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AIRCRAFT GEAR CORP. v. KAMAN AERO. CORP.

June 13, 1994

AIRCRAFT GEAR CORPORATION, Plaintiff,
v.
KAMAN AEROSPACE CORPORATION, Defendant.



The opinion of the court was delivered by: MILTON I. SHADUR

 Aircraft Gear Corporation ("Aircraft") has brought suit against Kaman Aerospace Corporation ("Kaman"), seeking damages for the alleged breach of a subcontract under which Aircraft supplied certain steel gears for helicopters that Kaman manufactured for the United States Navy. Although the work was completed and the over $ 3 million contract price was paid, Aircraft asserts it is now entitled to an additional $ 1.831 million to cover expenses that it incurred when the task turned out to be more difficult and expensive than expected. Aircraft argues that Kaman should be liable for those costs because Kaman assertedly failed to live up to its contractual obligation to provide workable detailed specifications instructing subcontractor Aircraft in how to tackle the job.

 Kaman has responded with a motion for summary judgment. Because Aircraft's rejoinder to Kaman's legal position raises no material issues of fact and because Kaman's position is sound, Kaman's motion is granted.

 Summary Judgment Principles

 Familiar Rule 56(c) principles teach that to be "entitled to a judgment as a matter of law," the moving party must establish the absence of any "genuine issue as to any material fact" ( Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986)). In that respect a "genuine issue" requires that there be sufficient evidence for a jury to return a verdict in favor of the nonmoving party ( Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986)), while a "material fact" is one that "might affect the outcome of the suit under the governing law" ( id. at 248; Pritchard v. Rainfair, Inc., 945 F.2d 185, 191 (7th Cir.1991)). Applying those principles, this Court is not required to draw "every conceivable inference from the record--only those inferences that are reasonable" in favor of nonmovant Aircraft ( Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir.1991)).

 To implement Rule 56--most particularly to smoke out the existence or nonexistence of material factual disputes--this District Court has adopted General Rule ("GR") 12(m) and 12(n). GR 12(m) requires every Rule 56 movant to submit a statement of allegedly uncontested facts accompanied by supporting citations to the record in support of each fact alleged, while GR 12(n) requires the nonmoving party to respond point by point, with citations to the record in support of (1) any claimed dispute as to the movant's version of the facts and (2) any additional facts that the nonmovant chooses to assert.

 In this instance Kaman meticulously conformed its initial submission to GR 12(m) as well as to the requirements of Rule 56 itself. Unfortunately Aircraft's counsel demonstrated that whatever might be said about his client's ability to follow specifications, he could not: No GR 12(n) statement of any kind was tendered in response. Instead counsel's memorandum of law purported to contest some of Kaman's evidentiary submissions, *fn1" relying in part on some 30 attached exhibits that violated the fundamental dictates of Rule 56(c) and (e) as to the required evidentiary nature of summary judgment materials. *fn2"

 Kaman's R. Mem. 2-3 properly took Aircraft to task for that deficiency, citing to a few of the numerous cases in which our Court of Appeals and judges in this District Court have enforced GR 12(m) and (n) literally and strictly by treating the noncomplying Rule 56 respondent as having admitted everything in the movant's GR 12(m) statement. *fn3" This Court granted Aircraft a reprieve, however, by permitting its belated filing of a GR 12(n) response. Yet that filing too has failed to conform to the plain dictates of Rule 56 and GR 12(n):

 
1. None of the earlier-tendered exhibits was put into a posture in which it is admissible into evidence (see Rule 56(e)). This Court is thus entitled to ignore those exhibits entirely in resolving Kaman's motion--though as later explained, they would not help Aircraft's effort to avert summary judgment even if they were to be considered.
 
2. Even within the GR 12(n) statement, its counsel reflects the erroneous notion that it is a pleading akin to an answer, so that he mistakenly believes that a material factual issue may be posed by simply stating "deny" in a number of instances (see, e.g., Aircraft's GR 12(n) P 4) or "Deny having information sufficient to form a belief as to the truth of the averment contained in statement 6" (its GR 12(n) P6).

 In the text that follows, this Court will cite to Kaman's GR 12(m) statement--uncontroverted as it is--as "D. 12(m) P--." In the few instances in which any reference to Aircraft's response is called for, it will be cited as "P. 12(n) P--."

 Facts

 Kaman sought and ultimately obtained a contract to build SH2F Seasprite helicopters for the United States Navy. Under Navy requirements certain gearboxes for those aircraft must be fashioned from steel capable of withstanding elevated temperatures without sustaining either excessive wear or a loss of strength. For that purpose Kaman decided upon an alloy known in the industry as Pyrowear 53 ("Pyrowear"). Fabrication of Pyrowear requires the heat treating process of "carburization," under which carbon is diffused into steel in an extraordinarily hot and carefully calibrated furnace of either an atmospheric or vacuum variety.

 Because Kaman has never had the capacity to perform, much less having actually performed, a carburization operation (D. 12(m) Ex. G, Kaman Senior Material and Process Engineer David Saulnier ("Saulnier") Aff. P5), it consulted with Aircraft and recognized that it had to subcontract the gearbox work. *fn4"

 Aircraft's Board Vice Chairman Ken Spurgeon ("Spurgeon") then conferred with Bell Helicopter ("Bell") employee Ed Roseler ("Roseler," a long-time friend) and received manufacturing and metallurgical "advice. . . of very great importance" about the process (D. 12(m) Ex. B (Spurgeon Dep. 91, concluding his extensive testimony on the subject, id. 75-91); D. 12(m) Exs. C and D). *fn5" At Spurgeon's request, Roseler then had a number of discussions with Aircraft's technical personnel and provided them with Bell's documentation on the subject, all to assist them in their own study and work (id. 85-91). Aircraft then heat-treated several "experimental gears" to determine whether it could carburize them successfully (P. 12(n) P10, citing former Aircraft employee Leonard Skronski ("Skronski") Dep. 23, 28). *fn6"

 In October 1986 Kaman and Aircraft reached agreement as to their contractor-subcontractor relationship, and Kaman's Purchase Orders were written up on December 15 for four Input Accessory Gearbox kits and on January 7, 1987 for six Nose Gearbox kits, plus spare parts for both. Each of those Purchase Orders incorporated Kaman's Purchase Order Conditions (revised to March 1985) ("Conditions") and a Statement of Work ("Statement") that set out each party's obligations and listed several specifications (discussed in more detail below) as to the work to be performed. *fn7" Among Aircraft's delineated duties was its commitment to supply for every component part a manufacturing order (which the parties term an "MO") describing and sketching the entire sequence of operations involved in the manufacturing process. Although Kaman was entitled to review the MOs, they were treated by Aircraft as proprietary and protected from disclosure to competitors. Kaman was authorized under the agreements to issue engineering changes (which the parties term "EOs") to supplement the Purchase Orders.

 From Complaint PP16-17 it can be gleaned that the gears were ultimately successfully treated and shipped to Kaman, which then paid the $ 3,004,716 original contract price. This litigation stems from the fact that the Pyrowear manufacturing process turned out to be much more difficult than had initially been anticipated. Development of the proper formulation was therefore a costly endeavor, and resolution of the current controversy ...


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