No. 87-361 

IN THE STJPREME COURT OF THE STATE OF MONTANA 

1988 

MONTE VISTA COMPANY, a Montana 

Corporation, 

Plaintiff and Appellant, 

THE ANACONDA COMPANY, a Delaware 

Corporation, and WILLIAM G MOUAT, 

individually and as agent, 

Defendants and Respondents. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Stillwater, 

The Honorable Diane G. Rarz, Judge presidinq. 

COUNSEL OF RECORD: 

For Appellant: 

Robert Edd Lee; Crowley, Haughey, Hanson, Toole 

and Dietrich, Billings, Montana 

For Respondent: 

Rockwood Brown; Anderson, Brown, Gerbase, Cebull, 

Fulton, Harman and Ross, Billings, Montana (Anaconda? 

William H. Bellingham; Moulton, Bellingham, Long0 

and Mather, Billings, Montana (Mouat) 

Submitted: April 8, 1988 

Decided: 4, 1988 

Filed: MAY 4 - 1988 
Mr. Chief Justice J. A. Turnage delivered the Opinion of the 

Court. 

In December 1980, plaintiff and appellant Monte Vista 

brought this action alleging breach of contract and seeking 

declaratory judgment and contract reformation. On May 23, 

1983, Monte Vista filed an amended complaint which added 

claims for interference with economic advantages, bad faith, 

civil conspiracy and punitive damages. Subsequently, appellant Monte Vista and respondents Anaconda Company and William 

Mouat filed numerous motions, including counter- and crossclaims and motions for summary judgment. On March 16, 1987, 

the Thirteenth Judicial District Court, Stillwater County, 

granted respondents' motions for summary judgment against 

Monte Vista. From that order, Monte Vista appeals. 

On appeal, Monte Vista raises six issues for our review. We have restated the issues as follows: 

1. Did the District Court properly determine that 

Monte Vista's leasehold interests under the "A" lease were 

lawfully terminated by reason of its failure to produce and 

its payment of "minimum rentals" for over three consecutive 

years? 

2. Did the District Court properly determine that 

Monte Vista's leasehold rights under the "B" lease expired by 

reason of Monte Vista's failure to renew the optional 

five-year term? 

3. Did the District Court abuse its discretion when it 

granted summary judgment against Monte Vista's claims of 

interference with economic advantages, bad faith, civil 

conspiracy and punitive damages? 

Prior to World War I, M. W. Mouat, the forebear and 

predecessor in title of the Mouat respondents, began locating 

mining claims in the "Stillwater Complex" located in 

Stillwater County, Montana. The Stillwater Complex is an area 
of large mineral reserves located at the northern edge of the 

Beartooth Mountains. The Stillwater Complex contains anomalous concentrations of integrated minerals including copper 

and nickel sulfides, chromites and platinum sulfides. From 

the 1920s through the 1-940s, M. W. Mouat was active in the 

Stillwater Complex and accumulated a significant holding of 

both patented and unpatented mining claims. 

During World War 11, the United States government 

condemned certain mining properties in the Stillwater Complex, including the Mouat interests, for the production of 

chrome. Subsequent to World War 11, M. W. Mouat and his 

heirs engaged in litigation to recover their condemned property. Ultimately, most of the mining properties were returned to the Mouat family. 

During the 1950s and until 1962, the Mouats leased the 

chrome mine developed during World War I1 to American Chrome 

Company. American Chrome produced and stockpiled chrome 

concentrates for national defense purposes under a subsidized 

contract with the United States government. American Chrome 

constructed a mill for processing chrome ores that was located on the Mouats' condemned Stillwater mineral properties. 

Following a one-year hiatus, in 1963 the Mouats leased 

a portion of the Stillwater mineral properties to Monte 

Vista. On May I, 1963, Monte Vista, as lessee, entered into 

three agreements with the Mouat family, as lessor. In 1964, 

Monte Vista suffered serious financial difficulties and was 

forced to renegotiate the Stillwater leases. On July 30, 

1964, the parties executed an agreement modifying and amending the 1963 contracts. 

The May 1, 1963, agreements included: (1) Mine Lease 

"A"; (2) Mine Lease "B". , and (3) the "Industries Agreement. " 

Under Mine Lease "A", Monte Vista leased the "Mouat Chrome 

Mine" and all property situated on or within the mining 
claims constituting the Mouat chrome mine, for fifty years, 

subject to certain provisions. The pertinent provisions of 

Mine Lease "A" are as follows: 

[This lease shall remain in effect for 

fifty (50) years -- and so long thereafter 

- as lessee shall:] 

(a) -- in each succeeding consecutive 18 

month period produce or ship chrome ores 

and/or chrome concentrates in commercial 

quantities obtained from the leased 

premises; or 

(b) continue Monte's operations as the 

term "Monte's operations" is defined in 

Section IV-Royalties and Rentals, of 

this lease; or 

(c) keep in force and effect the "lease 

of all other chromite claims" between 

Lessors herein, as lessors, and Lessee 

herein, as lessee, which said lease is 

of even date herewith and more particularly described in the ~~reement-of even 

date herewith between Lessors Mouat 

Industries, Inc., and Monte (said lease 

being hereinafter called -- "B" lease) . 

Paragraph 11, pp. 4-5, Mine Lease "A". 

The term "Monte's Operations" as used in 

subparagraph B of Section IV means 

Monte's manufacture - of sodium chromate, 

sodium biochromate, potassium chromate 

- or potassium bichromate and other chrome 

chemicals derived by Monte from sodium 

chromate or sodium -bichromate manufactured by Monte, including the usual 

by-products of such manufacture, at 

locations that can be reasonably and 

economically supplied with chromite 

obtained from the Stillwater Complex; 

-- and its mining, processing, and tkanswortina of chromite raw materials for 

>uch ;anyfacture. [Emphasis added.] 

Paragraph I11 B, p. 8, Mine Lease "A". 
Mine Lease "A" required Monte Vista to pay the Mouats a 

royalty calculated by means of a formula based on production 

of ores and concentrates plus a rental based on a percentage 

of the profits derived by Monte Vista from "Monte's Operations." Mine Lease "A" also provided for the payment of 

"minimum rentals" to the Mouats should mining operations by 

Monte Vista be "totally suspended*' as defined as follows: 

C. Minimum Rentals under Total Suspend- 

- ed Operations: 

- No minimum rentals shall - be payable 

under this lease - as long - as: 

(a) in any consecutive eighteen (18) 

month ~eriod. Lessee shall wroduce or 

ship ores and/or concentrates in commercial quantities obtained from the leased 

premises, or 

(b) Lessee is continuing Monte's operations as herTinbefore defined; or 

(c) -- the B lease shall -- be in force and 

effect. 

In the event that ores or concentrates 

are not produced in any period of eighteen (18) consecutive months in commercial quantities, - and the B lease has 

terminated, - and Monte's operations are 

suspended (such conditions being collectively called "total suspended operations"), as of the first day of any 

annual accounting period, as hereinbefore defined, and such total suspended 

operations shall continue to exist -- for a 

P---- eriod of not less than ninety (90) days 

thereafter, Lessee shall pay to the Lessors minimum rental in ---- 1 of 

royalty payable under this lease - as 

follows: 

(i) $750.00 per calendar month until the 

first annual accounting period of total 

suspended operations; and, 
(ii) $1,250.00 per calendar month during 

each succeeding annual accounting period 

of total suspended operations. 

- At any --- time from and after -- the end of 

the third full successive year -- of tG 

accrual - of minimum rentals hereunder, 

the Lessors .1 mav terminate this lease 

upon ninety (90) days' notice in writing - 

- to Lessee. [Emphasis added.] 

Paragraph 111 C, pp. 11-12, Mine Lease "A". 

Under Mine Lease "B", Monte Vista leased Mouats' remaining chromite mining claims in the Stillwater Complex. 

Mine Lease "B" was renewable each five years upon giving the 

Lessor not less than ninety days notice in writing. Royalties due the Mouats under Mine Lease "B" were based on 

amounts of ore or concentrate produced, similar to Mine Lease 

"A". The method of calculating minimum rentals, however, was 

much simpler than under Mine Lease "A". Mine Lease "B" 

provided that Monte had an obligation to pay a minimum rental 

". . . if royalties from said premises for said calendar 

month, and for any calendar month thereafter, do not equal or 

exceed the sum of $2,000.00, the Lessee shall pay on or 

before sixty days following the end of each such calendar 

month, such sum as may be necessary to equal the difference 

between royalty payments payable for such month and $2,000 

. . ." Paragraph IV, p. 7, Mine Lease "B". 

The "Industries Agreement" was the third agreement 

entered into between Monte Vista and the Mouats. This agreement provided for the sale of the Mouat Chrome Chemical Plant 

at Columbus. The Industries Agreement also provided for the 

sale of additional patented mining claims. Mine Leases "A" 

and "B" were incorporated as "integral and essential" parts 

of the "Industries Agreement." 
Following the May 1, 1963, execution of the Stillwater 

leases, Monte Vista encountered severe financial difficulties. By July 1964, Monte Vista was $14,000 in arrears in 

Mine Lease "B" minimum rental payments. Per Monte Vista's 

request, the parties, on July 30, 1964, executed a "Letter of 

Agreement," (1964 Amendments) which modified and amended the 

1963 contracts. 

Pertinent provisions of the 1964 Amendments are as 

follows : 

Amendment No. 4. Beginning August 1, 

1964, the monthly rental payable under 

the "B" Lease of May 1, 1963, shall be 

changed from a rental of $2,000 per 

month to a rental of - $10 per month. 

Amendment No. 7. For the purpose of 

determining minimum rentals under "A" 

Lease under Total Suspended Operations, 

as described in "C" of Part IV of the 

"A" Lease, the "B" Lease shall be considered in full force and effect until 

July 31, 1964. Beginning with August 1, 

1964, and the commencement of $10 per - 

month rentals under the "B" lease, the 

said $10 per month rental payments, 

while keeping -- in full force and effect 

-- the "B" Lease, -- will not eliminate the 

necessity - of Monte Vista making minimum 

rental payments -- to the Lessors -- as such 

may be required & the other provisions 

of the "A" Lease. [Em~hasis added.1 

Pursuant to the 1964 Amendments, Monte Vista was granted additional time to pay arrearages for minimum rentals 

under Mine Lease "B" . Additionally, royalties payable to the 

Mouats under Mine Lease "A" were changed from 20 percent to 

10 percent of net profits. 

In December 1968, the Mouats assigned all their rights, 

title and interests in the Stillwater mining leases to the 

Anaconda Company (Anaconda). In October 1980 Anaconda, as 
lessor, served its notice of termination of the lease agreements on Monte Vista, thereby precipitating this lawsuit. 

Mine Lease "A" 

As mentioned earlier, the term of Mine Lease "A" was 

fifty years and so long thereafter as Monte Vista had: (1) 

shipped ores obtained from the lease premises in each succeeding consecutive eighteen-month period; or (2) continued 

"Monte's operations" (mining, processing, transporting and 

manufacturing of chromite raw materials); or (3) kept in 

force and effect Mine Lease "B". These conditions were 

collectively referred to as "total suspended operations." 

Mine Lease "A" also granted the Mouats the right to 

terminate the lease after three successive years of the 

accrual of minimum rentals. Minimum rentals were not payable, however, until - all of the three conditions comprising 

total suspended operations occurred. 

Following the 1964 Amendments, Mine Lease "B" minimum 

monthly rentals were reduced from $2,000 to $10. Although 

Mine Lease "B" remained in full force and effect by payment 

of $10 per month, the 1964 Amendments provided "the "B" Lease 

will not eliminate the necessity of Monte Vista making minimum rental payments to the Lessors as such may be required by 

the other provisions --- of the "A" Lease. I' In summary, "total 

suspended operations" under Mine Lease "A" would be triggered 

by Monte Vista's failure to meet - two conditions instead of 

the previous three. 

Pursuant to Mine Lease "A" and the 1964 Amendments, 

Monte Vista was obligated to make minimum rental payments if, 

(1) Monte Vista did not ship ore in any eighteen-month 

period, and (2) Monte Vista discontinued operations. Following an additional ninety-day period of total suspended operations, Monte Vista would be obligated to pay minimum rentals 
in lieu of royalties as long as total suspended operations 

existed. 

Monte Vista began paying minimum rentals in February 

1966. Three years later, Monte Vista began a two-month 

production of chrome ores and made two royalty payments. 

Thereafter, Monte Vista was not required to make minimum 

rental payments for eighteen months. In February 1971 Monte 

Vista resumed minimum rental payments. 

On October 2, 1980, Anaconda, citing the passage of 

more than three successive years of the accrual of minimum 

rentals, served Monte Vista with its notice of termination of 

Mine Lease "A". 

Monte Vista contends the District Court erred when it 

found (1) that Monte Vista was in a state of total suspended 

operations, and (2) that even if Monte Vista was in a state 

of total suspended operations, minimum rentals never accrued 

for more than three years because Monte Vista always paid the 

minimum rentals as they became due. 

On review, we must determine if the District Court 

properly held there was no contractual ambiguity and that 

respondents were entitled to summary judgment as a matter of 

law. Section 28-2-905, MCA; Rule 56 (c) , M.R.Civ.P. Previously we held that, when interpreting contracts, it is a 

question of law whether there is an ambiguity sufficient to 

submit the issue to a jury. Nordlund v. School Dis. No. 14 

(Mont. 1987), 738 P.2d 1299, 1301, 44 St.Rep. 1183, 1185. An 

ambiguity exists when a contract is subject to two interpretations and par01 testimony can be used to determine what the 

parties intended. Martin v. Laurel Cable TV, Inc. (Mont. 

1985), 696 P.2d 454, 457, 42 St.Rep. 314, 317; S.W. Co. v. 

Schwenke (1977), 176 Mont. 546, 552, 568 P.2d 145, 147. 

However, intent of the parties is only looked to when the 

agreement in issue is not clear on its face. Glacier 
Campground v. Wild Rivers, Inc. (1979), 182 Mont. 389, 394, 

184 Mont. 543, 547, 597 P.2d 689, 692. Where the contractual 

language is clear and unambiguous on its face, it is this 

Court's duty to enforce the contract as drafted and executed 

by the parties. Wortman v. Griff (1982), 200 Mont. 528, 536, 

651 P.2d 998, 1002. 

Appellant contends that Monte Vista was never in a 

state of total suspended operations because (1) Mine Lease 

"B" was never terminated, and (2) Monte Vista never commenced 

the manufacture of chemical compounds defined in Mine Lease 

"A" under "Monte's Operations." 

Monte Vista's argument that its operations were never 

totally suspended because the operations were never started 

totally ignores the 1964 Amendments. Amendment 7 provides 

that Mine Lease "B", "while keeping in full force and effect 

. . . will not eliminate the necessity of Monte Vista making 

minimum rental payments to the Lessors . . ." Additionally, 

Mine Lease "A", Paragraph I11 C, p. 12, provides: "At any 

time from and after the end of the third successive year of 

the accrual of minimum rentals hereunder the Lessors may 

terminate this lease . . . I' When Anaconda terminated Mine 

Lease "A" in 1980, Monte Vista had paid minimum rentals in 

excess of three years. 

It is fundamental when reviewing contractual disputes 

that we are required to read the entire contract together and 

give effect to every part, if reasonably practicable. Section 28-3-202, MCA; Bender v. Rookhuizen (Mont. 1984), 685 

P.2d 343, 346, 41 St.Rep. 1418, 1422. Additionally, when a 

contract is clear and unambiguous, as is Mine Lease "A" and 

Amendment 7, we are required to enforce the contract as 

written. Wortman, 200 Mont. at 536, 651 P.2d at 1002. 

Amendment 7, when read together with Mine Lease "A", clearly 
indicates that respondent Anaconda acted within its 

contractual rights when it terminated Mine Lease "A". 

Monte Vista next contends that even if we agree with 

the District Court that Monte Vista was in a state of total 

suspended operations, minimum rentals never accrued for more 

than three years. Monte Vista supports its contention by 

citing that it always paid the minimum rentals as they became 

due. Therefore, Monte Vista argues the minimum rentals were 

paid and could not accrue. 

Mine Lease "A", Paragraph IV C, provides: 

At any time from and after the end of 

the third full successive year of the -- accrual - of minimum rentals hereunder, -. the Lessors may terminate this lease 

upon ninety (90)- days' notice in writing 

to the lessee. [Emphasis added.] 

We agree with the District Court that "accrual of 

minimum rentals" is not limited to accrual of minimum rental 

debts. Rather, accrual of minimum rentals simply means 

accrual of paid - or unpaid minimum rentals. When determining 

this issue, we are guided by the proposition that words of a 

contract must be interpreted by their ordinary and popular 

meaning. Rumph v. Dale Edwards, Inc. (1979), 183 Mont. 359, 

369, 600 P.2d 163, 168; § 28-3-501, MCA. 

Additionally, we note that in 1969, Monte Vista attempted to avoid minimum rental payments and termination 

under Mine Lease "A" when it began a two-month production of 

chrome ores and made two royalty payments. Monte Vista's 

two-month production of chrome ores occurred precisely three 

years after Monte Vista commenced making minimum rental 

payments. Where the language of a contract is doubtful and 

ambiguous, as Monte Vista contends, the conduct of the 

parties is often the best indication of the parties' intentions and the true meaning of the contract. See Souders v. 
Montana Power Co. (1983), 203 Mont. 486, 493, 662 ~.2d 289, 

291. 

If, arguendo, we accept appellant's argument that 

"accrual of minimum rentals" is an ambiguous term, this issue 

would be determined in an identical manner. In Energy Oils, 

Inc. v. Montana Power (9th Cir. 1980), 626 F.2d 731, 735, the 

Ninth Circuit Court of Appeals, in applying Montana contract 

law, stated: 

The primary function of judicial interpretation is to ascertain and give 

effect to the intention of the parties 

as expressed in their writing [taking] 

into consideration the writing itself, 

its purpose and the circumstances leading up to and attending its execution, 

endeavor[ingl to ascertain what the 

parties purposed and intended by their 

agreement. 

A careful review of the record reveals undisputed 

evidence that the Mouats entered into the 1963 contracts 

expecting the leased properties would be developed, and 

chrome ore and chemicals produced so that the Mouats would 

receive production royalties. If we accept appellant's 

interpretation of the lease, appellant would be able to 

control Mine Lease "A" until 2013 without paying production 

royalties. Clearly, the parties' intentions would not be 

fulfilled by such an interpretation. Accordingly, we hold 

the District Court properly found that respondent Anaconda 

lawfully terminated Mine Lease "A". 

Mine Lease B 

Mine Lease "B" provides that Monte Vista pay up to 

$2,000 per month minimum rentals if production royalties were 

less than $2,000 per month. Mine Lease "B", unlike Mine 

Lease "A", does not have a "total suspended operations" 
provision. However, the "B" lease could be only renewed "by 

giving the Lessors notice in writing . . . not less than 

ninety days prior to the expiration of [each] 5 year term." 

On May 1, 1983, Mine Lease "B" was scheduled to expire. 

Monte Vista failed to provide lessor Anaconda with written 

notice ninety days prior to the expiration date stating Monte 

Vista's intent to renew. We agree with the District Court 

that appellant provided no evidence that Monte Vista gave 

Anaconda such notice. Therefore, Mine Lease "B" expired at 

the end of the five-year term. 

Monte Vista contends that Anaconda wrongfully terminated Mine Lease "B" after the commencement of the Mine Lease 

"A" litigation. Monte Vista cites the six elements of estoppel and argues that respondent should be estopped from terminating Mine Lease "B" due to alleged constructive fraud and 

equitable considerations. See Sweet v. Coburn (1982) , 196 

Mont. 367, 373, 639 P.2d 521, 524. To support its contention, 

Monte Vista cites Anaconda's January 13, 1981, letter which 

allegedly lulled Monte Vista "into proceeding with payments 

on Mine Lease B pending determination of this proceeding." 

In its January 13, 1981, letter, Anaconda directed 

Monte Vista to make its $10 minimum rental payments to the 

Stillwater County Clerk of Court. Respondent also stated 

that it would "continue to accept any minimum rentals tendered by Monte Vista under Mine Lease R." We agree with the 

District Court that Anaconda's offer to continue accepting 

the Mine Lease "B" rental payments did not waive Monte Vista's duty to provide respondent with written notice of its 

right to renew. 

Claims for Economic Advantanaes. Bad Faith. 

Civil Conspiracy and Punitive Damages 
Monte Vista brought the above-mentioned claims in 

Counts IV through VII of its amended complaint. On June 7, 

1983, Anaconda filed a motion for a more definite statement. 

Anaconda, in its motion for summary judgment, renewed its 

earlier objections regarding the lack of factual support for 

Counts IV through VII. 

On December 20, 1984, Monte Vista filed a thirty-five 

page brief with forty-three attached exhibits in response to 

Anaconda's request for a more definite statement. The District Court found that Monte Vista again failed to specifically address Anaconda's request for specificity and counter 

Anaconda's legal arguments. The District Court then stated, 

"apparently Monte has either elected to abandon these counts 

or believes that the Court will accept Monte's exhaustive 

polemic diatribes in lieu of substantive argument." 

We agree with the District Court that Monte Vista 

repeatedly failed to provide, with particularity, factual 

support for its allegations of fraud. Rule 9 (b) , M.R.Civ.P. 

Monte Vista also repeatedly failed to provide the District 

Court with a simple, concise and direct pleading. Rule 8(e), 

M.R.Civ.P. The record also supports the District Court's 

finding that Monte Vista failed to demonstrate a genuine 

issue of material fact and that Monte Vista has merely relied 

on lengthy but unsupported allegations. Rule 56(c), 

M.R.Civ.P.; see, Larry C. Iverson, Inc. v. Bouma (1981), 195 

Mont. 351, 373, 639 P.2d 47, 59. 

Accordingly, we hold the District Court properly granted summary judgment against Monte Vista on its allegations of 

fraud, civil conspiracy and bad faith. 

The judgment of the District Court is affirmed. 
We concur: 

2-A Q , we-4 9 .& Q 

Hon. Frank I. Haswell, Retired 

Chief Justice, sitting in place 

of Mr. Justice John C. Sheehy