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Chimney Rock Public Power District v. Tri-State Generation and Transmission Association, Inc.

United States District Court, D. Colorado

March 3, 2014

CHIMNEY ROCK PUBLIC POWER DISTRICT, MIDWEST ELECTRIC COOPERATIVE CORPORATION, NORTHWEST RURAL PUBLIC POWER DISTRICT, PANHANDLE RURAL ELECTRIC MEMBERSHIP ASSOCIATION, and ROOSEVELT PUBLIC POWER DISTRICT, Plaintiffs,
v.
TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, INC., Defendant. TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, INC., Counterclaim Plaintiff,
v.
CHIMNEY ROCK PUBLIC POWER DISTRICT, MIDWEST ELECTRIC COOPERATIVE CORPORATION, NORTHWEST RURAL PUBLIC POWER DISTRICT, and PANHANDLE RURAL ELECTRIC MEMBERSHIP ASSOCIATION, Counterclaim Defendants. TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, INC., Third-Party Plaintiff,
v.
RYAN REIBER, and JERRY UNDERWOOD, Third-Party Defendants.

ORDER GRANTING MOTIONS FOR SUMMARY JUDGMENT

WILLIAM J. MARTÍNEZ, District Judge.

In this diversity action, Defendant and Counterclaim Plaintiff Tri-State Generation and Transmission Association, Inc. ("Tri-State") has filed Amended Counterclaims against Plaintiffs Chimney Rock Public Power District ("Chimney Rock"), Midwest Electric Cooperative Corporation ("Midwest"), Northwest Rural Public Power District ("Northwest"), and Panhandle Rural Electric Membership Association ("PREMA"). (ECF No. 84.) Tri-State also brings claims as a Third-Party Plaintiff against Jerry Underwood and Ryan Reiber (together the "Third-Party Defendants"). ( Id. ) This matter is before the Court on the Third-Party Defendants' Motions for Summary Judgment on Tri-State's Fifth and Sixth Counterclaims ("Motions"), which are the only claims asserted against them. (ECF Nos. 194 & 197.) For the reasons set forth below, the Motions are granted.

I. BACKGROUND

The relevant facts, viewed in the light most favorable to Tri-State, are as follows. Tri-State is a Colorado corporation, originally formed in 1965 by twenty-six electrical power distribution cooperatives and public power districts in the states of Colorado, Nebraska, and Wyoming for the purpose of furnishing long-term wholesale power and energy to the member cooperatives and districts, which in turn provide power to consumers in their separate geographical areas. (ECF No. 84 ¶¶ 10, 16.) Tri-State is now comprised of forty-four members located in the three original states plus New Mexico. ( Id. ¶¶ 72, 74.) Plaintiffs Chimney Rock, Midwest, Northwest, and PREMA are all members of Tri-State, operating in Nebraska under contracts with Tri-State for the provision of wholesale electric service. ( Id. ¶¶ 2-5, 17.)

On September 28, 2009, Plaintiffs filed their Complaint in the District of Nebraska against Tri-State and various individual defendants[1], alleging breach of contract and related claims arising from a dispute over the rates at which Tri-State sold electric power to Plaintiffs. (ECF No. 1-2.) After the District of Nebraska granted a Motion to Change Venue under 28 U.S.C. § 1404(a), the case was transferred to this Court on September 24, 2010. (ECF Nos. 1-71, 1-77.)

After the Court issued an Order granting in part and denying in part Tri-State's Motion to Dismiss (ECF No. 31), Tri-State filed its Answer on February 15, 2012, which included Counterclaims against Plaintiffs Chimney Rock, Midwest, Northwest, and PREMA. (ECF No. 39.) Tri-State's Counterclaims arise out of Plaintiffs' formation in 2007 of the Nebraska Power Supply Interest Group ("NPSIG"). Tri-State alleges that Plaintiffs, through NPSIG, sought to breach their contracts with Tri-State and pressure Tri-State to change its pricing rate, and planned and filed the instant lawsuit. (ECF No. 84 ¶¶ 34-35.) During discovery, Tri-State obtained information alerting it to additional claims, and consequently Tri-State filed a Motion to Amend the Scheduling Order and to Assert Additional Counterclaims on August 23, 2012. (ECF No. 65.)

Magistrate Judge Kathleen M. Tafoya granted Tri-State's Motion to Amend (ECF No. 83), and Tri-State filed its Amended Counterclaims on December 3, 2012, joining the Third-Party Defendants to this action. (ECF No. 84.) The Amended Counterclaims included a new Fifth Counterclaim[2] for breach of fiduciary duty against Wayne Cobb, a member of the board of directors of Northwest, and Jerry Underwood, a member of the board of directors of PREMA, both of whom were members of Tri-State's board of directors at all relevant times and allegedly failed to disclose material information about NPSIG's activities to Tri-State. ( Id. ¶¶ 26-27, 47, 53, 87-91.) Tri-State also brought a Sixth Counterclaim for aiding and abetting Cobb's and Underwood's breach of fiduciary duty, asserted against Plaintiffs, as well as against Rolland Skinner, an employee of Northwest, and Ryan Reiber, an employee of PREMA. ( Id. ¶¶ 8-9, 92-95.) The Court subsequently granted Motions to Dismiss by Cobb and Skinner, dismissing all claims against them. (ECF No. 252.)

On June 14, 2013, both Reiber and Underwood filed Motions for Summary Judgment.[3] (ECF Nos. 194 & 197.) On July 5, 2013, Tri-State filed its Responses to the Motions. (ECF Nos. 206 & 207.) Reiber's and Underwood's Replies were filed on July 22, 2013. (ECF Nos. 230 & 232.)

II. LEGAL STANDARD

Summary judgment is appropriate only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem Coal Co., Inc., 41 F.3d 567, 569 (10th Cir. 1994). Whether there is a genuine dispute as to a material fact depends upon whether the evidence presents a sufficient disagreement to require submission to a jury, or conversely, is so one-sided that one party must prevail as a matter of law. Anderson v. Liberty Lobby, 477 U.S. 242, 248-49 (1986); Stone v. Autoliv ASP, Inc., 210 F.3d 1132 (10th Cir. 2000); Carey v. U.S. Postal Serv., 812 F.2d 621, 623 (10th Cir. 1987).

A fact is "material" if it pertains to an element of a claim or defense; a factual dispute is "genuine" if the evidence is so contradictory that if the matter went to trial, a reasonable party could return a verdict for either party. Anderson, 477 U.S. at 248. The Court must resolve factual ambiguities against the moving party, thus favoring the right to a trial. Houston v. Nat'l Gen. Ins. Co., 817 F.2d 83, 85 (10th Cir. 1987).

III. ANALYSIS

The Third-Party Defendants make two arguments that summary judgment is warranted as to Tri-State's claims against them: (1) Tri-State has no valid theory of damages; and (2) Tri-State's fiduciary duty claims are barred by the statute of limitations. (ECF Nos. 194 & 197.) Because the Court finds ...


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