Dollar Plus Stores v. R-Montana Associates

• Decision Date: 13 May 2009
• Docket Number: No. DA 08-0143.,DA 08-0143.
• Citation: 209 P.3d 216,2009 MT 164,350 Mont. 476
• Parties: DOLLAR PLUS STORES, INC., Plaintiff and Appellee, v. R-MONTANA ASSOCIATES, L.P., and Rosen Associates Management Corporation, Defendants and Appellants.
• Court: Montana Supreme Court

209 P.3d 216

2009 MT 164

350 Mont. 476

DOLLAR PLUS STORES, INC., Plaintiff and Appellee, v. R-MONTANA ASSOCIATES, L.P., and Rosen Associates Management Corporation, Defendants and Appellants.

No. DA 08-0143.

Supreme Court of Montana.

Submitted on Briefs November 19, 2008.

Decided May 13, 2009.

Rehearing Denied June 16, 2009.

For Appellant: Brian J. Smith, Gary B. Chumrau and Kathryn S. Mahe, Garlington, Lohn & Robinson, Missoula, Montana.

For Appellee: Sean S. Frampton, Morrison & Frampton, Whitefish, Montana.

Justice BRIAN MORRIS delivered the Opinion of the Court.

¶ 1 R-Montana Associates, L.P., and Rosen Associates Management Corporation (R-Montana) appeal an order of the Fourth Judicial District Court, Missoula County, that granted summary judgment in favor of Dollar Plus Stores, Inc. (Dollar). We affirm.

¶ 2 We review the following issues on appeal:

¶ 3 Did the District Court correctly determine that the term "bar or tavern" as used in the lease agreement was unambiguous?

¶ 4 Did the District Court correctly determine that Doc Holliday's was a "bar or tavern?"

¶ 5 Did the District Court correctly determine that the doctrine of laches does not bar Dollar's claims?

¶ 6 Did the District Court abuse its discretion when it granted Dollar's summary judgment motion without holding a hearing?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 7 R-Montana owns the Holiday Village Shopping Center (shopping center) in Missoula. Dollar leases space in the shopping center. The parties operate under a lease agreement originally executed in 1973 by the parties' respective predecessors in interest. The lease agreement provides in pertinent part as follows: "No part of the Shopping Center other than the Leased Premises shall be used for ... [a] bar or tavern ... without Tenant's prior written consent."

¶ 8 R-Montana leased a space in the shopping center to Max's Casino and Subs (Max's) from May of 2004 until July of 2006. Max's possessed a Montana alcoholic beverage license that allowed it to serve beer and wine for on-premises consumption. Max's transferred its Montana alcoholic beverage license to Doc Holliday's Card Room and Casino (Doc Holliday's) when its lease expired. Doc Holliday's took over Max's location to operate a casino and live table card room.

¶ 9 Dollar complained to R-Montana in June of 2006 that Doc Holliday's was a "bar or tavern." Dollar argued that Doc Holliday's operation of a "bar or tavern" in the shopping center would violate the lease agreement. R-Montana ignored Dollar's complaint and completed the transfer of the lease to Doc Holliday's. Dollar filed an action on July 27, 2006, seeking specific performance of the "bar or tavern" provision of the lease.

¶ 10 The District Court's scheduling order stated that "[i]t shall be the responsibility of the moving party to advise the court either that the motions are submitted on briefs or to request a hearing in accordance with Rule [6] of the Local Rules of the Fourth Judicial District." The parties engaged in discovery. Dollar filed a motion for summary judgment on August 9, 2007, along with a brief in support of the motion. R-Montana filed a response brief on August 24, 2007. R-Montana also filed three affidavits opposing the motion for summary judgment. Dollar filed a reply brief. Neither party requested a hearing.

¶ 11 R-Montana argued that the phrase "bar or tavern" as used in the lease was ambiguous. R-Montana contended that Doc Holliday's operated primarily as a casino and that any sales of beer and wine were incidental to the casino and live table card business. R-Montana argued that Doc Holliday's therefore was not a "bar or tavern" as those terms were intended by the parties to the 1973 lease agreement. R-Montana further alleged that the equitable application of laches barred Dollar's claims.

¶ 12 The District Court granted Dollar's motion for summary judgment on October 29, 2007, without holding a hearing. The District Court determined that Doc Holliday's fell under the common and ordinary understanding of "bar or tavern." The District Court determined that R-Montana had failed to provide reasonable or logical definitions, or persuasive legal authority, for the proposition that the common and ordinary understanding of the term "bar or tavern" would not include a gambling establishment. The court noted that the gambling establishment at issue serves beer or wine pursuant to a Montana beer and wine license for on-premises consumption.

¶ 13 The District Court further determined that R-Montana had failed to support its argument that the common and ordinary understanding of the term "bar or tavern" was ambiguous. The District Court also concluded that R-Montana's reliance on laches failed to raise a material question of fact that would preclude summary judgment. The parties stipulated to entry of a final judgment and to the amount of Dollar's attorney's fees. The parties stipulated to stay the judgment pending this appeal.

STANDARD OF REVIEW

¶ 14 We review de novo a district court's decision to grant summary judgment, using the same criteria applied by the district court under M.R. Civ. P. 56. Prosser v. Kennedy Enterprises, Inc., 2008 MT 87, ¶ 10, 342 Mont. 209, ¶ 10, 179 P.3d 1178, ¶ 10. Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." M.R. Civ. P. 56(c). We draw all reasonable inferences in favor of the party opposing summary judgment. Prosser, ¶ 10. We review conclusions of law for correctness. Hughes v. Lynch, 2007 MT 177, ¶ 8, 338 Mont. 214, ¶ 8, 164 P.3d 913, ¶ 8.

¶ 15 We review a district court's decision to forego a hearing on a summary judgment motion for an abuse of discretion. SVKV, L.L.C. v. Harding, 2006 MT 297, ¶ 19, 334 Mont. 395, ¶ 19, 148 P.3d 584, ¶ 19. A court abuses its discretion when it acts arbitrarily, without employment of conscientious judgment, or exceeds the bounds of reason resulting in substantial injustice. SVKV, ¶ 19.

DISCUSSION

¶ 16 Did the District Court correctly determine that the term "bar or tavern" as used in the lease agreement was unambiguous?

¶ 17 The initial determination of whether an ambiguity exists in a contract presents a question of law. Wurl v. Polson School Dist. No. 23, 2006 MT 8, ¶ 17, 330 Mont. 282, ¶ 17, 127 P.3d 436, ¶ 17. We deem a contract term ambiguous when the language of the contract, as a whole, reasonably may be subject to at least two different interpretations. Wurl, ¶ 17. The mere fact that the parties disagree as to the meaning of a contract provision fails to create an ambiguity. Wurl, ¶ 17. We generally interpret the words of a contract in their ordinary and popular sense unless the parties use the words in a technical sense or unless the parties give a special meaning to them by usage. Section 28-3-501, MCA.

¶ 18 R-Montana argues that the ambiguous nature of the term "bar or tavern" precludes summary judgment. R-Montana contends that the ambiguity creates an issue of fact regarding the intent of the original parties to the contract. The District Court cited to the Webster's Dictionary definition of both "bar" and "tavern." Webster's defines "bar" as "a counter at which food or esp. alcoholic beverages are served." Merriam-Webster's Collegiate Dictionary 91 (Frederick C. Mish ed., 10th ed.1993). Webster's defines "tavern" as "an establishment where alcoholic beverages are sold to be drunk on the premises." Merriam-Webster's at 1208.

¶ 19 The District Court also noted the more detailed definition of "bar" adopted by the Legislature in 2005 as part of the Montana Clean Indoor Air Act, § 50-40-103, MCA. Under § 50-40-103, MCA, a bar means: "an establishment with a [state liquor] license that is devoted to serving alcoholic beverages for consumption ... on the premises." The statute further provides that a bar is an establishment "in which the serving of food is only incidental to the service of alcoholic beverages or gambling operations, including but not limited to taverns, night clubs, cocktail lounges, and casinos." Section 50-40-103, MCA. The District Court recognized that this definition did not exist in 1973 when the original parties signed the lease. The District Court stated, however, that the definition reflected a common understanding of the historical conception of what constitutes a "bar."

¶ 20 R-Montana asserts that the District Court's need to resort to three different definitions in determining the common understanding of bar or tavern supports its claim of ambiguity. The District Court used two separate dictionary definitions for "bar" and "tavern." We consistently have used dictionaries when seeking to define the common use and meaning of terms. See Ravalli County v. Erickson, 2004 MT 35, ¶ 13, 320 Mont. 31, ¶ 13, 85 P.3d 772, ¶ 13. R-Montana cites no authority for its argument that the District Court incorrectly used the dictionary definitions to determine the common understanding of "bar or tavern."

¶ 21 R-Montana also argues that the District Court improperly relied upon § 50-40-103, MCA. R-Montana contends that the 2005 statute is inapplicable to the 1973 lease. R-Montana further argues that the definition serves only the limited purposes of the Clean Indoor Air Act and does not cover commercial leases. R-Montana provides on appeal alternative definitions of "bar or tavern."

¶ 22 R-Montana asserts that "bar or tavern" could mean an establishment with the primary purpose of selling alcohol to be consumed on the premises. R-Montana argues that the term alternatively could refer to establishments that sell alcoholic beverages pursuant to a state liquor license for consumption on the premises. R-Montana proposes that another alternative definition of bar or tavern "is that it does not include casinos or card...