Covol Fuels No. 4, LLC v. Pinnacle Mining Company, LLC

PUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 14-1395

COVOL FUELS NO. 4, LLC, a Utah limited liability company,

Plaintiff – Appellant,

v.

PINNACLE MINING COMPANY, LLC, a Delaware limited liability
company,

Defendant – Appellee.

Appeal from the United States District Court for the Southern
District of West Virginia, at Beckley. Irene C. Berger,
District Judge. (5:12-cv-04138)

Argued: January 28, 2015 Decided: March 3, 2015

Before KING and FLOYD, Circuit Judges, and DAVIS, Senior Circuit
Judge.

Affirmed in part, vacated in part, and remanded by published
opinion. Judge King wrote the majority opinion, in which Senior
Judge Davis joined. Judge Floyd wrote a separate opinion
dissenting in part and concurring in part.

ARGUED: Thomas Vincent Flaherty, FLAHERTY SENSABAUGH BONASSO
PLLC, Charleston, West Virginia, for Appellant. Timothy J.
Downing, ULMER & BERNE LLP, Cleveland, Ohio, for Appellee. ON
BRIEF: Alan L. Sullivan, James D. Gardner, SNELL & WILMER
L.L.P., Salt Lake City, Utah, for Appellant. Wm. Scott
Wickline, Christopher D. Pence, HARDY PENCE PLLC, Charleston,
West Virginia; Joseph A. Castrodale, Paul R. Harris, Matthew T.
Wholey, ULMER & BERNE LLP, Cleveland, Ohio, for Appellee.
KING, Circuit Judge:

From 2008 to 2011, Covol Fuels No. 4, LLC (“Covol”) and

Pinnacle Mining Co., LLC (“Pinnacle”) were parties to a business

agreement wherein Covol conducted coal fines recovery operations

at Pinnacle’s mine in Wyoming County, West Virginia (the

“Pinnacle mine”). After it became economically unfeasible for

Covol to continue those recovery operations, it initiated this

civil action in the Southern District of West Virginia, alleging

claims for breach of contract, tort, and unjust enrichment.

Pinnacle moved for summary judgment, which was awarded as to all

claims. See Covol Fuels No. 4, LLC v. Pinnacle Mining Co., LLC,

14 F. Supp. 3d 724 (S.D. W. Va. 2014) (the “Opinion”). 1 Covol

has appealed the district court’s award of summary judgment on

its contract and tort claims. As explained below, there are

genuine issues of material fact that must be resolved with

respect to Covol’s breach of contract claim. On the other hand,

we agree with the Opinion that Covol’s tort claims are barred by

the so-called “gist of the action doctrine.” We therefore

affirm in part, vacate in part, and remand.

1
The Opinion is found at J.A. 2861-90. (Citations herein
to “J.A. ___” refer to the contents of the Joint Appendix filed
by the parties in this appeal.)

2
 I.

A.

The Pinnacle mine includes several stages of operations

through which coal is recovered, beginning with mining coal from

the Pocahontas Number 3 seam. 2 That extracted material goes

through Pinnacle’s “wash” or “prep” plant (the “wash plant”),

which strips coal from waste (the “refuse material”). Pinnacle

then pumps the refuse material through a slurry line and into

its nearby Smith Branch impoundment (the “impoundment”).

The impoundment is a ten-acre, man-made pond created by a

dam on the downstream side of the impoundment, on the Smith

Branch of Pinnacle Creek, near Pineville, West Virginia. It

measures 200-feet deep at the greatest depth, runs nearly a mile

in length, and is between 500- and 1000-feet across. The refuse

material settles into the impoundment, which is filled with

water. Pinnacle is able to pump water out of the impoundment

and into a so-called “toe pond” downstream. From there, the

water may either be pumped into an underground reservoir (and

then back into Pinnacle’s wash plant) or released, where it

flows into Pinnacle Creek, the Guyandotte River, and,

2
We recite the facts in the light most favorable to Covol,
as the nonmoving party. See Durham v. Horner, 690 F.3d 183, 185
n.3 (4th Cir. 2012).

3
eventually, to the Ohio River, the Mississippi River, and the

Gulf of Mexico.

The refuse material contains fine-grained coal (“coal

fines”) not captured by the wash plant. If refuse material is

lifted from the impoundment, it can be processed to extract

those coal fines, which can be sold for various industrial

purposes. 3 In October 2006, Beard Pinnacle, LLC (“Beard”)

initiated coal fines recovery operations at the Pinnacle mine,

wherein it dredged the impoundment for refuse material, which it

processed at an adjacent facility (the “processing facility”).

B.

1.

In February 2008, Covol executed a series of contracts with

various Pinnacle affiliates, whereby Covol took over Beard’s

operations. 4 The principal contract at issue is the Coal

3
The coal fines in the impoundment are apparently of
substantial value, having been extracted from the Pocahontas
Number 3 seam, which contains some of the best coal in the
world. See C. Stuart McGehee, Pocahontas No. 3 Coal Seam, W.
Va. Encyclopedia (Oct. 22, 2010),
http://www.wvencyclopedia.org/articles/1880. See also Castner
v. Coffman, 178 U.S. 168, 173 (1900) (observing that coal from
the Pocahontas Number 3 seam has been “well and favorably known
as a coal of high grade”).
4
Through a series of related agreements, Covol purchased
the processing facility and its assets from Beard; Covol assumed
a lease from Beard Technologies, Inc., in order to operate the
processing facility; and Covol and Pinnacle agreed on a manner
for splitting the profits from the processed coal fines.

4
Purchase and Refuse Recovery Agreement (the “Agreement”). 5 The

Agreement — a fully integrated contract — was executed on

February 15, 2008, and imposed a five-year term, with the option

for the parties to mutually agree to renew for additional one-

year terms. Covol was authorized to unilaterally terminate the

contract under section 12 of the Agreement if its operations

became economically unfeasible. The Agreement designates that

it shall be governed by West Virginia law. See Agreement § 27.

Pursuant to the Agreement, Covol agreed to purchase and

process “all or part of” the refuse material located in the

impoundment, and to handle and process that material “in such a

way which does not interfere with Pinnacle’s Mining Operations.”

See Agreement § 4. Pinnacle disclaimed any representation or

warranty as to the “character or quality or amount of the Refuse

Material Covol removes or receives.” Id. § 20. Pursuant to

section 18 of the Agreement, Pinnacle was required to provide

Covol with: an area near the impoundment where Covol could

install and maintain its equipment; ingress and egress across

Pinnacle’s property; and “any right-of-way reasonably needed”

for Covol to “transport the Refuse Material from the

5
The Agreement is located at J.A. 75-92.

5
[impoundment] to the processing [facility].” 6 Two provisions of

the Agreement — sections 7 and 8 — imposed contractual duties

relating to applicable laws. Section 7 required Covol and

Pinnacle, in performing their obligations under the Agreement,

to “comply in all respects with and undertake all

responsibilities under” applicable state and federal laws. 7

Relatedly, section 8 required the parties to obtain and maintain

any necessary permits or licenses. 8

6
Section 18 of the Agreement, which is titled “Access and
Lease Provisions,” provides, in pertinent part:

Pinnacle shall provide to Covol: (i) a mutually
agreeable area . . . to install and maintain its
Processing Facility . . . ; (ii) any right-of-way
reasonably needed by Covol to transport the Refuse
Material from the [impoundment] to the processing
[facility]; and (iii) ingress and egress over the
property of Pinnacle . . . to support the activities
described in this Agreement. . . .
7
Section 7 of the Agreement, which is titled “Compliance
with Laws,” provides, in pertinent part:

In performing their respective obligations under this
Agreement, Covol and Pinnacle shall comply in all
respects with and undertake all responsibilities under
all applicable . . . rules, regulations, . . . or
other similar requirements of any federal, state, or
local government, agency, court, or public authority
(“Governmental Requirements”), including, but not
limited to, those regulating or otherwise relating to
environmental pollution and environmental control,
safety, health, labor, such as, for example,
Governmental Requirements under . . . the Federal Mine
Safety and Health Act of 1977, as amended[;] . . . .
8
Section 8 of the Agreement, which is titled “Licenses and
Permits,” provides, in pertinent part:
(Continued)
6
 The Agreement provided for both Pinnacle and Covol to

profit from the recovered coal fines. Sections 2 and 3 set out

that Covol would sample and test the recovered coal fines to

determine their quality. Depending on the levels of ash and

moisture, the coal fines would be categorized as either “met

coal” or “steam coal.” See Agreement § 2. Met coal — which

contains lower ash and moisture content and is therefore more

valuable — would be purchased by an affiliate of Pinnacle, while

Pinnacle had an option — but no obligation — to purchase steam

coal. See id.

2.

Covol paid $14 million to purchase the processing facility,

and then immediately spent another $4 million renovating it.

Covol’s coal fines recovery operations were under way by the

summer of 2008. A number of issues and events arose in the

following years that ultimately made it economically unfeasible

for Covol to continue in the business. Covol ceased its

operations at the Pinnacle mine in 2012.

Pinnacle shall maintain its existing permits that are
required for its performance under this Agreement.
Any additional permits required by Pinnacle for
Covol’s operations . . . shall be acquired by Pinnacle
. . . .

7
 The biggest obstacle Covol faced related to the water level

of the impoundment. To extract the refuse material, Covol

utilized a dredge machine with a mechanical arm that dipped into

the water and dragged refuse material out of the impoundment.

The mechanical arm was 25-feet long, meaning that the dredge

could only reach the top 25 feet of water. Covol requested

several times that Pinnacle adjust the water level so that

Covol’s dredge could capture refuse material located deeper in

the impoundment. Pinnacle, however, declined to do so.

Moreover, in 2011, Pinnacle adopted a new protocol that

prevented it from pumping water out of the impoundment and

lowering the water level (the “water management plan”). 9 Without

those adjustments to the water level, Covol was able to extract

only a portion of the refuse material.

9
West Virginia regulations concerning selenium
contamination of surface water required Pinnacle to change its
operations in order to come into regulatory compliance. See W.
Va. Code R. §§ 47-30-1 to 47-30-15 (2009). Selenium is an
antioxidant that has been naturally found in West Virginia coal,
rocks, and soil. See J.A. 1637. Although humans require a very
small amount of selenium, it “can be toxic in larger amounts and
has been found to cause reproductive problems in some aquatic
animals.” Id. Pinnacle had at least two options: (1) a water
management plan, that would control selenium contamination by
essentially recycling the water in the impoundment, so that it
would not be released; and (2) a water treatment plan, that
would reduce the amount of selenium contained in the water
through a chemical process. Pinnacle selected the water
management plan. See id. at 1652-58.

8
 Throughout Covol’s coal fines recovery operations under the

Agreement, the parties were subject to mine plans required by

the federal Mine Safety and Health Administration (the “MSHA”),

see 30 C.F.R. §§ 77.216-77.217 (2008), and operating permits

required by the West Virginia Department of Environmental

Protection (the “WVDEP”), see W. Va. Code R. §§ 38-2-1 to 38-2-

14 (2008). As of 2008, a mine plan was in effect that had been

submitted in 2002 and approved prior to Beard opening the

processing facility (the “Beard mine plan”). Covol operated

under that plan from 2008 until August 2010, when the first two

phases of a modified mine plan (the “modified mine plan”) were

approved by both the MSHA and the WVDEP. 10 During the parties’

relationship under the Agreement, an approved mine plan required

that any mining of the impoundment be performed concomitant with

an incremental lowering of the water level. 11

10
Covol had pursued modifications to the Beard mine plan in
order to conduct the spoil removal project, which is described
infra at 10.
11
The Beard mine plan described two phases of operations
for removing coal fines from the impoundment, and stated that
the water level would be lowered “between 15 and 30 feet” during
phase 1, and “an additional 20 to 30 feet” during phase 2. See
J.A. 2026. The modified mine plan set out six phases of
operations, although only two of those phases were approved by
both the MSHA and the WVDEP. That plan called for the water
level of the impoundment to be lowered in 25-foot increments.
See id. at 2014.

9
 Beyond the problems Covol encountered in accessing the

refuse material located deeper than 25 feet below the surface of

the impoundment, it also faced a decline in the quality of coal

fines. When Covol began its operations at the Pinnacle mine,

Pinnacle’s wash plant was relatively inefficient, meaning that

it left a high level of coal in the refuse material. That

remaining coal was of good quality in terms of ash and moisture

content. Covol, then, benefited from the wash plant’s

inefficiency on the front end because it could recover that coal

on the back end. During the negotiations leading up to the 2008

Agreement, Pinnacle was aware that the wash plant was

inefficient and outdated, though it did not inform Covol of any

plans to update the wash plant. In fact, Pinnacle did not

approve that upgrade until 2009. It subsequently notified Covol

of those plans in July 2010. Pinnacle completed its upgrades to

the wash plant in 2011.

In the face of those obstacles to its coal fines recovery

operations, Covol attempted to maximize the areas of the

impoundment that could be mined. Initially, Covol was

restricted as to what portions of the impoundment its dredge

could reach under the Beard mine plan. Once the modified mine

plan was approved, Covol invested $4 million to excavate spoil

material from the banks of the impoundment, giving Covol new

access to millions of tons of coal fines (the “spoil removal

10
project”). That expenditure was properly approved in October

2010 and the project was completed in 2011. Covol realized no

benefit from the spoil removal project, however, because its

coal fines recovery operations had become economically

unfeasible as a result of the static water level of the

impoundment. Therefore, in 2011, Covol was soliciting offers to

sell its business.

C.

Covol filed this civil action against Pinnacle in the

Southern District of West Virginia on August 7, 2012, alleging

four causes of action. First, Covol charged Pinnacle with

breaching the Agreement, maintaining that Pinnacle had violated

its obligations under both the express terms of the Agreement

and the implied covenant of good faith and fair dealing. Covol

claimed damages including lost profits from its share of more

than $100 million worth of coal. Second, Covol asserted a tort

claim for fraudulent concealment, alleging that Pinnacle hid its

intentions to renovate the wash plant and to implement the water

management plan while Covol was spending millions of dollars to

renovate the processing facility and undergo the spoil removal

project. Third, Covol asserted another tort claim for negligent

misrepresentation, predicated on the theory that Pinnacle had

breached its duty to provide Covol with material information by

failing to disclose its plans relating to the wash plant and

11
water management plan. Fourth, Covol alleged an unjust

enrichment claim stemming from the monetary benefit that

Pinnacle received due to Covol’s investment in the spoil removal

project.

After discovery had been completed, on October 17, 2013,

Pinnacle moved for summary judgment on all four claims.

Following briefing, the district court, as explained in its

Opinion, granted Pinnacle summary judgment as to each claim.

With respect to Covol’s breach of contract claim, the

district court determined that the Agreement is not ambiguous,

and thus undertook to identify and enforce its plain and natural

meaning. See Opinion 15. More specifically, the Opinion

rejected Covol’s contentions that sections 1, 4, 8, and 18 of

the Agreement gave Covol a right to access the refuse material.

Id. at 16-19. Alternatively, the court determined that even if

the Agreement did provide such a right, “allowing Covol access

to the bottom of the impoundment pond does not require Pinnacle

to affirmatively lower the water level.” Id. at 17. The court

further reasoned that, as a matter of law, Pinnacle did not

breach the Agreement because “Covol simply had to deal with more

water in the impoundment where the refuse material was located,”

and “the Agreement explicitly disclaims any warranty regarding

the quantity or quality of the refuse material.” Id. at 20-21.

The court surmised that “Pinnacle may have made business

12
decisions that ultimately made Covol’s operations more

difficult, but no evidence indicates that Pinnacle breached the

[Agreement].” Id. at 21. Given that Covol could not succeed on

its contract claim arising under the terms of the Agreement, the

court ruled that Covol’s good faith and fair dealing theory must

similarly fail. That was so because “there is no avenue through

the applicable case law that affords Covol an independent cause

of action for a breach” of that covenant. Id. at 22.

Next, the district court analyzed Covol’s two tort claims

together. The Opinion briefly explained that the claims would

not succeed on their merits, but emphasized that the tort claims

were barred by the gist of the action doctrine because “they

would not arise independent of the existence of the

[Agreement].” See Opinion 26. Finally, the court granted

summary judgment on Covol’s unjust enrichment claim because “the

subject matter of this claim involves the performance of an

express contract,” which “cannot be the basis of an unjust

enrichment claim” under applicable law. Id. at 30.

Covol has timely noticed this appeal, and we possess

jurisdiction pursuant to 28 U.S.C. § 1291.

II.

We review de novo a district court’s grant of summary

judgment. See Desmond v. PNGI Charles Town Gaming, LLC, 630

13
F.3d 351, 354 (4th Cir. 2011). In so doing, “it is elementary

that . . . ‘[t]he evidence of the non-movant is to be believed,

and all justifiable inferences are to be drawn in [its] favor.’”

Greater Balt. Ctr. for Pregnancy Concerns, Inc. v. Mayor of

Balt., 721 F.3d 264, 283 (4th Cir. 2013) (en banc) (quoting

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)).

Summary judgment may be granted only where “there is no genuine

dispute as to any material fact and the movant is entitled to

judgment as a matter of law.” Libertarian Party of Va. v. Judd,

718 F.3d 308, 312-13 (4th Cir. 2013) (internal quotation marks

omitted). A dispute is genuine if “a reasonable jury could

return a verdict for the nonmoving party.” Dulaney v. Packaging

Corp. of Am., 673 F.3d 323, 330 (4th Cir. 2012). A fact is

material if it “might affect the outcome of the suit under the

governing law.” Anderson, 477 U.S. at 248.

III.

On appeal, Covol contends that the district court erred in

granting summary judgment on its breach of contract claim and on

its tort claims. Covol requests that the judgment be vacated

and the matter remanded for trial.

A.

We begin by addressing Covol’s breach of contract claim.

Covol asserts that Pinnacle breached the Agreement by failing to

14
lower the water level of the impoundment, thereby interfering

with Covol’s ability to access the coal fines contained therein.

Pinnacle, meanwhile, disputes that it was under any obligation

to adjust the water level. Covol maintains that such a duty was

created by both the express terms of the Agreement and by the

implied covenant of good faith and fair dealing. We address

those contentions in turn.

1.

First, whether the terms of the Agreement obliged Pinnacle

to adjust the water level of the impoundment hinges on the

language of that contract. The Agreement makes no explicit

reference to water levels. Covol nevertheless relies on

sections 1, 4, 7, 8, and 18 of the Agreement — individually and

in combination — as bestowing on Covol a right to access the

refuse material in the impoundment and imposing a corresponding

duty on Pinnacle to adjust the water level.

The Supreme Court of Appeals of West Virginia has explained

that, in construing a contract, a reviewing court must first

determine whether the contract is ambiguous, meaning that the

language is “reasonably susceptible of two different meanings,”

or “that reasonable minds might be uncertain or disagree as to

its meaning.” See Syl. Pt. 4, Estate of Tawney v. Columbia

15
Natural Res., LLC, 633 S.E.2d 22, 23-24 (W. Va. 2006). 12 Whether

or not a contract is ambiguous is a question of law. See Syl.

Pt. 5, id. at 24. If the contract is unambiguous, then the

court should enforce its terms according to the plain and

natural meaning of the language used without considering

extrinsic evidence. See Payne v. Weston, 466 S.E.2d 161, 166

(W. Va. 1995). If, however, the contract is ambiguous, then

extrinsic evidence may be consulted to discern what the parties

intended the rights and obligations of the agreement to include.

See id. Importantly, “when the document has been found to be

ambiguous[,] . . . the determination of intent through extrinsic

evidence become[s] a question of fact,” rather than a question

of law. Id.

a.

In section 18 of the Agreement, Pinnacle undertakes several

duties regarding Covol’s right to access its property. Relevant

here, section 18(ii) provides that Pinnacle must

provide . . . any right-of-way reasonably needed by
Covol to transport the Refuse Material from the
[impoundment] to the processing [facility].

12
Pursuant to the Constitution of West Virginia, the
Supreme Court of Appeals of West Virginia articulates new points
of law through its syllabus. See W. Va. Const. art. VIII, § 4
(“[I]t shall be the duty of the court to prepare a syllabus of
the points adjudicated in each case in which an opinion is
written in which a majority of the justices thereof concurred,
which shall be prefixed to the published report of the case.”).

16
Section 18(ii) clearly gives Covol a right-of-way relating to

the refuse material. The parties disagree, however, as to the

meaning of the term “from the [impoundment],” and whether that

term required Pinnacle to adjust the water level of the

impoundment. We therefore must determine whether section 18(ii)

is ambiguous on that point.

Covol characterizes section 18(ii) as requiring Pinnacle to

provide a right-of-way within the impoundment itself, such that

Pinnacle must adjust the water level in order for Covol to

retrieve the refuse material. That interpretation is

reasonable, given that the provision obliges Pinnacle to provide

“any right of way reasonably needed.” See Agreement § 18(ii).

Pinnacle maintains that section 18(ii) only speaks to Covol’s

right to transport “over the land from the Impoundment to the

Processing Facility,” suggesting that the right-of-way begins at

the edge of the impoundment. See Br. of Appellee 31. That

interpretation is also reasonable because the term “from the

[impoundment]” makes no explicit reference to the right-of-way

extending into the impoundment. A third reasonable reading of

section 18(ii) could be somewhere in the middle: that it

provides Covol a right-of-way within the impoundment to access

any refuse material that Covol could reach without Pinnacle

manipulating the water level. Thus, there are at least three

17
reasonable interpretations of section 18(ii), indicating that

the provision is ambiguous.

A broader reading of the Agreement underscores the

ambiguity. Section 18(ii) describes Covol’s right with respect

to transporting refuse material, and “refuse material” is

broadly defined in section 1 of the Agreement to include “coal

waste material . . . located at” Pinnacle’s refuse site. In

section 4, Covol undertakes to “purchase . . . all or part of

the Refuse Material produced, previously, currently and any in

the future, from Pinnacle’s Mining Operations in Wyoming

County.” A reasonable construction of the term “refuse

material” can encompass the material as it sits in the bottom of

the impoundment, having been pumped in from Pinnacle’s wash

plant. Section 18(ii) may thus naturally be interpreted as

giving Covol the right-of-way to extract the refuse material

from the impoundment. In all, we are satisfied that section

18(ii) is ambiguous and can be reasonably interpreted in

alternative ways.

Because section 18(ii) is ambiguous, extrinsic evidence may

be considered in order to resolve the factual question of what

the parties intended. If a reasonable jury could decide that

question in favor of Covol, then a genuine dispute of material

fact exists, precluding summary judgment. See Dulaney v.

Packaging Corp. of Am., 673 F.3d 323, 330 (4th Cir. 2012) (“A

18
genuine question of material fact exists where, after reviewing

the record as a whole, a court finds that a reasonable jury

could return a verdict for the nonmoving party.”). Covol relies

on deposition testimony of William Boor, who testified on behalf

of Pinnacle regarding the Agreement, pursuant to Rule 30(b)(6)

of the Federal Rules of Civil Procedure. 13 Boor testified that

Covol’s intent in entering the Agreement was to remove refuse

material from the impoundment. See J.A. 1324. Boor agreed that

“the purpose of the [A]greement” was that “Covol wanted to get

the [coal] fines out of the [impoundment].” Id. at 1325. When

asked whether Covol would have entered into the Agreement if it

would not be given access to the refuse material, Boor replied:

“Yeah, that would be no deal. I mean, the purpose of the deal

was for their business plan to clean coal.” Id. at 1325-26. He

agreed that “to clean the coal you had to have access to the

coal.” Id. at 1326.

In light of that testimony, Covol has established a genuine

dispute of material fact as to whether the parties intended for

the right-of-way granted in section 18(ii) to require Pinnacle

13
Rule 30(b)(6) of the Federal Rules of Civil Procedure
pertains to depositions of organizations, including corporate
entities. The organization is permitted to designate a person
to testify on its behalf, and the organization is bound by that
testimony. See Reilly v. Natwest Markets Grp., Inc., 181 F.3d
253, 268 (2d Cir. 1999).

19
to adjust the water level so that Covol could access the refuse

material located in the impoundment. See Scites v. Marcum, 560

S.E.2d 505, 509 (W. Va. 2002) (explaining that size, location,

and nature of right-of-way are factual questions to be decided

by jury). We must remand because the proper interpretation of

the Agreement can only be resolved by the trier of fact. See

World-Wide Rights Ltd. v. Combe Inc., 955 F.2d 242, 245 (4th

Cir. 1992). 14

b.

Covol also contends that Pinnacle was obliged to adjust the

water level of the impoundment based on the provisions of the

mine plans. That argument relies on sections 7 and 8 of the

Agreement. Section 7 required Pinnacle to comply with the law,

including state and federal regulations. Section 8 required

Pinnacle to “maintain its existing permits” and to acquire any

additional permits needed in order for Covol to conduct its

operations. Reading sections 7 and 8 in tandem, Covol contends

that Pinnacle breached the Agreement when it violated the mine

plans by refusing to lower the water level of the impoundment.

14
The district court’s alternative ruling — that, if Covol
was given some right to access the refuse material, that right
did not encompass all refuse material in the impoundment or
require Pinnacle to adjust the water level — is unpersuasive.
That construction is not clear from the Agreement, and thus
reflects a factual determination that could not be made against
Covol in the summary judgment proceedings.

20
 A threshold issue here is whether the mine plans should be

incorporated into the Agreement. In order to incorporate a

separate document into a contract, “a general reference” to the

other document is not enough. See Syl. Pt. 2, State ex rel. U-

Haul Co. of W. Va. v. Zakaib, 752 S.E.2d 586, 589 (W. Va. 2013).

Rather,

(1) the writing must make a clear reference to the
other document so that the parties’ assent to the
reference is unmistakable; (2) the writing must
describe the other document in such terms that its
identity may be ascertained beyond doubt; and (3) it
must be certain that the parties to the agreement had
knowledge of and assented to the incorporated document
so that the incorporation will not result in surprise
or hardship.

Id.

Taking the facts in Covol’s favor, the parties were aware

that mine plans — which could be modified — would govern

operations at the Pinnacle mine. Nonetheless, the parties’

awareness of the mine plans is not, by itself, sufficient to

incorporate the terms of those plans into the Agreement. The

Agreement does not clearly reference mine plans, nor does the

contractual language expressly indicate that the parties

intended for the terms of the mine plans to govern their

contractual relationship. Therefore, the Agreement is the sole

document memorializing the parties’ agreements.

Next, Covol contends that, even if the terms of the mine

plans are not incorporated into the Agreement, Pinnacle agreed

21
to abide by the terms of those mine plans, requiring it to

adjust the water level. That argument hinges on section 7’s

provision that Pinnacle comply with all governmental

requirements. Covol, however, did not raise section 7 in its

opposition to summary judgment in the district court. See J.A.

1282-1316. Although that issue has not been squarely preserved

for our review, we observe that whether section 7 obliged

Pinnacle to adhere to the terms of the mine plans, and whether

Pinnacle breached any such obligation, would raise factual

issues that a jury must decide. In any event, a remand is

required on the basis of section 18(ii) of the Agreement.

2.

Beyond the terms of the Agreement, Covol predicates its

claim for breach of contract on a theory that Pinnacle breached

the implied covenant of good faith and fair dealing by

interfering with Covol’s access to the refuse material and the

coal fines contained therein. West Virginia’s Uniform

Commercial Code provides that: “Every contract or duty within

this chapter imposes an obligation of good faith in its

performance and enforcement.” See W. Va. Code § 46-1-304

(2006). “Good faith” means “honesty in fact and the observance

of reasonable commercial standards of fair dealing.” Id. § 46-

1-201(b)(20).

22
 The district court ruled that Covol could not succeed on

its good faith and fair dealing theory because Covol had not

otherwise raised a genuine issue of material fact as to the

terms of the Agreement. See Opinion 22 (“Having previously

found that Pinnacle did not breach any duty [under the

Agreement], there is no avenue through the applicable case law

that affords Covol an independent cause of action for a breach

of the covenant of good faith and fair dealing.”). In light of

our determination that Pinnacle is not entitled to summary

judgment with respect to Covol’s theory that Pinnacle breached

the Agreement, we are satisfied that summary judgment should not

have been granted as to Covol’s allegation that Pinnacle

breached the implied covenant of good faith and fair dealing.

3.

Overall, then, section 18(ii) of the Agreement is ambiguous

as to whether Covol had the right to access the refuse material

located within the impoundment, thereby requiring Pinnacle to

adjust the water level of the impoundment. We therefore vacate

the district court’s award of summary judgment on Covol’s breach

of contract claim and remand. 15

15
The parties have focused much attention on the reasons
that Pinnacle did not lower the water level of the impoundment,
such as its efforts to comply with state regulations concerning
selenium contamination. But whether Pinnacle was required to
take some action to comply with the law does not affect whether
(Continued)
23
 B.

Covol also disputes the district court’s award of summary

judgment as to its tort claims for negligent misrepresentation

and fraudulent concealment. 16 As to both of those claims, Covol

relies on alleged misstatements and concealments by Pinnacle

with respect to Pinnacle’s intention to adjust the water level

of the impoundment and its intention to upgrade the wash plant.

We are satisfied, as was the district court, that Covol’s

tort claims are barred by the gist of the action doctrine. That

doctrine is meant “to prevent the recasting of a contract claim

as a tort claim.” Gaddy Eng’g Co. v. Bowles Rice McDavid Graff

& Love, LLP, 746 S.E.2d 568, 577 (W. Va. 2013). It applies if

any one of four factors is present, including:

(1) where liability arises solely from the contractual
relationship between the parties; (2) when the alleged
duties breached were grounded in the contract itself;
(3) where any liability stems from the contract; and

the Agreement required Pinnacle to adjust the water level of the
impoundment.
16
Under West Virginia law, “[f]raudulent concealment
involves the concealment of facts by one with knowledge or the
means of knowledge, and a duty to disclose, coupled with an
intention to mislead or defraud.” See Trafalgar House Constr.,
Inc. v. ZMM, Inc., 567 S.E.2d 294, 300 (W. Va. 2002). Negligent
misrepresentation, in turn, can be established where a person
“under a duty to give information to another . . . makes an
erroneous statement when he has no knowledge on the subject, and
thereby misleads the other to his injury.” See Folio v. City of
Clarksburg, 655 S.E.2d 143, 151 (W. Va. 2007).

24
 (4) when the tort claim essentially duplicates the
breach of contract claim or where the success of the
tort claim is dependent on the success of the breach
of contract claim.

Id. (quoting Star v. Rosenthal, 884 F. Supp. 2d 319, 328-39

(E.D. Pa. 2012)). In Gaddy, the Supreme Court of Appeals of

West Virginia observed that “whether a tort claim can coexist

with a contract claim is determined by examining whether the

parties’ obligations are defined by the terms of the contract.”

Id.

The Gaddy decision is instructive here. Gaddy involved a

verbal fee agreement between an attorney and an engineering

company. The company alleged that the agreement included a

promise by the lawyer to pay the company one-third of certain

recovered revenues, but the lawyer disagreed that such a promise

was ever made. The company thereafter brought both contract and

tort claims premised on that asserted recovered-revenue

agreement. The Gaddy court determined that the gist of the

action doctrine barred the company’s tort claim because that

claim “simply redoubled [the company’s] efforts in trying to

prove the existence of the [disputed provision].” Gaddy, 746

S.E.2d at 577. As such, the tort claim was “simply [a] breach

of contract claim[] masquerading as” a tort. Id.

Put succinctly, the same is true here. Covol’s assertions

that Pinnacle made misrepresentations or concealed its intention

25
regarding the water level of the impoundment simply recast

Covol’s claim for breach of contract. And with respect to the

alleged misstatements or concealments as to the wash plant, any

liability would be defined by the Agreement, wherein Pinnacle

expressly disclaimed any warranty as to the quality of refuse

material in the impoundment. See Agreement § 20.

In sum, Covol’s claims for tort liability are barred

because the gist of those actions sounds in contract. The

district court therefore properly granted judgment to Pinnacle

on the fraudulent concealment and negligent misrepresentation

claims.

IV.

Pursuant to the foregoing, we affirm the district court’s

awards of summary judgment as to Covol’s tort claims, vacate

with respect to Covol’s claim for breach of contract, and remand

for such other and further proceedings as may be appropriate.

AFFIRMED IN PART,
VACATED IN PART,
AND REMANDED

26
FLOYD, Circuit Judge, dissenting in part and concurring in part:

In my view, nothing in the Agreement’s plain language

requires Pinnacle to pump water to facilitate Covol’s coal

operations. In holding otherwise, I believe the majority

conjures an ambiguity where there is none, erring in two

fundamental respects. Accordingly, except in regard to Part

III.B of the majority’s opinion, I respectfully dissent.

First, the majority tacitly attributes a meaning to “right-

of-way” that is anything but “plain and ordinary.” Berry v.

Mountain Air Prop. Owners Ass’n, No. 13-1324, 2014 WL 5312274,

at *3 (W. Va. Oct. 17, 2014). A “right-of-way” is “[t]he right

to pass through property owned by another.” Black’s Law

Dictionary 1522 (10th ed. 2014). Although a landowner cannot

interfere with the use of a right-of-way, a landowner has no

duty to maintain or facilitate its use for the grantee’s

benefit. See, e.g., Greiner v. Columbia Gas Transmission Corp.,

41 F. Supp. 2d 625, 631 (S.D. W. Va. 1999); Restatement (Third)

of Property: Servitudes § 4.13(2) (2000); James W. Ely, Jr. &

Jon W. Bruce, The Law of Easements & Licenses in Land § 8.22

(2014). Thus, the pertinent part of § 18 provides Covol only

the right to pass through Pinnacle’s property; it clearly does

not impose an affirmative obligation on Pinnacle to facilitate

Covol’s passage and suit Covol’s changing needs.

27
 Second, the majority fails to construe the Agreement “as a

whole, taking and considering all the parts together.” Faith

United Methodist Church & Cemetery of Terra Alta v. Morgan, 745

S.E.2d 461, 481 (W. Va. 2013) (quoting Maddy v. Maddy, 105 S.E.

803, 803 (W. Va. 1921)). Specifically, the majority overlooks

the significance of § 20, which provides:

Pinnacle makes no representation as to the
character or quality or amount of the Refuse
Material Covol removes or receives.
Pinnacle HEREBY DISCLAIMS ANY WARRANTIES,
EXPRESS OR IMPLIED, IN CONNECTION WITH THE
REFUSE MATERIAL. . . . Pinnacle has not
made any representation or warranty to Covol
regarding the suitability or safety of
Pinnacle’s property for the processing of
the Material as contemplated by this
Agreement.

J.A. 85-86 (capitalization in original). Given Pinnacle’s

express disclaimers regarding the amount of material that Covol

should expect to recover and the suitability of Pinnacle’s

property for Covol’s operations, it is hard to see how Pinnacle

had an affirmative obligation to pump water and alter the

conditions of its property simply to allow Covol to access more

material.

In summary, unless one attributes a novel meaning to

“right-of-way” and isolates § 18 from the rest of the Agreement,

the Agreement unambiguously does not impose any obligation on

Pinnacle to pump and lower water for Covol’s benefit. As a

28
result, I respectfully dissent and would affirm the lower

court’s determination in full.

29