Case Title: Mountain Cement Co. v. Johnson

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1994-10-28T00:00:00Z

Document:
Mountain Cement Co. v. Johnson1994 WY 117884 P.2d 30Case Number: 93-227Decided: 10/28/1994Supreme Court of Wyoming
MOUNTAIN CEMENT COMPANY, 
a Wyoming Joint Venture or Partnership,

Appellant 
(Defendant),

v.

Millard C. JOHNSON and 
Deanna J. Johnson,

Appellees 
(Plaintiffs).

Rehearing Denied November 
22, 1994.

Appeal from District 
Court, Albany County, Arthur T. Hanscum, J.

 

Representing 
Appellant:

Philip A. Nicholas and 
Stephen N. Goodrich, Nicholas Law Offices, Laramie.

Representing 
Appellees:

Cary R. Alburn, III, 
Laramie.

 

Before 
GOLDEN, C.J., and THOMAS, CARDINE,* 
MACY,** and TAYLOR, 
JJ.

GOLDEN, Chief 
Justice.

[¶1]            
Appellant Mountain Cement Company appeals from a partial summary judgment 
which terminated an easement across land belonging to Appellees Millard C. 
Johnson and Deanna J. Johnson.

[¶2]      We reverse the 
partial summary judgment to appellees and remand for further proceedings 
consistent with this opinion.

[¶3]            
Mountain Cement presents this issue:

Partial Summary Judgment 
for appellees was improper because:

(1) if the December 31, 
1981 Agreement and Easement is ambiguous then genuine issues of material fact 
exist and neither party is entitled to summary judgment; or

(2) if the Agreement and 
Easement is unambiguous the trial court has rewritten the agreement under the 
guise of interpretation and appellant rather than appellees is entitled to 
judgment as a matter of law.

[¶4]            
Johnson restates the issue as:

Whether the District 
Judge correctly interpreted, that the December 31, 1981, Agreement and Easement 
was terminated by its own terms, because of the actions or inactions of 
Appellant or Appellant's predecessors in interest?

FACTS

[¶5]      Before 1981, 
Mountain Cement's predecessor, Monolith Portland Cement Company, owned the west 
half of Section 25, a parcel of land located south of Laramie, Wyoming, in 
Albany County. The east half of Section 25 was owned by Mrs. Johnson and her 
exhusband, William Despain. Monolith had operated a quarry on the land it owned 
for a long period and later began operating a quarry east of the Section 25 land 
owned by the Despains. In 1981, Monolith took steps to secure access to the 
latter quarry. By limited warranty deed, Monolith conveyed the west half of 
Section 25 to the Despains reserving two roads to Monolith, a north-south road 
and an east-west road. At the same time, the Despains, by Agreement and 
Easement, granted Monolith an easement across the east half of Section 25. 
Monolith built a road across both sections of the land that connected the quarry 
east of Section 25 to its plant west of the land. The easement agreement set out 
royalty payments for material transported over the east-west road. The parties 
also signed a royalty sales agreement setting out royalty payments for the 
materials hauled in or out along the north-south road in the west one-half of 
the section.

[¶6]      In 1986, Mountain 
Cement acquired Monolith's interest and because of contested mining permits 
suspended most hauling on the easement road. Mountain Cement continued to pay 
the semi-annual minimum royalties, as provided for in the Agreement and Easement 
and contends it continued to use and maintain the road.

[¶7]      In 1992, the 
Despains divorced, and Mrs. Despain received Section 25. When she married 
Millard Johnson, both became owners of Section 25 and began plans to subdivide 
the land. Mrs. Johnson notified Mountain Cement that she was terminating the 
easement across the east half of Section 25 for nonuse. She sought, and the 
district court granted in the form of a partial summary judgment, a declaratory 
judgment that the easement was terminated. The district court also granted a 
partial summary judgment in favor of Mountain Cement and ruled that its two 
rights of way located on the west half of Section 25 were not terminated. That 
ruling was not appealed.

DISCUSSION

Standard of 
Review

[¶8]            
Summary judgment is proper only when there are no genuine issues of 
material fact and the prevailing party is entitled to judgment as a matter of 
law. WYO.R.CIV.P. 56(c). We review a summary judgment in the same light as the 
district court, using the same materials and following the same standards. "We 
examine the record from the vantage point most favorable to the party opposing 
the motion, and we give that party the benefit of all favorable inferences which 
may fairly be drawn from the record." Four Nines Gold, Inc. v. 71 Constr., 
Inc., 809 P.2d 236, 238 (Wyo. 1991).

[¶9]      At issue in this 
case is the language of paragraphs two and four of the Agreement and Easement 
(document):

2. The said easement 
shall continue for so long a period as Grantee shall, in Grantee's sole 
discretion, require the road to enable Grantee to transport material to 
Grantee's aforementioned plant, and the said easement shall run with the land, 
and any subsequent conveyances of any interest in the land over and across which 
the said easement runs shall be subject to the said easement.

4. Grantee shall file for 
the record in the office of the County Clerk and ex-officio registrar of Deeds 
of the County of Albany, State of Wyoming, a release of the easement herein 
granted within thirty (30) days following the date on which Grantee has not used 
the road for one continuous twelve month period, and the failure of the Grantee 
to so file a release shall entitle Grantors, on demand made by them on Grantee, 
to be paid as liquidated damages for any and all loss occasioned Grantors by 
such failure the sum of Two Thousand and No/100 ($2,000.00) Dollars.

Grantee shall within a 
reasonable time following Grantee's non-use of the road for such continuous 
twelve month period re-seed the road and fill in and re-seed the borrow pits 
created in the construction and maintenance of the road.

[¶10]   Both parties agree the language of 
the contract is unambiguous. However, both offer completely different 
explanations of what that clear meaning supposedly is. Mountain Cement (grantee) 
contends the language of paragraph two clearly creates an easement terminable 
only at its sole discretion and claims paragraph four merely provides for 
damages if certain procedures do not occur following that termination. The 
Johnsons (grantor), however, contend that the paragraphs represent two methods 
of termination - one at Mountain Cement's discretion and one at the Johnsons' 
discretion if there is nonuse for a continuous twelve month period.

[¶11]   Our basic purpose in construing or 
interpreting a contract is to determine the intention and understanding of the 
parties. Rouse v. Munroe, 658 P.2d 74, 77 (Wyo. 1983). In construing a 
written agreement, we must derive the meaning of the instrument from its 
language if the terms are clear and unambiguous. Tibbets v. P & M 
Petroleum Co., 744 P.2d 651, 652 (Wyo. 1987). When the language is clear, we 
look no further than the four corners of a contract to determine the intent of 
the parties. Id. at 652. "The contract as a whole should be considered, 
with each part being read in light of all other parts." Rouse, at 77. If 
the terms are clear, then it falls within the province of the court to construe 
the instrument as a matter of law. Tibbets, at 653.

[¶12]            
Mindful that the document should be considered as a whole with the parts 
fitted harmoniously, it appears that each of these paragraphs has a different 
principal object. The principal object of paragraph two is to describe the 
nature and term of the easement, i.e., "The said easement shall continue for so 
long a period as Grantee shall, in Grantee's sole discretion, require the road 
to enable Grantee to transport material * * * and the said easement shall run 
with the land * * *." In other words, this language describes the easement as 
one of indefinite duration solely within the grantee's power to 
determine.

[¶13]            
Paragraph four, on the other hand, has as its principal object simply the 
method by which the grantee will effect the release of the easement and the 
consequences flowing from the grantee's failure to use that method. Also, under 
this provision, the easement-releasing grantee is obligated to re-seed the 
easement area. In this context, the parties have identified a point in time to 
be used as a reference point for the effectuation of the objects, viz., 
the grantee shall file the easement release "within thirty days following the 
date on which grantee has not used the road for one continuous twelve month 
period"; and the grantee shall re-seed "within a reasonable time following 
grantee's non-use of the road for such continuous twelve month 
period."

[¶14]            
Seeing the easement document in light of the objects of the two 
paragraphs in question, we find the document is unambiguous and the indefinite 
term of grantee's use is within the grantee's power of determination, that is, 
as long as grantee requires the road to enable it to transport material to its 
plant. Consequently, it cannot be found that the parties intended to use 
paragraph four's language as a qualifier to the term clearly set forth in 
paragraph two.

[¶15]   We reverse the district court's 
grant of partial summary judgment to the Johnsons and remand for further 
proceedings consistent with this opinion.

THOMAS, J., files an opinion 
concurring specially.

CARDINE, J., files a dissenting 
opinion.

MACY, J., files a dissenting 
opinion in which CARDINE, J., joined.

THOMAS, Justice, concurring 
specially.

[¶16]   I find additional insight into the 
proper construction of the Agreement and Easement by looking to the language of 
paragraph eight of that document and the manner in which it was followed by the 
parties. That paragraph of the Agreement and Easement reads:

8. Grantee shall as part 
of the consideration for the easement herein granted pay Grantors the sum of one 
and one-half cents ($.015) per ton of material hauled by Grantee (or by a 
contractor or contractors employed by Grantee) over the road. Payment of the 
royalties herein provided shall be made by Grantee to Grantors monthly, the 
first such payment to be made one month and ten days following the hauling of 
the first load of material over the road, and subsequent payments to be made to 
Grantors by Grantee at monthly intervals thereafter. It is specifically 
provided, however, that in the event that the royalties so paid Grantors by 
Grantee for any six month period as herein defined, to-wit: the first six month 
period to end six months after the date of the first such monthly payment, and 
each subsequent six month period to end at six month intervals thereafter; prior 
to Grantee's cessation of use of the road for a period of twelve consecutive 
months total less than One Thousand and No/100 ($1,000.00) Dollars, Grantee 
shall pay Grantors the difference between the total monthly royalties so paid by 
Grantee to Grantors during such six month period and One Thousand and No/100 
($1,000.00) Dollars.

[¶17]   There appears to be no question 
that these payments were made in the amount of $1,000.00 each six months since 
1986. Under the clear language of paragraph eight those payments were only to be 
made "prior to Grantee's cessation of use of the road for a period of twelve 
consecutive months * * *." During those years, Mountain Cement was not hauling 
materials to its plant over the easement, but it was using the road for other 
purposes and maintaining it. Consequently, there was not a total cessation of 
use such as paragraph four of the Agreement and Easement seems to contemplate, 
and the parties manifested their accord in that regard by the payment and 
receipt of the minimum royalties.

[¶18]   It is clear to me that up until the 
commencement of this action the parties understood their agreement to permit 
Mountain Cement to not use the road to haul materials to its plant so long as 
the minimum royalty was paid. Since there was some use of the road and those 
payments were made, the Agreement and Easement did not terminate under paragraph 
four. The only other possibility is termination under paragraph two, and it is 
clear that Mountain Cement did not determine, in its sole discretion, 
that the road was no longer useful to transport material to its 
plant.

[¶19]   The result of the majority opinion 
is entirely consistent with such a resolution, and I am in full accord with that 
disposition.

CARDINE, 
Justice, Retired, dissenting.

[¶20]   I also believe the agreement is 
unambiguous. It provides that the grantee will retain the easement as long as 
"Grantee shall * * * require the road * * * to transport material." That is a 
fair reading of the parties' agreement. It is the only one that is grounded in 
common sense. When material is no longer being transported, the road is not 
required "to transport material"; and if that situation continues for twelve 
months, the easement terminates.

[¶21]   Both the majority of this court and 
this dissenting justice, however, find the agreement unambiguous. Each concludes 
its meaning to be totally contrary to the other's position. Perhaps, then, this 
is a classic case of an ambiguous agreement. If so, then the court must 
ascertain the intent of the parties to arrive at a correct disposition of the 
case. The easement will never terminate under the opinion as now written by the 
court, for appellant only need claim that it needs the easement to transport 
material and never thereafter transport material. It boggles the mind that the 
court can conclude that this is what the parties intended when they made their 
agreement. At a minimum, the summary judgment should be reversed and evidence 
taken to ascertain the parties' intent.

MACY, Justice, dissenting, 
with whom CARDINE, Justice (Retired), joins.

[¶22]   I dissent. Although the majority 
concedes that the Agreement and Easement should be considered as a whole, it has 
failed to consider paragraph 1:

1. Grantors do hereby for 
themselves, their heirs, executors, administrators, successors and assigns 
grant, assign and set over to the Grantee[,] its successors and assigns an 
easement for a right of way for a road for the purpose of hauling material to 
Grantee's plant in Albany County, Wyoming. . . .

[¶23]   As stated in paragraph 1, the 
purpose of the easement was to permit Mountain Cement to haul material to its 
plant. According to paragraph 2, the easement continued for as long as Mountain 
Cement required the easement to enable Mountain Cement to transport material to 
its plant. Paragraph 4 required Mountain Cement to record a release of the 
easement within thirty days after it failed to use the easement for twelve 
continuous months. Mountain Cement was also required to reclaim the easement 
area within a reasonable period of time. The express purpose of the damages 
provision of paragraph 4 was to compensate the Johnsons in the event that 
Mountain Cement failed to record the release of the easement and to reclaim the 
surface of the land. The terms of the damages provision did not permit Mountain 
Cement to revive the easement by paying the stipulated sum after the easement 
had been terminated.

[¶24]            
Mountain Cement admitted that, for at least twelve continuous months, it 
had not used the easement to haul material to the plant. The easement 
automatically terminated after twelve continuous months of nonuse.

[¶25]   I would affirm the partial summary 
judgment in favor of the Johnsons. 

 

FOOTNOTES

*Retired July 
6, 1994.

**Chief 
Justice at time of consideration.