No. 13666 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1977 

UNITED CAMPGROUIJDS, U.S.A., 

a corporation, 

Plaintiff and Appellant, 

LESLIE B. STEVENSON, 

Defendant and Respondent. 

Appeal from: District Court of the Eighteenth Judicial 

District, 

Honorable W. W. Lessley, Judge presiding. 

Counsel of Record: 

For Appellant: 

J. David Penwell, Bozeman, Montana 

For Respondent : 

Joseph W. Sabol, Bozeman, Montana 

Submitted on briefs. 

Submitted: September 26, 1977 

Decided : NOv 2 9 1577 7 ., ';;I Filed: &, G 
Mr. Justice Gene B. Daly delivered the Opinion of the Court. 

This action by United Campgrounds, U.S.A., a Nevada 

corporation, against Leslie B. Stevenson, a resident of 

Bozeman, Montana, was brought in the District Court, Gallatin 

County, for damages for breach of contract and termination of 

a franchise agreement. It was tried to the District Court 

sitting without a jury. The court found in favor of Stevenson, 

awarded attorney fees, terminated the contract, and dismissed 

the claim. United appeals. 

On July 17, 1971, a franchise agreement was executed 

between United and Stevenson for the operation by Stevenson 

of a United Campground franchise at Bozeman, Montana. Thereafter, on December 1, 1971, the parties entered into a sign 

lease agreement for the lease of a sign owned and furnished by 

United for use by Stevenson at the campground. In December 

1971, Stevenson purchased land near bozeman and started a 

campground in early 1972. 

The franchise agreement provided that 3% of the annual 

registration fees at the campground was to be paid to United 

for educational and supervisory services. An additional sum of 

4% of the annual registration fees was to be paid for the use 

of the trade name and trademark "UNITED CAMPGROUNDS". Stevenson 

was also to pay United the sum of $500 per year as an advertising 

payment for promoting and advert is ing the "UNITED CAMPGROUNDS" 

trade name. 

Specifically, the franchise agreement required the payment 

by Stevenson to United of the sum of $7,500. This sum constituted compensation to United for work performed and services 
rendered in connection with setting up the campground. This 

sum of money was paid to United. In addition to the franchise 

agreement United and Stevenson entered into a lease agreement for 

the lease of an advertising sign. Steventon was to pay the sum 

of $350 per year as rental for the use of the sign. This sign 

lease was a separate agreement. However, the sign rental was 

required by the franchise agreement which in Article V, Paragraph 

1, Section S, states: 

"1. DUTIES OF FRANCHISEE: Franchisee agrees : 

"*** 

'1 s. To lease or purchase a standard lighted 

sign from Franchisor * * *." 

All payments were duly made by Stevenson to United until 

the beginning of 1974, at which time all payments ceased with no 

payments made since then. The franchise agreement is explicit 

as to the duties of United as the franchisor, and likewise, insofar 

as the duties of Stevenson as the franchisee. The District Court, 

after hearing testimony and examining the evidence and proof, 

found that United as franchisor had not met its duty to Stevenson 

as franchisee in that: 

1. United did not send a competent, qualified and experienced 

location advisor to Stevenson's territory to advise Stevenson. 

2. United did not furnish paper goods, sales aids, 

advertising materials or other items printed with United's trademark or trade name to Stevenson. 

3. . United did not provide Stevenson with one week of basic 

operational training in an actual operating campground. 

4. United did not instruct or advise Stevenson with regard 

to the leasing of equipment and rental of facilities or equipment 

for the operation of his campground. 
5. United did not assist Stevenson in developing sources 

of income from new and different types of facilities related 

to overnight campting. 

6. United failed, neglected and refused during the years 

1974 and 1975, to maintain the trade name and business of 

"United Campgrounds, U.S.A." in such a manner as to signify a 

high standard of excellence in management and operation. United 

I I did not publish, advertise, promote and develop United Campgrounds, U.S.A." trade name and public image. United did not 

make available to Stevenson paper goods, sales aids, advertising 

materials; did not publish during the years 1974 and 1975, a 

directory in content, scope or accuracy to facilitate and promote Stevenson's business. 

The court further found United's- failures to perform 

materially impaired and jeopardized Stevenson's business and 

were material breaches of the covenants, and were conditions 

precedent of the franchise agreement. 

United's first issue for review is whether the District 

Court erred in failing to rule on the evidence that a separate 

sign lease had been entered into between the parties and no 

payment had been made by the franchisee after December 1973, nor 

had the sign been returned to the franchisor? 

As heretofore noted, Article V of the franchise agreement 

imposes the obligation upon Stevenson to lease or purchase a sign 

from United. The sign agreement is of a lesser consequence in 

relation to the entire agreement than the segment relating to 

advertising and use of United's name. The obligation here is no 

different than the other payments relating to trade name and other 

advertising material. It has its own method of execution based 
on the purchase or lease option, but like all other obligations 

has its genesis in the franchise agreement and is a part thereof. 

Therefore, lack of specific reference beyond the franchise 

agreement is not reversible error. 

United's final issue is whether the District Court was 

correct in construing the obligations of the franchisor as 

conditions precedent. Section 58-206, R.C.M. 1947, states: 

"A condition precedent is one which is to be performed 

before some right dependent thereon accrues, or some 

act dependent thereon is performed." 

This Court in Atlantic-Pacific Oil Co. v. Gas Development Co., 

105 Mont. 1, 15, 69 P.2d 750 (1937), dealt at length with a 

"condition precedent" and held that a condition precedent is not 

a question of phrase or form, but one of the intent of the 

parties. Here, Stevenson contends the franchise agreement 

demonstrates it was the intent of the parties to create all 

obligations on the part of Stevenson, dependent upon performance 

of obligations by United. His contention is evidenced by the 

franchise agreement itself, reciting at length the rights of 

United for any breach of an obligation by Stevenson. Yet, nowhere within the agreement is there any provision concerning the 

rights of Stevenson for a failure by United to perform the 

obligations imposed upon United. The termination clause contained 

in the franchise agreement is very specific -- the agreement 

may be terminated when either a ten year period has expired 

or the franchisee is in breach of the agreement. However, no 

provision is made in the franchise agreement which allows for 

the termination of the agreement for breach thereof by the 

franchisor, United. 

United on the other hand maintains that each party's performance was equally dependent and ran concurrently, contending 
that conditions precedent are not favored and the courts 

will not construe stipulations to be such, unless required to 

do so by plain, unambiguous language or by necessary implication. 17 Am Jur 2d, Contracts, 5321, p. 752. 

The District Court decided these duties of the franchisor 

by necessary implication were conditions precedent. The 

District Court held Stevenson failed to establish damages, 

yet the court did feel that United had substantially failed 

in many of its obligations as a franchisor. Therefore, if this 

franchise agreement was to be construed as imposing upon United 

covenants or concurrent duties, this would leave Stevenson 

without an adequate remedy for a breach of these obligations 

by United. 

The judgment of the District Court is affirmed. 

i 

Chief Sustice