Mining company loses on appeal
This is an archived article that was published on sltrib.com in 2008, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

The 10th Circuit Court of Appeals has rejected an attempt by C.W. Mining, which is affiliated with the polygamous Kingston family, to overturn a ruling that says it owes a Midwestern utility $24 million for coal it failed to supply.

Last week, a panel of four Appeals Court judges affirmed U.S. District Judge Tena Campbell's October 2007 decision that the coal company had breached its contractual obligation to supply coal to Aquila Inc., a Kansas City, Mo.-based utility. Her ruling led C.W. Mining to file for involuntary bankruptcy.

"We agree with the district court's legal conclusions and find no clear error in its factual findings," the judges wrote.

C.W. Mining attorney Carl Kingston and a spokesman for Aquila's parent company did not respond to Tribune requests Tuesday for comment.

The legal fight stems from a 2003 contract in which C.W. Mining pledged to supply about 1.5 million tons of coal over five years to Aquila. The utility provided electricity in Missouri and Colorado and natural gas in four Midwestern states before it was sold in July for $2.6 billion and divided between Great Plains Energy Inc., also of Kansas City, and Black Hills Corp. of Rapid City, S.D.

Also known as Coop Mining Co., C.W. Mining operates several mines in Bear Canyon, off of Huntington Canyon in Emery County.

C.W. Mining did not dispute Aquila's claim that the contract to supply coal was not fulfilled. But the mining company argued the contract could be terminated because its failure resulted from a labor dispute that qualified as a "force majeure," involving causes beyond its reasonable control.

Campbell and the Appeals Court concurred with Aquila, which said the shortfalls were caused largely by controllable geological hazards - including roof falls, an underground fire and mud. The judges also determined that C.W. Mining never notified Aquila geological conditions rose to "force majeure" status.

"To the contrary, [C.W. Mining] downplayed its geological problems and represented that they would be overcome shortly."

They also chastised C.W. Mining for not documenting accusations that Aquila could have secured better prices for coal bought to replace the non-delivered Utah coal.

"C.W. Mining provides no citation in the voluminous record . . . to support its claim about the price of coal," the judges said.

"When a party's brief fails to provide citations in support of its factual assertions, we are left to scan volumes aimlessly for asserted facts. But reading a record should not be like a game of 'Where's Waldo?' "

mikeg@sltrib.com

Original ruling says C.W. Mining owes $24M to Midwestern utility
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