City of Beverly Hills v. Village of Velda Village Hills

• Decision Date: 18 June 1996
• Docket Number: No. 68343,68343
• Citation: 925 S.W.2d 474
• Parties: CITY OF BEVERLY HILLS, Plaintiff/Respondent, v. VILLAGE OF VELDA VILLAGE HILLS, Defendant/Appellant.
• Court: Missouri Court of Appeals

Page 474

925 S.W.2d 474

CITY OF BEVERLY HILLS, Plaintiff/Respondent, v. VILLAGE OF VELDA VILLAGE HILLS, Defendant/Appellant.

No. 68343.

Missouri Court of Appeals,

Eastern District,

Division Five.

June 18, 1996.

Madeline F. Franklin, St. Louis, for appellant.

Richard C. Bresnahan, Clayton, for respondent.

AHRENS, Judge.

In this breach of contract case, defendant Village of Velda Village Hills appeals the judgment in favor of plaintiff City of Beverly Hills. Defendant, through its governing body, the Velda Village Hills Board of Trustees, contends the trial court made four errors during trial: (1) the court admitted extrinsic evidence for the purpose of interpreting an unambiguous contract term; (2) the court failed to adopt the term's usual and ordinary meaning as defined in the dictionary; (3) the court's finding that defendant breached the contract was against the weight of the evidence; and (4) the court failed to construe any contract ambiguities against plaintiff, who drafted the contract. We affirm.

Review of this judge-tried case is governed by Rule 73.01 and Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976). We will affirm the trial court's judgment unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy, 536 S.W.2d at 32. We give due regard to the trial court's opportunity to have judged the credibility of the witnesses. Rule 73.01(c)(2). Further, we view the evidence and the concomitant inferences in a manner favorable to the prevailing party while disregarding all contradictory evidence. American States Insurance Co. v. P.R. Developers, Inc., 876 S.W.2d 12, 14 (Mo.App.1994).

The evidence adduced at trial, when viewed in the light most favorable to plaintiff, reveals the following: The parties entered into a contract on May 4, 1992, which was drafted by plaintiff's chief of police, Joe Collins. According to the contract, plaintiff would provide police services to defendant for a two-year period beginning on May 15, 1992, in exchange for a monthly fee. The contract contained a cancellation clause which permitted either party to terminate the agreement with "sixty days notice and cause shown". The phrase "cause shown" was undefined. Collins testified that the phrase was included specifically for the purpose of addressing defendant's concerns regarding plaintiff's performance. He stated that defendant wanted to be able to void the contract should plaintiff negligently perform its duties and obligations. Two members of defendant's Board of Trustees disputed Collins' testimony. Isaiah Johnson testified that the definition of "cause shown" was never discussed by the parties. However, his understanding was that it gave defendant the right to cancel the contract for any just reason. Earlene Luster ("Luster"), Chairman of the Board of Trustees, also testified that the parties did not discuss the definition of "cause shown".

On January 26, 1993, defendant notified plaintiff of its intention to exercise the cancellation clause. Notice was made via a letter which stated defendant had decided to obtain police services from the St. Louis County Police Department ("the County") instead of from plaintiff "because we feel that the County, with its wide variety of specialized services, can better meet the needs of our citizens." According to Luster, this letter did not communicate a belief that plaintiff was providing poor service. Later that day, Luster met with Collins to further explain the reasons for cancellation. According to admissions made pursuant to Rule 59.01, Luster told Collins at the meeting that defendant wanted to use the County police because the services provided were less costly. Furthermore, she stated cancellation was not due to any poor performance by plaintiff.

Plaintiff brought the instant suit seeking monetary damages. After trial, the court impliedly found that the term "cause" was unambiguous and that defendant, in order to cancel the contract, had to "show" ¹ that plaintiff had committed nonfeasance or malfeasance. The court found that defendant failed to meet this requirement. Therefore, the attempted cancellation was without legal effect. Plaintiff was awarded damages of approximately $42,000, the amount due on the remainder of the contract.

In its second point relied on ², defendant contends the trial court erroneously found that "the term cause, in it's (sic) usual understanding, pertains to the performance of duties or obligations imposed upon a party." Defendant asserts that the court should have utilized the dictionary definition of "cause". We disagree.

Defendant, citing Webster's Third New World Dictionary 78 (1993), suggests that we define "cause" as "anything bringing about an effect or result; a reason or motive for some action, feeling, etc." Plaintiff, on the other hand, urges us to adopt the trial court's performance related definition of "cause". Thus, the parties each ascribe a different meaning to the contract term "cause". However, the parties' dispute over the term's meaning does not make the term ambiguous. Phipps v. School District of Kansas City, 645 S.W.2d 91, 100 (Mo.App.1982).

Whether or not language is ambiguous is a question of law for the trial court. In determining whether the trial court has erred as a matter of law in interpreting the contract as unambiguous, the appellate court reviews the [contract] itself to determine if any ambiguity exists. The language in question is ambiguous if it is "fairly susceptible of two interpretations." (citations omitted)

Schuster v. Shelter Mutual Insurance Co., 857 S.W.2d 381, 383 (Mo.App.1993).

After thoroughly reviewing the parties' service contract, we hold that the term "cause" is unambiguous here; it is fairly susceptible to only one meaning. Our role is to determine the meaning to be enforced by what the words in context show the parties meant by the terms of the agreement, not by what the parties now say was intended. Phipps, 645 S.W.2d at 100. We agree with the trial court that, in the instant case, "cause" expresses a performance based standard for termination. Compare Roach v. Consolidated Forwarding Co., 665 S.W.2d 675, 680 (Mo.App.1984); Superior Gearbox Co. v. Edwards, 869 S.W.2d 239, 244 (Mo.App.1993). In the parties' service contract, "cause shown" mandates, that, at a minimum, defendant communicate dissatisfaction with plaintiff's performance of its duties and obligations prior to or simultaneous with defendant's notice of termination. We realize...