Court Opinion

ID: 3063650
Source: CourtListenerOpinion
Date Created: 2015-10-14 21:16:14.634549+00
Date Added: 2024-06-11T12:45:18.276816
License: Public Domain

[DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS
                                                                 FILED
                     FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
                       ________________________ ELEVENTH CIRCUIT
                                                             APR 3, 2009
                              No. 08-16668                 THOMAS K. KAHN
                          Non-Argument Calendar                CLERK
                        ________________________

                 D. C. Docket No. 08-00135-CV-3-RS-EMT

TAMINCO NV,

                                                            Plaintiff-Appellant,

                                   versus

GULF POWER COMPANY,

                                                           Defendant-Appellee.

                        ________________________

                 Appeal from the United States District Court
                     for the Northern District of Florida
                       _________________________

                               (April 3, 2009)

Before CARNES, WILSON and PRYOR, Circuit Judges.

PER CURIAM:

     Taminco appeals the summary judgment in favor of Gulf Power Company.
The district court concluded that Taminco was obligated, as a matter of law, to pay

Gulf Power monthly a congeneration service charge. We affirm.

                                  I. BACKGROUND

      The dispute between Taminco and Gulf Power arises from their cogeneration

and energy services agreement. Taminco is a Belgian corporation that is a

successor in interest to the original party to the agreement, Air Products Chemicals,

Inc. Taminco operates a chemical manufacturing facility in Pace, Florida, that

purchases electricity from Gulf Power. Gulf Power is a utility company that

generates and transmits electricity to northwest Florida.

      In 1997, Gulf Power and Air Products executed a cogeneration and energy

services agreement to allow Gulf Power to construct a cogeneration facility on the

grounds of Air Products. The cogeneration facility uses three combustion turbines

powered by natural gas to produce electric energy and thermal energy, which could

be harnessed to produce steam. The arrangement between Gulf Power and Air

Products was mutually beneficial: Air Products received electric and thermal

energy, and Gulf Power generated additional electricity and could sell to third

parties, subject to the first right held by Air Products, any unused thermal energy.

      The agreement contained reciprocal duties. The agreement required Air

Products to purchase “all of [its] requirements for electricity for at least the first 30

                                            2
megawatts of actual electric demand” from Gulf Power. Air Products also was

required to provide natural gas to “operate the Cogeneration Facility.” “In return

for” the natural gas “and payment of [a] Cogeneration Services Charge,” Air

Products was “entitled to the first right to all thermal energy output” to “produc[e]

steam for [its] use or other disposal[,]” and the “option to provide additional

volumes of natural gas to the Cogeneration Facility . . . to increase the amount of

steam . . . for [its] use or other disposal.” In 2006, Air Products assigned its

interest in the agreement to Taminco.

      In January 2008, Taminco notified Gulf Power that it no longer wanted to

exercise its first right to all thermal energy and intended to terminate payment of

the cogeneration services charge. Gulf Power responded that Taminco was

obligated to pay the charge for the term of the agreement.

      Taminco filed a complaint for a declaratory judgment that it was not

obligated to pay Gulf Power the cogeneration services charge. Taminco alleged

that payment of the charge was “optional at [its] discretion.” Both Taminco and

Gulf Power moved for summary judgment and alleged that the unambiguous

language of the agreement supported their respective positions.

      The district court granted summary judgment in favor of Gulf Power. The

district court ruled that Taminco could decline to exercise its first right to thermal

                                           3
energy, but it did not have the right to terminate its payment of the cogeneration

services charge. The district court based its decision on four provisions of the

agreement: article 8.1, which stated that the charge was “determined monthly”;

article 15, which provided that the agreement was “in full force and effect” for

twenty years; article 3.9, which delineated what circumstances allowed Taminco to

terminate the agreement; and article 10, which excluded from the definition of

force majeure “changes in the . . . operations.”

                          II. STANDARDS OF REVIEW

      We review the grant of a motion for summary judgment de novo and view

the evidence in the light most favorable to the party that opposes the motion.

Cotton v. Cracker Barrel Old Country Store, Inc., 434 F.3d 1227, 1230 (11th Cir.

2006). Summary judgment should be entered where there is no genuine issue of

material fact and the moving party is entitled to judgment as a matter of law. Fed.

R. Civ. P. 56(c).

                                 III. DISCUSSION

      Taminco argues that the district court misinterpreted the cogeneration and

energy services agreement. Taminco contends that the plain language of the

agreement establishes that it is not obligated to pay Gulf Power the cogeneration

service charge. We disagree.

                                           4
      Under Florida law, which the parties agree applies to this appeal, a court

determines the meaning of a contract based on “a general view of the whole

writing, with all of its parts being compared, used, and construed, each with

reference to the others.” Paddock v. Bay Concrete Indus., Inc., 154 So. 2d 313,

315 (Fla. Dist. Ct. App. 1963). The language of those provisions “‘must be given

[their] plain meaning.’” Waksman Enters., Inc. v. Oregon Props., Inc., 862 So. 2d

35, 40 (Fla. Dist. Ct. App. 2003) (quoting Interfirst Fed. Sav. Bank v. Burke, 672

So. 2d 90, 92 (Fla. Dist. Ct. App. 1996)). “It is not within the power of a court to

make a contract for the parties, and an unambiguous agreement must be enforced

in accordance with its terms.” Paddock, 154 So. 2d at 316.

      The cogeneration and energy services agreement granted to Taminco a right

of first refusal. Taminco refers interchangeably to the right as one of first refusal

and as an option, but there is a marked difference between the two rights. See

Steinberg v. Sachs, 837 So. 2d 503, 505 (Fla. Dist. Ct. App. 2003) (distinguishing

between a right of first refusal and an option); Coastal Bay Golf Club, Inc. v.

Holbein, 231 So. 2d 854, 857 (Fla. Dist. Ct. App. 1970) (same). An option is an

offer made irrevocable based on some consideration and when extended must be

accepted and performed within the time specified and according to the terms of the

offer. 25 Richard A. Lord, Williston on Contracts, § 67.85 (4th ed. 2002). A right

                                           5
of first refusal is conditioned on the decision of the offeror to sell and “has no

binding effect” until the good or service becomes available, at which point the

offeror must extend to the offeree the first opportunity to purchase. Id.

      Gulf Power extended to Taminco a continuous right of first refusal of

thermal energy produced by the cogeneration facility. Taminco’s right to first

refusal is based on its supply of natural gas to the facility and the payment of the

cogeneration services charge. Although Taminco can accept or decline to exercise

its right of first refusal, the agreement establishes that the precondition to pay the

charge is mandatory.

      The agreement requires Taminco to make a monthly payment comprised of

the charge reduced by available credits based on five provisions of the agreement:

article 8.1, which defines the charge; article 2.2, which outlines Taminco’s rights

for payment of the charge; article 8.5, which discusses the separation of insurance

from the “monthly CSC”; and articles 3.8 and 7.4, which allow adjustments to the

charge. Taminco argues that two provisions, articles 8.1 and 2.2, establish that

payment of the charge is optional, but that argument is inconsistent with the plain

language of the agreement. Taminco relies on language in article 2.2 that grants it

the “first right to all thermal energy output of the combustion turbines” for

payment of the charge, but Taminco disregards that the right of first refusal and

                                            6
payment of the charge are tied to an ongoing duty to “supply . . . fuel required to

operate the Cogeneration Facility.” Taminco argues that article 8.1 conditions “the

first right to all thermal energy output from the Cogeneration Facility” on payment

of the charge, but Taminco glosses over language that the charge is “determined

monthly for each month” according to a formula and in an amount that “shall not

be less than zero.” Article 7.4 grants Taminco an adjustment to the charge

“otherwise applicable for that month pursuant to section 8.1” for sales by Gulf

Power to third parties. Article 8.5 “unbundles” from the charge the cost of

insurance to minimize and stabilize Taminco’s “monthly expense.” If the

cogeneration facility fails to produce sufficient thermal energy, Taminco is entitled

under article 3.8 to a “retroactive adjustment to the cumulative [charge] paid” and a

“refund[]” for overpayment.

                                IV. CONCLUSION

      The summary judgment in favor of Gulf Power is AFFIRMED.

                                          7