                                    No. 12292

            I N THE SUPREME C U T O THE STATE O M N A A
                             OR F              F OTN

                                      1972



STATE O M N A A ex rel. YELLOWSTONE P R COMPANY,
       F OTN                         AK

                               Relator,



T E DISTRICT COURT O THE FOURTH JUDICIAL DISTRICT O
 H                  F                              F
THE STATE O MONTANA, I N AND FOR THE COUNTY O MISSOULA, THE
           F                                 F
HONORABLE E. GARDNER BROhNLEE, JUDGE PRESIDING,

                               Respondents.



O r i g i n a l Proceedings.

Counsel of Record:

      For Appellant :

            Gough, Booth, Shanahan and Johnson, Helena, Montana,
            C o r d e l l Johnson, Helena, Montana, argued.

      For Respondent :

            Tipp, Hoven and B r a u l t , Missoula, Montana.
            Vernon Hoven argued, Missoula, Montana.



                                                Submitted: June 1 6 , 1972
                                                  Decided : O C T ] 8 192
PER CURIAM:
      R e l a t o r , Yellowstone Park Company, a p p l i e d t o t h i s Court
f o r a w r i t of supervisory c o n t r o l o r o t h e r a p p r o p r i a t e order
g r a n t i n g r e l i e f from t h e order of t h e d i s t r i c t c o u r t of t h e
f o u r t h j u d i c i a l d i s t r i c t , county of Missoula, dated May 25, 1972,
wherein t h e d i s t r i c t c o u r t granted p l a i n t i f f s ' motion f o r
summary judgment on t h e i s s u e of l i a b i l i t y .           This Court issued
an order t o show cause on June 5 , 1972.                      B r i e f s were submitted
and o r a l argument had.
      Relator Yellowstone Park Company i s t h e defendant i n two
s e p a r a t e c i v i l a c t i o n s consolidated f o r t r i a l i n t h e d i s t r i c t
court.      The d i s t r i c t c o u r t c a s e s a r e : "Handee Foods, Inc.,
P l a i n t i f f v. Yellowstone Park Company, Defendant", Cause No.
35336; and " ~ a t i o n a lBusiness Factors, Inc.,                  P l a i n t i f f v,
Yellowstone Park Company, Defendant", Cause No. 35799.
      P l a i n t i f f s f i l e d a motion f o r summary judgment which was
heard by t h e d i s t r i c t c o u r t on May 25, 1972.              O t h e same d a t e ,
                                                                        n
t h e d i s t r i c t c o u r t entered i t s order g r a n t i n g summary judgment
i n p a r t on the question of l i a b i l i t y i n both cases.
      From t h e p r e t r i a l o r d e r , t h e agreed statement of f a c t
reads :
      "Handee Foods, Inc. i s a business located i n Missoula,
     Montana, represented by M r . F. W. Krieger, General
     Manager and President of t h e Company,                      It i s a d i s t r i -
     b u t o r of so-called 'convenience foods', which a r e foods
      t h a t have been pre-cooked, r e f r i g e r a t e d , and kept i n a
     r e f r i g e r a t e d condition u n t i l such time asbthey a r e ' r e -
     c o n s t i t u t e d ' o r cooked f o r s e r v i c e t o a customer.           It
     does not s e l l t o t h e general p u b l i c , b u t s e l l s t o i n s t i -
      t u t i o n s , r e s t a u r a n t s , and i n g e n e r a l , t h e wholesale and
    retail market.    Handee Foods has '0 degree' storage
    facilities, located in Livingston, Montana, that are
    capable of handling large supplies of frozen food
    products over extended periods of time.
    "H. Shenson, Inc. is a corporation located in San
    Francisco, California, and is a meat purveyor, that
    sells generally to the retail market, institutions,
    restaurants, and similar situated businesses.    It
    likewise 'breaks' or 'cuts up' meats, refrigerates
    the same, and offers them to its prospective customers.
    In the cause now before the Court, H. Shenson, Inc.
    is represented by Mr. Bud Murphy, Sales Manager for
    that company, National Business Factors, Inc., plain-
    tiff herein, is the owner and holder of the account of
    H. Shensan, Inc., by virtue of an assignment made to it
h


    by H. Shenson, Inc.
     e ell ow stone Park Company is a corporation which operates
    as a concessionaire under a concession agreement it has
    with the United States Department of Interior, National
    Park Service.    Its activities in Yellowstone National
    Park include the owning and operating of several different
    hotels and restaurants which provide food and beverage
    service to the traveling public.
    "The business of Yellowstone Park Company is highly
    seasonal with the primary concentration of visitors to
    the Park being in the months of June, J'uly and August of
    each year. Yellowstone Park Company is represented in
    this matter by Mr. R.L. Boyd, its Vice President and Con-
    troller, Mr. Peter Rogers who was the Food and Beverage
    Director for Yellowstone Park Company in 1969 and 1970,
    and Mr. Percy Butler, who is the Executive Chef for Yellow-
    stone Park Company. II
    According to the pretrial order, plaintiffs contend:
    1. That Yellowstone Park Company was to use all of the
products ordered from Shenson, Inc. and Handee Foods, Inc,,
during the Yellowstone Park season of 1970, or to pay for such
products as were not used,
    2.   That the total amount of the products for which
Yellowstone Park Company is obligated to pay, is to Shenson
Meats the sum of $4,119.12, and Handee Foods, Inc., in the
sum of $36,621.52.
    3.   That Handee Foods, Inc., in addition to the price of
the goods as represented by the account, is entitled to the
cost of storage at the Livingston warehouse, at the rate of
$600 per month from October 1, 1970, to date.
   According to the pretrial order, defendant contends:
    1. That under the terms of the agreement between Yellowstone
Park Company and Handee Foods, Yellowstone Park Company issued
its purchase orders for estimated approximate usages for the
1970 season and Yellowstone Park Company was obligated to pay
for and did pay for only those items that were ordered specifi-
cally for delivery and delivered to Yellowstone Park Company
in Yellowstone National Park; and that the total price of the goods
so delivered under the terms of the agreement was $630,711.73, and
that the exact same amount, $630,711.73, was paid by Yellowstone
Park Company to Handee Foods, Inc.
    2.   That it was the intent of the parties to the agreement
that Handee Foods, Inc. would be responsible for any oversupply
of food products left on hand in the Handee Foods warehouse in
Livingston at the end of the 1970 season.
    3. That Yellowstone Park Company has paid for all of the
goods delivered to it by Handee Foods, Inc, and Yellowstone
Park Company does not owe Handee Foods, Inc. $36,621,52 or any
other amount.
    4 That, in connection with t k .claim of H. Shenson, Inc.,
     .
Yellowstone Park Company has paid for all of the goods de-
livered directly from H. Shenson, Inc. to Yellowstone Park
Company and Yellowstone Park Company does not owe H. Shenson,
Inc, or National Business Factors, its assignee, the sum of
$4,119.12 or any other amount.
    5.   That, under no circumstances, and particularly under
the circumstances that exist in this case, would Handee Foods
be entitled to any amount of damages representing storage costs
incurred by Handee Foods, Inc. at the warehouse it rented in
Livingston.
    Subsequently, plaintiffs moved for summary judgment and
the district court issued an order granting summary judgment
on the question of liability. That order states in part:
   "On December 9, 1969 the Defendant wrote a letter
   to the Plaintiff. Plaintiff contends the letter is
   a writing expressing the agreement between the parties.
   Determination of that point before the trial is very
   necessary. If the writing contains the agreement of
   the parties, and if the Court can determine from the
   writing who is the actual owner of the food items that
   remained in the warehouse at the end of the 1970 season,
   then the question of liability is settled and no parol
   evidence would be permitted to show any other oral
   agreement.
    "In the opinion of the Court the letter does settle
    the question of liability and therefore parol evidence
    would not be admissible to vary any of its terms. The
    letter was written by the Defendant and must be inter-
    preted as provided in Chapter 7, of Title 13, RCM 1947,
    and as provided in 13-720, the words are to be interpreted
    most strongly against the party who put them in the
    writing. II
    The letter referred to in the court's order reads:
    "Mr. Fritz Krieger
    "Handee Foods Incorporated
    "802 Milton
    11
      Missoula, Montana 59801
    "Dear Fritz :
    "So that we keep up to date with each others progress,
    we are still going ahead as scheduled on converting our
    food program to total convenience. We are in the process
t h i s month of preparing our purchase orders f o r
convenience equipment t o t a l i n g some $144,000.00.
This equipment includes Thermotainers, Vischer
Steamers, Convection Ovens and a d d i t i o n a l f r e e z e r s .
John King, Plans and P r o j e c t s O f f i c e r and I have
spent t h i s p a s t month deciding what brands of equip-
ment we want t o buy and we r e c e n t l y returned from
t h e N w York Hotel Show, a t which time some of our
        e
questions were answered, a s t o t h e brand of equipment.
"At t h e same time, I am concerned about t h e progress
you a r e making, a s we a r e counting on you handling our
e n t i r e convenience food products, which w i l l be coming
from b a s i c a l l y t h r e e purveyors and i n a d d i t i o n , seven
small purveyors. I want t o make s u r e your warehouse
d e a l i s firm and t h a t you a r e ready t o proceed t o r e -
model t h e e x i s t i n g building. There i s going t o be a
huge volume and I want t o make s u r e you have ample
r e c e i v i n g , proper t i g h t c o n t r o l systems and t h a t you
a r e going t o have t h e equipment t o d i s t r i b u t e t h e product
throughout t h e Park. Nothing has changed r e l a t i v e t o
n i g h t d e l i v e r i e s a t four a r e a warehouses ehroughout t h e
Park.
1t
  I have made up t h e new menus and I am p u t t i n g them i n t o
f i n a l form f o r approval of p r i c e s t o t h e Government and
i t i s estimated t h a t we w i l l be purchasing through you,
some $650,000,00 t o $850,000.00 worth of product, Almost
a l l of t h i s product, t o t a l i n g c l o s e t o 100 i t e m s w i l l be
s e t f o r d e l i v e r y between A p r i l 1 and 15 t o your f a c i l i t i e s
i n Livingston. A s we have previously discussed, you w i l l
r e c e i v e 20% over and above t h e c o s t of t h e merchandise,
t o r e c e i v e , t o warehouse and t o d i s t r i b u t e t h e s e products
t o us. 20% w i l l be added t o t h e c a s e p r i c e on each item.
"On t h e b i g t h r e e d i s t r i b u t o r s , I have made, o r a i n t h e
                                                                              m
process of concluding arrangements whereby you w i l l be
a b l e t o pay t h e s e b i l l s i n t h r e e i n s t a l l m e n t s - June, J u l y
and August, even though t h e product w i l l have been d e l i v e r e d
i n A p r i l , However, such an arrangement i s n o t p o s s i b l y
where manufacturers a r e supplying only one item, such a s
our bacon Allentown, Pennsylvania; and our sausage from
Memphis, Tennessee; and our s t u f f e d baked p o t a t o from M i l -
waukee.
tI
  These awe j u s t examples of our one-item houses, whereby
t h e t r u c k load w i l l have t o be paid f o r by you a f t e r
d e l i v e r y , even though we do n o t consume t h e product i n i t s
e n t i r e t y u n t i l October.
It
 I n t h e near f u t u r e , I w i l l give you a l i s t of a l l t h e
purveyors and t h e i r products; t h e packing specs w i t h t h e
p r i c e t h a t you w i l l pay t o them and t h e p r i c e t h a t we w i l l
pay you which w i l l , of course, include 20% on top of t h e
factory price.
It
 Please keep m advised a s t o your progress, so t h a t I am
                e
assured you w i l l be i n t h e p o s i t i o n of handling our food
program f o r next year and succeeding years.
                                                         tt   Sincerely,

                                                    S/   " Peter
                                                         "Peter Rogers
                                                         It
                                                            Food & Beverage Director."
      The i s s u e before t h i s Court i s n o t confined s o l e l y t o t h e
question of whether t h e r e remains a genuine i s s u e of m a t e r i a l
f a c t concerning t h e oversupply of food i n t h e Handee warehouse
a t t h e c l o s e of t h e 1970 season b u t , r a t h e r , was t h e evidence
i n t h e record produced through discovery t h a t c r e a t e s t h i s
i s s u e properly excluded by the t r i a l c o u r t .                This evidence i n -
cludes par01 evidence by P e t e r Rogers, on behalf of defendant,
t h a t d i r e c t l y d i s p u t e s any i n f e r e n c e s i n t h e h e r e t o f o r e quoted
l e t t e r of December 9, 1969, t h a t defendant would be r e s p o n s i b l e
f o r oversupply; evidence of t h e course of conduct contained i n
defendants e x h i b i t s "F" and "G"             t o be construed with t h e l e t t e r ;
and a l s o evidence of "customs of t h e Trade".                         This a p p l i e s t o
Cause 35336, Handee Foods.                   I n Cause 35799, National Business
F a c t o r s , i t appears t h a t a l l items s o l d d i r e c t l y t o defendant
were paid f o r and t h e d i s p u t e concerns i t e m s handled through
Handee,and t h e u l t i m a t e i s s u e i n t h i s cause would be t h e same
a s t h a t of Cause 35336.
      The l e t t e r upon which t h e d i s t r i c t c o u r t based i t s d e t e r -
mination does n o t speak d i r e c t l y t o t h e i s s u e of oversupply a t
t h e c l o s e of t h e 1970 season,            Any determination must be had
from t h e general language contained i n t h e l e t t e r a s a whole,
a s was demonstrated by t h e d i s t r i c t c o u r t .             W hold t h e language
                                                                       e
t o be ambiguous and s u b j e c t t o a d d i t i o n a l c l a r i f i c a t i o n a s t o
t h e t r u e i n t e n t of t h e p a r t i e s under t h e a p p r o p r i a t e s e c t i o n s of
t h e Montana Uniform Commercial Code, T i t l e 87A, R.C.M.                            1947,
and more p a r t i c u l a r l y s e c t i o n s 87A-2-101,        et,seq.,       R.C.M.     1947.
      Section 87A-2-202, R.C,M.                 1947, provides:
      "Terms with r e s p e c t t o which t h e confirmatory
      memoranda of t h e p a r t i e s agree o r which a r e other-
      wise s e t f o r t h i n a w r i t i n g intended by the p a r t i e s
      a s a f i n a l ex                                     i t h respect
      t o such terms                                         n o t be con-
      t r a d i c t e d by                                   n t o r of a
      contemporaneous o r a l agreement b u t may be explained o r
      supplemented
              "(a) by course of d e a l i n g o r usage of t r a d e
              ( s e c t i o n 87A-1-205) o r by a course of per-
    formance (section 87A-2-208); and
        "b by evidence of consistent additional terms
         ()
    unless the court finds the writing to have been in-
    tended also as a complete and exclusive statement
    of the terms of the agreement," (Emphasis supplied).
    In the comment which follows Section 2-202, Uniform
Commercial Code, Uniform Laws Annotated, it is pointed out
that there are no prior uniform statutory provisions under
previous uniform codes. The comment then goes on to point
out that the purpose of Section 2-202, is to definitely
reject:
    "a
     ()   Any assumption that because a writing has been
    worked out which is final on some matters, it is to
    be taken as including all the matters agreed upon;
     ( ) The premise that the language used has the
    "b
    meaning attributable to such language by rules of
    construction existing in the law rather than the
    meaning which arises out of the commercial context
    in which it was used; and
    "c
     ()   The requirement that a condition precedent to
    the admissibility of the type of evidence specified
    in paragraph (a) is an original determination by the
    court that the language used is ambiguous.I I
    Paragraph (a) of section 8712-2-202, R.C.M. 1947, makes
admissible, evidence of course ofdealing, usage of trade and
course of performance to explain or supplement the terms of
any writing stating the agreement of the parties in order that
the 'trueunderstanding of the parties as to the agreement may
be reached.   Further, the course of actual performance by the
parties is considered the best indication of what they intended
the writing to mean.   See: Hunt Foods & Industries, Inc. v.
Doliner, 270 NeY.S.2d 937; Michael Schiavone & Sons, Inc, v.
Securalloy Company, In&., (D.C.Conn.   1970), 312 F.Supp. 801,
    The judgment of the trial court is reversed and the cause
remanded to the district court for trial in conformity with
this opinion.
