Ad Two, Inc. v. City & County of Denver, No. 99SC268.

• Citation: 376 Colo. 2000,9 P.3d 373
• Decision Date: 11 September 2000
• Docket Number: No. 99SC268.
• Parties: AD TWO, INC. d/b/a The Coffee Beanery; Airport Concessions, Inc.; Airport Services, Inc. d/b/a Quizno's and Peaberry Coffee; GRD & D, Inc. d/b/a Boyer's Gourmet Coffees; Laura Devarona d/b/a Varona Imports (Colorado Colors); Dick & Jane Pizza, Inc. d/b/a Domino's Pizza; First Class Baggage Co. f/k/a Golden Eel Import Co. of Colorado; Kellen Industries, Inc., d/b/a Rocky Mountain Chocolate Factory and the Studio; Mission Yogurt, Inc. d/b/a Penguin's Harvest Express; Trugoy, Inc. d/b/a TCBY Yogurt; Susan Vale, Inc.; and Lauren K. Wahlstrom, d/b/a The Colorado Collection, Petitioners, v. The CITY AND COUNTY OF DENVER, by and through The MANAGER OF AVIATION; and The Manager of Aviation, City and County of Denver, Respondents.
• Court: Supreme Court of Colorado

9 P.3d 373

376 Colo. 2000

AD TWO, INC. d/b/a The Coffee Beanery; Airport Concessions, Inc.; Airport Services, Inc. d/b/a Quizno's and Peaberry Coffee; GRD & D, Inc. d/b/a Boyer's Gourmet Coffees; Laura Devarona d/b/a Varona Imports (Colorado Colors); Dick & Jane Pizza, Inc. d/b/a Domino's Pizza; First Class Baggage Co. f/k/a Golden Eel Import Co. of Colorado; Kellen Industries, Inc., d/b/a Rocky Mountain Chocolate Factory and the Studio; Mission Yogurt, Inc. d/b/a Penguin's Harvest Express; Trugoy, Inc. d/b/a TCBY Yogurt; Susan Vale, Inc.; and Lauren K. Wahlstrom, d/b/a The Colorado Collection, Petitioners, v. The CITY AND COUNTY OF DENVER, by and through The MANAGER OF AVIATION; and The Manager of Aviation, City and County of Denver, Respondents.

No. 99SC268.

Supreme Court of Colorado, En Banc.

September 11, 2000.

Hochstadt, Straw, Strauss & Silverman, P.C., Richard S. Strauss, Jordan Hochstadt, Denver, Colorado, Attorneys for Petitioners.

J. Wallace Wortham, City Attorney, City and County of Denver, Helen Eckardt Raabe, Assistant City Attorney, City and County of Denver, Denver, Colorado, Attorneys for Respondents. Justice RICE delivered the Opinion of the Court.

We granted certiorari to review the judgment of the court of appeals in Ad Two, Inc. v. City & County of Denver, 983 P.2d 128 (Colo.App.1999). Petitioners, twelve concessionaires at Denver International Airport (DIA) (Concessionaires), challenged an order of the Manager of Aviation (Manager) for the City of Denver (City) interpreting a provision of the Concession Agreements between Concessionaires and the City as requiring Concessionaires to retain a certified public accountant (CPA) to perform an independent audit of their revenue statements. A hearing officer upheld the Manager's interpretation of the disputed provision and Concessionaires sought review of the hearing officer's decision pursuant to C.R.C.P. 106(a)(4). The district court and the court of appeals affirmed the hearing officer's decision in separate judgments. Upon review, we conclude that the hearing officer properly interpreted the disputed provision. Accordingly, we affirm the judgment of the court of appeals.

I. FACTS AND PROCEEDINGS BELOW

In 1993 and 1994, Concessionaires entered into agreements with the City to operate concessions at DIA. Paragraph 5.07 of these agreements required Concessionaires to submit annual statements of the total of all revenues and business transacted during the preceding calendar year. This paragraph provided, in relevant part:

5.07 BOOKS OF ACCOUNT AND AUDITING. Upon the Commencement Date, Concessionaire shall keep within the limits of the City and County of Denver true and complete records and accounts of all Gross Revenues and business transacted, including daily bank deposits. Not later than February 28 of each and every year during the Term hereof, Concessionaire shall furnish to City a true and accurate statement of the total of all revenues and business transacted during the preceding calendar year (showing the authorized deductions or exclusions in computing the amount of such Gross Revenues and business transactions). Such statement shall be prepared and certified to be true and correct by an independent certified public accountant. Such statement shall be furnished for every calendar year in which business was transacted under this Agreement during the whole or any part of the year.

(Emphasis added.)

In late 1995, as the first calendar year of operation at DIA was nearing an end, Concessionaires requested clarification from DIA representatives of the above-emphasized language in paragraph 5.07. After consultations with the City Attorney's Office, the Manager of Aviation issued an order on April 5, 1996, advising Concessionaires that the language in question required them to submit a report from an independent CPA after the CPA had audited the statement of revenues and business transacted. The Manager's order also indicated that financial statements signed by an officer of the company certifying the sales reported were unacceptable and that concessionaires who could demonstrate extraordinary economic hardship as a result of the independent audit should explain their circumstances to the City.

Concessionaires subsequently notified the City that they formally disputed the Manager's order. Concessionaires argued that the disputed language was ambiguous and impossible to perform as written because a CPA cannot ethically "certify" a revenue statement to be "true and correct," and, therefore, the language should be read as allowing an officer of a concessionaire to certify the revenue statements as true and correct. Pursuant to the written agreements with the City providing that all disputes arising from the agreements shall be resolved by an administrative hearing, the Manager appointed a hearing officer and a two-day hearing was held in November 1996. The hearing officer issued his findings of fact, conclusions of law, and ruling on January 10, 1997. The hearing officer affirmed the Manager's order and ruled that the disputed language was not ambiguous and that it was not impossible to perform because it could be satisfied by an audit opinion from an independent CPA that the revenue statement "presents fairly, in all material respects the revenues and business transacted." Concessionaires sought district court review of the hearing officer's ruling pursuant to C.R.C.P. 106(a)(4).¹ The district court entered its order affirming the hearing officer's ruling on July 18, 1997. Concessionaires then sought further review by timely appeal to the court of appeals and the court of appeals affirmed the district court and hearing officer in Ad Two, Inc.,983 P.2d at 132. We granted Concessionaires' petition for certiorari to review the judgment of the court of appeals.²

II. ANALYSIS

Concessionaires contend that the disputed language of paragraph 5.07—"such statement shall be prepared and certified to be true and correct by an independent certified public accountant"—is ambiguous because it is susceptible to more than one reasonable interpretation. Furthermore, Concessionaires argue that rules of construction of an ambiguous contract compel the conclusion that their interpretation of the disputed language, which would allow an officer of a concessionaire to certify the annual revenue statements, should be adopted. We disagree with Concessionaires' argument for the reasons stated below.

A. Standard of Review

Our review under C.R.C.P. 106(a)(4) is limited to "a determination of whether the [governmental] body or officer has exceeded its jurisdiction or abused its discretion, based on the evidence in the record before the defendant body or officer." C.R.C.P. 106(a)(4)(I). We review the record to determine if there is any competent evidence to support the hearing officer's decision. See City of Colorado Springs v. Givan, 897 P.2d 753, 756 (Colo.1995). The appropriate consideration for an appellate court is whether there is sufficient evidentiary support for the decision reached by the administrative tribunal, not whether there is adequate evidentiary support for the lower court's decision. See id. Therefore, an appellate court is in the same position as the district court in reviewing an administrative decision under C.R.C.P. 106. See id.

However, contract interpretation is a question of law that is reviewed de novo and we need not defer to a lower tribunal's interpretation of the contract. See Fibreglas Fabricators, Inc. v. Kylberg, 799 P.2d 371, 374 (Colo.1990). Our review is guided by well-established principles of contract law. The primary goal of contract interpretation is to determine and give effect to the intent of the parties. See USI Properties East, Inc. v. Simpson, 938 P.2d 168, 173 (Colo.1997). The intent of the parties to a contract is to be determined primarily from the language of the instrument itself. See id. In ascertaining whether certain provisions of an agreement are ambiguous, the instrument's language must be examined and construed in harmony with the plain and generally accepted meaning of the words employed. See id. Written contracts that are complete and free from ambiguity will be found to express the intention of the parties and will be enforced according to their plain language. See id. Extraneous evidence is only admissible to prove intent where there is an ambiguity in the terms of the contract. See id.

Terms used in a contract are ambiguous when they are susceptible to more than one reasonable interpretation. See Browder v. U.S. Fidelity & Guaranty Co., 893 P.2d 132, 133 (Colo.1995). Absent such ambiguity, we will not look beyond the four corners of the agreement to determine the meaning intended by the parties. See Simpson, 938 P.2d at 173. The mere fact that the parties may have different opinions regarding the interpretation of the contract does not itself create an ambiguity in the contract. See id.

B. Application

Concessionaires contend that the disputed language of paragraph 5.07 is ambiguous and should be interpreted to allow an officer of a concessionaire to certify its annual revenue statement as true and correct, without input or review by a CPA. We conclude that the language is unambiguous and requires an independent review and verification of the revenue statement by a CPA.

The disputed language is contained within paragraph 5.07 of the agreement, titled "BOOKS OF ACCOUNT AND AUDITING." The language provides, "Such statement shall be prepared and certified to be true and correct by an independent certified public accountant." This language unambiguously demonstrates that the parties intended to require Concessionaires' revenue statements to be reviewed by a CPA so that the CPA could provide an independent statement as to the accuracy of the information. This independent verification of the revenue statements provides a level of assurance as to the overall accuracy of the statements.

While...