Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-90-08051/USCOURTS-ca10-90-08051-0/pdf.json

Parties Involved:
Deepwater Investments, Limited
Appellee
Jackson Hole Ski Corporation
Appellant
Paul M. McCollister
Appellant

Document Text:

PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

DEEPWATER INVESTMENTS, LIMITED, 

Plaintiff-Appellee, 

FILED 

Ufiited Statu Court of Appeals 

Tenth Circuit 

JUL 10 1991 

:&OBERT L. HOECKER 

Clerk 

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No. 90-8051 

v. 

JACKSON HOLE SKI CORPORATION 

and PAUL M. McCOLLISTER, 

Defendants-Appellants. 

Appeal from the United States District Court 

For the District of Wyoming 

(D.C. No. C88-0048-B) 

Fredrick E. Sherman (Christopher P. Hall and Jonathan D. Schwartz 

of Jones, Day, Reavis & Pogue, New York, New York; Blair J. 

Trautwein and Michael Rosenthal of Hathaway, Speight, Kunz, 

Trautwein & Barrett, Cheyenne, Wyoming, with him on the brief), 

for Plaintiff-Appellee. 

Peter w. Sipkins (James R. Kahn and Carol A. Peterson of Dorsey & 

Whitney, Minneapolis, Minnesota; w. Perry Dray and Gregory c. 

Dyekman of Dray, Madison & Thompson, Cheyenne, Wyoming, with him 

on the brief), for Defendants-Appellants. 

Before McKAY, ALDISERT*, and McWILLIAMS, Circuit Judges. 

McWILLIAMS, Circuit Judge. 

* Honorable Ruggero J. Aldisert, United States Senior Circuit 

Judge for the Third Circuit Court of Appeals, sitting by designation. 

Appellate Case: 90-8051 Document: 01019293857 Date Filed: 07/10/1991 Page: 1 
This is a breach of contract action wherein, on motion for 

summary judgment, the district court held that there was an 

enforceable written contract between the parties and ordered 

specific performance. The principal question is whether there is 

a genuine issue of material fact as to the existence of an 

enforceable written contract between the parties. The jurisdiction of the district court was based on diversity of citizenship. 

28 u.s.c. § 1332. Our jurisdiction is based on 28 u.s.c. § 1291. 

Fed. R. Civ. P. 56 governs summary judgment proceedings in a 

federal court. Wyoming law, however, governs the contract issues 

presented. Accordingly, the question is whether the federal 

district judge sitting in the United States District Court in the 

District of Wyoming correctly read Wyoming contract law and then 

correctly applied it to the facts at hand. In our review, we are 

of course not bound by the district court's understanding of 

Wyoming law. Our review is de novo, and no deference should be 

given the district court's understanding of Wyoming state law. 

Salve Regina College v. Russell, ____ U.S. ____ (1991). 

As indicated, this litigation was resolved on a motion for 

summary judgment, the district court having before it the pleadings, numerous depositions and affidavits, the oral argument of 

opposing counsel, as well as a transcript of the testimony given 

at a hearing held on a motion for preliminary injunction. The 

chronology of the events out of which the present litigation arose 

must be rather fully developed if the issues are to have meaning. 

Jackson Hole Ski Corporation (JHSC) is a Wyoming corporation 

with its principal place of business in Teton Village, Wyoming, 

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Appellate Case: 90-8051 Document: 01019293857 Date Filed: 07/10/1991 Page: 2 
where it operates a well-known ski resort. It also has considerable assets related to the development and sale of real estate in 

the vicinity of the ski resort. Paul McCollister is the principle 

shareholder in JHSC, its chief executive officer, and president of 

the corporation. 

Deepwater Investments, Limited (Deepwater) is a corporation 

organized under the laws of the Island of Bermuda with its 

principal place of business in Hamilton, Bermuda. Johannes 

Christiaan Martinus Augustinus Maria Deuss, a Dutch oil trader who 

resides in Bermuda, owns and controls Deepwater. He also owns a 

vacation home near JHSC's ski properties and is himself a skier. 

Deuss and McCollister had a personal acquaintance of some 

duration, and in December, 1986, discussion occurred concerning 

Deuss buying into JHSC. This discussion was initiated by 

McCollister who was interested in obtaining working capital for 

JHSC. McCollister first proposed that Deuss (Deepwater) pay 

McCollister (JHSC) the sum of $11,000,000 for approximately 35% of 

the outstanding shares of JHSC. Deuss was not interested in this 

proposal. He was interested only in buying into JHSC's ski 

operations and was not interested in JHSC's other real estate 

operations. 1 

Deuss was definitely interested, however, in buying into 

JHSC's ski operations. In this connection, it was agreed by both 

1 Deuss was not interested in loaning money to JHSC and was 

only interested in buying an equity interest in JHSC. McCollister 

was in need of working capital, but, at the same time, he did not 

want to lose control of the company which he had run for some 

thirty-five years. 

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Deuss and McCollister that if Deepwater were to purchase an interest in JHSC's ski operations, it should be based on an independent 

appraisal. At the suggestion of McCollister, Deuss retained SnoEngineering, Inc., a New Hampshire company, to make an appraisal 

of JHSC's ski operations. An appraisal was later made by SnoEngineering which set the value of JHSC's ski operations at 

$11,329,000, arriving at that figure by discounting to present 

value the projected future earnings of the mountain ski operation. 

On April 23, 1987, Deuss and McCollister met in New York City 

and on the following day, April 24, 1987, in Philadelphia where 

there were further discussions regarding the 

by Deuss in JHSC. Out of these two 

McCollister agreed to the following: (1) 

proposed investment 

meetings, Deuss and 

the Sno-Engineering 

report would form the basis for Deuss's investment in JHSC; (2) 

Deuss would pay $3,600,000 for approximately 24% of the outstanding shares of stock in JHSC, once the real estate assets had been 

separated out; (3) Deuss's percentage of equity in JHSC would be 

adjusted at the end of five fiscal years to reflect the actual 

performance of JHSC during that five-year period, and after such 

adjustment Deuss would own no less than 20% and no more than 49% 

of the outstanding shares in JHSC; (4) Deuss would have one seat 

on the board of directors; (5) Deuss would have a right of first 

refusal of McCollister's interest in JHSC should McCollister die; 

(6) Deuss would have the option to invest another $2,000,000 in 

JHSC within two years in exchange for 33% ownership interest 

subject to the readjustment five years from the initial investment; (7) JHSC would be subject to certain restrictions concerning 

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incurring debt and issuing stock, and (8) if Deuss was to advance 

money before the issuance of any stock he wanted a written agreement. At these two meetings there was, apparently, no discussion 

of just how this transaction would be structured, although 

restructuring of some sort was necessary since JHSC owned both ski 

properties and non-ski properties, and Deuss desired to invest 

the former only. 

in 

On May 1, 1987, Deuss faxed a 

confirm the terms and conditions which 

letter to McCollister to 

he understood they had 

agreed to at their meetings in New York and Philadelphia. On that 

same date Deuss wired $608,053 to JHSC. 

When McCollister received Deuss's May 1 letter, he reviewed 

it with his attorney and made certain revisions to reflect his 

understanding of the agreement reached in New York and 

Philadelphia. McCollister and his attorney spoke with Deuss by 

telephone on May 4, 1987. Deuss agreed that many additional 

documents needed to be negotiated and executed. And then on May 

5, 1987, McCollister faxed a document which he labeled "RE: 

Interim Agreement" to Deuss. McCollister believed that this 

document reflected the terms and conditions agreed to by Deuss and 

himself in their meetings on April 23 and 24. It incorporated 

much of the letter which Deuss had faxed him on May 1, 1987, plus 

McCollister's revisions. It also used the phrase "our interim 

Agreement pending final closing of this transaction." McCollister 

prepared the May 5th letter with the expectation and intent that 

additional documents were required to finalize the agreement. 

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On May 6, 1987, Deuss wrote McCollister as follows: 

I refer to your letter of May 5, 1987 which 

summarizes our interim agreement and I would 

like to confirm that I am in complete agreement with the contents of your letter .... 2 

As indicated, Deuss made an initial payment to McCollister in 

the amount of $608,053 on May 1, 1987, the date when Deuss faxed 

to McCollister his understanding of their verbal agreement. A 

second payment in the sum of $627,304 was made on May 15, 1987. 

Shortly thereafter, problems began to arise. Under paragraph 

4 of the interim agreement, JHSC agreed that before issuing stock 

in JHSC to Deuss it would "sell, or otherwise transfer, to another 

corporation" JHSC's non-ski properties. In this connection, 

McCollister, and his attorney, had apparently become aware that an 

out-right sale or transfer of JHSC's non-ski properties to an 

unrelated corporation could produce unfavorable tax consequences. 

Accordingly, on July 2, 1987, McCollister's attorney sent a letter 

to Deuss proposing that Deepwater's investment would be structured 

as an equity interest in a subsidiary of JHSC into which JHSC's 

ski operations would be transferred. On July 7, 1987, Deuss wrote 

back to McCollister and stated that such was not in accord with 

their agreement and that he objected to any such arrangement. 

Deuss was apparently concerned that a subsidiary company might be 

liable for the debts of its parent corporation. 3 In the July 7 

2 In his May 6 letter, 

the exercise of his 

McCollister's interest in 

death, an event which, of 

Deuss did object to language related to 

right of first refusal to purchase 

JHSC in the event of McCollister's 

course, has not occurred. 

3 McCollister, in his testimony at the hearing on Deepwater's 

request for a preliminary injunction and again in an affidavit 

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letter, Deuss also stated that if McCollister did not want to go 

through with the deal, he could return the monies previously 

advanced and call the entire deal off. McCollister did not call 

the deal off and received eight more payments to the end that by 

November 25, 1987, Deuss had paid McCollister the entire 

4 $3,600,000 called for by the interim agreement. 

Other differences also arose between McCollister and Deuss 

regarding contract terms. At this point, it is sufficient to note 

that there were further proposals that McCollister return to Deuss 

the $3,600,000 plus interest, and the deal would be called off. 

In this connection, on February 5, 1988, Deuss wrote McCollister 

informing him that if he returned the $3,600,000 plus interest by 

February 15, 1988, their deal would be called off, but that if 

there were no such repayment by that date, he would take all 

necessary steps to enforce their agreement. On February 8, 1988, 

McCollister wrote Deuss informing the latter that his February 15 

deadline was unreasonable and that complete repayment by that date 

could not be made. Repayment was not made and this litigation 

ensued. 

filed in opposition to Deepwater's motion for summary judgment, 

stated that although Deuss initially objected to receiving an 

equity interest in a subsidiary corporation to which JHSC would 

transfer its ski properties, he later verbally agreed to such. 

4 Monies given JHSC (McCollister) by Deepwater (Deuss) were 

used to finance lift construction and mountain "grooming" 

operations which had to be completed during the summer months. 

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On February 16, 1988, Deepwater filed the present action in 

the United States District Court for the District of Wyoming, naming JHSC as the only defendant. Under the heading "Facts Underlying All Claims," counsel set forth in detail the background facts 

out of which the controversy arose and then asserted six claims 

for relief. In Count One, Deepwater alleged a breach of written 

contract, in Count Two a breach of oral contract, and in Count 

Three promissory estoppel. As to each of these three claims, 

Deepwater asked for specific performance. In Counts Four, Five 

and Six, Deepwater alleged a breach of contract, unjust enrichment, and for money had and received. As to those counts, 

Deepwater asked for money damages. 

At the same time the complaint was filed, Deepwater also 

filed a motion for a temporary restraining order and a preliminary 

injunction. The thrust of this motion was to obtain an order that 

would maintain the status quo and prevent JHSC from issuing more 

stock, merging or consolidating with any other corporation, or 

incurring indebtedness greater than $100,000 pending the outcome 

of the litigation. 

A hearing was held on Deepwater's motion for a preliminary 

injunction on March 1 and 2, 1988, at which time opposing counsel 

were present. On April 1, 1988, the district court, after reviewing the pleadings and the testimony of the various witnesses, as 

well as the oral and written argument of opposing counsel, granted 

Deepwater a preliminary injunction along the lines indicated 

above. 

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Although we do not find JHSC's answer in the record before 

us, presumably it denied liability. After considerable discovery, 

Deepwater filed a motion for summary judgment. Again, we do not 

find Deepwater's motion for summary judgment in the record before 

us. However, a memorandum in support of summary judgment, and a 

memorandum in opposition to summary judgment, are in the present 

record. 

Prior to the hearing on the motion for summary judgment, JHSC 

filed a motion to amend its answer by adding an additional affirmative defense charging Deepwater with fraudulent inducement. 5 

Hearing on Deepwater's motion for summary judgment and JHSC's motion to amend its answer was held on July 27, 1988. After 

extensive oral argument of counsel, the district court took the 

matter under advisement. 

On August 19, 1988, the district court granted Deepwater's 

motion for summary judgment, denied JHSC's motion to amend its 

answer and dismissed its counterclaim. JHSC had apparently filed 

a counterclaim with its answer wherein it sought an order that it 

be given a reasonable time to repay Deepwater the $3,600,000 

Deepwater had advanced JHSC. 

The district court's order granting summary judgment was accompanied by a thirty-eight page memorandum opinion. The gist of 

this memorandum opinion was that the parties intended to be bound 

by the interim agreement of May 5, 1987, and that the interim 

5 JHSC claimed that it had recently ascertained that Deuss had 

secretly and fraudulently intended to obtain control of JHSC from 

the outset, although he had disclaimed any desire to acquire 

control. 

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agreement was enforceable because the terms of the contract were 

established. The district court also found that the interpretation of this contract was a question of law for the court and that 

specific performance, as opposed to money damages, was warranted. 

This order also provided that Deepwater would, within sixty days, 

submit an appropriate order and JHSC would have thirty days 

thereafter to file any objections. The district court added that, 

if necessary, it would "schedule a hearing in order to fashion an 

appropriate decree." 

Deepwater submitted a proposed order of specific performance 

on October 18, 1988. On November 18, 1988, JHSC submitted to the 

district court its own proposed order of specific performance, 

supported by a memorandum. On September 26, 1989, the district 

court entered an order of specific 

paralleled Deepwater's proposed order. 

and order. 

performance which closely 

JHSC appeals that judgment 

JHSC takes the basic position that summary judgment was inappropriate. JHSC contends that the May 5 letter was not an 

enforceable contract between the two business entities. Rather, 

it was merely an "Interim Agreement" between the parties, both of 

whom contemplated further discussion on other critical terms of a 

complex business transaction, with the hope and expectation, that 

they could agree thereon. 

Deepwater's position on appeal is that the May 5 letter from 

McCollister to Deuss constitutes an enforceable contract between 

Deepwater and JHSC and that specific performance, as opposed to 

money damages, was appropriate. Our review of this matter 

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convinces us that the issues presented by this rather involved 

business transaction were not ripe for summary judgment. 

The primary issue to be addressed is just how this transaction was to be structured. Paragraph 4 of the May 5 letter 

provides: 

Prior to the issuance to Buyer [Deepwater] of 

shares pursuant to paragraph 1, the Company [JHSC] shall 

sell, or otherwise transfer, to another corporation, the 

following assets not related to the Jackson Hole Ski 

Corporation operated by the Company (the mountain 

operation): 

(Paul McCollister to 

excluded assets)6 

provide description of 

Deepwater argues that paragraph 4 of the May 5 letter clearly 

and unambiguously provides that before issuing JHSC stock to 

Deepwater in exchange for the $3,600,000, JHSC would sell or 

transfer its non-ski properties to another corporation. 

JHSC argues that to "sell, or otherwise transfer, to another 

corporation" its non-ski properties to be later identified by 

McCollister is not clear and unambiguous. In this regard, we note 

that the term "another corporation" does not in itself exclude 

another corporation that is a subsidiary. Moreover, paragraph 4 

does not identify the precise properties to be transferred. 7 Such 

6 Apparently, no prov~s~on in the May 5 letter permitted 

Deepwater to challenge or dispute McCollister's description of 

"excluded assets." 

7 Although not dispositive in this case, it should be noted 

that a contract for conveyance of land must be sufficiently 

certain "to fix and comprehend the property which is the subject 

of the transaction, so that, with the assistance of external 

evidence, the description, without being contradicted or added to, 

can be connected with and applied to the very property intended 

and to the exclusion of all other property." Noland v. Haywood, 

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Appellate Case: 90-8051 Document: 01019293857 Date Filed: 07/10/1991 Page: 11 
identification, under paragraph 4, was to be later made by 

McCollister. However, paragraph 4 does seem to contemplate that 

the ski properties would be retained by JHSC and its non-ski 

properties transferred to "another corporation," be it a 

subsidiary or otherwise. 

In this same connection, shortly after the May 5 letter, 

discussion apparently ensued between Deuss, McCollister, and their 

company lawyers and tax advisers, concerning the possible transfer 

by JHSC of its ski properties to a subsidiary and its non-ski 

properties to another subsidiary, with JHSC serving as a holding 

company for both. Deepwater would then receive stock in the 

subsidiary acquiring the ski properties. While it is not disputed 

that such discussions regarding the transaction's structure occurred, Deuss asserts that he did not agree to a subsidiary 

structure. Conversely, in an affidavit filed in opposition to 

Deepwater's motion for summary judgment, McCollister stated that, 

after initially objecting to investing in a subsidiary structure, 

Deuss nonetheless went on to state, "I don't like it, but I'll do 

it." McCollister testified to the same effect at the hearing on 

Deepwater's motion for preliminary injunction. 

In any event, Deuss thereafter continued to make installment 

payments on the $3,600,000 he agreed to invest in JHSC. And in 

December 1987, after Deuss had completed the payment of $3,600,000 

to JHSC, the board of directors of Deepwater approved such investment in Jackson Hole Mountain Corporation, a subsidiary of JHSC. 

23 P.2d 845, 846 (Wyo. 1933). See also, Wight v. Linden, 237 P.2d 

475 (Wyo. 1951); Freeburgh v. Lamoureux, 85 P. 1054, (Wyo. 1906). 

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On appeal, our review of the district court's order granting 

Deepwater summary judgment and specific performance is de novo. 

Gray v. Phillips Petroleum Co., 858 F.2d 610, 613 (lOth Cir. 

1988). In deciding whether there were genuine issues of material 

fact, we must view the record in a light most favorable to the 

parties opposing the motion for summary judgment (i.e., JHSC and 

McCollister). Baker v. Penn Mutual Life Ins. Co., 788 F.2d 650, 

653 (lOth Cir. 1986). When the present record is viewed in a 

light most favorable to JHSC and McCollister, we believe there 

were genuine issues of material fact which preclude the granting 

of summary judgment in favor of Deepwater. In thus concluding, we 

believe this is not so much an instance where a district judge 

misunderstood local state law, but rather is a case where the law 

was misapplied to the facts at hand. 

As indicated, a critical matter in this case is how the 

transaction would be structured. Deepwater argues that under the 

May 5 letter JHSC was obligated to sell or transfer its non-ski 

realty to another corporation and to then issue stock in JHSC to 

Deepwater in exchange for the latter's investment of $3,600,000 in 

JHSC. 

In opposition to Deepwater's position, JHSC points out that 

in the April 23 and April 24 meetings between Deuss and 

McCollister there was no discussion, let alone an agreement of any 

sort, regarding just how this transaction would be structured. 

The "sell, or otherwise transfer, to another corporation" language 

first appeared in Deuss' May 1 letter to McCollister. According 

to McCollister's affidavit in opposition to summary judgment, 

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which was in line with his testimony at the hearing on the motion 

for preliminary injunction, and also in accord with the affidavit 

and testimony of McCollister's attorney, there were various 

discussions between the parties and their attorneys regarding a 

subsidiary structure subsequent to the May 5th letter. And in 

June and early July there was further discussion of the matter. 

Such further discussion, according to McCollister, indicates that 

the May 5 "Interim Agreement" did not set in concrete, so to 

speak, all the matters to be resolved by the parties before there 

was a true meeting of their minds. In any event, the record, 

viewed in the light most favorable to JHSC, indicates that in 

early July Deuss agreed to a plan whereby JHSC would transfer its 

ski operations to one subsidiary and its non-ski real estate to 

another and then issue Deepwater stock in the ski subsidiary. 

Deuss, in his deposition, stoutly denies this, but McCollister, in 

his affidavit and testimony, certainly puts this particular matter 

in issue. 

Without further belaboring the matter, we do not believe this 

rather complicated business transaction involving a substantial 

amount of money was ripe for summary judgment. 8 Certainly, 

paragraph 4 of the interim agreement, including the "sell, or 

8 In this regard, see Skycom Corp. v. Telstar Corp., 813 F.2d 

810 (7th Cir. 1987) where the Seventh Circuit spoke as follows: 

"When a large-scale corporate transfer is afoot . • . the court will respect any evidence that only a formal 

contract binds; when a simple transaction for the lease 

of a machine is at issue . and the more formal 

agreement appears to be boilerplate, an objective reading of the documents more readily lends to the conclusion that a letter agreement is binding." 

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otherwise transfer, to another corporation" language, is something 

less than clear and unambiguous. 9 In addition, there are disputes 

over, or a lack of clarity regarding, other important terms 

included in the interim agreement such as the adjustment formula, 

the terms of the voting trust, and shareholder and stock purchase 

agreements. 

In sum, this case was not ready for summary judgment because 

genuine issues of material fact exist regarding the structure of 

the transaction. Issues such as whether a contract has been 

entered into and the terms of the alleged contract are generally 

questions of fact to be resolved by the fact finder. Manchester 

Pipeline Corp. v. Peoples Natural Gas Co., 862 F.2d 1439, 1445 

(lOth Cir. 1988). 10 The issues presented should be resolved at 

9 It should be noted that an agreement between the parties to 

agree in the future is ordinarily incapable of being enforced 

because the court cannot supply the terms of the agreement. Doud 

v. First Interstate Bank of Gillettee, 769 P.2d 927, 929 (Wyo. 

1989); Action Ads, Inc. v. Judes, 671 P.2d 309, 310-11 (Wyo. 

1983) • 

It is further noted that on motion for summary judgment, 

ambiguities are resolved against the moving party, Houston v. 

National General Insurance Co., 817 F.2d 83, 85 (lOth Cir. 1987), 

and an ambiguity may raise a genuine issue of fact sufficient to 

make summary judgment inappropriate. United States v. Gammache, 

713 F.2d 588, 594 (lOth Cir. 1983); Mari v. Rawlins National Bank 

of Rawlins, 794 P.2d 85, 87-88 (Wyo. 1990); Carlson v. Carlson, 

775 P.2d 478, 481 (Wyo. 1989). Furthermore, ambiguities in 

contracts are to be resolved against the draftsman. Williams 

Petroleum Co. v. Midland Cooperatives, Inc., 539 F.2d 694 (lOth 

Cir. 1976); State v. Pennzoil Co., 752 P.2d 975, 979 (Wyo. 1988). 

Although McCollister "drafted" the interim agreement in that he 

sent the May 5 document to Deuss, the provision in question was 

lifted verbatim from Deuss's May 1 letter to McCollister. 

10 McCollister's so-called "admission" in his cross-examination 

testimony at the hearing on Deepwater's motion for a preliminary 

injunction that "the deal was set forth" in the May 5 letter does 

not in itself resolve the whole case. McCollister also testified 

that he felt there was a "meeting of the minds to be covered by 

subsequent documents" and that the May 5 letter, in that sense, 

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trial where the disputed issues of fact can be fully developed and 

the fact finder can than decide what the true facts really are. 

By reversing, we are not indicating the ultimate outcome of this 

controversy, only that it should be decided after trial and not by 

. d t 11 summary JU gmen . 

Since considerable time has elapsed since the district court 

made certain interlocutory rulings, those should be re-examined in 

the light of possible changed circumstances. We refer to the 

district court's denial of JHSC's motion to amend its answer to 

include an affirmative defense of fraud, and the district court's 

sua sponte order adding McCollister as a defendant. The order of 

the district court granting Deepwater a preliminary injunction was 

not appealed, and so far as we are concerned remains in place. 

Judgment reversed. 

was not a final agreement. 

11 When the terms of a contract are shown without any conflict 

of evidence, the interpretation of the contract becomes a matter 

of law. Engle v. First National Bank of Chugwater, 590 P.2d 826, 

830 (Wyo. 1979). However, whether a contract has been entered 

into depends on the intent of the parties and is a question of 

fact. United States through Farmers Home Administration v. 

Redland, 695 P.2d 1031, 1036 (Wyo. 1985); Robert w. Anderson 

Housewrecking and Excavating, Inc. v. Bd. of Trustee, School Dist. 

No. 25, 681 P.2d 1326, 1330 (Wyo. 1984). 

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DEEPWATER INVESTMENTS, LTD. v. JACKSON HOLE 

SKI ~ORP. and PAUL McCOLLISTER 

ALDISERT, Circuit Judge, dissenting. 

No. 90-8051 

What'divides the panel is whether genuine issues of 

material fact exist to prevent the proper entry of summary 

judgment. I find that no genuine issues exist and would affirm 

the district court's grant of summary judgment. 

That I disagree with my brothers of the majority is not 

to demean their very respectable analysis. This is a summary 

judgment matter presenting a close question•of whether the 

appellants have met their factual burden of rebutting the 

movant's supporting data. It is difficult to decide, in Holmes' 

phrase, where the axe should fall, because my brothers and I are 

expressing value judgments. 

We are governed by beliefs about facts more than by 

abstract rules. We derive these beliefs more from practical 

standards and views about the allocation of competence between 

judge and jury than by logically determinable or empirically 

observable data. We are deciding, I suppose, what bubbles--

intellectual, philosophical and jurisprudential--are at the 

moment most in need of pricking. 1 

I gather that the majority hold that there is no 

dispute concerning the existence of a binding agreement. It 

1. The expression is not mine. It is a paraphrase of a 

statement contained in W. Auden and L. Kronenberger, The Viking 

Book of Aphorisms viii (1981). 

Appellate Case: 90-8051 Document: 01019293857 Date Filed: 07/10/1991 Page: 17 
would be extremely difficult to hold otherwise because by writing 

and by oral testimony the appellants have conceded the existence 

-of a binding agreement. In their letter of May 5, 1987, 

appellants Jackson Hole Ski Corporation and Paul McCollister 

suggested minor changes to Deepwater Investments' draft of the 

agreement. They presented the letter as an "interim agreement 

pending final closing of this transaction." Brief for Appellee 

at Tab A, p. 1. One of their proposed changes was a paragraph 

setting forth the governing law: "This Agreement shall be 

construed in accordance with and the remedies arising from this 

agreement shall be governed by the laws·of the State of Wyoming." 

~at 6, ! 11. on May 6, 1987, Deepwater agreed to the terms of 

this interim agreement. 

To be sure, additional documents needed to be executed, 

but the interim agreement expressed a complete meeting of the 

minds as to the contours of the agreement, as evidenced by 

McCollister's testimony: 

Q. There were to be further documents and a 

closing and the actual issuance of 

shares? 

A. That's right. Yes, sir. 

Q. But you weren't in any doubt that the 

deal was as set forth in that document? 

A. That's correct, sir. That's correct. 

Tr. 3/1-2/88, at 76. 

Instead, the majority conclude that genuine issues of 

material fact exist concerning the structure of the transaction: 

"Certainly, paragraph 4 of the interim agreement, including the 

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•sell, or otherwise transfer, to another corporation' language, 

is something less than clear and unambiguous." Slip op. at 14-

15. I find.no lack of clarity whatsoever. 

The parties do not dispute that Deepwater would invest 

only in the ski resort and not in Jackson Hole Ski's other real 

estate holdings. Those holdings were to be sold to another 

corporation. There is no ambiguity here. 

Jackson Hole Ski and McCollister would like to insert 

some ambiguity in this case because after receiving $3,600,000 

for investment in Jackson Hole Ski, and incidently receiving all 

the financial benefits from such investment without issuing one 

share of stock, they discovered that the ski resort would run 

into a substantial federal tax problem by selling or transferring 

the non-mountain real estate to another corporation. so they 

decided to renege on the deal. For the millions they had 

received for stock in Jackson Hole Ski, they then proposed, 

contrary to the terms of the agreement, to issue Deepwater shares 

of stock in a subsidiary they would form. The district court saw 

through this sham. The agreement provided that Deepwater would 

receive stock in Jackson Hole Ski and not in a subsidiary. To 

find ambiguity·here, as urged by the appellants, is to concoct 

it. 

The majority also state: "In addition, there are 

disputes over, or a lack of clarity regarding, other important 

terms included in the interim agreement such as the adjustment 

formula, the terms of the voting trust, and shareholder and stock 

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purchase agreements." ~at 15. On this determination, like my 

brothers of the majority, I do not argue or explain; I assert. 

Certainly, the appellants dispute this material. They 

fly-speck the record. They want to enjoy the fruits of a multimillion dollar cash infusion into their business without issuing 

a single share of stock, as provided in the agreement, and to 

prolong the inevitable result of this litigation by proceeding to 

trial or to blackjack a settlement. But I find no lack of 

clarity in the terms contained in the written instruments. Nor 

did the district court. 

Any uncertainty in the law governing summary judgment 

prior to 1986 has been resolved by the U.S. Supreme Court. In 

its now-famous trilogy, the Court explained that the plain 

language of Rule 56(c), Fed. R. Civ. P., mandates the entry of 

summary judgment, after ample time for discovery and upon motion, 

against a party who fails to make a showing sufficient to 

establish the existence of an element essential to that party's 

case, and on which the party will bear the burden of proof at 

trial. In such a situation, there can be "no genuine issue of 

material fact" because the complete failure of proof concerning 

an essential element of the nonmoving party's case necessarily 

renders all other facts immaterial. See Celotex Corp, v. 

Catrett, 477 u.s. 317, 322-27 (1986); Anderson v. Liberty Lobby, 

~, 477 u.s. 242, 247-57 (1986); Matsushita Elec. Indus. Co .. 

Ltd. v. zenith Radio Corp., 475 u.s. 574, 582-98 (1986). I 

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conclude that there was a complete failure of proof by the 

appellants in the summary judgment proceedings. 

The Court also explained that a dispute about a 

material fact is "genuine" when the evidence is such that a 

" reasonable jury could render a verdict for the nonmoving party. 

Anderson v. Liberty Lobby. Inc., 477 u.s. at 248. Thus, no 

genuine issue of material fact can exist unless there is 

sufficient evidence favoring the nonmoving party for a jury to 

return a verdict for that party. I conclude there was no genuine 

dispute here. 

What we know as men and women we should not forget as 

judges. We know what happened here. Paul McCollister needed 

money to operate his ski resort. He was the one who approached 

John Deuss, Deepwater's president and controlling shareholder, 

and persuaded him to invest in the ski resort. But the deal took 

on strange trappings for a business transaction. It was a stockpurchase for a sum certain, but the number of shares to be 

transferred was subject to a future projection of the ski 

resort's business. In this respect, the agreement took on the 

accouterments of a bid for commodities futures. Both sides 

gambled, but not for dollars and cents. They gambled on what 

percentage of the resort's capital stock each would control at a 

later date. 

McCollister later discovered two things: First, it was 

going to cost him a substantial federal tax assessment if he 

conveyed Jackson Hole Ski's excess real estate to another 

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corporation, as mutually agreed upon in the agreement; and, 

second, after entering into an enforceable agreement that 

contained a mechanism that adjusted Deepwater's equity interest 

in Jackson Hole Ski after five fiscal years, he realized that 

~ 

Deepwater may be entitled to as much as 49 percent of the 

outstanding shares in Jackson Hole Ski at the end of five years. 

Although McCollister got what he bargained for, it was 

not what he hoped for. But courts enforce legal bargains, not 

subjective hopes. Like the district court, I would enforce the 

agreement at the summary judgment stage because Jackson Hole Ski 

and McCollister have adduced no facts entitling them to a jury 

verdict at trial. See id.; see also Continental Ins. v. Page 

Eng'g Co., 783 P.2d 641, 650 (Wyo. 1989) ("The rule is clear that 

the • disposition of disputes relating to [an unambiguous] 

contract properly may be accomplished by a summary judgment."). 

The principals in this high finance drama were not 

Little League players. They were two professional Sumo wrestlers 

in a high stakes contest. Now that Deuss has thrown McCollister 

out of the ring, McCollister wants to climb back in by changing 

the rules. I would not let him do it. 

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