Cai Rail, Inc. v. Badger Mining Corporation

2021 U.S. Dist. LEXIS 32564 (2021)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

P and D entered into a lease for one hundred 3,280 cubic feet capacity covered hopper rail cars. D leased the Cars to transport sand used for hydraulic fracking. On May 18, 2020, P sent a letter via email advising D that it was in default because it had failed to make certain monthly payments due under the Lease Documents. P terminated the Scheduled payments and demanded immediate payment and all future payments. P also sought D’s cooperation in winding up the contract and its obligations. On June 13, 2020, D emailed that it was facing financial difficulty, and sought P's 'help by providing financial relief.' D attached a proposal to restructure the Lease Documents and offered a 'limited amount of rail storage capacity' in return. D also attached a letter, dated June 10, 2020, from Wadsworth Whitestar Consultants, a firm that D had engaged to 'perform[] an assessment of the business, financial condition and prospects of D,' which opined that D was a 'viable business' but needed to 'eliminat[e] . . . the expense associated with excess rail cars.' The Consultants attributed D's financial troubles to 'significant changes in the market for proppant over the last few years,' including 'falling oil prices,' which have been 'exacerbated by the economic impact of the COVID-19 pandemic.' P filed suit on June 17, 2020. P then used the suit as a means to negotiate a settlement. On July 3, 2020, D paid P $68,310, a small fraction of the amount set forth in an email as a condition for P's agreement to restructure. D has made no other payments since that date and has not returned the Cars. P had sued for breach of contract, trespass, and failure to return the equipment, specific performance, and conversion. P claims that it is owed at least $136,620 under the Master Lease due as of April 30, 2020, plus at least $6,900 daily to the date of judgment, as well as any costs necessary to recover the Cars. P seeks trespass damages of at least $6,900 daily from the May 18, 2020 Termination Letter until the date of the Court's judgment, as well as any interest, costs, and attorneys' fees. P seeks the immediate return of the Cars. P requests that the Court enter judgment against D 'for the intentional tort of conversion of the [Cars], with damages of the value of the equipment, plus attorneys' fees, interest and costs of at least $2,500,000, with such amount to be finally determined on motion or after trial.' By leave of court, P filed a motion for summary judgment on the breach of contract and then a second on the remaining counts in the complaint.