Case Title: M&M AUTO OUTLET, a Wyoming Corporation V. HILL INVESTMENT CORPORATION, a Colorado Corporation, d/b/a First Financial, Inc.

Citation: 

Docket Number: S-09-0160

State: wyoming

Court: Wyoming Supreme Court

Date: 2010-04-28T00:00:00Z

Document:
M&M AUTO OUTLET, a Wyoming Corporation V. HILL INVESTMENT CORPORATION, a Colorado Corporation, d/b/a First Financial, Inc.2010 WY 56230 P.3d 1099Case Number: S-09-0160Decided: 04/28/2010
APRIL 
TERM, A.D. 2010

 
 
M&M 
AUTO OUTLET, a Wyoming 
Corporation,Appellant(Defendant),v.HILL INVESTMENT 
CORPORATION, a Colorado Corporation, d/b/a First Financial, 
Inc.,Appellee(Plaintiff).

 
 

Appeal 
from the District Court of Laramie County

The 
Honorable Edward L. Grant, Judge

 
 
Representing 
Appellant:

Stephen 
R. Winship of Winship & Winship, P.C., Casper, 
Wyoming.

 
 
Representing 
Appellee:

Richard 
D. Bush, David Evans and John A. Coppede of Hickey & Evans, LLP, Cheyenne, 
Wyoming.

 
 
Before 
VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.

 
 
KITE, 
Justice.

 
 
[¶1]  M&M Auto Outlet (M&M) and Hill 
Investment Corporation, doing business as First Financial, Inc., (FFI) entered 
into a contract in which FFI agreed to purchase vehicle loans from M&M and 
perform collection activities on the loans at its expense. In the event an 
M&M customer became delinquent on a loan, the contract provided that M&M 
would pay FFI the "full recourse amount."  
Alleging that M&M failed to pay the full recourse amount on 
delinquent loans in accordance with the contract, FFI filed a complaint for 
breach of contract.  The district 
court granted summary judgment for FFI and ordered M&M to pay the full 
recourse amount plus interest.  
M&M appealed.  We 
affirm.

 
 
ISSUES

 
 
[¶2]  M&M presents the following issues 
for this Court's determination:

 
 
            
1.         
Whether the parties' Agreement was ambiguous?

 
 
            
2.         
Was there a genuine issue of material fact as to whether 
Plaintiff-Appellee performed in good faith its obligation under the parties' 
Agreement to diligently collect on the loans it purchased from 
Defendant-Appellant?

 
 
            
3.         
Whether Plaintiff-Appellee's breach of the parties' Agreement excused 
Defendant-Appellant's recourse obligation?

 
 
            
4.         
Was there a genuine issue of material fact as to whether 
Plaintiff-Appellee mitigated its damages?

 
 
            
5.         
Did Plaintiff-Appellee produce sufficient evidence to support summary 
judgment in its favor?

 
 
            
6.         
Whether the District Court abused its discretion in refusing to continue 
the summary judgment hearing when Plaintiff-Appellee had not timely responded to 
Defendant-Appellant's discovery?

 
 
FFI 
asserts the district court properly granted summary judgment in its favor 
because the contract was clear and unambiguous, FFI was not required to prove it 
had taken specific steps to mitigate and sufficient evidence supported the 
order.  FFI also asserts the 
district court did not abuse its discretion in denying M&M's motion to 
vacate the summary judgment hearing.

 
 
FACTS

 
 
[¶3]  M&M is in the business of selling 
used cars and does so in various locations in Wyoming.  As part of the business, M&M 
provides sub-prime financing for its customers.  FFI is in the business of purchasing 
sub-prime consumer loans from used car dealers such as M&M.  When companies like FFI purchase loans 
from used car dealerships like M&M, the dealership receives immediate 
operating capital and the loan purchaser assumes responsibility for collecting 
on the loans.  

 
 
[¶4]  On July 22, 2003, FFI offered M&M 
the opportunity to participate in a "full recourse paper-buying program."  The agreement setting forth the terms of 
the program provided that FFI would purchase the loans M&M extended to its 
customers; M&M's customers then would make the monthly loan payments 
directly to FFI rather than to M&M and, in the event a customer was 
delinquent in making the payments due:

 
 
FFI 
will perform all collection activities on accounts including but not limited to 
telephone collections and dunning when appropriate.  All collection costs, excluding 
repossession, are paid entirely by FFI.

The 
agreement further provided that FFI would advise M&M of any "problem 
collection accounts" and exercise its "Full Recourse option" after discussing 
those accounts with M&M.  Thus, 
M&M retained potential responsibility for the auto loans in the event of 
customer default.  The amount due to 
FFI from M&M upon customer default was to be "the funding amount by FFI less 
any principal received on the account."  
The agreement required M&M to pay off all designated "recourse 
accounts" within 30 days.  

 
 
[¶5]  M&M's owner and FFI's general 
manager signed the agreement on behalf of the respective entities in 2003 and 
FFI proceeded to purchase the loan contracts.  In 2008, FFI filed a complaint alleging 
that M&M breached the agreement by failing to pay the full recourse amounts 
due as the agreement required.  FFI 
sought judgment against M&M in the amount of $194,044.28 plus post-judgment 
interest and attorney's fees.  
M&M generally denied that it breached the agreement and asserted as 
an affirmative defense that FFI negligently and in bad faith failed to fully 
perform its obligation to collect on the accounts.   

 
 
[¶6]  FFI filed a motion for summary judgment 
to which it attached portions of the deposition of Keith Smith, M&M's vice 
president, secretary and the person in charge of its daily operations; the 
affidavit of Don Shaw, FFI's general manager; a list of the delinquent customer 
accounts and amounts owed; the 2003 full recourse agreement; and the notice of 
recourse designated accounts FFI provided to M&M upon the 
delinquencies.  In support of its 
motion, FFI asserted that the full recourse program agreement clearly and 
unambiguously required M&M to pay to FFI the amounts owing from defaulting 
customers upon FFI's designation of the account as subject to full 
recourse.

 
 
[¶7]  M&M responded to the motion and 
submitted the affidavit of Mr. Smith in which he averred that he entered into 
the 2003 full recourse agreement in reliance upon FFI "undertaking full and 
diligent collection efforts of the accounts it purchased in conformity with the 
generally followed practices for collection of delinquent payments arising under 
sales and financing agreements for sub-prime' used automobiles."  Mr. Smith asserted that, contrary to 
general practice, FFI did not hire an attorney or collection agency or engage in 
efforts to repossess the vehicles involved; instead, FFI made a couple of 
telephone calls and then sought full recourse.  Mr. Smith also averred that FFI did not 
discuss the problem accounts with him before seeking recourse as the agreement 
required.  Mr. Smith stated that 
when it became apparent that FFI was making only a "token effort" to collect on 
the delinquent accounts, he "considered that [FFI] had breached the Agreement 
thereby relieving M&M of further performance."

 
 
[¶8]  M&M also filed the affidavit of 
Diana Gray who stated she has worked in the automobile sales and finance 
business since 1978, is familiar with sub-prime financing of used automobiles 
and has "years of experience in various collection practices involving the 
documentation, administration and enforcement of sub-prime automobile financing 
obligations."  Ms. Gray stated that 
"a standard part of collecting on these kinds of loans is to engage in skip 
tracing'"1 and, when telephone or written 
contact fails, repossess the vehicle, turn the matter over to a collection 
agency, file a claim in small claims court or, if warranted by the amount owed, 
hire an attorney to file a claim in district court.  Ms. Gray averred "it is not proper or 
complete performance under an agreement for the collection of delinquent 
purchase agreements arising from sub-prime automobile loans to limit collection 
activities to a few telephone calls."        

 
 
[¶9]  In its reply to M&M's submissions, 
FFI distinguished full recourse contracts, in which the dealership must make 
good on any loans it sells that end up in default, from non-recourse contracts, 
where there is no recourse against the dealer in the event of default, and 
asserted FFI made a business decision to pay a premium of $4,247,761.47 for the 
accounts on the basis that, in the event of default, it had the contractual 
right to seek payment of the amounts due from M&M.  FFI attached a second affidavit from its 
general manager, Mr. Shaw, attesting to that decision and payment amount.  FFI also asserted it had complete 
discretion in its collection efforts under the plain language of the 
agreement.  Additionally, FFI 
pointed to facts showing that M&M did not complain about FFI's collection 
practices until after FFI filed this action; in 2004 Mr. Smith wrote to FFI 
stating that M&M was moving away from full recourse agreements, not because 
of FFI's collection practices, but because they were not profitable for M&M 
and in a subsequent communication M&M acknowledged it was behind in making 
the full recourse payments, suggested a plan for it to become current, and did 
not mention any problem with FFI's collection practices.  FFI asserted M&M's criticism of 
FFI's practices was an after-the-fact attempt to avoid making the payments.     

 
 
[¶10]  After a hearing, the district court 
granted summary judgment for FFI.  
The district court concluded the agreement was not ambiguous, M&M 
breached the agreement by failing to timely pay the amounts due and FFI incurred 
damages in the amount of $186,766.50 plus $52,248.53 in interest.  M&M timely appealed the judgment to 
this Court.       

 
 
STANDARD 
OF REVIEW

 
 
[¶11]  When reviewing an order granting summary 
judgment, we consider the record de 
novo.  Stone v. Devon Energy Prod. Co., L.P., 
2009 WY 114, ¶ 10, 216 P.3d 489, 492 (Wyo. 2009).

 
 
[W]e 
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 [the district 
judge].  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.  

 
 

Wyoming 
Medical Center 
v. Wyoming Ins. Guar. Ass'n, 2010 WY 
21, ¶ 11, 225 P.3d 1061, 1064 (Wyo. 2010), quoting McGarvey v. Key Prop. Mgmt. LLC, 2009 WY 
84, ¶ 10, 211 P.3d 503, 506 (Wyo. 2009).  

 
 
[¶12]  The summary judgment ruling challenged 
in this case arose out of the district court's determination that the parties' 
agreement was clear and unambiguous.  
We review that determination by applying the following 
standards:

 
 
The 
initial question of whether the contract is capable of being understood in only 
one way is a question of law for the court.  If the court determines that the contract 
is capable of being understood in only one way, then the language used in the 
contract expresses and controls the intent of the parties.  In such case, the next question, what is 
that understanding or meaning, is also a question of law.  When we review the district court's 
summary judgment decisions that a contract is capable of being understood in 
only one way and what that understanding is, we accord no deference to those 
decisions.  As we have said, "[w]e 
are . . . at liberty to make a determination as to the existence of ambiguity 
whether or not the parties here agree thereto one way or the other, and whether 
or not the trial court has reached a conclusion thereon one way or the 
other."  

 
 

Examination 
Mgmt. Servs., Inc. v. Kirschbaum, 
927 P.2d 686, 689 (Wyo. 1996) (internal citations 
omitted).

 
 
DISCUSSION

 
 

1.    
The 
Meaning of the Contract 

[¶13]  M&M asserts summary judgment was not 
appropriate because the parties' agreement was ambiguous.  M&M points to the following 
language:  "FFI will perform all collection activities on accounts including but not limited to telephone 
collections and dunning when appropriate."2  (Emphasis added).  M&M contends FFI treated "collection 
activities" to mean "several telephone calls to delinquent customers," while 
M&M understood the language required FFI to make "a good faith effort to 
undertake those industry recognized standards necessary to realize upon these 
inherently risky accounts receivable."  
M&M contends this ambiguity in what the term "collection activities" 
meant was a factual question precluding summary judgment.   

 
 
[¶14]  FFI responds that when placed in context 
with the other provisions of the agreement and the surrounding circumstances, 
the term "collection activities" is not ambiguous.  FFI points to the fact that the contract 
is referred to as "Full Recourse," meaning M&M guaranteed its customers' 
performance and, in the event they failed to perform, agreed to pay FFI the 
amounts owing within 30 days.  When 
placed in this context, FFI contends, the collection provision simply identified 
which of the parties was responsible for performing the collection 
activities.  It did not impose any 
conditions or requirements for how FFI was to go about those activities, but 
left that to FFI's discretion.

 
 
[¶15]  The law governing judicial 
interpretation of contracts is well-settled:  

 
 
            
In considering the meaning of a contract, we focus on the parties' 
intent.  If possible, we determine 
their intent from the language used in the agreement.  Where the language is clear and 
unambiguous, we limit our inquiry to the four corners of the document, giving 
the words contained therein their ordinary meaning.  The parties are free to incorporate 
within their agreement whatever lawful terms they desire, and we are not at 
liberty, under the guise of judicial construction, to rewrite the 
agreement.  It is only when a 
contract is ambiguous that we construe the document by resorting to rules of 
construction.  A contract is 
ambiguous if indefiniteness of expression or double meaning obscures the 
parties' intent.  

 
 

Christensen 
v. Christensen, 
2008 WY 10, ¶ 13, 176 P.3d 626, 629 (Wyo. 2008), citing Cathcart v. State Farm Mut. Auto. Ins. 
Co., 2005 WY 154, ¶ 18, 123 P.3d 579, 587 (Wyo. 2005).  

 
 
[¶16]  In its entirety, the "special Full 
Recourse paper-buying program" agreement provided:

 
 

§  
FFI 
will purchase contracts, with terms not to exceed 36 months, at 75% of the 
principal balance due at the date of funding, upon completing customer interview 
and issuing an approval.

§  
[Annual 
percentage rate] on all contracts must be 21%. 

§  
M&M 
must send the following documents for each contract to FFI for funding:  original security agreement, original 
credit application, and lienholder copy of warrant[y] if one is purchased by the 
consumer.

§  
M&M 
must fill out [the] assignment section on the original security agreement, sign, 
and write the following statement "Full 
Recourse To Dealer for Life Of Note" or fill in the Recourse provision on 
the Security Agreement.  (Emphasis 
in original).

§  
M&M 
will not make payments on behalf of the consumer.

§  
FFI 
will perform all collection activities on accounts including but not limited to 
telephone collection and dunning when appropriate.  All collection costs, excluding 
repossession, are paid entirely by FFI.

§  
FFI 
will advise dealer of any "problem collection accounts", their status when they 
become a problem, and will exercise its Full Recourse option after discussing 
the account with M&M.

§  
Full 
Recourse amount due by M&M to FFI will be the funding amount by FFI less any 
principal received on the account.  
M&M to pay off all designated "recourse accounts" within 30 days. 

§  
FFI 
will present a monthly report to M&M that analyzes this portfolio from a 
"loss" perspective.  M&M to 
provide to FFI a reconciliation report on each repossession as to the income and 
expenses associated with the disposal of the vehicle.  The reconciliation report will be 
incorporated in the FFI monthly report to M&M to assist in a more accurate 
"loss percentage" of FFI funding amounts. 

§  
FFI 
will not enter into any full recourse relationship with other dealers in Casper, 
Douglas, Sheridan, Gillette, Riverton, or Lander as long as M&M sells over 
[$]2 million worth of paper to FFI annually.

§  
FFI 
will offer good standing M&M customers returning to FFI an upgrade 
program.  The payoff to dealer will 
be a regular payoff amount less 15%.  
FFI must receive the discounted payoff amount from M&M before funding 
the new deal. 

§  
FFI 
will offer a "mechanical unwind" program to M&M for customers returning to 
FFI.  The program allows M&M to 
use a trade in value of the buyback amount (funding amount by FFI less any 
principal received).  This program 
is offered only for 90 days from the original contract date.  FFI must receive the buyback amount from 
M&M before funding the new deal.

§  
M&M 
to provide a dedicated employee to FFI to assist in all collection and title 
issues.

§  
M&M 
to provide an outlet for FFI to sell all vehicles that do not fall under this 
agreement as a result of repossession.

(Emphasis 
added).

 
 
[¶17]  From the four corners of the agreement, 
it is clear the parties intended the agreement to be a full recourse agreement 
in which FFI would purchase from M&M the loans M&M made to its 
customers, M&M's customers would then make payments on the loans directly to 
FFI and FFI, at its expense, was responsible for collection activities, except 
for repossession expenses.  In 
interpreting the words "collection activities" as used in this agreement, our 
task is to determine the parties' intent by giving the words their plain and 
ordinary meaning.  Christensen, ¶ 13, 176 P.3d  at 629.  Plain meaning is that "meaning which 
[the] language would convey to reasonable persons at the time and place of its 
use."  Hickman v. Groves, 2003 WY 76, ¶ 6, 71 P.3d 256, 258 (Wyo. 2003) (citation omitted).  

 
 
[¶18]  The ordinary meaning of the word 
"collect" as used in the context of this agreement is:  "to present as due and receive payment 
for."  Websters Third New Int'l Dictionary 444 
(2002).  The ordinary meaning of the 
word "activity" is "the quality or state of being active."  Id. at 22.  Giving the phrase "collection activities" 
its ordinary meaning, the agreement required FFI to pursue payments due before 
advising M&M of any "problem collection accounts" and exercising its "Full 
Recourse option."  It is undisputed 
that FFI pursued payments due from the customers before advising M&M that 
there were problem accounts for which it was seeking full recourse.  M&M contends, however, that FFI did 
not do enough in its collection efforts.

 
 
[¶19] 
Relying on Ms. Gray's affidavit, M&M asserts the term "collection 
activities" as generally used in the used car financing business means doing 
much more than making a few telephone calls.  M&M contends, in the context of the 
used car financing business, the phrase required FFI to make several telephone 
calls per day for 30 days, conduct skip tracing, repossess the vehicle at issue, 
turn the account over to a reputable collection agency, file a claim in small 
claims court or hire an attorney if the amount owed was within the 
jurisdictional limit of the district court.  Given this meaning of "collection 
activities," M&M contends a genuine issue of fact existed precluding summary 
judgment.

 
 
[¶20]  Wyoming precedent demands that we look 
to the language of the agreement and, when appropriate, to the facts and 
circumstances surrounding its execution to determine the parties' intent.  Ecosystem Resources, L.C. v. Broadbent Land 
& Resources, L.L.C, 2007 WY 87, ¶ 35, 158 P.3d 685, 694 (Wyo. 
2007).  Relevant circumstances 
considered in determining the parties' intent may include the relationship of 
the parties, the subject matter of the contract, and the parties' purpose in 
making the contract.  Id., ¶ 10, 158 P.3d  at 688.  Evidence of trade usage may also be 
relevant in determining the parties' intent.  As we said in Hickman:

 
 
[W]hile 
words in a contract are ordinarily to be construed according to their plain, 
ordinary, popular or legal meaning, as the case may be, if in reference to the 
subject matter of the contract, particular expressions have by trade usage 
acquired a different meaning, and both parties are engaged in that trade, the 
parties to the contract are considered to have used them according to their 
different and peculiar sense as shown by such trade usage.  Parol evidence is admissible to 
establish the trade usage, and that is true even though the words are in their 
ordinary or legal meaning entirely unambiguous, since, by reason of the usage, 
the words are used by the parties in a different sense.  

 
 

Id., 
¶ 13, 71 P.3d  at 261, quoting 12 Samuel Williston, A Treatise on the Law of Contracts, § 
34.5 (4th ed. 1999) (footnotes omitted).  
On the basis of this principle, we reversed a summary judgment ruling in 
Hickman because the parties submitted 
evidence creating a genuine issue of material fact as to the meaning of the 
words "oil rights" as used in a warranty deed and whether those words were 
intended to include both oil and gas rights, or only oil with no attendant gas 
rights.  Hickman, ¶ 14, 71 P.3d  at 
261.

 
 
[¶21]  The difficulty with M&M's argument 
in the present case is that the parties are really not disputing what the term 
"collection activities" means.  
There is no disagreement that FFI was required to pursue full payment 
from the customer on the outstanding loans.  The disagreement concerns the lengths to 
which FFI was required to go in collecting payments, and that is something the 
agreement simply does not address.  
M&M does not claim that FFI failed to assume responsibility for 
collecting on the accounts, but claims instead that FFI did not take the steps 
to collect that M&M wanted it to take.  
It may be that Ms. Gray is correct that where a recourse agreement like 
this one is involved, a used car dealer typically wants the finance company to 
use every possible collection technique before seeking recourse.  However, the agreement in this case did 
not specify the techniques FFI was required to use and we are not willing to 
conclude that every recourse agreement in which a finance company assumes 
responsibility for "collection activities" requires repossession as one of those 
activities before recourse can be sought.           

 
 
[¶22]  Additionally, the record demonstrates 
that M&M and FFI began their business relationship in 1999; thus, the 
parties had dealings with each other for several years before entering into the 
agreement at issue here.  The record 
also reflects that both parties had extensive experience in used car 
financing.  M&M sold used cars 
throughout the State of Wyoming and had experience in sub-prime financing, which 
Mr. Smith defined as providing credit for less than credit worthy 
individuals.  M&M financed the 
vehicles it sold by holding installment contracts itself or selling them to 
finance companies such as FFI.  FFI 
was only one of the finance companies with which M&M did business.  M&M had experience with both 
recourse and non-recourse contracts and knew the difference between the 
two.  Mr. Smith testified that 
recourse agreements gave M&M freedom to explore more potential car deals 
than it could in transactions involving non-recourse agreements.  FFI's general manager attested that FFI 
made a business decision to pay a premium for the accounts in question so that 
it would have the contractual right to full recourse.  Mr. Smith, testifying by deposition on 
behalf of M&M, stated that the 2003 agreement gave FFI complete discretion 
as to how to go about collecting on the delinquent accounts.  There is no evidence in the record that 
M&M took issue with FFI's collection activities until after FFI filed its 
complaint.  In fact, contemporaneous 
documents reflect the complete absence of any complaints by M&M.  

 
 
[¶23]  In light of these surrounding 
circumstances and giving the language used in the agreement its plain and 
ordinary meaning, we are not persuaded the parties' intent at the time they 
executed the agreement was for FFI to go to the lengths described in Ms. Gray's 
affidavit to collect on the delinquent accounts.  The agreement itself contains no 
indication that the parties intended "collection activities" to establish the 
standard of performance M&M suggests.  
The language in the agreement stating that "collection activities" include but are not limited to telephone 
collections and dunning likewise does not suggest the parties intended FFI to 
take particular steps such as repossessing vehicles, utilizing collection 
agencies, filing court claims or hiring lawyers.  If M&M desired FFI's collection 
efforts to include these specific activities, it was free to incorporate those 
terms in the agreement.  It did not, 
and under the circumstances presented here, we will not rewrite the agreement 
under the guise of judicial construction.  
We uphold the district court's ruling that the meaning of the parties' 
agreement was clear and unambiguous.   

 
 

2.    
Alleged 
Breach by FFI

[¶24]  M&M claims it was excused from 
performing under the agreement because FFI breached the agreement when it failed 
to perform its collection activities in good faith. M&M's vice president, 
Keith Smith, testified as follows:

 
 
I 
did pay, trying to fulfill the obligation  although I felt the obligation was 
not due and just  set out to try to make good on it.  And more information came in as we went 
as to the ineffective and inability for [FFI] to collect the notes.  My understanding was that they needed to 
collect all monies due, and they didn't.  
They gave up routinely and often, and did not fulfill their end of the 
contract.  So I put a halt to 
everything at that point. 

 
 
This 
testimony suggests that M&M stopped paying because FFI failed to collect the 
amounts due from M&M's customers, as if collection had to occur before the 
full recourse provision was triggered.  
Collection of the amounts due clearly was not a prerequisite to FFI 
seeking payment from M&M.  
Rather, the agreement unambiguously provided that FFI was entitled to 
full recourse from M&M in cases where its collection activities proved 
unsuccessful.  

 
 
[¶25]  M&M also asserts that it was excused 
from payment of the uncollected amounts because FFI did not perform its 
collection efforts in good faith but did so half-heartedly, essentially making 
only a couple of telephone calls to delinquent customers and then seeking full 
recourse.  In support of this 
assertion, M&M points to evidence that FFI did not involve a collection 
agency or a lawyer in its collection efforts and did not make efforts to 
repossess any of the vehicles.  

 
 
[¶26]  In Scherer Constr., LLC v. Hedquist Constr., 
Inc., 2001 WY 23, ¶ 24, 18 P.3d 645, 655 (Wyo. 2001), we held that parties 
to a commercial contract may bring a claim for breach of the implied covenant of 
good faith and fair dealing based upon a contract theory.  Given the agreement between M&M and 
FFI, it follows that a covenant of good faith and fair dealing is implied in the 
contract.  The implied covenant of 
good faith and fair dealing:

 
 
[R]equires 
that a party's actions be consistent with the agreed common purpose and 
justified expectations of the other party . . . .  The purpose, intentions and expectations 
of the parties should be determined by considering the contract language and the 
course of dealings between and conduct of the parties.  The covenant of good faith and fair 
dealing may not, however, be construed to establish new, independent rights or 
duties not agreed upon by the parties.  
In other words, the concept of good faith and fair dealing is not a 
limitless one.  The implied 
obligation must arise from the language used or it must be indispensable to 
effectuate the intention of the parties.  
In the absence of evidence of self-dealing or breach of community 
standards of decency, fairness and reasonableness, the exercise of contractual 
rights alone will not be considered a breach of the 
covenant.

 
 

Whitlock 
Constr., Inc. v. South Big Horn County Water Supply Joint Powers 
Bd., 
2002 WY 36, ¶ 24, 41 P.3d 1261, 1267 (Wyo. 2002) (citation omitted).  Although many claims for breach of good 
faith involve questions of fact making summary judgment inappropriate, summary 
judgment may be appropriate where, under the facts in the record, the party's 
actions were in conformity with the clear language of the contract.  Id.

 
 
[¶27]  Applying these standards, we conclude 
there is no genuine issue of material fact on M&M's breach of the implied 
covenant defense.  The contract 
language provided that FFI was responsible for collection activities, including 
telephone collections and dunning when appropriate.  The contract language did not state that 
FFI was required to make repeated telephone calls for several weeks, hire a 
collection agency or a lawyer, file a small claims action or repossess the 
vehicles.  There is no evidence in 
the record that at the time they entered into the agreement either party 
intended that FFI was required to engage in those activities.  Had the parties intended to impose those 
duties on FFI, they were free to expressly state that intention in the contract 
itself.  Particularly where, as 
here, the parties' business relationship spanned several years and both parties 
were experienced in the used car financing business, we are not willing to infer 
that such duties existed absent clear language in the contract or evidence 
indicating that was the parties' intent at the time the agreement was 
executed.

 
 

3.            
 Mitigation of 
Damages

[¶28]  M&M claims FFI failed to demonstrate 
that it took efforts to mitigate its damages.  M&M contends FFI's failure to 
mitigate is best illustrated by evidence that in fifty cases, customers were 
still driving vehicles for which they did not pay the full purchase price.  M&M asserts that if FFI had 
repossessed those vehicles, its damages would have been significantly 
reduced.  

 
 
[¶29]  We have recognized that a party to a 
contract has a duty to mitigate its damages.  We have relied on Restatement (Second) 
of Contracts, § 350 (1981), which states:

 
 
(1) 
Except as provided in Subsection (2), damages are not recoverable for loss that 
the injured party could have avoided without undue risk, burden or 
humiliation.  

(2) 
The injured party is not precluded from recovery by the rule stated in 
subsection (1) to the extent that he has made reasonable but unsuccessful 
efforts to avoid the loss.

            

Lewis 
v. Community First Nat'l Bank, N.A., 
2004 WY 152, ¶ 9, 101 P.3d 457, 459 (Wyo. 2004).  Generally the question of whether a 
party exercised reasonable diligence to mitigate its damages is for the fact 
finder.  Moore v. Continental Ins. Co., 813 P.2d 1296, 1300 (Wyo. 1991).  Where 
reasonable minds could not differ with respect to efforts to mitigate, however, 
summary judgment is appropriate.  Id.

 
 
[¶30]  The difficulty with M&M's mitigation 
claim is that the parties' agreement contained a provision expressly stating how 
FFI was to be paid if its collection activities were unsuccessful.  The agreement provided:  "Full Recourse amount due by M&M to 
FFI will be the funding amount by FFI less any principal received on the 
account."  This provision, read 
together with the "collection activities" provision, clearly states that in the 
event FFI was unsuccessful in collecting the amounts due, it was entitled to 
full recourse as expressly defined in the agreement.

 
 
[¶31]  The other problem with M&M's 
contention is that the agreement did not require FFI to repossess the vehicles 
as part of its collection activities.  
For this Court to conclude that FFI had a duty to mitigate its damages by 
taking steps to repossess vehicles would be to impose upon FFI a duty the 
contract did not require.  The 
contract clearly provided that upon performing collection activities, FFI was 
entitled to the full recourse amount due, that is, the funding amount by FFI 
less any principal received on the account.  We will not read duties into the 
contract to change the specific contractual provision for calculating 
damages.         

 
 

4.    
Sufficiency 
of the Evidence to Support Summary Judgment

[¶32]  M&M claims FFI did not present 
sufficient evidence to support summary judgment because it did not attach copies 
of the problem accounts or the record of payments to the affidavit it submitted 
in support of its summary judgment motion.  
Instead, FFI attached a summary identifying the problem accounts, date 
recourse was declared, buyback amount, accrued interest and the total due.  M&M contends W.R.C.P. 56(e) requires 
documents referred to or reviewed by an affiant to be attached to the affidavit. 

 
 
[¶33]  W.R.C.P. 56(e) provides in pertinent 
part as follows:

 
 
            
(e)  Form of affidavits; further testimony; 
defense required.  Supporting and opposing affidavits shall be made on 
personal knowledge, shall set forth such facts as would be admissible in 
evidence, and shall show affirmatively that the affiant is competent to testify 
to the matters stated therein.  
Sworn or certified copies of all papers or parts thereof referred to in 
an affidavit shall be attached thereto or served therewith.  

 
 
W.R.C.P. 
56(e) requires that an affidavit (1) be made on personal knowledge; (2) set 
forth facts which are admissible in evidence; (3) demonstrate the affiant's 
competency to testify on the subject matter of the affidavit; and (4) have 
attached to it the papers and documents to which it refers.  Lamar Outdoor Advertising v. Farmers Co-Op 
Oil Co. of Sheridan, 2009 WY 112, ¶ 10, 215 P.3d 296, 300 (Wyo. 
2009).

 
 
[¶34]  The affidavit to which M&M refers is 
that of Mr. Shaw, FFI's general manager.  
Mr. Shaw stated in the affidavit that as general manager he:  managed "all aspects of a multi-state 
automobile sub-prime finance company specializing in purchasing point-of-sale, 
short-term, high-risk loans from dealerships such as M&M . . ."; was FFI's 
primary business contact with M&M had extensive experience working with 
M&M from 1999 through 2008; and executed the July 22, 2003, agreement.  He also stated that he had personal 
knowledge of the notes FFI purchased from M&M and the recourse accounts and 
was responsible for giving notice to M&M on accounts that were designated as 
recourse.  Mr. Shaw referenced three 
exhibits which, like his affidavit, were attached to FFI's summary judgment 
memorandum:  the 2003 full recourse 
program agreement, the summary described in paragraph 32 above, and a list of 
the recourse designated accounts he provided to M&M.  The affidavit was made on personal 
knowledge, set forth facts that would be admissible in evidence, showed that Mr. 
Shaw was competent to testify to the matters stated therein and had attached to 
it the documents Mr. Shaw referenced.  
It, therefore, satisfied the requirements of Rule 56(e).  

 
 
[¶35]  M&M asserts the evidence FFI 
submitted was insufficient to support summary judgment because it did not attach 
to Mr. Shaw's affidavit copies of the actual problem accounts or records of 
payment on the accounts but instead attached a summary of the actual 
documents.  W.R.C.P 56(e) requires a 
summary judgment motion to be supported by admissible evidence. W.R.E. 1006 
provides that writings which cannot conveniently be examined in court may be 
presented in the form of a summary, as long as the party relying on the summary 
makes the documents upon which the summary is based available for examination 
and copying by the opposing party.  
There is no contention here that FFI did not make the actual documents 
available to M&M.  The summary 
was sufficient evidence to support FFI's motion.    

 
 

5.    
Prematurity 
of Summary Judgment

[¶36]  In its final issue, M&M asserts the 
summary judgment was premature because discovery had not been completed.  FFI filed its complaint on March 10, 
2008.  FFI filed its summary 
judgment motion ten months later, on January 13, 2009.  On February 11, 2009, M&M filed a 
motion to extend the time for filing its response.  The district court granted the motion, 
giving M&M until February 23, 2009 to respond.  The district court scheduled a summary 
judgment hearing for March 17, 2009.  
M&M filed its response to FFI's motion on March 2, 2009.   

 
 
[¶37]  On March 9, 2009, M&M filed a motion 
to vacate the hearing date on the ground that discovery was not completed.  The same day, M&M filed a motion to 
amend its answer to add as affirmative defenses that FFI failed to mitigate its 
damages and repudiated the contract by failing to collect on the past due 
accounts.  M&M also filed a 
motion to compel FFI to respond to discovery.  According to M&M's appellate brief, 
the district court denied the motion to vacate the hearing and never ruled on 
the motion to amend the answer.  FFI 
responded to M&M's discovery request before the hearing.  The district court held the hearing as 
scheduled and orally granted summary judgment for FFI.         

 
 
[¶38]  A district court has broad discretion in 
ruling on a motion for continuance, and absent a clear abuse of discretion, we 
will not disturb its ruling.  Abraham v. Great Western Energy, LLC, 
2004 WY 145, ¶ 16, 101 P.3d 446, 454 (Wyo. 2004).  When a district court denies a motion for 
continuance, we will find an abuse of discretion only upon concluding the ruling 
is so arbitrary as to deny the moving party due process.  Id.   The moving party has the burden to 
prove actual prejudice and a violation of his rights.  Id.  In reviewing a denial, we look at the 
particular circumstances of the case and the reasons presented to the district 
court when the motion was made.  Id.

 
 
[¶39]  The record here shows that by February 
23, 2009, the only discovery requests FFI had not responded to satisfactorily in 
M&M's view involved account notes or transaction ledgers for four customers 
and any collection expenses FFI incurred.  
Prior to the summary judgment hearing, FFI responded to the latter 
request as follows:  "Other than 
telephone expense and time expended by Mr. Shaw contacting various delinquent 
account holders, neither of which have been quantified, there are no other 
expenses . . . ."  FFI responded to 
the former request by stating that M&M was in possession of the information 
on four of the accounts and FFI received payment of an identified amount on one 
other account.     

 
 
[¶40]  On March 17, 2009, the same day as the 
summary judgment hearing, M&M signed a withdrawal of its motion to compel 
discovery, stating that FFI had satisfactorily amended its discovery 
responses.  M&M filed the 
withdrawal on March 23, 2009.  Given 
M&M's statement that it was satisfied with the discovery responses, we find 
no abuse of discretion in the district court's denial of the motion for 
continuance.  Whether or not the 
district court was aware on the date it denied the motion that discovery had 
been satisfactorily completed, the record reflects that M&M was satisfied 
with the responses as of the hearing date.  
M&M's argument that discovery was not complete and so its motion for 
continuance should have been granted is not borne out by the record.     

 
 
[¶41]  Affirmed.

 
 
FOOTNOTES

 
 

1Skip tracing is a colloquial term used to describe the process of 
locating a person's whereabouts.  

 
 

2The word "dun" is defined as follows:  To make persistent demands (as for 
money).  Websters Third New Int'l Dictionary 701 
(2002).