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BP Amoco Chemical Co. v. Flint Hills Resources LLC

October 24, 2009

BP AMOCO CHEMICAL COMPANY, PLAINTIFF/COUNTER--DEFENDANT,
v.
FLINT HILLS RESOURCES LLC, DEFENDANT/COUNTER--PLAINTIFF.
FLINT HILLS RESOURCES LLC, THIRD-PARTY PLAINTIFF,
v.
BP CORPORATION NORTH AMERICA INC., DEFENDANT.



The opinion of the court was delivered by: Judge Amy J. St. Eve

BP AMOCO CHEMICAL COMPANY'S AMENDED MEMORANDUM IN SUPPORT OF MOTION FOR JUDGMENT AS A MATTER OF LAW UNDER FRCP 50(a) AS TO ALL OR PORTIONS OF FLINT HILLS RESOURCES LLC'S REPAIR COST DAMAGES FOR CERTAIN CLAIMS

Now that Flint Hills has closed its case, its own evidence demonstrates fundamental problems with Flint Hills' repair cost damages. For one claim, the problem is as simple as Flint Hills' failure to put into evidence the damages it seeks. But for most of the claims covered by the motion, the problem is that Flint Hills has overlooked the limitations on damages that were negotiated by the parties and included in the PSA, the contract on which Flint Hills premises its damages claims. In particular, PSA § 13.6 states that BP Amoco will not be liable to Flint Hills "for any. special, indirect, incidental, or consequential damages suffered by buyer, howsoever arising under the agreement." (Trial Ex. 1.001 at 121 § 13.6 ¶ 3) Yet, Flint Hills' own demonstratives, damages summaries, and supporting documents establish that various of Flint Hills' claims seek rental costs, testing and/or inspection costs, remediation costs, and similar indirect, incidental and/or consequential damages that § 13.6 bars.

Nor is § 13.6 the only section of the PSA that bars certain of Flint Hills' alleged damages. The evidence shows that Flint Hills also seeks to recover for services provided by its affiliates' personnel-which are barred under a separate PSA provision. In addition, Flint Hills has failed to mitigate its damages as required under both the common law and the PSA. In sum, the claimed damages subject to this motion and discussed in this memorandum are either (i) unsupported, (ii) barred by law, or (iii) prohibited under the PSA. Accordingly, judgment as a matter of law should be granted in favor of BP Amoco and against Flint Hills' cost-of-repair damages claims, in whole or in part, which are listed in this memorandum and in accompanying Exhibits 1-32.

I. FLINT HILLS CANNOT RECOVER DAMAGES FOR UNSUPPORTED "INTERNAL JOURNAL ENTRIES"

As demonstrated by Flint Hills' damages summaries, for many of its claims Flint Hills seeks to recover for expenses described only as "FHR INTERNAL JOURNAL ENTRIES." (E.g., Exs. 16, 17, 22) Flint Hills has provided no explanation of what these journal entries are for or how they could constitute damages in this case. When Matthew Daugherty, who sponsored Flint Hills' damages summaries, was asked about particular internal journal entries, he could not provide any explanation of what they were for and what the basis was for them. (Ex. 33, 10/13/09 Tr. at 4905:17-20) Instead, Mr. Daugherty testified generally that such entries were done to accrue costs or correct errors (id. at 10/13/09 Tr. 4903:14-4904:10), but nothing in the record evidence explains what costs were being accrued in those journal entries, what errors they were correcting, and whether those accrued costs or errors are properly charged to the claims in this case. The costs for these internal journal entries thus are unsupported and judgment as a matter of law should be granted against any damages sought in the internal journal entries. See, e.g., Movitz v. First Nat'l Bank of Chicago, 148 F.3d 760, 765 (7th Cir. 1998) (reversing jury verdict where plaintiff had failed to support its alleged damages); Horina v. City of Granite City, Ill., 538 F.3d 624, 637 (7th Cir. 2008) (reversing award of damages where "the evidence relevant to the calculation of the award was lacking").

The internal journal entries that should be excluded from damages are:

* Claim 5, $985.80, Ex. 2

* Claim 9, $22,351.62, Ex. 4

* Claim 12, $133,126.54, Ex. 5

* Claim 16/70, $159,215.08, Ex. 7

* Claim 17, $117,464.13, Ex. 8

* Claim 18, $909.90, Ex. 9

* Claim 21, long-term waste water treatment project, $22,490.28, Ex. 12

* Claim 35, $1840.43, Ex. 14

* Claim 36, $14,207.19, Ex. 15

* Claim 38, $215,384.25, Ex. 16

* Claim 39, $203,936.72, Ex. 17

* Claim 45, $16,812.59, Ex. 19

* Claim 48, $884.71, Ex. 21

* Claim 50, $273,791.59, Ex. 22

* Claim 56, $30,765.60, Ex.. 25

* Claim 66, $17,540.45, Ex. 27

* Claim 67, $784.47, Ex. 28

* Claim 77, $137,505.45, Ex. 31

II. FLINT HILLS CANNOT RECOVER RENTAL COSTS, WHICH ARE CONSEQUENTIAL DAMAGES BARRED UNDER THE PSA

PSA, ยง 13.6 in relevant part provides: SELLER WILL NOT BE LIABLE TO BUYER FOR ANY LOSS OF PROFIT, LOSS OF USE, SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES SUFFERED BY ...


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