Longview Aluminum v. United Steel Workers of Am.

• Decision Date: 31 July 2002
• Docket Number: No. 02 C 0048.,02 C 0048.
• Citation: 213 F.Supp.2d 876
• Parties: LONGVIEW ALUMINUM, L.L.C., a Delaware limited liability company, Michigan Avenue Partners, L.L.C., an Illinois limited liability company, Plaintiffs/Counterclaim Defendants, v. UNITED STEEL WORKERS OF AMERICA, Defendant/Counterclaim Plaintiff.
• Court: U.S. District Court — Northern District of Illinois

213 F.Supp.2d 876

LONGVIEW ALUMINUM, L.L.C., a Delaware limited liability company, Michigan Avenue Partners, L.L.C., an Illinois limited liability company, Plaintiffs/Counterclaim Defendants, v. UNITED STEEL WORKERS OF AMERICA, Defendant/Counterclaim Plaintiff.

No. 02 C 0048.

United States District Court, N.D. Illinois, Eastern Division.

July 31, 2002.

Cary E. Donham, John Francis Kennedy, Channing K. Blair, Shefsky, Froelich & Devine, Steven J. Thompson, Drew George Peel, Jenkins & Gilchrist, Robert Patrick Cummins, Thomas Cusack Cronin, Cummins & Cronin, LLC, Kevin Buckley Duff, Rachlis Durham & Duff, John J. Curry, Jr., Anthony J. Nasharr, III, Bryan Patrick Lynch, Foran, Nasharr & O'Toole, Chicago, IL, for plaintiffs.

Jeremiah Andrew Collins, Jon Bourgault, Bredhoff & Kaiser P.L.L.C., Washington, DC, David L. Gore, Gore & Gore, Chicago, IL, for defendant.

MEMORANDUM OPINION AND ORDER

CASTILLO, District Judge.

The instant case involving Longview Aluminum, L.L.C. ("Longview"), Michigan Avenue Partners, L.L.C. ("MAP") and the United Steel Workers of America ("USWA") arises out of the curtailment of operations at the Longview Smelter ("Smelter"). Pursuant to a settlement agreement, Longview's claims against USWA and individual defendant David Foster were dismissed. (R. 37, May 29, 2002 Order.) As such, the suit narrowed to include only MAP's claim and USWA's counterclaims arising out of various alleged agreements. Currently before the Court is Counterclaim Plaintiff USWA's motion for partial summary judgment on the basis of two of these alleged agreements. For the reasons set out herein, USWA's motion is denied. (R. 31-1.)

RELEVANT FACTS

The parties involved in this dispute include USWA, an unincorporated association that represents some of the Smelter's hourly employees, Longview, a Delaware limited liability company and MAP, an Illinois limited liability company. Longview owns the Smelter located in Longview, Washington. Although USWA alleges that MAP owns both Longview and the Smelter, MAP and Longview claim — based on the declarations of Longview members John Kolleng and Michael Lynch — that MAP has never had an ownership interest in Longview. (R. 31-3, USWA Facts ¶ 1; R. 50, Longview Facts ¶ 1; R. 52, MAP Facts ¶ 1.) Lynch, however, has ownership interests in both MAP and Longview. According to his declaration, he is one of five members of Longview as well as the sole owner of MAP. (R. 50, Longview Facts, Ex. 2, Lynch Dec. ¶¶ 2-3.) While MAP and Longview originally alleged that MAP provides management and consulting services to Longview, Lynch currently claims that MAP is an acquisition company. (R. 27, Am. Compl. ¶ 2; R. 51, Longview Add'l Facts ¶ 2.)

At issue in the instant motion are two documents: (1) the agreement dated December 20, 2000 ("December 20 Agreement"); and (2) the letter of understanding dated February 18, 2001 ("LOU II"). Both documents were signed by USWA and MAP. In the preamble to the December 20 Agreement, the definition of MAP includes not only MAP itself but "any affiliate of Michigan Avenue Partners or any entity with which the principals of Michigan Avenue Partners is or becomes associated with." (R. 31-4, USWA Mot., Ex. 3, Dec. 20 Agreement.) The preamble also states MAP's intention to purchase the Smelter from Alcoa/Reynolds and then resell the electric power available to the Smelter. Section 1 provides that USWA shall support MAP's efforts to sell power. In return, MAP agrees in Section 2 that during any power sale period, the net proceeds of any sale shall be used to pay special supplemental payments ("SSP") and benefits to employees. A power sale period is defined as "any period in which Longview is operating at less than full capacity due, in whole or in part, directly or indirectly, to a Power Sale." (Id.) Section 5 is a choice of law and venue provision, applying Illinois law in federal court in the Northern District of Illinois in the case of any disputes. Section 6 provides for modification of the agreement by mutual written consent. The December 20 Agreement was executed by Michael Lynch as Chairman of MAP and George Becker as International President of USWA. Since March 31, 2002, Longview has not provided SSPs to any employees allegedly covered by the December 20 Agreement. The February 21, 2001 Curtailment Agreement between Longview and the Bonneville Power Authority ("BPA") provides for the curtailment of Smelter operations for the period extending from April 1, 2002 through June 30, 2002.

LOU II — the second document at issue in the instant motion — was drafted on MAP letterhead and signed by Michael Lynch as Chairman of MAP. On the final page of the letter, under the word "Confirmed," appears the signature of David Foster, Director of District 11 of USWA. The preamble states that "[a]ll capitalized terms herein have the same meaning ascribed to them in the December 20 Agreement and/or LOU I. As soon as practicable after execution of this LOU II and the closing of the Purchase (the `Closing'), the parties shall re-state the December 20 Agreement, LOU I and LOU II into a single document." (R. 31-4, USWA Mot., Ex. 1, LOU II.) The three documents were never restated in a single document. Section 5 of LOU II or the re-start provision states: "effective April 1, 2002, unless the USWA gives its consent to a lower operating rate (such consent not to be unreasonably withheld), Longview Aluminum will take 280 MW on every hour of such BPA power and use all such power to increase smelting operations at Longview, employing the number of bargaining unit employees reasonably associated with operation at that power level." (Id.)

USWA alleges that as April 1, 2002 approached, they became aware that the Smelter might not be operating at 280 MW. In fact, Longview did not take 280 MW of BPA power effective April 1, 2002. On March 26 and 27, 2002, Longview laid off all but approximately 15 employees. Since April 1, 2002, Longview has not taken any power from the BPA or any other source. In addition, the collective bargaining agreement in effect at the Smelter expired on May 31, 2002.

Currently before the Court is USWA's motion for partial summary judgment. USWA argues that MAP and Longview breached: (1) the December 20 Agreement by not providing SSPs to the applicable employees during the April 1, 2002 — June 30, 2002 curtailment period; and (2) LOU II by failing to restart the Smelter on April 1, 2002. USWA seeks damages in the amount of the SSP payments required by the December 20 Agreement and an order of specific performance to re-start the Smelter (or damages — including loss of income and benefits — resulting from the failure to restart the Smelter).

LEGAL STANDARDS

Summary judgment is proper when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c). A genuine issue exists only when "the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Accordingly, the nonmovant must "come forward with specific facts showing that there is a genuine issue for trial." Miller v. Am. Family Mut. Ins. Co., 203 F.3d 997, 1003 (7th Cir.2000) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). The Court must view the evidence, and all reasonable inferences therefrom, in the light most favorable to the nonmoving party. Id.

ANALYSIS

USWA seeks summary judgment on two claims predicated on the December 20 Agreement and LOU II. USWA argues that MAP and Longview violated the December 20 Agreement by failing to provide the payments required by the agreement for the period of April 1, 2002 through June 30, 2002. They contend that the period of April 1, 2002 through June 30, 2002 is a power sale period — as defined by the December 20 Agreement — and that MAP and Longview were thus obligated to make payments during that period. USWA further argues that MAP and Longview breached Section 5 of LOU II by not re-starting the Smelter on April 1, 2002. MAP and Longview, on the other hand, contest the enforceability of the December 20 Agreement and LOU II.¹ The companies primarily argue that the execution of a subsequent final agreement was a condition precedent to the enforceability of the December 20 Agreement and LOU II, and that there exist too many questions of material fact to grant summary judgment.

Resolution of the instant dispute involves delving into Illinois contract law.² A valid contract exists when the following requirements are met: competent parties, valid subject matter, legal consideration mutuality of obligation and, especially pertinent to the instant case, mutuality of agreement. Harris v. Johnson, 218 Ill. App.3d 588, 161 Ill.Dec. 680, 578 N.E.2d 1326, 1329 (1991). Even in a case where a future agreement is contemplated by the parties, the Court may nevertheless find a prior agreement binding if the parties intended to be bound by the prior agreement. Barton Chem. Corp. v. Pennwalt Corp., 79 Ill.App.3d 829, 35 Ill.Dec. 454, 399 N.E.2d 288, 291-92 (1979). See also Lambert Corp. v. Evans, 575 F.2d 132, 135 (7th Cir.1978). Initially, the Court must determine whether an agreement is ambiguous or capable of more than one interpretation. Quake Constr., Inc., v. American Airlines, 141 Ill.2d 281, 152 Ill.Dec. 308, 565 N.E.2d 990, 994 (1990). If an agreement contains an integration clause, the Court looks for intrinsic ambiguity or whether the language of the agreement itself evidences any ambiguity. Air Safety, Inc., v. Teachers Realty Corp., 185 Ill.2d 457, 236 Ill.Dec. 8, 706 N.E.2d 882, 884-85 (1999). In cases where there is no explicit integration clause, the Court may...