DG Whitefield, LLC v. Cate Street Capital, Inc., 041018 NHSUP, 218-2015-CV-01406

Docket Nº:218-2015-CV-01406
Opinion Judge:Richard B. McNamara, Presiding Justice
Party Name:DG Whitefield, LLC and Indeck Energy-Alexandria, LLC v. Cate Street Capital, Inc., et al
Case Date:April 10, 2018
Court:Superior Court of New Hampshire
 
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DG Whitefield, LLC and Indeck Energy-Alexandria, LLC

v.

Cate Street Capital, Inc., et al

No. 218-2015-CV-01406

Superior Court of New Hampshire, Merrimack

April 10, 2018

UNPUBLISHED OPINION

ORDER

Richard B. McNamara, Presiding Justice

DG Whitefield, LLC and Indeck Energy-Alexandria, LLC (collectively "Whitefield") have filed a Motion for Partial Summary Judgment on its breach of contract claim against the Defendant, Cate Street Capital ("Cate Street"). For the reasons stated in this Order, the Motion is GRANTED, as against Cate Street.[1] Whitefield has also filed a Motion to Approve Interlocutory Appeal Statement. Cate Street objects. Whitefield seeks an order approving an interrogatory appeal of this Court's Order of January 25, 2018, concluding Whitefield may not recover attorney's fees on its claim against Cate Street for breach of a covenant not to sue. For the reasons stated in this Order, the Motion is DENIED.

I

This litigation arises out of Cate Street's development of a 75 MW wood biomass fueled power plant known as Berlin Station, which is located in Berlin, New Hampshire. The lengthy history of this case is set out in this Court's prior orders - particularly in Cate Street Capital, Inc. v. DG Whitefield, LLC, Merrimack County Superior Ct., No. 218-2013-CV-00734, at 25 (Apr. 5, 2016) (Order, McNamara, J.), aff'd No. 2016-0355, 2017 WL 695387 (N.H. Jan. 17, 2017) - and is summarized here.

The Plaintiffs in this action are competitors of Berlin Station. In order to proceed with development of the 75 MW biomass plant, Cate Street needed certain approvals from the New Hampshire Public Utilities Commission. Whitefield intervened in the proceedings before the Public Utilities Commission and objected to the approvals. After lengthy litigation, including an appeal of a Public Utilities Commission order in favor of Cate Street to the New Hampshire Supreme Court, the parties entered into a settlement agreement that contained a release and a covenant not to sue running in favor of Whitefield from Cate Street ("the Settlement Agreement"). The Settlement Agreement resulted in Cate Street obtaining the necessary approvals from the Public Utilities Commission so that plans for the 75 MW wood biomass fueled power plant could go forward. To understand the claims in this case, it is necessary to understand the two actions brought by the parties against each other.

A. Cate Street's Suit against Whitefield

In 2013, Cate Street brought a declaratory judgment action against Whitefield (the "Underlying Litigation") in which it alleged that the price support and sales option agreements intertwined within the Settlement Agreement the parties had executed in 2011 were void. It alleged that both the release and covenant not to sue were invalid on the grounds of economic duress. In its Order on summary judgment dated April 5, 2016, the Court dismissed all of Cate Street's claims in the Underlying Litigation, based upon the release. Cate Street appealed that decision to the New Hampshire Supreme Court, which affirmed the dismissal of the Underlying Litigation.

B. Whitefield's suit against Cate Street

While the Underlying Litigation was pending in the Merrimack County Superior Court, on December 18, 2015, in the Rockingham County Superior Court Whitefield brought a complaint against the Defendants, alleging breach of contract against Cate Street (Count I), abuse of process against Cate Street (Count II), violation of the Consumer Protection Act against Cate Street (Count III), malicious prosecution against Cate Street (Count IV), and civil conspiracy against all the Defendants (Count V), and seeking enhanced compensatory damages (Count VI) and attorney's fees and costs (Count VII).

The action was transferred to the Merrimack County Superior Court on May 17, 2016. By that time, summary judgment had been granted to Whitefield in Cate Street's suit against it, but a Motion to Reconsider was pending. The Motion to Reconsider was denied in June 2016 and Cate Street filed a Notice of Appeal to the New Hampshire Supreme Court on July 7, 2016. In light of the appeal of the Underlying Litigation, this matter was stayed by Order dated October 12, 2016. The case was reactivated once the New Hampshire Supreme Court affirmed the Order in favor of Cate Street.

Once the New Hampshire Supreme Court had resolved the Underlying Litigation, Cate Street moved to dismiss in this matter. On July 10, 2017, the Court granted the Motion, as it relates to Counts III and V regarding violations of the Consumer Protection Act and civil conspiracy, and denied the Motion, as it related to Counts I-II and IV. Whitefield has now moved for partial summary judgment on Count I. Whitefield argues Cate Street breached its covenant not to sue contained in the Settlement Agreement when it brought the Underlying Litigation and that Cate Street is collaterally estopped from denying that it brought suit against Whitefield and that the covenant not to sue is valid and enforceable.

II

A covenant not to sue does not relinquish a right or claim or extinguish a cause of action. State Line Steel Erectors v. Shields, 150 N.H. 332, 338 (2003). Rather, a covenant not to sue recognizes the continuation of the obligation or liability but the party making the covenant not to sue agrees not to assert any right or claim based upon the obligation or...

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