After failing to meet a filing deadline in a federal breach of contract case, a Pennsylvania company has been ordered to honor its $4 million pledge to a West Virginia Bible college.
U.S. District Judge John E. Jones III of the Middle District of Pennsylvania granted summary judgment in favor of the Appalachian Bible College and ordered defendant Foremost Industries to make the donation it promised in a gift agreement with the school.
Foremost agreed to make five payments of $800,000 to the school, but failed to do so by the time the first two payments were due. The school, referred to as ABC by the court, filed a breach of contract lawsuit in 2016.
The now-shuttered Greencastle-based company—which was bought out by GLD Foremost Holdings—removed the case to Pennsylvania federal court, where ABC filed an amended complaint including a claim of anticipatory breach of contract. The court imposed filing deadlines for motions, but was concerned that Foremost was trying to stymie the litigation.
“On March 16, 2018, the court ordered Foremost Industries to file an opposition brief no later than April 16, 2018, due to concerns that Foremost Industries was engaging in dilatory tactics by repeatedly seeking leave to obtain new counsel,” Jones wrote in his opinion. “Despite the clear language of our order, and our warning that failure to file an opposition brief would result in our considering the motion as unopposed, Foremost Industries has not filed its brief in time.”
To prove anticipatory breach of contract, a plaintiff must show that the breaching party has displayed “an absolute and unequivocal refusal to perform or a distinct and positive statement of an inability to do so,” according to the 2010 Commonwealth Court ruling in Boro Construction v. Ridley School District.
That is in addition to the standard breach of contract factors, which include demonstrating “(1) the existence of a contract, including its essential terms, (2) a breach of the contract; and, (3) resulting damages,” according to the 2016 state Supreme Court case Meyer, Darragh, Buckler, Bebenek & Eck v. Law Firm of Malone Middleman.
“The existence of the gift agreement in this case is undisputed. The gift agreement contains all the essential terms and indicates the parties’ intent to be legally bound and to legally bind successor entities,” Jones said, satisfying the first element.
“The second element requires a breach of a duty imposed by the contract. In this case, the contract imposed a duty on Foremost Industries to pay $800,000 per year from April 1, 2016, through April 1, 2020. In its answer, Foremost Industries admits that it did not pay ABC the $800,000 due on April 1, 2016, and that it did not intend to make any future payments to ABC under the gift agreement,” Jones said. “Thus, according to Foremost Industries’ own admissions, the second element has been satisfied. The final element, resultant damages, is also easily satisfied. By the plain terms of the gift agreement, Foremost Industries was obligated to pay ABC $800,000 per year beginning April 1, 2016, and continuing for five years,” which it did not.
“ABC has not seen a single penny of that pledge, which Foremost Industries freely admits,” Jones said.
According to the docket, Foremost is not currently represented by counsel. Jeffrey T. McGuire of Pion, Nerone, Girman, Winslow & Smith in Harrisburg represented Foremost most recently and did not respond to a request for comment.
ABC is represented by James R. Hartline of Davies, McFarland & Carroll in Pittsburgh and did not respond to a request for comment.