PRESENT: Hassell, C.J., Lacy, Keenan, Koontz, and Lemons, JJ., 

and Compton, S.J., and Whiting, R.J. 

STANDARD BANNER COAL CORPORATION 

 OPINION BY 

v. Record No. 021075 JUSTICE DONALD W. LEMONS 

 February 28, 2003 

RAPOCA ENERGY COMPANY, LP 

FROM THE CIRCUIT COURT OF DICKENSON COUNTY 

Donald A. McGlothlin, Jr., Judge 

 In this appeal, we consider whether several amendments and 

supplements to a fifty-year coal lease altered the lease to 

allow the lessee to extend the lease beyond its stated 

termination date without satisfying certain contractual terms. 

I. Facts and Procedural Background 

 On December 15, 1949, Standard Banner Coal Corporation 

(“Standard Banner”), as lessor, entered into a Lease and Rent 

Agreement (the “1949 Lease”) with Banner Splashdam Coal Company 

(“Banner Splashdam”), the predecessor of Rapoca Energy Company, 

LP (“Rapoca”), as lessee. The 1949 Lease provided for Standard 

Banner to lease “all the mineable and merchantable coal of the 

thickness of thirty-four (34) inches and up” on approximately 

5,480 acres in Dickenson County to Banner Splashdam for mining 

operations. The 1949 Lease further provided: 

 (1) This lease and rental agreement shall 

run for a period of fifty (50) years, or until 

all the mineable and merchantable coal of the 

thickness of thirty-four (34) inches and up on 

the leased premises has been mined and removed, 
whichever event takes place first, unless sooner 

terminated by forfeiture. 

. . . . 

 (5) The LESSEE covenants and agrees to mine, 

at least, seventy-five (75) percent of all 

mineable and merchantable coal from the leased 

premises of the thickness of thirty-four (34) 

inches and up, and to continue its mining 

operations until, at least, seventy-five (75) 

percent of the mineable and merchantable coal of 

such thickness on the leased premises has been 

mined, provided, however, that same can be 

accomplished within said fifty (50) years. 

 On November 21, 1969, Standard Banner and Banner Splashdam 

entered into the first of two supplemental agreements. The 1969 

Supplemental Agreement (the “1969 Supplement”) provided for the 

lease of “any and all coal” but made no mention of any depth 

specifications or mining minimums which would alter Paragraph 

(5) of the 1949 Lease. In addition to other less relevant 

modifications, the 1969 Supplement further contained the 

following provision: 

 6. The following shall be added to Paragraph 1 of 

the said original lease agreement: “Provided all 

of the terms and conditions of this lease have 

been properly complied with the lessee at its 

option may extend this lease for an additional 

term of twenty (20) years by giving the party of 

the first part written notice of its intention so 

to do not later that six (6) months prior to the 

otherwise expiration date. In the event of such 

extension all of the terms and conditions as set 

out in the said lease of December 15, 1949 and 

supplements but those subject to all of the terms 

stated in this agreement shall continue in full 

force and effect during such extension.[”] 

2
 After the 1969 Supplement and before the Second 

Supplemental Agreement (the “1984 Supplement”), which was 

effective as of November 1, 1983, Banner Splashdam assigned all 

its rights and responsibilities under the lease to Rapoca. The 

1984 Supplement, entered into by Standard Banner and Rapoca, 

contained the following provision that recognized the validity 

of the 1949 Lease and 1969 Supplement: 

 2. Acknowledgement of Validity of Prior 

Agreements. Lessor and Lessee recognize and 

acknowledge the validity and binding effect of 

the 1949 Lease and 1969 Supplement as modified by 

this [1984 Supplement]. 

In addition, the 1984 Supplement re-addressed the issue of 

extension of the lease at the end of fifty years in 1999: 

 13. Term and Payments after Exhaustion. The 

term of the lease shall run until December 15, 

1999, and, at the option of Lessee upon notice in 

writing to Lessor mailed or delivered by June 15, 

1999, for an additional period of 20 years 

following December 15, 1999, or, whether during 

the initial or option term, until all the 

mineable and merchantable coal has been mined and 

removed, whichever occurs first . . . . 

 By letter dated May 18, 1999, Rapoca submitted notice to 

Standard Banner that it intended to exercise its option 

“[p]ursuant to Numerical Paragraph 13, of [the 1984 Supplement]” 

to renew the 1949 Lease for an additional twenty years until 

December 15, 2019. In reply, by letter dated November 10, 1999, 

Standard Banner terminated the 1949 Lease effective at its 

original contractual termination date, December 15, 1999. 

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Standard Banner maintained that Rapoca “has failed to mine 75% 

of the coal 34 inches and above during the term of the lease.” 

Standard Banner further maintained that “while subsequent 

modifications have occurred, none have released RAPOCA from the 

explicit requirement to comply with the terms and conditions of 

the 1949 lease.” 

 On January 5, 2000, Rapoca filed a bill of complaint 

against Standard Banner alleging that the 1969 Supplement and 

1984 Supplement collectively eliminated the “requirement of the 

1949 Lease that 75% of the mineable and merchantable coal 34 

inches in thickness and up be mined within the original lease 

term.” In the alternative, Rapoca alleged that the effect of 

the two supplements was to “extend the time to mine 75% of the 

coal 34 inches in thickness and up to the end of the extension 

period if Rapoca chose to extend.” Rapoca asked the trial court 

to declare that its notice of lease extension was valid and that 

the lease remain in “full force and effect” throughout the 

extension period. 

 Standard Banner filed an answer to the bill of complaint 

denying the allegations and a motion for partial summary 

judgment, asking the trial court “to find that Rapoca’s 

extension was ineffective” because of lack of compliance with 

all of the terms and conditions of the lease, specifically the 

“75% requirement.” Rapoca responded with a motion for summary 

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judgment arguing that “[it] was not required to mine 75% of 

certain of the coal as a condition to exercising its right to 

extend the lease term.” 

 By Final Order dated January 30, 2002, relying on “the 

grounds stated in Rapoca’s Memorandum in Support[,]" the trial 

court granted Rapoca’s motion for summary judgment and denied 

Standard Banner’s motion for partial summary judgment. The 

trial court further ruled that “Rapoca’s notice of lease 

extension is valid and effective and the lease which is the 

subject of this controversy is in full force and effect.” 

Standard Banner appeals the adverse judgment of the trial court. 

II. Analysis 

 Standard Banner assigns error as follows: 

(1) The trial court erred by imposing upon 

Standard Banner a 20-year term extension of 

the 1949 Lease in favor of Rapoca Energy 

Company by ignoring or rendering useless 

language specifically preserved from the 

prior Lease and Supplement. 

(2) The trial court erred by deleting 

performance requirements preserved from the 

1949 Lease and 1969 Supplement which were 

neither specifically deleted nor 

inconsistent with the language of the 1984 

Supplement. 

(3) The trial court erred by failing to apply 

the well established rules of statutory 

construction which rendered language in 

favor of Standard Banner Coal Corporation 

meaningless by deleting it when the same had 

not been specifically deleted by the 1984 

Supplement to the 1949 Lease and 1969 

Supplement. 

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These assignments of error involve interpretation of the 

1949 contract and its various amendments. We are not bound by 

the trial court’s construction of contract terms, but rather, 

“[w]e have an equal opportunity to consider the words within the 

four corners of the disputed provision.” T.M. Delmarva Power, 

L.L.C. v. NCP of Virginia, L.L.C., 263 Va. 116, 119, 557 S.E.2d 

199, 200 (2002) (quoting Wilson v. Holyfield, 227 Va. 184, 188, 

313 S.E.2d 396, 398 (1984)). 

 “It is the function of the court to construe the contract 

made by the parties, not to make a contract for them.” Wilson, 

227 Va. at 187, 313 S.E.2d at 398. Where the terms in a 

contract are clear and unambiguous, the contract is construed 

according to its plain meaning. Bridgestone/Firestone, Inc. v. 

Prince William Square Assoc., 250 Va. 402, 407, 463 S.E.2d 661, 

664 (1995). No word or clause in a contract will be treated as 

meaningless if a reasonable meaning can be given to it and the 

parties are presumed not to have included needless words in a 

contract. D.C. McClain, Inc. v. Arlington County, 249 Va. 131, 

135—36, 452 S.E.2d 659, 662 (1995). Utilizing these principles 

of contract interpretation, we conclude that the trial court 

erred. 

Paragraphs (1) and (5) of the 1949 Lease, read together, 

required the lessee to mine within fifty years at least seventyfive percent (75%) of the mineable and merchantable coal of a 

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thickness of thirty-four (34) inches and up from the leased 

premises. The economic utility of a coal lease to a lessor 

depends upon the generation of royalties. While there may be 

minimum payments under the terms of a lease, the lessor is 

primarily interested in production which generates royalties. 

The 1969 Supplement to the lease “added” (in Paragraph (6)) 

a twenty-year extension provision to Paragraph (1) but did not 

alter the seventy-five percent (75%) exhaustion provision. In 

fact, that provision was reinforced by language conditioning the 

new extension provision upon “all of the terms and conditions of 

this lease [having] been properly complied with.” 

In 1984, the lease was supplemented again. In Paragraph 

(13) entitled “Term and Payments after Exhaustion” (emphasis 

added), the ability to extend the lease for a period of twenty 

years (as provided by Paragraph (6) of the 1969 Supplement) was 

restated and an additional potential termination date for the 

lease was added, namely the date when “all mineable and 

merchantable coal has been mined and removed.” Nothing in the 

1984 Supplement affected the seventy-five percent (75%) mining 

requirement borne by the lessee in the 1949 Lease. 

 Simply stated, it is clear that no extension under the 

lease may occur unless the seventy-five percent (75%) mining 

requirement has been met. The trial court erred in holding to 

the contrary. 

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Accordingly, we will reverse the judgment of the trial 

court and remand for further proceedings not inconsistent with 

this opinion. 

Reversed and remanded.

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