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Wellons, Inc. v. Eagle Valley Clean Energy, LLC
United States District Court, D. Colorado
September 29, 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, 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.
ORDER ON MOTION FOR NEW TRIAL
BROOKE JACKSON UNITED STATES DISTRICT JUDGE
5, 2007 the jury rendered its verdicts in case no.
15-cv-1252-RBJ in favor of the plaintiff, Wellons, Inc., on
separate counts of breach of contract against defendants
Eagle Valley Clean Energy, LLC and Evergreen Clean Energy
Corporation. Specifically, the jury found that Eagle Valley
had breached a construction contract called the EPC Contract,
and it awarded damages to Wellons in the amount of $10, 840,
000. This was the unpaid portion of the contract price and
was a stipulated number. The jury found that Evergreen Clean
Energy had breached its obligations under a subordinated
promissory note, and it awarded damages to Wellons of the
same $10, 840, 000. The jury found in favor of the two
defendants (and entities related to them) on plaintiff's
fraudulent transfer claims. Finally, the jury found against
Eagle Valley on its two counterclaims, one asserting breach
of the EPC Contract by Wellons, and the other asserting
negligence by Wellons. See ECF Nos. 367 and 368
(unredacted), 369 and 370 (redacted).
Court entered its Final Judgment on July 24, 2017. ECF No.
382. On August 21, 2017 Eagle Valley and Evergreen Clean
Energy filed a motion asking the Court to grant Eagle Valley
a new trial on its breach of contract counterclaim against
plaintiff Wellons. ECF No. 408. Before plaintiff responded
the same defendants filed a notice of appeal. ECF No. 413. On
September 7, 2017 an Order was issued by the Clerk of the
United States Court of Appeals for the Tenth Circuit stating
that the appeal would be abated until the district court
disposes of the motion for a new trial. ECF No.
motion for new trial defendants argue that (1) the verdict
was against the weight of the evidence, and (2) the verdict
was precipitated by several prejudicial errors by the Court.
I address those arguments in turn.
Weight of the Evidence.
EPC Contract Wellons agreed to construct a biomass
electricity generation plant in Gypsum, Colorado in exchange
for an agreed price. Wellons built the plant, but Eagle
Valley refused to pay $10, 840, 000 which was the remaining
unpaid portion of the contract price. The jury found that
Eagle Valley, not Wellons, breached the contract and awarded
damages to Wellons in the amount of $10, 840, 000.
Accordingly, while the pending motion seeks a new trial on
Eagle Valley's counterclaim for breach of the EPC
Contract, it presumably would require a new trial as well on
Wellons' breach of contract claim against Eagle Valley
under the same contract.
argue that the verdict was “overwhelmingly”
against the weight of the evidence. ECF No 408 at 4-6. I
disagree. First, contrary to defendants' argument that
there was no evidence that Wellons achieved substantial
completion, there was substantial, albeit disputed, evidence
that “Final Completion” (a condition of
defendants' obtaining certain financing, which they did
obtain) was achieved. Wellons acknowledged that there were
various relatively small tasks, which Wellons called
“punch list” items, remaining to be done. But
there was evidence that defendants interfered with
Wellons' ability to complete those items, including by
excluding Wellons from the site. As Wellons points out in its
response, not only was there evidence that final completion
was achieved, but there was evidence that Wellons delivered a
plant that functions well and produces more electricity than
was promised. See ECF No. 427 at 3-4.
identify a list of specifics where, they contend, Wellons
breached the EPC Contract:
. the boiler's failure to achieve a 900
degree operating temperature, which defendants attribute at
least in part to the installation of an undersized boiler
. “CEMA” is the prevailing
industry standard for fuel conveyer design and construction,
but Wellons did not meet that standard
. Wellons did not “resolve”
eight punch list items ECF No. 408 at 2-4.
I agree that defendants presented evidence concerning alleged
deficiencies. But as pointed out in Wellons response,
defendants' evidence was not the only evidence on these
items. For example,
. Wellons presented evidence that Eagle
Valley's use of inappropriate fuel, i.e., fuel containing
high moisture or ash, was the likely cause of the difficulty
in achieving the 900 degree boiler temperature
. Wellons presented evidence that CEMA is
not a building code but a guideline which Wellons uses when
it is appropriate for ...