continued to pursue issuance of compliant letters of credit
or other credit facilities from Essar that would assure
payment and permit NAFCO to resume shipment. Bedeschi's
temporary suspension applied to shipments of material then in
the process of fabrication as well as all future shipments.
December 23, 2015, NAFCO sent a letter to Bedeschi. It
reported that NAFCO would suspend further operations and
shipments and await reinstatement of the suspended work.
NAFCO then sent invoices to Bedeschi for the additional costs
NAFCO had incurred because of the work's suspension, as
provided by Article 24 of the Bedeschi-NAFCO Subcontract.
Bedeschi never paid those invoices.
email dated March 28, 2016 and sent to NAFCO, Mr. Jones (a
Dearborn Project Manager) told NAFCO that it should include a
line item in its invoice for interest-or the cost of
money-because Bedeschi needed to show the separate charge
when it presented a request for a change order to Essar. Mr.
Jones noted that Mr. Harp (Bedeschi's President and CEO)
had suggested during an earlier conference call that NAFCO
include this line item. On March 31, 2016, NAFCO responded to
Mr. Jones's email by providing an updated change order
request that included the “cost of money” at $6,
750 per month for the four months while Bedeschi had
suspended NAFCO's work. Doc. 97-17 at 1. Bedeschi never
responded to NAFCO's March 31 email. It also never
contested the “cost of money” line item.
2, 2016, Bedeschi and NAFCO representatives met to discuss
the possibility of Bedeschi lifting the temporary suspension.
Mr. Harp suggested to NAFCO that the best way for it to get
paid for materials NAFCO had constructed was to ship them to
the Essar Project. The parties agreed that, if Bedeschi
agreed to lift the suspension, the payment terms established
in the Contract would continue to control. But John Ralph
Parrish (NAFCO's President) testified that Bedeschi
offered to pay NAFCO interest if NAFCO resumed its shipments.
During the meeting, Bedeschi never asked NAFCO to change the
terms of the parties' Contract. To the contrary, the
parties agreed that Bedeschi would be obligated to satisfy
all outstanding invoices. But Bedeschi also told NAFCO that
it would make payment to NAFCO when Bedeschi itself was paid
for its work on the Essar Project.
May 2 meeting, NAFCO asked Bedeschi to provide it with a
letter of credit to ensure payment. Bedeschi refused. Also at
the May 2 meeting, NAFCO asked Bedeschi to enter into a
written change order reflecting that it would pay NAFCO
additional amounts that NAFCO claimed it was owed for its
performance under the Contract. Bedeschi refused to enter or
issue any such change order.
in May, Mr. Harp spoke with Jim Smothers (a NAFCO employee)
about NAFCO's work on the Essar Project. Mr. Harp told
Mr. Smothers that Bedeschi would pay NAFCO when Bedeschi
itself received payment for the Essar Project. Also, Mr. Harp
told Mr. Smothers that, if NAFCO resumed shipping fabricated
steel to the Essar Project, Bedeschi would pay NAFCO when
Bedeschi was paid. Also during May 2016, Mr. Jones told NAFCO
that Bedeschi needed Essar to pay invoices so that it could
pay NAFCO for its work on the Essar Project. Mr. Jones told
NAFCO that Bedeschi did not have the ability to pay NAFCO
until Essar made its payments. When Mr. Jones made these
representations, he believes he relied on information that he
received from either Mr. Harp or Bedeschi's Controller,
Nancy Burris, about the company's finances.
4, 2016, Bedeschi sent a letter to NAFCO lifting the
temporary suspension and directing NAFCO to resume shipments
immediately. The letter asked NAFCO to ship the material as
quickly as possible so that Bedeschi could be paid under a
letter of credit that required delivery of the materials on
or before June 10, 2016. More specifically, the accelerated
shipment date required NAFCO to paint and ship 300 tons of
fabricated steel within four to five weeks. Bedeschi
acknowledges that this order involved a lot of steel and
amounted to “a tall order.” Doc. 85-3 at 133
(Jones Dep. 389:6-12). The letter also explained that
Bedeschi would pay NAFCO once it had received a corresponding
payment for the materials from Essar.
it received the May 4 letter, NAFCO informed Bedeschi that,
given the accelerated shipment date, it believed Bedeschi
would be responsible for NAFCO's increased costs arising
from the earlier suspension and future accelerated schedule.
Mr. Harp and Mr. Jones represented to NAFCO's President
that Bedeschi would compensate NAFCO for those expenses. Mr.
Jones, testifying in his capacity as Bedeschi's
designated corporate representative, testified that before
resuming the shipments in May 2016, “Bedeschi knew it
was going to have to pay NAFCO amounts that weren't
provided for in the parties' contract.” Doc. 85-3
at 113 (Jones Dep. 323:2- 6). Also, Mr. Jones testified that
Bedeschi's suspension of shipments in December 2015, and
its resumption of shipments on an expedited basis in May
2016, constituted a significant change to NAFCO's work
under the Contract. Still, NAFCO and Bedeschi never changed
the payment terms as established by the Subcontract Purchase
Order and Terms and Conditions.
10, 2016, Mr. Jones told NAFCO that Bedeschi would pay NAFCO
when Essar paid Bedeschi. On May 11, 2016, Mr. Jones sent an
email to NAFCO that again explained that Bedeschi would pay
NAFCO when it received the corresponding payment from Essar.
May and July 2016, NAFCO delivered 34 more loads of
fabricated steel totaling more than $1.3 million in product.
Bedeschi assured NAFCO that the letter of credit provided the
necessary surety to allow Bedeschi to compensate NAFCO for
its work. In response, NAFCO repeatedly told Bedeschi that
its payment obligations to NAFCO were independent of any
compensation it might receive under the letter of credit.
NAFCO repeatedly has declined any attempts to amend or alter
the parties' Contract. Instead, it has reserved its
rights under that agreement.
Receives Payment from Essar
eventually paid Dearborn more than $16 million for the Essar
Project. Dearborn has paid Bedeschi all amounts it has
received from Essar. Bedeschi received the balance of the
payment after NAFCO filed this lawsuit. Bedeschi never
informed NAFCO that Essar had paid Dearborn the $16 million.
Mr. Jones testified that the payment had occurred just
recently-after this lawsuit was filed. Mr. Jones acknowledged
that Bedeschi had informed NAFCO several times that Essar had
made no payments to Dearborn. But Mr. Jones testified that
these statements were accurate when Bedeschi made them
because Essar had not yet paid Dearborn.
now has received payment (from Essar through Dearborn) for 39
of the 42 loads of steel that NAFCO delivered to the Essar
Project. Bedeschi has not paid NAFCO's invoices because
the parties have not agreed on the amount that Bedeschi owes
NAFCO. Bedeschi has told NAFCO several times that Bedeschi
could not pay its invoices because NAFCO had not provided
sufficient documentation to support them. Mr. Jones described
the invoices as “not yet valid” because they lack
proper documentation. Doc. 97-2 at 48-49 (Jones Dep.
260:20-261:8). And for this reason, Bedeschi has not paid the
invoices. Bedeschi acknowledges, though, that its suspension
and resumption of shipments probably caused NAFCO to incur
increases in the cost of work, costs stemming from
inefficiencies, and loss of productivity. But Bedeschi has
not received information showing that NAFCO experienced these
increases from the suspension and resumption of shipments.
October 4, 2017, Bedeschi paid NAFCO $944, 378.30. Bedeschi
believed it owed NAFCO this amount for the final 34 shipments
of product under the Contract, plus a portion of the
additional charges that NAFCO had claimed. Bedeschi also
provided a reconciliation showing the method Bedeschi had
used to calculate the payment amount. This payment was the
first one that Bedeschi made for the 34 shipments that NAFCO
had delivered between May and July 2016.
Estimates of Costs for the Essar Project
Bedeschi suspended NAFCO's work in December 2015, but
before it resumed NAFCO's shipments to Essar in May 2016,
Mr. Jones prepared a document titled “Essar Vendor
Recap.” Mr. Jones prepared the Essar Vendor Recap
document to estimate Bedeschi's potential exposure to its
vendors, including NAFCO, on the Essar project. As of
February 22, 2016 (when Mr. Jones sent the Essar Vendor Recap
in an email), Bedeschi estimated that it owed NAFCO $1, 297,
425.40. Mr. Jones reached this estimate using the information
that he had at the time. And he based the estimate on Essar
potentially cancelling the project. So the estimate included
costs NAFCO had incurred as of February 22, 2016, but not
additional costs NAFCO would incur if Bedeschi resumed
Jones also drafted a document titled “NAFCO Estimate
Summary.” He prepared this document to estimate
NAFCO's “hard costs” for the Essar project.
Doc. 85-3 at 143 (Jones Dep. 410:20-24). The NAFCO Estimate
Summary reflects Bedeschi's estimation of NAFCO's
cost of materials based on average cost per pound, buyouts
and additional engineering changes, storage, ...