Case Title: WYOMING GAME AND FISH COMMISSION, STATE OF WYOMING v. THE MILLS COMPANY, A Wyoming Corporation

Citation: 

Docket Number: 84-101

State: wyoming

Court: Wyoming Supreme Court

Date: 1985-06-19T00:00:00Z

Document:
WYOMING GAME AND FISH COMMISSION, STATE OF WYOMING v. THE MILLS COMPANY, A Wyoming Corporation1985 WY 75701 P.2d 819Case Number: 84-101Decided: 06/19/1985Supreme Court of Wyoming

WYOMING GAME AND FISH 
COMMISSION, STATE OF WYOMING, APPELLANT (DEFENDANT), 

v. 

THE MILLS COMPANY, A 
WYOMING CORPORATION, APPELLEE (PLAINTIFF).

 
 
Appeal from the 
DistrictCourtofSheridanCounty, Paul T. Liamos, 
Jr., J.

 
 
A.G. McClintock, 
Atty. Gen., Allen C. Johnson, Sr. Asst. Atty. Gen. (argued) and Roger C. 
Fransen, Asst. Atty. Gen., for 
appellant.

Dan B. Riggs 
(argued) and Haultain E. Corbett of Lonabaugh & Riggs, Sheridan, for appellee.

Before THOMAS, C.J., 
ROSE, ROONEY and CARDINE, JJ., and JOHNSON, D.J.

CARDINE, 
Justice.

[¶1.]     This is an appeal from 
a summary judgment granting damages to the Mills Company in a breach of contract 
action. We reverse and direct judgment to be entered in favor of the state of 
Wyoming but 
that the State's counterclaim be denied.

[¶2.]     Appellant, Wyoming Game 
and Fish Commission, raises the following issue concerning breach of 
contract:

"Did the Appellant breach 
its contract with Appellee by refusing to purchase game and fish licenses from 
Appellee at the prices Appellee claimed it was due under the governing contract, 
where those prices are from ten to sixteen times higher than prices as 
contemplated by the contract generally and were ten to sixteen times higher than 
Appellee's actual costs of production?"

Appellee 
restates the issue as:

"1. Did a valid and 
enforceable requirements contract exist between Appellant and Appellee for the 
printing of game and fish licenses as of May 18, 1983?

"2. After placing an 
order for additional hunting licenses with Appellee on May 18, 1983, did 
Appellant breach its agreement with Appellee by refusing to allow Appellee to 
fill Appellant's order of May 18, 1983?

"3. Is Appellant entitled 
to unilaterally void its agreement with Appellee for the purchase of game and 
fish licenses as ordered by Appellant from Appellee on the grounds that Appellee 
was dissatisfied with the prices it was required to pay for those licenses when 
those prices had been approved in writing by the parties prior to Appellant's 
withdrawal from the agreement and when Appellant continued thereafter to make 
purchases from Appellee at the prices and terms stated in the parties' 
requirements contract?"

Each essentially 
contends that the other party first breached the contract thereby justifying 
their respective subsequent actions - the Game and Fish in placing its order 
with another printing firm and Mills in filing suit to recover damages. Our 
initial inquiry must be whether summary judgment was 
appropriate.

[¶3.]     In October 1980, 
appellant Game and Fish and appellee Mills agreed to a requirements contract for 
the printing of game and fish licenses. These parties had been involved in a 
business relationship for over fifty years; the dealings between them had been 
largely informal with orders placed over the telephone and price increases 
confirmed without the supporting information requested by the contract. This 
business relationship has been singularly trouble free until the contract of 
1980. It is perhaps significant that management of the Mills Company changed in 
1979.

[¶4.]     The contract was for 
one year with options for two one-year extensions. The options were exercised by 
Game and Fish, and the contract was in effect on May 18, 1983 when Game and Fish 
ordered 49,250 supplemental licenses from appellee Mills. Mills would have 
charged $80,843.881 for these licenses under the 
contractual provision for supplemental licenses,2 although the cost to Mills for 
these licenses would have been $5,259. Game and Fish informed appellee that the 
price was too high. After negotiations failed, Game and Fish placed the order 
with another printing firm. Mills filed suit claiming that placing the order 
with another firm was a breach of the contract resulting in damages to Mills in 
the amount of $80,843.88. Game and Fish counterclaimed for the amount of money 
it contends was mistakenly overpaid in 1981 and 1982.

[¶5.]     The appellate standard 
on a review of summary judgment is that:

"When a motion for 
summary judgment is before the supreme court, we have exactly the same duty as 
the district judge; and, if there is a complete record before us, we have 
exactly the same material as did he. We must follow the same standards. The 
propriety of granting a motion for summary judgment depends upon the correctness 
of a court's dual findings that there is no genuine issue as to any material 
fact and that the prevailing party is entitled to judgment as a matter of law. 
This court looks at the record from the viewpoint most favorable to the party 
opposing the motion, giving to him all favorable inferences to be drawn from the 
facts contained in affidavits, depositions and other proper material appearing 
in the record." Reno Livestock 
Corporation v. Sun Oil Company (Delaware), 
Wyo., 638 P.2d 147, 150 (1981). See also, Roth v. First 
Security Bank of Rock Springs, Wyoming, Wyo., 684 P.2d 93 (1984), and Blackmore v. Davis Oil 
Company, Wyo., 671 P.2d 334, 336 
(1983).

[¶6.]     A summary judgment is 
appropriate if there are no issues of material fact. Johnson v. Soulis, Wyo., 542 P.2d 867 (1975). A fact is material for 
purposes of a summary judgment if proof of that fact would effectively establish 
an essential element of the claim asserted or would refute an essential element 
as a defense. Schepps v. Howe, 
Wyo., 665 P.2d 504 (1983), and Hyatt v. Big Horn School Dist. No. 4, 
Wyo., 636 P.2d 525 (1981). It is improper to grant a summary judgment if there is a dispute of 
material fact. Wood v. Trenchard, Wyo., 
550 P.2d 490 (1976). If the evidence leads to conflicting interpretations or if 
reasonable minds might differ, summary judgment is improper. Weaver v. 
Blue Cross-Blue Shield of Wyoming, 
Wyo., 609 P.2d 984 (1980). Summary judgment is only appropriate for cases sounding in contract 
when the language of the contract is clear and unequivocal because then the 
contract construction is a matter of law. Kuehne v. Samedan Oil Corp., Wyo., 626 P.2d 1035 
(1981).

[¶7.]     Applying these 
principles to this case, we must conclude that there are no genuine issues of 
material fact. Both parties agree that the facts are undisputed and that summary 
judgment is proper, although each contends that it should be granted in its 
favor. It is undisputed that the parties entered into a contract and that the 
bid prices were based upon an initial estimated lot of 1,000 with estimated 
supplemental lots of 100. It is undisputed that before appellee Mills submitted 
its bid, it obtained a price list from Eagle Printing and Business Forms, Inc. 
in Montana. 
The bid submitted equalled the prices of Eagle Printing and Business Forms, Inc. 
plus a one-third markup. Mills stated on the bid application that 100 percent of 
the printing was to be done in the state of Wyoming. None of the licenses were ever 
printed in Wyoming. All were printed by Eagle Printing 
and Business Forms, Inc. in Montana. 

[¶8.]     The contract provided 
for price adjustments during the term of the contract. Section 11, Price 
Adjustments, provided:

"(a) If, during the term 
of the contract, the bidder's net prices to their customers for items like those 
listed herein are reduced below the price quoted herein, it is understood and 
agreed that the benefits of such reduction shall be extended to the State of 
Wyoming.

"(b) If, during the term 
of the contract, the bidder's cost for materials, labor, transportation, etc. 
are increased, the bidder may apply to the Purchasing Administrator for a 
corresponding contract price adjustment. Such application must be accompanied by 
sufficient information to justify approval, provided, however, no application 
for upward price adjustments will be approved during the first thirty (30) days 
of the contract period."

[¶9.]     The intent of the 
contracting parties together with common sense and good faith are the most 
important considerations in construing a contract. Busch Development, Inc. v. City of Cheyenne, Wyo., 645 P.2d 65 (1982). Courts must construe a contract 
as a whole, avoiding constructions which would render a provision meaningless. A 
presumption exists that a particular provision is placed there for a purpose. 
Sunburst Exploration, Inc. v. Jensen, 
Wyo., 635 P.2d 822 (1981), and Shepard v. Top Hat Land & Cattle 
Company, Wyo., 560 P.2d 730 
(1977).

[¶10.]  We recently reiterated the basic rules of 
contract interpretation in Cheyenne 
Mining and Uranium Company v. Federal Resources Corp., Wyo., 694 P.2d 65, 70 
(1985) (quoting from Amoco Production 
Company v. Stauffer Chemical Company of Wyoming, Wyo., 612 P.2d 463, 465 
(1980)):

"`Our basic purpose in 
construing or interpreting a contract is to determine the intention and 
understanding of the parties. If the contract is in writing and the language is 
clear and unambiguous, the intention is to be secured from the words of the 
contract. And the contract as a whole should be considered, with each part being 
read in light of all other parts. The interpretation and construction is done by 
the court as a matter of law.'" (Citations omitted.)

The intent of 
the involved parties is determined by an objective approach. "A party's 
intention will be held to be what a reasonable man in the position of the other 
party would conclude his manifestations to mean." Shrum v. Zeltwanger, Wyo., 559 P.2d 1384, 1387 
(1977).

[¶11.]  Twice during the contract period Mills 
applied for and was granted a price increase according to these contract 
provisions. For supplemental orders of large quantities, Eagle Printing and 
Business Forms, Inc. based its price to Mills on the larger numbers; however, 
Mills charged the Game and Fish according to the 100 lot estimates. Appellant 
contends that § 11(a) required Mills Company to pass on the reduced price 
obtained from Eagle to the state of Wyoming. Appellee Mills Company contends that 
this provision is not applicable because it did not have any other customers for 
"items like those listed," in that it did not print fish and game licenses for 
any other customer.

[¶12.]  The construction that Mills would have us 
give this provision would render it nonsensical. It could never have a practical 
application. We cannot believe that this was a manifestation of the parties' 
intent at the time the contract was entered into. The provision is entitled 
Price Adjustments. Subsection (b) provides for an increase in the payment to the 
bidder when its costs are increased. Subsection (a) provides for a corresponding 
decrease for the State if the bidder's prices are reduced. Thus, it is apparent 
that it was the intent of the parties that prices be adjusted upon an increase 
or decrease in cost. The provision concerning reduction in cost does not state 
that the items must be identical, e.g., fish and game licenses, but refers to 
"items like those listed herein." We conclude it was the intent of the parties 
that if the cost of "items like those listed" would be reduced to customers of 
Mills Company, that the reduction in price would be passed on to Game and Fish. 
Dealings between these parties indicate that it was the practice of Mills 
Company, in establishing net prices to their customers, to mark up the Eagle bid 
by one-third.

[¶13.]  The cost of printing the licenses in this 
case ($5,259.00) plus the markup of Mills Company would have resulted in a price 
for this order substantially below the Mills Company contract price of 
$80,843.83. As we have said, such benefit of the reduced price should have been 
"extended to the State of Wyoming." See contract, § 11, Price 
Adjustments. When Game and Fish contacted the Mills Company about the cost of 
the licenses, a representative of Mills Company stated:

"* * * I am talking right 
off the top of my head. I haven't figured anything. But if it will help you, we 
will knock ten, eleven thousand bucks off this."

An offer to 
reduce the price quoted by "ten, eleven thousand" dollars was not a good-faith 
offer nor did it satisfy the requirements of the agreement that "the benefits of 
such [price] reduction shall be extended to the State of Wyoming" as the contract 
states and as the parties intended.

[¶14.]  Accordingly when Game and Fish requested 
a reduction in price and Mills did not make a good-faith offer to extend the 
benefit of the reduced price to the state of Wyoming, it was a breach of the contract by 
Mills and Game and Fish could then properly seek out another printing firm as it 
did.

[¶15.]  Finally, in passing, we note that if the 
Game and Fish had known that Mills was not doing its own printing, the terms of 
subsection (a) might have more closely corresponded to the actual situation and 
perhaps stated that if the price to Mills from its supplier was less than the 
bid price, then the subsequent cost to Game and Fish would be reduced 
accordingly. We cannot hold the Game and Fish to a constrained reading of the 
contract in light of the fact that they were unaware of the true situation, 
i.e., that Mills, contrary to its representation on its bid, was doing none of 
the actual printing but had subcontracted the printing to an out-of-state 
agency.

[¶16.]  Game and Fish counterclaimed suing for 
the money it contends was mistakenly overpaid in 1981 and 1982. The counterclaim 
was dismissed. Appellant maintains that they mistakenly believed they were 
obligated by the terms of their contract to pay the charged prices. Appellant, 
however, never indicated to Mills that they intended to rely on § 11(a) in 
previous years but paid the submitted invoices without 
protest.

"It is elementary that an 
innocent party may waive a breach of a contract and continue performance on his 
part. If such performance is continued with no conditions attached, the innocent 
party has made an election and waived the breach." Western Transmission Corp. v. Colorado Mainline, Inc., 
376 F.2d 470, 472 (10th Cir. 1967).

[¶17.]  Game and Fish waived its right to demand 
compliance with this section until May 18, 1983.

[¶18.]  Game and Fish also contends that the 
contract should be declared void and illegal in violation of § 16-6-301, W.S. 
1977. The bid submittal stated that:

"If awarded this bid, 
100% of the printing will be done at our plant located at Sheridan, Wyoming.

"A preferential of ten 
percent (10%) will be applied to any contract for printing done within the State 
of Wyoming provided the printer either owns, operates, and/or maintains an 
establishment in the State of Wyoming and agrees to perform at least 
seventy-five percent (75%) of the work called for by the contract in the State 
of Wyoming. The preferential will be applied after deduction of any discount 
offered. W.S. 9-5-501, as amended."

Section 9-5-501, 
W.S. 1977, now titled § 16-6-301, W.S. 1977, provided in pertinent 
part:

"Whenever a contract is 
let * * * by the state of Wyoming or any department thereof, or any of its 
subdivisions, for public printing, * * * such contract shall be let to the 
responsible resident making the lowest bid if such resident's bid is not more 
than ten percent (10%) higher than that of the lowest responsible nonresident 
bidder. Any successful resident bidder shall perform at least seventy-five 
percent (75%) of the contract within the state of Wyoming. Except, that the 
provisions of this act [§§ 9-5-501 to 9-5-503] shall not apply to any contract 
for the compilation, codification, revision, or digest of the statutes or case 
law of the state of Wyoming."

[¶19.]  Mills contends that this statute is not 
applicable under the circumstances of the contract since Mills Company was the 
only bidder. The Game and Fish contends that the residency of Mills precluded 
its looking for other bids and induced it to exercise its option to extend the 
contract.

[¶20.]  We do not agree that the contract is 
void. This section was not violated since Mills was the only bidder. Jerry 
McCune stated in his affidavit that:

"Had the Mills Company 
notified the Purchasing Division, prior to performance of the contract awarded 
under Bid No. 0202-L, that they had determined to subcontract a majority of the 
contract to a non-resident printer the Purchasing Division would have 
investigated to determine the identity and competence of the proposed 
subcontractor. Although the Mills Company contract for 1981 would probably not 
have been rebid the existence of another potential bidder who could obviously do 
the work required at a competitive rate would likely have resulted in the Game 
and Fish license contract for 1982 being rebid rather than being renewed with 
the Mills Company under their 1980 bid."

The fact that 
they did not do the printing in Wyoming is relevant to the construction of the 
contract terms. However, since Mills was the only bidder, that fact is not 
relevant to the application of the preference statute, particularly since the 
Game and Fish acknowledges it would have entered into the initial contract 
anyway. We, therefore, reverse as to damages granted Mills, direct that judgment 
be entered in favor of Game and Fish, and affirm as to the dismissal of the Game 
and Fish counterclaim. Reversed and remanded for entry of judgment consistent 
with this opinion.

1 The original order of 
49,250 supplemental licenses would have been billed, under appellee's 
interpretation of the contract, at $80,843.88, the requested damages in this 
case. Ultimately, 56,810 supplemental licenses were printed by a different 
company, which if printed by appellee in accordance with its interpretation of 
the contract, would have resulted in a charge of 
$93,253.62.

2 The provision for 
supplemental licenses was based upon a cost price of $164.15 per 100 licenses. 
The regular price for these licenses was $97.95 per 1,000.