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Pursuant to Minnesota law, "a waiver is 'the intentional relinquishment of a known right.'" Valspar Refinish, Inc. v. Gaylord's Inc., 764 N.W.2d 359, 367 (Minn. 2009) (quoting Carlson v. Doran, 252 Minn. 449, 456, 90 N.W.2d 323, 328 (1958)). "Waiver is generally a question of fact, and '[i]t is rarely to be inferred as a matter of law.'"
enXco is the U.S. Subsidiary of EDF Energies Nouvelles, a multi-national company that is involved with renewable energy products, including solar and wind projects. enXco has been involved in many renewable energy projects throughout the United States. Northern States Power Company's ("NSP"), a Minnesota corporation and a subsidiary of Xcel Energy, Inc. ("Xcel"), is an electric and natural gas company that provides energy to customers in Minnesota and the Dakotas. In October 2008, enXco and NSP entered into two contracts for the development and purchase of a wind energy generation project in North Dakota, referred to as the Merricourt Project. The first contract is the Developed Wind Project Purchase and Sale Agreement (the "PSA") wherein enXco agreed to sell its wind energy development assets, including real property, to NSP. The second contract is the Engineering Procurement and Construction Agreement (the "EPCA") through which NSP agreed to pay enXco $353,500,000 for engineering, procurement of necessary infrastructure, construction, commissioning, start-up and testing of the Merricourt Project. Once the parties closed on the PSA, ownership of the Merricourt site would be transferred to NSP. Pursuant to North Dakota law, a Certificate of Site Compatibility ("CSC") from the North Dakota Public Service Commission ("NDPSC), was required before construction for the Merricourt Project could begin. On March 17, 2011, the NDPSC discovered that the hearing on enXco's CSC application was held in the wrong county and that a new hearing would have to be held in the correct county. In addition to the fact that enXco did not obtain the CSC by the Long-Stop Date of March 31, 2011, the parties do not dispute that the PSA did not close on or before that date. By letter dated April 1, 2011, NSP informed enXco that it was exercising its right to terminate the PSA pursuant to § 10.1(a)(I) of that agreement. NSP stated its reasons for the termination, noting that the Closing had not occurred on or before the Long-Stop Date and because conditions precedent to Closing were not fulfilled or waived on or before the Long-Stop Date. In addition, NSP further notified enXco that because it was terminating the PSA, NSP was entitled to terminate the EPCA pursuant to § 13.8.2 of that agreement. Thereafter, enXco brought this action, asserting four counts: Declaratory Judgment; Breach of Contract (Specific Performance - PSA); Breach of Contract (PSA and EPCA); and Breach of Contract (Implied Covenant of Good Faith and Fair Dealing) (PSA and EPCA). By letter dated July 18, 2012, enXco notified NSP of its intent to withdraw its claim for specific performance (Count II).
Did NSP waive the CSC requirement?
The court held that because enXco did not obtain a final, non-appealable CSC prior to the Long-Stop Date, the PSA allowed NSP to either provide written notice of termination or waive the condition. The court found that the terms of the PSA required enXco to obtain the requisite CSC by the Long-Stop Date, and that NSP did not waive such requirement. The PSA explicitly requires that any waiver of a condition precedent be in writing. In fact, enXco executive Tristan Grimbert testified that NSP did not waive any requirement set forth in the PSA.The court found that, based on the unique facts of this case and the relevant terms of the contracts at issue, Minnesota law would not support use of the doctrine of temporary impracticability to support a claim for damages. The Court also found that enXco has not experienced a disproportionate forfeiture due to the termination of the contracts at issue. NSP has demonstrated there are no genuine disputes as to any material fact and that NSP is entitled to judgment as a matter of law on enXco's claims that NSP breached the PSA and/or EPCA when it terminated those contracts on April 1, 2011.