United States District Court, D. Maryland
MEMORANDUM OPINION
J.
MARK COULSON UNITED STATES MAGISTRATE JUDGE.
This
case at its core involves a dispute between Plaintiffs and
Defendants over coal that was allegedly wrongfully mined by
Defendants from land (and associated mineral rights)
purportedly owned by Plaintiffs. Within this larger dispute
there are also sub-disputes between the parties. One such
sub-dispute gave rise to a counterclaim by Defendants WPO,
Inc., Jeffrey Rose and Debbie Rose (collectively, the
“WPO Defendants”) against Plaintiffs that
includes claims for breach of contract, unjust enrichment,
promissory estoppel, negligent interference with contractual
relationship, fraudulent misrepresentation and fraud. (ECF
No. 29). As to that counterclaim, Plaintiffs have moved for
summary judgment. (ECF No. 127).
The
parties consented to proceed before a magistrate judge
pursuant to 28 U.S.C. § 636(c) and Local Rule 301.4.
(ECF Nos. 174, 178, 179, 180, and 181). The Court has now
considered Plaintiffs' motion, along with the WPO
Defendants' Opposition. (ECF No. 158). Additionally, the
Court heard limited oral argument on May 21, 2019 and
additional oral argument on August 21, 2019. (ECF Nos. 210
and 241). Last, the WPO Defendants made an additional
production of documents to which Plaintiffs replied. (ECF
Nos. 242 and 244). For the reasons set forth more fully
below, Plaintiffs' Motion for Summary Judgment as to
Defendants Counterclaim, (ECF No.127), is
GRANTED.
I.
BACKGROUND
At some
point prior to the filing of the instant lawsuit, Plaintiffs
and the WPO Defendants had a dispute about other coal
allegedly wrongfully mined by the WPO Defendants from land
owned by Plaintiffs (the so-called “Callie
Mine”). The parties resolved that dispute privately,
with the WPO Defendants agreeing to pay Plaintiffs a royalty
for the disputed coal.[1] As explained by counsel at the recent oral
argument, as a follow-up to that dispute, Plaintiffs and the
WPO Defendants discussed a possible agreement whereby the WPO
Defendants would be permitted to mine additional coal from
the Plaintiffs' Callie Mine, paying royalties to
Plaintiffs for any coal mined. The caveat, according to the
WPO Defendants, was that mining the Callie Mine was not
economically efficient due to the amount of
“cover” over the coal, and the less than ideal
quality of the coal. (ECF No. 158-3 at p. 2). Therefore, the
WPO Defendants also sought an agreement to mine from two
other of Plaintiffs' properties-the “Bosley”
and “Bakerstown” mines. These two sites had less
cover over the coal, making them more economically attractive
to mine. Id. According to the WPO Defendants,
“Plaintiffs verbally agreed to allow WPO, Inc. to mine
the Bosley and Bakerstown sites if WPO, Inc. mined the Callie
Mine.” Id.
Originally,
the WPO Defendants argued that to memorialize these
agreements, the parties executed certain deeds, deeds of
trust, and promissory notes granting certain mining rights to
them on or about September 9, 2010. (Id. at 3). The
WPO Defendants also contended that the recorded versions of
those documents were somehow fraudulently altered so that
Plaintiffs retained those rights. (Id.). At
the recent oral argument however, the WPO Defendants
clarified that these September 9, 2010 documents did not
directly concern mining rights to the Bosley and Bakerstown
sites. Rather, they acknowledged that these documents relate
to another transaction involving a different piece of
property for which the WPO Defendants sought (and were
granted) surface rights so that they would have a separate
place for the “spoil” removed from the mines
during mining operations.
As for
the documentation of the Callie-Bosley-Bakerstown agreements
described above, at oral argument, counsel for the WPO
Defendants acknowledged that based on his experience he would
expect there to be a: (1) surface lease; (2) mineral rights
lease; and, (3) royalty agreement spelling out the rights and
responsibilities of the parties including such things as the
length of the agreement, the royalty amount, and the
conditions under which either party could terminate the
agreement . None of those documents have been located during
the extensive discovery that has taken place in this case
Instead, the WPO Defendants contend that they have sufficient
circumstantial evidence of the agreements to prove their
existence. First, the WPO Defendants allege that they applied
for and were granted a mining permit for the Bosley site by
the Maryland Department of the Environment. The WPO
Defendants argue not only that a permit would not have been
pursued in the absence of an agreement, but also that the
State of Maryland would not have issued a permit in the
absence of a valid mineral rights lease in favor of the WPO
Defendants.[2]Additionally, counsel proffered that the
WPO Defendants did some sampling on the sites in anticipation
of mining operations. Finally, the WPO Defendants argue that
they would not have purchased a parcel for the
“spoil” (as described in the September 9, 2010
documents) if they did not fully anticipate commencing mining
pursuant to the agreements.
The WPO
Defendants alleged that “[b]eginning in 2012 and
continuing to the present, the Plaintiffs have refused to
allow WPO, Inc. to permit and mine said coal.” (ECF No.
158-3 at p. 3). They further allege that “Plaintiffs
have communicated with the Maryland Department of the
Environment and [it] refused to allow WPO, Inc. to mine coal
on the new property.” Id. As a result, the WPO
Defendants claim “compensatory, reliance and expectancy
damages” in the form of lost revenues and profits from
the coal they expected to mine, expense in removing equipment
from the sites, and (having been deprived of those revenues
and profits) loss of various mining equipment to
repossession. (ECF No. 29 at p. 18; ECF No. 158-3 at p. 3.)
Plaintiffs
argue that any purported agreements to mine (including
associated grants of mineral rights) are subject to the
statute of frauds which, in the absence of any writing
memorializing the agreements, is not satisfied here. Further,
Plaintiffs argue that because the breach occurred
“beginning in 2012, ” the applicable three-year
statute of limitations ran prior to the filing of the WPO
Defendants' counterclaim in December of 2015.
In
response to these arguments, the WPO Defendants were asked to
muster and file any additional supporting documentation.
Specifically, the Court requested the Permit to the Maryland
Department of the Environment which purportedly shows the
existence of an agreement between WPO and Plaintiffs, and any
documentation concerning Plaintiffs' alleged revocation
of the agreement. In response, the WPO Defendants have
produced three additional documents: (1) a 104-page
resubmission of a permit application to mine on the Bosley
tract dated December 12, 2014; (2) a coal reserve estimate of
the Bosley tract dated November 18, 2013; and (3) ten emails
exchanged in 2013 and 2014 between Jeffery Rose and Carmen
Del Signore, a representative of Plaintiffs. (ECF No. 242).
While the additional documents narrowly defeat
Plaintiffs' statute of limitations argument, the WPO
Defendants fail to prevent summary judgment based on the
statute of frauds and an overall fatal lack of proof
concerning both breach and damages.
II.
STANDARD OF REVIEW
Federal
Rule of Civil Procedure 56(a) requires the Court to
“grant summary judgment if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” The moving
party can do so by demonstrating the absence of any genuine
dispute of material fact or by showing an absence of evidence
to support the non-moving party's case. Celotex Corp.
v. Catrett, 477 U.S. 317, 323-25 (1986). A dispute as to
a material fact “is genuine if the evidence is such
that a reasonable jury could return a verdict for the
nonmoving party.” J.E. Dunn Const. Co. v. S.R.P.
Dev. Ltd. P'ship, 115 F.Supp.3d 593, 600 (D. Md.
2015) (quoting Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986)).
A
nonmoving party “opposing a properly supported motion
for summary judgment ‘may not rest upon the mere
allegations or denials of [his] pleadings,' but rather
must ‘set forth specific facts showing that there is a
genuine issue for trial.'” Bouchat v. Baltimore
Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir.
2003) (quoting Fed.R.Civ.P. 56(e)). The court is
“required to view the facts and draw reasonable
inferences in the light most favorable to” the
nonmoving party. Iko v. Shreve, 535 F.3d 225, 230
(4th Cir. 2008) (citing Scott v. Harris, 550 U.S.
372, 377 (2007)). However, the Court must also “abide
by the ‘affirmative obligation of the trial judge to
prevent factually unsupported claims and defenses from
proceeding to trial.'” Heckman v. Ryder Truck
Rental, Inc., 962 F.Supp.2d 792, 799-800 (D. Md. 2013)
(quoting Drewitt v. Pratt, 999 F.2d 774, 778-79 (4th
Cir. 1993)). Consequently, a party cannot create a genuine
dispute of material fact through mere speculation or
compilation of inferences. See Deans v. CSX Transp.,
Inc., 152 F.3d 326, 330-31 (4th Cir. 1998).
III.
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