Title: Pocahontas Mining v. Jewell Ridge Coal Corp.
Citation: N/A
Docket Number: 010110
State: Virginia
Issuer: Virginia Supreme Court
Date: January 11, 2002

PRESENT: Carrico, C.J., Lacy, Hassell, Keenan, Koontz, and 
Lemons, JJ., and Stephenson, S.J. 
 
POCAHONTAS MINING LIMITED LIABILITY COMPANY 
 
v.  Record No. 010110 
 
JEWELL RIDGE COAL CORPORATION 
                                        OPINION BY 
SENIOR JUSTICE ROSCOE B. STEPHENSON, JR. 
                                    January 11, 2002 
 
JEWELL RIDGE COAL CORPORATION 
 
v. Record No. 010411 
 
POCAHONTAS MINING LIMITED LIABILITY COMPANY 
 
FROM THE CIRCUIT COURT OF BUCHANAN COUNTY 
Keary R. Williams, Judge 
 
 
In these consolidated appeals from the same judgment, we 
determine whether the trial court erred in interpreting a 
provision of a lease. 
I 
 
Pocahontas Mining Limited Liability Company, formerly 
Pocahontas Mining Company Limited Partnership, L.L.P. 
(Pocahontas), filed a declaratory judgment proceeding against 
its lessee, Jewell Ridge Coal Corporation (Jewell Ridge), 
seeking to have the trial court declare the meaning of the 
following lease provision: 
Upon final termination of this lease, whether on 
October 31, 2001, prior exhaustion of mineable and 
merchantable coal, or upon termination of any 
extensions which Lessee may have made as above 
provided, the premises shall revert to Lessor and 
there shall remain intact upon the premises the 
preparation plant with all fixed machinery and fixed 
equipment necessary for its operation including, 
without limitation, all outside tracks, power lines, 
conveyor belts and equipment, and tipples, but not 
including any moveable equipment above-ground or 
below-ground and not including any under-ground power 
lines, substations, conveyor belts or other moveable 
under-ground equipment and machinery. 
Pocahontas alleged that this provision required Jewell Ridge to 
provide it with an intact and operational preparation plant upon 
termination of the lease.  In its grounds of defense, Jewell 
Ridge contended that the provision did not require it to leave 
an operational plant and that Pocahontas "does not actually 
want" the plant. 
 
Following a bench trial, the court ruled that Jewell Ridge 
was obligated to restore "to functional capabilities and 
operational standards" all fixed machinery and fixed equipment 
at the preparation plant "at a level consistent with health, 
safety, and environmental laws, rules, and regulations . . . in 
effect on the last date [Jewell Ridge] commercially operated the 
preparation plant."  The court expressly ruled that the lease 
provision did not require the preparation plant and its fixed 
equipment to be "upgraded to current health, safety and 
environmental laws, rules and regulations." 
Pocahontas and Jewell Ridge filed separate appeals.  We 
awarded both appeals. 
II 
 
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On November 1, 1941, the parties entered into a lease for 
the mining of coal on several thousand acres of land (the 1941 
Lease).  The initial term of the 1941 Lease was 30 years, and 
Jewell Ridge was given the right to renew the lease for an 
additional 30-year term. 
 
In 1969, the parties agreed to amend and extend the lease 
for another 30 years (the 1969 Amendment).  At the time of the 
1969 Amendment, there existed on the property a preparation 
plant, known as Jewell 11.  The plant was used to prepare coal 
for market by separating it from rock and other materials 
gathered during mining operations.  As stated previously, the 
1969 Amendment provided that, upon termination of the lease, 
"the premises shall revert to [Pocahontas] and there shall 
remain intact upon the premises the preparation plant with all 
fixed machinery and fixed equipment necessary for its 
operation." 
 
In 1979, Jewell Ridge closed the Jewell 11 plant because 
the plant had become obsolete and uneconomical to operate.  When 
the plant last operated, it was capable of processing coal from 
only one seam, known as the Raven seam.  It was incapable of 
processing coal from other seams available in the area, and 
almost all of the Raven coal in the vicinity of the plant had 
been mined.  Environmental problems, including water and air 
 
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pollution from the plant's operation, also contributed to its 
closure. 
 
When Jewell Ridge closed the plant in 1979, it drained the 
pumps and disconnected the power.  Thereafter, the physical 
condition of the plant deteriorated, and various parts and 
pieces of equipment were removed or vandalized.  The plant is no 
longer mechanically operational.  Jewell Ridge did not terminate 
the lease; therefore, the lease expired on October 31, 2001. 
III 
 
Jewell Ridge, in its appeal, contends that the lease 
provision at issue only precluded it from removing the 
preparation plant and certain of its fixed equipment from the 
premises at the expiration of the lease.  According to Jewell 
Ridge, the provision did not require it to operate, maintain, or 
repair the plant, or to leave an operational plant on the 
premises. 
 
Pocahontas contends, on the other hand, that, by giving the 
language of the provision its plain meaning, Jewell Ridge was 
required to leave "an operational plant complete with equipment 
necessary for its operation."  Further, in its appeal, 
Pocahontas contends that the trial court erred in ruling that 
the provision did not require that the plant be maintained and 
upgraded to current health, safety, and environmental laws, 
rules, and regulations.  Pocahontas asserts that this ruling 
 
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violates public policy and argues that a plant cannot be 
operated unless it complies with current laws, rules, and 
regulations. 
 
It is well established that, when the terms of a contract 
are clear and unambiguous, a court must give them their plain 
meaning.  American Spirit Insurance Co. v. Owens, 261 Va. 270, 
275, 541 S.E.2d 553, 555 (2001); Bridgestone/Firestone v. Prince 
William Square, 250 Va. 402, 407, 463 S.E.2d 661, 664 (1995).  A 
contract is not ambiguous simply because the parties to the 
contract disagree about the meaning of its language.  Dominion 
Savings Bank v. Costello, 257 Va. 413, 416, 512 S.E.2d 564, 566 
(1999).  Rather, ambiguity arises when its language can be 
understood in more than one way or refers to two or more things 
at once.  Westmoreland-LG&E Partners v. Virginia Power, 254 Va. 
1, 11, 486 S.E.2d 289, 294 (1997); Doswell Ltd. Partnership v. 
Virginia Power, 251 Va. 215, 222, 468 S.E.2d 84, 88 (1996).  
When determining a contract's plain meaning, the words used are 
given their usual, ordinary, and popular meaning.  D.C. McClain, 
Inc. v. Arlington County, 249 Va. 131, 135, 452 S.E.2d 659, 662 
(1995). 
 
We think the language in the subject lease provision is 
clear and unambiguous.  In giving the language its plain 
meaning, we conclude that the trial court correctly ruled that 
Jewell Ridge was obligated to leave a preparation plant that is 
 
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intact, with all fixed machinery and equipment necessary for its 
operation left on the premises.  The word "intact" is defined as 
"left complete or entire[,] . . .  physically and functionally 
complete[,] . . . [and] having no relevant component removed or 
destroyed."  Webster's Third New International Dictionary 1173 
(1981).  We think the term "necessary for [the plant's] 
operation" plainly means that the fixed machinery and equipment 
must be functional and capable of being run. 
 
We also agree with the trial court's ruling that, while 
Jewell Ridge was obligated to leave a functional plant, nothing 
in the provision at issue required Jewell Ridge to upgrade the 
plant to meet current health, safety, and environmental laws, 
rules, and regulations.  A "functional plant" is one that will 
perform in a physical sense, but not necessarily in a legal 
sense.  If Pocahontas had wanted to require Jewell Ridge to 
leave a preparation plant that complied with current laws, 
rules, and regulations, it could have expressly provided for 
such.  It did not do so. 
 
Pocahontas contends, however, that such a requirement is 
implied because a plant cannot be operated unless it complies 
with existing law.  It is significant, however, that the lease 
did not require Jewell Ridge to operate the plant until the 
lease expired.  If Jewell Ridge could cease operating the plant 
during the lease term, it would be illogical to require it to 
 
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upgrade the plant to meet current law requirements upon final 
termination of the lease. 
 
A court must interpret a contract as it is written.  It 
cannot make a new and different contract.  Chawla v. 
BurgerBusters, Inc., 255 Va. 616, 620, 499 S.E.2d 829, 831 
(1998). 
 
In reaching this conclusion, we reject Pocahontas' 
assertion that the ruling by the trial court violates public 
policy.  The lease provision at issue contains no language 
violative of public policy, and the cases cited by Pocahontas do 
not support its assertion. 
IV 
 
In sum, we hold that the trial court correctly interpreted 
the lease provision.  Upon termination of the lease on October 
31, 2001, Jewell Ridge was obligated to leave intact a 
functional preparation plant.  It was not required to upgrade 
the plant to meet current health, safety, and environmental 
laws, rules and regulations.  In failing to leave a functional 
plant, Jewell Ridge breached the contract. 
 
Therefore, we will affirm the trial court's judgment with 
one modification.  If Pocahontas institutes an action for breach 
of contract against Jewell Ridge, any damages for the breach 
shall be determined as of October 31, 2001, the final 
 
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termination date of the lease, and not as of 1979, the date 
operation of the plant ceased. 
 
Accordingly, the trial court's judgment will be modified 
and affirmed. 
Modified and affirmed, as modified. 
 
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