Pittsburgh-Des Moines Steel Co. v. Brookhaven Manor Water Co.

Pittsburgh-Des Moines Steel Co. (PDM) (plaintiff) submitted a proposal to construct a steel tank for Brookhaven Manor Water Co. (Brookhaven) (defendant) for $175,000. PDM requested progress payments throughout construction, with the final payment due before PDM completed construction. Brookhaven rejected that proposal. Brookhaven and PDM ultimately agreed that Brookhaven would pay the entire purchase price within 30 days of the tank’s completion. After beginning performance, PDM contacted a bank with which Brookhaven was negotiating a potential loan, requesting written assurance that $175,000 of the loan funds would be held in escrow pending payment to PDM. When there was no response from the bank or Brookhaven, PDM requested a personal guarantee of payment from Brookhaven’s president, which the president did not give. However, the contract did not require such a personal guarantee or funds held in escrow. It merely required payment 30 days after PDM completed the tank. When PDM failed to obtain the requested assurances, PDM terminated performance of the tank’s construction. PDM sued Brookhaven, claiming that Brookhaven improperly repudiated the contract by failing to provide written assurances to PDM. Brookhaven counterclaimed, seeking damages from PDM for breach of contract based on PDM’s canceled performance. The district court held in Brookhaven’s favor, and PDM appealed.