CLARKE-MOBILE COUNTIES GAS v. Prior Energy Corp.

• Decision Date: 03 May 2002
• Citation: 834 So.2d 88
• Parties: CLARKE-MOBILE COUNTIES GAS DISTRICT v. PRIOR ENERGY CORPORATION.
• Court: Alabama Supreme Court

834 So.2d 88

CLARKE-MOBILE COUNTIES GAS DISTRICT v. PRIOR ENERGY CORPORATION.

1002019.

Supreme Court of Alabama.

May 3, 2002.

M. Roland Nachman, Jr., and Walter R. Byars of Steiner, Crum & Baker, Montgomery; Joseph C. McCorquodale III and Christopher A. Bailey of McCorquodale & McCorquodale, Jackson; and Stephen W. Drinkard of Beasley, Allen, Crow, Methvin, Portis & Miles, Montgomery, for appellant.

David Michael Higgins and Edward P. Turner, Jr., of Turner, Onderdonk, Kimbrough & Howell, P.A., Chatom; and William F. Blair of Blair & Bondurant, Jackson, Mississippi, for appellee. HARWOOD, Justice.

Clarke-Mobile Counties Gas District (hereinafter referred to as "the Gas District") appeals the trial court's partial summary judgment for Prior Energy Corporation (hereinafter referred to as "Prior Energy"). We dismiss the appeal.

On March 24, 1997, in the Clarke Circuit Court, the Gas District sued Prior Energy; Fred O. Roe, Jr.; Michael A. Coulter; G.M. Coulter; M.A. Abernethy; the estate of Robert M. Saunders, deceased; Union Gas Company of Alabama, Inc.; and Technical Specialties, Inc. (hereinafter collectively referred to as "the defendants"). The Gas District sought to recover compensatory and punitive damages on claims of conspiracy, breach of contract, breach of fiduciary duty, fraud, intentional interference with business relationships, and usurpation of corporate opportunities, in relation to its negotiations and transactions with Prior Energy, including sales, swaps, and purchases of natural gas.¹ All of the allegations contained in the Gas District's complaint pertained to Prior Energy and Roe, the president of Prior Energy, with the exception of the allegation of breach of contract, which involved a management contract that the Gas District alleged existed between it and Union Gas Company of Alabama, Inc. On April 17, 1997, Prior Energy sued the Gas District in the Mobile Circuit Court, alleging that a "Firm Gas Sale Contract" (hereinafter referred to as "the contract") existed between it and the Gas District that included subsequent "confirmations" providing for the delivery and purchase of natural gas, which Prior Energy alleged were supplements to the contract.

On April 29, 1997, the Gas District amended its complaint to state that Prior Energy claimed that the contract existed. The Gas District disputed the existence of the contract and sought a judgment from the trial court declaring that "the alleged contract and confirmations ... be of no force and effect and that there are no contractual relations in existence between [the Gas District] and [Prior Energy]."

On April 30, 1997, Prior Energy filed a motion to dismiss or for a more definite statement, with a supporting brief that had attached as exhibits the contract and three confirmations. On May 12, 1997, Prior Energy filed a motion to dismiss or to strike the Gas District's amendment to its complaint on the grounds that Prior Energy had previously commenced litigation on the contract when it filed its complaint against the Gas District in the Mobile Circuit Court on April 17, 1997. Prior Energy contended that the Gas District's amendment was "asserted solely in an effort to effect a dismissal or transfer of those claims asserted before the Mobile County Circuit Court." Prior Energy attached as an exhibit a copy of the complaint it had filed in the Mobile Circuit Court.

On July 15, 1997, the trial court conducted a hearing on Prior Energy's motions to dismiss, motion for a more definite statement, and motion to strike. On July 30, 1997, the Mobile Circuit Court dismissed Prior Energy's complaint in an order that determined that Prior Energy's complaint was a compulsory counterclaim to the complaint the Gas District had filed in the Clarke Circuit Court. On September 5, 1997, the Clarke Circuit Court entered an order denying Prior Energy's motions to dismiss and granting in part and denying in part its motion for a more definite statement. The trial court ordered the Gas District to amend its complaint to state certain information, as that information related to its allegations of fraud, with more particularity. On October 3, 1997, the Gas District filed a second amended complaint to comply with the trial court's order.

The Gas District's amended complaint, in pertinent part, alleged that the defendants, including Prior Energy, had "failed to disclose material facts to and/or suppressed material facts" (count four), and had made representations that "were false and [Prior Energy had] made them willfully to induce the [Gas District] to act, or [that] were fraudulently or recklessly represented as true and intended to deceive the [Gas District]" (count five), in regard to the following items:

"A. Exorbitant profits made for [Prior Energy] and/or ROE through the negotiation for supply of gas and the cost thereof, gas purchases, gas sales and swaps of gas on behalf of [the Gas District], all to the detriment of [the Gas District]; and/or

"B. Gas purchase and sale schemes entered into with [the Gas District] and others to the detriment of [the Gas District]; and/or

"C. Gas sales on [the Gas District's] lines for transportation and delivery of gas at a profit to [Prior Energy] and/or ROE; and/or

"....

"F. The cost of gas to [Prior Energy] and/or ROE; and/or

"G. Exorbitant profits made by [Prior Energy] and/or ROE; and/or

"H. The price of gas to [the Gas District]; and/or

"I. The sale of gas from [the Gas District] to [Prior Energy] and/or ROE; and/or

"J. The fixed price of gas that [the Gas District] had to pay to [Prior Energy] and/or ROE for its gas supply; and/or

"K. Manipulation of the price of gas that [the Gas District] had to pay to [Prior Energy] and/or ROE, to enhance the profits of [Prior Energy] and/or ROE, all to the detriment of [the Gas District] ...."

On November 10, 1997, Prior Energy filed an answer and counterclaims. The counterclaims, in part, sought a judgment from the trial court declaring (1) that the contract and confirmations were "valid, existing, and contractual agreements between the parties subject to termination only in accordance with the terms thereof," and (2) that Prior Energy was entitled to payment for the gas it had delivered to the Gas District. The counterclaims also included claims that the Gas District had breached the contract and that Prior Energy was due certain moneys on theories of account, open account, and goods sold and delivered. On December 3, 1997, the Gas District filed a motion to dismiss Prior Energy's counterclaims. On January 27, 1998, the trial court conducted a hearing on the Gas District's motion to dismiss; it denied the motion on March 27, 1998. On July 7, 1998, the Gas District filed an answer to Prior Energy's counterclaims. On March 2, 1999, the Gas District filed a third amendment to its complaint to add ICC Industries, Inc., and Prior Intrastate Corporation as defendants.

On September 29, 1999, Prior Energy filed a motion for a partial summary judgment; the motion contained argument and a narrative summary of undisputed facts and was supported by attached exhibits. On October 10, 2000, the Gas District filed a statement of undisputed facts and a statement in opposition to Prior Energy's motion for a partial summary judgment with an attached exhibit. On October 18, 2000, Prior Energy filed a response in opposition to the Gas District's statement of undisputed facts. On October 19, 2000, the trial court conducted a hearing on Prior Energy's motion for a partial summary judgment. On January 16, 2001, it entered a summary judgment for Prior Energy on its counterclaims, finding that the Gas District owed Prior Energy $1,225,290.97 under the contract and $574,400.41 in interest. That order further certified the summary judgment as final pursuant to Rule 54(b), Ala. R. Civ. P.

The trial court's January 16, 2001, order dealt with Prior Energy's counterclaims in isolation, failing to consider the fraud claims that had been asserted by the Gas District in its complaint. That order stated, in pertinent part:

"CONTENTIONS OF THE PARTIES

"18. [Prior Energy ]: [Prior Energy] contends that the natural gas it delivered to [the Gas District] was delivered pursuant to the Contract under written purchase confirmations which incorporated the Contract by reference. [Prior Energy] contends that these confirmations and the invoices that followed documented all material terms of the parties' agreement and satisfied the formal requirements for such sales of goods under the [Uniform Commercial Code (`UCC')]. Ala.Code § 7-2-201 (1975). [Prior Energy] contends that it is due payment for the gas delivered to [the Gas District] at the contract price as contained in the written confirmatory memoranda attached to its motion as collective Exhibit `C-5.' [Prior Energy's] contention is based not only upon the failure of [the Gas District] to object to the confirmatory memoranda which documented the terms of the deliveries to [the Gas District] but also upon the provisions of the [UCC] which dispense with the need for a writing of any kind between merchants with regard to a transaction in goods which have been received and accepted.

"[The Gas District]: [The Gas District] contends that there is no executed gas sale agreement in effect controlling the delivery of the volumes of gas because a representative of [the Gas District] did not sign the 1994 Contract. Further, [the Gas District] contends that the filing of this lawsuit on March 24, 1997, in objection to the invoices sent by [Prior Energy], satisfied any obligation it had to object to the price terms for the volumes of natural gas delivered by [Prior Energy]. Also, [the Gas District] contends that any obligation it had to object to the written purchase confirmations could not have been performed because it did not receive the written purchase confirmations until late March 1997. [The Gas District] does not dispute that it received 967,944 MMBtu's

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