Title: White Current Corp. v. VELCO

State: vermont

Issuer: Vermont Supreme Court

Document:

NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 
as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                No. 90-083


White Current Corporation                    Supreme Court

                                             On Appeal from
     v.                                      Windsor Superior Court

Vermont Electric Cooperative, Inc.           September Term, 1991
and Vermont Electric Generation &
Transmission Cooperative, Inc., et al.


Alden T. Bryan, J.

William J. Donahue, White River Junction, and Roger Lamson, Hartland, for
  plaintiff-appellee

Michael L. Burak, David M. Hyman and Andrew H. Montroll of Burak &
  Anderson, Burlington, for defendants-appellants


PRESENT:  Allen, C.J., Gibson, Dooley and Morse, JJ., and Martin, Super. J.,
          Specially Assigned


     ALLEN, C.J.   This interlocutory appeal focuses on a letter of intent
executed by appellant electric cooperatives (Vermont Electric Cooperative,
Inc. and its subsidiary Vermont Electric Generation and Transmission
Cooperative, Inc.) and appellee White Current, Inc., a small power producer.
During the liability phase of a bifurcated trial, the jury found that the
letter constituted a binding contract for the purchase of electrical energy
which the cooperatives breached.  The court entered a partial final judgment
for White Current.
     After the court denied their motion for judgment notwithstanding the
verdict, the cooperatives filed a motion pursuant to V.R.A.P. 5(b) for
leave to file an interlocutory appeal.  The court granted the motion and
certified the following questions:
     (1)  Whether failure of all or any party to Exhibit No.
     4 [the letter of intent] to submit to the Public Service
     Board for approval, as required by General Order 45, an
     agreement contemplating the purchase and sale of
     electricity produced by a hydroelectric facility in
     Vermont rendered the agreement unenforceable.

     (2)  Considering the evidence in the light most favor-
     able to the Defendants, whether there was any evidence
     to fairly and reasonably support the jury's special
     verdict that the power sale agreement embodied in
     Exhibit No. 4 was subsequently orally modified.

     (3)  If the answer to Question No. 2 is affirmative,
     whether subsequent oral modification of Exhibit No. 4
     would render Exhibit No. 4 unenforceable as contrary to
     the Statute of Frauds.

The trial court found that these were controlling questions of law on which
there were substantial grounds for difference of opinion and that their
resolution would materially advance the termination of the litigation.  We
answer the first two questions in the negative, do not reach the third, and
remand the case for a trial on damages.
     The trial court opined that the interests of judicial economy would be
well served if the Supreme Court considered all appealable issues related to
the partial judgment.  At the cooperatives' request, the court certified an
additional eighteen questions without making any findings that they were
controlling, substantial or would advance the litigation.
     The cooperatives raise four main issues in their brief: (1) whether the
trial court properly submitted the letter of intent to the jury to determine
whether it was a binding contract, (2) whether the court properly excluded
expert testimony, (3) whether White Current's failure to file the letter
with the Vermont Public Service Board rendered it unenforceable, and (4)
whether the trial court properly considered the issue of oral modification
of the letter.  The first two were not properly certified by the trial
court, and we decline to address the first for reasons stated herein.  We
consider the second because it was contested below and properly preserved.
We consider the cooperatives' third and fourth arguments, but decline to
adopt their formulation of the oral modification issue and address that
issue as certified by the trial court.
                                   FACTS
     White Current, a qualifying small power producer under federal law,
began to develop a hydroelectric site on the Ottauquechee River in Hartland
in the late 1970s.  Soon after White Current commenced this project, the
cooperatives started their own larger project one mile upstream.  Fearing
the effects of proposed stream impoundments that would result from
construction at the cooperatives' site, White Current indicated its
intention to intervene in related regulatory proceedings.  Concerned with
delays that might result from such intervention, the cooperatives prepared
the letter of intent which was executed by the parties.
     The letter provided that the parties enter into a power sales
agreement, after obtaining the necessary regulatory approvals, according to
"essential terms" set forth in the letter.  The terms specified that White
Current would sell, for an initial period of ten years, the net output of
its planned 432-kilowatt generator to the cooperatives at a price equal to
85% of the cooperatives' generation costs at their upstream project.  The
letter contained specific price terms for the period before the
cooperatives' project was to become operative.  In the final paragraph of
the letter, the parties agreed to resolve any disputes concerning the impact
of the cooperatives' project on White Current's ability to generate power
exclusively through the Federal Energy Regulatory Commission (FERC).  The
letter was not filed with the Public Service Board (PSB) pursuant to its
General Order 45, which requires utilities to file all contracts, including
letters of intent, for the purchase or sale of electrical energy.
     One impact of the cooperatives' project was to cause intermittent
increases in stream flow, which White Current's planned 432-kilowatt
generator could not accommodate.  White Current therefore modified its
original plan and installed a second, larger generator designed to meet this
new condition.  Roger Lamson, White Current's principal, testified at trial
that the cooperatives agreed to purchase the output from that generator as
well, but that the agreement was never reduced to writing.  With both
generators on line, White Current operates at approximately 2000 kilowatts
and the project is now leased to a third party.
     After the parties signed the letter of intent, White Current intervened
in the cooperatives' FERC proceedings out of continuing concern for stream
flow coordination between the two projects.  Because of this intervention,
the cooperatives refused to execute a formal power sales agreement or
purchase any power generated by White Current.  White Current then sued the
cooperatives for breach of contract.
     The day before the trial on liability, the cooperatives announced their
intention to call expert witnesses to testify about the custom and usage of
letters of intent in the utility industry.  The trial court excluded this
testimony.  At the request of the parties, the court submitted written
interrogatories to the jury on the issue of whether the letter of intent was
a binding contract for the purchase of output from the 432-kilowatt gener-
ator.  The jury found that the letter represented a binding agreement which
the cooperatives had breached.  While the jury deliberated, the parties
agreed to submit additional interrogatories to the jury on whether the
contract had been modified or whether the parties entered into a separate
oral agreement for power from the second larger generator.  Counsel did not
present argument on this issue, and the court submitted it to the jury
without significant instruction.  The jury found an oral modification.
After reviewing the testimony, the court ruled that there was no evidence to
support this finding and entered a partial final judgment for White Current
on all questions of liability concerning the 432-kilowatt generator.
                                    I.
      Initially, we address the matter of questions and issues not properly
certified for review pursuant to V.R.A.P 5(b).  We do not agree with the
trial court's observation that judicial economy would be well served if we
were to consider all appealable issues at this time.  As we have earlier
noted:
       Interlocutory appeals are an exception to the normal
     restriction of appellate jurisdiction to the review of
     final judgments.  There are weighty considerations that
     support the finality requirement.  Piecemeal appellate
     review causes unnecessary delay and expense, and wastes
     scarce judicial resources.

In re Pyramid Co. of Burlington, 141 Vt. 294, 300,