Case Title: YELLOWSTONE PARK CO v DISTRICT CO

Citation: 

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1972-10-18T00:00:00Z

Document:
No. 12292 I N T H E S U P R E M E C O U R T O F T H E STATE O F M O N T A N A 1972 STATE O F M O N T A N A ex rel. Y E L L O W S T O N E P A R K C O M P A N Y , Relator, T H E DISTRICT COURT O F THE F O U R T H JUDICIAL DISTRICT O F THE STATE O F M O N T A N A , I N AND F O R THE COUNTY O F MISSOULA, THE H O N O R A B L E E. GARDNER BROhNLEE, JUDGE PRESIDING, Respondents. Original Proceedings. Counsel of Record: For Appellant : Gough, Booth, Shanahan and Johnson, Helena, Montana, Cordell Johnson, Helena, Montana, argued. For Respondent : Tipp, Hoven and Brault, Missoula, Montana. Vernon Hoven argued, Missoula, Montana. Submitted: June 16, 1972 Decided : OCT ] 8 192 P E R CURIAM: Relator, Yellowstone Park Company, applied t o t h i s Court for a w r i t of supervisory control or other appropriate order granting r e l i e f from the order of the d i s t r i c t court of the fourth judicial d i s t r i c t , county of Missoula, dated M a y 25, 1972, wherein the d i s t r i c t court granted p l a i n t i f f s ' motion for summary judgment on the issue of l i a b i l i t y . This Court issued an order t o show cause on June 5, 1972. Briefs were submitted and oral argument had. Relator Yellowstone Park Company is the defendant i n two separate c i v i l actions consolidated for t r i a l i n the d i s t r i c t court. The d i s t r i c t court cases are: "Handee Foods, Inc., Plaintiff v. Yellowstone Park Company, Defendant", Cause No. 35336; and " ~ a t i o n a l Business Factors, Inc., Plaintiff v, Yellowstone Park Company, Defendant", Cause No. 35799. Plaintiffs f i l e d a motion for summary judgment which was heard by the d i s t r i c t court on M a y 25, 1972. O n the same date, the d i s t r i c t court entered i t s order granting summary judgment i n part on the question of l i a b i l i t y i n both cases. From the p r e t r i a l order, the agreed statement of fact reads : "Handee Foods, Inc. i s a business located i n Missoula, Montana, represented by M r . F. W. Krieger, General Manager and President of the Company, It i s a d i s t r i - butor of so-called 'convenience foods', which are foods that have been pre-cooked, refrigerated, and kept i n a refrigerated condition u n t i l such time asbthey are 're- constituted' or cooked for service t o a customer. It does not s e l l t o the general public, but s e l l s t o i n s t i - tutions, restaurants, and i n general, the wholesale and retail market. Handee Foods has '0 degree' storage facilities, located in Livingston, Montana, that are capable of handling large supplies of frozen food products over extended periods of time. " H . Shenson, Inc. is a corporation located in San Francisco, California, and is a meat purveyor, that sells generally to the retail market, institutions, restaurants, and similar situated businesses. It likewise 'breaks' or 'cuts up' meats, refrigerates the same, and offers them to its prospective customers. In the cause now before the Court, H. Shenson, Inc. is represented by Mr. Bud Murphy, Sales Manager for that company, National Business Factors, Inc., plain- tiff herein, is the owner and holder of the account of H . Shensan, Inc., by virtue of an assignment made to it h by H . Shenson, Inc. e ell ow stone Park Company is a corporation which operates as a concessionaire under a concession agreement it has with the United States Department of Interior, National Park Service. Its activities in Yellowstone National Park include the owning and operating of several different hotels and restaurants which provide food and beverage service to the traveling public. "The business of Yellowstone Park Company is highly seasonal with the primary concentration of visitors to the Park being in the months of June, J'uly and August of each year. Yellowstone Park Company is represented in this matter by Mr. R . L . Boyd, its Vice President and Con- troller, Mr. Peter Rogers who was the Food and Beverage Director for Yellowstone Park Company in 1969 and 1970, and Mr. Percy Butler, who is the Executive Chef for Yellow- stone Park Company. II According to the pretrial order, plaintiffs contend: 1 . That Yellowstone Park Company was to use all of the products ordered from Shenson, Inc. and Handee Foods, Inc,, during the Yellowstone Park season of 1970, or to pay for such products as were not used, 2 . That the total amount of the products for which Yellowstone Park Company is obligated to pay, is to Shenson Meats the sum of $4,119.12, and Handee Foods, Inc., in the sum of $36,621.52. 3 . That Handee Foods, Inc., in addition to the price of the goods as represented by the account, is entitled to the cost of storage at the Livingston warehouse, at the rate of $600 per month from October 1, 1970, to date. According to the pretrial order, defendant contends: 1 . That under the terms of the agreement between Yellowstone Park Company and Handee Foods, Yellowstone Park Company issued its purchase orders for estimated approximate usages for the 1970 season and Yellowstone Park Company was obligated to pay for and did pay for only those items that were ordered specifi- cally for delivery and delivered to Yellowstone Park Company in Yellowstone National Park; and that the total price of the goods so delivered under the terms of the agreement was $630,711.73, and that the exact same amount, $630,711.73, was paid by Yellowstone Park Company to Handee Foods, Inc. 2 . That it was the intent of the parties to the agreement that Handee Foods, Inc. would be responsible for any oversupply of food products left on hand in the Handee Foods warehouse in Livingston at the end of the 1970 season. 3 . That Yellowstone Park Company has paid for all of the goods delivered to it by Handee Foods, Inc, and Yellowstone Park Company does not owe Handee Foods, Inc. $36,621,52 or any other amount. 4 . That, in connection with t k .claim of H . Shenson, Inc., Yellowstone Park Company has paid for all of the goods de- livered directly from H. Shenson, Inc. to Yellowstone Park Company and Yellowstone Park Company does not owe H. Shenson, Inc, or National Business Factors, its assignee, the sum of $4,119.12 or any other amount. 5 . That, under no circumstances, and particularly under the circumstances that exist in this case, would Handee Foods be entitled to any amount of damages representing storage costs incurred by Handee Foods, Inc. at the warehouse it rented in Livingston. Subsequently, plaintiffs moved for summary judgment and the district court issued an order granting summary judgment on the question of liability. That order states in part: "On December 9, 1969 the Defendant wrote a letter to the Plaintiff. Plaintiff contends the letter is a writing expressing the agreement between the parties. Determination of that point before the trial is very necessary. If the writing contains the agreement of the parties, and if the Court can determine from the writing who is the actual owner of the food items that remained in the warehouse at the end of the 1970 season, then the question of liability is settled and no parol evidence would be permitted to show any other oral agreement. "In the opinion of the Court the letter does settle the question of liability and therefore parol evidence would not be admissible to vary any of its terms. The letter was written by the Defendant and must be inter- preted as provided in Chapter 7, of Title 13, RCM 1947, and as provided in 13-720, the words are to be interpreted most strongly against the party who put them in the writing. I I The letter referred to in the court's order reads: "Mr. Fritz Krieger "Handee Foods Incorporated "802 Milton 11 Missoula, Montana 59801 "Dear Fritz : "So that we keep up to date with each others progress, we are still going ahead as scheduled on converting our food program to total convenience. We are in the process t h i s month of preparing our purchase orders for convenience equipment totaling some $144,000.00. This equipment includes Thermotainers, Vischer Steamers, Convection Ovens and additional freezers. John King, Plans and Projects Officer and I have spent t h i s past month deciding what brands of equip- ment we want t o buy and we recently returned from the N e w York Hotel Show, a t which time some of our questions were answered, a s t o the brand of equipment. "At the same time, I a m concerned about the progress you are making, as we are counting on you handling our e n t i r e convenience food products, which w i l l be coming from basically three purveyors and i n addition, seven small purveyors. I want t o make sure your warehouse deal i s firm and that you are ready t o proceed t o re- model the existing building. There is going t o be a huge volume and I want t o make sure you have ample receiving, proper tight control systems and that you are going t o have the equipment t o distribute the product throughout the Park. Nothing has changed relative t o night deliveries a t four area warehouses ehroughout the Park. 1 t I have made up the new menus and I a m putting them into f i n a l form for approval of prices t o the Government and it i s estimated that we w i l l be purchasing through you, some $650,000,00 t o $850,000.00 worth of product, Almost a l l of t h i s product, totaling close t o 100 i t e m s w i l l be s e t for delivery between April 1 and 15 t o your f a c i l i t i e s i n Livingston. A s we have previously discussed, you w i l l receive 20% over and above the cost of the merchandise, t o receive, t o warehouse and t o distribute these products t o us. 20% w i l l be added t o the case price on each item. "On the big three distributors, I have made, o r a m i n the process of concluding arrangements whereby you w i l l be able t o pay these b i l l s i n three installments- June, July and August, even though the product w i l l have been delivered i n April, However, such an arrangement i s not possibly where manufacturers are supplying only one item, such as our bacon Allentown, Pennsylvania; and our sausage from Memphis, Tennessee; and our stuffed baked potato from M i l - waukee. t I These awe just examples of our one-item houses, whereby the truck load w i l l have t o be paid for by you a f t e r delivery, even though we do not consume the product i n i t s entirety u n t i l October. I t I n the near future, I w i l l give you a list of a l l the purveyors and t h e i r products; the packing specs with the price that you w i l l pay t o them and the price that we w i l l pay you which w i l l , of course, include 20% on top of the factory price. I t Please keep m e advised as t o your progress, so that I a m assured you w i l l be i n the position of handling our food program for next year and succeeding years. t t Sincerely, S/ " Peter "Peter Rogers I t Food & Beverage Director." The issue before t h i s Court i s not confined solely t o the question of whether there remains a genuine issue of material fact concerning the oversupply of food i n the Handee warehouse a t the close of the 1970 season but, rather, was the evidence i n the record produced through discovery that creates t h i s issue properly excluded by the t r i a l court. This evidence in- cludes par01 evidence by Peter Rogers, on behalf of defendant, that directly disputes any inferences i n the heretofore quoted l e t t e r of December 9, 1969, that defendant would be responsible for oversupply; evidence of the course of conduct contained i n defendants exhibits "F" and "G" t o be construed with the l e t t e r ; and also evidence of "customs of the Trade". This applies t o Cause 35336, Handee Foods. In Cause 35799, National Business Factors, it appears that a l l items sold directly t o defendant were paid for and the dispute concerns i t e m s handled through Handee,and the ultimate issue i n t h i s cause would be the same as that of Cause 35336. The l e t t e r upon which the d i s t r i c t court based i t s deter- mination does not speak directly to the issue of oversupply a t the close of the 1970 season, Any determination must be had from the general language contained i n the l e t t e r as a whole, a s was demonstrated by the d i s t r i c t court. W e hold the language t o be ambiguous and subject t o additional clarification a s t o the true intent of the parties under the appropriate sections of the Montana Uniform Commercial Code, T i t l e 87A, R.C.M. 1947, and more particularly sections 87A-2-101, et,seq., R.C.M. 1947. Section 87A-2-202, R.C,M. 1947, provides: "Terms with respect t o which the confirmatory memoranda of the parties agree or which are other- wise s e t forth i n a writing intended by the parties a s a f i n a l ex i t h respect t o such terms not be con- tradicted by n t or of a contemporaneous oral agreement but may be explained o r supplemented "(a) by course of dealing or usage of trade (section 87A-1-205) or by a course of per- formance (section 87A-2-208); and " ( b ) by evidence of consistent additional terms unless the court finds the writing to have been in- tended also as a complete and exclusive statement of the terms of the agreement," (Emphasis supplied). In the comment which follows Section 2-202, Uniform Commercial Code, Uniform Laws Annotated, it is pointed out that there are no prior uniform statutory provisions under previous uniform codes. The comment then goes on to point out that the purpose of Section 2-202, is to definitely reject: " ( a ) Any assumption that because a writing has been worked out which is final on some matters, it is to be taken as including all the matters agreed upon; " ( b ) The premise that the language used has the meaning attributable to such language by rules of construction existing in the law rather than the meaning which arises out of the commercial context in which it was used; and " ( c ) The requirement that a condition precedent to the admissibility of the type of evidence specified in paragraph ( a ) is an original determination by the court that the language used is ambiguous. I I Paragraph ( a ) of section 8712-2-202, R.C.M. 1947, makes admissible, evidence of course ofdealing, usage of trade and course of performance to explain or supplement the terms of any writing stating the agreement of the parties in order that the 'true understanding of the parties as to the agreement may be reached. Further, the course of actual performance by the parties is considered the best indication of what they intended the writing to mean. See: Hunt Foods & Industries, Inc. v. Doliner, 270 NeY.S.2d 937; Michael Schiavone & Sons, Inc, v. Securalloy Company, In&., (D.C.Conn. 1970), 312 F.Supp. 801, The judgment of the trial court is reversed and the cause remanded to the district court for trial in conformity with this opinion.