North Hartland, L.L.C. v. United States

309 Fed. Appx. 389, 309 F. App'x 389, 2009 U.S. App. LEXIS 1831, 2009 WL 223867
CourtCourt of Appeals for the Federal Circuit
DecidedFebruary 2, 2009
Docket2008-5008
StatusUnpublished
Cited by12 cases

This text of 309 Fed. Appx. 389 (North Hartland, L.L.C. v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
North Hartland, L.L.C. v. United States, 309 Fed. Appx. 389, 309 F. App'x 389, 2009 U.S. App. LEXIS 1831, 2009 WL 223867 (Fed. Cir. 2009).

Opinion

RADER, Circuit Judge.

The United States Court of Federal Claims dismissed North Hartland L.L.C.’s *390 (North Hartland’s) case against the United States for lack of subject matter jurisdiction. North Hartland had sued the United States for breach of contract, alleging that it had a contractual right to purchase a hydroelectric plant located on the Ottaque-chee River near North Hartland Lake, Vermont. Because a series of transactions left North Hartland with no contractual rights against the Government, this court affirms the trial court’s finding of no privity of contract between North Hartland and the United States.

I.

Vermont Electric Generation & Transmission Cooperative, Inc. (VEG&T) originally owned and operated the North Hart-land Lake hydroelectric plant. In 1996, however, VEG&T entered into a Chapter 7 bankruptcy. The bankruptcy trustee then gave full authority to direct the transfer and delivery of VEG&T’s assets in the North Hartland Lake plant to the United States Department of Agriculture Rural Utilities Services (RUS), VEG&T’s largest creditor.

On April 28, 1998, RUS issued a “Request for Proposal” from prospective purchasers of the plant. In response, Contech Development Company (Con-tech) offered RUS $2.407 million for the facility. RUS accepted Contech’s offer to purchase the plant as is via a letter contract dated September 28, 1998. The letter contract served as the contract between Contech and RUS until December 16, 1999, when the parties executed the Asset Purchase Agreement (APA). The APA listed the purchase price for the plant at $1.4 million and further contemplated a reduced sale price if closing occurred on or before March 15, 2000. The United States Bankruptcy Court for the District of Vermont approved and authorized this sale.

Despite the terms of the APA, RUS never closed the sale of the North Hart-land Lake plant with Contech. Under the APA, however, Contech retained the right to purchase the plant. Contech later assigned this right to North Hartland L.L.C. of New Hampshire (North Hartland of New Hampshire). Notably, although Appellant North Hartland shares its name with North Hartland of New Hampshire, as explained below, these two North Hart-lands are not the same entity. The exact date of Contech’s assignment of the APA to North Hartland of New Hampshire is unclear from the documentary evidence presented in this case; however, it appears that the assignment occurred close to the formation of the APA and the failed closing between RUS and Contech.

North Hartland of New Hampshire suffered the same fate as Contech under the APA. Indeed, according to Appellant, RUS not only refused to close on the sale to North Hartland of New Hampshire, but also invited bids on the plant in contravention of the APA.

In addition to losing the chance to purchase the hydroelectric plant, North Hartland of New Hampshire encountered organizational difficulties central to this appeal. The New Hampshire Secretary of State dissolved North Hartland of New Hampshire on November 1, 2002. North Hartland, L.L.C. v. United States, 78 Fed.Cl. 172, 175 n.4 (2007). The Secretary reinstated North Hartland of New Hampshire under the name “Vermont Generating, LLC” (VGL), effective December 9, 2004. Id. On October 6, 2004, Appellant North Hartland organized as a Virginia domestic limited-liability partnership. Id. This Virginia partnership was formed “to hold all of the equity in the soon-to-be VGL.” Id.

*391 Unable to sustain the cost and aggravation of RUS’s delay, Appellant North Hartland entered into an agreement with Concord Hydro Associates (Concord) for the sale of VGL and its equity interests in the North Hartland Lake power plant to Concord. Appellant North Hartland and Concord entered an “Agreement for the Purchase and Sale Vermont Generating, LLC Equity Interests” (APS). In that agreement, North Hartland represented “that it was ‘formed in the Commonwealth of Virginia on October 6, 2004, to hold all of the equity interest in and to the Vermont Generating, LLC,’ and that VGL held the right to purchase the North Hart-land Lake plant, under the APA, as the assignee of [Contech].” North Hartland, 78 Fed.Cl. at 175 (quoting APS at 1, 3). North Hartland “further represented that ‘[t]he only assets of [VGL] are intangible contract rights relating to the North Hart-land Project, including [plaintiffs] interest in the APA.’ ” Id. (quoting APS at 7).

Under the terms of the APA, North Hartland agreed to sell all equity interests in VGL to Concord for $465,000 plus interest. North Hartland was to ‘“sell and deliver to [Concord], and [Concord was to] purchase and take title to and delivery of, all equity units of [VGL’s] limited liability company interests owned by [Appellant] (the ‘Shares’), representing 100% of the authorized, issued, and outstanding equity interests in [VGL].’ ” Id. (quoting APS at 4). North Hartland was to “ ‘prepare an assignment of Interest, in the form attached as Exhibit A, by which [Contech] and [Appellant] shall release, discharge, and assign to [Concord] all right, title or interest that either has in the [VGL] or the APA.’ ” Id. (quoting APS at 6). The APS also recited that “ ‘[t]he transaction contemplated by this Agreement [was] a purchase by [Concord] and a sale by [plaintiff] of all equity interests in [VGL], which [plaintiff was to] convey to [Concord] free and clear of any claims and/or encumbrances on VGL, and free and clear of any claims or encumbrances of affiliated entities.’ ” Id. (quoting APS at 4). The parties completed their transaction under this agreement.

In January 2005, RUS sold the plant to Concord. North Hartland did not sue the Government for breach of contract until June 30, 2006, however, more than a year and a half after it sold VGL and its interest in the APA to Concord. Accordingly, the Government moved to dismiss North Hartland’s claim pursuant to RCFC 12(b)(1) for lack of subject matter jurisdiction. The Court of Federal Claims granted the government’s motion, finding no jurisdiction under the Tucker Act. In particular, the Court of Federal Claims found that North Hartland did not show any privity of contract with the Government. Therefore, the trial court lacked jurisdiction to entertain North Hartland’s claim. “Simply put, as [the Government] argues, [Appellant] sold its privity of contract with the Government to Concord and may not now assert it.” Id. at 181. North Hart-land timely appealed.

II.

This court reviews the Court of Federal Claims’ dismissal for lack of subject matter jurisdiction without deference. See Taylor v. United States, 303 F.3d 1357, 1359 (Fed.Cir.2002). When a Rule 12(b)(1) motion merely challenges the facial sufficiency of the pleadings to establish subject matter jurisdiction, this court takes the allegations in the pleadings as true and construes them in the light most favorable to the complainant. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974).

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Bluebook (online)
309 Fed. Appx. 389, 309 F. App'x 389, 2009 U.S. App. LEXIS 1831, 2009 WL 223867, Counsel Stack Legal Research, https://law.counselstack.com/opinion/north-hartland-llc-v-united-states-cafc-2009.