Ingram Coal Company, a Corporation v. Mower Limited Partnership, a West Virginia Limited Partnership

892 F.2d 363, 1989 U.S. App. LEXIS 19442, 1989 WL 154807
CourtCourt of Appeals for the Fourth Circuit
DecidedDecember 21, 1989
Docket87-2194
StatusPublished
Cited by11 cases

This text of 892 F.2d 363 (Ingram Coal Company, a Corporation v. Mower Limited Partnership, a West Virginia Limited Partnership) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ingram Coal Company, a Corporation v. Mower Limited Partnership, a West Virginia Limited Partnership, 892 F.2d 363, 1989 U.S. App. LEXIS 19442, 1989 WL 154807 (4th Cir. 1989).

Opinion

WIDENER, Circuit Judge:

In June 1983 Ingram Coal Company sold certain of its assets to Mower Lumber Company and NewEra Resources Corporation (predecessors in interest to the appellant, Mower Limited Partnership). The sale included the Cheat Bridge Coal Preparation Plant in Randolph County, W.Va., and the rights to certain coal leases in the surrounding area. The transaction was memorialized by a written Asset Purchase and Sale Agreement dated June 15, 1983. In this agreement Ingram warranted that the coal cleaning plant was in good operating condition and suitable for its intended use.

Sometime subsequently, Mower contended that the plant was not in good condition on the date of sale, and that this constituted a breach of contract making Ingram liable for $91,406.15 in repairs, plus interest in the amount of $19,899.88. Mower also contended that the plant was not suitable for its intended use. In December 1985, Mower withheld $111,306.03 it owed *364 to Ingram under a Coal Sales Agency Agreement to apply against Mower’s claim for the cost of repairs to the plant. Ingram then filed this suit based on diversity jurisdiction seeking judgment in the amount of the withheld funds. Mower filed a counterclaim seeking damages for breach of warranty of fitness for intended use and breach of warranty of good condition.

At the close of Mower’s evidence on its counterclaim, the district court granted Ingram’s motion for a directed verdict as to the claim of breach of express warranty that the cleaning plant would be suitable for its intended use. The remainder of the case went to the jury. The jury found that Mower owed Ingram the $111,306.03 withheld, but also found that Ingram breached its warranty that the plant would be in good condition and repair on the date of sale and awarded Mower $44,000 in damages. The court entered judgment in favor of Ingram for $66,894.72. 1 Mower appeals, claiming the district court erred in granting the directed verdict and in excluding certain evidence. We affirm.

In section 5.7 of the sales agreement, Ingram warranted that the coal cleaning plant would be in good operating order and fit for its intended use. The section reads:

Condition of Assets. The Preparation Plant is in good condition and repair, ordinary wear and tear, which is not as to affect adversely the operation of the Preparation Plant, excepted, and suitable for the use for which intended, but Seller makes no representation or warranty as to the capacity of the Preparation Plant. The Preparation Plant conforms in all material respects with all applicable laws, ordinance, regulations, rules, orders and other requirements relating thereto currently in effect.

The agreement, however, does not define the “use for which intended” of the plant. The agreement also provides that it shall be construed and interpreted in accordance with the laws of West Virginia and that the “Agreement, together with the annexed Exhibits constitutes the entire agreement between the parties.... ”

Mower argues that the intended use of the plant is to clean all marketable coal mined from the surrounding properties and that on the date of sale the plant was not in conformity with this warranty because it cannot clean the fine coal mined from the surrounding properties. 2

Ingram, on the other hand, claims that the plant is fit for its intended use, to clean and process coal that is larger than 0 X 100 mesh. Ingram contends that the plant flow sheet showing the design and limitations of the plant was available to Mower before the sale. This flow sheet shows, according to Ingram, that the plant was not built, nor has it ever been modified, to clean 0 X 100 mesh coal. Furthermore, Ingram points out that it disclaimed any representations as to the condition and grade of coal found on the surrounding property in the sales agreement. This provision reads:

Condition of Coal. Seller makes no representations or warranties regarding the quantity, quality or mineability of any coal contained on premises that are covered by any of the Coal Leases.

The district court rejected Mower’s interpretation of the intended use provision of the agreement and granted In *365 gram’s motion for a directed verdict on this claim. A motion for directed verdict should be granted only if, viewing the evidence most favorable to the party opposing the motion, a reasonable trier of fact could draw only one conclusion. Smithy Braedon Co. v. Hadid, 825 F.2d 787 (4th Cir.1987); Walker v. Pettit Construction Co., 605 F.2d 128 (4th Cir.1979). Under West Virginia law it is the duty of the court, and not the jury, to interpret a written contract. Orteza v. Monongalia County General Hospital, 318 S.E.2d 40, 43 (W.Va.1984). While the sales agreement at issue in this case provided for an express warranty of suitability for intended use, the agreement did not spell out the intended use of the plant. Thus, the district court had to construe the warranty at issue before it could rule on Ingram’s directed verdict motion.

The court found that the preparation plant was built without the ability to process fine coal in 1976. While modified in 1979 to process 28 X 100 mesh coal, the plant was never modified to process the ultrafine 0 X 100 mesh coal. The court further found that both Ingram and Mower were sophisticated, knowledgeable commercial parties, both of which knew the capacity and limitations of the plant.

The district court stated:

Mower’s counsel asserts and has asserted throughout that it is common sense that if a coal preparation plant is built on the property, it’s built for the economic reason to process coal from surrounding contiguous, adjacent or nearby properties, and the Court can accept that proposition as a general proposition, but to use that common sense proposition and to expand a general warranty of fit for intended purpose to mean the intended purpose to efficiently, economically, and properly claim all of Mower’s coal, mina-ble, and for which there is a market strains the Court’s credulity.

Thus, the court ruled that, as a matter of law, the contract did not provide for the warranty which Mower asserted. The court held that the plant is “generally fit for the intended purpose of processing, cleaning, and washing, and conveying coal.” Based on the uncontradicted evidence that the plant was suitable for this purpose, the court granted Ingram’s directed verdict motion on the breach of warranty of suitability for intended purpose.

We believe that the district court’s construction of the intended use warranty is correct. The court found, and it is not disputed by either party, that the plant has never been capable of processing 0 X 100 mesh coal. The court also found that both Mower and Ingram were knowledgeable, sophisticated commercial parties who were fully capable of protecting their own interest in an arm’s length transaction.

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892 F.2d 363, 1989 U.S. App. LEXIS 19442, 1989 WL 154807, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ingram-coal-company-a-corporation-v-mower-limited-partnership-a-west-ca4-1989.