Thunder Basin Coal Co. v. Southwestern Public Service Co., 95-8050
| Decision Date | 07 January 1997 |
| Docket Number | No. 95-8050,95-8050 |
| Parties | , 31 UCC Rep.Serv.2d 760, 97 CJ C.A.R. 83 THUNDER BASIN COAL COMPANY, Plaintiff-Appellee, v. SOUTHWESTERN PUBLIC SERVICE COMPANY, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Charles R. Watson, Jr. (Stephanie Landry with him, on the brief) of Hinkle, Cox, Eaton, Coffield & Hensley, P.L.L.C., Amarillo, TX, for Defendant-Appellant.
David K. Isom of David K. Isom & Assoc., Salt Lake City, UT (J. Preston Stieff of David K. Isom & Assoc., Salt Lake City, UT, Scot W. Anderson, Atlantic Richfield Co., Denver, CO, and Thomas F. Nicholas, Hirst & Applegate, Cheyenne, WY, with him, on the brief), for Plaintiff-Appellee.
Before HENRY, LIVELY, * and MURPHY, Circuit Judges.
Plaintiff-appellee, Thunder Basin Coal Company ("Thunder Basin"), brought suit alleging defendant-appellant, Southwestern Public Service Company ("Southwestern"), intentionally interfered with a contractual relationship between Thunder Basin and TUCO, Incorporated ("TUCO"), causing TUCO to partially repudiate its obligations. Thunder Basin further alleged that Southwestern was contractually obligated to guarantee TUCO's performance and had failed to do so. The case proceeded to trial and the jury returned a verdict in favor of Thunder Basin in the amount of $18,815,802. Southwestern timely appealed.
On appeal, Southwestern argues the district court erred when it determined TUCO was not an indispensable party. It also challenges the sufficiency of the evidence supporting several of the jury's specific findings. In addition, Southwestern claims no case or controversy exists and that the district court's judgment in favor of Thunder Basin constitutes merely an advisory opinion. This court exercises jurisdiction pursuant to 28 U.S.C. § 1291 and affirms. We specifically hold that an entity or individual subject to impleader under Fed.R.Civ.P. 14 and entitled to intervene under Fed.R.Civ.P. 24 is never an indispensable party under Fed.R.Civ.P. 19.
This diversity suit focuses on the amount of coal to be purchased under one of two 1976 coal-supply agreements and primarily involves three companies. The first company, Thunder Basin, mines coal from the Powder River Basin in Wyoming and is a subsidiary of the Atlantic Richfield Company ("ARCO"). 1 ARCO originally entered into the coal-supply agreements at issue here but subsequently assigned its interests in them to Thunder Basin. 2 The second company is Southwestern, a publicly regulated electric utility organized under New Mexico law and operating principally in Texas. Since at least 1983, Southwestern has operated three coal-fired, electric-generating plants in Texas. In 1976, ARCO entered into the coal-supply agreements with the third main company, TUCO. TUCO has been a subsidiary of Massachusetts-based Cabot Corporation since 1979. Prior to 1979, however, and at the consummation of these agreements, TUCO was a subsidiary of Southwestern. To this day, TUCO remains the exclusive supplier of coal to Southwestern. TUCO is not a party to this suit. It is that procedural fact which is at the center of this controversy.
Prior to entering into the agreements which form the basis of this suit, the three companies dealt with each other under a different coal-supply agreement. In 1973, ARCO entered into a long-term contract with Southwestern (the "1973 Agreement"). Soon thereafter, however, environmental litigation halted mining on certain federal lands and caused ARCO to be unable to meet its coal-supply obligations under the 1973 Agreement. Subsequent negotiations between the parties resulted in two separate, long-term, coal-supply agreements. The first agreement involved the sale of coal mined from state lands (the "State Agreement") and the second involved the sale of coal mined from federal lands (the "Federal Agreement"). For purposes of these two agreements, Southwestern created TUCO as a wholly owned subsidiary which would purchase coal for Southwestern. Both agreements were signed on or about February 20, 1976, and both involved the sale of coal to TUCO for Southwestern's use in Texas.
The State Agreement, which contained a significantly higher base price for coal than the 1973 Agreement, provided that TUCO would buy 13,800,000 tons of coal between 1978 and 1983. Under the Federal Agreement, TUCO agreed to purchase coal from ARCO commencing in 1983, after the conclusion of the State Agreement. The Federal Agreement, which contained both an original term and an extension period, provided during its initial term for the purchase of 3,000,000 tons of coal per full year of the contract's operation, subject to increases or decreases of up to 15% per calendar year.
As compensation for TUCO's purchase of the more expensive state coal, the Federal Agreement provided TUCO with the opportunity to buy an additional volume of the cheaper federal coal during an extension period after the initial term of the Federal Agreement expired in 1994. Section 2(b) of the Federal Agreement, which concerned this extension period, provided:
The initial term of this Agreement shall be extended for the period necessary for [TUCO] to take quantities of coal equal to the quantities of coal delivered to [TUCO] under [the State Agreement] dated February 20, 1976....
....
Such quantities of coal shall be delivered under the terms and conditions of this Agreement and in accordance with the delivery schedule in effect at the time of delivery; provided, however, that (A) [TUCO] shall not be entitled to take more than 13,800,000 tons of coal during this extension of the initial term and (B) if [TUCO] has not taken delivery of the total quantity of coal to which it is entitled under this Section 2(b) by December 31, 1997, [TUCO's] right to take such coal shall terminate as of midnight, December 31, 1997 and the initial term shall expire as of such date. 3
Under a separate agreement, Southwestern guaranteed TUCO's performance of the terms of the Federal Agreement (the "Guarantee Agreement"). After Southwestern sold TUCO to Cabot Corporation in 1979, TUCO continued to supply coal to Southwestern's Harrington Station plant; Southwestern's obligations under the Guarantee Agreement were not altered by the sale of TUCO.
The central dispute before the district court involved the amount of coal TUCO agreed to purchase under the section 2(b) extension of the Federal Agreement. In the course of discussions prior to the expiration of the Federal Agreement, Thunder Basin asserted that the total volume of coal to be purchased was 12,861,993 tons. This amount is equal to the amount TUCO had actually purchased under a contractual measuring period set out in the State Agreement. Eventually, however, Thunder Basin learned the parties disagreed over the amount. TUCO and Southwestern maintained the amount to be purchased was 1,000,000 tons per year per coal-fired unit, or 9,000,000 tons total. As a result, TUCO, Southwestern, and Thunder Basin held a meeting in August 1993 concerning the amount of coal to be purchased during the extension period. After this meeting, at which the parties continued to insist upon their respective interpretations, Thunder Basin filed a Complaint against TUCO and Southwestern in the United States District Court for the District of Wyoming.
The Complaint alleged as follows: TUCO was required to purchase 12,861,993 tons of coal for the period 1995-97; TUCO's refusal to purchase that amount constituted a breach and partial repudiation of the Federal Agreement; and Southwestern breached and repudiated its guarantee of TUCO's performance. Both TUCO and Southwestern moved the court to dismiss Thunder Basin's Complaint for lack of diversity jurisdiction, inasmuch as both plaintiff Thunder Basin and defendant TUCO were Delaware corporations. Thunder Basin responded with an Amended Complaint, pursuant to Fed.R.Civ.P. 15(a), which dropped TUCO as a party.
Thunder Basin's Amended Complaint involved somewhat different claims from its original Complaint. The Amended Complaint alleged the following: (1) TUCO partially repudiated its obligations to purchase 12,861,998 tons of coal between 1995 and 1997; (2) Southwestern refused to perform its guarantee obligations to Thunder Basin which arose as a result of TUCO's partial repudiation of the Federal Agreement; (3) Southwestern intentionally interfered in the relationship between Thunder Basin and TUCO at the time of the negotiations and thus caused TUCO to repudiate a portion of the Federal Agreement; and (4) Southwestern was liable for the entire amount of Thunder Basin's damages resulting from the partial repudiation as well as its costs, expenses, and fees.
In response to the Amended Complaint, Southwestern moved to dismiss under Fed.R.Civ.P. 19 for failure to join TUCO as an indispensable party. After the district court held that TUCO was a necessary but not indispensable party and denied Southwestern's motion, the case proceeded to trial. Southwestern has never moved to add TUCO as a party under Fed.R.Civ.P. 14 and TUCO has never sought to intervene under Fed.R.Civ.P. 24(a).
Before submitting the case to the jury, the district court determined the evidence did not support a claim that Southwestern "breached" its guarantee of performance. Nevertheless, the judge concluded that in the event of a jury determination that TUCO had partially repudiated the Federal Agreement, Southwestern would have a duty to pay and the judge would make such a declaration based on the jury's verdicts. Accordingly, Thunder Basin presented the jury with the following issues: TUCO's obligations under the Federal Agreement, TUCO's partial repudiation, and Southwestern's tortious interference with Thunder Basin's contractual relations with TUCO.
The jury returned a verdict for Thunder Basin. In its Special Verdict and Interrogatories, the jury found as follows: (1) TUCO...
To continue reading
Request your trial
-
DINE CITIZENS AGAINST RUINING OUR ENV. v. Klein
...would have an adequate remedy if the action were dismissed for non-joinder. Fed. R.Civ.P. 19(b); Thunder Basin Coal Co. v. Southwestern Pub. Serv. Co., 104 F.3d 1205, 1211 (10th Cir.1997). Considering these Rule 19(b) factors, the Tenth Circuit held in Manygoats that the Tribe would not be ......
-
Combs v. International Ins. Co.
...Stave Co., 193 Ky. 774, 237 S.W. 412, 413 (1922). The repudiation must be absolute or unequivocal. Thunder Basin Coal Co. v. Southwestern Pub. Serv. Co., 104 F.3d 1205, 1213 (10th Cir.1997); Sys. Council EM-3, Int'l Bhd. of Elec. Workers, AFL-CIO v. AT & T, 972 F.Supp. 21 (D.D.C.1997); Brow......
-
Continental Coal, Inc. v. Cunningham
...(Fed.R.Civ.P. 19); United States v. O'Neil, 709 F.2d 361, 371 (5th Cir.1983) (same); see also Thunder Basin Coal Co. v. S.W. Pub. Serv. Co., 104 F.3d 1205, 1211 n. 4 (10th Cir.1997) (issue of indispensable party is not jurisdictional); 4 James Wm. Moore et al., Moore's Federal Practice 19.0......
-
Dunlevy v. Stidham
...appeal. We disagree. “The issue of indispensability under Rule 19 is not a jurisdictional question.” Thunder Basin Coal Co. v. Sw. Pub. Serv. Co., 104 F.3d 1205, 1211 n. 4 (10th Cir.1997). Even assuming for the sake of argument that the Muscogee Judiciary is indispensable, its absence would......