Opinion ID: 2636767
Heading Depth: 1
Heading Rank: 6

Heading: Contractual Provisions Pertaining to Public Access

Text: [¶ 24] The legislature prohibited the release of any funds to HCCD for the reservoir project until it entered into a project agreement with DEPAD, incorporating certain specific provisions. Wyo. Stat. Ann. § 41-2-218(b)(ii). One of the provisions the parties were required to incorporate into the project agreement was the right of public access to HCCD land, discussed above. The project agreement included the following paragraph pertaining to public access: 12. It is further agreed that THE DISTRICT will not deny right of access to the general public, for recreational purposes, to Hawk Springs Reservoir and adjacent public lands designated for recreational use, after completion and acceptance of the reservoir and appurtenant works. [¶ 25] Our oft-stated procedure for interpreting contracts was reiterated in Fox v. Wheeler Electric, Inc., 2007 WY 171, ¶ 10, 169 P.3d 875, 878 (2007): The primary focus is on determining the intent of the parties to the contract. The initial question is whether the language of the contract is clear and unambiguous. If it is, then the trial court determines the parties' intent from the contract language alone. It does not consider extrinsic evidence, although it may consider the context in which the contract was written, including the subject matter, the purpose of the contract, and the circumstances surrounding its making, all to help ascertain what the parties intended when they made the contract. The trial court then enforces the contract in accordance with the plain meaning its language would be given by a reasonable person. All of these issues-deciding whether a contract is unambiguous, determining the parties' intent from the unambiguous language, and enforcing the contract in accordance with its plain meaning-involve questions of law for the trial court. When we undertake de novo review of the trial court's conclusions of law, we follow the same familiar path. See Double Eagle Petroleum & Mining Corp. v. Questar Exploration & Production Co., 2003 WY 139, ¶¶ 7-8, 78 P.3d 679, 681-82 (2003), and cases cited therein. See also Ecosystem Resources, L.C. v. Broadbent Land & Resources, L.L.C., 2007 WY 87, ¶¶ 9-11, 158 P.3d 685, 688 (2007). [¶ 26] The appellants argue that Paragraph 12 of the project agreement does not allow public access to HCCD lands adjacent to the reservoir because those lands are not public lands. The State recognizes the problem created by the use of the term public lands in the agreement, stating that it is unfortunate that the project agreement language failed to mirror the statutory language. [¶ 27] Our case law is clear that, in interpreting contracts, we must take into account relevant statutes. In Bjork v. Chrysler Corp., 702 P.2d 146 (Wyo.1985), we considered the effect of a release negotiated between one of several tortfeasors and the injured party. This Court ruled that the release language had to be interpreted in the context of Wyoming's Right to Contribution Among Joint Tortfeasors Act, Wyo. Stat. Ann. §§ 1-1-110 through -113 (1977). Id. at 151. See also Bentley v. Director of the Office of State Lands and Investments, 2007 WY 94, ¶¶ 18-22, 160 P.3d 1109, 1115-16 (2007) (interpreting installment contract for sale of State land in accordance with relevant statutes). [¶ 28] In Bjork, we considered the relevant statutes in interpreting the release even though there was no indication that the release specifically referred to the statute. See also Century Ready-Mix Co. v. Lower & Co., 770 P.2d 692, 696 (Wyo.1989) (statutory provisions become a part of the bargain contemplated by the parties in Wyoming as though the statute[s] actually were included in the terms). Here, the project agreement expressly referred to the statutes providing funding for the rehabilitation of the Hawk Springs Reservoir, making the rationale for interpreting this agreement in the context of the statutes even stronger. The project agreement recitals specifically recognized that the statutory enactment was the impetus for the rehabilitation project and the execution of the agreement. Employing phraseology from our typical rules of contract interpretation, the statutes pertaining to the Hawk Springs Reservoir rehabilitation form part, if not most, of the circumstances surrounding the agreement's creation. [¶ 29] We must, therefore, interpret the project agreement in light of the statutes. The project agreement provided that HCCD would not deny right of access to the general public, for recreational purposes, to Hawk Springs Reservoir and adjacent public lands designated for recreational use. The agreement does not define public lands designated for recreational use and HCCD maintains that its lands, including the disputed Section 9, are not public lands. As we stated above, however, Section 41-2-218(b)(ii)(G) required HCCD, as a condition of receiving funding for the project, to provide public access to all of its lands adjacent to the reservoir. The statute had the practical effect of making HCCD lands adjacent to the reservoir public lands, at least for recreation purposes. Thus, the clear language of the agreement, when interpreted in accordance with the relevant statutes, provided that HCCD was required to grant public access to its lands adjacent to the reservoir. [¶ 30] Our interpretation of the plain language of the project agreement is buttressed by the fact that DEPAD did not have the legal authority to enter into a contract that did not incorporate the statutorily required provisions. State agencies can exercise only those powers authorized by statute. Natrona County School Dist. No. 1 v. Ryan, 764 P.2d 1019, 1035 (Wyo.1988). See also K N Energy, Inc. v. City of Casper, 755 P.2d 207, 210-11 (Wyo.1988). A corollary of the rule is that, when a statute provides a particular manner in which a power may be executed, the agency may not exercise its power in a different way. Town of Worland v. Odell & Johnson, 79 Wyo. 1, 16-17, 329 P.2d 797, 802-03 (1958). Any action taken by an agency without authority is ultra vires and void. Id. at 803. Accordingly, when interpreting contracts involving State agencies, we must, if possible, interpret them in a manner to comply with the law. Tri-County Elec. Ass'n, Inc. v. City of Gillette, 584 P.2d 995, 1005-06 (Wyo.1978). [¶ 31] If we were to interpret the project agreement as advocated by appellants, the agreement would violate the statutes which expressly required HCCD to grant public access to its lands adjacent to the reservoir. Interpreting the project agreement to comply with DEPAD's statutory authority, it is clear that Section 41-2-218 required DEPAD and HCCD to enter into a contract guaranteeing public access to district lands. The contractual language public lands designated for recreational use must, therefore, be interpreted to include the adjacent HCCD property. [¶ 32] With that said, however, we recognize the potential for future problems resulting from the project agreement's failure to mirror the statutory language. This case, therefore, presents a classic scenario where we should use our equitable power of reformation to correct the project agreement's failure to express fully the obvious intent of the legislature and the parties. Reformation emanates from the maxim that equity treats that as done which ought to have been done. Hutchins v. Payless Auto Sales, Inc., 2002 WY 8, ¶ 19, 38 P.3d 1057, 1063 (Wyo.2002). The remedy is appropriate when a written instrument does not accurately memorialize the agreement of the parties. Id. [A] court acting in equity may reform a written instrument upon clear and convincing evidence of the following elements: (1) a meeting of the minds-a mutual understanding between the parties-prior to the time a writing is entered into, (2) a written contract, or agreement, or deed (3) which does not conform to the understanding, by reason of mutual mistake. Id. See also W.N. McMurry Construction Co. v. Community First Insurance, Inc. Wyoming, 2007 WY 96, ¶ 18, 160 P.3d 71, 77 (2007). [¶ 33] Sections 41-2-216 through -218 clearly establish that the parties had a mutual understanding prior to execution of the project agreement. The release of State funds to HCCD and the completion of the rehabilitation of the reservoir and associated systems in accordance with the statutes provide additional support that the statutes reflected the parties' mutual understanding. The project agreement was in writing and, although it is properly interpreted to be consistent with the statute, the contractual language does not fully conform to the parties' mutual understanding, as reflected in the statutes. Thus, we remand to the district court for reformation of the project agreement language to conform more closely to Wyo. Stat. Ann. § 41-2-218(b)(ii)(G) (now renumbered as Wyo. Stat. Ann. § 99-99-218(b)(ii)(G)).