Recycling LLC has won a breach-of-contract lawsuit against PPG
Industries Inc., which it had accused of wrongly terminating a
scrap metal contract.
The Lake Charles, La.-recycler,
which filed the lawsuit in 2007, is entitled to $319,255.
"Nothing in its pleadings or
reports to the court filed before trial suggested that PPG ever
considered poor performance to be the cause behind termination
of the Amerimex contract," Kathleen Kay, a magistrate judge in
a U.S. District Court in Louisiana, noted in her opinion.
In 2005, the two parties entered
a contract for Amerimex to purchase No. 2 heavy melting scrap
(HMS) and crushed drums from PPG. The price to be paid to PPG
was based on 65 percent of an AMM price for No. 2 HMS,
Houston. The drums were to be sold at $20 a gross ton.
The contract was to run from
Aug. 22, 2005, through July 31, 2008.
Amerimex said that it was
standard practice to remove large piles of scrap from
Pittsburgh-based PPG and separate the high-value metals at its
Amerimex alleged that when a new
manager took over the PPG scrapyard, he accused Amerimex of
stealing the nonferrous scrap that was in the HMS pile. The
manager alerted PPG security who informed Amerimex to return
the load and leave the facility.
Amerimex said it was at this
point its contract was terminated. The company that replaced
Amerimex removed 8.2 million pounds of scrap during the
remainder of the contract and was paid $549,680.
The judge noted that PPG had
opted for a fixed date on the contract and was bound to live up
to its obligation. Termination without reason and at will is
not an option. The contract did state that the scrapyard should
be cleaned to the ground, according to the decision.