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PRESENT: Lemons, Goodwyn, Millette, Mims, and Powell, JJ., and Russell and Koontz, S.JJ. HUGH M. CAPERTON, ET AL. v. Record No. 121046 OPINION BY JUSTICE DONALD W. LEMONS April 18, 2013

A.T. MASSEY COAL COMPANY, INC. FROM THE CIRCUIT COURT OF BUCHANAN COUNTY Henry A. Vanover, Judge In yet another chapter in the contentious story of litigation and controversy between Hugh M. Caperton and Donald Blankenship and the companies they control, we consider whether the trial court erred in its application of the doctrine of res judicata. Over the last fifteen years, litigation between Hugh Caperton and his companies and Donald Blankenship and his companies has involved trips to many courts. These include

suits in circuit courts in both Virginia and West Virginia, proceedings in the United States District Court for the Southern District of West Virginia, and appeals to this Court, the Supreme Court of Appeals of West Virginia, and the Supreme Court of the United States. The lineage of this dispute is as follows. Two of

Caperton's companies, Harman Mining Corporation and Sovereign Coal Sales, Incorporated, first sued one of Blankenship's companies, Wellmore Coal Corporation, in May 1998 for breach of contract. This case was litigated in the Circuit Court of

Buchanan County, Virginia ("First Virginia Action").

Harman

Mining Corp. v. Wellmore Coal Corp., No. 226-98 (Cir. Ct. of Buchanan County, Va. 1998). Caperton's companies prevailed. Wellmore Coal Corp. v.

We later dismissed Wellmore's appeal.

Harman Mining Corp., 264 Va. 279, 284, 568 S.E.2d 671, 673 (2002) (per curiam). In October 1998, Caperton, Harman Mining, Sovereign, and Harman Development Corporation sued A.T. Massey Coal, Incorporated, for certain tort claims in the Circuit Court of Boone County, West Virginia. Caperton v. A.T. Massey Coal

Co., No. 98-C-192 (Cir. Ct. Boone County, W. Va. 1998). Blankenship was president, chief executive officer, and chairman of the board of Massey. federal court. Massey removed the case to

Caperton v. A.T. Massey Coal Co., 251 B.R. The federal court later remanded Caperton v. A.T.

322, 324 (S.D. W. Va. 2000).

the case to the Boone County Circuit Court.

Massey Coal Co., 270 B.R. 654, 656 (S.D. W. Va. 2001); see also A.T. Massey Coal Co. v. Harman Dev. Corp. (In re Harman Dev. Corp.), No. 98-01990-WSB-11, Adv. No. 7-00-0057, Jt. Mem. Op. and Order at 1 (Bankr. W.D. Va. Nov. 28, 2000). Back in the West Virginia circuit court, Caperton and his companies won a substantial jury verdict, which Massey appealed to the Supreme Court of Appeals of West Virginia. On

its first consideration, the Supreme Court of Appeals of West

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Virginia reversed, but the opinion was later vacated because two justices who decided the case voluntarily disqualified themselves after the decision. Caperton v. A.T. Massey Coal

Co. (Caperton I), No. 33350, 2007 W. Va. LEXIS 119, at *5-6 (W. Va. Nov. 21, 2007), vacated as noted in Caperton v. A.T. Massey Coal Co. (Caperton II), 679 S.E.2d 223, 229 n.1 (2008). On its second consideration, the Supreme Court of Appeals of West Virginia again reversed and remanded the decision of the West Virginia trial court. 229. Caperton II, 679 S.E.2d at

Caperton and his companies appealed this decision to the

Supreme Court of the United States, arguing that another justice should have recused himself, because Blankenship and Massey contributed millions of dollars to the justice's election campaign. The Supreme Court of the United States

agreed with Caperton and his companies and reversed and remanded the case. Caperton v. A.T. Massey Coal Co. (Caperton

III), 556 U.S. 868, 890 (2009). On its third consideration, the Supreme Court of Appeals of West Virginia again reversed and remanded the decision of the West Virginia trial court. The court determined that a

forum selection clause in an agreement between the parties required that suit be brought in Virginia. Caperton v. A.T.

Massey Coal Co. (Caperton IV), 690 S.E.2d 322, 328 (2009).

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Caperton and his companies subsequently filed suit in Virginia in November 2010, bringing many of the same tort claims as they did just over twelve years earlier. Caperton

v. A.T. Massey Coal Co., No. 771-10 (Cir. Ct. Buchanan County, Va. 2011) ("Second Virginia Action"). The Circuit Court of

Buchanan County held that res judicata barred the Plaintiffs' claims. Whether this decision was correct is the issue we

decide in this appeal. I. Facts and Proceedings Below

A. Caperton's acquisition of the Harman mining operations, the Coal Supply Agreement with Wellmore, Wellmore's changing corporate structure, and bankruptcy On January 1, 1993, Appellant Hugh M. Caperton ("Caperton") acquired Harman Mining Corporation ("Harman Mining") and Sovereign Coal Sales, Inc. ("Sovereign"). also formed Harman Development Corporation ("Harman Development") that same year. 119, at *7. Caperton I, 2007 W. Va. LEXIS He

Caperton, Harman Mining, Sovereign, and Harman

Development were all plaintiffs to this action below, and are Appellants herein (hereinafter collectively referred to as "Plaintiffs"). The chart below details Caperton's

organization of his companies:

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Harman Mining and Sovereign were engaged in the mining and sale of metallurgical coal from a mine in Buchanan County, Virginia (the "Harman Mine"). In 1992, Harman Mining and

Sovereign entered into a Coal Supply Agreement with Wellmore Coal Corporation ("Wellmore"), whereby Harman Mining and Sovereign would supply a fixed output of coal from the Harman Mine to Wellmore each year, from 1993 through 2001. Harman

Mining, Sovereign, and Wellmore continued to fulfill their obligations under the agreement through 1996. Effective January 1, 1997, Harman Mining and Sovereign entered into a new Coal Supply Agreement ("CSA") with Wellmore. Because Caperton invested significant capital to

improve the long-term prospects of the Harman Mine, the CSA reflected a substantial increase in price paid for coal by

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Wellmore.

Wellmore was willing to pay a higher fee because it

supplied LTV Steel Corporation ("LTV") with coal blended with the Harman Mine product, and the metallurgical qualities of that coal made it desirable to steel producers. Harman

Mining, Sovereign, and Wellmore all performed under the CSA through 1997. Prior to July 31, 1997, Wellmore's corporate parent was United Coal Company ("UCC"). On that date, A.T. Massey Coal

Company, Inc. ("Massey"), of which Donald Blankenship ("Blankenship") was president, chief executive officer, and chairman of the board, acquired UCC. On December 1, 1997,

Wellmore informed Harman Mining and Sovereign that it would only accept a significantly reduced quantity of coal in 1998, 205,707 tons, instead of the negotiated amount, 573,000 tons. Wellmore cited the force majeure clause of the CSA to excuse its performance. In January 1998, Harman Mining and Sovereign Wellmore rejected the

tendered performance under the CSA. previously agreed-upon tender.

The effect of the tonnage reduction was the financial collapse of Harman Mining. Caperton's ventures were unable to

survive with Wellmore purchasing less than half of the amount agreed upon in the CSA. Although Harman Mining and Sovereign

attempted to compensate for the severely reduced demand, they

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were unable to do so.

Subsequently, Harman Mining and

Sovereign filed for bankruptcy protection. B. Breach of Contract Suit in Virginia

On January 6, 2000, Harman Mining and Sovereign filed their first amended motion for judgment against Wellmore, the First Virginia Action, in the Circuit Court of Buchanan County ("circuit court"). The suit alleged that Wellmore breached

the CSA as of January 1998 and that Wellmore's stated reason for its refusal to accept the 573,000 ton shipment of coal

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