Campbell v. White County Coal, LLC

2023 IL App (5th) 220302-U

• Court: Appellate Court of Illinois
• Decided: March 24, 2023
• Docket: 5-22-0302
• Status: Unpublished

Opinion

2023 IL App (5th) 220302-U NOTICE NOTICE Decision filed 03/24/23. The This order was filed under text of this decision may be NO. 5-22-0302 Supreme Court Rule 23 and is changed or corrected prior to the filing of a Petition for not precedent except in the

Rehearing or the disposition of IN THE limited circumstances allowed the same. under Rule 23(e)(1). APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT ______________________________________________________________________________

JAKOB L. CAMPBELL, CAMPBELL RUN ) Appeal from the ENTERPRISES, LLC, MATTHEW CAMPBELL, ) Circuit Court of and MEGAN CAMPBELL, ) White County. ) Plaintiffs-Appellants, ) ) v. ) No. 18-L-03 ) WHITE COUNTY COAL, LLC, a Delaware ) Limited Liability Company, ) Honorable ) Thomas J. Dinn III, Defendant-Appellee. ) Judge, presiding. ______________________________________________________________________________

JUSTICE MOORE delivered the judgment of the court. Presiding Justice Boie and Justice Welch concurred in the judgment.

ORDER

¶1 Held: The circuit court properly interpreted the Lease and found that “Slurry” was defined to include water and coal slurry, not water alone, and that White County Coal, LLC, disposed of Slurry rather than electing its option to store Slurry. Following the interpretation of the Lease, the circuit court did not err in granting summary judgment in favor of White County Coal, LLC.

¶2 The plaintiffs, Jakob L. Campbell, Campbell Run Enterprises, LLC, Matthew Campbell,

and Megan Campbell (Campbells), appeal the April 26, 2022, order of the circuit court of White

County that granted summary judgment in favor of the defendant, White County Coal, LLC

(WCC). For the following reasons, we affirm.

1 ¶3 I. BACKGROUND

¶4 On February 28, 2018, the Campbells filed their complaint for breach of contract against

WCC in the circuit court of White County on the basis that WCC had “refused to make Monthly

Rental payments in accordance with the Lease,” from February 2017 to the present. On March 29,

2018, WCC filed an answer that denied the allegations.

¶5 The lease at issue is entitled “Underground Storage Lease” (Lease) and was entered into

by and between Jakob L. Campbell, John L. Campbell, 1 Jana M. Campbell, Matthew S. Campbell,

Megan N. Campbell, and WCC on February 7, 2008. The Lease was prepared by attorneys for

both parties. The initial draft was prepared by counsel for the Campbells; however, the Lease was

exchanged and revised by counsel for each party prior to its final execution on February 7, 2008.

¶6 The portions of the Lease relevant to this appeal are as follows:

“WHEREAS, Lessee wishes to inject, store and/or dispose of water and coal slurry

(‘Slurry’) into the underground voids, passageways and corridors created by the mining

and removal of the No. 6 seam of coal within the Pattiki I Mine Area (the ‘Voids’), and

Lessors are willing to lease, let and demise unto Lessee, for such purpose, all of Lessors’

right, title and interest in and to all Voids within the Pattiki I Mine Area that are now owned

or hereafter acquired, in whole or in part, by Lessors or any of them.

NOW THEREFORE, for and in consideration of the rentals payable hereunder and

the performance and observance of the terms and conditions contained herein, Lessors do

hereby lease, let and demise unto Lessee all of Lessors’ right, title and interest in and to all

Voids within the Pattiki I Mine Area that are now owned or hereafter acquired by Lessors

1 On July 11, 2011, John L. Campbell and Jana M. Campbell transferred their interests in the property to Campbell Run Enterprises, LLC. 2 or any Lessor, together with the sole and exclusive right to utilize such Voids for the

purpose of injecting, storing and disposing of Slurry, subject to and in accordance with the

following terms and conditions, to-wit:

1. The term of this Lease shall extend for a period of ten (10) years from and after

the date hereof, with the right in Lessee to extend this Lease for successive additional one

(1) year periods until such time as Lessee has completed all coal mining operations in

White County, Illinois (including any processing or preparation plants operated in

connection with Lessee’s Pattiki II mine) and has begun the process of final reclamation

(‘Final Operations Cessation’). Each extension shall be subject in all respects to the terms

and conditions contained herein and, if Lessee is not in arrears in any payments due to

Lessors hereunder and/or is not in default of any terms contained in this Agreement, said

extension shall take effect automatically in the absence of notice to the contrary by Lessee

prior to the commencement of such extended term. This Lease shall terminate

automatically and without notice to Lessee upon the date of Final Operations Cessation,

and Lessee shall give Lessors notice of the date upon which Final Operations Cessation

occurs, it being understood and agreed that this Lease shall terminate upon the date of Final

Operations Cessation and not the date of notice.

2. (a) As rental for the rights granted hereunder (the ‘Monthly Rental’), Lessee shall

pay to Lessors, in the proportions set forth on Exhibit ‘C’ attached hereto and incorporated

herein by reference, the following sums:

i. Beginning on January 1, 2008 and extending through and including the

twelfth (12) Disposal Month (as defined below), the sum of $25,000.00 per month

for each month during the term of this Lease in which Lessee, at any time during

3 such month, injects, stores and/or disposes of Slurry in any Voids within the Pattiki

I Mine Area (each such month a ‘Disposal Month’), same to be payable on or before

the 15th day of the month following such Disposal Month;

ii. Beginning in the thirteenth (13th) Disposal Month and extending through

and including the twenty-fourth (24th) Disposal Month, the sum of $20,833.33 per

Disposal Month, same to be payable on or before the 15th day of the month

following such Disposal Month;

iii. Beginning in the twenty-fifth (25th) Disposal Month, and extending

until the expiration or termination of this Lease, the sum of $10,000 per Disposal

Month, same to be payable on or before the 15th day of the month following such

Disposal Month.”

¶7 On November 12, 2019, the Campbells filed a motion seeking summary judgment pursuant

to section 2-1005 of the Code of Civil Procedure (735 ILCS 5/2-1005 (West 2018)) along with a

supporting memorandum of law, statement of material facts, declaration of Jakob L. Campbell,

and declaration of Amy S. Rubin. The Campbells’ motion for summary judgment alleged they

were entitled to monthly rental payments for those months that WCC injected water into the Voids

as well as for the months that WCC stored “Slurry” within the Voids.

¶8 On March 24, 2020, WCC filed a cross-motion seeking summary judgment along with a

memorandum of law in support of its motion for summary judgment and in opposition to the

Campbells’ motion for summary judgment, affidavit of Chris Russell, verified expert report of

John L. Weiss, and Jakob Campbell’s answers to defendant’s first set of interrogatories. WCC’s

motion for summary judgment asserted that the lease did not provide that monthly rental payments

would be owed for months in which only water, and not “Slurry,” was injected into the Voids.

4 Additionally, WCC stated that no payments were due for storage because WCC was not storing

the “Slurry” in the Voids because it disposed of the “Slurry” in the Voids.

¶9 Each party asserted the language of the lease was clear and unambiguous such that they

each sought a finding from the circuit court as to the legal issues surrounding the application of

the lease. A hearing on the cross-motions for summary judgment was held on August 10, 2020.

¶ 10 The circuit court entered its order granting summary judgment in favor of WCC on April

26, 2022. The order interpreted the term “Slurry” and found as follows:

“4. The term ‘Slurry’ is defined on the first page of the Lease as ‘water and coal

slurry (“Slurry”)’. The terms water and coal slurry are joined by inclusion of the

conjunction ‘and’. The Parties did not use other terms in the definition, such as ‘either/or’

or ‘and/or’. A plain reading then, of the language used requires the term ‘Slurry’ to be

defined as requiring a combination of both substances. Since additional water is added to

the coal slurry (that already contains water) to dilute it for pumping purposes, this reading

of the term ‘Slurry’ is the most practicable.”

The order also interpreted the clause “injecting, storing and disposing of Slurry.” The court made

the following findings on that issue:

“5. The lease is entitled ‘Underground Storage Lease’. Despite that fact, the lease

states that the Defendant may inject ‘Slurry’ into the Voids for the purpose of storing it or

disposing of it.

6. The determination of whether the ‘Slurry’ is stored or disposed of is clearly an

option for the Defendant to make.

7. The Defendant places no value on the ‘Slurry’ it has injected into the Voids and

maintains that there is no viable method to extract it from the Voids. The ‘Slurry’ is

5 therefore considered disposed and the Defendant owes the Plaintiff a fee only for the month

in which it was injected.”

¶ 11 This timely appeal followed. Additional facts will be presented as necessary throughout

the analysis.

¶ 12 II. ANALYSIS

¶ 13 Motions for summary judgment are governed by section 2-1005 of the Code of Civil

Procedure, which provides that summary judgment should be granted only where “the pleadings,

depositions, and admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter

of law.” 735 ILCS 5/2-1005(c) (West 2020). “When parties file cross-motions for summary

judgment, they agree that only a question of law is involved and invite the court to decide the

issues based on the record.” Pielet v. Pielet, 2012 IL 112064, ¶ 28. However, a court is not

obligated to enter a summary judgment due to the mere filing of cross-motions, as the filings alone

are not determinative of whether an issue of material fact exists. Id.

¶ 14 “Rulings on motions for summary judgment are reviewed de novo.” Village of Bartonville

v. Lopez, 2017 IL 120643, ¶ 34. We may affirm a grant of summary judgment on any basis

contained within the record. Id.

¶ 15 De novo review is also appropriate as this matter turns on the interpretation of a contract

as a matter of law. Erlenbush v. Largent, 353 Ill. App. 3d 949, 952 (2004). The principles of law

applicable to contract interpretation are clear and free from doubt, and can be found, set forth in

detail, in our supreme court’s opinion in Thompson v. Gordon, 241 Ill. 2d 428, 441 (2011):

“The basic rules of contract interpretation are well settled. In construing a contract,

the primary objective is to give effect to the intention of the parties. [Citation.] A court will

6 first look to the language of the contract itself to determine the parties’ intent. [Citation.]

A contract must be construed as a whole, viewing each provision in light of the other

provisions. [Citation.] The parties’ intent is not determined by viewing a clause or

provision in isolation, or in looking at detached portions of the contract. [Citation.]

If the words in the contract are clear and unambiguous, they must be given their

plain, ordinary and popular meaning. [Citation.] However, if the language of the contract

is susceptible to more than one meaning, it is ambiguous. [Citation.] If the contract

language is ambiguous, a court can consider extrinsic evidence to determine the parties’

intent. [Citation.]”

¶ 16 A. Definition of Slurry

¶ 17 The Campbells urge us to find that water alone constitutes “Slurry” under the terms of the

lease, which would mean any time water was injected into the Voids, it would be considered a

Disposal Month and a rent payment would be due. WCC argues that “Slurry” was defined in the

Lease to be “water and coal slurry,” so any injection of solely water would not qualify as a Disposal

Month and no payment would be due.

¶ 18 The portion of the Lease that defines “Slurry” states: “Lessee wishes to inject, store and/or

dispose of water and coal slurry (‘Slurry’) into the underground voids ***.” (Emphasis added.)

Thereafter, the Lease refers only to “Slurry” and does not use either “water” or “coal slurry.” Our

supreme court has defined the word “and” as meaning “in addition to.” In re M.M., 2016 IL

119932, ¶ 21. Accordingly, we find that in order to be “Slurry,” as defined in the Lease, both water

and coal slurry are required. Water alone is not encompassed by the defined term “Slurry.”

7 ¶ 19 B. Storage and/or Disposal

¶ 20 Next, the Campbells assert that since the previously injected Slurry has not been removed

from the Voids, they are due rent for the storage of the Slurry. WCC contends that the Slurry in

the Voids was disposed of into the Voids and was not stored there.

¶ 21 The Lease states: “Lessee wishes to inject, store and/or dispose of water and coal slurry

(‘Slurry’) into the underground voids ***.” When interpreting “store and/or dispose” we must

apply the plain and ordinary meaning of “and/or,” which indicates that two words may be taken

together or individually. So, under the Lease, WCC could store and dispose of Slurry, or they could

elect, individually, to store or dispose of Slurry.

¶ 22 Examining the additional relevant portions of the Lease supports this interpretation. The

Lease provides that rent is owed only for months that are considered to be a “Disposal Month.”

“Disposal Month” is defined in the lease as “each month during the term of this Lease in which

Lessee, at any time during such month, injects, stores and/or disposes of Slurry in any Voids within

the Pattiki I Mine Area.” The amount of rent owed changes based on the number of Disposal

Months that have occurred, not calendar months.

¶ 23 The Campbells’ position is that the Slurry is being stored in the Voids until such time that

it is removed so they are owed rent until it is removed or the Lease terminates by reason of Final

Operations Cessation. If this were the intent of the Lease, rental payments would be owed from

the first month that Slurry was injected into the Voids and every subsequent calendar month until

the Slurry is removed or the Lease terminates. This would render the provisions defining “Disposal

Month,” as well as the provisions reducing rent based on the number of Disposal Months that have

occurred, meaningless. “A court will not interpret a contract in a manner that would nullify or

render provisions meaningless, or in a way that is contrary to the plain and obvious meaning of the

8 language used.” Thompson, 241 Ill. 2d at 442. Thus, we interpret the Lease to give WCC the option

to store or dispose of Slurry.

¶ 24 This leads to the next question—How can we determine if WCC elected to store Slurry or

to dispose of Slurry? In support of its motion for summary judgment, WCC submitted the affidavit

of Chris Russell, a mine engineer employed by WCC, with personal knowledge of the Pattiki

Mines and the issues in this case. Russell’s affidavit stated:

“The coal slurry yielded by the Pattiki Mine coal preparation plant at all times was a waste

product without value and as such it was permanently disposed of in the mine voids. At no

time did White County Coal, LLC, intend to retrieve the coal slurry injected into the mine

voids. At no time did any mine plan or reclamation plan related to White County Coal,

LLC, include retrieval of the coal slurry. After injection of the coal slurry into the mine

voids, it is not possible to retrieve it.”

¶ 25 The Campbells did not submit any counteraffidavits on this issue or challenge Russell’s

affidavit.

“If a party moving for summary judgment supplies facts which, if not contradicted, would

entitle such party to a judgment as a matter of law, the opposing party cannot rely on his

pleadings alone to raise issues of material fact. [Citation.] Thus, facts contained in an

affidavit in support of a motion for summary judgment which are not contradicted by

counteraffidavit are admitted and must be taken as true for purposes of the motion.

[Citation.]” Purtill v. Hess, 111 Ill. 2d 229, 240-42 (1986).

Based on the foregoing, we must accept as true that the coal slurry was a waste product without

value that was permanently disposed of because there is no way to retrieve it. Accordingly, WCC

9 was only obligated to pay rent for the Disposal Months that Slurry was injected for the purpose of

disposing it.

¶ 26 III. CONCLUSION

¶ 27 For the foregoing reasons, we affirm the April 26, 2022, order of the circuit court of White

County which granted summary judgment in favor of WCC.

¶ 28 Affirmed.