Cate Street Capital, Inc. v. DG Whitefield LLC, 040516 NHSUP, 218-2013-CV-734

Docket Nº:218-2013-CV-734
Opinion Judge:Richard B. McNamara, Presiding Justice
Party Name:Cate Street Capital, Inc. v. DG Whitefield, LLC d/b/a Whitefield Power and Light Company, et al.
Case Date:April 05, 2016
Court:Superior Court of New Hampshire
 
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Cate Street Capital, Inc.

v.

DG Whitefield, LLC d/b/a Whitefield Power and Light Company, et al.

No. 218-2013-CV-734

Superior Court of New Hampshire

April 5, 2016

UNPUBLISHED OPINION

MERRIMACK, SS

ORDER

Richard B. McNamara, Presiding Justice

The Plaintiff, Cate Street Capital, Inc. ("Cate Street"), brought a declaratory judgment action against the Defendants, DG Whitefield, LLC d/b/a Whitefield Power and Light Company ("Whitefield") and Indeck Energy-Alexandria, LLC ("Indeck") (collectively "the Defendants"), 1 in 2013, alleging price support and sales option agreements, intertwined with a global settlement and release agreement ("Settlement Agreement") the parties executed in 2011, were void and seeking to set aside the agreements. The Complaint was amended in 2014 to allege the following claims: declaratory judgment (Count I); abuse of process (Count II); tortious interference with contract and prospective economic advantage (Count III); civil conspiracy (Count IV); and unfair competition (Count V).

The Defendants moved to dismiss, which the Court denied by Order of August 27, 2014. The Defendants asserted the parties had entered into a mutual release of claims in 2011 as part of the Settlement Agreement, which would bar this action. The Plaintiff, however, argued the release was procured through economic duress and was, therefore, voidable. The Court ordered the Plaintiff to amend its Complaint to specifically assert that the release, which the Plaintiff admitted would otherwise bar the claims in this case, was void as a result of economic duress, and the Plaintiff did so, filing a Second Amended Complaint. In December 2014, the Plaintiff moved for leave to amend a third time to add NewCo Energy, LLC ("NewCo") as a party plaintiff. However, after a hearing on the Motion to Amend, the Plaintiff determined the Third Amended Complaint was unnecessary and withdrew it.

Before the Court are various motions for summary judgment. First, the Defendants have filed a Motion for Summary Judgment on all claims the Plaintiff purports to bring on behalf of NewCo, arguing those claims were never assigned to the Plaintiff. Second, the Defendants move for summary judgment on all the Plaintiff's claims based on the theory that the claims are barred by the mutual release the parties executed in 2011. The Plaintiff objects to both Motions and has brought a Motion for Partial Summary Judgment on Count II of its Complaint, seeking damages for abuse of process, to which the Defendants object.

For the reasons stated in this Order, the Plaintiff's Motion for Partial Summary Judgment on its abuse of process claim is DENIED and the Defendants' Cross-Motion for Summary Judgment is GRANTED and the Defendants' Motion for Summary Judgment on all claims based on the release is GRANTED. Because the Defendants' Motion for Summary Judgment based on the release is dispositive of all of the Plaintiff's claims, the Court does not address Defendant's Motion alleging NewCo's claims were never assigned to Cate Street .

I

In ruling on cross-motions for summary judgment, the Court "consider[s] the evidence in the light most favorable to each party in its capacity as the nonmoving party and, if no genuine issue of material fact exists, [the court] determine[s] whether the moving party is entitled to judgment as a matter of law." N.H. Ass'n of Counties v. State, 158 N.H. 284, 287-88 (2009) (citation omitted). In order to defeat summary judgment, the non-moving party "must put forth contradictory evidence under oath, sufficient . . . to indicate that a genuine issue of fact exists so that the party should have the opportunity to prove the fact at trial . . . ." Phillips v. Verax, 138 N.H. 240, 243 (1994) (citation and quotations omitted). A fact is material if it affects the outcome of the case under the applicable substantive law. Palmer v. Nan King Rest., Inc., 147 N.H. 681, 683 (2002). In considering a party's motion for summary judgment, the Court considers the evidence, and all inferences properly drawn from it, in the light most favorable to the nonmoving party. Sintros v. Hamon, 148 N.H. 478, 480 (2002). Mindful of this standard, the Court sets forth the undisputed facts below.

Cate Street is a developer of a 75 megawatt wood biomass fueled power plant known as Berlin Station, which is located in Berlin, New Hampshire. The Defendants operate other biopower plants and compete with Berlin Station. (McLaughlin Aff. ¶ 7, Nov. 20, 2015.) Cate Street, and its affiliated companies and predecessors, needed to negotiate a long-term power purchase agreement ("PPA") with Public Service Company of New Hampshire ("PSNH") in order for the Berlin Station project to be viable. On June 8, 2010, PSNH and Laidlaw Berlin BioPower, LLC ("LBB") executed a twenty-year, $2 billion PPA for renewable energy certificates ("RECs") and electricity. (McLaughlin Aff. ¶ 8.) LLB, an affiliate of Cate Street, was the entity negotiating the PPA on behalf of the other entities that would build Berlin Station.

On July 26, 2010, PSNH filed a petition with the New Hampshire Public Utilities Commission ("PUC") to approve the PPA under RSA 362-F:9. On August 17, 2010, LBB filed a petition to intervene in the PUC proceeding. On September 24, 2010, the Defendants petitioned to intervene, to which PSNH and LBB objected. Following a hearing, the PUC granted the Defendants' petition to intervene, stating the proposed intervenors are all existing or potential competitors of the proposed Berlin Station project and, thus, have interests affected by the proceeding. (PUC DE 10-195, Order No. 25, 158, Oct. 15, 2010.) The PUC also required PSNH to provide the PPA and supporting testimony, which PSNH initially filed as confidential documents, to the Defendants. (Id.) LBB subsequently withdrew from the PUC proceeding. (PUC DE 10-195, Order No. 25, 171, Nov. 17, 2010.)

After reviewing the PPA, the Defendants moved to dismiss the petition to approve the PPA, arguing the PUC lacked the authority to approve it. In particular, the Defendants argued RSA 362-F:3 only permitted the PUC to approve the PPA through 2025, but the PPA's timeframe was from 2014 through 2034. On January 14, 2011, the PUC denied the motion to dismiss. (PUC DE 10-195, Order No. 25, 192, Jan. 14, 2011.)

On April 18, 2011, following six-days of evidentiary hearings, the PUC conditionally approved the PPA in a two-to-one vote, but reduced its value to $1.3 billion. (PUC DE 10-195, Order No. 25, 213, Apr. 18, 2011.) Following the PUC's denial of their rehearing request, the Defendants appealed to the New Hampshire Supreme Court. PSNH then moved for summary dismissal of the appeal, arguing the Defendants lacked standing. Cate Street was not a party to the appeal. However, both PSNH and Cate Street engaged in negotiations with the Defendants and other Wood IPPs, with the assistance of the Governor's office and experienced counsel for all parties, to reach some resolution that would allow the project to go forward. (McLaughlin Aff. ¶ 20.) The negotiations extended from May 17, 2011 through August 19, 2011. (McLaughlin Aff. ¶ 20, Def.'s Hearing Ex. 16). On August 18, 2011, the Supreme Court denied PSNH's motion for summary dismissal and scheduled the Defendants' appeal for oral argument. (Hamilton Aff. Ex. 5, Dec. 21, 2015.) On the following day, August 19, 2011, Cate Street, PSNH, the Defendants, and other Wood IPPs entered into the Settlement Agreement at issue here. (McLaughlin Aff. ¶ 19.)

As part of the Settlement Agreement, the Defendants and other Wood IPPs agreed to withdraw from the PUC proceedings and the Supreme Court appeal. (McLaughlin Aff. Ex. P, at 2.) In exchange for dismissing their appeal, some of the Wood IPPs, including Indeck, secured PPAs with PSNH, the approximate worth of which is disputed. All the parties to the Settlement Agreement also agreed to a mutual release, which stated, in part, as follows:

[E]ach party, for itself and for its Related Persons, hereby releases, remises, discharges, holds harmless and covenants not to sue each of the other Parties and its respective Related Persons, from or with respect to any and all claims . . . that arise under or are related to the NHPUC Docket . . . the Pending Appeal . . . the Amended PPA . . . [and] the IPP Power Purchase Agreements. . . .

(Id. at 2-3.)

Intertwined with the Settlement Agreement were several other agreements, including price support and sales option agreements. Under the REC Price Support Agreement between Cate Street and Whitefield, Cate Street was required to pay price support so that Whitefield would receive at least $30 per environmental credit, subject to an 80, 000 credit maximum. (Def.'s Mot. Dismiss First Amend. Compl., Ex. 6, at 3-4.) Cate Street was also required to place a cash collateral amount of $1.2 million into a third-party escrow. (Id. at 8.) Under the REC Price Support Agreement between Cate Street and Indeck, Cate Street was required to pay price support so that Indeck would receive at least $31 per credit, subject to a 210, 833 credit maximum. (Def.'s Mot. Dismiss First Amend. Compl., Ex. 7, at 3-4.) Cate Street was also required to place a cash collateral amount of $2.5 million into a third-party escrow. (Id. at 9.) Under the Facility Sales Option Agreement between Cate Street and Whitefield, Cate Street was required to purchase Whitefield's electric generation facility for $3 million, at Whitefield's option. (Def.'s Mot. Dismiss First Amend. Compl., Ex. 8, at 1.) As part of the agreement, Cate Street was also required to place $1 million cash into a third-party escrow. (Id. at 2.) In total, therefore, Cate Street was required to deposit $4.7 million into escrow. (Hamilton Aff. Ex.V, Dec. 15, 2015.)

The Settlement Agreement was filed with...

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