Pittsburg County Rural Water District No. 11 v. KPP Supply Co.

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
JAN 29 2003
TENTH CIRCUIT
PATRICK FISHER
Clerk
PITTSBURG COUNTY RURAL
WATER DISTRICT NO. 11, an
Oklahoma rural water district,
Plaintiff - Appellant,
v.
No. 01-7160
KPP SUPPLY COMPANY, a non- D.C. No. 01-CV-448-S
profit Oklahoma Corporation; KIOWA (E.D. Oklahoma)
POWER PARTNERS, LLC; JUNIPER
WATER COMPANY, LLC; POWER
RESOURCE GROUP, INC., DONCO,
LLC; TENASKA, INC.
Defendants - Appellees.
ORDER AND JUDGMENT *
Before KELLY, Circuit Judge, BRORBY, Senior Circuit Judge, and
MURPHY, Circuit Judge.
Plaintiff-Appellant Pittsburg County Rural Water District No. 11 (“RWD”)
appeals from the district court’s order granting summary judgment to Defendants-
Appellees KPP Supply Co. (“KPP Supply”) et. al. RWD argues that the district
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. This court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
court erred both procedurally by granting summary judgment before RWD had an
opportunity to respond and substantively by granting summary judgment when
genuine issues of material fact remain. Our jurisdiction arises under 28 U.S.C. §
1291, and we affirm.
Background
RWD is a nonprofit rural water district formed to provide water to
residential and commercial customers in a defined service area in Oklahoma.
Under 7 U.S.C. § 1926(b), a section of the Consolidated Farm and Rural
Development Act, RWD claims it is protected from encroachment of its service
area by a municipal corporation, other public body, or private franchise. When
KPP Supply was formed to provide cooling water to an electric power generating
plant within RWD’s service area, RWD filed a declaratory judgment action in
Oklahoma state district court seeking a finding that it had the sole right to furnish
commercial water in the service area. KPP Supply removed the case to federal
court under diversity jurisdiction.
In its motion to dismiss filed on August 10, 2001, KPP Supply argued that
RWD’s assignment to the Indian Nation Water Resources Corporation (“Indian
Nation”) of RWD’s exclusive right to serve commercial customers effectively
removed RWD’s statutory protection. This motion to dismiss was followed by a
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motion for summary judgment filed by KPP Supply on November 1, 2001,
addressing further issues and RWD’s proffered affirmative defenses. On
November 6, 2001, the district court notified the parties that it intended to convert
the August 10 motion to dismiss into a motion for summary judgment and gave
the parties until November 13, 2001, to file additional materials. On November
14, 2001, RWD requested additional time to respond to the November 1 motion
for summary judgment.
The district court issued its order granting the motion to dismiss (now
converted to a motion for summary judgment) on November 16, 2001, holding
that RWD had no standing to claim the exclusive right to supply commercial
water in the service area under 7 U.S.C. § 1926(b) because it had completely
assigned that right to Indian Nation. App. at 372-73. According to the court,
only one entity can hold an “exclusive right” under a contract and RWD assigned
that right away in its contract with Indian Nation. Thus, the court held that RWD
could no longer claim statutory protection.
Discussion
A. Grant of Summary Judgment Prior to Plaintiff’s Response
RWD claims that the district court erred by not allowing it to file its
response to KPP Supply’s motion for summary judgment before granting summary
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judgment. Aplt. Br. at 14. It is clear, however, from the record that the district
court ruled on an earlier motion to dismiss, albeit one converted to a motion for
summary judgment. Appellant, in short, seems confused as to the motion upon
which the court ruled.
It is true that the district court granted RWD an extension until December
5, 2001, to respond to KPP Supply’s motion for summary judgment filed on
November 1, 2001. App. at 169, 365. What is equally clear, however, is that the
district court converted the earlier motion to dismiss (filed on August 10, 2001)
into a motion for summary judgment, as permitted under Fed. R. Civ. P. 12, and
provided RWD a “reasonable opportunity to present all material made pertinent to
such a motion.” Fed. R. Civ. P. 12(b); see also App. at 352 (Minute Order giving
notice that court intended to convert motion to dismiss into motion for summary
judgment). The extension of time, then, went only to the later-filed motion for
summary judgment and not to the earlier motion to dismiss, a fact which RWD
itself seems to acknowledge. See App. at 364 (stating that “request for extension
goes only to the Summary Judgment Motion filed herein and not the Motion to
Dismiss previously filed by the Defendants”).
We are fully satisfied that the district court here acted properly in
“convert[ing] a Rule 12(b)(6) motion to dismiss into a summary judgment
proceeding in order to consider matters outside of the plaintiff’s complaint” and
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that the court “g[a]ve the parties notice of the changed status of the motion and
thereby provide[d] the parties to the proceeding the opportunity to present to the
court all material made pertinent to such motion by Rule 56.” Brown v. Zavaras,
63 F.3d 967, 969 (10th Cir. 1995) (quotations omitted). Because the district court
did not cite any of the arguments or evidence presented in the November 1 motion
for summary judgment, it is difficult to see how the court’s ruling could properly
be characterized as a ruling on that motion. 1 Instead, the court referred only to
the arguments of the August 10 motion to dismiss–a motion to which RWD had
already responded.
B. Summary Judgment
Turning, then, to the substantive aspects of this appeal, we review de novo
the district court’s converted summary judgment order. Schlicher v. Thomas, 111
F.3d 777, 779 (10th Cir. 1997). In doing so, we view the record in the light most
favorable to the party opposing summary judgment. McKnight v. Kimberly Clark
Corp., 149 F.3d 1125, 1128 (10th Cir. 1998). Summary judgment is appropriate if
there is no genuine issue of material fact and the moving party is entitled to
1
There is a passing reference in a footnote to the court’s order that it
acknowledges the filing of motions to dismiss and motions for summary judgment
by newly added defendants. This alone hardly suffices to show that the court was
thereby ruling on KPP Supply’s November 1 motion for summary judgment, and
the substantive arguments contained in the court’s order all go to the earlier
motion to dismiss.
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judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986);
Fed. R. Civ. P. 56(c).
The basis for the district court’s order is that RWD lacks standing to pursue
its claim since it no longer can demonstrate an “injury in fact,” because, in turn,
RWD no longer has the statutory protection of 7 U.S.C. § 1296(b). See Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). Before the district court was
the undisputed fact that RWD and Indian Nation had entered into an agreement
granting Indian Nation the exclusive right to supply commercial water in the
district. App. at 30. Nor is it disputed that RWD had the authority to so assign
its rights under Okla. Stat. tit. 82, § 1324.10(9).
RWD’s rejoinder to these undisputed and seemingly dispositive facts is that
Indian Nation was its agent but that RWD retained the rights and, thereby,
statutory protection from encroachment of its service area. The express language
of the contract and the elements of principal-agency law belie this contention and
no facts suggest otherwise. The language of the contract provides that Indian
Nation is “an independent contractor.” App. at 33. In order for an agency
relationship to exist, however, the principal must maintain some control over the
means employed by the agent. Such control is usually lacking where one of the
parties is an independent contractor. See Banning Transp., Inc. v. Vansickle, 527
P.2d 586, 588 (Okla. 1974) (“Under Oklahoma law, an ‘independent contractor’ is
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one who, exercising an independent employment contract to do work according to
his own methods and without being subject to control of his employer except as to
result of work.”).
RWD also raises a vague argument that the contract with Indian Nation is
ambiguous and offers evidence not presented before the district court to argue for
such ambiguity. Aplt. Br. at 8-10; App. at 376-77. RWD’s argument before the
district court was not that the contract was ambiguous but instead created an
agency relationship with Indian Nation. Because this ambiguity argument is
raised for the first time on appeal, we will neither consider it, see FDIC v. Noel,
177 F.3d 911, 915 (10th Cir. 1999), nor the new evidence offered in its support,
see Allen v. Minnstar, Inc., 8 F.3d 1470, 1475 (10th Cir. 1993).
AFFIRMED.
Entered for the Court
Paul J. Kelly, Jr.
Circuit Judge
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