Carborundum Co. v. Tennessee Valley Authority, CIV-1-80-298.

• Decision Date: 29 July 1981
• Docket Number: No. CIV-1-80-298.,CIV-1-80-298.
• Citation: 518 F. Supp. 1260
• Parties: The CARBORUNDUM COMPANY v. TENNESSEE VALLEY AUTHORITY, et al.
• Court: U.S. District Court — Eastern District of Tennessee

518 F. Supp. 1260

The CARBORUNDUM COMPANY v. TENNESSEE VALLEY AUTHORITY, et al.

No. CIV-1-80-298.

United States District Court, E. D. Tennessee, S. D.

July 29, 1981.

Thomas O. Helton, Stophel, Caldwell & Heggie, Chattanooga, Tenn., George W. Grider and Charles M. Crump, Apperson, Crump, Duzane & Maxwell, Memphis, Tenn., for plaintiff.

Herbert S. Sanger, Jr., Gen. Counsel, James E. Fox, Associate Gen. Counsel, Robert C. Glinski, Robert E. Washburn, T.V.A., Knoxville, Tenn., for defendants.

MEMORANDUM

FRANK W. WILSON, Chief Judge.

This is an action in which the plaintiff, The Carborundum Company, brought suit seeking relief from the minimum payment provisions of its ten-year electric service contract with the Tennessee Valley Authority. The action seeking a declaratory judgment was filed upon September 17, 1980, although by the terms of the contract the last payment would not have been due until December 31, 1980. A memorandum opinion was entered upon April 30, 1981, in which the Court indicated that it would sustain the TVA's motion for summary judgment, dismiss the plaintiff's original action for a declaratory judgment, and grant judgment upon TVA's counterclaim in the amount of $1,095,037.05. This amount did not reflect the final three payments due under the contract for the months of October, November and December of 1980. Therefore, final judgment was withheld for 20 days to permit the filing of an agreed statement or separate affidavits regarding that additional amount.

The parties having failed to reach an agreement, conflicting affidavits were submitted on May 20 and May 22, 1981. The parties did agree that the additional amount due for the months of October through December of 1980 would total $406,593.87. The parties failed to agree on the total amount of late payment charges to be assessed against Carborundum. In the affidavit of James A. McMahon filed upon May 20, 1981 the TVA asserted that the total amount of late charges, if calculated through May 28, 1981, would total $103,788.11 minus $5,406.77 paid by Carborundum for a net total of $98,381.34. In the counteraffidavit of B. P. Oliverio, filed upon May 22, 1981, Carborundum asserted that the amount of late charges accrued and payable through the date of that affidavit would total only $82,539.63. The difference of $15,841.71 is explained by the fact that TVA included an additional 1% late charge in its larger amount. The additional late charge had not yet been assessed, but would have become due and payable on May 28, 1981.

Upon June 23, 1981, Carborundum's attorney of record filed a further affidavit stating that any failure to reach a timely agreement on the total amount payable was due to TVA's addition of the late charge for May which had not then become payable. The affidavit further reflects unsuccessful attempts to reach TVA lead counsel before the date that such charges became payable. Thereafter upon July 8, 1981 a stipulation of facts and statement of contentions was filed. The parties agreed that the total amount of the minimum bills and late payment charges due and unpaid through April 28, 1981 totalled $1,584,170.55. TVA asserts that in addition to that amount, that it is entitled to recover additional late payment charges of 1% per month from that date in accordance with the terms of the contract. Carborundum asserts that TVA is entitled only to interest in the nature of post-judgment interest at the rate of 8% per annum. The parties further stipulated that if the Court allows only interest in addition to the stipulated total, that such interest rate should be applied as would have been applicable on April 28, 1981. Most recently the parties orally sought additional time to submit briefs which are now before the Court.

The contract between TVA and Carborundum contains the following provisions concerning billing:

TVA will bill Company for power and energy made

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