Mad River Boat Trips, Inc. v. Jackson Hole Whitewater, Inc.

Citations: 803 P.2d 366; 1990 Wyo. LEXIS 165; 1990 WL 209519Docket: 89-268

Court: Wyoming Supreme Court; December 21, 1990; Wyoming; State Supreme Court

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Mad River Boat Trips, Inc. (Appellant) appeals a district court decision that mandated the sale of two special use permits to Jackson Hole Whitewater, Inc. (Appellee) and awarded damages for breach of contract. The Supreme Court of Wyoming reviews the case, identifying key issues in the trial court's interpretation of the May 26, 1989 contract. 

Appellant argues that the trial court incorrectly assessed the parties' intentions regarding specific contract provisions, particularly by failing to recognize that consent from the U.S. Forest Service for an assignment in trust was a condition precedent to the sale. Additionally, Appellant contends that the trial court improperly severed Article 6.01 from the contract and disregarded the termination rights outlined in Article 4.03, which Appellant asserts it had invoked validly.

The contract stipulated the sale of two rafts and two special use permits for a total price of $75,000, with payments structured over time. Appellant sought the Forest Service’s consent to an assignment in trust, which would allow permits to revert to Appellant if Appellee defaulted on payments. However, the Forest Service denied this consent, citing concerns over its discretion in issuing permits. Consequently, Appellant informed Appellee that it could not proceed with the sale without this consent and offered to refund the initial payments upon the return of the rafts. The court's decision is reversed and remanded for further proceedings.

Appellee initiated legal action for specific performance of a contract, seeking a temporary restraining order and preliminary injunction to compel Appellant to provide permits, along with damages for breach of contract. The district court postponed the hearing on the temporary restraining order but set a date for the preliminary injunction, which was ultimately denied. The court determined the contract was unambiguous and could be interpreted without extrinsic evidence. Following further memoranda from both parties, the court ruled in favor of Appellee, mandating Appellant to fulfill its contractual obligations and scheduling a hearing for damages.

In its judgment, the court reiterated the contract's clarity, rejecting Appellant's argument that consent from the Forest Service for an assignment in trust was a precondition for delivering permits. The court declared this provision invalid and severable, as the Forest Service would not grant such consent. At the damages hearing, the court ordered Appellant to pay Appellee a total of $23,877.31, including lost profits, retail losses, attorney's fees, litigation costs, and post-judgment interest. Appellant appealed, asserting that the Forest Service's consent was indeed a necessary condition precedent for performance under the contract. The court acknowledged that a condition precedent must occur before a duty to perform is triggered and found that obtaining the Forest Service's consent was a mandatory requirement as per the contract's language.

The contract's default provisions reflect the parties' intent to secure the transaction through an assignment in trust, with the stipulation that upon the Appellee's payment of the principal, the Appellant must execute a release of this assignment. The transfer of permits was understood to be contingent on the Forest Service's consent to the assignment in trust. Appellee claims the district court rightly determined the contract's severability clause rendered the assignment in trust requirement null and void. The severability clause states that if any provision is found invalid or unenforceable, it does not affect the remaining provisions. The district court concluded the consent requirement was not a condition precedent or subsequent, thus making the assignment in trust unenforceable and severable from the contract. However, the ruling was reversed on the grounds that the parties intended for the consent requirement to be a condition precedent necessary for the contract’s effectiveness. The severability clause could not negate this intent. The court instructed the district court to order the Appellee to facilitate the transfer of special use permits back to the Appellant.

Justice Cardine dissented, arguing the contract is unambiguous and that the Assignment in Trust was intended as a severable provision rather than a condition precedent. He cited legal principles that conditions precedent should not be implied unless explicitly stated. Cardine emphasized that the contract did not indicate the Assignment in Trust provision would render the contract void if found unenforceable, and he supported the district court's order for specific performance.