Kleberg Cnty. v. URI, Inc.
Decision Date | 28 January 2016 |
Docket Number | NUMBER 13–14–00158–CV |
Citation | 540 S.W.3d 597 |
Parties | KLEBERG COUNTY, Appellant, v. URI, INC., Appellee. |
Court | Texas Court of Appeals |
Bradley L. Rockwell, Marisa Perales, Austin, TX, for Appellant.
Amy Emerson, Duncan C. Norton, Jeffrey Reed, Jose E. De La Fuente, Austin, TX, Jo Ellen Hewins, Corpus Christi, TX, for Appellee.
Before Justices Benavides, Perkes, Longoria
Opinion by Justice Perkes
Appellant Kleberg County (Kleberg) and cross-appellant URI, Inc. (URI) dispute various provisions of a settlement agreement regarding URI's uranium mine operations.1 URI filed suit against Kleberg pursuant to the Declaratory Judgments Act seeking a declaration that URI had complied with the well restoration pre-requisites of the settlement agreement. Kleberg filed an answer and counter-petition alleging four separate theories of breach of contract and requesting declaratory relief. URI responded to Kleberg's counter-petition by raising affirmative defenses. After a bench trial, the trial court found in favor of Kleberg on one of its breach of contract claims—that URI failed to restore a well to its pre-mining water quality—and awarded Kleberg nominal damages and partial specific performance. The trial court declined to award attorney fees.
By four issues, Kleberg argues: (1) the trial court erred by failing to award attorney fees to Kleberg; (2) the trial court erred by ordering specific performance that deviated from the terms of the settlement agreement; (3) URI breached its water treatment obligations; and (4) URI breached its duty to provide written notice and reports.2
By two cross-appeal issues, which we address first, URI argues: (1) the trial court erred by finding URI breached its restoration obligations; and (2) the case should be remanded to the trial court to determine attorney's fees. We reverse and remand.
URI operates the Kingsville Dome (KVD) uranium mine; located approximately eight miles southeast of Kingsville. The KVD site is roughly within a half-mile of several domestic water wells and shares its geological formation with an aquifer. The mine is divided into three productions areas, PAA–1, PAA–2, and PAA–3.
Beginning in 1985, before commencing mining operations, URI drilled wells in PAA–1 to test the underground aquifer water. The water in one of those test wells, I–11, met the then-current standards for irrigation. In 1987, URI retested its wells, including I–11. The 1987 samples showed that the groundwater from well I–11 contained a higher level of uranium, rendering the well unsuitable for irrigation. Also in 1987, URI submitted a permit application for PAA–1 to the Texas Water Commission, the precursor to the Texas Commission on Environmental Quality (TCEQ). With the permit application, URI included the results of the well I–11 samples taken in 1985, but not the samples taken in 1987. TCEQ issued the permit in 1988, and URI mined uranium in PAA–1 from 1988 to 1991, and again from 1996 to 1999. In 2004, URI sought and received authorization from TCEQ to commence mining in PAA–3.
Also in 2004, Kleberg and URI entered into a settlement agreement pertaining to URI's mining activities at KVD, specifically, the restoration of groundwater. URI's post-mining restoration of groundwater is at the heart of this dispute. The agreement states in pertinent part:
The Agreement further included a table titled "Water Quality Use Limits" which showed the permissible levels of various chemicals and elements for different water uses: drinking; livestock; and irrigation.
URI began restoring wells in PAA–1, and, in 2006, submitted a certificate to the Kleberg County Judge showing that the wells in PAA–1 were sufficiently restored to allow commencement of mining in PAA–3. In 2007, the Kleberg County Commissioners, dissatisfied with URI's restoration efforts in PAA–1, adopted a resolution to enforce the requirements of the Agreement "by all legal means available including litigation before any further mining takes place in [PAA–3]."
URI filed suit against Kleberg in 2010 seeking declaratory relief. URI pleaded one cause of action under the Declaratory Judgment Act that it complied with the terms of paragraph 11.1 of the settlement agreement; most specifically that it complied with the agreement with respect to restoration of PAA–1. See TEX. CIV. PRAC. & REM. CODE. § 37.003 (West, Westlaw through 2013 R.S.). URI also requested recovery of attorney's fees.
Kleberg filed an answer and counter-petition, alleging that URI breached the Agreement by: (1) failing to provide notices to its attorney, Richard Lowerre3 ; (2) failing to restore PAA–1 per paragraph 11.1; (3) failing to treat groundwater at required rates; and (4) failing to provide fiscal security for restoration. Kleberg also sought declaratory relief, disgorgement of profits4 , nominal damages, and attorney's fees pursuant to section 37.009 of the Texas Civil Practice and Remedies Code. See id. § 37.009. Kleberg further sought court declarations for each of the four theories pleaded in its breach of contract cause of action.
In response to Kleberg's counter-petition, URI generally raised several affirmative defenses, including laches, waiver, estoppel, and failure to mitigate, but did not specify to which claims these defenses applied. URI also alleged that its failure to perform restoration at the agreed rate was excused by the force majeure provision of the Agreement.
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