Buy This Entire Record For
Wellons, Inc. v. Eagle Valley Clean Energy, LLC
United States District Court, D. Colorado
March 7, 2017
WELLONS, INC. an Oregon corporation, Plaintiff,
EAGLE VALLEY CLEAN ENERGY, LLC, a Utah limited liability company, EVERGREEN CLEAN ENERGY CORPORATION, a Colorado corporation, CLEARWATER VENTURES, LLC, a Utah limited liability company, DEAN L. ROSTROM, individually, KENDRIC B. WAIT, individually, GEORGE SORENSON, individually, WILCOX REVOCABLE TRUST U/A 0627/03 WILLIAM WILCOX AND LYN WILCOX TRUSTEES FOR THE BENEFIT OF WILLIAM WILCOX AND LYN WILCOX, SEA SOUTH, LLC, a Delaware limited liability company, WESTERN RESOURCES, LLC, a Utah limited liability company, COLORADO FORESTRY FUNDING, LLC, a Delaware limited liability company, and WEST RANGE FOREST PRODUCTS, LLC, a Colorado limited liability company, Defendants. EAGLE VALLEY CLEAN ENERGY, LLC, EVERGREEN CLEAN ENERGY CORPORATION, and CLEARWATER VENTURES, LLC, Counterclaimants,
WELLONS, INC., Counterclaim defendant. EAGLE VALLEY CLEAN ENERGY, LLC, EVERGREEN CLEAN ENERGY CORPORATION, and CLEARWATER VENTURES, LLC, Third-party plaintiffs,
WELLONS GROUP, INC., and MARTIN NYE, Third-party defendants. GCUBE INSURANCE SERVICES, INC., a California corporation, Plaintiff,
WELLONS, INC., an Oregon corporation, Defendant.
Brooke Jackson, Judge
defendant Wellons, Inc. moves for summary judgment on
counterclaimants' second cause of action for liquidated
damages under the “Consent and Agreement.” ECF
No. 216. The motion is granted.
December 21, 2011 Wellons, Inc. (“Wellons”) and
Eagle Valley Clean Energy, LLC (“EVCE”) entered
into an contract for Wellons to design and build a biomass
power plant in Gypsum, Colorado. The parties memorialized
their agreement in the “Amended and Restated Engineer,
Procure, and Construct Contract” (“the EPC
obtain a construction loan for the project, EVCE executed a
“Credit Agreement” with Deutsche Bank Trust
Company Americas and lenders affiliated with the bank on
August 8, 2013. ECF No. 226-1 ¶ 4; ECF No. 228-1.
Deutsche Bank “was not a lender, ” but instead
was “an agent acting at the direction of the
lenders.” ECF No. 226-2 ¶ 5. In the Credit
Agreement's jargon, Deutsche Bank was the
“Administrative Agent” and “Collateral
Agent” for “the Lenders that [were] from time to
time parties” to that agreement. See ECF No.
Bank considered EVCE's loan risky and required additional
safeguards from the parties. ECF No. 216 at 3; ECF No. 226-1
¶ 8. To that end, Deutsche Bank required EVCE and
Wellons to sign a “Consent and Agreement”
(“the Consent”) before it would finance the
Credit Agreement. See ECF No. 216-1 at 1; ECF No.
226 at 5-6, ¶¶ 3-4. The Consent amended the EPC
contract to EVCE's benefit, making it more likely that
EVCE would be able to repay the Deutsche Bank loan if Wellons
failed to adequately construct the power plant. See
ECF No. 216 at 3; ECF No. 226 at 5, ¶ 3 (summarizing the
Consent's amendments as including “requiring
Wellons to secure its performance under the EPC Contract with
a letter of credit, ” “imposing additional Repair
Warranty obligations on Wellons, ” “adding
liquidated damages for Wellons' failure to timely achieve
Substantial Completion and/or Final Completion, ” and
“eliminating a provision that purports to limit
Wellons' financial liability for defects in its
work”). The Consent provided that these amended terms
would remain in effect “until the time that this
Consent is terminated.” ECF No. 216-1 art. 1.11;
accord ECF No. 226 at 8, ¶ 14.
had also sought less expensive financing from the U.S.
Department of Agriculture's Rural Utilities Service
(“RUS”), but was unable to obtain such a loan
until May 2014. ECF No. 216 at 3; ECF No. 226 at 6, ¶ 9.
Some of this money was used to pay off the Deutsche Bank
loan. ECF No. 216 at 5; ECF No. 226 at 6, ¶ 9.
project did not go as planned. Wellons and EVCE each claim
that the other party breached the EPC contract. See
Compl., ECF No. 1 ¶¶ 22-25; Am. Countercl., ECF No.
141 ¶¶ 49-62. Wellons now moves for summary
judgment on EVCE and other counterclaimants' claims for
liquidated damages under the Consent, arguing that the
Consent terminated when RUS repaid the Deutsche Bank loan in
full. ECF No. 216 at 2.
Court may grant summary judgment if “there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a). The moving party has the burden to show that there is
an absence of evidence to support the nonmoving party's
case. Celotex Corp. v. Catrett, 477 U.S. 317, 325
(1986). The nonmoving party must “designate specific
facts showing that there is a genuine issue for trial.”
Id. at 324. A fact is material “if under the
substantive law it is essential to the proper disposition of
the claim.” Adler v. Wal-Mart Stores, Inc.,
144 F.3d 664, 670 (10th Cir. 1998). A material fact is
genuine if “the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). The Court will examine the factual record and make
reasonable inferences in the light most favorable to the
party opposing summary judgment. Concrete Works of Colo.,
Inc. v. City & Cnty. of Denver, 36 F.3d 1513, 1517
(10th Cir. 1994).
liquidated damages claim depends on the meaning of Sections
1.2, 4.6, and 4.7 of the Consent. Wellons contends that only
Section 4.7 applies in this case, and that its plain terms
dictate that the Consent terminated when RUS repaid the
Deutsche Bank loan. ECF No. 216 at 2. EVCE disagrees, arguing
that the Consent continues to apply in favor of RUS under
Section 1.2, and that Sections 4.6 and 4.7 must be read
together to require a signed agreement to terminate the
Consent. ECF No. 226 at 10.
of the Consent-a contract-is a question of law for the Court.
See USAA Cas. Ins. Co. v. Anglum, 119 P.3d 1058,
1059 (Colo. 2005). When interpreting a contract, the primary
goal is to determine and give effect to the intent of the
parties. Ad Two, Inc. v. City & Cnty. of Denver,
9 P.3d 373, 376 (Colo. 2000). The parties' intent is to
be ascertained primarily from the language of the agreement
itself. Id. The Court gives words their plain and
ordinary meaning unless it is clear that the parties intended
an alternative interpretation. Chacon v. Am. Family Mut.
Ins. Co., 788 P.2d 748, 750 (Colo. 1990). Unless the
terms in a contract are susceptible to more than one
reasonable interpretation, the Court will not look beyond the
four corners of an agreement in determining its meaning.
Ad Two, Inc., 9 P.3d at 376-77. And any ambiguity in
the Consent will be construed against the party that drafted
it-Deutsche Bank. See Moland v. Indus. Claim
Appeals Office of State, 111 P.3d 507, 510 (Colo.App.
2004). The Court will consider each disputed provision in
1.2 of the Consent is titled “Consent to
Assignment” and provides, in relevant part:
The Collateral Agent [Deutsche Bank] and the Project Company
[EVCE] agree that the Secured Obligations may be refinanced,
extended, renewed or replaced from time to time, and Contract
Party [Wellons] agrees that this Consent will remain in full
force and effect and continue to apply in favor of the
Collateral Agent [Deutsche Bank] or any replacement