Cranpark, Inc. v. Rogers Group, Inc.

When the main Youngstown-area crushed-stone supplier discontinued production, RGI, a Sandusky quarry, approached Hardrives, Sabatine's asphalt paving company, to discuss jointly establishing a large RGI distribution center and Hardrives production plant. In 1998, RGI’s representatives and Sabatine produced a draft agreement, with contingencies, such as the minimum amount of stone Hardrives was to buy, low-cost railroad transportation, and government incentives; it stated that it was subject to RGI senior management approval. Sabatine was unable to convince Norfolk Railroad to establish access and enlisted Congressman Traficant’s help.Unbeknownst to RGI, Sabatine paid Traficant a $2,400 bribe and was later indicted. Ultimately, the parties arrived at an acceptable rail rate and selected a Youngstown site. Hardrives began bidding on larger projects and purchasing new equipment. All the agreed contingencies were fulfilled, except RGI had arguably not given explicit senior management approval. Sabatine called RGI about ordering a $1.5 million asphalt plant for the site. According to Sabatine, RGI gave him the go ahead. Sabatine purchased the plant. Two months later RGI told Hardrives that it would no longer participate in the joint venture. Hardrives began losing money, and by 2001, became Cranmark and sold to McCourt. In 2004, Cranpark sued, alleging breach of contract and promissory estoppel. In 2010, the court granted RGI summary judgment, based on the limitations period, and holding RGI’s representations were not unambiguous promises. On remand, RGI argued that Cranpark was not the “proper party” because it had sold everything, including the right to bring the cause of action, to McCourt. The court denied the motion. A jury awarded $15.6 million, but the court then held that Cranmark lacked standing. The Sixth Circuit reversed, stating that the court failed to timely call the proof-of-standing issue to counsel’s attention, once RGI finally squarely presented the issue. View "Cranpark, Inc. v. Rogers Group, Inc." on Justia Law