The Delaware Supreme Court on Monday ruled that Exelon General Acquisitions' decision to change the location of a Michigan wind farm allowed the company to avoid a $14 million earn-out payment to Deere & Co. stemming from its 2010 purchase of Deere's wind-energy business.

In his first full opinion since joining the court, Justice Gary F. Traynor reversed a 2016 Delaware Superior Court ruling that found Exelon was on the hook for the payment because it did not abandon the wind farm, but had simply moved it about 100 miles from its intended site.

The lower court's determination, he said, was based on extrinsic evidence that could not be used to conclude that the companies had agreed that the project could be moved. Rather, the terms of the purchase agreement dictated that the wind farm had to be built in Michigan's Lenawee County in order for Deere to collect the earn-out payment.

“Together, these provisions in the purchase agreement make implausible the notion that a different wind farm, situated in a different location and regulatory environment (and acquired from another company, no less), was the same 'wind project' that had been under development in Lenawee County,” Traynor wrote in a unanimous 26-page opinion.

Deere had sued to recover the payment after local opposition to the wind farm forced Exelon to scrap its plans to build in Lenawee County. Exelon later finished the project in Gratiot County, Michigan, after partnering with a different developer, sparking the dispute.

Deere argued that Exelon had simply relocated the wind farm, making the company still eligible to collect the earn-out based on contractual milestones that had still been met.

Exelon, however, countered with its own summary judgment motion, saying that the payment could only be triggered if the project was completed in Lenawee County. Forces beyond its control, the company said, had caused it to start over in a new county with different partners, wiping out any obligation it owed to Deere.

But the Superior Court initially sided with Deere, saying that the changes amounted only to a decision to move the wind farm and that Exelon believed when it signed the agreement that the wind farm could be moved to another site.

Traynor acknowledged that the reasoning presented some “superficial appeal,” but found that Exelon had only agreed to make the earn-out payment based on Deere's assurances that the wind farm could be completed in its original location.

“The representations that Deere made about the suitability of the Lenawee County site do more than just demonstrate that the 'wind project' had a geographic anchor at the time of the sale—these representations were essential to Exelon's willingness to assume the earn-out obligation,” he said.

Traynor also rejected the lower court's determination that the contractual earn-out provision allowed it to look to post-closing events to decide the parties rights and obligations under the purchase agreement. Because both courts agreed that the terms of the contract were unambiguous, the court could limit its analysis only to the terms of the contract, which required the project to be built in Lenawee County in order for Deere to receive its earn-out payment.

“That evidence cannot be used, as the Superior Court did here, as an aid to interpreting the meaning of the contract,” Traynor wrote.

Attorneys for both sides were not immediately available to comment on the ruling.

Exelon was represented by Matthew E. Price of Jenner & Block and David J. Margules, Geoffrey A. Kahn and Matthew A. White of Ballard Spahr.

Deere was represented by Peter J. Walsh Jr., Matthew F. Davis and Jacob R. Kirkham of Potter Anderson & Corroon.

The case, on appeal, was captioned Exelon Generation Acquisitions v. Deere.