Severstal is in another lawsuit.
Mississippi Scrap Recycling, LLC filed a complaint July 15 against Severstal Columbus, LLC for an alleged breach of contract.
According to the complaint, the two companies entered into negotiations in May 2007 regarding Mississippi Scrap providing “brokering services” to Severstal for the “purchase of aluminum for Severstal’s steel production facility.”
The complaint states the initial terms of the contract were laid out in a June 19, 2007 e-mail correspondence, and “the term of the contract was for a period of five years, with an automatic renewal period at the end of the fifth year for an additional five years.”
The complaint states the contract terms were discussed and a final agreement was reached in or around July 2007.
“Based on the final agreement of the parties, a contract was prepared, executed by Mississippi Scrap, and submitted to Severstal for its signature,” the complaint reads, noting “Severstal obtained the original contract.
“From on or about August 2007 through May 2009, Mississippi Scrap’s and Severstal’s definite and unequivocal course of dealing regarding Mississippi Scrap procuring aluminum for Severstal comported with the terms of the contract that was delivered to Severstal, disclosing that Severstal had acceded or assented to the contract. Further, Mississippi Scrap altered its course of conduct in order to comply with the terms of the contract, entering into agreements with its network of aluminum vendors to fulfill the contract and turning down other opportunities to enter into contracts with other steel production facilities for the procurement of aluminum.”
According to the complaint, Severstal requested a copy of the contract on May 15, 2009, around two years after negotiations started, and requested a copy of the contract from Mississippi Scrap, “even though Severstal never returned the original contract to Mississippi Scrap.”
“After neither side could produce a copy of the contract — and for the first time — Severstal stated that it never had a contract with Mississippi Scrap for the purchase of aluminum. Thereafter, in December 2009, Severstal informed Mississippi Scrap that it would no longer use Mississippi Scrap’s services for the purchase of aluminum.”
According to Mississippi Scrap’s complaint, Severstal’s actions made it seem it had agreed to the contract.
“In fact, for approximately two years, Severstal’s actions evidence that it ratified the terms of the contract,” the complaint reads.
Mississippi Scrap contends it has been damaged due to entering into agreements with its “network of aluminum vendors to satisfy the terms of the contract” and turned down other business opportunities.
According to the complaint, Severstal has purchased aluminum from another source since December 2009, which Mississippi Scrap claims is “in violation of the aluminum contract.”
Mississippi Scrap is asking for: judgement against Severstal; an order declaring the contract enforceable; reasonable costs and expenses; and equitable relief.
Severstal responded Aug. 17 and stated there was no finalized contract between the two parties
“The alleged contract does not meet the essential elements of an enforceable contract under Mississippi law,” Severstal responded.
Severstal admitted that “it discussed the possibility of entering into a contract with Mississippi Scrap in May 2007” but denies that any final agreement was ever reached between the parties.
Later in the response, Severstal “admits that it purchased aluminum through Mississippi Scrap during the relevant time period,” but denies that it was a result of the alleged contract.
The lawsuit, which started in the Lowndes County Chancery Court, has made its way to the Lowndes County Circuit Court.
Severstal motioned to transfer the case to the circuit court due to it having “general jurisdiction” and chancery courts having “limited jurisdiction.”
Severstal states Mississippi Scrap “attempts to characterize the relief sought as the equitable remedies of specific performance and accounting in an apparent attempt to avoid circuit court jurisdiction. However, when subjected to the realistic and pragmatic review required, it is clear that Mississippi Scrap has a singular goal, the payment of money.”
Mississippi Scrap responded in opposition to the motion to transfer and stated it only sought “equitable relief only from this court to enforce a contract between Severstal and Mississippi Scrap for the purchase of aluminum, a commodity.”
The court ruled Oct. 14 to transfer the case to circuit court.
“Based on the complaint, plaintiff seeks only a ruling from this court as to whether the subject contract is enforceable, specific performance, if it is, and an equitable accounting to determine ‘damages.’ The court is not convinced that plaintiff would be satisfied, nor made whole, if correct, by grant of the relief requested. Plaintiff’s ultimate goal must be the relief prayed for and the grant of money damages, with money damages being by far the most important element.”
Severstal was in another dispute with a former metal brokerage company earlier this year, but a circuit court judge ruled Sept. 12 in favor of Severstal.
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