effective April 1, 2002. On March 26 and 27, 2002, Longview laid off all but approximately 15
employees. Since April 1, 2002, Longview has not taken any power from the BPA or any other
source. In addition, the collective bargaining agreement in effect at the Smelter expired on May
31, 2002.

Currently before the Court is USWA’s motion for partial summary judgment. USWA
argues that MAP and Longview breached: (1) the December 20 Agreement by not providing
SSPs to the applicable employces during the April 1, 2002 -- June 30, 2002 curtailment period;
and (2) LOU I] by failing to restart the Smelter on April 1, 2002. USWA seeks damages in the
amount of the SSP payments required by the December 20 Agreement and an order of specific
performance to re-start the Smelter (or damages — including loss of income and benefits —
resulting from the failure to restart the Smelter).

LEGAL STANDARDS

Summary judgment is proper when “the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any matcrial fact and that the moving party is entitled to a judgment as a
matter of law.” Fed. R. Civ. P. 56(c). A genuine issue exists only when “the evidence is such
that a reasonable jury could return a verdict for the non-moving partly.” Anderson v. Liberty
Lobby, Inc., 477 1.8. 242, 248 (1986). Accordingly, the nonmovant must “come forward with
specific facts showing that there is a genuine issue for trial.” Miller v..4m. Family Mut. Ins. Co.,
203 F.3d 997, 1003 (7° Cir, 2000) (quoting Matsushita Elec. Indus. Co. vy. Zenith Radio Corp.,
475 U.S. 574, 587 (1986)). The Court must view the evidence, and all reasonable inferences

therefrom, in the light most favorable to the nonmoving party. Jd.


December 20 Agreement might be found reasonable by a rational jury. In light of this ambiguity,
the Court must deny summary judgment on USWA’s counterclaim premised on the December 20
Agrecment.

After examining LOU I - the basis for USWA’s claim to re-start the Smelter — the Court
finds that this document is also ambiguous as to the parties’ intent to be bound. The letter
contains the same alleged condition precedent which calls into question the cnforccability of the
December 20 Agreement and which obviously also calls into question the enforceability of LOU
II. Furthermore, there is ambiguity as to whether LOU II was intended to be binding on both
MAP and Longview. USWA’s argument that the definition of MAP from the December 20
Agreement was intended to be incorporated into LOU II is reasonable.* Also reasonable,
however, is the view that if a party intended to be bound by a document, such an intention would
be stated directly. Furthermore, USWA itself has conceded that there are genuine issues of
material fact as to Longview’s obligations under both the December 20 Agreement and LOU II.
(R. 57, USWA Reply at 3.)

Accordingly, the Court must deny USWA’s motion for partial summary judgment
because MAP and Longview have raised genuine issues of material fact regarding the

enforceability of the agreements and the parties bound by the agreements. After viewing all the

* USWA bases this argument on the following statement in LOU II: “All capitalized
terms hercin have the same meaning ascribed to them in the December 20 Agreement and/or
LOU I.” (R. 31-4, USWA Mot., Ex. 1, LOU IL)

9


agreement binding if the parties intended to be bound by the prior agreement. Barton Chem.
Corp. v. Pennwalt Corp., 399 N.F.2d 288, 291-92 (LIL. App. Ct. 1979). See also Lambert Corp.

vy. Evans, §75 V.2d 132, 135 (7" Cir. 1978). Initially, the Court must determine whether an
agreement is ambiguous or capable of more than one interpretation. Quake Consir., Inc., v.
American Airlines, 565 N.E.2d 990, 994 (LI. 1990). [fan agreement contains an integration
clause, the Court looks for intrinsic ambiguity or whether the language of the agreement itself
evidences any ambiguity. Air Safety, Inc., v. Teachers Realty Corp., 706 N-F..2d 882, 884-85 (Il.
1999). In cases where there is no explicit integration clause, the Court may look at objective
extrinsic evidence to ascertain the parties’ intent. Cincinnati Ins. Co., v. River City Constr. Co.,
757 N.E.2d 676, 680-81 (Ill. App. Ct. 2001).

The parties do not dispute that the December 20 Agreement meets most of the
requirements of a contract, bul they vigorously dispute whether there was mutuality of agreement
— whether the agreement was meant to be binding, and, if so, whether it was meant to be binding
on both MAP and Longview. The instant case is not -— as MAP and Longview’s casclaw
citations suggest — a clear-cut one where there is an explicit disclaimer of an intent to be bound.
Compare Terracom Dev. Group, Inc. y. Coleman Cable and Wire Co., 365 N.E.2d 1028, 1031-
32 (III. App. Ct. 1977) (holding that letter was not binding as it explicitly slated “that no
contractual relationship shall exist between the partics unless and until the definitive agreement
shall have been executed in writing”); Feldman v. Allegheny Int'l, Inc., 850 F.2d 1217, 1221-22
(7" Cir. 1988) (holding that letter of intent did not constitute a contract where it stated that it was
“understood that this is not a binding agreement and the obligations and rights of the parties shall

be set forth in the definitive agreement executed by the parties”).


dl

ANALYSIS

USWA seeks summary judgment on two claims predicated on the December 20
Agreement and LOU II. USWA argues that MAP and Longview violated (he December 20
Agreement by failing to provide the payments required by the agreement for the period of April
1, 2002 through June 30, 2002. They contend that the period of April 1, 2002 through June 30,
2002 is a power sale period — as defined by the December 20 Agreement — and that MAP and
Longview were thus obligated to make payments during that period. USWA further argues that
MAP and Longview breached Section 5 of LOU LI by not re-starting the Smelter on April 1,
2002. MAP and Longview, on the other hand, contest the enforceability of the December 20
Agreement and LOU IL' The companies primarily argue that the execution of a subsequent final
agrecment was a condition precedent to the enforceability of the December 20 Agreement and
LOU IL, and that there exist too many questions of material fact to grant summary judgment.

Resolution of the instant dispute involves delving into Minois contract law,” A valid
contract exists when the following requirements are met: competent parties, valid subject matter,
legal consideration, mutuality of obligation and, especially pertinent (o the instant case, mutuality
of agreement. Harris v. Johnson, 578 N.E.2d 1326, 1329 (IIL App. Ct. 1991). Even in a case
where a future agreement is contemplated by the parties, the Court may nevertheless find a prior

' MAP incorporated Longview’s arguments against summary judgment, except those
related solely to Longview’s individual circumstances. (R. 53, MAP Resp. at 9-10.)

? Both USWA and Longview agree that the Court has jurisdiction over USWA’s
counterclaim pursuant to Section 301 of the Labor Management Relations Act, 29 U.S.C. §
85(a). (R. 31-3, USWA Facts { 4; R. 50, Longview Facts 4.) As such, the Court should apply
federal law, but may also resort to state law if it is compatible with the purpose of § 301. Textile
Workers Union v. Lincoln Mills, 353 U.S. 448, 456 (1957). In addition, because the parties apply
Tllinois law in their briefs, the Court will apply Tllinois law in ruling on the instant motion.

5


Ud.) The Ilinois Appellate Court recently held that a remarkably similar provision was not an
explicit integration clause.> Cincinnati Ins., 757 N.E.2d at 681. Instead, the court held that the
provision did not express the parties’ intent to establish the contract as an integrated agreement,
but rather their intent (o prevent unilateral modifications of the policy. Jd. As such, the court
held that — in the absence of an explicit integration clause like the one in Air Safety — the trial
court should have considered extrinsic objective evidence of ambiguity. fd. Applying Air Safety
and Cincinnati Insurance to the instant case, the Court finds that in the absence of an explicit
integration clause, we should look to extrinsic evidence of ambiguity.

As extrinsic cvidence of the ambiguity of the December 20 Agreement, MAP and
Longview primarily rely on the sentence in LOU LI stating: “As soon as practicable after
execution of this LOU II and the closing of the Purchase (the “ClosingTM), the parties shall re-state
the December 20 Agreement, LOU I and LOU I] into a single document.” (R. 31-4, USWA
Mot. Ex. 1, LOU IL} MAP and Longview argue that the statement evidences the parties’ intent
not to be bound by either the December 20 Agreement or LOU TI. Specifically, they argue that
the execution of a single document was a condition precedent to the enforcement of their bargain.
Considering this cxtrinsic statement casts cnough doubt on the enforceability of the December 20
Agreement to create a material issue of fact and law under the applicable summary judgment

standards. In short, MAP and Longview’s argument that they did not intend to be bound by the

> The provision at issue in Cincinnati Insurance stated:
This policy contains all the agreements between you and us concerning the insurance
afforded. The first named Insured shown in the Declarations is authorized to make changes
in the terms of this policy with our consent. This policy’s terms can be amended or waived
only by endorsement issued by us and made a part of this policy.
Cincinnati Ins., 757 N.B.2d at 681.


PY a
‘Minute Order Porm (05/97)

United States District Court, Northern District of Iinois

Name of Assigned Judge Ruben Castillo Sitting Judge if Other
or Magistrate Judge than Assigned Judge
CASE NUMBER 02 C48 DATE 7/31/2002

CASE Longview Aluminum, LLC, et al. vs. United Steel Workers of America
TITLE
[In the following box (a) indicate the party filing the motion, e.g. pluinti, defendunt, 3rd party plaintiff, and (b) state bricily the nature
MOTION: of the motion heing presented.)

DOCKET ENTRY:

(1) Oo Filed motion of [ use listing in “Motion” box above.]

(2) O Brief in support of motion duc

(3) o Answer brief lo motion due____.- Reply to answer briefdue___

(4) Oo Ruling/Hearing on _sebfor at _

(5) Oo Status hearing[held/continued to] [set for/re-set for] on set for at

(6) oO Pretrial conference[held/continued to] [set for/re-set for] on setfor al

(7) oO Trial[set for/re-set for]on.__ at

(8) { [Bench/Jury trial] [Hearing] held/continucd to_____at

(9) oO This is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to}

courtroom
deputy’s
initials

RO

CIFRCP4(m) OlGeneral Rule 21 ClFRCP41(a)(1) C1 FRCP41(a)(2).
qo) [Other docket entry] Enter Memorandum Opinion and Order. Defendant’s motion for summary
judgment is denied.
dl) [Kor further detail see order attached to the original minute order. |
No notices cequired, advised in open court, Dagurigiit..
7 . ‘Number:
No notices required. tamer of ntices
Nolives mailed by judge’s suff.
- AUG 0 2002
Nolified counsel by telephone. die docketed
wv | Docketing 10 mail notices. D
Mail AQ 450 form collin deputy initials
Copy to judge/magistrate judge. yunoe |

are mailed varies

Date/time receiv:
cgntial Ciérk’s

mailing deputy initials



facts in the light most favorable to MAP and Longview, as instructed by the law, we believe that
summary judgment in favor of USWA - or, for that matter, Longview — would be inappropriate.
CONCLUSION *

The Court sympathizes with the predicament of the Smeltcr’s laid-off employees. Too
many genuine issucs of material fact exist, however, for the Court to hold MAP and Longview
liable pursuant to either the December 20 Agreement or LOU II via summary judgment. We urge
all the parties to focus their valuable resources not on further litigation in this Court, but on
negotiating a settlement of the issues at hand in this suit and a new collective bargaining
agreement. Such an outcome would truly be the optimal one for all the parties involved. For the
reasons set forth in this opinion, we deny USWA’s partial motion for summary judgment.

(R. 31-1.) This Court will set an expedited trial date for this case at the earliest opportunity.

ENTERED:

udge Ruben Castillo
United States District Court

Dated: July 31, 2002

* In its brief, Longview asks the Court to grant summary judgment in favor of Longview
and MAP on all claims predicated on LOU II and the December 20 Agreement. (R. 49,
Longview Resp. at 6.)

10


On the contrary, the December 20 Agreement, standing alone, appears to provide
compelling evidence of an intent to be bound on the part of both MAP and Longview. In the

preamble, MAP is defined not only as MAP, the Delaware L..L

., but as “any entity with which
the principals of Michigan Avenue Partners is or becomes associated or affiliated with.” (R. 31-
4, USWA Mot. Ex. 3 Dec. 20 Agreement.) Lynch is the sole principal of MAP and signed the
agreement as MAP’s chairman. In addition, he is a member of Longview. Therefore, USWA’s
claim that Longview should be bound to the December 20 Agreement because of the document’s
expansive definition of MAP is reasonable. In addition, the December 20 Agreement contains a
choice of law and venue provision as well as a severability and survivorship provision - all
which evidence an intent to be bound by the agreement.

An intent to be bound by the December 20 Agreement could also be shown by the
inclusion of an explicit integration clause in the agreement. ‘he presence of such a clause would
prevent this Court from looking at extrinsic evidence of ambiguity. See Air Safety, 706 N.E.2d at
884-85. For example, in Air Sajety, the Illinois Supreme Court held that the following explicit
integration clause — “Contract represents the entire and integrated agreement between the parties
hereto and supercedes all prior negotiations, representations, or agreements, either written or
oral” — prevented the trial court from considering extrinsic cvidence of ambiguity, Jd, at 883-86.
The December 20 Agreement does not, however, contain a similar explicit integration clause.
Section 6 of the Agreement merely states:

This Agreement is the entire agreement between the parties relation to the subject

matter contained hercin. No modification or alteration of the terms contained in

this Agreement shall be of any force or effect unless such modification or
alteration is by mutual written agreement.


court in the Northern District of Illinois in the casc of any disputes. Section 6 provides for
modification of the agreement by mutual written consent. The December 20 Agreement was
executed by Michael Lynch as Chairman of MAP and George Becker as International President
of USWA. Since March 31, 2002, Longview has not provided SSPs to any employees allegedly
covered by the December 20 Agreement. The February 21, 2001 Curtailment Agreement
between Longview and the Bonneville Power Authority (“BPA”) provides for the curtailment of
Smelter operations for the period extending from April 1, 2002 through June 30, 2002.

LOU II- the second document at issue in the instant motion ~ was drafled on MAP
letterhead and signed by Michael Lynch as Chairman of MAP, On the final page of the letter,
under the word “Confirmed,” appears the signature of David Foster, Director of District 1] of
USWA. The preamble states that “[a|ll capitalized terms herein have the same meaning ascribed
to them in the December 20 Agreement and/or LOU I. As soon as practicable after execution of
this LOU LI and the closing of the Purchase (the “Closing”), the parties shall re-state the
December 20 Agreement, LOU 1 and LOU II into a single document.” (R. 31-4, USWA Mot,,
Ex. 1, LOU IL) The three documents were never restated in a single document. Section 5 of
LOU I or the re-start provision states: “effective April 1, 2002, unless the USWA gives its
consent to a lower operating rate (such consent not to be unreasonably withheld), Longview
Aluminum will take 280 MW on every hour of such BPA power and use all such power to
inereasc smelting operations at Longview, employing the number of bargaining unit employees
reasonably associated with operation at that power level.” (/d.)

USWA alleges that as April 1, 2002 approached, they became aware that the Smelter

might not be operating at 280 MW. In fact, Longview did not take 280 MW of BPA power


Longview, Washington. Although USWA alleges that MAP owns both Longview and the
Smelter, MAP and Longview claim — based on the declarations of Longview members John
Kolleng and Michael Lynch — that MAP has never had an ownership interest in Longview.
(R. 31-3, USWA Facts ¥ 1; R. 50, Longview Facts § 1; R. 52, MAP Facts { 1.) Lynch, however,
has ownership interests in both MAP and Longview. According to his declaration, he is one of
five members of Longview as well as the sole owner of MAP. (R. 50, Longview Facts, Ex. 2,
Lynch Dec. {ff 2-3.) While MAP and I.ongvicw originally alleged that MAP provides
management and consulting services to Longview, Lynch currently claims that MAP is an
acquisition company. (R. 27, Am. Compl. § 2; R. 51, Longview Add’] Facts { 2.)

At issue in the instant motion are two documents: (1) the agreement dated December 20,
2000 (“December 20 Agreement”); and (2) the letter of understanding dated February 18, 2001
(“LOU II”), Both documents were signed by USWA and MAP. In the preamble to the
December 20 Agreement, the definition of MAP includes not only MAP itself but “any affiliate
of Michigan Avenue Partners or any entity with which the principals of Michigan Avenue
Partners is or becomes associated with.” (R, 31-4, USWA Mot., Ex. 3, Dec. 20 Agreement.)
The preamble also states MAP’s intention to purchase the Smelter from Alcoa/Reynolds and then
resell the electric power available to the Smelter, Section 1 provides that USWA shall support
MAP’s efforts to sell power. In return, MAP agrees in Section 2 that during any power sale
period, the net proceeds of any sale shall be used to pay special supplemental payments (“SSP”)
and benefits to employees. A power sale period is defined as “any period in which Longview is
operating at less than full capacity duc, in whole or in part, directly or indirectly, to a Power

Sale.” (/d.) Section 5 is a choice of law and venue provision, applying Illinois law in federal

we


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

LONGVIEW ALUMINUM, L.L.C.,
a Delaware limited liability company,
MICHIGAN AVENUE PARTNERS,
L.L.C., an Tilinois limited liability company,

Plaintiffs/Counterclaim Defendants,
No. 02 C 0048
v.
Judge Ruben Castillo
UNITED STEEL WORKERS OF AMERICA,
Aug

Defendant/Counterclaim Plaintiff.

wwe weer rere eee

MEMORANDUM OPINION AND ORDER

‘The instant casc involving Longview Aluminum, L.L.C. (“Longview”), Michigan Avenue
Partners, 1..1..C. (“MAP”) and the United Steel Workers of America (“USWA”) arises out of the
curtailment of operations at the Longview Smelter (“Smelter”). Pursuant to a settlement
agreement, Longview’s claims against USWA and individual defendant David Foster were
dismissed. (R. 37, May 29, 2002 Order.) As such, the suil narrowed to include only MAP’s
claim and USWA’s counterclaims arising out of various alleged agreements. Currently before
the Court is Counterclaim Plaintiff USWA’s motion for partial summary judgment on the basis
of two of these alleged agreements. For the reasons set out hercin, US WA’s motion is denied.
(R. 31-1.)

RELEVANT FACTS

The parties involved in (his dispute include USWA, an unincorporated association

that represents some of the Smelter’s hourly employees, Longview, a Delaware limited liability

company and MAP, an Illinois limited liability company. Longview owns the Smelter located in

\g?