Grant Town Power Plant

The Grant Town Power Plant, pictured from the north side.

FAIRMONT — A decades-old legal dispute between two Marion County companies will be heading back to circuit court for a retrial, according to a 31-page ruling Monday from The West Virginia Supreme Court of Appeals.

The state’s high court reversed and remanded a ruling by the business court division of Marion County Circuit Court in a dispute between American Bituminous Power Partners — owner of the Grant Town Power Plant — and Horizon Ventures of West Virginia.

At the heart of the appeal, Horizon, which owns the property on which the Grant Town Power Plant sits, claims that American Bituminous — known locally as Ambit — owes its landlord years of back rent.

“So, we conclude that the business court erred in granting summary judgment to either party when it is plain that the underlying premise of each party’s claim remains unresolved. Likewise, summary judgment was not proper because the various agreements at issue here are ambiguous, and the intent of the parties is not clear. For that reason, genuine issues of material fact remain. We therefore reverse the business court’s February 6, 2020 and July 30, 2020 orders and remand for further proceedings consistent with this opinion,” states Monday’s opinion, which was delivered by Justice Beth Walker.

The Grant Town Power Plant, which went online in 1993, is built on the former Federal No. 1 mine site. Today, the mine is owned by Horizon Ventures.

According to published reports, at the same time Ambit has skipped rent payments, the company has paid Sen. Joe Manchin’s family company, Enersystems Inc., millions of dollars for waste coal it hauls to the power plant. Enersystems handles all of the fuel that is trucked in to the plant.

In writing the high court’s opinion, Walker points out how confusing and entangled the legal problems are between the two entities.

“These parties have a protracted, convoluted, and litigious relationship dating back to the formation of their lease agreement on November 29, 1989. Much of that history is irrelevant to our analysis here, but the backdrop of that continuous litigation informs the issues presented in these appeals. At base, Horizon is the landlord and AMBIT is the tenant of certain parcels of property in Marion County, West Virginia. That property was leased for the purpose of constructing and operating a coal-fired power plant, now operated and maintained as the Grant Town Power Plant. The parties’ arrangement is governed by a Lease Agreement that has been amended several times since its November 29, 1989 formation,” states the court opinion.

According to terms of the lease agreement, American Bituminous’ rent bill is determined on what type of waste coal is brought onto the property to fuel the power plant. The agreement calls for a higher rent if Ambit hauls in “local coal” and a lower rent if Ambit hauls in “foreign coal.” Local coal is defined as coal mined from the Horizon Ventures site of the former Federal No. 1 mine, while foreign coal is coal shipped in from any other mine.

“Foreign fuel used for an operating reason imposes a rent calculation of one percent of AMBIT’s gross revenues, the lower rate accounting for the need to transport and handle foreign fuel to keep the Power Plant operational,” states the opinion. “Consistent with that notion, if foreign fuel is used for a non-operating reason, AMBIT must still pay the full three percent.”

The court opinion also points out how Ambit and Horizon have had ongoing disputes about how the rent should be calculated. The two companies have also entered into numerous settlement agreements, which both parties claim have been abandoned at different periods during the ongoing litigation.

“To steal a phrase used at oral argument, the essentials of this case boil down to which ‘cookbook’ the parties are using — the 1996 Settlement Agreement and the Admissions made therein, or the Lease Agreement. It is clear from AMBIT I that that question is riddled with ambiguity. When we add the 2017 Order to the mix, we inject even more confusion as to whether that ambiguity was actually resolved,” states the opinion.

Before concluding the opinion, Walker took one more opportunity to point out how unclear the issues are surround the lease agreement saying “it is impossible to find clear meaning in the circular and imprecise language employed in these agreements so as to warrant an interpretation as a matter of law.”

Reach Eric Cravey at 304-367-2523.

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