Opinion ID: 4508490
Heading Depth: 3
Heading Rank: 1

Heading: Summary Judgment - Breach of Contract

Text: Tour 18 contends that the district court erred in finding it breached the MMAs by terminating all Masters Memberships. The MMAs provide for “terminat[ion] by 9 Tour 18 at any point in time pursuant to the club rules as established and published by Tour 18.” App. at 98. Tour 18 argues that the phrase “pursuant to the club rules as established and published by Tour 18” incorporates by reference the R&Rs, which allow termination whenever “Rose Creek management . . . deem[s] [it] necessary.” Aplt. Br. at 4.2 Oklahoma law places the burden of proving a contract upon the party alleging that contract for its defense. See Nat’l Sur. Co. v. Bd. of Ed. of City of Hugo, 129 P. 25, 26 (Okla. 1912). Thus, Tour 18 must first establish a genuine issue regarding whether the R&Rs are incorporated by reference into the MMAs, and then do the same regarding whether the R&Rs permit termination of Masters Memberships whenever Tour 18 deems it necessary. Because we conclude that Tour 18 cannot establish incorporation by reference, we do not address whether the R&Rs permitted termination under these circumstances. Under Oklahoma law, “[a] contract may include a separate writing or portions thereof, if properly incorporated by reference.” Walker v. Builddirect.Com Techs., Inc., 349 P.3d 549, 553 (Okla. 2015). A properly incorporated extrinsic document “‘becomes constructively a part of the writing,’ forming a single instrument.” Id. (quoting 11 Williston on Contracts § 30:25 (4th ed. 1999)). But “Oklahoma law does not recognize a vague attempt at incorporation by reference.” Id. at 554. Incorporation is effective only when “(1) the underlying contract makes clear reference to the extrinsic document, (2) the identity and location of the extrinsic 2 Tour 18 makes no argument that it can prevail without incorporating the R&Rs by reference. 10 document may be ascertained beyond doubt, and (3) the parties to the agreement had knowledge of and assented to its incorporation.” Id. We address the first two of these required elements, which are closely intertwined. As the district court determined, the MMAs fail to “make[] clear reference to the separate document, the identity of which may be ascertained beyond doubt.” App. at 1007. Tour 18 argues that the key clause in the MMAs’ last paragraph—“pursuant to the club rules as established and published by Tour 18”—“clearly refers to something other than the MMA or any of its terms.” Aplt. Br. at 12. This may be true, but it is not enough: Clear reference must be made to the extrinsic document, and the “something other” being alluded to is not unambiguously the R&Rs, or even a single discrete writing.3 While the MMAs make general reference to “the club rules,” the document Tour 18 seeks to incorporate has a specific, proper title: “Rose Creek Rules & Regulations.” And, as the Masters Members argued, the “club rules” could just as easily refer to the “General Club Rules” provision contained within the R&Rs. The MMAs’ general reference to “the club rules,” without further detail, does not “clear[ly] reference” the R&Rs and certainly does not do so “beyond doubt,” as required by Oklahoma law. 3 Tour 18’s argument that “[t]he ‘club rules as established and published by Tour 18’ was a known, discrete document,” Aplt. Br. at 13, contradicts Tour 18’s own briefing before the district court, in which it stated that the MMAs “do not mandate a particular set of rules were effective and were to remain in effect in perpetuity,” App. at 654. 11 The MMAs also fail to specify adequately the location of the “club rules.” Tour 18 argues that the reference is to the R&Rs, which “are published and located prominently” at the Rose Creek clubhouse and were also given to Masters Members in their “membership packages.” Aplt. Br. at 11–12. But Oklahoma’s test for incorporation requires that “a contract must . . . describe [an extrinsic document] in such terms that its . . . location may be ascertained beyond doubt.” Walker, 349 P.3d at 551 (emphasis added). For example, in Walker, the Oklahoma Supreme Court held there was no incorporation by reference where the contract referred to “Terms of Sale,” but made no mention of the website where that document could be found. Id. at 554. Likewise, the MMAs refer to “club rules as established and published by Tour 18,” but make no mention of where such rules are or can be found—whether posted on a clubhouse wall, included in a membership package, or otherwise available from club management on request. Rather than making the R&Rs’ location “ascertain[able] beyond doubt,” the MMAs’ vague assertion that the club rules are “published” in some fashion is nothing more than an “oblique reference [that] falls short of [Oklahoma’s] demanding standard” for incorporation. Id. Nor do the MMAs sufficiently identify the R&Rs via “words of express incorporation.” Id. at 553; see also High Sierra Energy, L.P. v. Hull, 241 P.3d 1139, 1141 n.3 (Okla. Civ. App. 2010) (finding extrinsic documents incorporated where the contract stated, “Exhibits attached to this Agreement are expressly made a part of, and incorporated by reference into, this Agreement.”); Monkey Island Dev. Auth. v. 12 Staten, 76 P.3d 84, 88 (Okla. Civ. App. 2003) (finding extrinsic documents “attached hereto” were incorporated into a contract).4 While “neither physical attachment nor magic words are necessary,” a contract must nevertheless “clearly and unambiguously state that the parties intended to incorporate any additional terms.” Walker, 349 P.3d at 553–54. The MMAs—which do not refer to the “club rules” by a proper name, describe their location beyond doubt, or clarify that the reference is to a particular document as opposed to any number of rules disseminated by Tour 18 in whatever form and at whatever time—cannot suffice. As the Oklahoma Supreme Court reasoned in Walker, had Tour 18 “intended to make the [R&Rs] part of the parties’ agreement, [Tour 18] could easily have accomplished that purpose by drafting the [MMAs] employing words of express incorporation or clearly referencing, identifying and directing the [Masters Members] to the document to be incorporated.” Id at 554. It did not do so. Thus, as a matter of Oklahoma law, Tour 18’s “vague attempt at incorporation by reference” cannot be recognized. Id. Because Tour 18 offers no other justification for terminating the MMAs, the district court properly vacated the terminations. We now consider Tour 18’s objections to the damage award. 4 As the Masters Members point out, Tour 18 knew how to use such words of express incorporation: the paragraph of the MMAs pertaining to escrow states that “[s]aid Escrow Agreement is incorporated and made a part of this agreement as if fully set forth herein.” App. at 96. 13