MICHAEL MCAULIFFE; MCKENNA CONNOLLY; STEPHEN CONTI; STEVEN BEILEY; TERRY CHECHAKLI; NORMAN CHENEY; MATTHEW BALKMAN, individuаlly and on behalf of all others similarly situated, Plaintiffs - Appellants, v. THE VAIL CORPORATION, d/b/a Vail Resorts Management Company; VAIL RESORTS, INC., Defendants - Appellees.
No. 21-1400
United States Court of Appeals for the Tenth Circuit
June 6, 2023
PUBLISH. Appeal from the United States District Court for the District of Colorado (D.C. No. 1:20-CV-01121-RBJ). FILED June 6, 2023. Christopher M. Wolpert, Clerk of Court.
Michael J. Hofmann, Bryan Cave Leighton Paisner, LLP, Denver, Colorado (David L. Miller, Bryan Cave Leighton Paisner, LLP, Denver, Colorado; and Darci Madden, Bryan Cave Leighton Paisner, St. Louis, Missouri, with him on the brief) for Defendants – Appellees.
Before HOLMES, Chief Judge, McHUGH, and EID, Circuit Judges.
In March 2020, as COVID-19 spread across the United States, The Vail Corporation and Vail Resorts, Inc. (collectively, “Vail”) closed its ski resorts and did not reopen them until the start of the 2020–2021 ski season. Plaintiffs-Appellants (“Passholders”) are a group of skiers and snowboarders who purchased Epic Passes from Vail to access its resorts during the 2019–2020 ski season. Passholders, on behalf of themselves and a class of similarly situated individuals, brought contractual, quasi-contractual, and state consumer protection law claims all based on the same issue—Vail’s decision to close its ski resorts in March 2020 due to the COVID-19 pandemic without issuing refunds to Passholders. The district court granted Vail’s
The district court determined Passholders’ contractual and state consumer protection law claims failed based on its interpretation of two parts of the contract betwеen Passholders and Vail: (1) the meaning of “2019–2020 ski season” in the context of Vail’s promise that Passholders could access its resorts for the entire 2019–2020 ski season; and (2) the impact of a no-refund clause in the contract between Vail and Passholders on Passholders’ ability to seek refunds based on Vail closing its resorts prior to the end of the season. Although we do not agree with the district court’s interpretation of “2019–2020 ski season,” we are in accord with its
Therefore, we agree with the district court’s determination that Passholders failed to adequately plead their contractual claims. Recognizing that Passholders might amend their breach of contract and breach of warranty claims to seek other forms of relief, however, we vacate the dismissal of these two claims with prejudice and remand for the district court to modify its judgment to a dismissal without prejudice. Because Passholders’ breach of the implied covenant of good faith and fair dealing claim rested solely on Vail’s exerсise of its contractual right not to issue refunds, we affirm the dismissal of this claim with prejudice. We also affirm the district court’s dismissal of Passholders’ two quasi-contractual claims because Passholders failed to allege sufficient facts to show the claims were based on a dispute not already covered by their express contracts with Vail. Passholders attempted to plead these claims in the alternative, arguing their contracts with Vail may be illusory if interpreted to give Vail total discretion over the dates of the ski
As with Passholders’ breach of contract and breach of warranty claims, we conclude the district court correctly dismissed Passholders’ consumer protection claims. Although we conclude a reasonable jury could find that Vail acted unfairly or deceptively by advertising Epic Passes as providing access to its resorts for the entire 2019–2020 ski season, Passholders’ claims fail because they sought only refunds as a remedy for these claims—a remedy expressly prohibited by their contracts. Recognizing Passholders could refile these claims to seek an alternative remedy, however, we vacate the district court’s dismissal of Passholders’ state consumer protection law claims with prejudice so the district court may modify its dismissal of these six claims to be without prejudice.
I. BACKGROUND
A. Factual Background1
During the 2019–2020 ski season, Vail operated thirty-seven ski resorts and urban ski areas (collectively, “ski resorts” or “resorts”) across the United States and the world. The majority of these resorts were in the United Stаtes, located in fifteen separate states. To recreate in Vail’s various ski resorts, customers could buy lift tickets or Epic Passes. Lift tickets provided access to a specific ski area for a period
For the 2019–2020 ski season, Vail sold four types of Epic Season Passes at varying prices, providing different levels of access to its ski resorts. Vail’s most expensive pass, simply titled the Epic Pass, gave skiers and snowboarders unlimited access to most of Vail’s ski resorts, with the occasional exception of blackout dates at certain resorts. For 2019–2020, Vail advertised that the Epic Pass would provide “Unlimited, Unrestricted Skiing at [Its] Best Resorts.” Id. at 27–28. A lower cost version of the Epic Pass, the Local Epic Pass, provided “unlimited, unrestricted access” to many ski resorts, while providing more limited access to others. Id. at 28. Vail also sold Regional Epic Passes, that provided “unlimited, unrestricted access,” for a specific ski resort or specific set of resorts, although sometimes only on certain days of the week. Id. As a fourth option, Vail sold Specialty Epic Passes that were available to specific groups—such as service members, veterans, and students. Like Regional Epic Passes, Specialty Epic Passes provided access to a limited set of ski areas, sometimes only on certain days of the week, but for the full season. All four types of Epic Season Passes “were marketed to provide access to the ski areas for the entire 2019–2020 ski season.” Id. at 29.
For the 2019–2020 ski season, skiers and snowboarders could purchase the various Epic Passes either online or directly at one of Vail’s ski resorts.2 At the time, the Terms & Conditions for all of Vail’s websites stated that use of Vail’s websites was governed by Colorado state law and any legal proceedings against Vail must be brought in state or federal court in Denver, Colorado. To buy an Epic Season Pass, purchasers had to make an initial payment of forty-nine dollars and provide a credit card that Vail could charge for the outstanding balance in September 2019. Once purchasers made the initial payment, they were committed to paying the full price, as Vail did not allow cancellations or refunds. Passholders conceded in their operative complaint that “Vail’s website stated that 2019–2020 Passes were not ‘eligible for a refund of any kind.’” Id. at 30. Passholders understood this statement to mean they could not seek a refund based on personal reasons—not that Vail could close all its ski resorts prior to the end of the 2019–2020 ski season without refunding any portion of their payments.
The year 2020 brought unprecedented challenges, as the nation fell into the grip of the COVID-19 pandemic. On March 11, 2020, the World Health Organization classified the rapid spread of COVID-19 as a global pandemic, and a couple days later, the President of the United States declared a national emergency. COVID-19, a contagious respiratory virus, alarmed governments and the public because of its rapid, undetected spread across communities and the world. Starting in March 2020, state and local governments began responding to the pandemic by either restricting business operations or requiring them to shut down entirely.
In mid-March 2020, the media reported COVID-19 was spreading around ski areas in Colorado. Vail initially responded to the outbreak on March 15, 2020, announcing a temporary closure of all its ski resorts in North America through March 22, 2020. Two days later, Vail announced it would be closing all ski resorts in North America through the summer. Vail was requirеd to close “some or all of [its] resorts” in response to state or local mandates. Vail offered refunds for those who had purchased lift tickets for the week of March 15 through March 22, 2020, but it
Five of the Passholders, Ms. Connolly, Mr. Conti, Mr. Cheney, Mr. Beiley, and Mr. Balkman, contacted Vail seeking refunds for the unused portions of their passes, but Vail refused to return any payments. On April 27, 2020, after the initial complaint in this lawsuit had already been filed,11 Vail announced it would provide credits to individuals who purchased Epic Passes for the 2019–2020 ski season to use towards the purchase of an Epic Pass for the 2020–2021 ski season. The credits ranged from 20–80% of purchase price, based on what type of pass individuals had purchased and how many times they had used it. The credit offer had a deadline of September 17, 2020. At least 200,000 purchasers of 2019–2020 Epic Passes, including Passholders, chose not to accept the credit offer. Vail refused to issue refunds of any amount to Passholders.
B. Procedural Background
Starting in April 2020, Passholders impacted by Vail’s mid-March closure of its resorts filed multiple suits on similar legal theories in the United States District Court for the District of Colorado. The district court ordered that all related class action suits by Passholders be consolidated and appointed lead counsel for the
Passholders, pursuant to
Passholders’ first three causes of action alleged contractual violations: (1) breach of contract, alleging Vail breached its contract with Passholders and class members when Vail closed its resorts prior to the end of the 2019–2020 ski season without refunding any of the money it had received for Epic Passes; (2) breach of warranty, alleging Vail created an express warranty by advertising that Epic Passes would allow access for the entire ski season and then breached said warranty by closing early without issuing partial refunds; and (3) breach of the implied covenant of good faith and fair dealing, alleging “Vail acted dishonestly and/or outside the scope of accepted commercial practices to deprive Plaintiffs and the Class Members some benefit of the bargain originally intended by the parties”; id. at 38. In addition, Passholders brought two quasi-contractual causes of action, pleaded in the alternative
Vail responded to the complaint by submitting a
In their memorandum in opposition to Vail’s motion to dismiss, Passholders disputed Vail’s interpretation of their contracts. First, Passholders argued Vail’s promise of season-long access had to mean more than access for as long as Vail chose to keep its resorts open and was best interpreted based on the customary meaning of ski season—a season starting and ending based on snow and weather conditions. Passholders argued at minimum, the term “2019–2020 ski season” was ambiguous and they had based their claim on a reasonable interpretation of their contracts. Thus, they argued dismissal at the pleading stage was inappropriate. Passholders also contended the no-refund clause did not apply when Vail breached its contractual obligations. Turning to their quasi-contractual claims, Passholders argued the claims should not be dismissed because the court might determine Vail’s contracts with Passholders were unenforceable or silent as to refunds. Addressing their state consumer protection law claims, Passholders refuted Vail’s arguments, stating (1) the choice-of-law provision applied only to claims based on the contract;
After Passholders filed their class action claims against Vail, another group of skiers and snowboarders brought similar claims, also in the United States District Court for the District of Colorado, against Alterra Mountain Company (“Alterra”), another ski pass seller. See Goodrich v. Alterra Mountain Co., No. 20-CV-01057-RM-SKC, 2021 WL 2633326, at *1 (D. Colo. June 25, 2021) (Moore, J.). In Goodrich, Ikon passholders brought nearly identical claims against Alterra as those advanced against Vail here, and Alterra sought dismissal of the claims on the same grounds as Vail. See id. at *2–6. Specifically, Alterra argued the Ikon passholders’ contractual and state consumer protection law claims failed because Alterra had not promised them a season of any length and the passes were non-refundable. Id. This litigation and the Goodrich case were assigned to different judges in the District of Colorado. While Vail’s Rule 12(b)(6) motion was pending, the district court issued a decision in the Goodrich case, denying in part and granting in part Alterra’s Rule 12(b)(6) motion to dismiss. See id. at *15–16. The Goodrich court first explained the fact “[t]hat the date in which a ski season may end varies from season to season is not fatal to Plaintiffs’ claim for the 2019/20 ski season.” Id. at *3. Second, the court
After Passholders brought the Goodrich decision to the district court’s attention, the court ordered supplemental briefing on how the instant case differed, or did not differ, from Goodrich. Passholders argued the only differences between the two cases were minor and generally the analysis in the Goodrich decision applied to Vail’s pending motion to dismiss. In contrast, Vail argued there was a key factual difference because while Alterra did not allow refunds generally, Vail did not allow refunds “of any kind.” App. at 132. After receiving the supplemental briefs, the district court requested and Passholders provided copies of Vail’s advertisements and contract language referenced in Passholders’ complaint.
Ultimately, the district court granted Vail’s Rule 12(b)(6) motion and dismissed all of Passholders’ claims with prejudice. Addressing Passholders’ contract
Turning to Passholders’ quasi-contractual claims, the district court determined Passholders had not plausibly stated a claim for unjust enrichment or money had and received because Passholders and Vail had an enforceable contract covering the same subject matter.
Finally, the district court dismissed Passholders’ various claims based on state consumer protection laws because they failed to state a claim under the district court’s interpretation of “ski season” and the no-refund clause. The court assumed, without deciding, that the choice-of-law provision did not prevent Passholders from bringing the non-Colorado state claims. The court also chose to assume, without deciding, that Epic Passes were “services” under the
Having granted Vail’s Rule 12(b)(6) motion to dismiss all of Passholders’ claims, the court entered final judgment. Passholders timely filed a notice of appeal.
II. DISCUSSION
Exercising jurisdiction under
A. Standard of Review
We review the district court’s grant of a motion to dismiss for failure to state a claim de novo. Tavernaro v. Pioneer Credit Recovery, Inc., 43 F.4th 1062, 1066 (10th Cir. 2022). “Under
B. Passholders’ Contract Claims
The district court dismissed Passholders’ first three claims—(1) breach of contract, (2) breach of warranty, and (3) breach of the implied covenant of good faith and fair dealing. Because the district court’s decision was based on its interpretation of the underlying contract terms, we must determine whether its reading of the contract is correct. To place that discussion in context, we first decide what law controls our analysis. Concluding the contract is governed by Colorado law, we next
1. Choice of Law
Passholders and Vail agree that based on the choice-of-law provision, their contracts are governed by Colorado law. See App. at 84 (quoting choice-of-law provision as stating “[t]his agreement is governed by and interpreted in accordance with the laws of the State of Colorado”); see also App. at 67. Accordingly, we apply Colorado law. Grynberg v. Total S.A., 538 F.3d 1336, 1346 (10th Cir. 2008) (“Because the parties’ arguments assume that Colorado law applies, we will proceed under the same assumption.”). In doing so, we “follow decisions of the state’s highest court, or, when none is [o]n point, predict how it would rule on the issue.” Id. at 1354. “Our predictions may consider appellate decisions in other states with similar legal principles, federal district court decisions interpreting [Colorado] law, and the general weight and trend of authority.” Sinclair Wyo. Ref. Co. v. A & B Builders, Ltd., 989 F.3d 747, 766 (10th Cir. 2021) (internal quotation marks omitted).
2. Contract Interpretation under Colorado State Law
Under Colorado law, “[t]he primary goal of contract interpretation is to determine and give effect to the intent of the parties.” Ad Two, Inc. v. City & Cnty. of Denver ex rel. Manager of Aviation, 9 P.3d 373, 376 (Colo. 2000). “Interpretation of a written contract and the determination of whether a provision in the contract is ambiguous are questions of law.” Dorman v. Petrol Aspen, Inc., 914 P.2d 909, 912 (Colo. 1996). “The intent of the parties is to be determined from the contract
“Terms used in a contract are ambiguous when they are susceptible to more than one reasonable interpretation” Ad Two, Inc., 9 P.3d at 376. “The fact that the parties disagree as to [a term’s] meaning does not in itself create an ambiguity.” Kuta v. Joint Dist. No. 50(J) of Cntys. of Delta, Gunnison, Mesa & Montrose, 799 P.2d 379, 382 (Colo. 1990). “In ascertaining whether certain provisions of an agreement are ambiguous, the instrument’s language must be examined and construed in harmony with the plain and generally accepted meaning of the words employed.” Ad Two, Inc., 9 P.3d at 376. “When an ambiguity is found to exist and cannot be resolved by reference to other contractual provisions, extrinsic evidence must be considered by the trial court in order to determine the mutual intent of the parties at the time of contracting.” Pepcol Mfg. Co. v. Denver Union Corp., 687 P.2d 1310, 1314 (Colo. 1984). “Only after a contract is deemed ambiguous may the trial court use extrinsic evidence to assist it in ascertaining the intent of the parties.” Cheyenne Mountain Sch. Dist. No. 12 v. Thompson, 861 P.2d 711, 715 (Colo. 1993).
3. Passholders’ Breach of Contract Claim
Although we are not in complete agreement with the district court’s interpretation of Vail and Passholders’ contracts, we agree that Passholders’ breach of contract claim fails as currently pleaded. First, we conclude the contracts were ambiguous as to the meaning of “2019–2020 ski season,” and that Passholders’
To state a breach of contract claim, a party must plead sufficient facts to plausibly allege four elements: “(1) the existence of a contract; (2) performance by the plaintiff or some justification for nonperformance; (3) failure to perform the contract by the defendant; and (4) resulting damages to the plaintiff.” W. Distrib. Co. v. Diodosio, 841 P.2d 1053, 1058 (Colo. 1992) (internal citations оmitted). Passholders alleged in their complaint, and Vail has not disputed, that Vail entered contracts with them when Passholders purchased their Epic Passes. In these contracts, Vail promised to provide Passholders with varying levels of access to its resorts for the entire 2019–2020 ski season, and Passholders promised to pay the full price of the Epic Passes. Passholders claimed to have performed their contracts fully by paying the costs of their Epic Passes. Vail has not disputed that Passholders pleaded facts that plausibly satisfy the first two elements of their breach of contract claim.
Rather, the parties’ dispute centers on the third and fourth elements of the breach of contract claim, “(3) failure to perform the contract by the defendant; and (4) resulting damages to the plaintiff.” Id. at 1058. Passholders alleged that Vail failed to perform, resulting in damages to them, when it closed its resorts prior to the end of the “2019–2020 ski season” while “retaining the consideration received from [Passholders].” App. at 36. Vail countered that it fully performed under the contract, because it had not promised Passholders a ski season of any particular length and
a. Meaning of the term “ski season”
Because the term “ski season” is undefined in Passholders’ and Vail’s contracts, “we interpret it according to its plain meaning.” Renfandt v. N.Y. Life Ins. Co., 419 P.3d 576, 580 (Colo. 2018). “When determining the plain and ordinary meaning of words, we may consider definitions in a recognized dictionary.” Owners Ins. Co. v. Dakota Station II Condo. Ass‘n, Inc., 443 P.3d 47, 51 (Colo. 2019) (quoting Renfandt, 419 P.3d at 580). If the term “ski season” is “susceptible to more than one reasonable interpretation . . . [it is] ambiguous.” Ad Two, Inc., 9 P.3d at 376.
Although the full term “ski season” is not included in dictionaries, definitions of the term “season” are helpful in interpreting the term. Oxford English Dictionary most relevantly defines “season” as “[t]he portion of a year regularly devoted to a particular business, sport, or amusement, or when the greatest activity prevails therein. Often with defining word, as the fishing, hunting, publishing, racing, theatrical, holiday season.” Season, Oxford English Dictionary Online, https://www.oed.com (last accessed Jan. 25, 2023). Merriam-Webster Dictionary similarly defines “season” as “a period of the year characterized by or associated with a particular activity or phenomenon.” Season, Merriam-Webster Online Dictionary, https://www.merriam-webster.com/dictionary/season (last accessed Jan. 25, 2023). If the modifier “ski” is inserted into these definitions they would read,
Passholders and Vail proposed two alternative definitions of “ski season.” According to Passholders, the exact dates of a “ski season” vary annually, but the term refers to the period of time in which “snow conditions were such that skiing or snowboarding were [] possible.” App. at 27. Vail countered that the absence of a specific length of the 2019-2020 ski season in its contracts with Passholders should be read as leaving the duration of the ski season to Vail’s sole discretion, limited by the implied covenant of good faith and fair dealing. According to Vail, therefore, the 2019–2020 ski season ended when Vail closed its resorts in gоod faith due to the COVID-19 pandemic. The district court gave “ski season” a third construction, concluding the term referred to the period of time in which “skiing and snowboarding safely were possible.” Id. at 216.
Of these three interpretations, Passholders’ and the district court’s proposed definitions of “ski season” most closely align with the dictionary definition of “season.” “The portion of a year regularly devoted to [skiing],” could be the portion of the year that snow conditions make skiing and snowboarding possible or the portion of the year that skiing or snowboarding safely are possible. See Season, Oxford English Dictionary Online, https://www.oed.com (last accessed Jan. 25, 2023). Both Passholders’ and the district court’s interpretations of the term ski season
Vail argues on appeal that Passholders’ proposed interpretation of “ski season” is unreasonable because Passholders could not have reasonably expected Vail to allow access to its resorts when the conditions were unacceptably dangerous. According to Vail, Passholders’ proposed definition of ski season as referring to the period in which “snow conditions were such that skiing or snowboarding were [] possible,” App. at 27, would include times when snow conditions made skiing or snowboarding possible but dangerous. But considering Passholders’ complaint in its entirety, Vail’s attempt to cast Passholders’ interpretation of ski season as unreasonable is overly literal. As Passholders have explained on appeal, their complaint alleged, “the guiding principle for determining the end of the ski season should be consistency with the metrics that determined the end of the season during all prior years—snow conditions.” Appellants’ Br. at 16.
The term ski season in Passholders’ and Vails’ contracts is “susceptible to more than one reasonable interpretation.” Ad Two, Inc., 9 P.3d at 376. The term can be reasonably interpreted to mean a season ending when skiing and snowboarding are
b. Impact of the “no refund” clause
Passholders argue that Vail breached its contracts with them by closing its resorts prior to the end of the 2019–2020 ski season, and accordingly, Vail owes them refunds as a remedy for this breach. Because Passholders pray for relief only in
Vail’s website informed Passholders that 2019–2020 Epic Passes “were not eligible for a refund of any kind.” App. at 30.13 Accordingly, Vail argued the Passholders had failed to state a claim that Vail breached the contract by not providing a refund. Passholders argued in opposition to Vail’s motion to dismiss that the no-refund clause “cannot insulate [Vail] from its own breach” because “[w]hen the obligor breaches, contractual provisions against providing refunds are unenforceable.” Id. at. 74. Vail disagreed, asserting the no-refund clause meant what it said, and that Vail had no obligation to refund any pass payments regardless of the circumstances. The district court again took a middle route, concluding the no-refund clause barred recovery by Passholders so long as Vail acted in good faith. And because Passholders had conceded Vail acted in good faith in response to the COVID-19 pandemic, the district court granted the motion to dismiss with prejudice.
We now consider whether the district court was correct to dismiss the claim. Recall that at the pleading stage, Passholders needed to show only that their
A “refund” is a “[a] repayment; the return of money paid.” Refund, Oxford English Dictionary Online, https://www.oed.com (last accessed Jan. 25, 2023); see also Refund, Merriam-Webster Online Dictionary, https://www.merriam-webster.com/dictionary/refund (last accessed Jan. 25, 2023) (defining “refund” as “to give or put back” or “to return (money) in restitution, repayment, or balancing of accounts”). These definitions favor Vail’s interpretation of the contract—if Passholders agreed to purchase the Epic Passes knowing they could not receive a repayment or the return of money paid, then Vail could not be contractually obligated to do just that—return Passholders’ money paid to them based on the closure.
Passholders disagree, pointing to case law they claim suggests a more nuanced definition of “refund.” Passholders rely here, as they did in the district court, on the Goodrich decision from a different district judge in the District of Colorado, denying Alterra’s motion to dismiss Ikon passholders’ breach of contract claim based on a no-refund clause. 2021 WL 2633326, at *6. In Goodrich, the Ikon passholders’ contracts with Alterra contained a “Payment Plan & Cancellation Policy” stating that “ALL
In Allied, the Sixth Circuit applied Pennsylvania law to affirm the district court’s summary judgment ruling that U.S. Steel was entitled to recover a $10 million “non-refundable advance payment” under a contract with Allied. 726 F. App‘x at 281, 286–87. Although designated as “non-refundable,” the contract provided that U.S. Steel would recoup the $10 million through discounts on invoices for steel produced by Allied over 120 months under non-cancelable manufacturing contracts. Id. at 287–88. The Sixth Circuit held that Allied’s repudiation of its promise to provide manufacturing work prevented U.S. Steel from receiving the intended benefit of the bargain. Id. at 288. It therefore affirmed the district court’s summary judgment order in favor of U.S. Steel on its claim to recover the $10 million advance payment.
In reaching its decision, the Sixth Circuit relied on an analogous Pennsylvania Supreme Court decision, William F. Mosser Co. v. Cherry River Boom & Lumber Co., 138 A. 85, 88 (Pa. 1927). Id. at 286–87. There, the plaintiff paid a $150,000
The district court in Goodrich and Passholders’ argument in opposition of Vail’s motion to dismiss placed great weight on the Sixth Circuit’s Allied decision. See Goodrich, 2021 WL 2633326, at *6. However, the present facts involve neither a complete failure to perform nor a contract with express provisions calling for repayment of the advance through discounts on goods provided by the recipient over time. Further, the Allied decision applied Pennsylvania law as set forth by the Pennsylvania Supreme Court in Mosser. See Allied, 726 F. App‘x at 286–87. And because Allied is unpublished it lacks precedential authority even in the Sixth Circuit. Accordingly, Allied is not controlling here, where we must apply Colorаdo law to a contract that lacks any express provision for recoupment of the cost of the Epic passes and where Passholders have not alleged a complete failure to perform. Further, because Goodrich relied on Allied, we are similarly not persuaded by its analysis.
Although the Eighth Circuit’s analysis in Stokes is consistent with Colorado’s focus on the plain language of the contract, it is also distinguishable. The Stokes contract stated no refunds would be given for the exact reason the plaintiffs later sought refunds. The same is true of the other decisions relied upon by Vail. See Stathakos v. Metro. Transit Auth. Long Island R.R., 971 N.Y.S.2d 557, 558–59 (N.Y. App. Div. 2013) (holding plaintiffs failed to state a breach of contract claim seeking a refund for monthly train passes based on weather cancellations under a contract that stated no refunds would be given based on route cancellations and delays); see also Jacobs v. Metro. Transp. Auth., 11 N.Y.S.3d 702, 703–04 (N.Y. App. Div. 2020) (holding plaintiffs failed to state a claim for breach of contract based on metro line service disruptions where the Metro Authority expressly informed them that no refunds would be given based on service disruptions). Unlike these decisions, the contracts here contain no disclaimer focused on a ski season impacted by a global pandemic.
Consequently, the authorities highlighted by Passholders and Vail are not particularly helpful to our analysis. The case law identified by Passholders reveals that some courts have considered no-refund clauses inapplicable when one party wholly breaches, thereby eliminating an opportunity provided by the contract for recoupment of an advance. In turn, Vail points us to decisions that have enforced no-refund provisions expressly tied to the complained-of nonperformance. But neither Passholders nor Vail have directed us to Colorado law suggesting courts may deviate from the plain language of a contract containing a blanket prohibition on refunds. To the contrary, the Supreme Court of Colorado has repeatedly stated a contract’s “language must be examined and construed in harmony with the plain and generally accepted meaning of the words employed.” Ad Two, Inc., 9 P.3d at 376; see also Renfandt, 419 P.3d at 580 (“Where the [contractual] language is undefined, we interpret it according to its plain meaning.”).
Importantly, the contract does not include the limiting principle Passholders now invoke—that the passes would be eligible for a refund if Vail failed to fully perform its obligations. Although the no-refund clause “greatly limits the available damages [Passholders] can recover in the event of breach, it is not the courts’ role to create or enforce a different contract than the one the parties negotiated.” SOLIDFX, LLC v. Jeppesen Sanderson, Inc., 841 F.3d 827, 838 (10th Cir. 2016) (applying Colorado law and vacating portions of jury verdict awarding lost profits despite exclusion of such damages in the contract). Accordingly, because refunds are the only remedy sought by Passholders in their complaint, their breach of contract claim fails and was correctly dismissed by the district court. See Appellants’ Br. at 29 (“Plaintiffs do not allege that Vail was merely obligated to come up with some form of ‘compensation’ of its own choosing. Indeed, the term ‘compensation’ does not
This, however, does not prevent Passholders from seeking some other type of relief from Vail if they establish Vail breached its contracts with Passholders by closing its resorts prior to the end of the “2019–2020 ski season,” as that term is defined by the trier of fact. For example, Passholders could seek future access to Vail’s resorts for the amount of time Vail closed its resorts prior to the end of the 2019–2020 ski season.14 Accordingly, we vacate the district court’s dismissal with prejudice of this claim and remand for the court to modify its judgment to a dismissal
4. Passholders’ Breach of Warranty Claim
Like their breach of contract claim, Passholders’ breach of warranty claim fails because Passholders sought refunds as the sole remedy for the alleged breach—a
Passholders alleged that through its advertisements, Vail created an express warranty that Passholders would be able to access its ski resorts, subject to the various pass-level limitations, for the entire 2019–2020 ski season. Passholders alleged this warranty became a “basis of the bargain” as “[Passholders] and the Class relied on the Warranty in deciding to purchase a [p]ass from Vail.” App. at 37. Passholders alleged Vail breached this warranty when it closed its resorts prior to the
The district court granted dismissal of Passholders’ breach of warranty claim based on the same analysis it applied to Passholders’ breach of contract claim, determining Vail did provide Passholders access to its resorts for the entire 2019–2020 ski season and was not obligated to provide Passholders refunds.17 Accordingly, the district court determined Vail had not breached any warranty to Passholders. Although we disagree with the district court’s decision to the extent it relied on its erroneous interpretation of “ski season,” the claim fails as it stands because Passholders sought only refunds as a remedy for the alleged breach. As with the breach of contract claim, we vacate the district court’s dismissal with prejudice of this claim and remand for the district court to modify its judgment to a dismissal without prejudice so that Passholders may refile seeking relief not expressly barred by the contracts.
Passholders’ final contract claim alleged Vail breached the implied covenant of good faith and fair dealing “by failing to refund to [Passholders] the money paid for the unusable portion of their Epic Passes covering the dates when the resorts were closed due to the COVID-19 pandemic.” App. at 38. In opposition to Vail’s motion to dismiss, Passholders argued the breach was two-part. First, Vail announced the season was over when it closed its resorts in March 2020, rather than stating it was closing prior to the end of the season due to the pandemic. Second, based on its decision to treat its closure as the end of the season, Vail failed to issue refunds to Passholders. Unlike Passholders’ breach of contract and breach of warranty claims, Passholders alleged the failure to issue refunds was itself the breach of the implied covenant. See Appellants’ Br. at 44 (“Plaintiffs allege that Vail breached the duty of good faith by failing to recognize that because it closed its ski areas prior to the end of the 2019-2020 season it owed passholders pro-rated refunds.”); see also id. at 46 (“It was Vail’s failure to provide refunds that was inconsistent with reasonable expectations, and denied Plaintiffs the benefit of their bargain.” (emphasis in original)). Because Passholders’ contracts expressly disallowed refunds, the district court correctly granted dismissal of this claim.
“Colorado, like the majority of jurisdictions, recognizes that every contract contains an implied duty of good faith and fair dealing.” Amoco Oil Co. v. Ervin, 908 P.2d 493, 498 (Colo. 1995), as modified on denial of reh’g (Jan. 16, 1996). “Good
Passholders’ argument—that Vail breached the implied covenant by not issuing refunds—is not plausible under the plain language of the contract. As discussed above, the plain language of the no-refund clause, that Epic Passes were “not eligible for a refund of any kind,” App. at 30, means that Passholders could not reasonably expect a return of their money after purchasing the passes. Further, “the duty of good faith cannot be used to contradict terms or conditions for which a party has bargained.” ADT Sec. Servs., Inc. v. Premier Home Prot., Inc., 181 P.3d 288, 293 (Colo. App. 2007). Accordingly, Vail did not breach the implied covenant of good faith and fair dealing by refusing to issue refunds, and we affirm the dismissal of this claim with prejudice.
We now turn to Passholders’ two quasi-contractual claims: unjust enrichment and money had and received. Because they are based on issues covered by Passholders’ express contracts with Vail, the district court correctly granted Vail’s motion to dismiss these claims.
1. Unjust Enrichment
To state a claim for unjust enrichment, Passholders needed to allege sufficient facts to show: “(1) at [Passholders’] expense (2) [Vail] received a benefit (3) under circumstances that would make it unjust for [Vail] to retain the benefit without paying.” DCB Const. Co. v. Cent. City Dev. Co., 965 P.2d 115, 119–20 (Colo. 1998). Unjust enrichment is a quаsi-contractual claim, based on the law of restitution. See id. at 118–19. “A party generally cannot recover for unjust enrichment, however, where there is an express contract addressing the subject of the alleged obligation to pay.” Pulte Home Corp., Inc. v. Countryside Cmty. Ass’n, Inc., 382 P.3d 821, 833 (Colo. 2016); see also Dudding v. Norton Frickey & Assocs., 11 P.3d 441, 445 (Colo. 2000) (“[C]ourts will refuse quantum meruit recovery when expressly contrary to the provisions of the written contract between the parties.”).
Colorado courts have recognized two exceptional circumstances where a party could recover based on an unjust enrichment claim despite the existence of an express contract covering the same subject matter: (1) when “the express contract fails or is rescinded,” Pulte Home Corp., Inc., 382 P.3d at 833 (citing Dudding, 11 P.3d at 445); or (2) “the claim covers matters that are outside of or arose after the
Passholders argue on appeal that the district court erred in dismissing this claim by not recognizing that the Federal Rules of Civil Procedure allow for pleading in the alternative. But the district court did not dismiss Passholders’ unjust enrichment claim because it was pleaded in the alternative. Rather, Passholders did not plead any facts, whether in the alternative or not, that would plausibly state a claim for unjust enrichment. Passholders’ complaint does not allege facts supporting a finding that (1) there was no contract between Passholders and Vail, (2) the contract between Passholders and Vail has failed or should be rescinded, or (3) Passholders’ claim relating to the early closure of the resorts is outside the scope of the contract. Thus, their unjust enrichment claim does not fall into any of the exceptions recognized by Colorado.
Passholders also argue they pleaded sufficient facts to show their contracts with Vail may be illusory if Vail had sole discretion to decide when the 2019–2020 ski season ended. A contract is illusory when it “le[aves] sole discretion whether or not to perform to one party.” Bernhardt v. Hemphill, 878 P.2d 107, 111 (Colo. App. 1994) (citing Sentinel Acceptance Corp. v. Colgate, 424 P.2d 380 (Colo. 1967)). Passholders, however, did not allege that Vail had discretion over when the ski
2. Money Had and Received
Passholders’ second quasi-contractual claim, money had and received, fails for the same reason.18 Like unjust enrichment, a plaintiff cannot recover based on a money had and received claim where the claim is based on an allegation that defendant breached an express contract.
“A plaintiff can maintain an action for money had and received whenever the defendant ‘has received money which, in equity and good conscience, he ought to pay over.’” Monday v. Robert J. Anderson, P.C., 77 P.3d 855, 857 (Colo. App. 2003)
Colorado has adopted the “economic loss rule,” meaning “a party suffering only economic loss from the breach of an express or implied contractual duty may not assert a tort claim for such a breach absent an independent duty of care under tort law.” Town of Alma v. AZCO Const., Inc., 10 P.3d 1256, 1264 (Colo. 2000). “The key to determining the availability of a contract or tort action lies in determining the source of the duty that forms the basis of the action.” Id. at 1262. When the source of the duty is independent from any contract, the economic loss rule is not implicated. Id. But when the source of the duty is the contract itself, it “must be redressed under contract.” Id. (quoting Tommy L. Griffin Plumbing & Heating Co. v. Jordan, Jones & Goulding, Inc., 463 S.E.2d 85, 88 (S.C. 1995)).
Applying this test to Passholders’ claim, all of Passholders’ allegations stem from the contract between Passholders and Vail. Passholders alleged Vail wrongfully kept their money despite closing its resorts prior to the end of the 2019–2020 ski season. Passholders alleged they were promised access to Vail’s resorts for the entire 2019–2020 ski season in their contracts with Vail. Importantly, Passholders did not allege Vail violated any independent, common-law duty. Nor did Passholders plead
D. Passholders’ State Consumer Protection Law Claims
In addition to their contractual and quasi-contractual claims, Passholders brought six causes of action based on allegations that Vail violated various state consumer protection laws.19 These claims are all tied to an individual Passholder, who lives in the relevant state, as well as a sub-class of all Passholders from the relevant state.20 The specific elements of each of these causes of action vary according to the relevant state statute, but all of the claims require Passholders to demonstrate Vail engaged in a deceptive or unfair act or practice. On appeal, Vail has relied on one overarching argument to address these six claims—that it did not engage in any deceptive or unfair act when it sold the Epic Passes, advertising them as providing access to its resorts for the entire 2019–2020 ski season, and then closed
The district court granted dismissal on these six claims based on its interpretation of “2019–2020 ski season” and the no-refund clause. Because the district court determined “2019–2020 ski season” unambiguously referred to the period it was safe for Vail to keep its resorts open, the district court concluded Vail did not act unfairly or deceptively by advertising Epic Passes as providing access for the entire 2019–2020 ski season. The district court also concluded that even if Vail had failed to provide access for the entire ski season, Passholders could not have reasonably expected refunds when the advertisements for Epic Passes included no language such as “unlimited, unrestricted access or your money back[,]” id. at 234 (emphasis in original), and Vail’s representations “disclaimed ‘refunds of any kind,’” id. (quoting App. at 30).
For the six state consumer protection law causes of action to survive a
Only the first of these two allegations is potentially meritorious. As outlined above, the district court erred in its interpretation of “2019–2020 ski season” because the term was ambiguous and Passholders reasonably interpreted it to refer to the period of time in which skiing and snowboarding were practical based on weather conditions. Accordingly, Passholders have plausibly alleged the advertisements were unfair or deceptive as Passholders could have reasonably understood the advertisements to promise access to Vail’s ski resorts for a period longer than the resorts remained open. However, due to the no-refund clause, Passholders could not have been reasonably misled or deceived into believing Vail would provide refunds if it closed its resorts prior to the end of the season.
Ultimately, these six claims suffer the same fatal flaw as Passholders’ breach оf contract and breach of warranty claims. Based on Vail’s alleged violations of these six consumer protection statutes, Passholders seek refunds as a remedy. As discussed
III. CONCLUSION
We AFFIRM in part and VACATE in part. We AFFIRM the district court’s dismissal of Passholders’ implied covenant of good faith and fair dealing, unjust enrichment, and money had and received claims. We VACATE the district court’s dismissal of Passholders’ breach of contract, breach of warranty, and state consumer protection claims, so that the district court may modify the dismissal of these claims to be without prejudice.
EID, J., concurring in part and dissenting in part
The majority concludes that Passholders’ claims fail because the only relief they seek is a refund, and the agreement with Vail says in plain and unambiguous terms that there will be no refunds. See maj. op. at 26 (noting that passes “were not eligible for a refund of any kind” (quoting App’x at 30)). I agree. But I disagree with the majority’s decision to vacate the district court’s “with prejudice” dismissal in order to allow Passholders to amend their complaint to add a request for other forms of relief. As the district court found, Passholders are not interested in other forms of relief; they want “cash only.” App’x at 221. Moreover, Passholders did not argue below or in their submissions to us that the dismissal should have been without prejudice in order to allow them to amend. Accordingly, because I would affirm the district court’s dismissal order as it was issued—that is, with prejudice—I respectfully concur in part and dissent in part.1
I.
As an initial matter, the majority’s decision to vacate the district court’s “with prejudice” dismissal just gets the facts wrong. The majority repeatedly suggests that the dismissal should be without prejudice because Passholders may want to amend
Passholders could have asked the district court on reconsideration for a dismissal without prejudice and then sought to amend their complaint to seek additional non-cash relief. See
That Passholders have not challenged the “with prejudice” dismissal is not at all surprising, given that—as the district court correctly concluded—the core of their dispute with Vail is getting a cash refund. Passholders should not be given another bite at the apple to test other theories of recovery now that we have rejected their refund-only theory based on the plain and unambiguous “no refunds” language. The majority’s decision otherwise is counterfactual and unpreserved.4
Jurisdiction or the failure to exhaust administrative remedies in prisoner lawsuits has generally been the issue in the cases in which we have changed the district court’s dismissal to one without prejudice despite the futility of amendment in the instant case. See id. at 1219–20 (no jurisdiction); Hutchinson, 211 F.3d at 523 (no jurisdiction); Bauchman, 132 F.3d at 549–50, 561–62 (no jurisdiction); Gallagher, 587 F.3d at 1068 (failure to exhaust administrative remedies in prisoner suit); Fitzgerald, 403 F.3d at 1139–40 (failure to exhaust administrative remedies in prisoner suit). Neither of those is at issue here.
We have also changed a dismissal to be without prejudice as a form of compromise to effectuate a result in a case. See Fourth Corner Credit Union, 861 F.3d at 1053 (per curiam). However, the reasoning allowing such a dismissal without prejudice is not coherent enough to guide us here because every panel member wrote separately and had different rationales and desired judgments. One panel member “would [have] affirm[ed] the dismissal with prejudice.” Id. Another panel member “would [have] reverse[d] the dismissal of the amended complaint.” Id. Only one panel member wanted to “vacate and remand with instructions to dismiss the amended complaint without prejudice” and based this “on prudential ripeness grounds.” Id. The dismissal without prejudice effectuated the result of allowing the plaintiff “to proceed with its claims.” Id. But the only panel member arguing for this result did so on prudential ripeness grounds, id. at 1058–59 (Matheson, J., opinion)—which, as another panel member noted, may no longer be good law. See id. at 1076 n.13 (Bacharach, J., opinion) (citing Susan B. Anthony List v. Driehaus, 573 U.S. 149, 167 (2014); Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 125–26 (2014); Reddy v. Foster, 845 F.3d 493, 501 n.6 (1st Cir. 2017)) (noting that the Supreme Court has cast doubt on the continuing viability of prudential ripeness). As a result, this varied reasoning can hardly guide us in the present case.
II.
Because Passholders cannot recover refunds no matter how long or short the “ski season” is, I would not need to reach the question of how “ski season” should be defined. Indeed, the majority acknowledges that the definition of “ski season” only matters because, in its view, the dismissal should be vacated to allow Passholders to seek relief other than refunds. See maj. op. at 32–33, 35, 45. But setting this disagreement aside, the majority’s decision to vacate the “with prejudice” dismissal has collateral—and problematic—consequences.
The majority starts with the premise that “[w]hen a claim rests on intеrpretation of a contract, ‘ambiguous contract language may not be resolved in a motion to dismiss.’” Id. at 17 (quoting Sonoiki v. Harvard Univ., 37 F.4th 691, 711 (1st Cir. 2022)) (citing Orlander v. Staples, Inc., 802 F.3d 289, 295 (2d Cir. 2015); ASARCO, LLC v. Union Pac. R.R. Co., 765 F.3d 999, 1008–09 (9th Cir. 2014)). The majority also cites Jaeco Pump Co. v. Inject-O-Meter Mfg. Co., 467 F.2d 317 (10th Cir. 1972), for the proposition that “[o]nce it has been determined that a contract is ambiguous and that its construction depends upon extrinsic facts and circumstances, then the terms of a contract become questions of fact and are thereafter for the triers of fact to decide.” Id. at 24 (quoting Jaeco Pump Co., 467 F.2d at 320); see also id. (citing City of Farmington v. Amoco Gas Co., 777 F.2d 554, 560 (10th Cir. 1985)) (cited for same proposition). But the majority is wrong to suggest that these cases establish a general rule that under
We must apply Colorado law to interpret this contract and our law for procedural purposes. Yet the majority loses sight of both binding sources of law—improperly finding ambiguity where Colorado law does not support it and failing to follow our circuit’s case law on what kind of ambiguity prevents resolution at the motion to dismiss stage. The majority’s purported federal rule about when we can interpret contract language given differences in legal interpretations is not supported by the Tenth Circuit’s case law. See Metro. Paving Co. v. City of Aurora, 449 F.2d 177, 181 (10th Cir. 1971) (“[T]he mere fact that the parties to the contract disagree on the construction to be given it does not necessarily establish a case of ambiguity.” (citing generally Whiting Stoker Co. v. Chi. Stoker Corp., 171 F.2d 248 (7th Cir. 1949))). In neglecting to interpret the contract in this case at this stage of the litigation, the majority ignores our case law and improperly bases the decision in the law of other circuits. But even if this were our rule, the cited cases are inapposite because the contractual language here is not ambiguous in the same sеnse as the contractual language in the cited cases.
In determining ambiguity under Colorado case law, referring to Dorman v. Petrol Aspen, Inc., 914 P.2d 909 (Colo. 1996)—which the majority cites, see maj. op. at 18 (quoting Dorman, 914 P.2d at 912); id. at 19 (quoting Dorman, 914 P.2d at 911); id. at 26 (citing Dorman, 914 P.2d at 912)—is helpful but shows that Dorman is substantively unavailing here for the majority. In Dorman, the district court
Likewise, the majority cites Cheyenne Mountain School District No. 12 v. Thompson, 861 P.2d 711 (Colo. 1993), for the related proposition that “[o]nly after a contract is deemed ambiguous may the trial court use extrinsic evidence to assist it in ascertaining the intent of the parties.” Maj. op. at 19 (quoting Cheyenne Mountain Sch. Dist. No. 12, 961 P.2d at 715). Like Dorman, Cheyenne Mountain School District No. 12 was an employment contract dispute for which parol evidence was necessary to determine meaning. See Cheyenne Mountain Sch. Dist. No. 12, 861 P.2d at 715–16.
But the majority’s reliance on these cases does not further its argument that this contract is ambiguous under Colorado law. These cases did not involve simply judging competing interpretations. See id.; Dorman, 914 P.2d at 912–15. Indeed,
Unlike the parties in the majority’s cited cases, Passholders made the legal argument in the district court, and repeat it before us, that “ski season” should be defined as “when snow conditions and weather require[] closing.” App’x at 77 (Plaintiffs’ Response to Defendants’
Moreover, although Colorado case law provides that “[a] document is ambiguous ‘when it is reasonably susceptible to more than one meaning,’” Cheyenne Mountain Sch. Dist. No. 12, 861 P.2d at 715 (quoting N. Ins. Co. of N.Y. v. Ekstrom, 784 P.2d 320, 323 (Colo. 1989)), it is not determined to be ambiguous before considering local usage of terms in analyzing plain meaning: “In deciding whether a contract is ambiguous, a court ‘may consider extrinsiс evidence bearing upon the meaning of the written terms, such as evidence of local usage and of the circumstances surrounding the making of the contract,’” see id. (quoting KN Energy, Inc. v. Great W. Sugar Co., 698 P.2d 769, 777 (Colo. 1985)) (citing Pepcol Mfg. Co. v. Denver Union Corp., 687 P.2d 1310, 1314 n.3 (Colo. 1984)). “[T]he court may not consider the parties’ own extrinsic expressions of intent” at this stage. See id. (quoting KN Energy, Inc., 698 P.2d at 777) (citing Pepcol Mfg. Co., 687 P.2d at 1314 n.3). But that is unnecessary here. Even if we must use local custom in addition to common sense to determine the meaning of a ski season, that is done before declaring that a contract is ambiguous because it can be used “[i]n deciding whether a contract is ambiguous.” Id. (citations omitted). And here we can successfully use common
In my view, the district court’s reading of “ski season” is correct. That term cannot mean what Passholders propose—namely, that the ski season must go on even though it is unsafe to ski. See App’x at 215–16. Notably, the majority simply rejects this definition as “overly literal” (although apparently “reasonable”). Maj. op. at 23. There is no disputed fact issue. At issue is a legal interpretation question that we may decide at the motion to dismiss stage. The existence of competing arguments does not leave us helpless at the motion to dismiss stage. See Metro. Paving Co., 449 F.2d at 181 (citing generally Whiting Stoker Co., 171 F.2d 248).
In sum, even if Passholders had challenged the “with prejudice” dismissal and eventually amended their complaint to seek something other than a cash-only remedy, they still could not maintain a consumer protection claim under the theory proposed by the majority—namely, that under their definition of “ski season” that requires a season to continue as long as weather and conditions permit, “a reasonable jury could find that Vail acted unfairly or deceptively by advertising Epic Passes as providing access to its resorts for the entire 2019–2020 ski season.” Maj. op. at 4. Nor could they make out a contract or warranty claim under this theory. Cf. id. at
III.
For these reasons, I would affirm the district court’s judgment in its entirety and respectfully concur in part and dissent in part.