Center v. Mad River Corp., 87-044

• Citation: 151 Vt. 408,561 A.2d 90
• Decision Date: 10 March 1989
• Docket Number: No. 87-044,87-044
• Parties: Robert N. CENTER v. MAD RIVER CORPORATION.
• Court: United States State Supreme Court of Vermont

Page 90

561 A.2d 90

151 Vt. 408

Robert N. CENTER v. MAD RIVER CORPORATION.

No. 87-044.

Supreme Court of Vermont.

March 10, 1989.

Motion for Reargument Denied

April 18, 1989.

Dorothy L. Helling of Theriault & Joslin, P.C., Montpelier, for plaintiff-appellee.

King & King, Waitsfield, for defendant-appellant.

Before ALLEN, C.J., PECK, GIBSON and DOOLEY, JJ., and BARNEY, C.J. (Ret.), Specially Assigned.

GIBSON, Justice.

Defendant appeals from a jury verdict awarding plaintiff $17,000 after finding that defendant was unjustly enriched when it refused to renew lease and license agreements with plaintiff. We reverse.

I.

In 1976, plaintiff purchased a small cross-country ski operation at the Tucker Hill Lodge in Fayston, Vermont. He spent the next several years expanding and developing the business into a viable Nordic ski center, operating under the name "Tucker Hill Ski Touring Center."

During the winter of 1980-81, plaintiff decided to expand his ski trails to include neighboring areas, including the Mad River Glen downhill skiing resort, located only two miles from Tucker Hill. As he had done with other neighboring landowners over whose land he wished to groom and use ski trails, plaintiff asked the defendant corporation to sign a license agreement (designated a "Special Use Permit") allowing use, for the ski season, of portions of its land. In addition, defendant orally leased plaintiff a portion of the building called the "Mad River Barn," in which plaintiff set up a second ski touring center.

This second center, which plaintiff also called the Tucker Hill Ski Touring Center, consisted of one room of a condominium building from which plaintiff's employees rented out cross-country ski equipment, sold passes to the trails, and gave instruction in Nordic and Telemark skiing. In addition, plaintiff ran numerous cross-country and Telemark competitions and other special events relating to Nordic skiing out of the center.

This arrangement continued in essentially the same form for the next three ski seasons, with some minor changes. First, the name of the business operated by plaintiff out of the Mad River Barn was changed in 1982, at defendant's request, to "Mad River Glen Nordic Center." Second, the trail system developed by plaintiff increased with each passing year, until by the 1983-84 ski season, over twenty kilometers of cross-country and Telemark trails were in use over defendant's land. Third, the lease agreement for the 1982-83 season was reduced to writing, and provided for renewal "on such terms and conditions as may be mutually agreed upon." A written lease was proposed by defendant for the 1983-84 season, but was not executed by the parties, who could not agree on two provisions. ¹ Instead, the parties agreed to another oral lease, consisting of the terms of the proposed lease absent the two disputed provisions.

The 1983-84 ski season ended in the spring of 1984. In August of 1984, plaintiff had lunch with defendant's general manager, and was told that his lease and license agreements were not going to be renewed. Plaintiff then received a letter dated August 24, 1984, from defendant's president, confirming that the lease would not be renewed because the "uncertainty surrounding the format of future operation of the Barn" was causing defendant to reconsider the nature of the Nordic operation, since the corporation was "not prepared to aggressively pursue a commercial type [cross]-country or touring center" at that time.

When the lease and license agreements were not renewed, plaintiff sold some of the inventory from the Mad River Barn operation (consisting of cross-country equipment, retail items, and his snow machine and grooming equipment), as well as the name Tucker Hill Ski Touring Center and his inventory from that operation, to Tucker Hill Lodge for $24,000. He also sold a portion of the equipment located at the Mad River Barn to the defendant, along with some ski racks, boxes and trail signs.

This lawsuit was precipitated when, despite the language in its August 24th letter to plaintiff, defendant began running a similar Nordic operation in the 1984-85 ski season out of the Mad River Barn. Plaintiff sued defendant for damages, alleging an obligation on defendant's part to renew the lease and/or license agreements based on plaintiff's reasonable expectations arising from the course of conduct between the parties over the four-year period. Plaintiff claimed damages based on the value of the benefits conferred upon defendant which, he contended, defendant wrongfully retained after failing to renew the lease and license agreements. Those benefits included increased patronage and visibility to the defendant corporation as a whole, the goodwill value of the business, increased profits to defendant, and improvements to the Mad River Barn.

After the close of all the evidence, defendant moved for a directed verdict. The trial court granted the motion as to all claims of breach of an express or implied-in-fact contract, but denied the motion as to the quasi-contract ² claim and submitted the case to the jury on that theory. The jury returned a verdict in plaintiff's favor in the sum of $17,000. Defendant made a timely motion for judgment notwithstanding the verdict (judgment n.o.v.), which was denied. This appeal followed.

Defendant raises three issues on appeal. First, it contends that in the absence of an express agreement to the contrary, neither a licensee nor a lessee has a legally enforceable right to renewal or to compensation for the value of improvements made to the property. Second, it asserts that there can be no quasi-contract if an express agreement on the same subject matter existed between the parties. Finally, defendant claims that an incorrect measure of damages was used by the jury. Because we find the first issue dispositive of this appeal, we do not reach the others.

II.

Plaintiff alleged that three distinct business relationships existed between him and defendant: first, the licensor-licensee relationship created by the annual "special use permits"; second, the lessor-lessee relationship created by the express lease agreements; and third, a not-readily-definable relationship which arose out of the efforts of plaintiff and defendant, individually and jointly, to develop complementary skiing opportunities, Nordic and Alpine, at plaintiff's place of business and defendant's adjoining Alpine ski resort. While plaintiff offered extensive evidence of these shared undertakings and alleged mutual benefits, he did not claim either in the complaint or at trial that he and defendant were partners or engaged in a joint venture.

Plaintiff has claimed that he had "reasonable expectations," given the prior conduct of the parties, that his business relationship with defendant would continue indefinitely. In response, defendant has consistently claimed that their relationship was governed by the terms of the leases and license agreements, which plaintiff admits contained no provisions requiring their annual renewal. The trial court dismissed all of plaintiff's claims based on the express agreements between the parties--i.e., the leases and licenses--and plaintiff has not cross-appealed from that decision.

The nub of plaintiff's argument appears to be that...