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Transworld Aggregate, LLC, Duraport Newfoundland Limited, and the v. Western Logging Limited

September 26, 2011

TRANSWORLD AGGREGATE, LLC, DURAPORT NEWFOUNDLAND LIMITED, AND THE ALESSI ORGANIZATION, INC. PLAINTIFFS-APPELLANTS,
v.
WESTERN LOGGING LIMITED, MARINE CONTRACTING LIMITED, MARINE CONTRACTORS, INC., GLYNN PIKE, AND DARYL BENNETT, DEFENDANTS-RESPONDENTS,
AND DENNIS DOLOMOUNT, DEFENDANT.



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-708-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued November 4, 2010

Before Judges R. B. Coleman, Lihotz and J. N. Harris.

Plaintiffs Transworld Aggregate, LLC (Transworld), Duraport Newfoundland Limited (Duraport) and the Alessi Organization, Inc. (Alessi) (collectively plaintiffs or Duraport*fn1 appeal from a February 24, 2010 order granting the motion of defendants Western Logging Limited (Western Logging), Dennis Dolomount,*fn2

Marine Contracting Limited, Marine Contractors, Inc., Glynn Pike and Daryl Bennett (collectively defendants or Western Logging) to enforce the settlement entered between the parties and to terminate the parties' Terminal Agreement dated March 4, 2009. Plaintiffs also appeal from the denial of their cross-motion to declare the Settlement Agreement void and relist the matter for trial. Plaintiffs contend the Settlement Agreement never went into effect because an express contingency - plaintiffs' receipt of and satisfaction with a timely Tenant Estoppel Certificate -was never met. Contrary to plaintiffs' contentions, the motion court held in a written opinion that plaintiffs "were in total control of the 'contingency,'" and "[d]ue to plaintiffs' own actions and/or inactions, plaintiffs cannot complain that the Estoppel Certificate was not timely or satisfactory." We agree and, accordingly, affirm the order enforcing the Settlement Agreement and terminating the Terminal Agreement.

This matter arises out of a complaint filed by plaintiffs in January 2003. After more than seven years of litigation, and the case having been called for trial, the parties entered into a Settlement Agreement, the terms of which were orally placed on the record on March 4, 2009. Subsequently, the settlement was memorialized in a written agreement deemed entered into as of March 4, 2009 (the Settlement Agreement). In accordance with the Settlement Agreement, the complaint and counterclaim of the underlying action were to be dismissed, as were the claims and counterclaims asserted by the parties against each other in actions pending in the Supreme Court of Newfoundland and Labrador, Canada. The agreement provided:

The Settlement Agreement provided, among other things, that the parties would enter into a separate Terminal Agreement to address certain ownership and shipping rights relating to a facility known as Turf Point in Newfoundland, Canada.

2. Simultaneous with the execution of this Agreement, Western Logging and Duraport agree to enter into a Terminal Agreement concerning the ownership and certain rights to certain real property, including all real property owned and leased by Western Logging in Newfoundland, Canada, including a "haul road," water lots, property owned in fee simple, and the facility, improvements and fixtures thereon, and the equipment used in connection with the facility commonly known as ("Turf Point") as further described in the form agreement attached hereto as Exhibit A ("Terminal Agreement"). The parties agree that a short form contract describing that the parties have entered into a contract (the Terminal Agreement) pursuant to which Duraport shall purchase the property, and that the terms of the contract shall run with the land will be drafted, signed by Western Logging and Duraport and recorded by Duraport at its own expense, and Western Logging specifically agrees to execute same within a reasonable period of time.

Paragraph 1 of the Settlement Agreement specifies that the settlement is subject to a contingency. That paragraph more fully describes the contingency as follows:

The contingency is receipt from AUR Resources, Inc. and its assignee Teck Cominco Limited [Teck] an executed tenant estoppel letter or some other reasonably acceptable document confirming that [Teck] does not consider the purchase and assignment of the Turf Point Property . . . by Western Logging to Duraport to be a transaction that is subject to [Teck's] right of first refusal. This contingency shall be satisfied within a reasonable period of time in light of the parties' efforts and conduct.

As contemplated by the Settlement Agreement, the parties entered into the Terminal Agreement, which was also dated March 4, 2009. The Terminal Agreement included a confidentiality provision, but consistent with Paragraph 1 of the Settlement Agreement, Paragraph 11 of the Terminal Agreement states, in pertinent part, that disclosure to Teck was permitted for the purpose of obtaining a tenant estoppel and confirmation that Teck's right of first refusal was not implicated or triggered. More specifically, the confidentiality clause provides:

11. Confidentiality. During the term of this Agreement, neither Western Logging nor Duraport shall cause or allow the terms of this Agreement to be disclosed to anyone other than each other, and their respective attorneys and accountants, and banks/lenders or those individuals or entities that may finance Duraport's operations or its acquisition of the Turf Point facility. Duraport may disclose the terms of this Agreement to its bank, lender or other person/entity providing Duraport financing. The parties further agree that this Agreement and its terms shall be disclosed to AUR Resources, Inc[.] and its assignee Teck Cominco, Limited for the purpose of obtaining a tenant estoppel and confirmation satisfactory to Duraport that AUR Resources, Inc. and Teck Cominco, Limited do not consider any of the transactions contemplated by this Agreement to implicate or trigger any right of first refusal contained in their Port Facilities Agreement with Western Logging. This shall be a condition of this Terminal Agreement and the Settlement Agreement. In addition, an update of the tenant estoppel and confirmation at the time of the closing of the purchase of Turf Point facility contemplated herein.

The Terminal Agreement declares that its term is for a period of ten years commencing on May 1, 2009. Paragraph 7 of the Terminal Agreement specifies that the shipping season (from Turf Point) is from April 1 through December 1, and Paragraph 9 of the Terminal Agreement provides in relevant part:

During the term of this agreement, Duraport shall ship a minimum of three (3) Handy Max Vessels loading approximately 30,000-35,000 metric tons (each ship) per year. If Duraport fails to ship the minimum required herein in any year, all of Duraport's rights under this agreement shall be waived and this agreement shall terminate.

Paragraph 10 of the Terminal Agreement forbids Western Logging and all companies with which it is directly or indirectly associated from competing with Duraport or its operations for the term of the Terminal Agreement. Further, a non-compete clause included in the agreement provides that Western Logging may not directly or indirectly sell, mine, distribute, ship, cause to be shipped, or otherwise transport construction aggregate material including sand, stone and cement to any person or entity located in Massachusetts, Rhode Island, Connecticut, New York, New Jersey and Pennsylvania, designated as the "Restricted Zone."

Prior to the execution of the Settlement Agreement, counsel for Western Logging forwarded to plaintiffs' counsel, a March 4, 2009 e-mail from Peter Rozee, Senior Vice President of Commercial Affairs for Teck. In that e-mail, Rozee indicated, based upon the settlement as described to him by plaintiff's counsel, that Teck acknowledged the transaction would not trigger first refusal if the terms of the settlement provide that as a condition of Duraport's proposed purchase of Western Logging's interest in the port facility, Duraport agreed to assume and honor all obligations of Western Logging and respect all rights of Teck/AUR under all agreements in place between Teck/AUR and Western Logging in connection with the port and the improvement made thereto.

The Settlement Agreement was executed as of March 4, 2009. On March 23, 2009, plaintiffs' counsel advised Western Logging that he expected to send out a Tenant Estoppel Certificate for Teck sometime that week. Having not received the Tenant Estoppel Certificate in that timeframe, Western Logging inquired in two letters dated April 6 and June 18, 2009 as to the status of the document. Four-and-one-half months after the Settlement Agreement was executed, and three-and-one-half months into the 2009 shipping season, plaintiffs forwarded, on July 16, 2009, a copy of a preliminary draft of the Tenant Estoppel Certificate for Teck's review. On September 11, 2009, ...


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