Paul Gabrilis, Inc. v. Dahl

• Decision Date: 10 June 1998
• Citation: 961 P.2d 865,154 Or.App. 388
• Parties: PAUL GABRILIS, INC., dba Rock Creek Country Club, Inc., an Oregon corporation, Appellant, and Loren and Donna Bosshard, husband and wife; Sam and Hope Campagna, husband and wife; Donald and Naomi Davidson, husband and wife; and Donna Bodtker, Intervenors-Respondents, v. Joe DAHL; Peggy Dahl; Scott Osborn and David Bodtker, Respondents, and Paul Gabrilis, Inc., dba Rock Creek Country Club, an Oregon corporation, Intervenor-Appellant. D950915CV; CA A94285.
• Court: Oregon Court of Appeals

Page 865

961 P.2d 865

154 Or.App. 388

PAUL GABRILIS, INC., dba Rock Creek Country Club, Inc., an Oregon corporation, Appellant and Loren and Donna Bosshard, husband and wife; Sam and Hope Campagna, husband and wife; Donald and Naomi Davidson, husband and wife; and Donna Bodtker, Intervenors-Respondents, v. Joe DAHL; Peggy Dahl; Scott Osborn and David Bodtker, Respondents and Paul Gabrilis, Inc., dba Rock Creek Country Club, an Oregon corporation, Intervenor-Appellant.

D950915CV; CA A94285.

Court of Appeals of Oregon.

Argued and Submitted Dec. 5, 1997.

Decided June 10, 1998.

Glen McClendon, Portland, argued the cause for appellant--intervenor-appellant. With him on the briefs were Gilion C. Ellis and Lindsay, Hart, Neil & Weigler.

Michael A. Cox, Portland, argued the cause and filed the brief for respondents--intervenors-respondents.

Before WARREN, P.J., and EDMONDS and ARMSTRONG, JJ.

ARMSTRONG, Judge.

Plaintiff appeals the trial court's grant of defendants' motion for summary judgment in a dispute over plaintiff's unilateral termination of defendants' memberships in a country club owned and operated by plaintiff. ¹ We review in accordance with ORCP 47 C and affirm. ²

Plaintiff purchased the Rock Creek Country Club in 1991. At that time, defendants all held membership agreements with the club that they had entered into with the club's previous owner, the Moschetti Corporation. Defendants had entered into those membership agreements with the understanding that the initiation fee of $1,000 for each membership would be used as start-up capital by the corporation to purchase and renovate property that, before that time, had been a public golf course. As a condition of the sale of the country club to plaintiff, plaintiff agreed to assume Moschetti's obligations under the membership agreements. Although the agreements are not all identical, the provisions pertinent to this appeal are the same. They provide:

"The member and all eligible members of his or her household shall at all times be subject to general rules to be adopted from time to time by the owner and a majority of the membership for the operation and use of club facilities.

"Neither the owner nor the membership majority have the right to adopt rules or regulations not applicable equally to all members and their families, but this restriction shall not prevent the owner from restricting any person whomsoever from use of the club facilities who fails or refuses to abide by club rules and regulations or who conducts himself or herself in such a manner as to annoy or harass the members or their families, or to restrict the enjoyment of the club facilities by other members, and such conduct may result in the suspension of the use of such facilities by any such offending member by either the owner or the majority of the club membership.

" * * * * * *

"In the event that owner wishes to sell the club property to others at any time, it is agreed that this agreement must be a condition of the sale. It is also agreed that the offer of sale shall be submitted to the club membership on the same terms and for the same consideration offered to others or another with the option to purchase the same on identical terms and for an identical price as proposed to be offered.

" * * * * * *

"Owner may establish rules for the payment of dues, including due dates therefor, and shall have the right to disclose delinquency for nonpayment of dues and to terminate membership therefor based upon such rules and may include in such rules standards for reinstatement of any membership terminated for such nonpayment.

" * * * * * *

"A member may transfer by sale or assignment to another named person his membership, and the license for use of the club facilities as hereinabove set forth and limited shall pass by said transfer[.]" ³

(Emphasis supplied.)

In early 1995, plaintiff notified defendants that it had terminated their membership privileges. Along with the notice of termination, plaintiff refunded defendants' initiation fees and unused dues. Plaintiff did not give a reason for the decision to terminate the memberships. Defendants returned the refunded fees and dues to plaintiff and expressed their intention to continue to use the club facilities. Plaintiff then brought this action for trespass against defendants, who moved for summary judgment on the ground that their membership agreements were still in effect, because plaintiff did not have the right unilaterally to terminate them. Plaintiff argued that, because the agreements had no definite term on their duration, the agreements were terminable at will by either party. The trial court concluded that the language of the agreements was inconsistent with plaintiff's interpretation and, accordingly, granted defendants' motion for summary judgment. ⁴

Plaintiff assigns error to the trial court's conclusion that it could terminate defendants' memberships for cause only. Specifically, plaintiff argues that the agreements are mere licenses, revocable at any time, because they do not contain language designating them as perpetual. ⁵ In response, defendants contend that the language of the contract indicates that the parties intended the memberships to last for as long as membership dues were paid. Defendants point to the provisions that permit the transfer and assignment of the memberships as well as to the provisions setting forth grounds for suspension or termination. We agree with defendants.

"When considering a written [contract], the court's first inquiry is what the words of the contract say, not what the parties say about it. To determine that, the court looks at the four corners of [the] written contract, and considers the contract as a whole with emphasis on the provision or provisions in question. * * * In the absence of an ambiguity, the court construes the words of [the] contract as a matter of law."

Eagle Industries, Inc. v. Thompson, 321 Or. 398, 405, 900 P.2d 475 (1995) (citations omitted). Moreover,

"[i]n the construction of an instrument, the office of the judge is simply to ascertain and declare what is, in terms or in substance, contained therein, not to insert what has been omitted, or to omit what has been inserted; and where there are several provisions or particulars, such construction is, if possible, to be adopted as will give effect to all.''

ORS 42.230 (emphasis supplied).

Plaintiff argues that, because the membership agreements are silent as to duration they are terminable at will. To support that argument, plaintiff relies on statements in Lund v. Arbonne International, Inc., 132 Or.App. 87, 90, 887 P.2d 817 (1994), and Fleming v. Kids and Kin Head Start, 71 Or.App. 718, 722-23 n. 1, 693 P.2d 1363 (1985), reciting the general proposition that contracts that are for an indefinite period may be terminated at will with reasonable notice. Plaintiff's reliance on that general rule is misplaced. It is true that if there is nothing in the nature or language of a contract to indicate that the contract is perpetual, courts will interpret the contract to be terminable at will on reasonable notice. Nevertheless, where provided for, perpetual agreements will be enforced according to their terms. Council of Jewish Women v. Sisters of Charity, 266 Or. 448, 456, 513 P.2d 1183 (1973). All the circumstances of each case must be considered in...