KDH vs Eagle

8/3/2019 KDH vs Eagle

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Despite: (a) KDH immediately responding to aid Eagle in a time of commercial need; (b) Eagle

orally directing KDH to proceed with production and delivery of a large order of vest panels,

including enough Large Vest Panels to fill 3,884 vests; and (c) KDH performing in reliance on

Eagles direction and agreement to pay for the number of units ordered, Eagle failed to purchase

front and back panels for use in 1,192 of the large vests at more than $206 per unitmore than

30% of the total order for Large Vest Panels. Eagle admitted its mistake and promised to buy the

number ordered but has failed to date to do so. Accordingly, Eagle breached its contract and

caused KDH to incur damages including without limitation, material, labor, storage, and

administration costs, lost profits, attorneys fees, and interest.

PARTIES

2. Plaintiff, KDH, is a corporation organized and existing under the laws of theCommonwealth of Pennsylvania, with its principal place of business located at 750A Fieldcrest

Road, Eden, North Carolina. KDH is a leading manufacturer of American-made custom

solutions for body armor. The company designs, manufactures and distributes high-performance

body armor for military, federal government and law enforcement agencies.

3. Defendant, Eagle, is a corporation organized and existing under the laws of theState of Missouri, with its principal place of business located at 1000 Biltmore Drive, Fenton,

Missouri.

JURISDICTION AND VENUE

4. This Court has jurisdiction over this matter pursuant to 28 U.S.C. 1332(a)(1),in that KDH and Eagle are citizens of different states and the amount in controversy exceeds

$75,000.00, exclusive of interest and costs.


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5. Venue is proper in the United States District Court for the Middle District ofNorth Carolina, Greensboro Division, pursuant to 28 U.S.C. 1391(a) and (c), because: (1) KDH

has its principal place of business in Rockingham County, North Carolina; and (2) the

Defendants are subject to personal jurisdiction in North Carolina by virtue of their having

transacted business in North Carolina pursuant to N.C. Code 1-75.4 and by virtue of having a

registered agent for service of process in North Carolina.

FACTUAL ALLEGATIONS

6. Eagle served as the general contractor in a contract involving the supply of Kevlarsoft armored vests to the U.S. Marine Corps (Eagle/Marine Corps Contract).

7. In connection with that contract, Eagle reached out to KDH in North Carolina toemergently assist Eagle in fulfilling its time sensitive obligations to produce protective panels for

use in over 12,000 body armor vests.

8. Specifically, under extremely significant and disclosed time pressures, Eagle sentto KDH a Request for Quote (RFQ) on January 13, 2011, for soft armor vest panels, which

RFQ sought two separate quotes for two purchase/production scenarios. A true and correct copy

of Eagles RFQ is attached hereto as Exhibit A.

9. The emergent need arose because vest panels from a previous manufacturer thatEagle had engaged failed product testing, placing Eagle in serious jeopardy of failing to meet

stringent production deadlines, and exposing Eagle to substantial late delivery penalties under

the Eagle/Marine Corps Contract.

10. Eagle, needing a quick turn-around, requested that KDH promptly respond to theEagle-authored RFQ.


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11. KDH provided quick and timely responses to both of the RFQspurchase/production scenarios within two days (by January 15, 2011).

12. Shortly thereafter, Eagle orally told KDH that it accepted KDHs proposal, andEagle ultimately directed KDH to proceed to manufacture and deliver front and back body armor

panels for the second scenario under Eagles RFQ (Ex. A), requesting front and back panels to

fill more than 12,000 vests at the designated unit price (which varied with the size of the vest

panel).

13. KDH ordered materials and devoted the labor force and manufacturing spacenecessary to cut the material to fit the contracts precise specifications and complete the order as

quickly as possible.

14. Included in the order Eagle directed KDH to fill were front and back body armorpanels for 3,884 large vests at $206.83 per vest.

15. After the oral direction to proceed, and after KDH performed, Eagle followed upand sent a unit/price purchase order to KDH for all vests. For the large vest panels, the numbers

in the purchase orders equated to panels to fill a total of 2,692 large vests, which was 1,192

fewer large vests than the 3,884 large vests requested in Eagles RFQ (Ex. A, scenario 2), and

1,192 fewer vests than the number for which Eagle directed KDH to manufacture panels.

16. As a result, on February 18, 2011, KDH informed Eagle that the Purchase Ordertotal of front and back panels to fill 2,692 large vests was less than the Eagle-ordered number of

panels to fill 3,884 large vests.

17. Eagles representative, Mr. Canas, responded, stating that he would look into theissue and get back to KDH.


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18. That same day, Eagle admitted that the Request for Quote that Eagle authored,sent to KDH, and asked KDH to quote on was incorrect, and that Eagle would look for ways to

buy the remaining large vests from KDH.

19. Specifically, Mr. Canas, on Eagles behalf, stated that [t]here was a discrepancyin the number of large pieces required that had not been realized at the time of the RFQ. We

unfortunately do not need the extra larges. That being said, we are very grateful for this

opportunity and are looking into a couple ways we could buy that extra armor from KDH.

20. In a subsequent meeting in March 2011, Eagle again promised that it wouldpurchase the panels for the 1,192 remaining large vests.

21. However, despite several representations to the contrary, Eagle has not purchasedor followed through on its intention to purchase any of the remaining Large Vest Panels that

were part of Eagles acceptance and order.

22. The overall order for vest panels to fill more than 12,000 different sized vests(and other than the panels to fill the 1,192 large vests at issue), proceeded as Eagle directed and

ordered. Eagle took delivery of all such other vests, and delivered them to the Marine Corps.

23. The Marine Corps accepted the vests and paid Eagle for them. Eagle, in turn,paid KDH for the vest panels that Eagle accepted. No vest panel was ever rejected (nor was

payment for any ever withheld) for any reasons related to quality, performance, or compliance

with specifications. In fact, none were rejected for any reason whatsoever, other than the 1,192

Large Vest Panels at issue in this matter, which Eagle has apparently refused to accept after

admitting that it made an error in the number ordered.

24. Eagle has never criticized or questioned the quality of any vest panel ordered,including the panels to fill 1,192 large vests at issue.


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COUNT I

Claim for Breach of Contract Against Eagle

25. KDH incorporates by reference the averments contained in the paragraphs aboveas fully as if set forth herein.

26. KDH and Eagle entered into a duly executed and enforceable contract; Eagleaccepted KDHs proposal, and Eagle ordered and directed KDH to proceed to manufacture and

deliver front and back body armor panels to fill over 12,000 body armor vests for the

Eagle/Marine Corps Contract, including without limitation panels to fill 3,884 large vests.

27. KDH performed its obligations under the contract.28. Eagle failed to perform its obligations under the contract, in part, because it failed

to purchase panels for 1,192 large vests as it was required to do pursuant to the clear and

unambiguous terms of its oral direction.

29. Eagles breach has caused damages to KDH.30. Specifically, KDH has incurred and suffered damages caused by Eagles breach

of contract in the form of costs and expenses for: (a) purchasing the materials; (b) manufacturing

the vests; and (c) the additional administrative and storage costs (among other costs) incurred in

holding the Large Vests (uniquely manufactured pursuant to precise specifications for a Marine

Corps/Eagle Contract) and for lost profits and attorneys fees.

31. Eagles breaches of contract are the actual cause of the damages sustained byKDH, which damages are recoverable under North Carolina law. Those damages exceed

$75,000.00.

WHEREFORE, Plaintiff KDH Defense Systems demands judgment against Defendant

Eagle Industries Unlimited, Inc., and seeks recovery of the damages outlined above, plus costs,

interest, and such other relief the Court deems just and equitable.


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COUNT II

Claim for Breach of Duty of Good Faith and Fair Dealing Against Eagle


33. By entering into a contract with KDH, Eagle is subject to the implied covenant ofgood faith and fair dealing applicable to all contracts in the State of North Carolina.

34. The implied covenant of good faith and fair dealing required that Eagle not doanything that would have the effect of destroying or injuring KDHs right to receive the fruits of

its agreement with Eagle.

35. Eagle intentionally refused to comply with the express terms of the contract whenit failed to purchase and take delivery of the panels to fill the remaining 1,192 large vests that it

had ordered.

36. In doing so, Eagle destroyed KDHs right to receive the fruits of the contract.37. As a result, KDH has suffered actual damages in excess of $75,000.00.WHEREFORE, Plaintiff KDH Defense Systems demands judgment against Defendant



COUNT III

Claim for Quantum Meruit/Unjust Enrichment Against Eagle


39. Alternatively, KDH pleads the theories of quantum meruit and unjust enrichment.40. Specifically, relying on Eagle directing the production of front and back body

armor panels to fill over 12,000 vests (including without limitation 3,884 large vests) on the


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promise of payment, KDH undertook the material purchases and labor efforts necessary to

manufacture the total number of vests ordered.

41. As a result of undertaking these actions, KDH conferred a benefit on Eagle forwhich Eagle has failed to fairly and properly compensate KDH.

42. In this respect, Eagle has been unjustly enriched.43. In addition, KDH is entitled to the reasonable value of the Large Vests that Eagle

refused to take delivery of or pay for.

44. As a result, KDH seeks recovery of the value of the benefit KDHs performanceconferred on Eagle, and/or the value of the Large Vest Panels that Eagle ordered but failed to

take delivery of and pay for. The value of the Large Vest Panels at issue exceeds $75,000.00.




COUNT IV

Claim for Promissory Estoppel Against Eagle


46. KDH relied on the oral and written conduct, representations and promises ofEagle, designed to create the expectation that Eagle would take delivery of and pay for the

quantity of vests (including panels to fill the 1,192 large vests at issue) listed in the RFQ

scenario 2, and that KDH would be paid in accordance with its proposal that Eagle accepted.

47. Eagles promises induced KDH to proceed immediately (and over several weeks)to manufacture the total number of vests ordered.


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48. Eagle failed to honor its representations and promises concerning the acceptanceof and payment of panels to fill 1,192 large vests.

49. Injustice can be avoided only by enforcing the representations and promises ofEagle which induced KDH to act, and created the expectation of acceptance of and payment for

all panels ordered, including panels to fill the 1,192 large vests at issue.

50. As a result, Eagle is estopped from asserting any right to refuse delivery of and/orpayment for those panels.




PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays that this honorable Court will take jurisdiction of this

proceeding; that it be awarded damages against the Defendant; and for such other and further

relief as the Court may find warranted.


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JURY TRIAL DEMAND

The Plaintiff hereby demands a trial by jury on all issues triable by jury.

DATED: October 7, 2011 Respectfully submitted,

/s/ Pamela S. Duffy

Pamela S. Duffy, Esquire (N.C. State Bar #18329)Molly A. Whitlatch, Esquire (N.C. State Bar #34137)WISHART NORRIS HENNINGER & PITTMAN, P.A.3120 South Church StreetP.O. Box 1998Burlington, NC 27216-1998Tel: (336) 584-3388

Fax: (336) [email protected]@wnhplaw.com

David A. Dorey, EsquireMichael A. Iannucci, EsquireBLANK ROME LLP

One Logan SquarePhiladelphia, PA 19103-6998Tel: (215) 569-5500Fax: (215) [email protected]@BlankRome.com

Counsel for Plaintiff

KDH Defense Systems, Inc.

Documents

KDH vs Eagle