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BP Amoco Chemical Co. v. Flint Hills Resources

March 25, 2010

BP AMOCO CHEMICAL COMPANY, PLAINTIFF/COUNTER--DEFENDANT,
v.
FLINT HILLS RESOURCES, LLC, DEFENDANT/COUNTER--PLAINTIFF.



The opinion of the court was delivered by: Amy J. St. Eve United States District Court Judge

MEMORANDUM OPINION AND ORDER

BP Amoco Chemical Company ("BP Amoco") initially filed suit seeking a declaration that it had not breached a contract with Flint Hills Resources, LLC ("Flint Hills"). (R. 8-1, Am. Compl.) Flint Hills filed counterclaims against BP Amoco for fraud and breach of contract.*fn1 (R. 14-3, Answer & Countercls.) After a nine week trial, a jury returned a verdict against BP Amoco in the amount of $41,688,648. BP Amoco now moves for judgment as a matter of law on the counts that went to trial or, in the alternative, for a new trial. For the reasons discussed below, BP Amoco's motion is denied. Furthermore, BP Amoco's motion to alter or amend the judgment on its declaratory judgment claim is denied.

BACKGROUND

This breach of contract case involves the sale of a chemical plant between two sophisticated business entities. In May 2004, BP Amoco sold certain rights and assets of its Performance Chemicals Business Unit ("PCBU") to Flint Hills for over $300 million pursuant to a contract called the Asset Purchase and Sale Agreement ("PSA"). A chemical plant located outside of Joliet, Illinois (the "Joliet Plant") was one of the assets BP Amoco sold to Flint Hills under the PSA. The parties signed the PSA on March 29, 2004, and Flint Hills assumed ownership of the Joliet Plant on May 28, 2004.

I. The PSA

The parties engaged in lengthy negotiations over the terms of the 131-page PSA, which extensively detailed the agreements between the parties. Two specific representations in the PSA were the focus of this lawsuit: (1) the representation regarding the condition of the Joliet Plant's assets and (2) the representation of the Joliet Plant's production capacity. After Flint Hills took over the Joliet Plant, the evidence at trial revealed, it ran into problems with both the condition of assets and the production capacity at the Joliet Plant.

A. Condition of Assets Representation

Section 7.1 of the PSA represented and warranted the following regarding the condition of assets at the Joliet Plant:

All of the Joliet Plant process units and buildings are structurally sound, and all tangible Assets have been maintained substantially in accordance with normal industry practice, are in substantially good operating condition and repair for their age (taking account of their nature, normal wear and tear and continued repair and replacement in accordance with Seller's past practice) . . . .

This representation and warranty was applicable as of the date of the PSA (March 29, 2004) and the date that the sale of the Joliet Plant closed (May 28, 2004).

B. Production Capacity Representation

The Joliet Plant produced three chemicals: (1) trimellitic anhydride ("TMA"); (2) purified isophthalic acid; and (3) maleic anhydride ("MAN"). These chemicals are used in performance plastics and coatings such as plastic water bottles.

Section 7.1(d)(ii) of the PSA set forth the production capacity representation regarding these chemicals:

Seller represents and warrants to Buyer, as of the date of this Agreement, and as of the Closing, as follows: The annualized maximum demonstrated sustainable production of the TMA, purified isophthalic acid and MAN production units at the Joliet Plant are 71,000 metric tons, 170,000 metric tons, and 51,000 metric tons, respectively, with the product produced meeting Seller's standard specifications therefor, recognizing that such demonstrated capacity does not take into account planned or unplanned downtime.

The PSA contains no other statements regarding capacity. Although the PSA contains various definitions, it does not define the phrase "annualized maximum demonstrated sustainable production" ("AMDSP") or any of the individual words in that phrase. Similarly, the PSA does not specify how long a rate must be achieved to be deemed "demonstrated" or "sustainable."

C. Other Provisions

The PSA provided that BP Amoco would indemnify Flint Hills under certain conditions for losses incurred that were greater than $75,000. Specifically, Section 13.2 of the PSA -- "Indemnification by Seller" -- provided:

To the fullest extent permitted by Law, Seller, in accordance with the terms of this Article 13, hereby agrees to Indemnify Buyer . . . from and against, any and all Losses incurred or required to be paid by any Buyer Indemnified Party . . . , which arise out of, relate to or result from any of the following: (a) any breach of any warranty or representation of Seller contained in Section 7.1 . . . .

Further, in Section 13.6 of the PSA, the parties agreed that, except for fraud, the remedies set out in Article 13 are the "sole and exclusive remedies" available for claims arising out of the PSA. Section 13.6 of the PSA states:

Except for . . . fraud, any claim or cause of action based on, arising out of or relating to this Agreement or Implementing Agreements must be brought by either Buyer or Seller, subject to the applicable provisions, conditions and limitations of this Agreement or Implementing Agreements, whether such claim arises out of contract, tort or otherwise. * * * Except for . . . fraud, the provisions of Article 13, Section 2.8(b) and Section 8.1(b) are intended to be the sole and exclusive remedies between the parties for the matters covered by such provisions. * * * SELLER WILL NOT BE LIABLE TO BUYER FOR ANY LOSS OF PROFIT, LOSS OF USE, SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES SUFFERED BY BUYER, HOWSOEVER ARISING UNDER THIS AGREEMENT, WHETHER BASED ON BREACH OF WARRANTY, BREACH OF AGREEMENT, STATUTE, STRICT LIABILITY OR OTHERWISE, INCLUDING WITHOUT LIMITATION NEGLIGENCE OF SELLER. . . . EACH PARTY AGREES THAT IT WILL NOT SEEK AND HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS TO OR FOR PUNITIVE OR EXEMPLARY DAMAGES AS TO ANY DIRECT CLAIM ARISING IN CONNECTION WITH THIS AGREEMENT.

II. Problems at the Joliet Plant

Flint Hills encountered problems with both the assets at the Joliet Plant and its production capacity after it purchased and took over the Joliet Plant from BP Amoco. The problems were extensive and included issues with the fire water system, the laboratory roof, the MAN reactor flanges, the motor control center buildings, the PIA sewer line, the underground piping, the tanks and water wells, the MAN sump, the cooling towers, the TMA and other tanks, the electrical systems, the PIA dryer, the boiler, and an abundant amount of other assets at the Joliet Plant. At times, Flint Hills had to shut down the plant to make repairs or to replace the assets because they were not in substantially good condition and could not operate. In fact, Flint Hills spent approximately $42 million to repair or replace the damaged assets and estimated an additional $56 million to complete the necessary repairs and replacements.

In December 2004, Flint Hills sent BP Amoco a claims notice seeking indemnification for the losses that it incurred as a result of the misrepresentations in the PSA, pursuant to Section 13.5 of the PSA. That section required Flint Hills to notify BP Amoco of its losses in writing with "reasonable promptness," "specifying, to the extent known, the nature of such Claim . . . , setting forth the specific facts and circumstances that are the basis of such Claim in reasonable detail, the amount of Losses sought . . . ." Flint Hills sent BP Amoco additional notices with significant details of the problems. Nonetheless, BP Amoco refused to indemnify Flint Hills, and the parties could not resolve their differences.

III. Procedural Background

On September 30, 2005, BP Amoco filed a declaratory judgment action against Flint Hills, seeking a declaration that BP Amoco did not breach the PSA or defraud Flint Hills. (R. 1-1, Compl.) On October 17, 2005, Flint Hills filed counterclaims against BP Amoco, alleging breach of the representations and warranties in the PSA and fraud. It also filed a separate complaint against BP North America, alleging breach of contract and fraud and raising multiple environmental claims. On January 5, 2006, Judge Moran consolidated Flint Hills' case with this one.*fn2 In advance of trial, Flint Hills moved to realign the parties for trial given that Flint Hills had the burden of proof on the substantive claims. (R. 480-1, Motion.) BP Amoco did not oppose the motion. (R. 537-1, Response.) The Court granted the request, and the parties were realigned for trial such that Flint Hills was the plaintiff, and BP Amoco was the defendant. (R. 539-1, Order.) The parties also stipulated to the dismissal of BP North America in advance of trial. (R. 774-1, Stipulation.)

Prior to trial, the parties -- both of whom were represented by experienced and talented litigation counsel -- extensively briefed the issues now before the Court. The parties engaged in extensive discovery, including BP Amoco serving Flint Hills with 4,637 requests to admit. (R. 191-1, Mem., Op., & Order.) BP Amoco also filed a motion for sanctions, claiming spoliation of certain evidence, which the Court ultimately denied. (R. 362-1, Motion.) BP Amoco filed four separate summary judgment motions*fn3 , and the parties filed 12 separate Daubert motions challenging the admissibility of the testimony of 17 experts. In addition, the parties filed approximately 21 lengthy motions in limine in advance of trial.

The trial lasted nine weeks. During trial, 41 witnesses testified, two of whom testified twice, and the parties introduced over 1,000 exhibits that were admitted into evidence. After the close of Flint Hills' evidence, the Court granted BP Amoco's motion for a directed verdict under Rule 50(a) on Flint Hills' claim for punitive damages because the circumstances of the case did not justify an award of punitives. Specifically, as a matter of law, a reasonable jury could not have found the necessary willful or wanton fraudulent conduct to award the extraordinary remedy of punitive damages. (R. 899-1, Order.) The Court denied BP Amoco's remaining motions.

The jury of twelve deliberated for approximately one week. On November 13, 2009, the jury returned a verdict in favor of Flint Hills on the breach of contract claim in the amount of $41,688,648 and for BP Amoco on Flint Hills' fraud claim. (R. 910-1, Verdict.) The verdict form reflects that the jury based its verdict on the breach of contract claim on both a breach of the condition-of-assets representation and a breach of the production capacity representation in the PSA. (Id.) Under the PSA, Flint Hills is also entitled to fees and costs.*fn4 (R. 730-1, Order.)

ANALYSIS

I. Legal Standard

BP Amoco seeks relief under both Federal Rule of Civil Procedure 50(b) and Federal Rule of Civil Procedure 59(a). The standard under both rules is difficult to satisfy.

A. Judgment As a Matter of Law Pursuant to Rule 50(b)

When ruling on a motion for judgment as a matter of law following a jury verdict, courts do not re-weigh the evidence presented at trial or make credibility determinations. See Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000). "Once a jury has spoken, we are obliged to construe the facts in favor of the parties who prevailed under the verdict." Tate v. Executive Mgmt. Servs., Inc., 546 F.3d 528, 531 (7th Cir. 2008) (citations and quotations omitted). Considering the totality of the evidence, courts determine whether the jury was presented with a "legally sufficient amount of evidence from which it could reasonably derive its verdict." Massey v. Blue Cross-Blue Shield of Ill., 226 F.3d 922, 924 (7th Cir. 2000). In assessing a motion under Rule 50(b), courts view the evidence and all reasonable inferences in a light most favorable to the party who prevailed under the verdict and "do not make credibility determinations or weigh the evidence." Tate, 546 F.3d at 532; Reeves, 530 U.S. at 150-51; Learning Curve Toys, Inc. v. PlayWood Toys, Inc., 342 F.3d 714, 721 (7th Cir. 2003). As the Seventh Circuit has noted, "the standard is steep. A verdict will be set aside as contrary to the manifest weight of the evidence only if no rational jury could have rendered the verdict." Staub v. Proctor Hosp., 560 F.3d 647, 658 (7th Cir. 2009) (citations omitted).

B. New Trial Pursuant to Rule 59(a)

In the alternative, BP Amoco seeks a new trial pursuant to Rule 59(a). "A party seeking to reverse a district court's denial of a motion for a new trial bears a particularly heavy burden." Moore ex rel. Estate of Grady v. Tuelja, 546 F.3d 423, 427 (7th Cir. 2008) (quoting Smith v. Northeastern Ill. Univ., 388 F.3d 559, 569 (7th Cir. 2004)). "In ruling on a motion for new trial, federal law requires a district court to determine whether the verdict is against the weight of the evidence . . . the damages are excessive, or . . . for other reasons, the trial was not fair to the party moving." Kapelanski v. Johnson, 390 F.3d 525, 530 (7th Cir. 2004) (citations and quotations omitted). A verdict will be set aside as contrary to the manifest weight of the evidence only if "no rational jury" could have rendered the verdict. Moore, 546 F.3d at 427. Federal courts will not "set aside a jury verdict if a reasonable basis exists in the record to support the verdict, viewing the evidence in the light most favorable to the prevailing party, and leaving issues of credibility and weight of evidence to the jury." Id. The Seventh Circuit reviews new trial motions for an abuse of discretion, which occurs only when no reasonable person could agree with the district court. ABM Marking, Inc. v. Zanasi Fratelli S.R.L., 353 F.3d 541, 543 (7th Cir. 2003).

C. General Verdict

Before turning to the merits of the motion, the Court first addresses BP Amoco's argument regarding general-verdict forms. According to BP Amoco, where a general verdict form is used, the Court cannot uphold the verdict if any error was committed. The Court disagrees.

Contrary to BP Amoco's argument, the verdict form in this case was not a general verdict on Flint Hills' claims. Flint Hills pursued two claims in this case -- a breach-of-contract claim and a fraud claim. Its breach of contract claim rested on two separate theories -- breach of contract in connection with the condition-of-assets warranty and breach of contract in connection with the production-capacity warranty. The verdict form had a separate question for liability for Flint Hills' breach of contract claim and for its fraud claim. (R. 910-1, Order.) In addition, the form specifically differentiated between Flint Hills' two theories of liability for breach of contract by directing the jury to proceed to a specific question only if its breach of contract finding was based in part on the production-capacity claim. (Id.) Thus, the verdict form was not general on the question of liability. The verdict form did not itemize damages based on Flint Hills' damages theories.

1. Sunkist Does Not Require Reversal for a Single Error

Relying on Maryland v. Baldwin, 112 U.S. 480 (1884), and Sunkist Growers, Inc. v. Wincker & Smith Citrus Prods. Co., 370 U.S. 19 (1962), BP Amoco asserts that because of the general verdict form in this case, any error -- legal or evidentiary -- automatically results in reversal. Unlike the cases upon which BP Amoco relies, the verdict form in this case was not "general" in the traditional sense as to the question of liability or defenses. It simply did not itemize the amount of damages awarded. BP Amoco does not cite any cases supporting that the verdict form must itemize damages or reflect the damages theory or theories applied by the jury. Such a requirement would make little sense, especially where -- as here -- the damages for the breach-of-contract claim were the same whether the breach was for the condition-of assets-claim or the production capacity claim.

Furthermore, as the Tenth Circuit has noted, Sunkist "does not paint with as broad a brush as appears from the language quoted. As with all errors committed at trial, a litmus test for reversal is whether the appellant was thereby unjustly prejudiced." Asbill v. Housing Auth. of Choctaw Nation, 726 F.2d 1499, 1504 (10th Cir. 1984). As to evidentiary issues, the Seventh Circuit*fn5 has found that as long as substantial evidence exists to support one theory of liability on a general verdict in a single-claim case, then it will uphold the jury's verdict:

[B]ecause the plaintiffs could have succeeded under one of two alternative theories of relief, and the jury returned a general verdict as opposed to a special verdict which, for example, could have included specific findings with respect to each theory of relief, we need only find that there was substantial evidence to support the jury's verdict under at least one of the two alternative theories.

Culli v. Marathon Petroleum Co., 862 F.2d 119, 123 (7th Cir. 1988). The same analysis applies where multiple claims are involved in a case. See Lawndale Nat'l Bank v. American Cas. Co., 489 F.2d 1384, 1389 (7th Cir. 1973) (distinguishing general verdicts with multiple theories of defense and multiple theories of liability). Other courts have reached similar results. See, e.g., Davis v. Rennie, 264 F.3d 86, 105-07 (1st Cir. 2001) (adopting a harmless error approach and reversing general verdict only where it is "reasonably certain that the jury was not significantly influenced by issues erroneously admitted to it." (citations omitted)).

2. BP Has Waived This Argument

Further, BP Amoco requested a general verdict form and did not ask for any itemization of damages; it did not object to the format of the verdict form that went to the jury. BP has therefore waived this argument. BP Amoco's argument that it has not waived any rights by failing to request itemized damages because Flint Hills bore that burden fails. In Kossman v. Northeast Ill. Reg. Commuter R.R. Corp., 211 F.3d 1031 (7th Cir. 2000), the Seventh Circuit rejected a similar argument involving multiple theories of liability where the defendant did not object or specify its request for a special verdict form:

Because the defendant never requested any special form of verdict, the jury only returned a general verdict for Kossman. And when a jury only returns a general verdict, we need only find support in the record for one of the theories presented to the jury in order to affirm the jury award.

Id. at 1037. See also Eastern Trading Co. v. Refco, Inc., 229 F.3d 617, 622 (7th Cir. 2000) (party "has only itself to blame for its inability to demonstrate that the jury was confused by the instruction" where party did not request special interrogatory and party claiming instruction was submitted to the jury on theory for which there was no evidentiary support). As Judge Coar noted in Dimensions Med. Ctr. Ltd. v. Aetna Life Ins. Co., No. 93 C 6244, 1997 WL 208387, at *3 n.1 (N.D. Ill. Apr. 23, 1997):

Because there was a lump sum verdict in this case, however, it is impossible to determine to what extent the award was based on any particular claim. Indeed, defendant makes this argument in its brief. This result is a byproduct of the defendant's failure to submit or request separate and/or itemized verdict forms for each claim. By doing so, defendant took the risk that the award would be uninterpretable when contesting individual claims. Moreover, a lump-sum award is not a basis, as defendant urges, for granting a new trial. Cf. Jastremski v. United States, 737 F.2d 666, 670 (7th Cir. 1984) ("The failure to divide the lump sum award into discrete elements of recovery does not warrant reversal."); In re International Surplus Lines Ins. Comp., 1994 WL 502015, *3 (N.D.Ill. Sept.12, 1994) (citing Robbins v. Day, 954 F.2d 679, 684 (11th Cir.), cert. denied, 506 U.S. 870, 113 S.Ct. 201, 121 L.Ed.2d 143 (1992)); Barbier v. Shearson Lehman Hutton, Inc., 948 F.2d 117, 121 (2d Cir. 1991) ("Lump sum awards are perfectly acceptable and are not subject to vacatur or modification because they are a lump sum."). The court can find no prejudice to defendant where defendant failed [to] mitigate this obvious risk when it had the opportunity. A Rule 50(b) motion is not a vehicle for remedying the inadequate defense of a claim.

See also Landes Constr. Co., Inc. v. Royal Bank of Canada, 833 F.2d 1365, 1373 (9th Cir. 1987) ("When a jury returns a general verdict for the plaintiff after hearing alternative calculations of damages, we uphold the award if there is substantial evidence in the record as to any one calculation to support the award.").

3. The Verdict is Supported by the Evidence

Even if BP Amoco's reading of Sunkist is correct, as discussed in detail below, it is not entitled to a new trial. The jury's verdict was more than supported by the evidence, and BP Amoco has failed to identify any errors.

II. BP Amoco Is Not Entitled to Judgment As a Matter of Law

BP Amoco argues that it is entitled to judgment as a matter of law based on various arguments regarding damages. At trial, Flint Hills sought the same damages for the breach of the condition-of-assets claim as for the breach of the production-capacity claim. Flint Hills sought damages for both the costs and expenses it had already incurred in repairing and replacing the assets and the future estimated damages to bring the Joliet Plant into compliance with the PSA warranties. The Court instructed the jury that:

Flint Hills has the burden of proving a reasonable basis for its computation of damages. While Flint Hills is not required to prove damages with mathematical precision, the law requires that damages be proved with reasonable certainty. Damages cannot be based on conjecture and speculation.

(R. 907-1, Jury Instructions at 46.)

BP Amoco further argues that it is entitled to a new trial because Flint Hills failed to prove by a preponderance of the evidence the future estimated damages for Claims 9, 21, 56, and 77. In Claim 9, Flint Hills sought damages for the installation of the heating ventilation and air-condition system ("HVAC") in the motor control center buildings. In Claim 21, Flint Hills sought damages concerning the waste water treatment project, including an air compressor used in connection with the production capacity of the Joliet Plant. Flint Hills' Claim 56 involves future costs to replace an electrical system and Substation A. Finally, Claim 77 involves the repair or replacement of a CB-704 boiler necessary to run the Joliet Plant.

BP Amoco asserts that Flint Hills failed to establish that the future estimated costs for these claims were "reasonably certain to occur" and that such costs could "be calculated with reasonable certainty." Furthermore, BP Amoco contends that Flint Hills' damages evidence did not satisfy the Federal Rules of Evidence because the future estimates were hearsay. Finally, BP Amoco argues that the PSA barred many of the damages Flint Hills sought. The Court will address each of these arguments in turn.

A. Future Estimated Costs

Viewing the evidence in the light most favorable to Flint Hills, Flint Hills established both the reasonable certainty of the future estimated costs and that such costs were reasonably certain to occur on each of these claims. BP Amoco's arguments fail as to both elements.

Claim 9 involved the motor control center buildings at the Joliet Plant. Rick Morris, Flint Hills' Reliability Manager, testified about the condition of this asset and the fact that the HVAC needed to be replaced in order to put that asset in compliance with the PSA representations and warranties. (Trial Transcript ("Tr.") at 4174.) Flint Hills received an estimate from Precision Control to conduct this work. Morris testified that the work on the HVAC system was reasonably certain to occur and that the HVAC provided the air filtration, temperature control, humidity control, and pressurization. (Id. at 4174-75, 4176.) The estimate from Precision Control was admitted into evidence without objection. (Id. at 4176-77; Trial Ex. 707.) The Precision Control estimate was for approximately $3 million. (Tr. at 4176.)

In proving Claim 21, Mr. Morris testified about the future costs for an air compressor necessary to increase the production capacity at the Joliet Plant. Flint Hills had an Authorization for Expenditure ("AFE") (Trial Ex. 1008) for $1.49 million that Mr. Morris had worked on with the Lead Rotating Equipment Engineer and the Senior Electrical Engineer at the Joliet Plant setting forth the cost to repair the air compressor that had been out of service for some time. (Tr. at 4206-07.) The Court admitted the AFE without objection. (Id. at 4213.) This AFE set forth an estimated $1.49 million to complete the work. (Id. at 4211.) Mr. Morris -- who was the Reliability Manager at the Joliet Plant -- testified that the air compressor was not working at the time Flint Hills purchased the Joliet Plant from BP Amoco. He further explained that it was necessary to restore the air compressor to service in order to meet the production capacity warranted in the PSA. (Id. at 4209-11.) He also testified that the air compressor work in Claim 21 was reasonably certain to occur in the future and that it was necessary to meet the production-capacity representations in the PSA. (Id. at 4212-13.)

Rick Morris also testified that the future costs for the Substation A replacement project in Claim 56 were reasonably certain to occur. Substation A, created in approximately 1958, housed electrical equipment and distributed electrical power to the waste water treatment plant and other areas at the Joliet Plant. (Id.) As Rick Morris testified, "it's very similar to a breaker box in your house, only it's about the size of a trailer home. It's bigger -- much bigger." (Id. at 4143.) It supplies approximately 10 to 15 percent of the power to the Joliet Plant. (Id. at 4144.) Evidence reflected that Substation A had "reached the end of its reliable operating range." (Id. at 4146-47; Trial Ex. 710.) Morris testified that Substation A was not insulated and did not have any temperature or humidity control. (Tr. at 4151.) He explained the significance of these problems for this central asset at the Joliet Plant:

The problem with that, with electrical equipment, is that you need to keep it temperature controlled, so that it doesn't go through heat and cold cycles that would loosen up the connections on the bolts. Also, you can get dew point corrosion, again, with humidity. So, if you get condensation inside the building, that will hurt the electrical equipment. So, it needs to be kept clean and dry.

Also, if you get dirt inside the building around the gear, that can cause arcing or tracking of the electricity. It's called corona. And you'll eventually create tracks, and the electricity will go a direction you don't want it to go and you'll have a failure. So, you need to keep electrical equipment pressurized and purged to blow air out of the building -- any cracks or openings. You need to keep it at a constant temperature, as well. (Id.) BP internally recognized these same problems and the need to replace Substation A in 1999 and 2002. (Id. at 4156.) In order to remedy these problems, Flint Hills worked with Valdez Engineering in developing an estimate for the cost of replacing Substation A. (Id. at 4154-57; 4544-45.) Valdez Engineering estimated $6 million to fix the problems at Substation A. (Id. at 4545-46; Trial Ex. 5589.) Mr. Morris testified that the estimated $6 million was reasonably certain to be incurred by Flint Hills given the various benefits and costs associated with the project. (Tr. at 4545.)

Claim 77 involved the repair/replacement of a steam boiler that generates 150 pounds of steam for the Joliet Plant to use in its operations. (Id. at 4201.) Morris testified that the boiler was in such bad shape when Flint Hills took over the Joliet Plant that they had to shut it down. (Id. at 4201.) In order to repair the boiler, Flint Hills looked into both replacing it and repairing it. (Id. at 4202.) Ultimately, Flint Hills decided to repair the boiler and obtained a $3.6 million estimate to rebuild it. (Id. at 4203-04.) Morris further testified that the future estimated costs for the repairs were reasonably certain to occur in the future. (Id. at 4203.) In addition, George Roman, who served as the project manager for the boiler project, testified that Flint Hills contacted Hayes Mechanical to provide an estimate for a portion of the costs to the boiler at issue in Claim 77. (Id. at 4627-29.) Hayes Mechanical visited the plant, then submitted an estimate for certain costs associated with repairing the boiler. (Id. at 4628-29.) Roman explained that the $2.5 million estimate from Hayes Mechanical (Trial Ex. 2094) was not for the full scope of the necessary work. After Roman received the estimate, he included additional items that were necessary to repair the boiler and created a total cost estimate, which the Court ...


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