No. 12292 INTHE SUPREME COURT OF THE STATE OF MONTANA 1972

STATE OF MONTANA ex rel. YELLOWSTONE PARK COMPANY, Relator,

THE DISTRICT COURT OF 

### THE FOURTH JUDICIAL DISTRICT OF 

### THE STATE OF MONTANA, INAND FOR THE COUNTY OF MISSOULA, 

### THE HONORABLE E. GARDNER BROhNLEE, JUDGE PRESIDING, Respondents.

Original Proceedings. Counsel of Record: For Appellant: Gough, Booth, Shanahan and Johnson, Helena, Montana, Cordell Johnson, Helena, Montana, argued. For Respondent: Tipp, Hoven and Brault, Missoula, Montana. Vernon Hoven argued, Missoula, Montana.

Submitted: June 16, 1972 Decided:

### OCT]

### 8

### 192PER CURIAM: Relator, Yellowstone Park Company, applied to this Court for a writof supervisory control or other appropriate order granting relief from the order of the district court of the fourthjudicial district, county of Missoula, dated May 25, 1972, wherein the district court granted plaintiffs' motion for summary judgment on the issue of liability. This Court issued

an order to show cause on June 

### 5, 1972. Briefs were submitted and oral argument had. Relator Yellowstone Park Company 

### is the defendant in two separate civil actions consolidated for trialinthe district court. The district court cases are: "Handee Foods, Inc., Plaintiff v. Yellowstone Park Company, Defendant", Cause No. 35336; and "~ational Business Factors, Inc., Plaintiff v, Yellowstone Park Company, Defendant", Cause No. 35799. Plaintiffs filed a motion for summary judgment which was heard by the district court on May 25, 1972. On the same date, the district court entered itsorder granting summary judgment inpart on the question of liability inboth cases. From the pretrial order, the agreed statement of fact reads: "Handee Foods, Inc. is a business located inMissoula, Montana, represented by Mr. F. W. Krieger, General Manager and President of the Company, It isa distributor of so-called 'convenience foods', which are foods that have been pre-cooked, refrigerated, and kept ina refrigerated condition until such time asbthey are 'reconstituted' or cooked for service toa customer. It does not sell to the general public, but sells to institutions, restaurants, and ingeneral, the wholesale and

### retailmarket. Handee Foods has '0

### degree' storage facilities, located in Livingston,Montana, that are capable of handling large supplies of frozen food products over extended periods of time. 

### "H. Shenson, Inc. is a corporation located in San Francisco, California,and is a meat purveyor, that sells generally to the retailmarket, institutions, restaurants,and similar situated businesses. It likewise 'breaks' or 'cuts up' meats, refrigerates the same,and offers them to its prospective customers. In the causenowbefore the Court,H. Shenson, Inc. is representedby Mr. Bud Murphy, SalesManager for that company, National Business Factors, Inc., plaintiff herein, is the owner and holder of the account of H. Shensan, Inc., by virtue of an assignment made to it

h

### by 

### H. Shenson, Inc.



## e ell ow stone Park Company is a corporation which operates

as a concessionaire under a concession agreement it has with the United States Department of Interior,National Park Service. Its activities inYellowstone National Park include the owning and operating of several different hotels and restaurants which provide food and beverage service to the traveling public. "The business of Yellowstone Park Company is highly seasonalwith the primary concentration of visitors to the Park being in the months of June,J'ulyand August of each year. Yellowstone Park Company is represented in thismatter by Mr. 

### R.L. Boyd, its Vice President and Controller,Mr. Peter Rogers who was the Food and Beverage Director forYellowstone Park Company in 1969 and 1970, and Mr. Percy Butler, who is the Executive Chef forYellowstone Park Company.II

### According to the pretrial order, plaintiffs contend: 1. That Yellowstone Park Companywas to use all of the products ordered from Shenson, Inc. and Handee Foods, Inc,, during the Yellowstone Park season of 1970,or to pay for such products as were not used, 2. That the total amount of the products forwhich Yellowstone Park Company is obligated to pay, is to Shenson Meats the sum of $4,119.12, and Handee Foods, Inc., in the

sum of $36,621.52. 3. That Handee Foods, Inc., in addition to the price of the goods as representedby the account, is entitled to the cost of storage at the Livingstonwarehouse, at the rate of $600per month from October 1, 1970, to date. According to the pretrial order, defendant contends: 1. That under the terms of the agreement between Yellowstone Park Company and Handee Foods,Yellowstone Park Company issued its purchase orders for estimated approximate usages for the 1970 season and Yellowstone Park Companywas obligated to pay for and did pay for only those items that were ordered specifically for delivery and delivered to Yellowstone Park Company inYellowstone National Park;and that the total price of the goods

so delivered under the terms of the agreementwas $630,711.73, and that the exact same amount, $630,711.73,was paid by Yellowstone Park Company to Handee Foods, Inc. 2. 

### That it was the intent of 

### the parties to the 

### agreement that Handee Foods, Inc. would be responsible for any oversupply of foodproducts left onhand in the Handee Foods warehouse in Livingston at the end of the 1970 season. 3. That Yellowstone Park Companyhas paid for all of the goods delivered to it by Handee Foods, Inc,and Yellowstone Park Company does not owe Handee Foods, Inc. $36,621,52 or any other amount.

### 4. That, in connectionwith tk

### .claimof H. Shenson, Inc., Yellowstone Park Company has paid for all of the goods delivered directly fromH. Shenson, Inc. to Yellowstone Park Company and Yellowstone Park Company does not owe H. Shenson, Inc, or National Business Factors, its assignee, the sum of $4,119.12 or any other amount. 5. That,under no circumstances, and particularly under the circumstances that exist in this case,would Handee Foods be entitled to any amount of damages representing storage costs incurred by Handee Foods, Inc. at the warehouse it rented in Livingston. Subsequently, plaintiffs moved for summary judgment and the district court issued an order granting summary judgment

on the question of liability. That order states in part: "On December 9,1969 the Defendant wrote a letter to the Plaintiff. Plaintiff contends the letter is awriting expressing the agreementbetween the parties. Determination of that point before the trial is very necessary. If the writing contains the agreement of the parties, and if the Court can determine from the writing who is the actual owner of the food items that remained in the warehouse at the end of the 1970 season, then the question of liability is settled and no parol evidence would be permitted to show any other oral agreement. "In the opinion of the Court the letter does settle the question of liability and therefore parol evidence would not be admissible to vary any of its terms. The letterwas written by the Defendant and must be interpreted as provided in Chapter 7, of Title 13, RCM 1947, and as provided in 13-720,the words are to be interpreted most strongly against the partywho put them in the writing.II 

### The letter referred to in the court's order reads: "Mr. Fritz Krieger "Handee Foods Incorporated "802 Milton 11



### Missoula,Montana 59801 "Dear Fritz: 

### "So thatwe keep up to datewith each others progress, we are still going ahead as scheduled on converting our food program to total convenience. We are in the processthis month of preparing our purchase orders for convenience equipment totaling some $144,000.00. This equipment includes Thermotainers, Vischer Steamers, Convection Ovens and additional freezers. John King, Plans and Projects Officer and I have spent this past month decidingwhat brands of equipment we want tobuy and we recently returned from the New York Hotel Show, atwhich time some of our questions were answered, as to the brand of equipment. "At the same time, I am concerned about the progress you aremaking, aswe arecounting on you handling our entireconvenience food products, which willbe coming frombasically three purveyors and inaddition, seven small purveyors. I want tomake sureyour warehouse deal isfirm and that you areready toproceed toremodel the existingbuilding. There 

### is going tobe a huge volume and I want tomake sure you have ample receiving, proper tight control systems and that you are going tohave the equipment to distribute theproduct throughout the Park. Nothing has changed relative to night deliveries atfour area warehouses ehroughout the Park.

1 t I have made up the new menus and I am putting them into final form for approval of prices tothe Government and it isestimated that we willbe purchasing through you, some $650,000,00 to $850,000.00 worth of product, Almost allof this product, totaling close to 100 itemswillbe set for deliverybetween April 1and 15 toyour facilities inLivingston. Aswe have previously discussed, you will receive 20%over and above the cost of the merchandise, toreceive, towarehouse and to distribute these products tous. 20%willbe added to the case price on each item. "On thebig three distributors, I have made, or am inthe process of concluding arrangements whereby you willbe able topay thesebills in three installments- June, July and August, even though the product willhave been delivered inApril, However, such an arrangement 

### isnot possibly where manufacturers are supplying only one item, such as our bacon Allentown, Pennsylvania; and our sausage from Memphis, Tennessee; and our stuffed baked potato from Milwaukee.

tI

These awe just examples of our one-item houses, whereby the truck load

### willhave tobe paid forby you after delivery, even though we do not consume the product inits entiretyuntil October.

It

In the near future, I willgive you a list of allthe purveyors and their products; the packing specswith the price that you willpay to them and the price thatwe will pay you which will, of course, include 20%on top of the factory price.

It

Please keep me advised as toyour progress, so that I am assured you 

### willbe inthe position of handling our food program fornext year and succeeding years.

t tSincerely, 

### S/ 

## " Peter "Peter Rogers It

Food & Beverage Director."The issuebefore this Court 

### isnot confined solely to the question of whether there remains a genuine issue of material fact concerning the oversupply of food in the Handee warehouse atthe close of the 1970 seasonbut, rather, was the evidence in the record produced through discovery that creates this issue properly excluded by the trialcourt. This evidence includes par01 evidence by Peter Rogers, on behalf of defendant, that directly disputes any inferences inthe heretofore quoted letter of December 9, 1969, that defendant would be responsible for oversupply; evidence of the course of conduct contained in defendants exhibits "F" and "G" tobe construed with the letter; and also evidence of "customs of the Trade". This applies to Cause 35336, Handee Foods. In Cause 35799, National Business Factors, it appears that allitems sold directly todefendant

were paid for and the dispute concerns itemshandled through Handee,and the ultimate issue inthis cause would be the same as that of Cause 35336. The letterupon which the district court based its determination does not speak directly to the issue of oversupply at the close of the 1970 season, Any determination must be had from the general language contained in the letter as a whole,

aswas demonstrated by the district court. We hold the language tobe ambiguous and subject to additional clarification as to the true intent of the parties under the appropriate sections of the Montana Uniform Commercial Code, Title 87A, R.C.M. 1947, and more particularly sections 87A-2-101, et,seq., R.C.M. 1947. Section 87A-2-202, R.C,M. 1947, provides: "Terms with respect towhich the confirmatory memoranda of the parties agree orwhich are otherwise set forth ina writing intended by the parties as a final ex ithrespect to such terms not be contradicted by nt or of a contemporaneous oral agreement but may be explained or supplemented "(a) by course of dealing orusage of trade (section 87A-1-205) orby a course of per-

### formance (section 87A-2-208); and "(b) by evidence of consistent additional terms unless the court finds thewriting to have been intended also as a complete and exclusive statement of the terms of the agreement," (Emphasis supplied). In the comment which follows Section 2-202,Uniform Commercial Code, Uniform Laws Annotated, it is pointed out that there are no prior uniform statutory provisions under previous uniform codes. The comment then goes on to point out that the purpose of Section 2-202,is to definitely reject: "(a) Any assumption that because awriting has been worked out which is final on somematters, it is to be taken as including all the matters agreed upon; "(b) The premise that the languageused has the meaning attributable to such language by rules of constructionexisting in the law rather than the meaning which arises out of the commercial context inwhich itwas used; and "(c) The requirement that a conditionprecedent to the admissibility of the type of evidence specified inparagraph (a) is an original determinationby the court that the language used is ambiguous.II 

### Paragraph (a) of section 8712-2-202,R.C.M. 1947,makes admissible, evidence of course ofdealing,usage of trade and course of performance to explain or supplement the terms of anywriting stating the agreement of the parties in order that the 'trueunderstanding of the parties as to the agreement may be reached. Further, the course of actual performance by the parties is considered the best indication ofwhat they intended thewriting to mean. See: Hunt Foods & 

### Industries, Inc. v. Doliner, 270NeY.S.2d 937;Michael Schiavone & 

### Sons, Inc,v. Securalloy Company, In&., (D.C.Conn. 1970), 312 F.Supp. 801, The judgment of the trial court is reversed and the cause remanded to the district court for trial in conformity with this opinion.