Boyne USA. Inc v. Meadows

• Decision Date: 09 June 2010
• Docket Number: No. DA 09-0580.,DA 09-0580.
• Parties: BOYNE USA, INC., Plaintiff and Appellee,v.LONE MOOSE MEADOWS, LLC and Lone Moose Meadows Condominiums Unit Owners Association, Inc., Defendants and Appellants.
• Court: Montana Supreme Court

356 Mont. 408

235 P.3d 1269

2010 MT 133

BOYNE USA, INC., Plaintiff and Appellee,v.LONE MOOSE MEADOWS, LLC and Lone Moose Meadows Condominiums Unit Owners Association, Inc., Defendants and Appellants.

No. DA 09-0580.

Supreme Court of Montana.

Submitted on Briefs April 21, 2010.

Decided June 9, 2010.

For Appellants: Stephen R. Brown, Charles E. Hansberry, Elena J. Zlatnik; Garlington, Lohn & Robinson, PLLP, Missoula, Montana.

For Appellee: David M. Wagner, Crowley Fleck, PLLP, Bozeman, Montana.

Justice MICHAEL E. WHEAT delivered the Opinion of the Court.

¶ 1 The Fifth Judicial District Court, Madison County, granted summary judgment in favor of Boyne USA, Inc. (Boyne), concluding that Lone Moose Meadows, LLC and Lone Moose Meadows Condominiums Unit Owners' Association, Inc. (collectively referred to as “Lone Moose”) were obligated under the terms of a “Lift Operations Agreement” to pay Boyne for depreciation payments beginning in the 2002-2003 ski season. Lone Moose appeals.

BACKGROUND

¶ 2 Boyne operates Big Sky Ski Resort. Lone Moose is a privately-owned residential development on the eastern boundary of the resort. Lone Moose constructed the Lone Moose ski lift to provide ski access from its condominiums to Big Sky's ski area. In 1999, Boyne and Lone Moose entered into a “Lift Operations Agreement” in which Boyne agreed to operate the Lone Moose ski lift and Lone Moose agreed to pay Boyne to operate the lift. Section 1(a) of the agreement discusses the terms of payment. It states, in pertinent part:

The method of determining the amount due m[sic] shall be in accordance with the cost outline attached as Exhibit D and incorporated by reference. The amount of such payment is $78,250 for the 1999-2000 ski season. This amount does not include any amount for depreciation. [Lone Moose] shall not be required to pay any depreciation dollar component of the operating expenses until the 2002-2003 ski season.

Exhibit D, titled “Lone Moose Lift Expenses,” listed the expenses as:

                -----------------------
                |                      |Lift Criteria|Amount                |Expense|||
                |----------------------|-------------|----------------------|-------|||
                |Value                 |$500,000     |Depreciation          |50,000 |||
                |----------------------|-------------|----------------------|-------|||
                |400 H.P.              |.085KW/hp/hr |130 days @ 7.5 hrs/day|33,150 |||
                |----------------------|-------------|----------------------|-------|||
                |2.5 operaters[sic]/day|$30/hr       |130 days @ 9 hrs/day  |35,100 |||
                |----------------------|-------------|----------------------|-------|||
                |Maintenance           |$10,000      |Annual                |10,000 |||
                |----------------------|-------------|----------------------|-------|||
                |$128,250              |             |                      |       |||
                -----------------------
                

The contract stated that “[r]eplacement lifts will be constructed and owned by Boyne.” The contract also provided that if any dispute arose under the contract, the prevailing party would be entitled to reasonable attorney fees.

¶ 3 In December 2002, Boyne gave Lone Moose a Notice of Lift Operation Expenses for the 2002-2003 ski season. The Notice stated that Lone Moose was required to pay the depreciation operating expense set forth in Exhibit D. Lone Moose refused to pay the depreciation dollar component of the operating expenses. For the next several years, the parties attempted to resolve the handling of the depreciation payments.

¶ 4 Boyne filed its complaint in February 2008 for breach of contract because Lone Moose had not made any depreciation payments. Lone Moose moved for summary judgment, contending the contract had unambiguously stated that Lone Moose was not obligated to reimburse Boyne for depreciation on a lift it did not own. Boyne responded and filed a cross-motion for summary judgment, arguing that the contract had unambiguously established Lone Moose's obligation to make annual depreciation expense payments of $50,000 beginning with the 2002-2003 ski season, and Lone Moose had breached the contract by failing to make payments.

¶ 5 In May 2009, the District Court held a hearing on the summary judgment motions. Noting that the sole issue was the determination of when Lone Moose must start paying $50,000 annually for depreciation, the court stated:

What I parse out when I read [Section 1(a) ] is that these are, in essence, two negatives. One is “not required,” and the second is “until.” Two negatives, as we are advised by mathematical calculation, reads positive. It reads then, as I interpret it, [Lone Moose] shall start paying in 2002-2003.

Ruling from the bench, the District Court granted Boyne's summary judgment motion and denied Lone Moose's motion.

¶ 6 On appeal, both parties reiterate their arguments from the District Court. Both parties agree that the facts are not disputed and the contract is unambiguous, but disagree about what event triggers payment of the depreciation dollar component of Section 1(a). Boyne asserts that depreciation payments should have begun in the 2002-2003 ski season. Lone Moose asserts that depreciation payments are not due until Boyne owns the lift. Lone Moose also contends on appeal that no proper judgment was entered because the court did not give a specific dollar amount and, as a result, the matter should be remanded to the District Court to determine the specific amount of the judgment. In its response, Boyne requests its attorney fees incurred on appeal.

¶ 7 We restate the issues as follows:

¶ 8 Issue 1: Did the District Court err when it determined that the contract required Lone Moose to pay Boyne for “depreciation” beginning with the 2002-2003 ski season?

¶ 9 Issue 2: Was a money judgment ever properly entered against Lone Moose when the District Court failed to specify the amount of the judgment?

¶ 10 Issue 3: Is Boyne entitled to its attorney fees incurred on appeal?

STANDARD OF REVIEW

¶ 11 We review de novo a district court's grant of summary judgment, employing the same standards utilized by the district court pursuant to M.R. Civ. P. 56. PPL Mont., LLC v. State, 2010 MT 64, ¶ 84, 355 Mont. 402, 229 P.3d 421. Because we review a grant of summary judgment de novo, we need not defer to the judgments and decisions of the district court. PPL Mont., ¶ 85.

DISCUSSION

¶ 12 Issue 1: Did the District Court err when determined that the contract required Lone Moose to pay Boyne for “depreciation” beginning with the 2002-2003 ski season?

¶ 13 Lone Moose argues that “depreciation” should be applied under its technical tax definition-meaning that depreciation is only available to a taxpayer who has suffered an economic loss and erosion in the value of its own property-and because Boyne does not own the lift, it is not entitled to payments for depreciation. Lone Moose asserts that the contract's language that it “shall not be required to pay any depreciation dollar component of the operating expenses until the 2002-2003 ski season” means that, if Boyne had to replace the lift before the 2002-2003 ski season and the value of the lift depreciated, Lone Moose would not have to pay Boyne for depreciation until the 2002-2003 ski season. (Emphasis added.) That is, Lone Moose would have to pay Boyne for depreciation only after the 2002-2003 ski season and only if Boyne had replaced the lift and owned it.

¶ 14 “Where the language of an agreement is clear and unambiguous and, as a result, susceptible to only one interpretation, the duty of the court is to apply the language as written.” Carelli v. Hall, 279 Mont. 202, 209, 926 P.2d 756, 761 (1996). If the terms of the contract are clear, “there is nothing for the courts to interpret or construe and the court must determine the intent of the parties from the wording of the contract alone.” Doble v. Bernhard, 1998 MT 124, ¶ 19, 289 Mont. 80, 959 P.2d 488 (internal quotations omitted); see also § 28-3-303, MCA. Because we concur with the parties that the contract is unambiguous, our task is to determine the intent of the parties from the wording of the contract as to whether depreciation payments were triggered in the 2002-2003 ski season regardless of whether Boyne owned the lift at the time.

¶ 15 We reject Lone Moose's contention that depreciation should be applied as a technical term under its tax definition. If the parties intended the term “depreciation” to have a specific definition, the definition should have been included in the contract. Further, we are not convinced by Lone Moose's contention that no legal basis exists for Boyne to receive depreciation payments because it did not own the lift. The legal basis arises from the contract that Lone Moose signed agreeing to make payments for depreciation beginning in the 2002-2003 ski season.

¶ 16 Boyne asserts that because the lift began depreciating the day it was put into use, the depreciation payments were to offset the wear and tear on the lift and to facilitate Boyne's ability to construct a replacement lift when needed. However, the reasons why the parties agreed that Lone Moose would make “depreciation” payments are irrelevant. The contract is unambiguous. Thus, we simply ascertain and declare the terms of the contract. Deschamps v. Treasure State Trailer Court, 2010 MT 74, ¶ 28, 356 Mont. 1, 230 P.3d 800 (citing § 1-4-101, MCA). The wording of the contract shows that the parties agreed Lone Moose would make $50,000 annual payments, which the parties agreed to call “depreciation.” Lone Moose was “not required” to make these payments “until the 2002-2003 ski season.”

¶ 17 Moreover, if we adopted Lone Moose's argument that the depreciation payment was not due until Boyne replaced the lift, we would have to insert language into the contract that is not present. Our job is to ascertain and declare what is in terms or in substance contained in the contract, not to insert what has been omitted or to omit what has been inserted. Deschamps, ¶ 28. The District Court did not err when it...