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Energy Consulting & Management, A Nebraska Limited Liability Company v. Western States Equipment Co.

September 27, 2012


The opinion of the court was delivered by: U. S. District Judge Honorable Edward J. Lodge


Pending before the Court are plaintiff's motion for partial summary judgment (Dkt. 26) and defendant's motion for summary judgment (Dkt. 30). Additionally, plaintiff has moved to submit additional evidence and briefing (Dkt. 50). The matters have been fully briefed and the Court has determined oral argument would not assist the decision-making process. The Court will therefore decide the motions without a hearing. For the reasons explained below, the Court will grant both summary judgment motions and will deny plaintiff's motion to supplement.


Defendant Western States Equipment Company is a retailer that sells Caterpillar brand equipment in several western states, including Idaho, Montana, Wyoming, Oregon, and Washington. In July 2007, Western States agreed to sell two Caterpillar gas co-generators and related equipment to non-party Renova Energy (ID) LLC for roughly $2.1 million.

Renova agreed to pay 10% of the $2.1 million purchase price at the time it signed the purchase order, an additional 40% "upon expiration of the cancellation window," and the final 50% upon delivery of the equipment to Renova's Heyburn, Idaho facility. Renova paid the first 50% of the purchase price in accordance with the contract terms. But in January 2008, Renova contacted Western States and told it to suspend "delivery of materials as well as construction and fabrication activities." Ex. 68 to Kesting Dep., Dkt. 31-2, at 37. Western States attempted to delay Caterpillar's manufacture of the generators, but the cancellation window had expired, so at that point, Western States was obligated to accept the generators from Caterpillar when they were complete.

A couple months later, in March 2008, Western States told Renova it would try to sell the generators to mitigate its losses on the contract. Renova did not object to this plan, and in June 2008, Renova filed a chapter 11 bankruptcy petition in the United States Bankruptcy Court for the District of Wyoming. Renova did not notify Western States of its bankruptcy nor did it list Western States or the July 2007 generator contract in its bankruptcy schedules.

In March 2010, the bankruptcy court approved Renova's Chapter 11 bankruptcy plan. See Ex. I to Adams Aff., Dkt. 31-12. Part of Renova's bankruptcy plan included creating a liquidating trust -- the REID Liquidating Trust -- and Renova transferred all "Trust Assets" to this trust. See REID Liquidating Trust Agmt., Ex. H to Adams Aff., Dkt. 31-11, ¶ 2.1.

The parties dispute whether the July 2007 generator contract between Renova and Western States was included in this transfer. As explained below, the Court concludes that neither the contract, nor any rights to assert claims arising from that contract, were transferred to the trust.

Nonetheless, in November 2010, when Renova's liquidating trustee auctioned off various Renova assets in Heyburn, Idaho, he included Renova's generator contract with Western States. He transferred his "rights, titles and interests" in this contract -- which the parties refer to as "the purchase order," or "the PO" -- to plaintiff Energy Consulting & Management Solutions, LLC. The Assignment Agreement between Energy Consulting and the liquidating trustee states:

Assignments of Rights in PO: The Trustee hereby grants, bargains, sells, and assigns all of the rights, titles, and interests of the REID Liquidating Trust under the PO to Energy Consulting & Management Solutions as well as any and all rights to the Deposit and all claims and causes of action it may have against WSECO on account of the PO or the transaction contemplated thereunder.

No Warranty: The PO is being assigned "as is-where is" without any warranty, express or implied, or of fitness for any purpose of merchantability. Energy Consulting & Management Solutions has inspected the PO and will accept delivery of it "as is-where is."

Nov. 10, 2010 Assignment Agreement, Ex. A to Rohrbough Dec., Dkt. 29-1.

After the November 2010 auction, Energy Consulting informed Western States that it had purchased the "rights and interests to the generators and the deposit" and eventually demanded that Western States return the $1 million Renova had paid Western States on the contract. See Rohrbough Dec., Dkt. 29, ¶ 8; Feb. 4, 2011 Letter from Counsel, Ex. M. to Adams Dec., Dkt. 31-16. Not surprisingly, Western States refused to simply return the $1 million, among other things because Renova had breached the contract before filing bankruptcy. In February 2011, Energy Consulting sued Western States for breach of contract, restitution, and unjust enrichment. Western States counterclaimed for breach of contract and offset.


Motions for summary judgment are governed by Rule 56 of the Federal Rules of Civil Procedure. Rule 56 provides that "[t]he court shall grant summary judgment 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). "A party asserting that a fact cannot be or is genuinely disputed must support the assertion by: (A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials; or (B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1).

The party moving for summary judgment has the initial burden of showing there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, 477 U.S. 242, 247-48 (1986). Material facts are those necessary to the proof or defense of a claim, and are determined by reference to substantive law. Id. at 248. A fact issue is genuine ...

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