Charles L. Anania v. Snowshoe Mountain, Inc. ( 2014 )

STATE OF WEST VIRGINIA
SUPREME COURT OF APPEALS
Charles L. Anania, FILED
Plaintiff Below, Petitioner May 30, 2014
RORY L. PERRY II, CLERK
SUPREME COURT OF APPEALS
vs) No. 13-0406 (Pocahontas County 06-C-53) OF WEST VIRGINIA
Snowshoe Mountain, Inc., doing
business as Snowshoe Mountain Resort,
Defendant Below, Respondent
MEMORANDUM DECISION
Petitioner Charles L. Anania, by counsel Joshua I. Barrett and Robert M. Bastress III,
appeals the order of the Circuit Court of Pocahontas County, entered March 25, 2013, granting
summary judgment in favor of Respondent Snowshoe Mountain, Inc. Respondent appears by
counsel John Philip Melick, Ellen S. Cappellanti, and Ryan J. Aaron.
This Court has considered the parties’ briefs and the record on appeal. The facts and legal
arguments are adequately presented, and the decisional process would not be significantly aided
by oral argument. Upon consideration of the standard of review, the briefs, and the record
presented, the Court finds no substantial question of law and no prejudicial error. For these
reasons, a memorandum decision affirming the circuit court’s order is appropriate under Rule 21
of the Rules of Appellate Procedure.
Petitioner is the representative property owner in this class action challenging the method
in which respondent, a resort area, calculates annual assessments for safety provisions and the
upkeep of common areas in its domain.1 The source of authority for the collection of the
assessments is the “Declaration of Restrictions, Conditions, Easements, Liens and Charges”
dated June 14, 1974 [hereinafter, “the declaration”], and later recorded in the Pocahontas County
Clerk’s Office, which provides in part:
1
Assessments are collected from approximately 2,000 property owners. The total amount
collected annually has ranged from $1.5 million to $3 million since 2001. As the circuit court
explained, there are two “sections” of membership in this class action. Section A of the class is
made up of people who were owners of realty at Snowshoe Mountain Resort as of September 21,
2010. Section B is comprised of people invited to opt into the class, who owned subject property
between November 27, 1995, and September 21, 2010, but did not own as of September 21,
2010. Petitioner purchased property in the Westridge subdivision of Snowshoe Mountain in
September of 2003, and later conveyed the property by unrecorded deed to a limited liability
company, of which he has a one-third interest.
1
XIII
Assessment By Snowshoe and
Lien Therefore
A. Each owner or purchaser of a lot shown on the herein referred to map or plat
shall by acceptance of a deed thereto or by the signing of a contract or an
agreement to purchase the same, whether from Snowshoe or a subsequent owner
or purchaser of such lot, covenant, agree and bind himself, his heirs, personal
representatives, successors and assigns to pay an annual assessment, determined
as hereinafter provided, for the maintenance and care of the roads, streets, alleys,
sidewalks, parks, common areas and common facilities in and around Snowshoe
to which lot owners have a right of use or access, and for fire and police
protection, and for such other services as may be made available to lot owners or
purchasers by Snowshoe.
B. Until such time as a lot owner or purchaser shall commence the construction of
improvements upon his lot, the annual assessment as aforesaid shall be an amount
equal to one-half (1/2) of one percent (1%) of the list purchase price of the lot at
the time of purchase.
C. Effective on June 1 of the year following the year in which the construction of
improvements commences upon a lot, the annual assessment as aforesaid shall be
an amount not to exceed, in the absolute and sole discretion of Snowshoe, a sum
equal to 1 ½ percent of the taxable (assessed) value of the lot.[2]
D. The statement or bill for the aforesaid applicable annual assessment for each
year (or for a pro rata portion thereof for the year in which the purchase was
made) shall be rendered by Snowshoe in July of each year and is payable at any
time thereafter and shall be due by October of such year. Any permissible
increase in the assessment contained herein shall be based upon the percentage
increase in the said Consumer’s Price Index, or any successor index thereto,
during the twelve calendar months preceding the end of the month prior to the
month in which Snowshoe renders the annual statement for assessments.[3]
The declaration was drafted by respondent’s predecessor; respondent has owned
Snowshoe Mountain Resort since 1995.4 Petitioner filed his complaint in 2006, asserting, among
2
Though Paragraph C permits respondent to exercise its “absolute and sole discretion” in
this matter, the circuit court noted that, historically, respondent has established the amount of
annual assessments in a budgeting process “accomplished in concert” with the Snowshoe
Property Owners Council.
3
This appears to be the first and only reference in the declaration to the consumer price
index.
4
Subsequent declarations have been recorded, though not all were included in the
appendix record on appeal. The parties included a declaration recorded in 1977 for comparison
2
other grievances, that respondent breached the parties’ contract by using an improper formula to
calculate annual assessments.5 The crux of petitioner’s position was that the 1.5% provided in
Paragraph C is intended to apply to the “base year” only, and Paragraph D calls for the
application to the base amount of a multiplier not exceeding the consumer price index for the
prior twelve-month period.6 After a lengthy period of discovery, the parties each filed a motion
for summary judgment, and the circuit court granted respondent’s motion by order entered
March 25, 2013. In doing so, the circuit court explained that Paragraphs C and D are “inherently
inconsistent” and that Paragraph D is a boilerplate escalator clause mistakenly included by the
drafter.7 Based on this determination, the circuit court concluded that Paragraph C alone guided
the calculation of the assessments for all years following the year in which construction
commenced, and respondent had appropriately computed the obligations.
purposes, noting that Paragraph D was identical in the 1974 and 1977 versions; however,
petitioner’s deed references only the 1974 declaration.
5
Petitioner also asserted fraud for respondent’s “misrepresentation” that the assessments
were correctly made, as well as breach of the duty of good faith and fair dealing. On appeal,
petitioner challenges only the grant of summary judgment with regard to the breach of contract
claim.
6
We borrow this explanation of the Consumer Price Index, or “CPI”:
The CPI is a periodic statistical measure, undertaken by the United States
Department of Labor, of the average change in prices in a fixed market basket of
goods. The CPI, as a whole, entails approximately thirty separate indexes. Since
its inception during World War I the index has undergone several revisions. The
“general summary” or comprehensive index represents the broadest of all of the
separate indexes in the CPI. Among the additional indexes are ones which cover
particular geographic regions, metropolitan areas and population-size groups.
However, the comprehensive index stands as the primary listing in the group of
indexes known together as the CPI.
Trautman v. Hill, 116 Idaho 337, 340, 775 P.2d 651, 654 (Idaho App.1989) (citations omitted).
7
The Department of Labor warns: “[W]hen an escalation contract is tied to the CPI, the
index to be used should be spelled out clearly in the contract to avoid potential conflicts, as the
Bureau of Labor Statistics cannot mediate disputes which might arise between the parties to an
escalation agreement.” http://stats.bls.gov/cpi/cpifaq.htm#Question_14. The Bureau of Labor
Statistics offers a number of suggestions for parties using a consumer price index as an escalator,
including: (1) clearly define the base payment that is subject to escalation; (2) identify the index
series that will be used for escalation; and (3) specify a reference period from which changes in
the index will be measured. http://stats.bls.gov/cpi/cpi1998d.htm. However, one court has
written: “When used without qualification, [the CPI] is generally taken to mean the national
average figures.” Satterfield v. Layton, 669 S.W.2d 287, 288-89 (Mo. App. 1984).
3
Petitioner appeals the circuit court’s grant of summary judgment in favor of the
respondent. This Court reviews a circuit court's entry of summary judgment under a de novo
standard of review. Syl. Pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). In
conducting a de novo review, this Court applies the same standard for granting summary
judgment that a circuit court must apply. United Bank, Inc. v. Blosser, 218 W.Va. 378, 383, 624
S.E.2d 815, 820 (2005). Further, “[s]ummary judgment is appropriate if, from the totality of the
evidence presented, the record could not lead a rational trier of fact to find for the nonmoving
party, such as where the nonmoving party has failed to make a sufficient showing on an essential
element of the case that it has the burden to prove.” Syl. Pt. 2, Williams v. Precision Coil, Inc.,
194 W.Va. 52, 459 S.E.2d 329 (1995). “‘[T]he party opposing summary judgment must satisfy
the burden of proof by offering more than a mere ‘scintilla of evidence’ and must produce
evidence sufficient for a reasonable jury to find in a nonmoving party’s favor.’ Anderson [v.
Liberty Lobby, Inc.], 477 U.S. [242] at 252, 106 S.Ct. [2505] at 2512, 91 L.E.2d [202] at 214
[1986].” Williams, 194 W.Va. at 60, 459 S.E.2d at 337. We also reiterate: “The interpretation of
[a] . . . contract, including the question of whether the contract is ambiguous, is a legal
determination that, like a lower court’s grant of summary judgment, shall be reviewed de novo
on appeal.” Syl. Pt. 2, Riffe v. Home Finders Assocs., Inc., 205 W.Va. 216, 517 S.E.2d 313
(1999). It is a settled principle, long recognized in this state that “‘[i]t is the province of the
[c]ourt, and not of the jury, to interpret a written contract.’ Syl. Pt. 1, Stephens v. Bartlett, 118
W.Va. 421, 191 S.E. 550 (1937).” Syl. Pt. 1, Orteza v. Monongalia County General Hospital,
173 W.Va. 461, 318 S.E.2d 40 (1984).
Petitioner puts forth four assignments of error on appeal, all concerning the circuit court’s
interpretation of the declaration. We begin our discussion with the following basic principles:
In construing the terms of a contract, we are guided by the common-sense canons
of contract interpretation. One such canon teaches that contracts containing
unambiguous language must be construed according to their plain and natural
meaning. Payne v. Weston, 195 W.Va. 502, 507, 466 S.E.2d 161, 166 (1985).
Contract language usually is considered ambiguous where an agreement’s terms
are inconsistent on their face or where the phraseology can support reasonable
differences of opinion as to the meaning of words employed and obligations
undertaken. In note 23 of Williams [v. Precision Coil, Inc.], 194 W.Va. [52,] at
65, 459 S.E.2d [329,] at 342 [(1995)], we said: “A contract is ambiguous when it
is reasonably susceptible to more than one meaning in light of the surrounding
circumstances and after applying the established rules of construction.” (Emphasis
added).
Fraternal Order of Police, Lodge No. 69 v. City of Fairmont, 196 W.Va. 97, 101, 468 S.E.2d
712, 716 (1996). In syllabus point one of Berkeley County Public Service District v. Vitro Corp.
of America, 152 W.Va. 252, 162 S.E.2d 189 (1968), this Court cautioned that “[t]he mere fact
that parties do not agree to the construction of a contract does not render it ambiguous. The
question as to whether a contract is ambiguous is a question of law to be determined by the
court.” Accord Pilling v. Nationwide Mut. Fire Ins. Co., 201 W.Va. 757, 759, 500 S.E.2d 870,
872 (1997). Construction of the language is undertaken only when it is determined that an actual
ambiguity exists. “Only if the court makes the determination that the contract cannot be given a
4
certain and definite legal meaning, and is therefore ambiguous, can a question of fact be
submitted to the jury as to the meaning of the contract. It is only when the document has been
found to be ambiguous that the determination of intent through extrinsic evidence becomes a
question of fact.” Payne v. Weston, 195 W.Va. 502, 507, 466 S.E.2d 161, 166 (1995).
First, petitioner argues that the circuit court “changed” contractual language by omitting
Paragraph D from its reading of the applicable declaration. In that vein, he argues in his fourth
assignment of error that the circuit court erred when it made the unsupported factual
determination that the inclusion of Paragraph D in respondent’s predecessor’s draft of the
declaration was the result of mistake. It is worth noting that petitioner purchased property in the
resort area in 2003, and respondent purchased Snowshoe Mountain in 1995. Neither participated
in the drafting of the declaration in 1974, and the parties concede that there is no evidence of the
drafter’s intent. However, Paragraph C unequivocally grants respondent “absolute and sole
discretion” to annually calculate assessments up to 1.5% of the assessed taxable value of the lot.8
We find no plain language restriction in that paragraph suggesting that a “base” is established in
the year after construction is completed. Furthermore, petitioner’s proposed construction is
unreasonable. As the circuit court explained, petitioner’s interpretation potentially commits
respondent indefinitely to an assessment base before property value is realized, and leaves that
base susceptible to manipulation by a property owner who may choose to delay improvements.
Again, the language in the declaration contained in Paragraph C is clear, vesting “absolute and
sole discretion” with respondent. We thus agree with the circuit court that the declaration is not
ambiguous because the mistaken inclusion of the Paragraph D escalator clause is apparent on the
face of the document.
We now consider petitioner’s third assignment of error, in which he argues that the
circuit court failed to apply rules of construction favoring him. As the circuit court aptly
explained, the instrument must be construed against the grantor only if the language is
ambiguous after consideration of the context and circumstances surrounding the contract
formation. McIntyre v. Zara, 183 W.Va 202, 206, 394 S.E.2d 897, 901 (1990). Upon the circuit
court’s acknowledgement that Paragraph D was clearly included by mistake, the terms of the
declarations had but one meaning. As we concluded in Pilling, “[a]lthough the contract at issue
in the present case is poorly drafted, its meaning can still be discerned.” Pilling at 759, 500
S.E.2d at 872.
For the foregoing reasons, we affirm.
Affirmed.
8
For these reasons, we also reject the argument supporting petitioner’s second assignment
of error that the circuit court failed to enforce clear contractual language. The clear language of
the declarations vests in respondent the “absolute and sole discretion” to calculate annual
assessments up to 1.5% of the assessed taxable value of the property.
5
ISSUED: May 30, 2014
CONCURRED IN BY:
Chief Justice Robin Jean Davis
Justice Margaret L. Workman
Justice Allen H. Loughry II
DISSENTING:
Justice Brent D. Benjamin
Justice Menis E. Ketchum
The circuit court attempted to clarify an ambiguous contract as if the contract were
affected by a simple scrivener’s error. In reality, we are faced with a substantive dispute that
requires greater attention than such treatment allows. While I acknowledge the difficulty
(attributable to a lack of historical evidence) facing a fact-finder in this case, I believe the result
reached by the circuit court unfairly affords a presumption to the drafting party. I do not find it
unreasonable that early purchasers may have wished to establish some degree of control over
their assessments. The characterization of the attempt as a mistake is perplexing, particularly in
view of a similar provision having been incorporated in the counterpart document for the sale of
condominium properties only three years after drafting of the 1974 declaration. The terms are
substantively confusing and capable of multiple interpretations, and therefore would be more
appropriately untangled by a jury.
I dissent.
6