Schwob Energy Services, LLC v. Matrix PDM Engineering, Inc.

Summary

The United States District Court for the Northern District of Oklahoma addresses cross-motions for partial summary judgment and motions to strike expert testimony in a breach-of-contract dispute arising from a construction subcontract. The court interprets the subcontract’s termination-for-convenience provision, holds that Schwob may recover reasonable qualifying costs subject to contractual releases and factual reasonableness limits, and declines to find that Matrix waived its counterclaims for defective performance. The court denies the motions to strike the identified expert testimony and related briefing.

Holdings

1. The unambiguous termination-for-convenience clause entitles Schwob to recover reasonable costs of work performed and materials furnished before termination, plus reasonable demobilization costs, subject to the subcontract's limitations on overhead and profit; the clause does not limit recovery to milestone values under the Rules of Credit.
2. Schwob's signed releases bar it from seeking payment for labor, materials, or work included in progress-payment requests through November 14, 2021, but costs not included in those progress payments, including potentially change orders, may remain recoverable.
3. Matrix did not waive its counterclaim by terminating Schwob for convenience rather than default.
4. Schwob's motion to strike Richard DuCarme's testimony was denied because his report disclosed the underlying materials on which he relied, the undisclosed spreadsheets were summaries of those materials, and any disclosure deficiency was harmless.
5. Michael Patena was a non-retained expert because of his factual connection to the underlying contractual dispute, and Matrix was not required to provide a retained-expert report merely because Patena changed employment.
6. Harlan Smith may testify as a lay witness about costs Schwob incurred in performing the subcontract, subject to objections if his testimony exceeds personal knowledge and enters the realm of specialized expert opinion.

Questions Presented

1. Whether the subcontract's termination-for-convenience clause entitled Schwob to recover reasonable costs of work performed and materials furnished, rather than only prorated milestone amounts under the Rules of Credit.
2. Whether Schwob's signed milestone releases barred recovery of costs for labor, materials, or work included in progress-payment requests through November 14, 2021.
3. Whether Matrix waived its counterclaim for defective work and other alleged breaches by terminating Schwob for convenience rather than for default.
4. Whether the challenged expert testimony should be excluded under Federal Rules of Civil Procedure 26 and 37 and Federal Rule of Evidence 702.
5. Whether Schwob's CEO could testify as a lay witness regarding costs incurred in performing the subcontract.

Disposition

other