Tennessee Valley Authority v. Fire Star Energy Resources, LLC

District Court, E.D. Tennessee·Decided June 13, 2025·No. 3:23-cv-00424·Unknown

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TENNESSEE

TENNESSEE VALLEY AUTHORITY, ) ) Plaintiff, ) ) v. ) No.: 3:23-CV-424-TAV-DCP ) FIRE STAR ENERGY RESOURCES, ) LLC, ) ) Defendant. )

AMENDED MEMORANDUM OPINION AND ORDER1

Before the Court is plaintiff’s Motion for Summary Judgment [Doc. 37]. Defendant responded in opposition [Doc. 46], and plaintiff replied [Doc. 48]. Accordingly, this matter is ripe for review. See E.D. Tenn. L.R. 7.1(a). For the reasons below, plaintiff’s Motion for Summary Judgment [Doc. 37] will be GRANTED in part and DENIED in part. I. Background This breach of contract dispute arises from the circumstances surrounding defendant’s failure to supply coal to plaintiff as contemplated by their written agreements. In 2021, the parties entered into two separate contracts for the provision of coal, copies of which appear to be attached to plaintiff’s complaint [See Docs. 1, 1-1, 1-2]. These agreements, referred to as “Contract 559” and “Contract 585” (collectively, the

1 After the Court entered its Memorandum Opinion and Order on June 9, 2025 [Doc. 51], counsel informed the Court of errata related to the Court’s reference to the Counts and/or Contracts discussed herein. Therefore, for avoidance of doubt, the Court enters this Amended Memorandum Opinion and Order with corrections made on pages 11, 14, and 15. None of these corrections alters or amends the substance of the Court’s original judgment as to plaintiff’s Motion for Summary Judgment [Doc. 37]. “Contracts”), obligated defendant to supply a specified quantity of coal upon the request, acceptance, and scheduling of delivery trains by plaintiff [Doc. 1-2, pp. 4–8]. Specifically, defendant agreed to supply, and plaintiff agreed to purchase, a total of

102,600 tons of coal under Contract 559 and 184,000 tons of coal under Contract 585 [Doc. 1-1, p.5; Doc. 1-2, p. 5].2 In terms of shipping logistics, plaintiff reserved trains for coal deliveries using an online scheduling system called ShipCSX [Doc. 32 ¶ 6]. According to Zane H. K. Irby, a Senior Logistics Specialist employed by plaintiff, once the Tennessee Valley Authority (“TVA”) entered a train reservation on ShipCSX, defendant was

responsible for activating that reservation through the platform [Id.]. Initially, both parties appear to have rendered their respective performances under Contracts 559 and 585, including through use of the ShipCSX platform [See Doc. 36-2; Doc. 36 ¶¶ 6–8]. For example, in July 2021, plaintiff reserved a delivery train designated by ShipCSX as reservation number W602 pursuant to Contract 559 [Doc. 36-2, p. 3]. This

delivery is designated in the software’s log as “Completed” with a load date of July 12, 2021, at which time defendant supplied 11,328.88 tons of coal [Id.; Doc. 33 ¶ 6]. However, by the expiration of both Contracts, defendant had failed to provide a cumulative 68,181.50 tons under Contract 559 and 104,231.63 tons under Contract 585 [Doc. 33 ¶¶ 7, 12]. While defendant does not appear to dispute its failure to fully perform

under the Contracts, it argues that its performance was excused by (i) plaintiff’s prior

2 Although Contract 585 originally contemplated only 138,000 tons, subsequent partially executed call options expanded this initial obligation to 184,000 tons [See Doc. 9 ¶¶ 46 (defendant admitting to the same)]. material breach; and/or (ii) force majeure [See Doc. 46]. Ultimately, plaintiff purchased 67,477.72 tons of coal at an average price of $72.58 per ton to compensate for the shortfalls in defendant’s deliveries under Contract 559, resulting in claimed damages of $578,958.84

[Id. ¶ 9]. As for Contract 585, plaintiff purchased 98,454.58 tons of coal at an average price of $197.58 per ton, resulting in claimed damages of $11,303,570.33 [Id. ¶ 13]. Plaintiff brings two breach of contract claims, one stemming from Contract 559 (Count I) and one stemming from Contract 585 (Count II) [Doc. 1 ¶¶ 56–65]. In its answer, defendant asserts several defenses3 to these claims, including prior material breach by

plaintiff, force majeure, failure to satisfy conditions precedent on the part of plaintiff, and estoppel [Doc. 9, pp. 7–8]. II. Standard of Review Summary judgment under Federal Rule of Civil Procedure 56 is proper only “if the movant shows that there is no genuine dispute as to any material fact and the movant is

entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The moving party bears the initial burden of establishing that no genuine issues of material fact exist. Celotex Corp. v. Catrett, 477 U.S. 317, 330 n.2 (1986); Moore v. Philip Morris Cos., 8 F.3d 335, 339 (6th Cir. 1993). Furthermore, all facts and inferences that the Court draws from the record before it must be viewed in the light most favorable to the nonmoving party. Matsushita Electrical

Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Burchett v. Kiefer,

3 Defendant also asserted a counterclaim against plaintiff in its answer [Doc. 9, pp. 8–12]; however, the Court granted plaintiff’s motion to dismiss as to this counterclaim in its prior Memorandum Opinion and Order [Doc. 26]. 301 F.3d 937, 942 (6th Cir. 2002). Yet, “[o]nce the moving party presents evidence sufficient to support a motion under Rule 56, the nonmoving party is not entitled to a trial merely on the basis of allegations.”

Curtis Through Curtis v. Universal Match Corp., 778 F. Supp. 1421, 1423 (E.D. Tenn. 1991) (citing Celotex, 477 U.S. at 317). To establish a genuine issue as to the existence of a particular element, the nonmoving party must point to evidence in the record upon which a reasonable finder of fact could find in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The genuine issue must also be material; that is, it must involve facts that

might affect the outcome of the suit under the governing law. Id. The court’s function at the point of summary judgment is limited to determining whether sufficient evidence has been presented to make the issue of fact a proper question for the factfinder. Id. at 250. The court does not weigh the evidence or determine the truth of the matter. Id. at 249. Nor does the court search the record “to establish that it is bereft

of a genuine issue of material fact.” Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479–80 (6th Cir. 1989). Thus, “the inquiry performed is the threshold inquiry of determining whether there is the need for a trial—whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Anderson, 477 U.S. at 250.

III. Analysis The parties do not appear to dispute that the Contracts were validly formed and enforceable, nor does defendant disagree that it breached both agreements by failing to deliver the quantity of coal contemplated therein [See Docs. 38, 46]. Rather, the disputed issues are whether defendant has a valid excuse for its non-performance of both Contracts and, if not, the appropriate calculation of damages.

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