IPS Avon Park Corporation, et al v. Kinder Morgan, Inc., et al

[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-10547
____________________
IPS AVON PARK CORPORATION,
D E JONES CONSULTING, INC.,
Plaintiffs-Appellants,
versus
KINDER MORGAN, INC.,
EL PASO LLC,
MESQUITE INVESTORS, LLC,
Defendants-Appellees,
SHADY HILLS POWER COMPANY, LLC,
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2 Opinion of the Court 22-10547
Defendant.
____________________
Appeal from the United States District Court
for the Middle District of Florida
D.C. Docket No. 8:20-cv-01643-TPB-CPT
____________________
Before BRANCH and B RASHER , Circuit Judges, and WINSOR ,* District
Judge.
PER CURIAM:
Appellants D E Jones Consulting, Inc., and IPS Avon Park
Corporation held an equity interest in an electric power generation
plant they helped develop. When they later sold that interest, the
sales contract provided each would receive an additional $1.25 mil-
lion payment if the project were later expanded. Years later, and
after an unsuccessful effort to expand the facility, they demanded
the additional payment. The issue in this appeal is whether they are
entitled to that payment.
The trial court granted summary judgment against Jones
Consulting and Avon Park, concluding that under the sales con-
tract’s plain language, no additional payment was due. After
* Honorable Allen C. Winsor, United States District Judge for the Northern
District of Florida, sitting by designation.
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22-10547 Opinion of the Court 3
carefully reviewing the record, and with the benefit of oral argu-
ment, we affirm.
I. BACKGROUND
Shady Hills Power Company, LLC, formed to develop and
own a Pasco County electric power generation project. Jones Con-
sulting and Avon Park worked on the project, and each received a
2.5% interest in that LLC. They eventually sold that interest to
Shady Hills Holding, which held the remaining 95%.1
The parties recognized that future expansion would increase
the project’s value, and the sales contract included a future-pay-
ment provision to account for this. Under that provision, Jones
Consulting and Avon Park would each receive an additional $1.25
million “upon the issuance of notice to proceed with construction
of the Expansion of the Project under any engineering, procure-
ment and construction contract[2] related thereto.” The agreement
further provided that “an Expansion of the Project shall be deemed
1 Appellees are Mesquite Investors, LLC, which has assumed the obligations
under the payment provision; El Paso LLC, which is the obligor on the guar-
anty; and Kinder Morgan, Inc., which has assumed the liability associated with
the guaranty. The parties agree that these other entities—not Shady Hills
Holding—are those obligated to make any payments due under the payment
provision. For simplicity, we refer to these three collectively as “Kinder Mor-
gan.”
2 An “engineering, procurement and contract” or “EPC contract” is an indus-
try term referring to a specific kind of contract. DE 32-1 at 48:11-15; DE 35-1
at 13:24-14:7.
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4 Opinion of the Court 22-10547
to have occurred upon (i) the conversion of the Project or any por-
tion thereof from a simple cycle to a combined cycle configuration
or (ii) the addition of one or more combustion turbines to the site
of the Project.”
Years after the sale, Shady Hills Energy Center, LLC—a
Shady Hills Power affiliate—began efforts to construct, design, op-
erate, and maintain a new combined-cycle facility on adjacent
property. Though the new facility was never completed, Shady
Hills Energy entered certain contracts related to the plan. Four of
those contracts are at issue here: those with Duke Energy Florida
LLC, General Electric Company (“GE”), Aquatech International,
LLC, and The Industrial Company (“TIC”).
The Duke Energy contract was to connect the new facility
to Duke Energy’s power grid. The GE contract was for the sale of
power-generation equipment and related services. The Aquatech
contract was for the construction of a water treatment facility. And
the TIC contract was for the construction of a combined-cycle elec-
tric power generation facility.
After Jones Consulting and Avon Park learned about the ex-
pansion efforts, each demanded the $1.25 million payment. When
no payment came, they sued, alleging breach of contract and
breach of guaranty. Kinder Morgan removed the action to federal
court, where the parties later filed cross-motions for summary
judgment. The district court granted Kinder Morgan’s motion and
denied Jones Consulting and Avon Park’s motion. This appeal fol-
lowed.
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22-10547 Opinion of the Court 5
II. STANDARD OF REVIEW
This court reviews de novo the district court’s summary-
judgment decisions.
Klaas v. Allstate Ins. Co., 21 F.4th 759, 766
(11th Cir. 2021).
III. ANALYSIS
As the parties agree, Florida law governs in this diversity
case. Under Florida law, “[t]he elements of a breach of contract ac-
tion are (1) a valid contract; (2) a material breach; and (3) damages.”
Beck v. Lazard Freres & Co., LLC, 175 F.3d 913, 914 (11th Cir.
1999) (citing
Abruzzo v. Haller, 603 So. 2d 1338, 1340 (Fla. Dist. Ct.
App. 1992)). Breach is the only disputed element here. And that
turns on the interpretation of the contract.
The parties agree the contract here is unambiguous, so we
must “give effect to the plain language.”
Equity Lifestyle Props.,
Inc. v. Fla. Mowing & Landscape Serv., Inc., 556 F.3d 1232, 1242
(11th Cir. 2009) (quoting
Arriaga v. Fla. Pac. Farms, L.L.C., 305
F.3d 1228, 1246 (11th Cir. 2002)). We must “give meaning to each
and every word” and “avoid treating a word as redundant or mere
surplusage ‘if any meaning, reasonable and consistent with other
parts, can be given to it.’”
Id. (quoting
Roberts v. Sarros, 920 So. 2d
193, 196 (Fla. Dist. Ct. App. 2006)).
Jones Consulting and Avon Park’s principal argument is that
any notice to proceed related to construction of the project expan-
sion qualifies to trigger the payment provision. But the provision’s
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6 Opinion of the Court 22-10547
unambiguous language is narrower than that. The payment is due
“upon the issuance of notice to proceed
with construction of the
Expansion of the Project under any engineering, procurement and
construction contract related thereto.”3 The “related thereto” lan-
guage connects “construction of the expansion of the project” to
“any engineering, procurement, or construction contract.” Thus, a
qualifying notice to proceed must be both (i) for construction of
the expansion of the project and (ii) under an EPC contract related
to construction of the expansion. It is not enough to have a notice
to proceed for just anything “related to” project expansion.
With that interpretation in mind, we consider whether any
notice to proceed under any of the four contracts at issue sufficed
to trigger the payment obligation. As we explain below, the answer
is no.
A. Duke Energy
The parties dispute whether the Duke Energy contract is an
EPC contract. But that ultimately makes no difference. Either way,
there was no “notice to proceed with construction of the Expan-
sion of the Project.” The Duke Energy contract was to connect the
proposed new facility to Duke Energy’s existing power grid—not
for the addition of a turbine or for conversion of the facility to a
3 As noted above, “Expansion of the Project” is a defined term and occurs upon
“(i) the conversion of the Project or any portion thereof from a simple cycle
to a combined cycle configuration or (ii) the addition of one or more combus-
tion turbines to the site of the Project.”
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22-10547 Opinion of the Court 7
combined-cycle facility. It is true the contract relates to the expan-
sion project, but as discussed above, this is not enough.
B. GE
The parties also dispute whether the GE contract is an EPC
contract. Again, this makes no difference. The notice to proceed
was for the work authorized by the contract, which is the supply of
equipment (including turbines), and the provision of services (in-
cluding engineering services and project management services).
This is not construction.
Jones Consulting and Avon Park argue the engineering ser-
vices suffice because engineering is construction. But under any
plain-meaning interpretation, engineering services are not “con-
struction.” In short, the notice to proceed did not authorize con-
struction of the expansion of the project.
C. Aquatech
The Aquatech contract is an EPC contract, under which a
limited notice to proceed was issued.4 The limited notice to pro-
ceed was for construction of a water treatment facility—which is
neither an additional turbine nor the conversion of the facility into
a combined-cycle facility. It is not enough to argue, as Jones
4 For both the Aquatech and TIC contracts, Kinder Morgan maintains the lim-
ited notices to proceed do not qualify because they are not general notices to
proceed. Because they were, in any event, not qualifying notices to proceed,
we need not reach this alternative argument.
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8 Opinion of the Court 22-10547
Consulting and Avon Park do, “that the water treatment plant is
essential to the Expansion.” Perhaps it is essential, but there was no
notice to proceed
with the Expansion. So this likewise was no trig-
gering event.
D. TIC
The TIC contract was also an EPC contract, and several lim-
ited notices to proceed issued under it. But none was for construc-
tion of the expansion of the project: They authorized engineering
work, construction of a concrete pad for a fire pump, installation
of a fence, mowing, clearing trees, and more mowing. Only the
one about the concrete pad involved construction. And even that
one was for construction of a concrete pad for a fire pump—not
construction of an additional combustion turbine. As before, that
these activities may have related to the overall planned expansion
does not make them “notice[s] to proceed with construction of the
Expansion of the Project.”
* * * *
In short, there was never a notice to proceed with construc-
tion of the expansion of the project issued under any EPC contract.
Without such a notice, the payment provision was never triggered.
IV. CONCLUSION
The district court’s order granting summary judgment for
Kinder Morgan and denying summary judgment for Jones Consult-
ing and Avon Park is AFFIRMED.
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