Five companies and a union affiliated with the polygamous Kingston family are fighting back against a Missouri utility that forced the family’s Emery County coal mine into involuntary bankruptcy last fall.

The six entities filed a lawsuit last week in U.S. District Court for Utah against Aquila Inc., a Kansas City-based utility that provides electric and natural gas service to approximately 900,000 customers in Colorado, Iowa, Kansas, Missouri and Nebraska.

They claimed Aquila’s aggressive efforts to collect a $25 million judgment against C.W. Mining Corp., which operates the Bear Canyon mines in Huntington Canyon, prevented the company from paying for mining equipment needed to cut the coal needed to pay its debts.

The six – World Enterprises, ABM Inc., Security Funding Inc., C.O.P. Coal Development Co., Standard Industries Inc. and the International Association of United Workers’ union – are asking for $217 million in compensatory damages plus punitive damages.

Based in Nevada or Utah, the companies all have Kingston family members as registered agents.

Aquila, meanwhile, was sold Monday in separate transactions for $2.6 billion to Great Plains Energy Inc., which runs Kansas City Power and Light Co., and Black Hills Corp. of Rapid City, S.D. A Great Plains spokesman did not return a call seeking comment on the Utah lawsuit.

The legal fight stems from a 2003 contract in which C.W. Mining pledged to supply about 2.5 million tons of coal over a five-year period to Aquila. But C.W. Mining encountered labor and mining problems after the signing and, in April 2005, informed Aquila it was canceling the contract after delivering just 160,000 tons of coal.

Aquila filed suit. Last October, U.S. District Judge Tena Campbell ruled that C.W. Mining owed Aquila $25 million, down from the $54 million sought by the utility. C.W. Mining filed an appeal a week later.

Shortly afterward, the six Kingston-related companies said, “Aquila began garnishing every party Aquila thought might be a source of income” to C.W. Mining. It took about $275,000 from C.W. Mining’s Bank of Utah account. Other garnishments caused A-Fab Engineering, which provided the mining company’s longwall machine, to back away from negotiations for additional mining machinery, and killed prospects of obtaining equipment loans from Bank of Utah and Fidelity Funding Co.

In addition, the six entities allege, an Aquila garnishment prevented Standard Industries Inc. from taking in $2.7 million from the Nov. 28, 2007, sale of Bear Canyon coal to UtahAmerican Energy Inc., whose own production was disrupted by August’s deadly Crandall Canyon mine disaster and the frequent closures of the Tower mine.

Rob Murray, a spokesman for UtahAmerican Energy’s parent company, Murray Energy Corp., declined comment on the lawsuit but added that the legal dispute “is not causing UtahAmerican any difficulties whatsoever in meeting its contractual obligations to supply coal to its customers.”

By Mike Gorrell
The Salt Lake Tribune