FILED
United States Court of Appeals
Tenth Circuit
November 7, 2008
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
AQUILA, INC.,
Plaintiff-Appellee,
v.
No. 07-4255
C.W. MINING, d/b/a Co-op Mining
Company,
Defendant-Appellant.
Appeal from the United States District Court
for the District of Utah
(D.C. No. 2:05-CV-555-TC)
Todd W. Ruskamp (Elizabeth C. Burke with him on the brief), Shook, Hardy &
Bacon, L.L.P., Kansas City, MO, for Plaintiff-Appellee.
Carl E. Kingston, Salt Lake City, UT, for Defendant-Appellant.
Before McCONNELL, EBEL, and GORSUCH, Circuit Judges.
GORSUCH, Circuit Judge.
This diversity action implicates a contract between C.W. Mining (“CWM”)
and Aquila, Inc. (“Aquila”), pursuant to which CWM supplied Aquila, a public
utility that produces electrical power, periodic shipments of coal from CWM’s
Utah mine. At trial, Aquila claimed that CWM breached the parties’ contract by
failing to perform as promised and that, as a result, it had to purchase coal from
other sources at prices higher than those specified in the contract. CWM
conceded its failure to perform, but argued that its nonperformance was excused
by virtue of a labor dispute that amounted to a force majeure event under the
terms of the contract. The district court disagreed with the factual premise
underlying this defense, finding that geological, not labor, problems were the
primary force inhibiting CWM’s performance. The district court further rejected
CWM’s alternative theory that the geological difficulties themselves qualified as
force majeure events because Aquila had actual notice of them that substituted for
the written notice required under the contract; instead, the court found that Aquila
never received adequate notice that CWM considered its geological difficulties to
constitute force majeure events. Finally, the district court found that Aquila
properly mitigated its losses and that it was entitled to approximately $24 million
in damages. CWM appeals each of these determinations. Because we agree with
the district court’s legal conclusions and find no clear error in its factual findings,
we affirm.
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I
A
On September 16, 2003, the parties signed an agreement obliging CWM to
provide Aquila with a total of 1,550,000 tons of coal during the years 2004-2006,
with an option for Aquila to extend the contract through 2008. Pertinent for our
purposes, the contract also contained a force majeure provision providing in
relevant part as follows:
Section 13 Force Majeure
(A) Defined
The term “Force Majeure” as used herein shall mean any and all causes
beyond the reasonable control of the party failing to perform, including but
not limited to acts of God; . . . labor disputes; boycotts; lockouts; labor and
material shortages; . . . ; breakdowns of or damage to plants, equipment, or
facilities; . . . or other causes of a similar nature which wholly or partly
prevent or make unreasonably costly (i) the mining, delivering, or loading
of the coal by Seller; or (ii) the receiving, transporting, accepting, or
utilizing of the coal by Buyer at the Station. To be considered
unreasonable such increased costs must be substantial and sustained so that
mining is no longer possible. This Section shall not be construed to require
either party to prevent, settle or otherwise avoid or terminate a strike, work
slowdown, or other similar labor action.
(B) Effect Hereunder
If, because of any Force Majeure, either party hereto is unable to fulfill any
of its obligations under this Agreement, and if such party shall promptly
give to the other party concerned written notice of such Force Majeure,
then the obligation of the party giving such notice shall be suspended to the
extent made necessary by such Force Majeure and during its continuance,
and the obligations of the party receiving the notice shall be equally
suspended; provided, however, that the party giving such notice shall use
its best efforts to eliminate such Force Majeure insofar as reasonable, with
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a minimum of delay. Any deficiencies in deliveries or acceptance of coal
hereunder caused by Force Majeure shall not be made up except by mutual
consent. If a Force Majeure continues for more than six (6) months then
either party may terminate this Agreement by giving written notice to the
other party without penalty or cost. During an event of partial Force
Majeure by either party, a fair and reasonable allocation of deliveries of
coal or the ability to consume coal shall be made to mitigate the impact on
each party.
Aplt. App. at 129-30 (Section 13 of the contract).
The contract further included a choice of law clause specifying that
Missouri law was to control the parties’ agreement, id. at 132 (Section 18), as
well as a nonwaiver clause indicating that
[t]he failure of either party hereto to insist in any one (1) or more instances
upon strict performance of any provision of this Agreement by the other
party hereto, or to take advantage of any of its rights hereunder, shall not
be construed as a waiver by it of any such provisions, or of the obligation
to comply with such provisions in the future and the same shall continue
and remain in full force and effect.
Id. at 131 (Section 16(A)).
Less than a week after signing the contract, a labor strike hit CWM, and
between 50 and 70 of its 120 employees walked off the job. Because CWM
believed its collective bargaining agreement with the International Association of
United Worker’s Union prohibited its employees from striking, the company
anticipated that the strike would be quickly resolved. As it happened, however,
the labor dispute lingered unresolved for over two years.
Fall of 2003 also represented the beginning of other hardships for CWM.
Several roof collapses that season culminated in the Federal Mine Safety and
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Health Administration (“MSHA”) ordering CWM to seal its mine number one in
January 2004. At that time, CWM anticipated it could still meet its contractual
obligations to Aquila with coal from its mines three and four, but CWM soon
encountered a slew of geological problems in mine three. These included roof
collapses, muddy conditions, and “hot spots” of coal (essentially areas of
extremely high temperatures). According to CWM’s mining supervisor, Mr.
Defa, the muddy conditions and the hot coal were the worst of those problems he
had seen in thirty-eight years of mining. Supp. App. at 126, 128. Because of the
muddy conditions in mine three, according to Mr. Defa active mining in that mine
“almost stopped.” Supp. App. at 131 (Testimony of Mr. Defa). And as to the
“hot spots” of coal, they “slowed the mining way down. It stopped [CWM] from
mining that area.” Id. at 132. When the problems first erupted in mine three,
mine four was not yet ready for coal production.
In December 2003, just before CWM’s delivery obligations to Aquila were
slated to begin, CWM notified Aquila in writing that it considered its labor
dispute a force majeure event, as defined by the parties’ contract, and that its coal
shipments would be reduced as a result. Over the course of the following months,
CWM sent several more letters to Aquila confirming the labor dispute’s status as
a force majeure event, and updating Aquila on the progress of its labor
negotiations. For its part, Aquila accepted the coal CWM did deliver, but
informed CWM by letter on August 25, 2004, that “[f]or the avoidance of doubt,
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Aquila does not, with this letter and the requests contained herein, waive any
rights it has or excuse [CWM] from any obligations it has under the Agreement.”
Supp. App. at 148.
While CWM invoked the force majeure clause with respect to its labor
problems, the geological difficulties it experienced were another matter. In
March 2004, a coal purchasing agent for Aquila, Phil Rogers, visited CWM’s
mines and was shown maps of mines three and four, escorted through mine three,
and told that mine number one had been closed by order of MSHA. Some months
later Mr. Rogers again visited the mines, was escorted through both mines three
and four, and was told of the geological problems CWM continued to face. At no
point, however, was Mr. Rogers or anyone else at Aquila notified, in writing or
otherwise, that CWM considered these geological problems force majeure events.
To the contrary, CWM downplayed its geological problems and represented that
they would be overcome shortly. 1
1
See, e.g., Supp. App at 109 (CWM’s president testifying that after
showing Mr. Rogers some of the geological problems he “didn’t seem too
concerned because we did show him the reserves we had in the number three mine
that we were developing toward”); Id. at 111 (“We [CWM] mentioned to them
[Aquila] that with that hot coal that we had encountered, there was going to be
some delay until we could mine around it and find a way around it and determine
just how much it was going to affect the reserves. And then – but we did mention
to them that we were getting ready to start the full production in the number four
mine, and that was going to give us another section that would help that
production.”)
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In April 2005, CWM informed Aquila of its intent to cancel the contract
entirely, citing the parties’ force majeure provision. Until CWM cancelled the
contract, Aquila accepted CWM’s partial deliveries of coal and bought the
remainder of its required coal on the spot market. Once CWM cancelled the
contract, Aquila entered into a new long-term contract with Consolidated Coal
Company (“Consolidated”) on terms less favorable to Aquila than those contained
in the CWM contract. In particular, the price of coal Aquila had to pay was
higher, and the coal it received had a higher sulfur content, necessitating the
purchase of sulfur emission credits before the coal could be burned.
B
In due course, Aquila brought suit against CWM in the United States
District Court of Utah to recoup the damages it sustained as a result of CWM’s
impaired performance under – and eventual cancellation of – the contract. As its
chief defense, CWM asserted that its labor dispute and geological problems, of
which it argued Aquila had written notice of the former and actual notice of the
latter, excused its deficient performance under the contract as force majeure
events. CWM also asked the court to find that Aquila had waived its claim that
CWM breached the contract by continuing to accept coal shipments from CWM,
and that, if nothing else, Aquila had failed to mitigate its damages.
After a three-day bench trial, the district court rejected each of CWM’s
defenses and awarded over $24 million in damages to Aquila. In doing so, the
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court found (1) CWM failed to prove that its performance was excused by virtue
of a force majeure labor dispute; (2) CWM did not inform Aquila in writing that it
considered geological problems to be force majeure events, and neither did Aquila
have actual notice to that effect; (3) CWM did not prove Aquila had waived its
right to sue for breach of contract; and (4) CWM did not prove that Aquila failed
to mitigate its damages. CWM timely appealed these holdings, and we review
each in turn.
II
In aid of its first argument – that the district court “erred in concluding that
the labor dispute at CWM was not a force majeure that excused performance,”
Aplt. Br. at 20 – CWM appears to offer two distinct theories. First, it asserts that
the district court’s decision rests on a factual error; then, and alternatively, it
assigns legal error to the court’s conclusion.
A
As a factual matter, CWM contends that its labor dispute caused all of its
coal production problems and, thus, as a force majeure event of which Aquila had
written notice, the labor dispute excused all of its deficient performance under the
contract. In CWM’s view, the geological problems it suffered affected coal
production only because the company lacked sufficient workers to overcome
them; its geological troubles were thus merely symptoms of the labor dispute, not
an independent malady. As CWM puts it, “[h]ad CWM not lost its labor force, it
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would have been able to overcome the geological problems and would have fully
performed under the contract, despite the problems.” Aplt. Br. at 23-24.
Reviewing the district court’s factual finding that CWM’s geological
problems were the primary cause of its production difficulties and arose
independently from its labor dispute, we may reverse only in the presence of clear
error – that is, only if the court’s finding “is without factual support in the record
or if, after reviewing all the evidence, we are left with a definite and firm
conviction that a mistake has been made.” Keys Youth Servs., Inc. v. City of
Olathe, 248 F.3d 1267, 1274 (10th Cir. 2001) (quotation marks omitted). After a
careful review of the record, we have no such conviction.
Copious evidence supports the district court’s finding that CWM’s
geological problems were the primary cause of its inability to perform as
promised in the parties’ contract. Indeed, testimony from CWM’s own top-level
employees supports the district court’s factual finding on this score. See, e.g.,
Supp. App. at 132 (Mr. Defa, CWM’s mining supervisor, testified that the hot
spots CWM encountered “slowed the mining down. It stopped us from mining
that area [of mine three].”); id. at 131 (Mr. Defa testified that due to the muddy
conditions in mine three mining there “almost stopped.”); id. at 112 (CWM’s
president, Mr. Reynolds, testified that “in March of 2005, as we were developing
[mine three], we again encountered the burn area, only in this area the
temperatures were gone ahead of us but so was the coal. It had already been
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burned, and there was no coal there.”); id. at 113 (Mr. Reynolds testified that
“we knew we were not going to fill . . . the production levels because of that
burnout and because of the hot zone there, that the reserves we thought we had
were not there.”).
The question remains whether its geological problems arose independently,
as the district court found, or whether they affected production only because
CWM lacked sufficient personnel to address them, as CWM contends. The record
before us reveals that CWM prepared a list of job openings on April 1, 2004,
showing only three openings on that date. Supp. App. 184-86 (CWM’s list); see
also Dist. Ct. Op. at 5. This fact – that CWM professed to need only three
additional workers at a time when it was suffering mightily from its geological
difficulties – tends to undercut its position. If CWM’s geological difficulties
could be cured simply by additional employees, why seek only three more
employees? Making matters worse, CWM’s own president testified that “the
reason for the list being short at that time was we had encountered that hot spot in
the one section, and we were working on the rock tunnel in the other section, and
we had no other areas to put the employees to work at that time.” Dist. Ct. Op. at
5 (quoting testimony from Mr. Reynolds). Given such evidence, we cannot help
but conclude that the district court’s factual finding that geological, not labor,
problems formed not just the primary but also an independent cause of CWM’s
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difficulties is entirely plausible, if not inescapable. Accordingly, we see no
reversible clear error.
B
Even accepting the district court’s factual finding that geological problems
were the primary and independent cause of its production difficulties, CWM
contends that the district court’s decision nonetheless rests on a legal error.
CWM suggests that its labor dispute – which indisputably inhibited its
performance to some degree and was a declared force majeure event – excused the
entirety of its deficient performance. That is, even if the labor dispute was not
solely or even primarily responsible for its deficient performance, CWM contends
that it remains, under the parties’ contract, a force majeure event sufficient to
excuse CWM from its failure to perform. We of course review assignments of
legal error, including allegations of contractual misconstruction, de novo. See
Holdeman v. Devine, 474 F.3d 770, 775 (10th Cir. 2007).
Even under that standard, however, we ultimately find CWM’s argument
unavailing. To be sure, we agree with the initial premise of CWM’s argument:
the plain language of the parties’ agreement defines a force majeure as including
difficulties that prevent performance “wholly or partly.” A force majeure event
thus need not be something that precludes a party from performing at all. At the
same time, we cannot accept CWM’s subsequent assertion that a partial force
majeure could excuse it from performance difficulties arising from what the
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district court fairly found to be other, entirely independent causes. The parties’
agreement expressly indicates that a party’s obligations will be suspended by the
force majeure, but only to “the extent made necessary by such Force Majeure,” at
least until such time as the contract is properly terminated. That is, under the
terms of the agreement, the district court could lawfully excuse CWM’s deficient
performance during the life of the contract only to the extent that the partial force
majeure – here, the labor dispute – caused the deficiency.
Under this contractual scheme, CWM was free to prove at trial the extent to
which the labor dispute force majeure, as opposed to independent geological
problems, caused its nonperformance, and to be excused from damages caused by
the labor dispute. Under Missouri law, much as elsewhere, however, it was
CWM’s burden to come forward with proof from which the district court could
determine the impact of the force majeure labor strike. See ASi Indus. GmbH v.
MEMC Elec. Materials, Inc., 2008 WL 413819, at * 4 (E.D. Mo. 2008) (invoking
force majeure in response to a claim of breach is affirmative defense); Gennari v.
Prudential Ins. Co. of Am., 335 S.W.2d 55, 60 (Mo. 1960) (“The burden o[f]
proof on all affirmative defenses rests upon the defendant as the asserting
party.”). The difficulty in this case is that CWM declined to offer the district
court any evidentiary basis from which the court could have assessed what part of
Aquila’s losses were attributable to labor problems versus geological problems.
Perhaps a reflection of the persistent optimism of miners throughout the history of
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the American West, 2 CWM instead adopted an “all or nothing” trial strategy,
asserting that all of its nonperformance should be excused under its labor-
shortage-as-source-of-all-problems theory. See, e.g., Aplt. Br. at 23-24, 28. In
doing so, CWM declined to offer a back-up theory, tailored to the possibility that
the court might find that geological problems posed an independent obstacle to
CWM’s performance, that identified which part of its nonperformance might be
fairly attributable solely to its labor difficulties.
The district court recognized CWM’s tactical decision and noted that,
without some evidence about the extent to which labor problems caused CWM’s
failure to perform, it was simply unable to reduce Aquila’s damages without
resorting to (impermissible) speculation: “[a]lthough the labor problems had
some impact on CWM’s coal production, how much impact is not clear.” Dist.
Ct. at 10 (emphasis added). Far from erroneously interpreting the contract,
therefore, the district court’s opinion reflects a correct interpretation and an
evidentiary deficiency of CWM’s making. Of course, parties routinely, and for
many good tactical reasons, decline to pursue back-up defense theories that
involve undesirable concessions to an opponent’s theory of the case. But these
are tactical decisions that must be abided when they fail, not just admired when
they succeed. CWM thus cannot be heard to complain about an evidentiary gap it
2
See, e.g., Frederick Jackson Turner, The Frontier in American History
(2007 ed.); George F. Willison, Here They Dug the Gold (1950 ed.).
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had the opportunity, and bore the responsibility, to fill. See Grand River Enter.
Six Nations, Ltd. v. Pryor, 481 F.3d 60, 68 (2d Cir. 2007) (“To the extent that
there was a dearth of evidence, [the party bearing the burden of proof] is to
blame. Consequently, [that party] should not now be allowed to complain that the
district court relied on the limited evidence that was provided.”); Sure-Trip, Inc.
v. Westinghouse Eng’g, 47 F.3d 526, 533 (2d Cir. 1995); Filippini v. United
States, 318 F.2d 841, 845 (9th Cir. 1963). 3
3
Our analysis of the preceding questions invites another – namely,
whether any event that qualified as a force majeure by “partly prevent[ing]”
performance and that continued for the contractually specified period of six
months could entitle a party to cancel the contract. The implications of such an
argument naturally give reason for pause. What if CWM’s coal production fell by
0.0000001% due to, say, an equipment breakdown, but CWM could still fulfill
99.9999999% of its coal shipments to Aquila? It seems unlikely the parties
would have intended to allow CWM to cancel all of its obligations to Aquila
under these circumstances. If this were true, each party could cancel the contract
virtually whenever it pleased and such a contract would provide little stability to
the parties, all but negating any reason a party might want to enter into a long-
term sales contract in the first place. At the same time, and despite what we
surmise might have been the parties’ intentions, the plain language of the contract
suggests that a force majeure that “partly prevents” performance may permit
termination. Happily, however, we do not need to venture any further into this
thicket. While this contractual interpretation question arose during the course of
oral argument, and it may be one parties wish to give attention when drafting
force majeure clauses in the future, CWM did not fairly raise it in its brief before
us or at any time before the district court. Without any indication from CWM
that the issue would be at play, Aquila did not address it in its briefing either. In
these circumstances, we decline to address the question. It is not our role to play
the part of counsel by making an argument for a party as well-represented as
CWM that it has not chosen to make for itself. See Am. Airlines v. Christensen,
967 F.2d 410, 415 n.8 (10th Cir. 1992); cf. Headrick v. Rockwell Int’l Corp., 24
F.3d 1272, 1277-78 (10th Cir. 1994).
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III
Even assuming the district court correctly found that its problems arose
primarily and independently from geological difficulties, CWM submits that
reversal is still required. Though the contract required the parties to provide
written notice of any force majeure in order to avoid damages for
nonperformance, CWM submits that Aquila had actual notice of its geological
difficulties. And, CWM contends, under Missouri law, and most particularly
Gateway Frontier Properties, Inc. v. Selner, Glaser, Komen, Berger & Galganski,
P.C., 974 S.W.2d 566 (Mo. Ct. App. 1998), actual notice can substitute for
written notice required by contract so long as the receiving party is not prejudiced
by the substituted form of notice, see Aplt. Br. at 32-37.
It is unclear whether Missouri law goes quite as far as CWM suggests. In
Blue Ridge Bank & Trust Co. v. Trosen, 221 S.W.3d 451, 458-460 (Mo. Ct. App.
2007), the Missouri Court of Appeals recently questioned whether actual notice
can substitute for written notice, at least in the context of private party contracts.
Id. at 460. The Blue Ridge court noted that Gateway relied entirely on cases
pertaining to statutory notice, and then proceeded to hold that cases involving
private party contracts – like that between Aquila and CWM – are different in
kind from statutory notice cases. Id. It did so reasoning that in the arena of
private contracts, the “cardinal rule . . . is that the parties’ intentions must be
ascertained and given effect . . . . Unless the contractual provisions are
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ambiguous, the contract language alone is used to determine the parties’ intent.”
Id. at 459. When private parties clearly intend to require written notice, the Blue
Ridge court explained, that intention should be respected. See id. 4
Even accepting for argument’s sake CWM’s contention that Missouri does
not enforce contract provisions requiring written notice of a force majeure when
actual notice of a force majeure exists, these circumstances simply do not pertain
here. To be sure, Aquila had notice that CWM was experiencing geological
problems. But, the district court expressly found that Aquila did not have actual
notice that CWM considered its geological problems a force majeure event. Dist.
Ct. at 31. CWM points us to no piece of evidence in the record to suggest this
finding was in clear error, and neither could it do so: CWM repeatedly
downplayed the significance of its geological problems, promising Aquila that
they would be resolved quickly. See supra n.1. On this basis alone, CWM’s
argument before us must fail.
4
The remaining cases on which CWM seeks to rely, Reichert v. Jerry
Reece, Inc., 504 S.W.2d 182 (Mo. Ct. App. 1973); Gannon Int’l, Ltd. v. Nat’l
Union Fire Ins. Co. of Pittsburgh, PA, 2006 WL 288096 (E.D. Mo. 2006), suffer
from similar problems. Reichert involved a statutory notice provision. Worse
still, the statutory notice provision at issue there explicitly stated that “[n]o defect
or inaccuracy in the notice shall invalidate it unless the commission finds that the
employer was in fact misled and prejudiced thereby.” Reichert, 504 S.W.2d at
188 n.5. The Aquila-CWM contract of course provides no such exception.
Gannon, meanwhile, held that failure to provide timely notice of a loss did not
necessarily void insurance coverage. Gannon, 2006 WL 288096, at *2. The court
did not consider the question of actual versus written notice and rendered its
ruling on a doctrine developed specially in the context of insurance contracts.
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Neither could we accept CWM’s apparent belief that the difference between
notice of an event and notice that a party considers that event to be a force
majeure is inconsequential or, in Gateway’s terminology, non-prejudicial. After
all, classifying an event as a force majeure has powerful ramifications – at the
very least, receiving notice that an event is considered a force majeure allows a
party to evaluate the validity of a claimed force majeure event and permits it to
make other arrangements to mitigate its damages if it suspects the event is serious
and will persist. CWM’s notice was not calculated to meet these objectives. Far
from alerting Aquila that its geological problems might rise to the level of a force
majeure, a “cause[] beyond the reasonable control of the party failing to
perform,” Aplt. App. at 129 (Section 13(A) of the contract), CWM strung Aquila
along with assurances that its geological problems would be easily and quickly
surmountable. Simply put, notice that a party to a contract has some soon-to-be
rectified problem is materially and consequentially different from notice that a
party has a serious and potentially enduring problem qualifying as a force majeure
event.
IV
Whatever the success of its other liability arguments, CWM argues that
Aquila waived its claim for breach of contract because Aquila “continued to
accept deliveries of coal less in quantity and lower in quality than the contract
required for a year and a half [after notice of the labor dispute as force majeure]
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and never declared a breach.” Aplt. Br. at 30. As CWM sees it, Aquila’s
acceptance of defective performance amounted to a waiver of Aquila’s right to
sue for breach; in CWM’s view, the proper course, and only means Aquila had to
preserve its right to sue, was to “demand[] full performance or declare[] a breach
and commence[] litigation within a reasonable time.” Id. 5
We approach the question of waiver cognizant that, under Missouri law,
“[w]aiver is a question of intention, and is based upon knowledge of the
circumstances.” Purington Paving Brick Co. v. Metro. Paving Co., 4 F.2d 676,
680 (8th Cir. 1925). It is “an intentional relinquishment of a known right. To
rise to the level of waiver, the conduct must be so manifestly consistent with and
indicative of an intention to renounce a particular right or benefit that no other
reasonable explanation of the conduct is possible.” Austin v. Pickett, 87 S.W.3d
343, 348 (Mo. Ct. App. 2002) (citations omitted). The dispositive question before
us, then, is whether Aquila intended to renounce its right to sue.
We think the answer to this question is clearly no, and we are influenced by
three facts in reaching this conclusion. First, the parties included a non-waiver
clause in their contract expressly stating that the failure of one party to insist
upon strict performance from the other ought not be construed as a waiver. Aplt.
5
CWM also argues that Aquila waived its right to object to CWM’s notice
of force majeure and to receive written notice of the geological problems. See
Aplt. Br. at 29. Because CWM raises these arguments for the first time on
appeal, see Supp. App. at 12, 40-41, and in deference to our general rule, see
Headrick, 24 F.3d at 1277-78, we decline to consider them.
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App. at 131 (Section 16(A)). Second, rather than represent a waiver of a right to
full performance, Aquila’s acceptance of partial performance was contemplated
and perhaps even required by the parties’ force majeure clause. Under the terms
of the parties’ force majeure provision, Aquila’s obligation to accept coal was
suspended only to the extent that CWM’s obligation to supply coal was suspended
by the force majeure, id. at 130 (Section 13(B)); had Aquila declined to accept
CWM’s deficient shipments of coal, it may well have faced a suit for its own
breach of contract. Third, to avoid any possible later confusion, Aquila wrote
CWM a letter specifically stating that, “[f]or the avoidance of any doubt, Aquila
does not, with this letter and the requests contained herein, waive any rights it has
or excuse [CWM] Mining from any obligations it has under the Agreement,
including, but not limited to, [CWM] Mining’s obligation to deliver coal to
Aquila in the quantity and quality provided for under the Agreement.” Supp.
App. at 148. CWM makes no effort to explain why the confluence of this letter
and the explicit language in the contract contemplating and perhaps even
requiring – but never penalizing – Aquila’s acceptance of partial coal shipments
fails to resolve the waiver question definitively in Aquila’s favor.
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V
Finally, CWM contends that Aquila failed to mitigate its damages by
failing to negotiate its April 2005 contract with Consolidated on better terms. 6
For example, CWM argues that market data revealed the spot price of coal in
April 2005 to be $28 per ton, see Aplt. Br. at 41, while the Aquila-Consolidated
contract provided for a price of $38.06 per ton, Supp. App. at 161.
We have difficulty evaluating CWM’s argument, however, because CWM
provides no citation in the voluminous record before us to support its claim about
the price of coal in April 2005. When a party’s brief fails to provide citations in
support of its factual assertions, we are left to scan volumes aimlessly for asserted
facts. But reading a record should not be like a game of Where’s Waldo? See
Martin Handford, Where’s Waldo?: The Great Picture Hunt (2006). And it is
6
CWM also argues before us that Aquila acted unreasonably in failing to
enter into a long-term contract prior to April 2005, the date when CWM cancelled
the contract. This argument was not raised at trial before the district court,
however, see Dist. Ct. Op. at 12, and therefore cannot be pursued here. Even
were we to consider it, though, we would find it unpersuasive given CWM’s
assurances to Aquila, throughout the duration of the contract, that the labor
dispute would soon be terminated and coal production would return to normal.
See, e.g., Aplt. App. at 160 (CWM letter of December 2003 to Aquila describing
its labor problems and stating that “it appears it may be 60 to 90 more days before
we are back to our normal production”); Aplt. App. at 168 (CWM letter of April
2004 to Aquila stating that it felt its “labor situation” would “be resolved in the
not too distant future” and that it “hope[s] to be back to [its] normal production
before long”); Aplt. App. at 169 (CWM letter of September 2004 to Aquila stating
that its attorneys expect a decision within a month from the NLRB and that it
“hope[s] that this will settle the matter and we can begin to get our labor force
back to normal”). In essence, CWM’s argument boils down to asserting that
Aquila acted unreasonably by listening to CWM’s own representations.
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within our power as a court to refuse to consider an argument in these
circumstances. See MacArthur v. San Juan County, 495 F.3d 1157, 1161 (10th
Cir. 2007) (“It is indisputably within our power as a court to dismiss an appeal
when the appellant has failed to abide by the rules of appellate procedure.”); Fed.
R. App. P. 28 (a)(9)(A) (appellant’s argument must contain “appellant’s
contentions and the reasons for them, with citations to the authorities and parts of
the record on which appellant relies”).
Even bypassing this defect and reaching the merits of CWM’s argument,
however, there is plainly “factual support in the record” to support the district
court’s finding that Aquila reasonably mitigated its damages. Keys Youth Servs.,
248 F.3d at 1274. Not only was there evidence that the price of coal in the
Consolidated contract was well within the range of market prices at the time, see
Supp. App. at 143-44, but Abby Herl, Aquila’s director of coal procurement,
testified that, for a variety of reasons, the Consolidated contract was the “best
selection” among the options available to Aquila at the time, see Supp. App. at
79. The district court explicitly credited and relied on Ms. Herl’s testimony to
conclude Aquila properly considered its options and took an appropriate course
under the circumstances. Dist. Ct. Op. at 12-13. The Supreme Court has
cautioned that “when a trial judge’s finding is based on his decision to credit the
testimony of one of two or more witnesses, each of whom has told a coherent and
facially plausible story that is not contradicted by extrinsic evidence, that finding,
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if not internally inconsistent, can virtually never be clear error.” Anderson v. City
of Bessemer City, 470 U.S. 564, 575 (1985). Finding Ms. Herl’s testimony
“coherent and facially plausible” and not “contradicted by extrinsic evidence,” we
are in no position to disturb the district court’s factual finding.
***
The judgment of the district court is
Affirmed.
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