Volunteer Electric Coop. v. TENNESSEE VALLEY AUTHOR., Civ. No. 2161.

• Decision Date: 29 December 1954
• Docket Number: Civ. No. 2161.
• Citation: 139 F. Supp. 22
• Parties: VOLUNTEER ELECTRIC CO-OPERATIVE v. TENNESSEE VALLEY AUTHORITY.
• Court: U.S. District Court — Eastern District of Tennessee

139 F. Supp. 22

VOLUNTEER ELECTRIC CO-OPERATIVE v.TENNESSEE VALLEY AUTHORITY.

Civ. No. 2161.

United States District Court E. D. Tennessee, S. D.

December 29, 1954.

Harold M. Humphreys, Chambliss, Chambliss & Brown, Chattanooga, Tenn., for plaintiff.

Joseph C. Swidler, Chas. J. McCarthy, Thos. A. Pederson, C. A. Reidinger, Knoxville, Tenn., for defendant.

DARR, Chief Judge.

On June 10, 1939plaintiff and defendant entered into a contract which provides that plaintiff has participated in the acquisition of certain facilities of the Tennessee Power Company and that the purpose of the contract is to state the terms and conditions under which defendant shall sell electricity to the plaintiff.On March 29, 1949sections two and three of the contract were amended to state in substance that defendant would supply plaintiff with all of its power requirements within certain limits.Section three as amended sets up the delivery points for power and the demand at each delivery point.Section two provides for the furnishing of additional power when applied for by plaintiff in writing, under certain conditions and restrictions.On April 15, 1952 the contract was further amended whereby plaintiff and defendant agreed to increases in the wholesale and retail prices of power resold for industrial purposes.The 1952amendment contains the following recital: "Whereas, it is the desire of TVA and Distributor that they consult one another as early as feasible in the consideration of service to large new industrial loads in the area served by Distributor, and that standard arrangements be available for normal application, so that only in unusual cases, where the loads are of disproportionate size, or involve unusual service conditions, or where direct service by TVA would make possible substantial economies through coordination of the TVA system with the customer's facilities, would service by TVA, or by Distributor under special arrangements with TVA, be called for * * *" There have been other amendments, but they have no bearing upon the present dispute between the parties.

In 1944 certain tentative negotiations were held between representatives of defendant and Bowaters Southern Paper Corporation.Bowaters was interested in erecting a large plant somewhere in the Tennessee valley.Meetings on this question were resumed in January 1951.Defendant assisted Bowaters by furnishing it with information concerning the desirability of certain sites and also gave Bowaters preliminary assurances as to rates for power to be used by their plant if erected.In reliance upon defendant's assurances that it would furnish power at certain rates together with other favorable conditions in the area, Bowaters decided to construct a plant in McMinn County, Tennessee.The plant site was located within the area in which plaintiff has power lines and sells power.

It seems that on March 27, 1952 a meeting was held between representatives of plaintiff and defendant concerning service problems within plaintiff's area and that defendant brought up the Bowaters account suggesting that plaintiff supply the power needed by Bowaters during the construction of its plant.This was agreed upon.The amount of power to be required by Bowaters during construction was not to exceed 1,000 kw and it appears that defendant suggested plaintiff supply this power since plaintiff's system was adequate for the job.Such service was begun by plaintiff in 1952 and plaintiff was to continue to serve such construction power until Bowaters' plant was completed.

On July 16, 1952plaintiff wrote defendant requesting the establishment of a substation at the site of the Bowaters plant to supply a minimum of 17,000 kw of power (the firm power required by Bowaters) which plaintiff intended to distribute to Bowaters.Plaintiff also asked defendant to suspend further negotiations with Bowaters until plaintiff and defendant could agree concerning the service to Bowaters.On January 27, 1953defendant answered plaintiff indicating defendant was studying the problem and would discuss their findings when they were completed.On April 1, 1953defendant contracted with Bowaters to supply all of its power needs excluding the construction power being furnished by plaintiff.By letter dated April 20, 1953defendant advised plaintiff that this contract had been negotiated.However, it appears from defendant's affidavits that plaintiff had been advised as early as July 1952 that such a contract was to be negotiated and that on July 29, 1952defendant wrote plaintiff advising that a proposed draft of such contract had been made.

Plaintiff alleges that it is prepared to furnish the facilities necessary to supply Bowaters with its power requirements, the plant being located within its service area, and that the action of defendant in contracting to furnish such power violates the contract existing between plaintiff and defendant, especially as interpreted by the conduct of the parties throughout the years.

Pursuant to Rule 56 of the Federal Rules of Civil Procedure,28 U.S.C.A., defendant has filed an amended motion for summary judgment alleging there is no genuine issue as to any material fact and therefore defendant is entitled to judgment.Numerous detailed affidavits have been filed by defendant in support of its motion, together with written briefs.Plaintiff has also filed affidavits and brief in support of its position.

The first question which must be disposed of is whether this is a case which may properly be decided on motion for summary judgment.Rule 56(c) of the Federal Rules of Civil Procedure provides in part that summary judgment "shall be rendered forthwith if the pleadings, depositions, 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."(Emphasis supplied.)The determination of the existence of a genuine issue of fact depends upon the entire record of the case being considered.

The Court is aware of the care which must be exercised in making such a determination.In such a casethe Court is not authorized to try the issue of fact but rather must determine whether there is an issue to be tried.Toebelman v. Missouri-Kansas Pipe Line Co., 3 Cir., 130 F.2d 1016.The summary judgment procedure is not intended to be used as a substitute for trial of disputed questions of fact.It must be temperately and cautiously used lest abuse reap nullification.Avrick v. Rockmont Envelope Co., 10 Cir., 155 F.2d 568.The true intention of the summary judgment rule is to put an end to useless and expensive litigation if there is no genuine issue as to any material fact, even though an issue may be raised formally by the pleading.Battista v. Horton, Myers & Raymond, 76 U.S.App.D.C. 1, 128 F.2d 29.All of these considerations must be kept in mind in deciding the particular case lest the rights of either party be impinged.

In the present case the basic question is simply what the contract between the plaintiff and defendant means.The contract with pertinent amendments is before the Court having been filed by defendant in response to certain interrogatories put to it by the plaintiff.The plaintiff does not claim that there is any other amendment which affects the rights of the parties.Therefore, the Court must assume that the contract and amendments, as filed by the defendant, constitutes the entire written agreement insofar as it bears on the questions in issue.Plaintiff nowhere disputes the accuracy of the contract as filed by defendant, but rather asserts that a certain interpretation thereof be effected.

What plaintiff claims is that defendant's contract with Bowaters violates the express provisions of plaintiff's contract with defendant and that it also constitutes a violation of certain implied provisions thereof, the implied provisions having arisen by virtue of the conduct of the parties throughout the years.In support of its contention plaintiff asserts the contract requires defendant furnish plaintiff with its entire power requirements, that it gave the required notice for a contemplated increase in power and defendant breached the contract by supplying that power to plaintiff's contemplated customer.Plaintiff also relies upon certain provisions of the TVA Act itself, 16 U.S.C.A. § 831 et seq., which it claims entitles it to preference over industrial consumers.Although plaintiff asserts the course of conduct of the parties was such that certain rights arose by implication under the contract, nowhere in plaintiff's complaint, brief, or affidavits is the specific conduct relied upon set out except by an assertion that defendant never before competed with plaintiff.Though not disputing this, the plaintiff points to other facts which it contends show that its right to supply large industries direct has always been recognized.

The purpose of a motion for summary judgment is to separate the formal from the substantial issues raised by the pleadings.Walling v. Fairmont Creamery Co., 8 Cir., 139 F.2d 318.It is intended to permit a party to pierce the allegations of fact in the pleadings and obtain relief where facts set forth in detail in affidavits, depositions, and admissions on file show there is no genuine issue of fact to be tried.Engl v. Aetna Life Ins. Co., 2 Cir., 139 F.2d 469.To hold plaintiff's bare assertions in its pleadings sufficient to bar defendant's right to summary judgment would be contrary to the law.What then is presented in this case?First, a contract relied upon by plaintiff as forming the basis for its complaint.The contents thereof are before the Court and are undisputed by either party.Second, a particular interpretation of the contract asked for by plaintiff because of past conduct of the parties.The one fact asserted by plaintiff in support of the interpretation sought is not denied, namely...