TAMPA PIPELINE TRANSPORT COMPANY, A FLORIDA CORPORATION, APPELLANT,
v.
IMC FERTILIZER, INC., APPELLEE
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Tampa Pipeline Transport Company sued IMC Fertilizer for payment adjustments under a pipeline transportation contract, but the trial court granted IMC's motion for summary judgment and judgment on the pleadings. The appellate court affirmed, holding that Tampa Pipeline failed to comply with the contract's mandatory dispute resolution mechanism requiring submission to an independent certified public accountant before filing suit.
The court affirmed the judgment, concluding that the trial court correctly determined the action was premature. Because the contract's dispute resolution mechanism is clear and unambiguous and Tampa Pipeline failed to comply with it, the judgment does not adjudicate the merits of Tampa Pipeline's claim but rather enforces the contractual prerequisite to litigation.
[1] A contract provision requiring parties to submit disputes to an independent accountant for a binding resolution is a condition precedent to litigation.
[2] A lawsuit is premature when a party fails to comply with a contractually mandated dispute resolution mechanism.
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Join FLexlaw to unlock all legal intelligence“If there is any dispute between IMC and Transport concerning any such determination, IMC and Transport shall engage an independent public accountant (who will be a nationally-recognized firm of independent certified public accountants) to resolve the dispute and the opinion of such independent public accountant shall be binding on both parties.”
The contract's mandatory dispute resolution clause that Tampa Pipeline failed to invoke before filing suit
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Join FLexlaw to unlock all legal intelligenceIMC contracted with Tampa Pipeline to transport ammonia through Tampa Pipeline's pipeline, with payment based on volume and rates adjusted annually ba…
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PATTERSON, Judge.
This dispute arises from a contract under which IMC Fertilizer, Inc. (IMC) contracted to transport ammonia from its facilities to its customers through a pipeline owned and operated by Tampa Pipeline Transport Company (Tampa Pipeline). IMC agreed to pay Tampa Pipeline based on the volume of ammonia actually transported through the pipeline. The agreement provided for annual adjustment of the rate per ton transported based on the changes in the “average operating costs per ton” of Tampa Pipeline. At the beginning of each year, Tampa Pipeline was to notify IMC of its estimated charges for transport and the adjusted rates per ton for that year. At the end of the year, Tampa Pipeline was to notify IMC of its actual average operating costs for the year. If the actual costs exceeded the estimated billed costs, IMC was to pay the difference. Conversely, if the actual costs were less, Tampa Pipeline was to remit the difference to IMC. In the event of a dispute over the adjustment, the contract provides:
If there is any dispute between IMC and Transport concerning any such determination, IMC and Transport shall engage an independent public accountant (who will be a nationally-recognized firm of independent certified public accountants) to resolve the dispute and the opinion of such independent public accountant shall be binding on both parties.
A dispute of substantial proportion did in fact arise. When lengthy negotiations between the parties failed, Tampa Pipeline brought suit. In its answer, IMC asserted numerous substantive defenses to Tampa Pipeline’s right to adjustment payments in any amount. Additionally, it asserted that the action was premature in that Tampa Pipeline had failed to perform a condition precedent, that being the submission of the dispute to a firm of certified public accountants. IMC then moved for summary judgment and judgment on the pleadings in which it asserted in pertinent part:
[Mjost importantly, no demand by Tampa Pipeline for an accountant has been made and no accountant has in fact been selected, even though IMC has been ready, willing and able to do so, and has requested application of this procedure.
In granting the motions, the trial court did not specify the grounds upon which it relied. Thus, it is unclear whether the trial court intended the final judgment to be an adjudication on the merits of Tampa Pipeline’s right to recover any amount or whether the court found that the action was merely premature. In that the dispute resolution mechanism of the contract is clear and unambiguous and was not complied with by Tampa Pipeline, we must conclude that the court only determined that the action was premature. Therefore, the final judgment does not act as an adjudication on the merits of Tampa Pipeline’s claim, and the parties are left to resolve this conflict in the manner provided in their contract.
Affirmed.
FRANK, A.C.J., and BLUE, J., concur.
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