Triple Peaks wins appeal

State court overturns Judge Doucette's ruling on ski area sale

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A lawsuit over the abandoned sale of the Steamboat Ski Area isn't over and could be headed for a trial in District Court.

On Thursday, the Colorado Court of Appeals reversed a Dec. 30, 2002, ruling by now retired Judge Richard Doucette against Triple Peaks LLC in its efforts to require American Skiing Co. to consummate the sale of the ski area.

Tim and Diane Mueller of Chester, Vt., the principals of Triple Peaks, filed a lawsuit in April 2002 seeking to force ASC to follow through on the $91.4 million sale of the Steamboat Ski Area to their group of investors. ASC countered that it was obligated to do no more than pay $500,000 in liquidated damages. Both sides sought to have the matter dismissed.

Now, the appeals court has ruled that Doucette was wrong to have dismissed the suit and sent it back to the local trial court. The appeals court, in an opinion written by Judge John R. Webb, did not award damages and stopped short of requiring ASC to follow through on the sale contract.

Tim Mueller said Thursday that it remains a possibility that he will attempt to acquire the Steamboat Ski Area.

"We're not ruling it out," Mueller said. "We're still considering it a viable option."

The Muellers signed a contract Jan. 7 to purchase Crested Butte Mountain Resort.

Mueller acknowledged in a February 2003 interview that there are circumstances under which he might have to be satisfied with seeking greater damages.

The Denver attorney for Triple Peaks, Joel Glover, said the appeals court ruling was welcome news.

"Our client is delighted to have its legal position vindicated," Glover said.

Mueller said he had anticipated the ruling.

"I was always confident of our position," he said. "This is the way we thought it would have come out very quickly."

ASC officials vowed Thursday to remain steadfast in their position.

In a statement approved by CEO B.J. Fair, ASC marketing executive Andy Wirth said ASC is convinced the contract obligates it to do no more than pay Triple Peaks the $500,000.

"While the company is reviewing all legal options, it's a certainty the company will appeal today's decision," Wirth said. "The company is clearly disappointed with the appellate court's decision, particularly in light of the Routt County Court's summary judgment (dismissal). It was in that summary judgment that the company's position was thoroughly supported, and the company feels it was a very well-reasoned summary judgment."

Mueller said his attorneys have advised him that ASC's options could include a further appeal to the entire Colorado Court of Appeals, which would involve additional judges in the decision. Alternatively, ASC could appeal to the Colorado Supreme Court, which is not obligated to hear the case.

The legal dispute over the ski area sales contract stems from the two sides' differing interpretations of language in the contract.

Both sides have agreed that ASC is in breach of the contract. ASC officials did not attend the closing in Manhattan in March 26, 2002. Instead of selling Steamboat to Triple Peaks, they opted to raise cash for their financially struggling company by selling the Heavenly Resort in California to Vail Resorts.

The dispute boils down to two words: "breach" and "terminate."

ASC argues that after it breached the contract, the sole remedy available to Triple Peaks was the liquidated damages.

Glover, on behalf of the would-be purchasers, argued Triple Peaks, and only Triple Peaks, had the right to "terminate" the contract in the event that ASC "breached," thereby kicking in the $500,000 penalty. However, he noted, Mueller never acted to terminate the contract.

Judge Webb, along with judges Jose D.L. Marquez and Daniel M. Taubman, agreed with Glover's position.

A section of the contract "permits, but does not require, the innocent party to elect termination upon the other party's 'material breach' if the closing does not occur as a result of the breach," Webb wrote. "Thus, in our view, absent an election to terminate ... the agreement (to sell) continues to exist, despite occurrence of a material breach."

In remanding the suit back to the 14th Judicial District for "further proceedings," the appeals court acknowledged the passage of time and the impact that could have on the sales contract.

"The effect of circumstances that may have arisen during the 20 months since seller refused to close, if any, and the availability of actual damages in the event that specific performance is no longer a viable remedy, are matters that should be addressed first by the trial court," the court wrote.

The Muellers own Okemo Mountain, Vt., and Mount Sunapee, N.H., in addition to their purchase of Mount Crested Butte.

-- To reach Tom Ross call 871-4205

or e-mail tross@steamboatpilot.com

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