A Utah mine must pay nearly $25 million to a Kansas City-based utility service for failing to deliver on a contract for hundreds of thousands of tons of coal to two coal-fired power plants in Missouri, a federal judge has ruled.
U.S. District Judge Tena Campbell on Monday concluded that Price-based C.W. Mining must pay $24.8 million for failing to fulfill the terms of its contract with Aquila Inc.
Campbell's conclusion comes after a February bench trial in which C.W. Mining, which is owned by the polygamous Kingston family, admitted it delivered just 160,000 tons of coal to Aquila in 2004 and 2005 well short of the 450,000 tons contractually required in 2004 and the 550,000 tons in 2005 and 2006.
Repeated efforts to reach C.W. Mining were unsuccessful.
According to the judge's order, C.W. Mining, also known as the Co-Op Mining Company, claimed it was legally excused from meeting the terms of the September 2003 contract. C.W. Mining said a labor dispute and geological problems prevented it from fulfilling the terms of the contract and both items were covered by a "force majeure" clause included in the document, Monday's ruling states.
Between 50 and 70 miners walked out of the Huntington Co-Op mine in September 2003, amid a dispute over, among other things, union representation. Around the same time, a series of roof collapses forced a permanent closure of Co-Op's number one mine, according to court documents. Additional problems at Co-Op's third and fourth mines, the ruling states, left C.W. Mining unable to fulfill its contract with Aquila.
Aquila, therefore, purchased replacement coal on the "spot market" in 2004 and 2005, paying more than it had contracted to pay C.W. Mining, the ruling states.
In her Monday order, Campbell rejected C.W. Mining's claims that it was excused from fulfilling its contract with Aquila, noting that the company did not give written notice that it considered the geological issues as part of the problem and that the labor dispute, alone, was not the sole impact of the Utah company's failure to fully execute the contract.