Steamboat Springs Tim and Diane Mueller's bid for a court order to force the sale of the Steamboat Ski Area could be snowed under.
District Court Judge Richard Doucette issued a summary judgment Tuesday in favor of American Skiing Company in a dispute over American Skiing's decision to abandon the sale of the ski area to Triple Peaks LLC, the investment group led by the Muellers.
Barring an appeal, the judge's order represents the end of the matter.
"I heard there had been an order, but I didn't know the result," Tim Mueller said when reached at a dinner party Tuesday night. "If it's negative, I'm very, very disappointed."
B.J. Fair, CEO of American Skiing said his management team has been focused on a future that includes Steamboat, even as the lawsuit has been working its way through the court system this year.
"We're just happy this is behind us right now," Fair said. "We have been acting and working with the management of Steamboat as if this were not occurring. We're committed to the future and success of Steamboat."
Steamboat Ski & Resort Corp. President Chris Diamond said his staff has become so accustomed to change it was unfazed by the lawsuit. But he believes this may prove to be a juncture when the entire community begins to embrace its future with ASC.
"(The suit) kept constant focus on the past, which isn't necessarily a good thing," Diamond said. "For our staff up here, they're so professional and change oriented, they just blew right through this. Lots of stuff has changed. I hope some of the people who are looking backwards can start looking forward with us."
Triple Peaks is a group of investors formed by the Muellers in 2001 to acquire the ski area. The Muellers, who own and operate Okemo Mountain Resort in Vermont, were the primary investors and Triple Peaks would have owned Steamboat, Okemo and Mt. Sunapee, N.H. American Skiing Company had announced its intent to sell Steamboat in the spring of 2001 as part of its ongoing efforts to get out from under a mountain of debt.
The two parties announced a $91.4 million sale price on Jan. 31, but on March 26, with Tim Mueller sitting at the closing table in Manhattan, ASC announced it was calling the sale of Steamboat off. Instead, the company announced its intent to sell Heavenly Resort, Calif., to Vail Resorts for between $96 and $99 million.
Fair said his company's sole motivation for selling either one of the resorts was to de-leverage debt. Delays in closing the Steamboat deal forced ASC to miss some deadlines with its creditors, and subsequently reevaluate the deal.
The Steamboat sale contract specified that in the event it was breached, American Skiing Company would be required to pay $500,000 in liquidated damages to Triple Peaks. Fair said ASC offered the $500,000 payment immediately upon withdrawing from the sale last spring, and remains prepared to do that today. However, Triple Peaks rejected the payment, insisting that the terms of the sale contract did not allow ASC to breach the contract. Attorneys for Triple Peaks argued before the court that the language of the contract allowed only Triple Peaks to back out of the deal.
Judge Doucette disagreed.
Acting on his last official day on the job before retiring, Doucette interpreted the language of the contract the same way attorneys for ASC had.
"The language of this agreement is clear and unambiguous, was bargained for by the parties, and was agreed upon by sophisticated negotiators," Doucette wrote, "The agreement will not be rewritten by this court."
The judge cited ample case law in reaching his decision, but it seemed to revolve around the interpretation of a key section of the contract which read: "The purchaser and the seller agree that the liquidated damages contemplated by this section shall be the purchaser's sole and exclusive remedy hereunder for breach by the seller..."
It was Doucette's judgment that the language of the contract was clear.
"By using the terms 'sole and exclusive remedy,' this court concludes the intent was to make this provision a substitute for performance and not merely security for performance," the judge wrote.
Mary Wells, a Denver attorney who represented ASC in the case, said she was convinced all along that the language in the contract was solidly consistent with well-established law.
"This case is on all fours with strong law in Colorado," Wells said. "The judge affirmed in every respect our position. He validated our reading of the contract."
Attorneys for Triple Peaks could not be reached Tuesday night.
Tim Mueller said he and his legal team would look into an appeal, but he said he was unable to comment on the judge's ruling because he had not yet seen it.