Ridgeway Coal Co., Inc. v. FMC Corp.

• Decision Date: 06 August 1985
• Docket Number: Civ. A. No. 83-2366.
• Citation: 616 F. Supp. 404
• Parties: RIDGEWAY COAL COMPANY, INC., et al., Plaintiffs, v. FMC CORPORATION, et al., Defendants.
• Court: U.S. District Court — Southern District of West Virginia

616 F. Supp. 404

RIDGEWAY COAL COMPANY, INC., et al., Plaintiffs, v. FMC CORPORATION, et al., Defendants.

Civ. A. No. 83-2366.

United States District Court, S.D. West Virginia, Charleston Division.

August 6, 1985.

James M. Cagle, Charles R. Garten, Charleston, W.Va., for plaintiffs.

Charles Q. Gage, M. Blane Michael and Karen Speidel Rodgers, Jackson, Kelly, Holt & O'Farrell, Charleston, W.Va., for defendants.

MEMORANDUM OPINION AND ORDER

HADEN, Chief Judge.

This is an action which was originally filed in the Circuit Court of Boone County, West Virginia. The action was removed to this Court by the Defendants on July 27, 1984. Although a United Mine Workers Local and several of its members had joined the present Plaintiffs in bringing this suit, the Union and its members have settled their differences with the Defendants and, consequently, have been dismissed from the case. The remaining Plaintiffs are Ridgeway Coal Company, Inc. and Harold J. Henry, President and Chief Executive Officer of the Plaintiff corporation. The original Defendants were FMC Corporation, Bill Curry, an employee of FMC, William A. McMinn, Vice President of FMC, and Richard Roe, an unknown employee of FMC. When the Plaintiffs filed their amended complaint, Roe was dropped as a Defendant. Defendant William A. McMinn has never been served with process. Thus, only FMC and Curry remain as Defendants. These two Defendants now move the Court to dismiss the amended complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted.

I. Background

FMC, the Defendant corporation, is the owner of certain coal properties in Boone County, West Virginia. The particular property of the Defendant involved in this litigation is known as the "Orgas property." Ridgeway Coal Company, Inc., the Plaintiff corporation,.is a West Virginia corporation engaged in the business of coal mining. Most of its business is in Boone County. During the summer of 1982, Ridgeway, through its President, Henry, approached FMC and made known to FMC its interest in subleasing the Orgas property. The initial discussions between the parties culminated in a letter dated July 12, 1982, from Dale R. Silbernagel, an employee of FMC, to the Plaintiff Henry. In the letter, Silbernagel set forth several conditions which Ridgeway would have to satisfy before FMC would be willing to enter into negotiations regarding a sublease. The conditions were directed toward Ridgeway's ability to effectively mine and sell the coal and the company's general financial condition.

The Plaintiffs (Ridgeway and Henry) allege that they met the conditions spelled out in the July 12, 1982, letter. In their amended complaint, the Plaintiffs further allege that FMC "failed and refused to enter into good faith discussions or negotiations with the Plaintiffs, or to have a good faith, meaningful discussion with the Plaintiffs concerning the Orgas property." Incorporating the Silbernagel letter into their complaint, the Plaintiffs claim the letter created a contractual relationship between themselves and FMC. Having met the letter's conditions, the Plaintiffs view as a contractual breach the failure of FMC to either lease or negotiate with them.

Plaintiffs also seek relief under a civil conspiracy theory. They claim that FMC, Defendant Bill Curry and William McMinn "did combine and conspire together to maliciously, wrongfully and illegally deprive the Plaintiffs of their contractual rights and interests in the Orgas property." In particular the Plaintiffs charge the Defendants with frustrating the Plaintiffs' attempt to sublease the Orgas property. They allege, without elaboration, that the conspiracy was carried out by means of meetings, phone calls and conversations between the Defendants and others.

In their motion, the Defendants have assigned grounds attacking both of the Plaintiffs' theories. First, the Defendants argue that their discussions with the Plaintiffs never resulted in a contractual relationship. At most, contend the Defendants, there was only an agreement to negotiate. They submit that such an agreement is not legally binding. Second, the Defendants argue that a corporation cannot conspire with its own employees. Because only FMC and its employee, Bill Curry, are before the Court as Defendants, the Defendants contend that the Plaintiffs' complaint fails to state a cause of action under a civil conspiracy theory.

II. Discussion

As an initial matter, the Court notes its agreement with the Plaintiffs on the standard of review applicable to a motion to dismiss under Rule 12(b)(6). That standard is weighted heavily in the favor of the Plaintiffs. "In appraising the sufficiency of the complaint," the Supreme Court stated in Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957), "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the Plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Furthermore, in reviewing the Plaintiffs' complaint, a court must assume as true any allegations set forth in support of the Plaintiffs' theories. Johnson v. Mueller, 415 F.2d 354 (4th Cir.1969); see also Vance v. Bordenkircher, 533 F.Supp. 429 (N.D.W.Va.1982); and Brock & Davis Co. v. Charleston National Bank, 443 F.Supp. 1175 (S.D.W.Va. 1977).

Although a court's attention must be limited to the complaint in ruling on a Rule 12(b)(6) motion, it must be noted that a complaint can comprise more than numbered paragraphs of allegations. Rule 10(c) of the Federal Rules of Civil Procedure specifically provides that "a copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes." The Plaintiffs in their amended complaint incorporated by reference the July 12, 1982, letter from Dale Silbernagel and attached it is an exhibit to their complaint. Therefore, that letter may be considered in conjunction with the amended complaint as the Plaintiffs' theories are tested.

A. The Plaintiffs' Contract Theory. The Plaintiffs allege in their amended complaint that the Defendant corporation contracted to sublease the Orgas property to the Plaintiffs, or at a minimum agreed to conduct good faith discussions or negotiations with the Plaintiffs. As support for their contentions, they incorporate the Silbernagel letter into their complaint. This letter, which is attached to this Memorandum Opinion and Order as an appendix, would seem to be the mainstay of the Plaintiff's contract theory.

It is recognized that parties can agree to agree in the future. To do so, however, it is necessary that the terms to be agreed upon in the future be substantially drawn from the initial agreement. Frank Horton & Co. v. Cook Electric Co., 356 F.2d 485 (7th Cir.) cert. denied 384 U.S. 952, 86 S.Ct. 1572, 16 L.Ed.2d 548 (1966). The terms must be determined "independent of a party's mere `wish, will and desire ...' either by virtue of the agreement itself or by commercial practice or other useage or custom." U.S. v. Orr Construction Co., 560 F.2d 765, 769 (7th Cir.1977) (quoting 1 Corbin on Contracts, § 95, at 402). The letter Plaintiffs present as the sole basis for their contractual theory does not begin to supply the terms of any possible sublease which may have been entered into between Ridgeway and FMC. The letter contains conditions, but these conditions were prerequisites to negotiation; for the most part they would not have carried over into any sublease which resulted from the negotiations.

The Plaintiffs alternatively claim that FMC contracted to negotiate with the Plaintiffs in good faith. Although the letter does speak of the willingness of FMC to enter into negotiations with the Plaintiffs, it does not create a contractual relationship between the parties. The letter is nothing more than an agreement to negotiate. As such, it is nothing more than negotiations itself. Wharf Restaurant, Inc. v. Port of Seattle, 24 Wash.App. 601, 605 P.2d 334 (1979). As the court said in Neff v. World Publishing Co., 349 F.2d 235 (8th Cir.1965), "preliminary negotiations between parties who have in mind the execution of a formal written contract cannot themselves be construed as constituting a contract."

The primary failing point of the contract claimed by the Plaintiffs, whether it be to sublease or merely to negotiate, is the inability of this Court to enforce the contract or to fashion any other remedy. When terms are so vague and indefinite that there is no basis or standard for deciding whether the agreement has been kept or broken, or to fashion a remedy, and no means by which such terms may be made certain, then there is no enforceable contract. Candid Productions, Inc. v. International Skating Union, 530 F.Supp. 1330 (S.D.N.Y.1982).¹

This Court cannot write a sublease between the parties. There is nothing to indicate what the terms of such a lease would be. How long would the lease run? What would be the consideration? What type of covenants would attach? The Court cannot write an agreement for the parties that they themselves would not have written. Neither can the Court enforce any promise to negotiate. "An agreement to enter into negotiations in the future cannot be enforced because the court has no means to determine what sort of contract the negotiations would have produced." Weitzman v. Steinberg, 638 S.W.2d 171, 175 (Tex.App.1982). The only possible exception to this principle is where the parties have agreed to basic terms, leaving only nonessential elements subject to negotiations. Eckles v. Sharman, 548 F.2d 905, 909 (10th Cir.1977). In this instance, however, not even the basic terms have been agreed upon. Much has been left to do. There is no enforceable contract.

In addition to enforcement of the alleged contract, Plaintiffs seek compensatory damages. The Plaintiffs cannot recover. For the reasons above mentioned,...