Opinion ID: 1193798
Heading Depth: 1
Heading Rank: 4

Heading: Limitation of Remedies Provision

Text: The district court determined that the contract between the parties furnished Fremont's exclusive remedies and granted summary judgment in favor of Elmer on Fremont's claims for intentional interference with a known economic advantage and breach of fiduciary duty. When the interpretation of a contract is at issue, summary judgment is proper where the terms of the parties' contract do not raise issues of material fact, the contract language is plain and unambiguous, and the terms of the contract are controlling. Kirkwood v. CUNA Mut. Ins. Soc., 937 P.2d 206, 208-09 (Wyo.1997); Barlage v. Key Bank of Wyoming, 892 P.2d 124, 127 (Wyo.1995); Moncrief v. Louisiana Land & Exploration Co., 861 P.2d 516, 523 (Wyo.1993). Because the interpretation of a contract is purely a question of law, this court conducts a de novo review of the district court's conclusions. Anderson v. Bommer, 926 P.2d 959, 961 (Wyo.1996); Moncrief v. Louisiana Land & Exploration Co., 861 P.2d at 524. In interpreting a contract, our primary concern is the true intent and understanding of the parties at the time and place the contract was made. Examination Management Servs., Inc. v. Kirschbaum, 927 P.2d 686, 690 (Wyo.1996). We consider the contract as a whole, reading each part in light of all other parts; meaning should be afforded to all the language used by the parties if that can be done and a reasonable construction achieved. In other words, we analyze the tenor of the contract. Id. Only when a contract is ambiguous do we acquire license to construe that document by resort to extrinsic evidence. Martin v. Farmers Ins. Exch., 894 P.2d 618, 620 (Wyo.1995). Ambiguity exists where a contract is obscure in its meaning because of indefiniteness of expression or because it contains a double meaning. Id. ( quoting Ferguson v. Reed, 822 P.2d 1287, 1289 (Wyo.1991)); see Kirkwood v. CUNA Mut. Ins. Soc., 937 P.2d at 208. Disagreement by the parties concerning the meaning of a contract term does not render the contract ambiguous. Kirkwood, 937 P.2d at 209. With these rules of contract analysis in mind, we examine the parties' contract. Paragraph two of the employment contract provides: (e) Remedies (i) The remedies which Elmer has against Fremont shall be limited to those remedies which are for failure to pay past accrued wages and/or bonuses or other compensation agreed upon between the parties in writing. (ii) The remedies which Fremont shall have against Elmer shall be limited to reimbursement for misappropriated funds or equipment or entering into agreements or making contributions or financial obligations of the business which are in excess of the scope of his authority set out herein. We must answer two questions: (1) does this contract provision limit Fremont's remedies to those listed; and (2) if so, is the provision enforceable? Elmer argues that paragraph 2(e)(ii) unambiguously limits Fremont's remedies to those mentioned. Elmer also argues that the limitation of remedies provision applies to claims arising under the contract as well as claims arising outside of the contract. We agree. The limitation of remedies provision explains that Fremont's remedies shall be limited to those listed. In addition, the remedies provision lists remedies which, although they are indirectly related to the contractual relationship between the parties, sound in tort. More specifically, we look at two of the remedies mentionedreimbursement for misappropriated funds or equipmenttwo torts more commonly known as theft and conversion. Because the provision clearly declares that Fremont's remedies shall be limited and that the remedies listed include extra-contractual remedies, we agree with the district court's determination that the contract provides Fremont's exclusive remedies against Elmer. Nevertheless, we do not agree, as a matter of public policy, that this contract term is enforceable. The question for the court is whether the limitation of remedies provision, which, in effect, exempts Elmer from liability for intentional torts, is enforceable. In Wyoming, a contract limiting liability for negligence may be enforced only if it does not contravene public policy. Schutkowski v. Carey, 725 P.2d 1057, 1059-60 (Wyo.1986); Boehm v. Cody Country Chamber of Commerce, 748 P.2d 704, 710 (Wyo.1987); Brittain v. Booth, 601 P.2d 532, 535 (Wyo.1979). Where willful and wanton misconduct is shown, an otherwise valid release is not enforceable. Schutkowski v. Carey, 725 P.2d at 1060; Milligan v. Big Valley Corp., 754 P.2d 1063, 1065-68 (Wyo.1988). Section 195, of the Restatement, Second, Contracts (1981), provides in pertinent part: § 195 Term Exempting from Liability for Harm Caused Intentionally, Recklessly or Negligently. (1) A term exempting a party from tort liability for harm caused intentionally or recklessly is unenforceable on grounds of public policy. The rationale behind § 195 is recited in comment a: The law of torts imposes standards of conduct for the protection of others against unreasonable risk of harm. One cannot exempt himself from such liability for harm that is caused either intentionally or recklessly. We find § 195 to be consistent with Wyoming law as found in Schutkowski v. Carey , its progeny, and its predecessors. We adopt Restatement, Second, § 195(1) and hold that the term in the parties' employment contract which, in effect, exempts Elmer from tort liability for harm caused intentionally or recklessly, is unenforceable on grounds of public policy. Where only a single provision of a contract is contrary to public policy and the considerations from both sides are sufficient for performance absent such paragraph, we will enforce the contract with the exception of the invalid provision. Tate v. Mountain States Tel. and Tel. Co., 647 P.2d 58, 61-62 (Wyo.1982). In this case, the single provision limiting Fremont's remedies is unenforceable to the extent that it exempts Elmer from harm caused intentionally or recklessly. Fremont's claims for breach of fiduciary duty and intentional interference are reinstated to the extent that they are based on Elmer's intentional or reckless conduct. See Dobratz v. Thomson, 155 Wis.2d 307, 455 N.W.2d 639, 645-646 (Wis.Ct.App.1990) rev'd 161 Wis.2d 502, 468 N.W.2d 654 (1991). We reverse the summary judgement entered in Elmer's favor and remand this case to the district court for further proceedings on Fremont's claims. [3] Because the rest of the contract is valid, we proceed to examine Elmer's damage award.