Bergkamp v. Carrico
| Decision Date | 01 July 1980 |
| Docket Number | No. 13058,13058 |
| Citation | 101 Idaho 365,613 P.2d 376 |
| Parties | Richard J. BERGKAMP and Marilyn Bergkamp, husband and wife, dba Alpine Mexico Cafe, Plaintiffs-Appellants, v. Thomas CARRICO, dba the Alpine Saloon; Gruener, Inc., an Idaho Corporation; SNT, Inc., an Idaho Corporation; and Michael A. Martin and Karin T. Martin, husband and wife, Defendants-Respondents. |
| Court | Idaho Supreme Court |
E. Lee Schlender of Schlender & Donovan, Ketchum, for plaintiffs-appellants.
George R. Kneeland of Kneeland, Laggis, Korb, Collier & Benjamin, Ketchum, for defendants-respondents.
This is an appeal from an order granting summary judgment in favor of defendant respondents. We reverse.
In July of 1974 plaintiff appellants Bergkamps, for brevity referred to herein as lessees, entered into a written lease agreement with Gruener, Inc., hereinafter referred to as lessor, whereby the lessees obtained a leasehold interest in lessor's property, commonly known as the "Alpine Club," a restaurant in Ketchum, Idaho. The lease contained a variety of standard provisions, including an option to renew for an additional five years after the original term of five years expired. A final paragraph in the lease is the heart of this controversy:
Elizabeth Gruener, sole stockholder of Gruener, Inc., did in fact sell Gruener, Inc., in November, 1974, to Spence, Thornton & Noxon, who thereafter changed the name of the corporation to SNT, Inc. In June, 1976, SNT in turn sold the Alpine Club to the Carricos, defendant respondents. On May 26, 1977, Carricos sent a letter to Bergkamps advising them that they were terminating the lease pursuant to paragraph 21. The Carricos in turn sold to defendant respondents Michael and Karin Martin on November 8, 1977. On November 10, 1977, the Martins sent a letter to the Bergkamps, lessees, again purporting to terminate the lease.
In December, 1977, the Bergkamps filed a complaint in district court seeking: (1) damages for unjust enrichment resulting from Bergkamps' improvements and from breach of the lessors' covenant of quiet enjoyment; and/or (2) a declaratory judgment that the lease could not be terminated.
The parties stipulated to the factual background of the case, and agreed that the court could on cross motions for summary judgment determine the issue of interpretation of the disputed paragraph 21. The parties requested a declaratory judgment which would determine whether the defendants had the right to terminate the lease. Holding paragraph 21 of the lease agreement to be unambiguous, the district court construed it unfavorably against the lessee and entered a decree cancelling the lease.
The intended meaning of paragraph 21 is not apparent on its face. Its provisions are susceptible to differing interpretation. It can just as easily be read to imply a continuing reservation in any subsequent owner of the power to terminate the lease as it can be read to imply a limited reservation in certain parties only.
Where the terms of a contract are ambiguous, its interpretation and meaning is a question of fact and extrinsic evidence may be considered in attempting to arrive at the true intent of the contracting parties. Roberts v. Hollandsworth, 582 F.2d 496 (9th Cir. 1978); Werry v. Phillips Petroleum Co., 97 Idaho 130, 540 P.2d 792 (1975); Ridley v. VanderBoegh, 95 Idaho 456, 511 P.2d 273 (1973). Moreover, the court must try to discover that intent and may scrutinize circumstances surrounding the contract's formation. Transamerica Leasing Corp. v. Van's Realty Co., 91 Idaho 510, 427 P.2d 284 (1967).
Resolution of this ambiguity issue requires further proceedings in which oral and documentary evidence may be presented on the question of the true intent of the parties at the time of the execution of the contract.
The cause is reversed and remanded to the district court for further proceedings consistent herewith. Costs to appellants. Any award of attorney fees to abide final determination in the district court.
While I agree that the summary judgment should be reversed, I am unable to join in the Court's opinion holding that there must be a trial for the taking of evidence in order to aid the trial court in construing the lease. In holding the lease free from ambiguity the trial court unfortunately did not favor the parties with any memorandum decision setting forth its own views in construing the lease. Today the Court in holding that the trial court was in error does not favor the trial court and the parties with any explanation of the rationale by which it comes to the conclusion that paragraph 21 of the lease is susceptible of two different interpretations.
I agree with the trial court that the lease is not ambiguous. We are not handed the lease and its paragraph 21 in a vacuum, but with a stipulation of all the pertinent facts which brought about the controversy. Obviously the parties carefully stipulated to those facts in order to avoid the delay and expense of a trial, and generally those facts are stated in the Court's opinion. The lease, given a proper construction in connection with the stipulated facts brings me to the conclusion that, following Mrs. Gruener's sale to SNT, the lease was not subject to cancellation by subsequent purchasers of the owner-lessor's interest. Lawyers and judges as well, should not view such transactions...
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