Haggerty v. Gallatin County

• Decision Date: 18 April 1986
• Docket Number: No. 85-382,85-382
• Citation: 717 P.2d 550,221 Mont. 109
• Parties: T.G. HAGGERTY, a/k/a Thomas G. Haggerty, R.G. Simkins, a/k/a Robert G. Simkins, and Bridger Village Development Corp., Plaintiffs and Appellants, v. GALLATIN COUNTY; Joy Nash, Ruth Mary Tonn, and Wilbur Visser, as County Commissioners; Bridger Bowl, Inc., et al., Defendants and Respondents.
• Court: Montana Supreme Court

Page 550

717 P.2d 550

221 Mont. 109

T.G. HAGGERTY, a/k/a Thomas G. Haggerty, R.G. Simkins, a/k/a Robert G. Simkins, and Bridger Village Development Corp., Plaintiffs and Appellants, v. GALLATIN COUNTY; Joy Nash, Ruth Mary Tonn, and Wilbur Visser, as County Commissioners; Bridger Bowl Inc., et al., Defendants and Respondents.

No. 85-382.

Supreme Court of Montana.

Submitted March 26, 1986.

Decided April 18, 1986.

Morrow, Sedivy & Bennett, Edmund P. Sedivy, Jr., argued, Bozeman, for plaintiffs and appellants.

A. Michael Salvagni, County Atty., Bozeman, Thomas R. Anacker, argued, Deputy County Atty., Moore, Rice, O'Connell & Refling, Christopher Manos, argued, Bozeman, for 1st Bank & 1st Trust.

Gregory O. Morgan, argued, Bozeman, for Bridger Bowl.

TURNAGE, Chief Justice.

Appellants brought this action in the District Court seeking an injunction to prevent respondent Bridger Bowl, Inc., from serving beer and wine. In the alternative, appellants sought a rescission of the contract for transfer of lands from appellants to Bridger Bowl. Appellants, Simkins and Haggerty, along with their wives, organized appellant, Bridger Village Development Corporation to handle their interest in lands located in the vicinity of the Bridger Bowl ski area. Respondents Gallatin County, First Trust Company of Montana and First Bank of Bozeman are parties because of mortgage and lease-back agreements entered into by Bridger Bowl with these parties to finance improvements on the property. After trial, the District Court entered findings of fact and conclusions of law and judgment denying any relief to appellants and awarding attorney fees to respondents. Appellants appeal this judgment.

We considered the following issues on appeal:

1. Whether the District Court erred in concluding there is no binding agreement prohibiting Bridger Bowl from conducting commercial activities in the Base Area Chalet.

2. Whether the District Court erred in concluding that the terms of the June 11, 1971, agreement merged into the deeds of December 15, 1972.

3. Whether the District Court erred in concluding that the commercial use limitation on Bridger Bowl lands was void as an unlawful restraint on trade.

4. Whether the District Court erred in concluding that the conduct of commercial activities by Bridger Bowl on lands other than the parking lot is not a violation of the commercial use limitation in the deed to the parking lot lands.

5. Whether the District Court erred in awarding respondents attorney fees.

Appellant has raised two other issues concerning whether the sale of beer and wine violates the commercial use restriction and whether the county, bank and trust company had notice of the restriction. Our holdings on the other issues makes consideration of these issues unnecessary.

We affirm the District Court's denial of relief to appellant. However, we reverse the court's holding which voided the commercial use restriction as an unlawful restraint on trade. We also reverse the award of attorney fees to respondents.

The parties have been fighting over their respective rights in property near the Bridger Bowl Ski Area for over fifteen years. The record of the parties' previous litigation provides a useful introduction to the current dispute.

The District Court's opinion in Bridger Bowl v. Simkins and Haggerty, No. 19930, Gallatin County, provides an explanation of the original intentions of the parties. Most valuable are items 1 & 2 in the District Court's order dated September 28, 1972, amending its findings of fact and conclusions of law in that case. Those items are as follows:

1. In view of the evidence at trial to the effect that Simkins and Haggerty at the time of purchasing the land in question intended to provide land for daytime skiing and uphill transportation needs of Bridger Bowl, but to retain the rest of said Neuffer lands for future development and investment and profit to themselves by furnishing overnight accommodations to skiers; and, in keeping with these purposes Simkins and Haggerty have sold and conveyed to Bridger Bowl approximately fifty (50) acres of ski terrain and fifteen (15) acres of parking at their cost of $200.00 per acre, and Bridger Bowl relying on defendants' assurances to provide lands sufficient to accommodate the needs of daytime skiers and uphill transportation, moved the facilities on to defendants' lands, and

2. By virtue of the great expansion of Bridger Bowl which has created problems for Bridger Bowl in parking and sewage disposal which had not been anticipated or adequately provided for, but which is within the power of Simkins and Haggerty to assist in resolving consistent with their original intention of benefiting Bridger Bowl and themselves;

Thus, the District Court in that earlier case envisioned a symbiotic rather than competitive relationship between appellants and Bridger Bowl whereby Bridger Bowl accommodated the daytime needs of skiers thereby drawing customers to the area and thus providing business for overnight accommodations developed or invested in by appellants. Unfortunately, this spirit of cooperation among the parties has not prevailed, and we are faced with the current litigation.

There were a number of transactions, deeds, escrows and conveyances among the parties leading to this litigation. The following highlights only those details important to the outcome of this case, but the scenario remains complicated.

Bridger Bowl, Inc., is a nonprofit corporation organized for operating and maintaining the Bridger Bowl Ski Area near Bozeman, Montana. The corporation primarily provides uphill transportation to skiers, but it also operates chalets at the base of the area and in Deer Park on the mountain as daytime facilities for the comfort and convenience of the skiers. Both appellants, Haggerty and Simkins, served as directors of Bridger Bowl through fiscal year 1971-1972, Haggerty starting in 1955 and Simkins in 1961.

John and Cynthia Neuffer conveyed the tract of land upon which the Deer Park Chalet was subsequently built to Bridger Bowl's predecessor on July 20, 1961, by warranty deed. No reservations or restrictions are on the deed. Then on September 7, 1966, appellants acquired 170 acres of land located just east and at the bottom of the then existing ski area by warranty deed from the Neuffers.

Soon after appellants' purchase of the Neuffer land, Bridger Bowl developed plans to expand downhill by building a new chair lift and chalet further down the hill and on the land that appellants had purchased. Appellants accommodated these plans by granting respondents a permanent easement over portions of the 170 acres for the new lift, ski runs and a parking lot. In addition, on July 20, 1967, appellants deeded one acre of their land to Bridger Bowl without charge. The Base Area Chalet and Alpine lift terminal are now located on this parcel. The deed to this Base Area Chalet parcel contains no restrictions or reservations, but appellants allege that the deed was subject to an oral agreement that Bridger Bowl would not use the acre for commercial activity. The District Court, however, did not allow testimony on this oral agreement.

In 1969, appellants constructed a building on some of their land adjacent to the Base Area Chalet parcel. The building was known as the St. Benard and contained a restaurant, lounge and bar. Later they built a ski shop and deli also on the land adjacent to the Base Area Chalet. Beer and wine are served in the deli. It is undisputed that appellants are interested in limiting competition to these facilities and their future developments in the area.

The land that appellants purchased from Neuffers became the subject of a title dispute and two lawsuits between appellants and Bridger Bowl in 1971-72. Appellants charged Bridger Bowl with slander of title and Bridger Bowl charged appellants with breach of fiduciary duty. This Court's opinion in Simkins v. Jaffe (1974), 165 Mont. 266, 527 P.2d 1195, summarizes the course of the dispute and the litigation. As a result of the dispute and on-going negotiation, appellants entered into an agreement on June 11, 1971, with Bridger Bowl whereby appellants would convey to Bridger Bowl sixty-five acres of the disputed land at the price they had purchased it for. This agreement was subsequently modified by an addendum to include five additional acres for the parking lot area. This addendum was in response to the judge's order in Bridger Bowl's action against appellants. The agreement, addendum and deeds were prepared by appellants' attorneys in consultation with Bridger Bowl's and deposited in escrow. The deeds were subsequently recorded. Neither the June 11, 1971, agreement nor its addendum have been recorded.

Discrepancies between the agreements and deeds with respect to a commercial use restriction are at the basis of this current litigation. We will now outline those discrepancies.

The June 11, 1971, agreement purports to facilitate the coveyance of two parcels of land, Parcel A and Parcel B from appellants to Bridger Bowl. Parcel A includes skiing lands near the base of the ski area described in the agreement as follows:

All of the sellers' land situate in the Southeast Quarter of the Southwest Quarter and the Southwest Quarter of the Southeast Quarter of Section 19, Township 1 North, Range 7 East, M.P.M., which are subject to a ski easement as described in Easement No. 3 of the easement recorded in Book 24 of Miscellaneous at Page 108 in the office of the County Clerk and Recorder of Gallatin County, Montana, and as more particularly described in Exhibit "A" hereunto attached and by this reference incorporated herein.

Exhibit "A" to the agreement then further describes the land:

SE 1/4SW 1/4 and SW 1/4SE 1/4 of Section 19, Township 1 North, Range 7 East, M.P.M., Gallatin County, Montana, SAVE and EXCEPT the six (6) tracts described as follows: [Exhibit then describes the six tracts.] And subject...