Opinion ID: 2498928
Heading Depth: 4
Heading Rank: 1

Heading: Meaning of Paragraph 8(m)

Text: [¶ 15] Paragraph 8(m) is the only provision in the Agreement governing rock removal. It provides: When rock conditions are encountered in the construction of the pipeline rock shall be removed from said premises. The word rock as used in herein shall not include sand, gravel or rocks less than two inches (2) in diameter and boulders may be retained on the right-of-way per Grantor's direction. The parties agree that the provision is unambiguous but disagree as to its meaning. Berthel contends that the provision requires Rockies Express to remove all rock greater than two inches in diameter, from both the surface and subsurface. In other words, Rockies Express may not bury the rock it digs up and must instead remove it from the property altogether. Rockies Express, on the other hand, contends that the provision requires the removal of rock greater than two inches in diameter from the surface only, and asserts it may otherwise rebury the rock it digs up. [¶ 16] The district court agreed with the parties that the rock removal provision was unambiguous, and it interpreted it to require removal of rock only from the surface of the easement. We likewise find the provision unambiguous, and based on the plain meaning of its terms we interpret it to require removal of surface rock only. [1] [¶ 17] Paragraph 8(m) does not use the terms surface or subsurface and instead requires that rock encountered in construction of the pipeline be removed from the premises. The question then is whether the term premises means surface, subsurface, or both. The dictionary definition of premises is a tract of land with buildings thereon, or a building or part of a building usu. with its appurtenances (as grounds). Merriam-Webster's Collegiate Dictionary 980 (11th ed.2007). The legal definition of the term is similar: A house or building, along with its grounds (smoking is not allowed on these premises). Black's Law Dictionary 1300 (9th ed.2009). [¶ 18] The plain meaning of the term premises relates to the land's surface, an interpretation that is confirmed by the remainder of Paragraph 8(m). The provision's second and final sentence defines the term rock and allows boulders to be retained on the right-of-way per Grantor's direction. (Emphasis added.) The overall tenor of the provision is a concern with the easement surface. [¶ 19] The only subsurface concern that Berthel has alluded to is the subsurface rock's impact on revegetation, its contention being that premises means surface and subsurface and was intended to address concerns with revegetation. As noted above, our primary and most important objective in interpreting the Agreement is to ascertain the parties' intent. In doing so, we consider the plain language and its relationship to other provisions in the Agreement. Using this approach, we must reject Berthel's proffered interpretation. The parties were indeed concerned with vegetative disturbance, and those concerns are addressed in the Agreement's Paragraph 8(d): Grantee shall affect a minimum of vegetative or soil disturbance, consistent with practical operations, and will smooth and maintain all disturbed areas to conform as nearly as practical with the adjacent terrain, and provide and maintain adequate water drainage to minimize erosion; after the initial construction of the pipeline covered by this Agreement is completed, or upon completion of any subsequent maintenance or replacement of the facilities causing vegetative or soil disturbance, all disturbed areas shall be restored and reseeded by Grantee. Also such restoration and reseeding shall be completed by Grantee using FERC specifications then in effect[.] [¶ 20] Not only does the Agreement's rock removal provision, Paragraph 8(m), not mention subsurface concerns or concerns with revegetation or soil disturbance, the parties expressly addressed those issues in a separate provision. If Berthel's concern is with the presence of construction-produced rock on the land's surface, its recourse is through Paragraph 8(m). If its concern is alternatively with restoration of the soil or vegetation, its recourse is through Paragraph 8(d). In other words, it is unlikely the parties intended to address revegetation concerns in Paragraph 8(m), given that those concerns were separately addressed in Paragraph 8(d). [¶ 21] That Paragraph 8(m) was intended to require removal only of surface rock is an interpretation confirmed by the facts and circumstances surrounding the Agreement's negotiation. As discussed, even when a contract's language is unambiguous, this Court may consider the facts and circumstances surrounding the making of the contract to determine the parties' intent and the plain meaning of the terms used. Davison, ¶ 9, 238 P.3d at 560; see also Ecosystem Resources, L.C. v. Broadbent Land & Resources, L.L.C., 2007 WY 87, ¶¶ 34-36, 158 P.3d 685, 693-694 (Wyo.2007) (facts and circumstances evidence may include case law, nature of parties, type of land covered by deed, purpose of conveyances and/or reservations, railroad's use of timber in business activities, and consideration paid); Mullinnix, ¶¶ 13-20, 126 P.3d at 916-19 (facts and circumstances evidence included nature of parties (ranchers with limited formal education), use of terms such as oil rights in casual versus formal contexts, and nature of petroleum industry at time of execution (gas considered unwanted byproduct of oil production)); Boley v. Greenough, 2001 WY 47, ¶¶ 13-23, 22 P.3d 854, 858-60 (Wyo.2001) (facts and circumstances evidence included evidence demonstrating meaning of term had evolved, nature of grantors' mineral interests, history of oil and gas development on property, and fact that parents assigned interests as gifts to their children immediately after discovery of oil and gas on their land). Our goal is to effectuate the parties' intent by giving their contract terms the meaning which the language would convey to reasonable persons at the time and place of its use. Union Pacific, ¶ 15, 246 P.3d at 872. [¶ 22] Bernie Lowery, one of the owner-partners in Berthel, provided the following deposition testimony concerning negotiation of the rock removal provision, which testimony Berthel submitted to the district court in support of its summary judgment motion: Q. Do you remember any particular provisions of the contract that you spent more time on than others? A. No. I can't really recall trying to measure time, but I do know the covenant pertaining to removal of the rock, which is becoming an important issue, or has become an important issue, was certainly an important issue at the time of the negotiations because it was so important to me that they did not leave our place, after they got done with their work, looking like a previous pipeline had left the place before we bought the ranch. And I told them thatI asked them, rather, what are you goingWhat are your plans when you encounter rock on our ranch? And they had never visited the ranch. And they had no idea what I was talking about. And I tried to explain to them what a mess was going to be left after they had to blast the rock out of there. And they had not come across that type of terrain before, and had not personally visited our ranch, and I told them that I thought we were entitled to more money than anyone else along the line because they were going to leave our place a mess. And they disagreed and wanted to go and inspect what I was talking about. And so we made a special trip with Needham, I believe is his name, and Skelton, and they observed what I was referring to on a previous project. Q. And I've seen some of the photos, and they show big piles of rocks left and things like that. A. Exactly. So they explained that they would never leave a job looking like that, and they could understand why I was upset. And I said, well, see, you need to know this, because now you understand why I want more money. And they said, well, we can't give you any more money, our hands are tied there, but maybe we can come up with some special wording in our agreement that you can live with.     Q. Now, when you were negotiating the rock provision, why was it important to you that the rocks be removed? You've saidLet me back up. You said that you didn't want it to look like the other pipelines that came through there. What were your reasons for not wanting rocks left on the property? A. Well, first off let me say, removing the rock was not my suggestion, and it was not my demand, not that I had much room to demand anything. I wanted more money because I felt they would leave the place in a mess.     Q. Does theSo it sounds like what you're telling me is that rocks don't impact necessarily how you use the land, things like that, what you were really looking for is more compensation and it was a tradeoff? A. Well, they do impact the land, that's why I didn't want them there. Q. In your opinion how does it impact the land? A. First off it's unsightly. Second off, you can't grow anything on it. You can't drive across it. But most of all it's unsightly. Q. So aesthetic reasons was your main concern? A. Well, that equates to financial reasons, so my concern is always the bottom line. And when something becomes unsightly, whether it's your house or a piece of property or your girlfriend, they Q. It's worth less? A. They affect the bottom line, yeah.     Q.    I'm talking just about the Rockies Express, if you believe that the land is worth less because of the way the easement was left, the reclamation? A. Yes. Q. Okay. And why do you think that? A. It's unsightly. Q. Okay. Does it detract fromIn what way does it detract from what was already there? A. Makes it more unsightly. [¶ 23] In addition to Mr. Lowery's testimony, representatives of Rockies Express provided deposition testimony, also submitted in support of Berthel's summary judgment motion, that it is standard construction practice to use rock unearthed in ditch construction as fill in burying a pipeline. The circumstances surrounding the rock removal negotiations illustrate that the parties' focus was on the appearance of rock on the surface. Rock piled on the surface was the problem Berthel brought to the attention of Rockies Express, and based on that circumstance, coupled with the standard construction practice of backfilling with rock, there is no reason to suspect that the parties would have contemplated the removal of subsurface rock. That is, reasonable persons under these facts and circumstances would intend that the provision requires the removal of rock from the right-of-way surface, not the right-of-way subsurface. [¶ 24] We thus agree with the district court that Paragraph 8(m) requires removal of surface rock only. Using this interpretation, we next consider whether the district court's determination that Berthel had not proven damages for the rock removal breach was clearly erroneous.