                             UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                             No. 14-2256


KNOX ENERGY, LLC; CONSOL ENERGY, INCORPORATED,

                Plaintiffs - Appellees,

           v.

GASCO DRILLING, INC., A Virginia Corporation,

                Defendant - Appellant.



                             No. 14-2296


KNOX ENERGY, LLC; CONSOL ENERGY, INCORPORATED,

                Plaintiffs - Appellants,

           v.

GASCO DRILLING, INC., A Virginia Corporation,

                Defendant - Appellee.



Appeals from the United States District Court for the Western
District of Virginia, at Abingdon.   James P. Jones, District
Judge. (1:12-cv-00046-JPJ-PMS)


Argued:   December 9, 2015                 Decided:   February 2, 2016


Before MOTZ and FLOYD, Circuit Judges, and John A. GIBNEY, Jr.,
United States District Judge for the Eastern District of
Virginia, sitting by designation.
Affirmed in part, reversed in part, and remanded by unpublished
per curiam opinion.


ARGUED: Daniel G. Bird, KELLOGG, HUBER, HANSEN, TODD, EVANS &
FIGEL, P.L.L.C., Washington, D.C., for Appellant/Cross-Appellee.
Michael John Finney, GENTRY LOCKE, Roanoke, Virginia, for
Appellees/Cross-Appellants.  ON BRIEF: J. Scott Sexton, Monica
T. Monday, H. David Gibson, GENTRY LOCKE, Roanoke, Virginia, for
Appellees/Cross-Appellants.


Unpublished opinions are not binding precedent in this circuit.




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PER CURIAM:

        Knox    Energy,         LLC     and       Consol       Energy,       Inc.   (collectively

“Consol”)       brought         this    action          seeking       a    declaratory      judgment

that a purported contract it signed with Gasco Drilling, Inc.

(“Gasco”)       was    not       enforceable.                The     district       court    granted

judgment as a matter of law in favor of Consol.                                     Gasco appeals

that order and several pre-trial rulings.                                  We reverse the grant

of   judgment         as    a    matter           of    law,    but       affirm    in    all    other

respects.



                                                       I.

                                                       A.

        In    2008,    Consol,          a    natural         gas     producer,      and     Gasco,    a

drilling company, entered into a drilling agreement that lasted

for two years, or until Gasco completed its work.                                         Under the

contract, Consol agreed to pay a “standby” rate of $10,800 per

day, per drilling rig, for time when Gasco was on site but not

actively       drilling.           While          drilling,         Gasco     received      an    even

higher       fee.          Additionally,               the   2008     agreement      contained       a

special       “take-or-pay”            provision,            which    guaranteed         that    Gasco

would make two rigs available for Consol whenever it requested

work.        Whether or not Gasco 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

                                                        3
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 Gasco and

Consol reinstated that 2008 contract in 2011.                      On June 6, 2011,

Consol emailed Gasco 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 Gasco on July 29, 2011.                          The Addendum

stated    that   Gasco    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.”

                                          B.

       For a year after signing this Addendum, Consol did not ask

Gasco    to    drill,    and    neither        party     communicated        about    the

Addendum.      Then, in June 2012, Gasco 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

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declaratory relief.               In response, Gasco sent Consol a second

$7,084,800 invoice as liquidated damages for early termination,

and counter-sued for breach of contract.

     After discovery, both parties moved for summary judgment.

Consol    argued      in    the    alternative        that,    if    the    parties      had

reinstated the contract, it was in the same form as when it

originally terminated -- with only one rig.                         The district court

granted     Consol         partial     summary       judgment        on     this    basis.

Otherwise, the district court denied both parties’ motions for

summary judgment.

     The court also denied two of Gasco’s motions in limine.

First,    the    court      refused     to    bar    Consol    from       introducing     a

privilege       log   of    “the     general       subject    matter      or    timing   of

communications between Gasco and its attorney.”                                Second, the

court allowed Consol to present parol evidence that it genuinely

made a mistake when it signed the Addendum.                         The case proceeded

to trial.        At the conclusion of Gasco’s evidence, Consol moved

for judgment as a matter of law, which the court granted.



                                             II.

                                             A.

     The principal issue before us is whether the district court

erred in granting judgment as a matter of law.                             We review the

district court’s ruling de novo.                   Sales v. Grant, 158 F.3d 768,

                                              5
775 (4th Cir. 1998).             We “must draw all reasonable inferences in

favor of [Gasco],” and “may not make credibility determinations

or weigh the evidence.”                Reeves v. Sanderson Plumbing Products,

Inc., 530 U.S. 133, 150 (2000).                       We must reverse a grant of

judgment as a matter of law if “reasonable minds could differ”

on a verdict in Gasco’s favor.                 Sales, 158 F.3d at 775.

      Under Virginia law, a contract is not valid unless there is

an “agreement or mutual assent” between the parties.                               Lucy v.

Zehmer,   84      S.E.2d       516,    522    (Va.    1954).           Objectively,      if    a

party’s   “words         and     acts,    judged      by    a    reasonable      standard,

manifest an intention to agree, it is immaterial what may be the

real but unexpressed state of [the party’s] mind.”                                 Id.        In

Lucy, defendants Zehmer contended that a document purporting to

sell their farm to the plaintiff, Lucy, had been a bluff.                                 Id.

at 517-20.        The Supreme Court of Virginia enforced the contract

because     the    parties’           “conduct     and     words        would   warrant       a

reasonable     person       in    believing        that    [they]       intended    a    real

agreement.”       Id. at 522.            Virginia courts continue to look for

outward “manifestation[s] of mutual assent.”                            Wells v. Weston,

326   S.E.2d      672,     676    (Va.       1985);   see       also    Falls   Church        v.

Protestant Episcopal Church in the United States, 740 S.E.2d 530

(Va. 2013) (evaluating the expressions communicated between the

parties).



                                               6
                                            B.

      Consol’s basic argument supporting grant of judgment as a

matter of law is that “one cannot snap up an offer that is too

good to be true,” and Gasco could not have reasonably believed

Consol intended to renew the 2008 contract.                    Consol Br. 41.        If

Gasco knew or should have known that Consol made a mistake, we

agree       there    was     no    mutual    assent.        But    Gasco      presented

sufficient evidence that, if credited, a reasonable jury could

have found in its favor.

      Gasco’s case for contract formation included the Addendum

and     a   copy     of    the     2008    drilling      agreement.        Gasco    also

introduced emails showing that Consol initiated the transaction,

confirmed         that    the     2008    drilling     agreement      (referenced     by

number) was the contract referred to in the Addendum, confirmed

Gasco’s contact information, and returned the executed Addendum.

The parties dispute whether those documents and actions carry

any meaning.

      First, in Consol’s view, its mistake was obvious.                        Despite

Gasco’s      decades-long         relationship       with   Consol,     Gasco’s     CEO

Ratliff had never heard of the Consol employees who sent or

signed      the     Addendum.        In   her    email    returning     the   executed

Addendum,      a    Consol      representative       perfunctorily     thanked     Gasco

“for [its] cooperation with this matter.”                    And the Addendum, as

sent to Gasco, did not include an effective date.                        But Ratliff

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maintained he “never thought Consol made a mistake” and “didn’t

know who to call about the drilling.”                   His secretary, who reads

and sends his emails, informed him that Consol wanted to renew a

contract.     Ratliff testified that it was not odd to renew an

expired contract, because “every contract [he had] ever had with

Consol was always open for additional drilling down the road.”

He thought nothing of the unfamiliar names, because Consol had

informed    him     that    it   “made    a     major    change”    and    that   “all

contracts [would] be coming out of chain supply management.”

        Second,   Consol    argues     that     Gasco’s    behavior    demonstrated

its   knowledge     of     the   mistake,       and   points   to    the    following

evidence.     Gasco bid on Consol’s 2011 drilling in December 2010,

and knew Consol rejected that bid and hired a different company.

When Gasco received the Addendum, Ratliff consulted an attorney

before    signing    it,    although      his    usual    practice    was    to   make

contract decisions alone.              In September 2011, Ratliff met with

Consol without mentioning the take-or-pay contract he maintains

was in place.        Moreover, Ratliff did not tell his employees or

other    executives      about   the     contract.        Finally,    Gasco   billed

Consol after a whole year, rather than monthly.                      Gasco responds

that Ratliff heard that the company that had won Consol’s 2011

bid “was having lots of problems.”                    Ratliff testified that he

usually waited to tell his drilling team about a contract until

he had a work order to drill.             He said he did not follow up with

                                           8
Consol about drilling because the people he knew “had moved on.”

Finally, Ratliff contended that he billed at the end of the year

because that was Gasco’s typical practice.

     Third,    Consol   maintains    that    a    take-or-pay        contract    was

commercially unreasonable in 2011.               Consol points to evidence

that Ratliff knew that natural gas prices were at historic highs

in 2008, when the original contract was signed, and had dropped

dramatically by 2011.      In fact, Gasco had only ever entered into

two take-or-pay contracts -- both in 2008 -- and almost all of

Gasco’s rigs were idle in 2011.           But Ratliff claimed that he had

a different “view of the market.”           Ratliff testified that in his

view Consol might have engaged in gas hedging to lock in higher

prices years in advance.          Additionally, Consol might have had

lease     obligations   requiring   it     to    drill        despite    the   lower

prices.      Gasco   introduced   evidence       that    in    its   SEC   filings,

Consol admitted that it sometimes attempted to mitigate risk “by

entering into ‘take or pay’ contracts,” even though it “may have

to pay for services that [it] did not use.”

     Given this mix in the evidence, we cannot conclude that,

without      weighing    the      evidence        or     making         credibility

determinations, no reasonable jury could have rejected Consol’s




                                      9
contentions and instead found mutual assent.                   Consequently, we

reverse the grant of judgment as a matter of law to Consol. ∗



                                       III.

      Gasco next appeals two of the district court’s rulings on

partial summary judgment.         As with judgment as a matter of law,

we review summary judgment de novo to determine “whether there

exist any genuine issues of material fact.”                    Atalla v. Abdul-

Baki, 976 F.2d 189, 192 (4th Cir. 1992).

      First, Gasco appeals the district court’s ruling that the

2008 agreement, if reinstated, included only one rig.                      Gasco

claims that     “[a]   jury    could     reasonably    infer    that,   when   the

parties    further   amended     the   term   in   2011,    they   replaced    all

prior term amendments.”          Gasco Br. 51.        But the Addendum states

that,     besides    modifying     the    “term”      provision,    “all   other

provisions of the contract purchase order shall remain in full

force and effect.”       The rig amendment was one of the provisions

in   effect   that   remained    unchanged.        Unlike    the   appellant   in

Midlothian Coal Mining Co. v. Finney, 59 Va. 304 (1868), on

which Gasco relies, Gasco had ample opportunity for discovery.



      ∗ Because we find disputed issues of material fact
sufficient for this case to proceed to a factfinder, we reject
Consol’s contention that it was entitled to judgment on the
pleadings.


                                         10
Gasco     did     not     produce     sufficient        evidence     to    support      its

contrary interpretation.

      Second,      Gasco     appeals     the      court’s     refusal     to   foreclose

Consol     from     arguing     unilateral         mistake      plus      fraud    as    an

affirmative defense.          Gasco does not dispute the fact that fraud

is   an   affirmative        defense    to     contract       enforceability.           See

Spence    v.    Griffin,     372    S.E.2d     595,     598   (Va.     1998)   (defining

fraud).     Rather, Gasco argues that “[a]s a matter of law, Gasco

did not commit fraud” because Consol’s own “system’s error” led

it   to    sign     the    Addendum.          Gasco     Reply      Br.    42-43.        But

considering the above evidence in the light most favorable to

Consol,    we     cannot    conclude     that     the    district      court    erred    in

refusing to grant summary judgment on this claim to Gasco.



                                          IV.

      Finally, Gasco challenges the district court’s denial of

two motions in limine.                We review the denial of a motion in

limine for abuse of discretion.                   Projects Mgmt. Co. v. DynCorp

Int’l LLC, 734 F.3d 366, 373 (4th Cir. 2013).

      First, Gasco argues that the court should have excluded

parol evidence of Consol’s mistake as “irrelevant, confusing,

and misleading.”           But Consol had to present some evidence of a

mistake in order to prove that its mistake was obvious to Gasco.

Furthermore,       both     parties    proposed       essentially        the   same     jury

                                             11
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.              The

court did not abuse discretion in allowing this evidence.

     Nor did the court abuse discretion in allowing Consol to

introduce Gasco’s privilege log.        Gasco challenges the admission

of this log only on the grounds that it was irrelevant and

prejudicial.   But   as   Consol   argues,   the   log   rebuts   Gasco’s

narrative that there was nothing unusual about the Addendum that

would have alerted it to Consol’s mistake.



                                   V.

For the forgoing reasons, the judgment of the district court is

                                                     AFFIRMED IN PART,
                                                     REVERSED IN PART,
                                                         AND REMANDED.




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