Case Title: Southwestern Public Service Co. v. Thunder Basin Coal Co

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1999-04-27T00:00:00Z

Document:
Southwestern Public Service Co. v. Thunder Basin Coal Co1999 WY 43978 P.2d 1138Case Number: 98-139, 98-140Decided: 04/27/1999Supreme Court of Wyoming

SOUTHWESTERN PUBLIC SERVICE COMPANY (Appellant) 
(Defendant),

v.

THUNDER BASIN COAL COMPANY, 
(Appellee) (Plaintiff).

 

 

TUCO, INC., (Appellant) 
(Defendant),

v.

THUNDER BASIN COAL COMPANY, (Appellee) 
(Plaintiff).

 

                          

Appeal from the District Court of Campbell 
County Honorable Dan R. Price II, Judge.

 

 

Kate Fox, Davis & 
Cannon, Cheyenne, WY, and Stephanie Landry, Hinkle, Cox, Eaton, Coffield & 
Hensley, L. L. P., Albuquerque, NM. Argument by Ms. Fox, Representing 
Appellant Southwestern Public Service Company.

 John J. Coates, Dill, Dill, Carr, Stonbraker & 
Hutchings, P. C., Denver, CO; John A. Coppede, Sundahl, Powers, Kapp & 
Martin, Cheyenne, WY; and Steven L. Hoard, Don D. Sunderland, Brad A. Chapman, 
Mullin, Hoard & Brown, L. L. P., Amarillo, TX. Argument by Mr. Coates, 
Representing Appellant TUCO, Inc.

 David K. Isom, J. Preston Stieff, David K. Isom Law 
Offices, Salt Lake City, UT; Thomas F. Linn, Atlantic Richfield Company, Denver, 
CO; and William D. Omohundro, Omohundro Law Offices, Buffalo, WY. Argument by 
Mr. Isom, Representing Appellee Thunder Basin Coal 
Company.

 

   
Before LEHMAN, C.J., and THOMAS, MACY, GOLDEN, and HILL, 
JJ.

 

   
HILL, Justice.

 [¶1]       Appellants, TUCO, Inc. and Southwestern 
Public Service Company (SPS), challenge the district court's rulings in a 
declaratory judgment action brought by Appellee Thunder Basin Coal Company.  Appellants claim the court erred in 
refusing to dismiss or stay the Wyoming action because it resolved factual 
issues at the center of a pending case filed in Texas. They also attack the 
district court's entry of summary judgment in favor of Thunder Basin. Although 
the district court did have jurisdiction over TUCO in respect to one of two coal 
supply agreements, we find it abused its discretion in refusing to stay the 
Wyoming action during the pendency of the Texas lawsuit. Because we reverse and 
remand on that basis, summary judgment in favor of Thunder Basin is 
vacated.

 

                              
ISSUES

 

  [¶2]    TUCO presents the following 
issues for review:

 

1. Do principles of comity and federalism mandate 
that the trial court dismiss or stay Thunder Basin Coal Company's declaratory 
relief action because it carves out a central fact issue from a first-filed 
Texas case and presents it for determination in Wyoming?

 

2. Did the trial court err by failing to stay or 
dismiss Thunder Basin Coal Company's complaint for declaratory relief when there 
was no case or controversy presented for the court to determine because the 
subject matter of the dispute under the Coal Supply Agreements had been resolved 
by Thunder Basin Coal Company's performance?

 

3. When it became apparent that there was no case or 
controversy to confer jurisdiction over Thunder Basin Coal Company's complaint, 
did the trial court err by permitting this case to proceed to summary 
judgment?

 

4. Should TUCO INC. have been granted summary 
judgment when it proved that the unambiguous terms of the Coal Supply Agreements 
when given their plain meaning established that there were no genuine 
issues of material fact for 
determination at trial and that TUCO was entitled to judgment as a matter of 
law?

 

5. Alternatively, did the trial court err in granting 
Thunder Basin Coal Company's motion for summary judgment when the terms of the 
Coal Supply Agreements were shown to be ambiguous and there were disputed issues 
of material fact to be determined at trial that precluded the entry of summary 
judgment?

 

   [¶3]     SPS limits its appeal to two 
issues:

 

1. Does Thunder Basin have standing to seek 
declaratory judgment on a contract that had never been assigned to 
it?

 

2. Is there a case or controversy regarding 
agreements that are contingent upon a happening that has yet to 
occur?

 

  [¶4]    Appellee Thunder Basin 
phrases the issues:

 

1. Did the district court properly grant summary 
judgment in favor of Thunder Basin on the ground that the unambiguous language 
of the Coal Supply Agreements supports Thunder Basin's interpretation of the 
contracts?

 

2. Did the district court abuse its discretion in 
declining to dismiss or stay this action where, among other considerations, this 
action involved critical issues and claims not being litigated in Texas, 
complete relief was not available in Texas, the subject contracts were governed 
by Wyoming law, and all interested 
parties were parties to this action but not the Texas 
action?

 

                               
FACTS

 

 [¶5]       This dispute involves separate contracts 
for the purchase of coal. In 1976, TUCO agreed to purchase coal from ARCO 
pursuant to the Revised Harrington Agreement (the First Agreement). The initial 
term of the First Agreement continued through 1993, and, by extension, 
terminated at the end of 1997. At the same time, SPS signed a Guaranty Agreement 
with ARCO assuring that SPS would assume TUCO's obligations under the First 
Agreement if TUCO defaulted.

 

 [¶6]       In 1977, ARCO assigned its interest in 
the First Agreement and the Guaranty to its subsidiary, Thunder Basin. The same 
year, ARCO and TUCO signed the Tolk Agreement (the Second Agreement) for 
additional supplies of coal through the year 2017. ARCO assigned the Second 
Agreement to Thunder Basin in 1982.

 

 [¶7]       In lieu of a direct guaranty to the 
Second Agreement, SPS and ARCO signed a "Conditional Agreement for Coal" 
(Conditional Agreement).  Under the 
Conditional Agreement, if the Second Agreement is canceled, ARCO and SPS will 
execute a new coal agreement (the SPS Agreement), which contains terms virtually 
identical to the Second Agreement. The SPS Agreement is attached as an exhibit 
to the Conditional Agreement and can be assigned if, and only if, the Second 
Agreement is canceled. The Conditional Agreement is not 
assignable.

 

 [¶8]       On February 16, 1994, TUCO and SPS 
initiated an action in Texas district court against Thunder Basin and ARCO 
asserting limited claims relating to the First Agreement. (TUCO INC. v. Thunder 
Basin Coal Company, No. 79, 483-C). In September 1994, TUCO amended its petition 
in the Texas action to allege that Thunder Basin failed to adjust the price of 
coal in relation to its actual production costs, and, therefore, overcharged 
TUCO millions of dollars under both the First and Second 
Agreements.

 

 [¶9]       Thunder Basin counterclaimed, contending 
that its actual production costs were not relevant to pricing. Thunder Basin 
asserted that only those costs relating to taxes and royalties were to be used 
in calculating the price of the coal, otherwise using industry indices as a 
basis for price. Under that formula, Thunder Basin alleged it had correctly 
charged or even undercharged TUCO.

 

 [¶10]    
In August and September 1994, TUCO notified Thunder Basin that it 
intended to audit Thunder Basin's books and records pursuant to the audit 
provisions of the Agreements. In May 1995, TUCO sent Thunder Basin a list of the 
specific documents it wished to review on audit, including all documents 
relating to coal production costs. Thunder Basin refused to comply. Consistent 
with its position in the pending Texas lawsuit, Thunder Basin maintained that 
TUCO's request for actual costs of production exceeded the scope of the audit 
provisions because those costs did not affect the coal price. By letter dated 
June 23, 1995, TUCO asserted that Thunder Basin's failure to provide the 
requested documents would result in a breach of the audit 
provisions.

 

 [¶11]    
Two days later, Thunder Basin filed a declaratory judgment action in the 
Wyoming district court naming TUCO and SPS as defendants.  Thunder Basin sought a declaration that 
TUCO's audit request exceeded the scope of the Agreements' audit provisions in 
asking for actual costs which were unrelated to the price of 
coal.

 

 [¶12]    
SPS responded to Thunder Basin's declaratory judgment action with a 
motion to dismiss, claiming it was not a signatory of the First or Second 
Agreements, and, therefore, was not a proper party to the action. In October 
1995, Thunder Basin filed a motion for summary judgment asserting it was 
entitled to judgment as a matter of law regarding the interpretation of the 
audit provisions. Subsequently, Thunder Basin amended its complaint to assert 
that SPS was a proper party under the Guaranty and the Conditional Agreement. 
TUCO and SPS then filed motions to dismiss or stay the Wyoming action because 
the crucial question, i. e., how the pricing was to be calculated, was at the 
heart of the earlier-filed Texas lawsuit and properly should be decided by the 
Texas court.

 

 [¶13]    
A few days after Thunder Basin filed its claim in the Wyoming court, TUCO 
served discovery requests on Thunder Basin in the Texas action. TUCO requested 
production of all documents regarding the administration of the Agreements, 
including all Asupporting cost data" evidencing Thunder Basin's actual costs of 
production. Eventually, the same documentation which was the subject of TUCO's 
audit request was produced in response to the discovery request. Having received 
the information it wanted, TUCO formally withdrew the audit request on January 
5, 1996.

 

 [¶14]    
Hearings on the Motion to Dismiss or Stay the Wyoming proceedings were 
held on January 8, 1996, and May 9, 1997.1 On May 23, 1997, the district court 
issued a written order denying the motion. In response to this ruling, TUCO 
amended its answer to assert a counterclaim for declaratory relief against 
Thunder Basin, alleging that the unambiguous terms of the Agreements required 
Thunder Basin to maintain and produce actual cost data for producing, 
processing, and loading coal purchased by TUCO.  The amendment was followed by TUCO's 
cross-motion for summary judgment. The district court heard arguments on the 
summary judgment motions on August 12, 1997, and on March 6, 1998, issued its 
order granting Thunder Basin's motion, and denying all of TUCO's pending 
motions.2 TUCO and SPS then filed this timely 
appeal.

 

                        
STANDARD OF REVIEW

 

 [¶15]    
In a de novo review of the threshold question of jurisdiction, "we 
examine the policies underlying both the Uniform Declaratory Judgments Act and 
the doctrine of justiciability to determine if this is a proper case for 
judicial action." Reiman Corp. v. City of Cheyenne, 838 P.2d 1182, 1185 (Wyo. 
1992). The district court's decision to stay or dismiss an action due to a 
pending proceeding, however, is discretionary. Morris v. Farmers Ins. Exchange, 
771 P.2d 1206, 1213 (Wyo. 1989).

 

Judicial discretion is a composite of many things, 
among which are onclusions drawn from objective criteria; it means a sound 
judgment exercised with regard to what is right under the circumstances 
and             
without doing so arbitrarily or capriciously.

            
 * * *

 

Mintun v. State, 966 P.2d 954, 958 (Wyo. 1998); Vaughn v. State, 962 P.2d 149, 151 (Wyo. 1998) (quoting 
Martin v. State, 720 P.2d 894, 897 (Wyo. 1986)). Therefore, we review the 
district court's decision to determine whether the court could reasonably 
conclude as it did in the situation before it. Clark v. Gale, 966 P.2d 431, 435 
(Wyo. 1998); Hilterbrand v. State, 930 P.2d 1248, 1250 (Wyo. 1997). 
However,

 

[t]he trial court's exercise of this discretion is 
subject to searching  appellate 
review and is not given the same deference as is the trial court's exercise of 
discretion in other contexts. Independent review is justified because the 
exercise of the trial court's discretion in granting or denying declaratory relief is not dependent upon factors 
which are difficult for an appellate tribunal to review, such as, for example, 
factual determinations of credibility.

 

Gaiser v. Village of Skokie, 
648 N.E.2d 205, 210 (Ill. App. 1995) (quoting Chicago & Eastern Illinois 
Railroad Company v. Reserve Insurance Co., 425 N.E.2d 429, 432 (Ill. App.3d 
1981)).

 

                            
DISCUSSION

 

   
A. Justiciable Controversy.

 

 [¶16]    
Based on several undisputed facts, TUCO and SPS contend that no 
justiciable controversy existed at the time the Wyoming district court ruled on 
Thunder Basin's summary judgment motion. First, Appellants argue that because 
the audit request had been withdrawn, and the documents which were the subject 
of that request had been produced prior to summary judgment, the question 
regarding the scope of the audit provision was moot at the time of the district 
court's ruling. In addition, SPS maintains that Thunder Basin lacked standing to 
insert SPS into the controversy between it and TUCO.

 

 [¶17]    
Summary judgment argument was heard in August 1997 and judgment issued in 
March 1998. The district court found that "a justiciable controversy exists 
between the parties as to the interpretation of certain contracts, and 
declaratory relief should be granted to settle the controversy." Although the 
district court did not further elucidate its position, its ruling apparently 
applied to both the Revised Harrington Agreement and the Tolk Agreement. 
Therefore, on appeal we must look to each of the Agreements individually to 
determine whether a justiciable controversy existed at the time the district 
court exercised its jurisdiction.

 

 [¶18]    
A justiciable controversy must exist before a court may grant declaratory 
relief. Reiman, 838 P.2d at 1185-86; West Texas Utilities Co. v. Exxon Coal USA, 
Inc., 807 P.2d 932, 938 (Wyo. 1991). It is "defined generically as a controversy 
fit for judicial resolution." Reiman, 838 P.2d  at 1186. To establish a 
justiciable controversy under the Uniform Declaratory Judgments 
Act:

 

1. The parties must have existing and genuine, as 
distinguished from theoretical, rights or interests.

 

2. The controversy must be one upon which the 
judgment of the court may effectively operate, as distinguished from a debate or 
argument evoking a purely political, administrative, philosophical or academic 
conclusion.

 

3. It must be a controversy the judicial 
determination of which will have the force and effect of a final judgment in law 
or decree in equity upon the rights, status or other legal relationships of one 
or more of the real parties in interest, or, wanting these qualities to be of 
such great and overriding public moment as to constitute the legal equivalent of 
all of them.

 

4. The proceedings must be genuinely adversary in 
character and not a mere disputation, but advanced with sufficient militancy to 
engender a thorough research and analysis of the major 
issues.

 

 Reiman, 838 P.2d  at 1186 (citing Brimmer 
v. Thomson, 521 P.2d 574, 578 (Wyo. 1974)).

 

 [¶19]    
Under the umbrella of the justiciable controversy concept stand "the 
political question[s] doctrine, the administrative questions doctrine, the 
advisory opinions doctrine, the feigned and collusive cases doctrine, the 
doctrine of standing, the doctrine of ripeness, and the doctrine of mootness." 
Reiman, 838 P.2d  at 1186. "These doctrines are premised upon jurisprudential 
principles which are designed to promote judicial economy and the wise exercise 
of judicial power." Id.

 

   
1. The First Agreement (Revised Harrington 
Agreement).

 

 [¶20]    
In this case, Appellants' initial challenge to the jurisdiction of the 
district court arises under the doctrine of mootness.

 

The doctrine of mootness encompasses those 
circumstances which destroy a previously justiciable controversy. This doctrine 
represents the time element of standing by requiring that the interests of the 
parties which were originally sufficient to confer standing persist throughout 
the duration of the suit. Thus, the central question in a mootness case is 
"whether decision of a once living dispute continues to be justified by a 
sufficient prospect that the decision will have an impact on the parties." 
Wright & Miller § 3533.

 

 Reiman, 
838 P.2d  at 1187 (citations omitted).

 

 [¶21]    
It is undisputed that TUCO formally withdrew its audit request under the 
Agreements on January 6, 1996, and was in the process of reviewing the 
documentation which was the subject of those requests. Thunder Basin argues, 
however, that given TUCO's failure to withdraw its claim that Thunder Basin 
breached the First and Second Agreements, or to further stipulate to the 
propriety of Thunder Basin's pricing, future audit disputes were 
likely.

 

 [¶22]    
We will not interpret the scope of the declaratory judgment statute in a 
narrow or technical sense as long as the party seeking declaratory relief 
presents the court with an actual controversy. Hirschfield v. Board of County 
Com'rs, 944 P.2d 1139, 1142 (Wyo. 1997). The controversy, however, must be real. 
A court should not hear a case where there has been a change in circumstances 
occurring either before or after a case has been filed that eliminates the 
controversy. International Ass'n of Fire Fighters, Local 279 v. Civil Service 
Comm'n of Fire Dep't of City of Cheyenne, 702 P.2d 1294, 1297 (Wyo. 
1985).

 

 [¶23]    
The First Agreement expired on December 31, 1997 - three months after the 
summary judgment hearing and three months before the district court issued its 
order. The audit requests had been formally withdrawn over a year earlier. If 
the real dispute in this case is the scope of the audit provisions, as 
Thunder Basin contends, then the 
question of future audits under the First Agreement was improbable when summary 
judgment was argued and became impossible three months prior to the issuance of 
the court's order. Therefore, this claim was moot at the time the district court 
issued summary judgment on the audit provisions of the First Agreement. Because 
no justiciable controversy existed relating to that Agreement, the summary 
judgment granted in favor of Thunder Basin relating to the Revised Harrington 
Agreement is vacated.

 

   
2. The Second Agreement (Tolk Agreement).

 

 [¶24]    
Unlike the First Agreement, the Second Agreement will remain in effect 
until at least 2017, and possibly longer. Under the Second Agreement, TUCO is 
permitted to request an additional audit once each calendar year. Thus, the 
withdrawal of the audit request did not affect TUCO's right to request audits in 
the future. The fact that TUCO remained steadfast in a construction of the audit 
provision contrary to the interpretation given by Thunder Basin presented 
sufficient controversy for the district court's judgment to effectively operate 
in terminating that dispute.  
Therefore, the claim against TUCO regarding the Second Agreement was not 
moot.

 

   
3. The Conditional Agreement

 

 [¶25]    
While Thunder Basin concedes that SPS is not a party to the Second 
Agreement, it posits that under the Conditional Agreement, SPS, Ain effect, 
assume[s] TUCO's obligations under the Tolk Agreement." Therefore, the district 
court's declarations concerning TUCO's obligations define SPS's obligations, as 
well, and Thunder Basin was entitled to include SPS in this action so that SPS 
will be bound by the court's judgment." SPS, on the other hand, argues it has no 
involvement in a justiciable controversy relating to the Second Agreement 
because SPS is not a guarantor of TUCO's performance under that Agreement. SPS 
points to the fact that the Conditional Agreement specifically provides that, 
with limited exceptions irrelevant to this case:

 

[N] one of the rights, powers, privileges, duties, 
liabilities or obligations of Seller [Thunder Basin] or TUCO arising under the 
Coal Supply Agreement [the Second Agreement] shall be assigned, shall accrue, or 
shall be otherwise transferred to the parties to the SPSC Coal Supply Agreement 
[ARCO and SPS] or shall be assumed by them.

 

 (Emphasis added.) Because the Conditional 
Agreement expressly negates SPS's assumption of the duties enumerated in the 
Second Agreement, Thunder Basin's attempts to bootstrap an interpretation of the 
SPS Agreement to a construction of the Second Agreement is 
unavailing.

 

 [¶26]    
In essence, Thunder Basin claims it may bring a declaratory judgment 
action on an unexecuted contract found as an exhibit in a contract between two 
other parties. This gambit is prevented by the intertwined principles of 
standing and ripeness.

 

The doctrine of standing is a jurisprudential rule of 
jurisdictional magnitude. At its most elementary level, the standing doctrine 
holds that a decision-making body should refrain from considering issues in 
which the litigants have little or no interest in vigorously advocating. * * * A 
litigant is said to have standing when 
he has a Apersonal stake in the outcome of the controversy." This personal stake 
requirement has been described in Wyoming as a "tangible interest" at 
stake.

 

 Robinson v. Hamblin, 914 P.2d 152, 154 
(Wyo. 1996) (citing Schulthess v. Carollo, 832 P.2d 552, 556-57 (Wyo. 1992)). 
When determining standing, the courts Aalmost invariably" focus on the 
plaintiff's position in the litigation. 13 Charles Alan Wright, Arthur R. Miller 
& Edward H. Cooper, Federal Practice and Procedure § 3531, pp. 339-40 
(1984).

 

 [¶27]    
Thunder Basin, as the plaintiff in this case, is not a party to the 
Conditional Agreement. Generally, a non-party to a contract has no standing to 
bring a claim on that contract. See Central Contractors Co., Inc. v. Paradise 
Valley Utility Co., 634 P.2d 346, 348 (Wyo. 1981). Further, "the Declaratory 
Judgment[s] Act gives the courts no power to determine future rights or 
anticipated disputes or controversies." White v. Board of Land Com'rs, 595 P.2d 76, 79 (Wyo. 1979). See also Langdon v. Aetna Life Insurance Co., 640 P.2d 1092, 
1099 (Wyo. 1982). Here, the Conditional Agreement cannot be assigned to Thunder 
Basin.  Although ARCO has expressed 
its intent to assign the SPS Agreement to Thunder Basin in the event it becomes 
operative, Thunder Basin failed to present any evidence that there is a 
likelihood of that occurrence.

 

 [¶28]    
The SPSC Coal Agreement does not become operative until there has been a 
breach by TUCO under the Second Agreement. Nothing in the record indicates that 
TUCO breached, or intends to breach, the Second Agreement in the future. Because 
the SPS Agreement has not been, and cannot be, assigned to Thunder Basin until 
certain conditions are met in the future, the "controversy" presented by Thunder 
Basin relating to SPS is simply too remote and uncertain to justify present 
adjudication. We find the district court erred in denying SPS's motion to 
dismiss it from the declaratory judgment action.

 

   
B. Motions to Dismiss or Stay Due To Pending Litigation In 
Texas.

 

 [¶29]    
TUCO asserts that under our holding in Morris v. Farmers Ins. Exchange, 
771 P.2d 1206 (Wyo. 1989), the district court erred in refusing to dismiss or 
stay the declaratory judgment action due to the pending litigation between the 
parties in Texas. In Morris, an insurance company filed a complaint in a Wyoming 
district court for declaratory relief to establish that it had no duty to defend 
or indemnify its insured in a suit pending in another Wyoming district court. 
The trial court granted summary judgment in favor of the insurance company, 
holding that the facts at issue showed intentional conduct by the insured as a 
matter of law, thereby negating a duty to defend or indemnify. Id. at 
1207.

 

 [¶30]    
On appeal, we found the trial court's determination to proceed with the 
case was an abuse of discretion. Morris 771 P.2d. at 1212. Limiting our opinion 
to the facts of that case, we held that the trial court should have stayed the 
declaratory judgment proceeding until the crucial issues in the principal case 
were determined by the district court presiding over the first-filed case. Id. 
at 1208, 1209. We listed six justifications for taking a more restrictive view 
of utilizing declaratory judgments:

 

1. The declaratory judgment action was not intended 
to be used to force the insured to have a "dress rehearsal" of an issue to be 
tried in the main case

 

2. The holding in the declaratory judgment action 
might inappropriately collaterally estop the parties to the main action as to 
certain factual issues

 

3. Such a proceeding would unduly burden the insured 
and improperly allow the insurer to wrest control of the litigation from the 
injured party

 

4. Such a declaratory judgment would violate the 
principle of judicial economy

 

5. Such an action would constitute an unwarranted 
interference with another court's proceedings

 

6. To the extent the declaratory judgment might 
resolve an issue adversely to the insured, it would be inherently unfair to 
force the insured to litigate against the insurance company; . . . rather than 
obtaining the benefit of the company's resources and expertise in defending 
against the            
plaintiff[.]

 

 Morris 771 P.2d  at 1211. We further 
stated, "The institution of the declaratory judgment action as in the case at 
bar results in a race to res judicata, or at least collateral estoppel, which is 
improper." Id.

 

 [¶31]    
TUCO argues that the same principles which applied in Morris should 
govern our decision in this matter. In support of its position, TUCO directs us 
to the fact that the same crucial issue in the declaratory judgment claim - the 
pricing issue - was first raised in the Texas action over eight months before 
Thunder Basin filed its claim in Wyoming. TUCO charges that Thunder Basin filed 
the Wyoming action solely to avoid litigating the pricing issue in Texas and to 
use the decision of the Wyoming court to estop the Texas 
claims.

 

 [¶32]    
Thunder Basin replies that Morris should not apply in this case because, 
unlike Morris, the pending case does not involve an insured and its insurer. 
Thunder Basin also denies that its actions amount to "procedural fencing," 
maintaining that the declaratory judgment action was appropriate because Thunder 
Basin Afeared that it might be sued for breach [of the audit provision], and 
that TUCO might attempt to terminate the Coal Supply Agreements on that basis, 
if the dispute were not promptly resolved."

 

 [¶33]    
We are not persuaded by Thunder Basin's argument. We see no reason to 
limit the principles in Morris to intrastate actions between an insured and its 
insurer. Moreover, Thunder Basin's justifications for resisting a stay in the 
Wyoming action do not rebut TUCO's claim that the initiation of the Wyoming 
action was a procedural ploy. Thunder Basin's alleged fear of suit for breach of 
the audit provisions and a subsequent termination of the Agreements rings hollow 
in light of the history between these parties. TUCO had already sued Thunder 
Basin in Texas over a year earlier for a material breach of the Coal Supply 
Agreements claiming a loss of millions of dollars. Still, TUCO had not attempted 
nor threatened to terminate the Agreements. Thunder Basin's fear is even more 
questionable when one considers that all audit requests were formally withdrawn 
at the time the district court considered the motions to stay. Further, TUCO 
never disputed that the scope of the audit provisions included only those 
materials relevant to the price of the coal. The real issue in both Texas and 
Wyoming was the relevancy of actual costs to the price of coal. See Wilshire 
Associates v. Grebow, 74 Cal. Rptr. 2d 912, 915 (Cal.App. 1998) (wife never 
disputed her share of estate would be liable for judgment against husband; 
therefore, no actual controversy existed). Indeed, by the time the district 
court refused to stay this case, the only controversy between Thunder Basin and 
TUCO was the pricing issue as it affected future audit requests by 
TUCO.

 

 [¶34]    
Thunder Basin's insistence that the trial court appropriately refused to 
stay the action because "the Texas action and this action involve different 
subject matters and different issues" is contradicted by its own argument. In 
nearly the same breath, Thunder Basin states, "The district court's ruling that 
Thunder Basin had used the proper method for pricing coal by implication 
determined that Thunder Basin has not overcharged TUCO, and therefore the 
district court's rulings will have res judicata or collateral estoppel effect in 
the Texas Action." (Id.) Further, 
we will not characterize attempted utilization of the Wyoming court to usurp the 
jurisdiction of the Texas court as "judicial efficiency." We prefer to identify 
the obvious motivation in this instance, a "race to res 
judicata."

 

 [¶35]    
Given the posture of the case before the district court at the time it 
heard TUCO's request to stay the action, we see no reason why these issues 
should not have been decided by the Texas court in the context of a remedial 
dispute which includes all the issues between these parties. We have no doubt 
that our sister state will competently apply Wyoming law to the contracts at 
issue. It is unlikely that the "audit issues" would endure after resolution of 
the Texas action. Even so, awaiting the Texas decision to tie up any loose ends 
regarding later audit requests would not have prejudiced Thunder 
Basin.

 

 [¶36]    
Instead, Thunder Basin clearly wrested control of the litigation from 
TUCO's grasp in an attempt to transfer the litigation to a strategically 
superior forum. This constitutes an unwarranted interference with another 
court's proceedings which will not be approved in Wyoming. The district court's 
order denying a stay of the Wyoming action during the pendency of the Texas 
litigation is, therefore, reversed.

 

             
               CONCLUSION

 

 [¶37]    
Because TUCO had withdrawn its audit requests and the Revised Harrington 
Agreement was no longer in effect at the time the district court ruled on 
summary judgment, the claims relating to the audit request under the Revised 
Harrington Agreement were moot. Therefore, the district court's ruling on that 
issue is hereby vacated.

 

  [¶38] 
Because SPS was not a party to, nor a guarantor of, the Tolk Agreement, 
there was no justiciable controversy between Thunder Basin and SPS under the 
Tolk Agreement. In addition, Thunder Basin lacked standing to bring a claim 
against SPS relating to the Conditional Agreement or the SPSC Coal Agreement 
between ARCO and SPS. Thus, the district court's refusal to dismiss SPS from 
this action is reversed.

 

 [¶39]    
Finally, the declaratory judgment action in Wyoming constituted a 
transparent attempt to win the race to res judicata. Thunder Basin would have 
suffered no prejudice by awaiting the resolution of the first-filed Texas action 
prior to litigation of any remaining claims in Wyoming. The district court 
abused its discretion in permitting the Wyoming action to continue and, 
therefore, its summary judgment is vacated, and its order denying the stay is 
reversed and remanded for further action in accord with this 
opinion.

 

  

FOOTNOTES

1 On 
February 20, 1997, shortly before the second hearing on the motion to dismiss or 
stay, SPS withdrew from the Texas suit.

 2 After 
the district court denied the motions to dismiss or stay, SPS filed a renewed 
Motion to Dismiss, and TUCO filed a Motion for Leave to File Its Third Amended 
Answer, a Motion to Join Third Party Defendant, and a Second Motion to Stay 
Proceedings.