Court Opinion

ID: 9593202
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:20:34.976881+00
Date Added: 2024-06-11T18:01:18.849204
License: Public Domain

BOYLE, Justice,
concurring in part and dissenting in part.
I concur in sections II and IV of the lead opinion and with that portion of section III dealing with Afton’s claims regarding the force majeure provision of the agreement and whether Afton failed to provide the required amount of dispatchable capacity. I respectfully dissent, however, from the remainder of section III of the majority opinion because, in my view, an ambiguity in the contract exists which prevents resolution of this case on summary judgment.
The majority opinion interprets the contract. as precluding simultaneous application of remedies provided by Appendix B-2(A)(1) and B-2(C) because to do so would render Appendix B-2(A)(1) “meaningless.” Ante, at 856. The effect of the majority’s ruling is to hold that Idaho Power’s remedies can only be exercised in the alternative.
It is well settled that the determination of a contract’s meaning and legal effect are questions of law to be decided by a court where the contract is clear and unambiguous. Galaxy v. Outdoor Advertising Inc. v. Idaho Transportation Dept. 109 Idaho 692, 710 P.2d 602 (1985). I agree with the majority that the interpretation of an unambiguous contract is a question of law for the courts. St. Clair v. Krueger, 115 Idaho 702, 769 P.2d 579 (1989). However, if an agreement or contract is ambiguous, the resolution of any ambiguity rais*341es a question of fact for the trial court or jury. St. Clair v. Krueger, 115 Idaho 702, 769 P.2d 579 (1989); DeLancey v. DeLancey, 110 Idaho 63, 714 P.2d 32 (1986); Pocatello Ind. Park v. Steel West, Inc., 101 Idaho 783, 621 P.2d 399 (1980). Further, where a contract is determined to be ambiguous, interpretation of the document presents a question of fact which focuses upon the intent of the parties. See Ramco v. H-K Contractors, Inc., 118 Idaho 108, 794 P.2d 1381 (1990); Luzar v. Western Surety Co., 107 Idaho 693, 692 P.2d 337 (1984). Likewise, as the majority opinion properly notes, the determination of whether a contract is ambiguous or not is a question of law over which we exercise free review. See Clearwater Minerals Corp. v. Presnell, 111 Idaho 945, 729 P.2d 420 (Ct.App.1986). In making this determination, our task is to ascertain whether the contract is reasonably subject to conflicting interpretations. Spencer-Steed v. Spencer, 115 Idaho 338, 766 P.2d 1219 (1988).
In reviewing Idaho Power’s remedies under the contract, the trial court noted the following:
[T]he contract itself permits the use of both the reduction of capacity payments in order to recoup an overpayment and the reduction in capacity payments. Any other interpretation seems unreasonable. The contract clearly contemplates that Idaho Power will have a right to recoup capacity overpayment and it also clearly permits the de-rating of the facility based upon “prior performance,” among other grounds. Thus it may recoup an overpayment already made and avoid what would appear, based on past performance of the facility to be the almost certain problem of an overpayment for the following year. There is nothing inconsistent about the two remedies. Afton was not able to meet its dispatchable capacity requirements in either contract year one or contract year two. The overpayment for contract year one of 1.9 million dollars was a considerable overpayment, approximately sixty percent of the entire payment for the capacity payments for that year. The Power Sales Agreement permitted Idaho Power based upon Afton’s established inability to perform in the first contract year to de-rate the dispatchable capacity payment immediately. The de-rating of the facility prevented an overpayment in contract year two. It simply does not seem reasonable that Idaho Power is obligated to continuously overpay Afton or completely terminate the agreement.
(R., pp. 844-45.)
In my view, the trial court’s analysis demonstrates Appendix B is reasonably subject to conflicting interpretation and the majority’s different interpretation of the same agreement serves to highlight the existence of an ambiguity. Appendix B-2(A) gave Idaho Power the option of recouping the prior year’s overpayments by reducing capacity payments the following year. Appendix B-2(C) gave Idaho Power the right to de-rate Afton’s capacity “immediately” and “at any time” in order to limit the likelihood of making future over-payments. As the record demonstrates, Idaho Power exercised this remedy only after Afton demonstrated its inability to meet its contractual obligations. These remedies provided Idaho Power with the means to protect two distinct interests, recouping the prior year’s overpayments and limiting future payments to a level consistent with Afton’s demonstrated ability to provide capacity.
At the very least, the language creates an ambiguity regarding application of Appendix B remedies. The effect of the majority’s interpretation is to hold that Idaho Power’s remedies as outlined in Appendix B can only be exercised in the alternative. This interpretation overlooks the express language in Appendix B-2(C) which entitled Idaho Power to de-rate Afton’s capacity “immediately” and “at any time.” As this Court has previously noted, “in the absence of fraud or overreaching as between parties this court cannot modify the express terms of a contract lawfully entered into by competent parties.” Miller v. Miller, 88 Idaho 57, 396 P.2d 476 (1964) (citing J.R. Simplot v. Chambers, 82 Idaho 104, 350 P.2d 211 (1960)); see also Lupis v. Peoples Mortg. Co., 107 Idaho 489, 690 *342P.2d 944 (Ct.App.1984); Knoke v. Charlebois, 107 Idaho 427, 690 P.2d 362 (Ct.App.1984). In my view, the majority opinion does not adequately give weight to the express terms of the contract and implies a nonexistent “or” when referring to available remedies. This by itself should demonstrate that the contract is not clear and unambiguous.
Assuming arguendo, that the language of Appendix B is clear and unambiguous, it is my view that the trial court’s interpretation is the better reasoned analysis. However, after considering the agreement as a whole, I am persuaded that Appendix B is reasonably subject to conflicting interpretation that requires ascertaining the intent of the parties and precludes resolution of this case on summary judgment.
Accordingly, to this extent I respectfully dissent from part III of the majority opinion.