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COMMONWEALTH EDISON CO. v. DECKER COAL CO.

July 2, 1985

COMMONWEALTH EDISON COMPANY, PLAINTIFF,
v.
DECKER COAL COMPANY, DEFENDANT.



The opinion of the court was delivered by: Moran, District Judge.

MEMORANDUM AND ORDER

Commonwealth Edison Company's (Edison) motion for judgment on the pleadings raises the question whether Decker Coal Company (Decker) repudiated two contracts between the parties covering the purchase, mining and delivery of 462,000 tons of coal. Because it is far from clear as a matter of law that Decker repudiated the contracts, Edison's motion is denied.

FACTS

On June 4, 1982, Decker and Edison entered into two related contracts. In the Coal Lease Purchase Agreement, Edison agreed to purchase in five annual installments Decker's lease interest in 2.15 million tons of unmined coal. The Coal Mining Agreement gave Decker the exclusive right to mine and deliver the coal.

The coal covered by the agreements is known as "Reserve Coal". Edison was originally obligated to purchase, and Decker to mine and deliver this coal in the years 1981-1985, under a June 20, 1974 contract. The 1982 agreements modified this arrangement by (1) obligating Edison to purchase Decker's lease interest in the Reserve Coal on July 1 of the year in which it had originally been scheduled to receive delivery of the coal and (2) deferring mining and delivery of each annual installment for five years, to the 1986-1990 period.

The 1982 Coal Mining Agreement provided the following delivery schedule:

Year         Reserve Coal Delivered (tons)
1986                   370,000
1987                   308,000
1988                   548,000
1989                   462,000
1990                   462,000

The Agreement provided that the Reserve Coal "shall be scheduled for delivery on a monthly basis, ratably over the year for which it is scheduled." (Subpar. 2.)

  Subparagraph 1(b) of the Agreement provided that the year of
delivery of the Reserve Coal could be modified at Edison's option
upon proper notice. The provision at issue here reads:

   . . Edison may on notice to Decker on or before
  September 1 of the year six years preceding that in
  which deliveries are scheduled in accordance with
  subparagraph (a) above, accelerate in whole or in
  part the deliveries of Reserve Coal to the year five
  years preceding that in which it is scheduled, and
  with the consent of Decker, which shall not be
  unreasonably withheld, to any other year preceding
  that for which it is scheduled under subparagraph
  (a). . . .

There is no indication that the coal that Edison ordered on an accelerated basis was not to be delivered on a monthly basis ratably over the course of the year, in accordance with subparagraph 2.

In an August 22, 1984 letter to Decker, Edison stated that pursuant to subparagraph 1 of the 1982 Mining Agreement it elected to accelerate the delivery of the 462,000 tons of 1990 Reserve Coal to 1985. On August 31, 1984 Edison sent another letter to Decker which read in its entirety:

    Please refer to the Coal Mining Agreement dated
  June 4, 1982, as amended (1982 Mining Agreement)
  between Decker Coal Company and Commonwealth Edison
  Company.
    Edison in accordance with subparagraph 1(b) of the
  1982 Mining Agreement hereby elects to accelerate the
  deliveries of 462,000 tons ...

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