Pepcol Mfg. Co. v. Denver Union Corp., No. 83SC160

Docket NºNo. 83SC160
Citation687 P.2d 1310
Case DateSeptember 17, 1984
CourtSupreme Court of Colorado

Page 1310

687 P.2d 1310
PEPCOL MANUFACTURING CO., a Colorado corporation, Petitioner,
v.
DENVER UNION CORPORATION, a corporation, and Western Stock
Center, Inc., a corporation, Respondents.
No. 83SC160.
Supreme Court of Colorado,
En Banc.
Sept. 17, 1984.
Rehearing Denied Oct. 9, 1984.

Page 1311

Quiat, Bucholtz, Bull & Laff, P.C., Alan H. Bucholtz, Denver, for petitioner.

Tilly & Graves, P.C., Greg L. Perczak, Denver, for respondents.

QUINN, Justice.

We granted certiorari to review the decision of the court of appeals in Pepcol Manufacturing Co. v. Denver Union Corporation, 668 P.2d 971 (Colo.App.1983), relating to the construction of the term "at seller's cost" in a contract between Denver Union Corporation (Denver Union) and Pepcol Manufacturing Company (Pepcol) for the payment of water supplied by the Denver Water Board to Denver Union and ultimately used by Pepcol. Denver Union sought a judgment against Pepcol for $10,732.39, which represented the amount of surcharge allegedly owed by Pepcol for water used by it under its contract with Denver Union. The trial court construed the term "at seller's cost" to mean the per gallon rate charged to Denver Union by the Denver Water Board and, concluding that

Page 1312

the surcharge was improper, entered judgment in favor of Pepcol on Denver Union's claim. In reversing the judgment and ordering the entry of judgment in favor of Denver Union, the court of appeals held that the term "at seller's cost" was unambiguous and meant the costs actually incurred by Denver Union in providing water to Pepcol. We reverse the judgment of the court of appeals.

The facts are not in dispute. Denver Union's claim against Pepcol for $10,732.39 was based on a surcharge for water furnished to Pepcol during the years 1973 through 1976. 1 This claim was based on a 1970 contract entered into by Denver Union and Herman Horwich, an agent and predecessor in interest of Pepcol. Denver Union, which owned much of the property in the stockyards area, operated a cooperative water service system for the use and benefit of tenants and landowners doing business in the stockyards. During the period of time in question Denver Union obtained water from the Denver Water Board and was billed on the basis of the meter reading on its master meter in the stockyards. In March 1970 Denver Union sold to Horwich a parcel of land which was later transferred to Pepcol. The contract of sale provided in pertinent part as follows:

Seller [Denver Union] agrees to sell and convey to Buyer [Horwich] and Buyer agrees to purchase from Seller the real property described particularly on Exhibit A hereto attached ... subject to utility easements and rights-of-way of record. Seller further agrees to grant and convey to Buyer for use in connection with the property the following:

* * *

* * *

The right to connect for water usage to the existing water line owned by Seller located on the east side of the property without payment of a tap fee therefor to Seller (it is understood however that the hookup and meter installation charges shall be at Buyer's expense and that water usage by Buyer shall be metered and the charges of water so used shall be paid by Buyer, its successors or assigns or designee at Seller's cost) ....

Pepcol, which commenced operation of a rendering plant on its property in 1971, connected to Denver Union's main water line and installed a water meter at its plant location. The general manager of Pepcol testified that during 1971 and 1972 Denver Union billed Pepcol each month for the amount of water shown on Pepcol's plant meter. The cost of the water to Pepcol was billed at the same per gallon rate as the Denver Water Board charged Denver Union. The president of Denver Union corroborated this testimony. He testified that during the first two years of Pepcol's operation Denver Union would receive a bill from the Denver Water Board for water metered to Denver Union's master meter; a Denver Union employee would then read the meters of the various users connected to Denver Union's main line; and Denver Union would "bill the users for their prorata share of the water" at the same per gallon rate as the Denver Water Board charged Denver Union. This method was followed because, according to Denver Union's president, "[w]e had agreed not only with Pepcol but with all of the other users of the system to provide water at our cost, so we were being consistent here."

In mid-1973, however, Denver Union became aware that it was paying the Denver

Page 1313

Water Board a 20-25 percent greater sum than it received from the businesses operating under its water service system in the stockyards. Although Denver Union was unable to determine where in the system its water loss...

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184 practice notes
  • In re San Luis & Rio Grande R.R., Inc., Lead Bankruptcy Case No. 19-18905-TBM
    • United States
    • United States Bankruptcy Courts. Tenth Circuit. U.S. Bankruptcy Court — District of Colorado
    • September 2, 2021
    ...contract law, extrinsic evidence sometimes may be conditionally admitted to assess ambiguity. Pepcol Mfg. Co. v. Denver Union Corp. , 687 P.2d 1310, 1314 n.3 (Colo. 1984) ("In determining whether a contract is ambiguous, the court may conditionally admit extrinsic evidence on this issue.");......
  • Powder Horn Constructors, Inc. v. City of Florence, No. 85SC502
    • United States
    • Colorado Supreme Court of Colorado
    • April 25, 1988
    ...the mutual intent of the parties. Martinez v. Continental Enters., 730 P.2d 308 (Colo.1986); Pepcol Mfg. Co. v. Denver Union Corp., 687 P.2d 1310 (Colo.1984); Griffin v. United Bank of Denver, 198 Colo. 239, 599 P.2d 866 (1979). Intent may be determined by reference to separate ancillary in......
  • In re South Canaan Cellular Investments, Inc., No. 09-10473bf
    • United States
    • United States Bankruptcy Courts. Third Circuit. U.S. Bankruptcy Court — Eastern District of Pennsylvania
    • March 25, 2010
    ...that parties' intent is determined by the express terms of the agreement. See, e.g., Pepcol Manufacturing Co. v. Denver Union Corp., 687 P.2d 1310, 1313-14 (Colo.1984); Moland v. Industrial Claim Appeals Office of State, 111 P.3d 507, 510 (Colo.App. 2004). As the agreement permitted the ass......
  • Huddleston by Huddleston v. Union Rural Elec. Ass'n, No. 91SC503
    • United States
    • Colorado Supreme Court of Colorado
    • November 23, 1992
    ...this court need not defer to the trial court's interpretation of the contract.") (emphasis added); Pepcol Mfg. Co. v. Denver Union Corp., 687 P.2d 1310, 1313 (Colo.1984) ("Interpretation of a written contract is generally a question of law for the court.") (emphasis In contrast with Gran Pr......
  • Request a trial to view additional results
187 cases
  • In re San Luis & Rio Grande R.R., Inc., Lead Bankruptcy Case No. 19-18905-TBM
    • United States
    • United States Bankruptcy Courts. Tenth Circuit. U.S. Bankruptcy Court — District of Colorado
    • September 2, 2021
    ...contract law, extrinsic evidence sometimes may be conditionally admitted to assess ambiguity. Pepcol Mfg. Co. v. Denver Union Corp. , 687 P.2d 1310, 1314 n.3 (Colo. 1984) ("In determining whether a contract is ambiguous, the court may conditionally admit extrinsic evidence on this issue.");......
  • Powder Horn Constructors, Inc. v. City of Florence, No. 85SC502
    • United States
    • Colorado Supreme Court of Colorado
    • April 25, 1988
    ...the mutual intent of the parties. Martinez v. Continental Enters., 730 P.2d 308 (Colo.1986); Pepcol Mfg. Co. v. Denver Union Corp., 687 P.2d 1310 (Colo.1984); Griffin v. United Bank of Denver, 198 Colo. 239, 599 P.2d 866 (1979). Intent may be determined by reference to separate ancillary in......
  • In re South Canaan Cellular Investments, Inc., No. 09-10473bf
    • United States
    • United States Bankruptcy Courts. Third Circuit. U.S. Bankruptcy Court — Eastern District of Pennsylvania
    • March 25, 2010
    ...that parties' intent is determined by the express terms of the agreement. See, e.g., Pepcol Manufacturing Co. v. Denver Union Corp., 687 P.2d 1310, 1313-14 (Colo.1984); Moland v. Industrial Claim Appeals Office of State, 111 P.3d 507, 510 (Colo.App. 2004). As the agreement permitted the ass......
  • Huddleston by Huddleston v. Union Rural Elec. Ass'n, No. 91SC503
    • United States
    • Colorado Supreme Court of Colorado
    • November 23, 1992
    ...this court need not defer to the trial court's interpretation of the contract.") (emphasis added); Pepcol Mfg. Co. v. Denver Union Corp., 687 P.2d 1310, 1313 (Colo.1984) ("Interpretation of a written contract is generally a question of law for the court.") (emphasis In contrast with Gran Pr......
  • Request a trial to view additional results

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