Knox Energy, LLC v. Gasco Drilling, Inc. (258 F. Supp. 3d 709, 2017)

OPINION AND ORDER

James P. Jones, United States District Judge

In this breach of contract action arising under Virginia law, a jury found for the plaintiff and counterclaim defendants, Knox Energy, LLC and Consol Energy, Inc., on the ground that there was no mutual assent to enter into the alleged contract. The defendant and counterclaim plaintiff, Gaseo Drilling, Inc.,’ has moved for a new trial pursuant to Rules 59(a) and 60(b)(3) of the Federal Rules of Civil Procedure. For the reasons that follow, I will deny the Motion for New Trial.

I. Procedural History.'

Knox Energy, LLC (“Knox”), a natural •gas producer, filed this action seeking a declaratory judgment that no contractual relationship existed between it and Gaseo Drilling, Inc, (“Gaseo”), a gas drilling company. Gaseo in turn filed, a Counterclaim against both Knox and an additional party, Consol Energy, "Inc.' (“Consol”). In its Counterclaim, Gaseo sought recovery of more than $14 million under an expired drilling contract that Gaseo claimed had been resurrected by a form addendum that Consol sent to Gaseo. Without objection, I ruled prior .to trial that Gaseo would be treated as a plaintiff and had the burden of proof as to the existence of an enforceable, contract. ......

This case was first tried in September 2014. At that trial, at the close of Gasco’s case-in-chief, I granted judgment as a matter of law pursuant to Rule 50(a) in favor of Knox/Consol. Knox Energy, LLC v. Gaseo Drilling, Inc., 54 F.Supp.3d 489, 501 (W.D. Va. 2014) (holding that no reasonable jury could find that there was mutual assent to the alleged contract). On appeal by Gaseo, the court of appeals reversed, finding that, “[gjiven this mix in the evidence ... without weighing the evidence or making credibility determinations,” the issue of mutual assent to the alleged contract was a matter for the jury. Knox Energy, LLC v. Gasco Drilling, Inc., 637 Fed.Appx. 735, 739 (4th Cir. 2016) (unpublished).

In its. opinion, the court of appeals recited the basic facts as follows:

In 2008, Consol, a natural gas producer, and Gaseo, a drilling company, entered into a drilling agreement that lasted for two years, or until Gaseo completed its work. Under the contract, Consol agreed to pay a- “standby” rate of $10,800 per day, per di’illing rig, for time when Gaseo was on site but not actively drilling. While drilling, Gaseo received an even higher fee. Additionally, the 2008 agreement contained a special “take-or-pay” provision, which guaranteed that Gaseo would make two rigs available for Consol whenever it, requested work. Whether or. not Gaseo was on site,. it provided that Consol would pay the standby rate for 328 days of each twelve-month period. In May 2010, the parties amended the agreement to-release one of the rigs from the contract. The remaining rig completed its work, and the contract terminated, in July 2010.

• The essential dispute in this case is whether Gaseo and- Consol reinstated that 2008 contract in . 2011. Qn June 6, 2011, Consol emailed Gaseo a document titled “Addendum to Contract Purchase Order.” Clyde Ratliff, Gasco’s CEO, signed the Addendum and returned it on June 14, 2011. Consol returned the countersigned Addendum to Gaseo on July 29,. 2011. The Addendum stated that Gaseo and Consol “agree to modify the ‘term’ provision of the contract purchase order to read as follows:” that the new “term of this agreement shall be for one year from the date set forth above and shall be automatically extended for one year terms unless either party gives written notice” of termination at least thirty days before renewal. The Addendum was “effective” on, June 13, 2011. The “contract purchase order” referenced in the Addendum was the 2008 drilling agreement, “PO No. 5600000439.”

For a year after signing this Addendum, Consol did not ask Gaseo to drill, and neither party communicated about the Addendum. Then, in June 2012, Gas-eo sent Consol a $7,084,800 bill for 328 days of take-or-pay standby charges. Contending that it had' mistakenly signed-the Addendum, Consol refused to pay. Additionally, Consol filed this diversity action for declaratory relief. In response, Gaseo sent Consol a second $7,084,800 invoice as liquidated damages for early termination, and counter-sued for breach of contract.

Id. at 736-37. The court of appeals held that “[i]f Gaseo knew or should have known that Consol made a mistake, we agree there was no mutual assent. But Gaseo presented sufficient evidence that, if credited, a reasonable jury could have found in its favor.” Id. at 738.

The court of appeals affirmed several rulings I had made prior to the first trial. Id. at 739-40. These included my ruling, based on an addendum dated May 10, 20Í2, that Gasco’s potential recovery was limited' to standby charges associated with only one drilling rig.- Op. & Order, Sept. 4, 2014, ECF No. 236. I had also declined to exclude parol evidence of Knox/Consol’s mistake, which Gaseo argued was irrelevant, confusing, and misleading. In affirming that ruling, the court of appeals found that “Consol had to present some evidence of a mistake in order to prove that its mistake was obvious to Gaseo.” 637 Fed. Appx. at 740.' The court of appeals further noted that “both parties proposed essentially the same jury instructions, that ‘[i]f a person’s words or actions warrant a' reasonable person in believing that he intended real agreement, his contrary, but unexpressed, state of mind is immaterial.’ Thus the jury would have been instructed that its decision on mutual assent must rest on the objective circumstances.” Id.

After the second trial in this case, the jury found for Knox/Consol. The first question on the special verdict form read,

1. Has Gaseo proved by a preponderance of the evidence that Gaseo and Consol had a meeting of the minds — mutual assent — such that the expired 2008 drilling contract was reinstated by the Addendum, with a distinct and common intent and understanding by both parties as to all of its material terms?

Verdict Form, ECF No. 409. The jufy checked “No” and, in accordance with the form’s instructions, did not answer the remaining questions.

II. Trial Evidence.

The following is a summary of the evidence presented at the second trial.

In 2011, Clyde Beaver “Ben” Ratliff was the president and part owner of Gaseo. Ben Ratliffs brother, Jerry Ratliff, and Ben’s two sons, Chris and Brian Ratliff, were also part owners of the company. In early 2008, at its peak, Gaseo employed about 180 people.

Using an International Association of Drilling Contractors (“IADC”) contract form titled “Drilling Bid Proposal and Daywork Drilling Contract — U.S.,” Knox/Consol and Gaseo entered into a drilling contract effective January 10, 2008. The contract covered natural gas horizontal wells in eastern Tennessee in the first quarter of 2008. A daywork drilling contract is different from a footage drilling contract, which the parties would have used for drilling vertical wells. The day rate stated in the January 2008 contract was $10,800 per day without drill pipe and $11,800 per day with drill pipe. The January 2008 contract also stated a standby rate of $10,800 per day. The standby rate was to be paid even when Gaseo was not performing any drilling. In the “Special Provisions” section of the contract form, the parties had stated certain additional terms, including that the vertical part of the well would be drilled at a footage rate of $21.50 per foot.

The January 2008 contract had a term of one year, hut the parties cancelled that contract before its term ended. In June 2008, Knox/Consol and Gaseo entered into a take-or-pay contract because Knox/Con-sol wanted a guarantee that rigs would be available to drill anytime they were needed. “Take-or-pay” means that Knox/Consol agreed to pay Gaseo to have rigs and personnel ready to drill for a specified number of days per year, regardless of whether any drilling actually took place. This new 2008 take-or-pay contract (“2008 Drilling Contract”) differed from the January 2008 contract it superseded in that the earlier contract did not entitle Gaseo to any payment-prior to when it was called to mobilize its equipment and go to the well site. The take-or-pay provision benefited Gaseo by guaranteeing that Gaseo would receive payment for a specified number of days, but it disadvantaged Gaseo by preventing it from using the dedicated rigs to perform other drilling work at higher rates.

The 2008 Drilling -Contract used the same IADC form that the parties had used for the earlier contract. The take-or-pay provision, written into the Special Provisions part of the form, reads:

Operator shall pay for 328 days per 12-month period, at the following rates per day, per rig:

$ 13,500.00/ with pipe

$ 12,000.00/ without pipe

$ 10,800.00/ standby

Contractor must have rig available to work or these rates will be adjusted for days rig is not available to work. The days that -rig is drilling top hole on Footage Rate will be deducted from the 328 day total.

Gaseo Trial Ex. 2 at 6, ECF No. 387-2.

The 2008 Drilling Contract covered a larger geographical area than the earlier contract — eastern Tennessee, eastern Kentucky, Virginia, and southern West Virginia. Gaseo drilled about five wells under the January 2008 contract, and about eight additional wells under the 2008 Drilling Contract during the rest of 2008:

In February 2009, Knox/Consol and Gaseo amended the 2008 Drilling Contract to reduce the standby rate from $10,800 per day per' rig to $6,800 per day per rig. Gaseo received nothing in exchange for reducing the rate. The amendment provided that when drilling recommenced, the standby rate would increase to $10,800. Gaseo resumed drilling in September 2009, but Ben Ratliff did not begin charging the higher standby rate because he forgot about the rate increase. Knox/Consol did not notify Gaseo of the billing mistake and has never offered to pay the uncharged amounts.

Gaseo and Knox/Consol amended the 2008 Drilling Contract again in May 2009 to reduce the day rate from $12,500 to $11,500. The parties also changed the footage rate from $22.50 to $20.50. Gaseo did not receive any consideration in exchange for reducing these rates. In May 2010, while the 2008 Drilling Contract was still in effect, the parties again amended the contract to require one of the drilling rigs to continue drilling until the five listed wells were' completed, which occurred in August 2010. This May 2010 amendment had the effect of extending the term of the 2008 Drilling Contract for a little more than one month. Gaseo did not submit a bid for this contract extension. The amendment also released the other drilling rig from the contract after the completion of a specified well, meaning that Knox/Consol would no longer have to pay the standby rate for that rig.

While the' 2008 Drilling Contract was in effect, Ben Ratliff prepared an invoice after Gaseo finished drilling each well. His secretary would then contact Knox/Consol to obtain a purchase order number for the invoice. Knox/Consol sent a different purchase order number for each invoice, along with a lengthy list of terms and conditions that Ben Ratliff was required to sign before Knox/Consol would pay the invoice. All of the seventeen invoices Gaseo issued under the 2008 Drilling Contract contained a unique purchase order number. •

In February 2009, Randy Albert and Kent Wright of Knox/Consol instructed Gaseo to submit invoices monthly. Ben Ratliff testified that Gasco’s normal practice was to bill for standby time at the. end of the year and deduct any days in which the rigs had been used for drilling. In accordance with the instruction from Albert and Wright, Gaseo submitted monthly invoices under the 2008 Drilling Contract.

In late 2010, Knox/Consol invited Gaseo to submit a bid for drilling in 2011. The person who sent the, bid request, and the person to whom Gaseo submitted a bid, was Cecil Sagraves, Contract Sourcing Specialist for Consol. The contract form that Knox/Consol sent to Gaseo when soliciting the bid indicated that the contract would cover eastern Tennessee and eastern Kentucky. The bid solicitation sought bids on a footage basis. Knox/Consol instructed bidders to bid the project based on using a three-person crew, whereas the 2008 Drilling Contract had provided for a four-person crew. Knox/Consol also indicated that the new contract would not provide for a standby rate.

Gaseo submitted two bid proposals. In the first, Gaseo proposed day rates of $11,800 without pipe and $12,300 with pipe, as well as a footage rate, for a four-person crew. The $12,300 day rate was $200 less than the modified day rate under the just-completed 2008. Drilling Contract. Gasco’s first proposed bid also included a standby rate of $10,800, despite Knox/Consol’s indication that this contract would not include a standby rate. Gasco’s second proposal stated day rates of $12,500 without pipe and $12,850 with pipe; the size of the crew was not specified. The second proposal again included a standby rate of $10,800. In its second proposal, Gaseo stated that the term would be one year from January 2011 with no extensions or renewals. The proposal did not include an early termination penalty, nor did it include any take- or-pay provision. Ben Ratliff testified that because Knox/Consol did not request- a take-or-pay provision, he knew he would likely be wasting his time by including one in the proposal, given the state of the natural gas market at the time.,

Gaseo did not win the contract for 2011 drilling; the contract was instead awarded to Noah Horn Well Drilling (“Noah Horn”), one of Gasco’s competitors. Gaseo learned from Sagraves that the contract had been awarded to Noah Horn. In early 2011, Ben Ratliff heard a rumor that the Noah Horn rig that was performing drilling for Knox/Consol was experiencing mechanical problems.

On June 6, 2011, Gaseo received an email from Janet Fahrenhold át Knox/Consol with an attachment titled Addendum to Contract Purchase Order (“Addendum”). The email stated:

Attached is a [sic] Addendum to your current Contract Purchase Order No. 5600000439. The purpose of the Addendum is to revise the Term of the Contract Purchase Order to have it extend automatically from year to year unless either party gives the other party notice of intent not to extend at least thirty days before the end of the current one year term.

Also, because of changes in our SAP system we have to renumber our existing contracts., Please be advised that the number of your contract has been changed from 4600000856 to 5600000439

Please sign and return the attached addendums via email within 2 business days.

Gaseo Trial Ex. 7 at.l, ECF. No. 387-7. The attached form read as follows:

Addendum to Contract Purchase Order

This Addendum to contract purchase order (“Addendum”) is entered into effective this _ day of _, 20_, by and between Consol Energy, Inc. and its affiliates (“Gompány”) and _:_ (“Contractor”). ■ . .

Whereas, Company and Contractor are parties to a contract purchase order (PO No_') (the “Contract Purchase Order”); and

Whereas, Company and Contractor agree to modify the “Term” provision of the Contract Purchase Order as provided herein.

Therefore, intending to be legally bound, Company and Contractor agree as follows.

1. Company and Contractor agree to modify the “Term” provision of the Contract Purchase Order to read as follows:

Term:

Subject to. Company’s right to cancel this contract purchase order as set forth below, the term of this agreement shall be for one year from the date set forth above and shall be, automatically extended for one year terms " unless either party gives written notice to the other party of the termination of the agreement at least thirty (30) days before the end of the current one year term.

2., Except for the modification of the “Term” provision as set. forth in paragraph 1 of this Addendum, all other provisions, of the Contract Purchase-Order shall remain in full force and effect.

■ In .witness whereof, the parties have caused their duly authorized representatives to, execute this agreement intending it to be effective on the effective date.

Id. at 2.

Gasco’s office manager, Freda Rasnake, called Ben ’ Ratliff to tell him about the email. Ben Ratliff testified that he did not understand the email, so he instructed Rasnake to respond to the email and request from Knox/Consol a copy of the contract' to which the Addendum would apply. That afternoon, Rasnake wrote to Fahren-hold, “We have reviewed your email "with the attached Addendum. Can you please forward a copy of Contract # 4600000856.” Gaseo Trial Ex. 8, ECF No. 387-8. Ben Ratliff did not know Fahrenhold.

When Rasnake did not receive a response from Fahrenhold, she emailed again two days later to ask for the contract a second time. That day, Rasnake received an email from Erin Bywaters of Knox/Con-sol. The subject line of the email read, “FW: Contract 5600000439 — copy of contract,” and the body of the email stated:

We would like to draw your attention to the attached contract: 5600000439 From ECC Contract: 4600000856.

Please contact Sourcing Specialist for questions related to the referenced contract. •

Best regards,

Todd Shumaker

724-485-4349

Gaseo Trial Ex. 10 at 1, ECF No. 387-10. Attached to this email was the 2008 Drilling ' Contract and several related documents. The email identified Bywaters as a member of the Material and Supply Chain Management department. Ben Ratliff had seen Bywaters’ name previously on a purchase order email sent by Knox/Consol. He testified that in 2009, Rex Cooper of Knox/Consol had told him that because of some restructuring, communications would be coming from the Material and Supply Chain Management department. A letter and email sent by Knox/Consol in February 2009 also indicated that the company was making certain changes in how it did business with suppliers and moving toward electronic procurement. Ben Ratliff testified that when he received the email from Fahrenhold with the 2008 Drilling Contract attached, it was clear to him that Knox/Consol wanted to reinstate that contract.

Shortly after receiving the email from Bywaters, Rasnake received an email from Fahrenhold, which appears to have been a forwarded copy of the same email Bywa-ters had sent to Rasnake, with the original attachments plus an electronic commerce agreement and the Addendum form. Ben Ratliff was out of the office at the time Rasnake received these emails, but when he returned to the office a few days later, he received a paper copy of a lengthy list of terms and conditions from Knox/Consol. Todd Shumaker was identified in the terms and conditions document, which referred to him as General Manager, Contract and Project Management for Knox/Consol.

One of the attachments to the emails from Bywaters and Fahrenhold referencing the 2008 Drilling Contract listed a validity start date of January 22, 2010. Ben Ratliff testified that he thought Knox/Con-sol wanted to backdate the reinstated contract to that date, which made him uncomfortable. He knew that if he backdated the document to January, he would already be entitled to a significant amount of standby time. The same attachment listed an end date of December 31, 9999. He understood the purpose to be to renew the contract for a one-year term with automatic renewal each year until termination notice was given.

Ben Ratliff testified that it was not his usual practice to consult an attorney about drilling contracts unless he had a question or was uncomfortable about something. He met with attorney Randy Bolling regarding the Addendum on June 13,2011.

He ultimately “made the decision to use the current date that [he] signed the contract,” filled in the blanks on the form, and executed the Addendum on June 13, 2011, the same day that he first met with Boll-ing. Trial Tr., Dec. 13, 2016, at 31, ECF No. 421. He signed the Addendum three days after he signed the accompanying electronic commerce agreement, but he could not explain why he had waited to sign the Addendum. He instructed Ras-nake to email the signed Addendum to Knox/Consol, which she did on June 14, 2011. In the email, at Ben Ratliffs instruction, Rasnake typed, “Gaseo is standing by and ready to perform work under this agreement at Consol’s call.” Gaseo Trial Ex. 12 at 1, ECF No. 397-5. The email did not mention drilling. Ben Ratliff testified that when he signed the Addendum, he believed “that I was committing myself to having two rigs, according to this contract, ready at their call.” Trial Tr., Dec. 13, 2016, at 34, ECF No. 421.

On July 27, 2011, Fahrenhold sent an email to Rasnake requesting information about which personnel handled certain types of matters for Gaseo. Two days later, on July 29, 2011, Fahrenhold sent an email to Rasnake with the subject line “100679 Gaseo Drilling — Daywork Reference Only.” Gaseo Trial Ex. 15 at 1, ECF No. 397-1. The body of the email read, “Please see the attached copies of the fully executed addendum and eCommerce forms. Thanks for your cooperation -with this matter.” Id. Attached to the email were the Agreement to Engage in Electronic Commerce and the Addendum, both signed by Shumaker.

Ben Ratliff testified that in light of the Addendum, Gaseo renewed a lease for an equipment yard in Tennessee and retained certain employees to perform drilling work. He testified that he had no reason to believe Shumaker would not have read the Addendum, reviewed the 2008 Drilling Contract, or intended to sign the Addendum.

One year after he executed the Addendum, on June 13, 2012, Ben Ratliff caused an invoice to be issued to Knox/Consol for standby charges totaling $7,084,800, representing 328 days at a day rate of $10,800 per rig for two rigs. He testified that after Knox/Consol received the invoice, Shumaker called his cell phone and left a message asking for a return call. Ben Ratliff called Shumaker, but Shumaker did not answer. According to Shumaker, Ryan Litwinovich called Ben Ratliffs cell phone and then called Gasco’s office and left a message, but he never received a return phone call. Shumaker then called and left' a message for Ben Ratliff. Several days after Knox/Consol received the invoice, Ben Ratliff received a letter from an attorney representing Knox/Consol that denied the existence of a contract and claimed that there had been a mistake. Bolling, Gasco’s attorney, wrote a letter in response, and Enox/Consol’s in-house counsel replied. The reply letter read, in part:

Through clerical error by a temporary employee in the Material and Supply Chain Management Department at Con-sol Energy, a notice was sent months [after the 2008 Drilling Contract terminated] to Gaseo regarding an addendum that was being added to Consol’s Contract Purchase Orders (not drilling contracts) in order to allow these existing contracts to extend from year to year. There is no doubt that Gaseo was on notice that the forms sent to it were a mistake and were not intended to resurrect the' terminated 2008 Drilling Contract.

There is not now por was there ever a meeting of the minds about extending the terms of the July 7, 2008 IADC Daywork Drilling Contract. Knox (and its parent and affiliate companies) expressly deny any current contractual arrangement with Gaseo as well as any such arrangement since July/August of 2010 when the July 7, 2008 IADC Day-work Drilling Contract terminated.

Gaseo Trial Ex. 21 at 1-2, ECF No. 397-9. The letter went on to state that to the extent there existed “any contractual arrangement whatsoever” between the parties, “that arrangement is hereby terminated.” Id. at 2. The address to which the letter was sent was the notice address listed in the 2008 Drilling Contract.

The 2008 Drilling Contract contained an early termination provision that required payment of a full year’s worth of standby time if Knox/Consol terminated the contract before the end of a current term. Ben Ratliff responded to the letter from Knox/Consol’s counsel by sending an invoice for standby charges for a second year.

The 2008 Drilling contract, the amendments thereto, and the earlier January 2008 contract had all been negotiated by Randy Albert or Kent Wright on behalf of Knox/Consol. None of those agreements had been negotiated or executed by Shu-maker.

Ben Ratliff had been in the gas drilling business for approximately 40 years, and he had only negotiated one other contract with a 328-day, take-or-pay provision. He executed that contract with a different natural gas producer, EXCO, in 2008, about 40 days after he executed the 2008 Drilling Contract. The- other take-or-pay contracts he had negotiated in his career had contained 60- or 90-day take-or-pay provisions. Drilling under the EXCO contract was to begin in January 2009, but Gaseo never drilled any wells under that contract because the price of natural gas dropped significantly between June 2008 and January 2009.

In January 2008, natural gas was priced at $7.38 per unit. In June 2008, natural gas was priced at $10.28 per unit. The price of gas reached record heights in June and July of 2008. By.February 2009, the price of gas had fallen to $3.70 per unit. It was during that month that Albert and Wright approached Ben Ratliff to negotiate the first amendment to the 2008 Drilling Contract.

In March or April of 2009, Albert and Wright told Ben Ratliff that Gaseo would have to put its rigs on standby for the foreseeable future. On May 6, 2009, Gaseo sent Knox/Consol an invoice for one month’s worth of standby charges for one rig under the 2008 Drilling Contract. One of the rigs 'drilled a well in September 2009."The rigs started drilling again in January 2010 and were steadily in use until the last well was drilled; thus, little standby time was incurred in 2010. In May 2010, Albert and Wright requested another amendment to the 2008 Drilling Contract because of the downturn in the natural gas market. Tn negotiating the amendment that released the second rig from' the 2008 Drilling Contract, Gaseo proposed language' that would have allowed for the contract to be extended at the agreement of the parties, but Knox/Consol removed that language, and it did not become, part of the executed agreement.

After Gaseo sent Consol a final invoice in August 2010 and Knox/Consol paid the invoice, there was no relationship between Gaseo and Knox/Consol during the remainder of 2010. On January 3, 2011, Chris Ratliff emailed Wright to ask whether it was true that Knox/Consol might need a few wells to be drilled in the south in the next year, Wright responded, “We only have two shallow conventional wells scheduled in SWV this year. I will give you a heads up when we get close to starting.” Knox/Consol Trial Ex. 12, ECF No, 390-14. The next day, Chris emailed Rocky Malamisura of CNX Gas, another affiliate of Knox/Consol, and asked whether CNX had any drilling work for Gaseo. Malami-sura responded, “The contract for Va. is current & will not be bid out[.]” Knox/Con-sol Trial Ex. 13, ECF No. 390-15.

Ben Ratliff testified that when he received the initial email from Fahrenhold, he- did not have a current contract with Knox/Consol, The email referred. to the current one-year term, but when Gaseo received the email, there was no current one-year term, The email also referred to existing contracts, but Gaseo did not have any existing contracts with Knox/Consol at the time. Ben Ratliff, testified that Knox/Consol had reused, and renewed other expired contracts in the past.

The Terms and Conditions document that Knox/Consol sent to Gaseo in connection with the Addendum stated that “Terms & Conditions Agreements apply only to non-bid work generally performed' as time and material jobs.” Knox/Cons.ol Trial Ex. 14 at 3, ECF No. 390-16. Another part of the document stated, “Terms and Conditions Agreements can be used for routine, regularly occurring services. Terms and Conditions Agreements cannot be used for any services or projects that have been competitively bid by the Site Supervisor and Contract Sourcing Specialist.” Id, at 4. Ben Ratliff testified that he did not read the Terms and Conditions document because it was a long document and he thought it was the same document he had read on many previous occasions. He noted that Knox/Consol was not asking for a bid in the Addendum form, and drilling contracts are routine in th'e sense that Gaseo had used the same IADC contract form for decades. Several purchase orders that Gaseo had received in connection with work performed under the -2008 Drilling Contract in 2008 also contained Terms and Conditions sections.

Ben Ratliff testified that he believed the word “term” in the Addendum referred to the term provision in the 2008 Drilling Contract, and that the Addendum changed that provision. He understood that ‘the “term” language set forth in the Addendum was to be substituted for the “term” paragraph of the original 2008 Drilling Contract. The 2008 Drilling Contract stated that the term was two years, “commencing on the date specified in paragraph 2 above.” Knox/Consol Trial Ex. 2 at 2, ECF No. 390-1. The date specified in paragraph two of the 2008 Drilling Contract was July 7, 2008. But he believed that Knox/Consol wanted to renew the term as of the date he signed the Addendum.

When Gaseo received the initial ¿mail from Fahrenhold with the Addendum form attached, natural gas was selling for $4.20 per unit, down from $10.50 per unit in June 2008. As of June 1, 2011, 15 of Gas-co’s 16 operable drilling rigs were sitting idle. A substantial number of the rigs were idle for all of 2011. Each rig had cost Gaseo millions of dollars. In June 2011, Gaseo was not doing nearly as much business as it had been doing in June 2008, and its income had dropped precipitously. In 2008, Gaseo had paid approximately $19,000,000 in dividends to its shareholders, Ben Ratliff, Ben Ratliffs brother, and Ben Ratliffs two sons, In contrast, in 2011 and 2012, Gaseo operated at a loss of-several hundred thousand dollars each year.

Gaseo submitted ho bids to any gas producers in 2010 that included take-or-pay provisions. The same was true for 2011, 2012, and 2013. Gaseo knew that if it had included take-or-pay provisions in its bids during that time period, it would not have won the bids. Yet Ben Ratliff testified that he believed that Knox/Consol wanted , to resurrect the take-or-pay 2008 Drilling Contract in 2011.

: When Gaseo received the signed Addendum back from Knox/Consol, the only Gas-eo representatives who .knew about the Addendum were Ben Ratliff, Rasnake, and Bolling. The Vice President of Drilling, the Vice President of Construction, the other shareholders, and the accountants were all unaware of the alleged contract. Ben Ratliff testified that this was typical of how he handled contracts; he only let the others know about a contract when they needed to take action related to the contract. For competitive reasons, he did not want many people to know the details of Gasco’s contracts. .

In late August of 2011, Ben Ratliff met with Litwinovich of Consol to discuss a possible bid for drilling in the Marcellus Shale in western Pennsylvania and northern West Virginia. Litwinovich’s name had been on the documents Gaseo had received regarding the Addendum. Gaseo submitted a bid. The only rigs owned by Gaseo that were capable of doing any Marcellus Shale drilling were the two Speedstar 185 rigs that Gaseo stored in Tennessee, and to> a lesser extent, Gasco’s Speedstar 150 rigs. Ben Ratliff testified that the Speedstar 185 rigs were the rigs that would have performed the work under the allegedly revived 2008 Drilling Contract. He never suggested to Knox/Consol that those rigs, which were sitting idle in Tennessee and incurring standby charges, could be moved to the Marcellus Shale region to perform the drilling there, despite the fact that the day rates for the Marcellus Shale work were much higher than the day rates under the 2008 Drilling Contract.

Gaseo added the following special provision to its Marcellus Shale bid:

It is understood and agreed by and between the parties that this Contract pertains only to the proposed drilling services to be provided by Contractor in drilling Top holes for the Marcellus Shale in Pennsylvania and West Virginia and nothing contained herein shall in any way alter, amend, change, limit, modify, terminate, replace or supplant any other prior, existing or future contracts as may be entered into by and between Operator and Contractor, all of which other contracts shall be binding and enforceable in accordance with their separate terms and conditions.

Knox/Gasco Trial Ex. 27 at 6, ECF No. 390-25. Ben Ratliff testified that he did not add this provision for the specific purpose of protecting the Addendum contract, but because drilling in the Marcellus Shale was so different from other drilling,work Gaseo had done for Knox/Consol, and he wanted to clearly separate the Marcellus Shale contract from other contracts. Though he testified that he may have added similar language to other contracts over the years, no other such contracts were offered into evidence. According to a list of attorney-client communications prepared and produced by Gaseo, on the same day that Ben Ratliff signed the Marcellus Shale bid, he had a telephone conference with Bolling about the Addendum.

Gasco did not win the Marcellus Shale drilling contract. Gaseo lost $941,000 in 2011. Nevertheless, Gaseo did not send Knox/Consol an invoice in 2011 for standby time under the 2008 Drilling Contract. Ben Ratliff testified that it was his practice to send a bill at the end of the contract term, which is why he did not send monthly invoices to Knox/Consol and instead waited until a full year after signing the Addendum to send an invoice for standby time. The 2008 Drilling Contract stated that payment “shall be due, upon presentation of invoice therefor, ... at the end of the month in which such work was performed or other charges are incurred, whichever shall first occur.” Knox/Consol Trial Ex. 2 at 2, ECF No. 390-1. Ben Ratliff testified that he did not believe that provision required him to issue monthly invoices.

On January 3, 2012, Chris Ratliff emailed Doug Clark at Knox/Consol to “see if you are drilling any this year and if so when you plan on bidding it out.” Knox/Consol Trial Ex. 28 at 1, ECF No. 390-26. Clark responded, “They tied our drilling to Virginia so we will be using Noah Horn, we have only 13 to drill this year.” Id. Chris Ratliff still did not know about the Addendum. On the date of this email exchange, all of Gasco’s rigs were idle.

When Gaseo sent Knox/Consol an invoice for standby time under the allegedly revived 2008 Drilling Contract on June 13, 2012, according to Gaseo, it was too late for Knox/Consol to give notice of nonre-newal for a second term. The invoice was the first communication between Knox/Consol and Gaseo regarding the Addendum since it was executed a year earlier. Gaseo did not call Knox/Consol to obtain a purchase order number before sending the invoice as it had done in the past. Instead, the invoice listed the contract number for the 2008 Drilling Contract rather than a purchase order number.

In its annual report to the Securities and Exchange Commission for the 2010 fiscal year, Knox/Consol wrote the following:

Investment in our securities is subject to various risks, including risks and uncertainties inherent in our business. The following sets forth factors related to our business, operations, financial position or future financial performance or cash flows which could cause an investment in our securities to decline and result in a loss.

A decrease in the availability or increase in the costs of commodities, key services, or capital equipment used in mining or gas operations, such as steel, liquid fuels and rubber products we use in mining operations or drilling rigs we use to drill gas wells in our gas operations, could impact our cost of production and decrease our anticipated profitability. ■

We attempt to mitigate the risks involved with increaséd industrial activity by entering into “take or pay” contracts with well service providers which commit them to provide services to us at specified levels and commit us to pay for services at specified levels even if we do not use those services. However, these contracts expose us to economic risk. For example, if the price- of natural gas declines and it is not economical to drill and produce natural gas, we may have to pay for services that we did not use[.j This would decrease our cash flow and raise our costs of production.

Gaseo Trial Ex. 75B at 41, 47-48, ECF No-. 390-38.

Todd Shumaker testified that he did not have authority to enter into drilling contracts on behalf of Knox/Consol. He explained that there were two sides of the Knox/Consol business: the operational side, which has authority to spend money on services and equipment needed to produce coal and natural gas, and the supply chain side, which is the administrative side. The operational side would identify needs and request that the necessary materials, equipment, or services be procured by the supply chain side. The supply chain side has the authority to negotiate contracts and enter into purchase orders for the items and services requested by the operational side. To his knowledge, no representative of Knox/Consol informed Gaseo of any limitation on Shumaker’s authority or the internal procedures for contracting and procurement.

Shumaker testified that he stamped his signature on the Addendum after scanning it to ensure that all the blank spaces on the form had been completed. He explained that Falirenhold was a temporary worker hired to work on a project that entailed “evergreening” Knox/Consol’s contract purchase orders, Erin Bywaters was a clerical employee who worked directly for’ Shumaker. Fahrenhold worked in Shumaker’s department, the Supply Chain department.' She did not work for Shumaker; she worked for the Business Supply Process Group. Shumaker testified that Knox/Consol drafted the Addendum form to implement what he called an evergreen program. Knox/Consol had a number of contract purchase orders that were essentially rate sheets with no values included. The contract purchase orders had terms of one or two years and had to be renewed at the end of each term, which became burdensome. Shumaker came up with the idea, to amend all of those contract purchase orders to renew automatically, to reduce the administrative burden. Once the parties to the contract purchase orders executed the Addendum form, each contract purchase order would automatically renew every year unless one of the parties gave notice at least 30 days before the.end of the year that it did not wish to renew or wished to negotiate the applicable rates.

There were approximately 1,000 contract purchase orders that Knox/Consol sought to amend. Three temporary workers had .the task of emailing vendors about the evergreening project. Fahrenhold was given a list of vendors to whom she was supposed to email the Addendum form. The number stated in Fahrenhold’s emails to Rasnake was the number that identified the 2008 Drilling Contract.. Rex Cooper had previously instructed Litwinovich to add IADC drilling contracts to Knox/Con-sol’s computerized SAP system, which was used to issue boilerplate purchase orders. Though the drilling contracts were not the same as the boilerplate contracts,. adding them to the SAP system allowed Knox/Consol to track invoicing and issue purchase orders against the drilling contracts. The 2008 Drilling Contract was intentionally added to the same SAP system that held the contract purchase orders some time before the commencement of the evergreening project. When lists of contracts were prepared from the SAP system for the evergreening project, Shu-maker forgot that the SAP system contained the drilling contracts.

Shumaker testified that in Knox/Consol parlance, a terms and conditions contract and a contract purchase order are essentially the same thing. Both phrases refer to small value or noncommittal contracts, like rate sheet agreements. When Shu-maker stamped his signature on the Addendum, he did not look up the contract purchase order number listed on the Ad-dendum in the SAP system to see which contract- purchase order was referenced. Shumaker did not instruct Fahrenhold or Bywaters to carefully read the referenced documents in the SAP system before sending the Addendum forms to vendors.

Shumaker explained that the Addendum form was intended to modify the term of an underlying contract purchase order by essentially replacing the term language in the original contract' purchase order with the term language set forth in the Addendum. Therefore, from Knox/Consol’s perspective, the Addendum’s use of the phrase “date set forth above” referred not to the effective date in the preamble to the Addendum form, but rather' to thé effective date listed in the underlying contract purchase order that was- to be amended by the Addendunii form. Knox/Consol Trial Ex. 16, ECF No. 390-18. Shumaker testified that the Addendum form’s use of the words “current” and “extended” and the phrase “shall remain in full force and effect” reflect the form’s intended purpose of evergreening existing agreements rather than reviving an agreement that had already terminated. Likewise, the use of thé words “current,” “extend,” and “existing” in Fahrenhold’s initial email to Rasnake were consistent with amending a contract that was in effect at that time.

Knox/Consol had a Terms <⅞ Conditions Agreement Pplicy whose summary stated, in relevant part:

• Terms and Conditions Agreements are solely for the purpose of contractually establishing the pricing, terms and conditions under which- work is to be performed and -to insure the contractors’ compliance with all safety, insurance and regulatory requirements.

• A Terms and Conditions Agreement expedites the process for utilizing, a contractor under certain conditions, but it does not bypass the requirement for a purchase order. A separate purchase' order is still required ■ for each service performed under a Terms and Conditions Agreement in order for the contractor to be able to bill for the work. Invoicing MUST comply with the pricing in the Terms and Conditions Agreement,

Knox/Consol Trial Ex. 14 at 2, ECF No. 390-16. The policy further stated that “Terms & Conditions Agreements apply only to non-bid work generally performed as time and material jobs.” Id. at 3. Shu-maker explained that time and material jobs. are billed hourly and would coyer things like water trucks. The policy also read, “Terms and Conditions Agreements can be used for routine, regularly occurring services. Terms and Conditions Agreements cannot be used for any services or projects that have been competitively bid by the Site Supervisor and Contract Sourcing Specialist.” Id. at 4. Another section stated, “A purchase order must be issued for each specific-job before any work can start and the contractor is required to. reference this purchase order number on their invoices. This, purchase order number is needed in order for Accounts Payable to be able to pay the invoice.” Id. Shumaker testified that this policy was sent to all of Knox/Con-sol’s contractors, including Gaseo.

Knox/Consol had inadvertently sent the Addendum form to several other drilling companies in addition to Gaseo. None of those other drilling companies-contended that their expired drilling contracts had been revived by the Addendum form or sought payment, based on the Addendum form.

Brian- Green was the General Manager of Knox from approximately May 2010 until November 2011. He reported to. Randy Albert, .who was Vice President of Emerging Business Unit for Cqnsol. In his General Manager role, Green interacted with Gaseo primarily through Chris Ratliff, who oversaw drilling. Green also communicated with Brian Ratliff regarding construction. Green spent time with Chris and Brian Ratliff socially as well. Green met with Ben Ratliff in person on two occasions to discuss issues surrounding drilling.

Green testified that on May 10, 2010, Gaseo proposed an amendment to the 2008 Drilling Contract to remove one of its rigs from the contract.--The amendment language Gaseo proposed regarding the remaining rig included the sentence, “Contract can be extended if agreed.to by both parties.” Knox/Consol Trial Ex. 5 at 2, ECF No. 390-5. That proposed amendment language was. not adopted by the parties.

■ Before Knox/Consol solicited bids for drilling in 2011, Green spoke with Chris Ratliff. On December 1, '2010, Sagraves sent a bid solicitation email to Chris Ratliff and representatives of five other drilling companies. Green was copied on the email, along -with Clark and Litwinovich. Clark was Drilling Manager for Knox and Litwi-novich was- Manager of Supply Chain. Sar graves . sent the drilling companies . an ■IADC footage-based contract form. Knox/Consol completed some of the blanks in the form before sending it to the drilling companies to indicate certain elements it expected their bids to contain. The expectation was that the drilling companies would complete the remaining blanks on the form.

Green explained that a standby provision is different from a take-or-pay provision. Standby time is paid when -a drilling rig has commenced work on a well and something outside the control of the drilling company causes a delay. On the IADC form that Knox/Consol sent to the drilling companies, it typed “N/A,” meaning not applicable, into the blank for standby rate. Green testified that Knox/Consol did not intend to pay standby time under the 2011 drilling contract. Knox/Consol did not propose a take-or-pay provision for the 2011 contract because the natural gas market was down and rigs were readily available for drilling. Given the low gas prices in December 2010, it would not have been commercially reasonable for Knox/Consol to enter into a take-or-pay drilling contract at that time. Gaseo submitted two bids for 2011, neither of which contained take-or-pay provisions. Had those bids contained take-or-pay provisions, Green testified that Knox/Consol would not have considered them.

On December 30, 2010, Knox/Consol notified Gaseo via email that the 2011 contract had been awarded to Noah Horn. Though Green continued to communicate with Chris and Brian Ratliff about other issues, Gaseo did not mention the Addendum to Green or ask any questions regarding the allegedly resurrected 2008 Drilling Contract. Green testified that the bids Knox/Consol had received for the 2011 contract were more favorable to it than the 2008 Drilling Contract, so there would have been no reason for Knox/Consol to reinstate the 2008 Dialling Contract. Green testified that the 2010 quarterly investment report’s mention of take-or-pay contracts likely referred to the Marcellus Shale or other geographic regions rather than the Knox area.

Antony Roop, a former accountant for Gaseo, testified that it was unusual for him to be involved with invoicing, but he was aware of the invoice that Gaseo issued to Knox/Consol based on the Addendum before Gaseo sent it. He could not recall seeing another invoice for such a large amount during the ten years that he worked for Gaseo. Roop participated in two in-person meetings with Bolling regarding the Addendum and received nine emails from Bolling about the Addendum. Bolling sent two emails to Roop on February 14, 2012. The first in-person meeting took place in May 2012 between Ben Ratliff, Bolling, and Roop.

On May 15, 2012, Roop emailed Berkley Keen, another accountant who worked for Gaseo, and stated, “Attached is the contract, extension and emails we discussed today. Do you think we should setup a reminder for the annual billing on the standby rate?” Knox/Consol Trial Ex. 29, ECF No. 397-19. Roop testified that the email referred to the Addendum, and the reminder mentioned was the reminder to send what would be the June 13, 2012 invoice. Roop sent the email to Keen two days after the date on which notice of nonrenewal was allegedly required under the Addendum.

Roop agreed that it would have been possible for Gaseo to send invoices under the Addendum monthly rather than waiting until the end of the first year-long term. He further admitted that based on the time value of money, it would have been more financially beneficial for Gaseo to be paid in monthly increments. However, he explained that it is sometimes advantageous from a tax perspective to delay issuing an invoice.

Roop testified that although Gaseo complied with Knox/Consol’s request for monthly billing under the 2008 Drilling Contract, Gaseo did not usually bill standby time monthly. He stated that he had no reason to believe that there was any problem with billing annually under the Addendum.

Randy Albert testified that footage drilling contracts are more favorable to a gas company like Knox/Consol than day rate contracts because a footage drilling contract places the risk of delays on the drilling company rather than the gas company. He explained that take-or-pay contracts are very risky for gas companies and are typically used when rigs are in high demand. Albert • testified that Knox/Consol tried to have its permits and title work ready twelve to eighteen months before drilling would occur, and there was a lengthy planning process before Knox/Consol decided to drill. Decisions to enter into drilling contracts were- not made quickly or lightly.

Albert explained that between 2008 and 2010, natural gas drilling across the industry migrated from Tennessee, Kentucky, and Virginia up to the Marcellus Shale in Pennsylvania and West Virginia because drilling in that formation was much more productive and profitable. In 2007 and 2008, demand for drilling rigs in Tennessee, Kentucky, and Virginia was at an all-time high. By 2011, the supply of available rigs was high and the demand was low, in part because the kinds of rigs that had been used in Tennessee, Kentucky, and Virginia could only be used for vertical top hole drilling in the Marcellus Shale. After the rigs had reached a certain depth, larger rigs would be needed to do the horizontal drilling.

Albert testified that a drilling company might need to invest $20 million or more to make a rig available for drilling in the Marcellus Shale, which was ten to twenty times as much as it cost to make a rig like Gasco’s available in the southern Appalachian region. Because of that substantial up-front cost to the drilling companies, Knox/Consol sometimes felt it was necessary to enter into take-or-pay contracts in 2009 and 2010 for drilling in the Marcellus Shale.

Albert stated that over the decades that he had known Ben Ratliff, the two communicated often and through various channels, including face-to-face meetings and by telephone. Ben Ratliff also communicated frequently with several other Knox/Consol personnel about drilling contracts. Gasco’s office is located approximately two miles from Knox/Consol’s Virginia' office..

Albert testified that when Gaseo and Knox/Consol amended the 2008 Drilling Contract in May 2010 to release, one of the rigs, Knox/Consol struck Gasco’s. proposed amendment language that would have allowed for extension of the contract upon agreement.of both, parties. Albert stated that he had asked Knox/Consol’s in-house counsel to remove that provision because Knox/Consol was eager for the financially unfavorable.take-or-pay contract to end at that point.- -

Noah Horn, which was awarded the 2011 drilling contract, had a newer, bigger rig than Gaseo. The 2011 Noah Horn contract contemplated drilling approximately 20-25 wells, and Knox/Consol was not in a hurry to drill those wells. Albert indicated that when Gaseo submitted its bids for the 2011 drilling contract, it did not mention to Knox/Consol that it believed it had two rigs standing by under the allegedly revived 2008 Drilling Contract. Albert testified that had Gaseo mentioned those rigs, assuming that Albert found the contract was valid, he would have put those rigs to work in the Marcellus Shale to avoid losing money. Regarding the clause in Gasco’s bid stating that “nothing-contained herein shall in any way alter, amend, change, limit, modify, terminate, replace or supplant any Other prior, existing or future contracts,” Knox/Consol Trial Ex. 27 at 6, ECF No. 390-25, Albert stated he had never seen that language in any other drilling contract. He further testified that he knew of no reason a drilling company would wait a year to issue an invoice, and he had not known other drilling companies to issue annual invoices. Albert stated that Knox/Consol had on occasion extended existing drilling contracts by .mutual agreement without- undergoing a competitive bidding process.

Knox/Consol did not tell Gaseo or other drilling companies about its drilling commitments to landowners under gas leases. On April 30, 2010, Consol acquired Dominion Resources, which held approximately 1.46 million acres of gas leases in- north central-West Virginia, southwestern Pennsylvania, and' eastern Ohio. Consol paid approximately $3.5 billion in cash for the acquisition and acquired approximately one million cubic feet of net crude reserves. Around the same time, Consol purchased all publicly owned stock in CNX Gas, a subsidiary of Consol. Knox/Consol drilled 534 wells in 2008, 247 wells in 2009, 317 wells in 2010, 254 wells in .2011, 96 wells in 2012, and 150 wells in 2013.

III. 2012 Noah Horn Contract.

The primary focus of Gasco’s motion .was my exclusion of a contract between Knox/Consol and Noah Horn, entered into on December 19, 2011, that covered drilling in 2012, 20⅛ and 2014 (“2012 Noah Horn Contract”). The 2012 Noah Horn Contract was titled “Contract Purchase Order,” renewed automatically unless a party gave timely notice of nonrenewal, and was not the result of competitive bidding.

On the third day of trial, Gaseo sought to introduce the 2012 Noah Horn Contract in its case-in-chief during its direct examination of Shumaker. Gaseo had not included the document on its exhibit list. Knox/Consol had not produced the 2012 Noah Horn Contract in discovery, and at trial, Knox/Consol’s counsel indicated that they had not previously seen' the document.

Gaseo had issued a trial subpoena to Leon Boyd of Noah Horn that directed Boyd to bring to court all original drilling contracts between Noah Horn and Knox/Consol covering any portion of 2011. Counsel for' Noah Horn had emailed the 2012 Noah Horn Contract to Gasco’s counsel the week before trial began. Gasco’s counsel represented that upon receiving the document, they initially thought it was a drilling contract, but they could not be sure because they had not. received the attachments to the contract. They requested the attachments, which Boyd brought with him to court on the morning of the third day of trial. The attachments consisted óf a pricing sheet and a drilling bid proposal. Gasco’s counsel made copies of the contract and its attachments and provided them to counsel for Knox/Consol that morning, and then sought to'introduce the 2012 Noah Horn Contract that afternoon.

Outside the presence of the'jury, Gaseo argued that the 2012 Noah Horn Contract “impeaches Consol’s narrative of the case because it refers to this drilling contract as a terms and conditions contract.” Trial Tr., Dec. 14, 2016, at 53, ECF No. 422. Gasco’s counsel noted that Shumaker had testified that terms and conditions contracts or contract purchase orders are not drilling contracts,

Knox/Consol’s counsel objected to the introduction of the 2012 Noah Horn Contract based on their belief that they had not previously seen the document. Knox/Consol further argued that the subpoena that led to Gasco’s receipt of the 2012 Noah Horn Contract had violated an order of the court that prohibited further discovery after .September 1, 2016, and it objected on the ground that the document had not been included on Gasco’s exhibit list. Shumaker stated that he was not far miliar with the 2012 Noah Horn Contract. Because Shumaker could not authenticate the document, it was not admitted during his testimony.

Later that day, Gaseo ; sought to call Boyd to introduce the 2012 Noah Horn Contract. Knox/Consol again objected on the same grounds and further argued that the document was irrelevant because it was entered into more than six months after Fahrenhold sent the Addendum form to Rasnake.

Gaseo contended that the 2012 Noah Horn Contract should not have surprised Knox/Consol because it was entered into and possessed by Knox/Consol, even if counsel had been unaware of it. Gaseo stated that it had only issued the subpoena for documents to Boyd because Gasco’s copy of the 2011 contract between Noah Horn and Knox/Consol was difficult to read, and it wanted to obtain a more legible copy. Gasco’s counsel stated that he did not anticipate receiving any new documents in response to the subpoena. He stated that in an email exchange with Noah Horn’s counsel regarding the subpoena, he had asked whether Boyd would have any information about the 2012 agreement between Knox/Consol and Noah Horn, specifically regarding whether it was an exclusive agreement. Noah Horn’s counsel replied to the email by sending the 2012 Noah Horn Contract, which Gasco’s counsel received about five days before the second trial began.

: Upon reviewing the document, counsel for Gaseo thought that it may have been a contract for ancillary services rather than a drilling contract. Gasco’s counsel asked Noah Horn’s counsel to provide the attachments to the contract. Noah Horn’s counsel responded that Boyd would bring those documents to the trial that Monday, but counsel for Gaseo at some point told Boyd his presence would not be required until Wednesday. Gasco’s counsel did not send the contract to counsel for Knox/Consol upon its receipt, despite an earlier-issued document request that required Gaseo to produce copies of any documents received in response to third-party subpoenas. ■

Gaseo argued that the document was responsive to a discovery request it had issued early in the case. However, Knox/Consol had objected to the discovery request in December 2013, and Gaseo had never filed a motion to compel or other? wise followed up on the objection.

I ruled that the 2012 Noah Horn Contract would be excluded. I did so because I concluded that allowing Gaseo to introduce the document or. question witnesses about it would have been unfair to Knox/Consol, which would not have had an adequate opportunity to investigate the circumstances surrounding the contract.

The next day, during his cross-examination of Albert, Gasco’s counsel began questioning the witness about-the 2012 Noah Horn Contract. Knox/Consol objected on the grounds that allowing Gaseo to ask questions about the 2012 Noah Horn Contract was simply a way to circumvent my ruling excluding the contract itself, and that allowing Gaseo to use the contract in any way would undermine my pretrial order prohibiting further discovery. Counsel for Gaseo responded that he was merely trying to impeach Albert’s testimony and that Knpx/Consol’s witnesses and counsel had opened the door by claiming that contract purchase orders are not drilling contracts.

I voiced my concerns about the limited relevance of the 2012 Noah Horn Contract. I noted that it did. not counter Knox/Con-sol’s evidence that the Addendum had been sent in error as part of an evergreen-ing program, and there was no evidence that Gaseo had been aware of the 2012 Noah Horn Contract, which had not even existed when the Addendum was executed. I also noted that Albert did not say unequivocally that a contract purchase order had never been used for a drilling contract or that a drilling contract had never been awarded without going through a biddi