Opinion ID: 883921
Heading Depth: 1
Heading Rank: 3

Heading: Did the District Court err in dismissing Savik and Piippo's breach of contract claim?

Text: Our standard of review in appeals from summary judgment rulings is de novo. Mead v. M.S.B., Inc. (1994), 264 Mont. 465, 470, 872 P.2d 782, 785. When we review a district court's grant of summary judgment, we apply the same evaluations as the district court based on Rule 56, M.R.Civ.P. Bruner v. Yellowstone County (1995), 272 Mont. 261, 264, 900 P.2d 901, 903. Savik and Piippo's claims of breach of contract stem from their interpretation of the intent of paragraph 4.13 of the Agreement. That paragraph provided in relevant part: Subject to satisfying Entech's hiring policies, Entech shall retain Messrs. Savik and Piippo for terms of three (3) years each at annual initial salaries of $60,000 each. Messrs. Savik and Piippo will be entitled to those benefits that are afforded to other employees under Entech's employment policies[.] Savik and Piippo maintain that the benefits available to them as Entech employees included not only vacation, health insurance, and pension, but also permanent employment terminable only for good cause. Savik and Piippo based their interpretation of the contract on oral representations that they claim were made to them by Meldahl. They also claim that the term benefits, as used in the contract, was ambiguous and thus parol evidence was needed to explain what the parties intended in using that term. The parol evidence rule in Montana has been codified under §§ 28-2-904, and 28-2-905, MCA. Section 28-2-904, MCA, explains, [t]he execution of a contract in writing, whether the law requires it to be written or not, supersedes all the oral negotiations or stipulations concerning its matter which preceded or accompanied the execution of the instrument. Section 28-2-905, MCA, further provides that when an agreement has been reduced to writing by the parties, there can be no evidence of the terms of the agreement other than the contents of the writing except when a mistake or imperfection of the writing is claimed or when the validity of the agreement is the fact in dispute. In their claim for breach of contract, Savik and Piippo contend that the term benefits was ambiguous and thus the court should have allowed parol evidence as to statements made to them by Meldahl which led them to believe that benefits included permanent employment. This Court has held that where the terms of the contract are ambiguous and uncertain, evidence of attending circumstances is admissible. Molerway Freight Lines v. Rite-Line Transp. (1995), 273 Mont. 95, 100, 902 P.2d 9, 12. In Monte Vista Co. v. Anaconda Co. (1988), 231 Mont. 522, 528-29, 755 P.2d 1358, 1362, this Court explained: An ambiguity exists when a contract is subject to two interpretations and parol testimony can be used to determine what the parties intended. [Citations omitted.] However, intent of the parties is only looked to when the agreement in issue is not clear on its face. [Citation omitted.] In the present case, the District Court gave the following rationale for granting summary judgment: The express language of that provision [4.13] clearly establishes a three year term of employment. Plaintiffs contend that the intent of the provision was to bind the individual Plaintiffs to a minimum of three years, and that the language in the provision entitling Plaintiffs to  those benefits that are afforded to other employees under Entech's employment policies include the benefit of permanent employment absent good cause for firing Plaintiffs. This Court does not find that the provision language is ambiguous and therefore, there is no need to look to the parties' intent, and in any event, such interpretation would require adding language to the agreement which would contradict the express three year term in violation of the parol evidence rule. After reviewing the record and the Agreement, we agree with the District Court that the provision regarding benefits and three years of employment was clear and unambiguous and did not include permanent employment. Our decision in Sherrodd, Inc. v. Morrison-Knudsen Co. (1991), 249 Mont. 282, 815 P.2d 1135, is on point. In that case, Sherrodd had contracted to perform certain earth work for Morrison-Knudsen. The terms of the written contract provided that all of the earthwork would be performed for a lump sum of $97,500. Sherrodd, 815 P.2d at 1136. After completion of the work, Sherrodd claimed that it was owed more money than the $97,500 because it had been pressured to execute the contract and that it had been told that a deal would be worked out wherein Sherrodd would be paid more than the sum provided for in the contract. Sherrodd, 815 P.2d at 1136. The district court granted summary judgment to Morrison-Knudsen, holding that the parol evidence rule precluded Sherrodd from relying upon oral representations which were not incorporated into the written contract. This Court affirmed and held that Sherrodd's contention that the $97,500 did not cover the entire job contradicted the terms of the written agreement. Sherrodd, 815 P.2d at 1137. In applying the parol evidence rule, we concluded: the compensation of Sherrodd is governed exclusively by the written contract and that Sherrodd's claims are barred under the parol evidence rule. We hold that the District Court did not err in granting summary judgment for defendants. Sherrodd, 815 P.2d at 1137. As with Sherrodd's attempt to vary the amount of compensation specified, Savik and Piippo's reliance on oral representations that would vary the expressed term of employment was barred by the parol evidence rule. Accordingly, the District Court was correct in granting summary judgment and dismissing the breach of contract claim.