Opinion ID: 1360830
Heading Depth: 1
Heading Rank: 3

Heading: pocatello breached the wastewater treatment contract

Text: If the terms of a contract are clear and unambiguous, the interpretation of the contract's meaning is a question of law. E.g., Ada County Assessor v. Taylor, 124 Idaho 550, 553, 861 P.2d 1215, 1218 (1993). If, on the other hand, the terms of a contract are ambiguous, the interpretation of that contract's meaning is a question of fact. Id.; Bondy v. Levy, 121 Idaho 993, 997, 829 P.2d 1342, 1346 (1992). The initial inquiry into whether a contract is ambiguous presents a legal question, over which this court exercises free review. Bondy, 121 Idaho at 997, 829 P.2d at 1346. In order to determine whether the contract between Pocatello and Chubbuck is ambiguous, this Court must determine whether the terms of that contract are reasonably susceptible to conflicting interpretations. Id. The source of the dispute between Chubbuck and Pocatello is Section 1 of the contract, which provides: Pocatello agrees to provide treatment of wastewater originating within the corporate limits of the City of Chubbuck. The cost of treatment shall be at such rates as may from time to time be established by resolution of the Pocatello City Council. The rate for that portion of wastewater delivered through the Chubbuck sewerage system to the Pocatello wastewater treatment facility shall be at a rate that will provide revenue sufficient to return to Pocatello the allocated cost of service. The allocated cost of service takes into account the fact that the City of Chubbuck maintains the sewerage system within its corporate boundaries and the trunk sewer to the Pocatello Wastewater treatment facility. The rates for treatment of that portion of the Chubbuck wastewater generated south of I-86 and introduced into the Pocatello sewers will also be established by resolution of the Pocatello City Council. The cost of service allocation is based on the determination set out in the Black and Veatch study of 1983 for the City of Pocatello. Chubbuck argues that Pocatello breached this provision of the contract when Pocatello based the rates it charged Chubbuck on the cost of service calculation in the 1990 Black and Veatch study. In response, Pocatello contends that the rate increases reflect a more accurate estimate of the value of the wastewater treatment plant. Although the valuation in the 1990 study was different, Pocatello argues, the 1990 study employed essentially the same methodology to determine the cost of service allocation. The issue before this Court on Chubbuck's first cause of action therefore turns on whether the provision that [t]he cost of service allocation is based on the determination set out in the Black and Veatch study of 1983 is ambiguous. Pocatello asserts that a reasonable definition of the word determination can include the methodology used to reach the result of the 1983 study, and is not limited to the result itself. We disagree. Words or phrases that have established definitions in common use or settled legal meanings are not rendered ambiguous merely because they are not defined in the document where they are used. Mutual of Enumclaw v. Wilcox, 123 Idaho 4, 8, 843 P.2d 154, 158 (1992). Both the settled legal meaning and common usage of the word determination are contra to the definition urged by Pocatello. Black's Law Dictionary defines determination as: The decision of a court or administrative agency. It implies an ending or finality of a controversy or suit. To settle or decide by choice of alternatives or possibilities. The ending or expiration of an estate or interest in property, or of a right, power, or authority. The coming to an end in one way or another. Black's Law Dictionary 450 (6th ed. 1990). (citations omitted) Webster's definition of determination is the settling and ending of a controversy esp. by judicial decision: conclusion, decision. Webster's Third New International Dictionary (unabridged) 616 (1971 ed.). This state's statutory and common law applications of the term determination similarly demonstrate that the term denotes a conclusive resolution of an issue. Compare Bunn v. Bunn, 99 Idaho 710, 712, 587 P.2d 1245, 1247 (1978) (A determination entails a finding of the facts and an application of the law in order to resolve the legal rights of the litigants....) with I.C. § 10-701 (A Judgment is the final determination of the rights of the parties in an action or proceeding.) (Repealed). Because the word determination has a settled definition, the relevant clause in the contract between Chubbuck and Pocatello is not ambiguous, nor is it reasonably susceptible to the interpretation urged by Pocatello. Under the terms of this clause in the contract, Pocatello was empowered to set wastewater treatment rates that will provide revenue sufficient to return to Pocatello the allocated cost of service[,] basing the allocated cost of service on the 1983 Black and Veatch study. By charging rates based on the 1990 study, without providing notice and renegotiating according to the terms of the contract, Pocatello breached the contract with Chubbuck. The trial court therefore erred by granting Pocatello's motion for summary judgment on the contract claim and by denying Chubbuck's motion. This Court's holding renders moot Chubbuck's additional claim that the trial court should have granted relief on the alternative grounds of quasi-estoppel.