McAuliffe v. Vail Corp.
No. 21-1400. 6/6/2023. D.Colo. Judge McHugh. Class Action—Dismissal with Prejudice—Implied Covenant of Good Faith and Fair Dealing—Unjust Enrichment—Money Had and Received—Breach of Contract—Breach of Warranty—State Consumer Protection Claims.
June 6, 2023
During the 2019–20 ski season, The Vail Corporation and Vail Resorts, Inc. (collectively, Vail) operated ski resorts and urban ski areas (collectively, ski resorts) in 15 states. Customers could buy lift tickets or Epic Passes to recreate in the ski resorts. Lift tickets provided access to a specific ski area for a period of 1 to 14 days, while Epic Passes provided broader access throughout the ski season. For the 2019–20 ski season, Vail sold four types of Epic Passes at varying prices, providing different levels of access to its ski resorts, which were marketed to provide access to the ski resorts for the entire 2019–20 ski season. On March 15, 2020, in response to the COVID-19 pandemic, Vail temporarily closed its ski resorts in North America through March 22, 2020. Two days later, Vail extended that closure through the summer. Vail offered refunds to lift ticket purchasers for the week of March 15 through March 22, 2020, but it refused to provide refunds to Epic passholders. Vail did not reopen the ski resorts until the start of the 2020–21 ski season. Appellants (passholders) are skiers and snowboarders who purchased Epic Passes from Vail to access its ski resorts during the 2019–20 ski season. Passholders, on behalf of themselves and a class of similarly situated individuals, brought contractual, quasi-contractual, and state consumer protection law claims based on Vail’s decision to close its ski resorts in March 2020 without issuing them refunds. The district court granted Vail’s motion to dismiss all of passholders’ claims with prejudice for failure to state a claim.
On appeal, passholders argued that the district court erred in dismissing their breach of contract claim because Vail failed to perform when it closed its resorts before the end of the 2019–20 ski season while retaining the consideration it received from passholders. Here, while passholders’ breach of contract claim is based on a reasonable interpretation of the term “ski season,” passholders’ contracts explicitly excluded the sole remedy that passholders sought—refunds of the costs of their Epic Passes. And passholders identified no Colorado authority suggesting that courts may deviate from the plain language of a contract containing a blanket prohibition on refunds. Accordingly, the district court correctly dismissed the breach of contract claim.
Passholders also argued that the district court erroneously dismissed the breach of warranty claim. Passholders maintained that through its advertisements, Vail created an express warranty that passholders would be able to access its ski resorts for the entire 2019–20 ski season, and that Vail breached this warranty when it closed its resorts before the end of that ski season, causing them damages. However, as with the breach of contract claim, passholders sought only refunds as a remedy for the alleged breach. Accordingly, the district court did not err in determining that Vail had not breached any warranty to passholders.
Passholders further contended that Vail breached the implied covenant of good faith and fair dealing by not issuing refunds to them for the unusable portion of their Epic Passes covering the dates when the resorts were closed due to the COVID-19 pandemic. However, passholders’ argument is not plausible under the plain language of the contract, which expressly disallowed refunds. Therefore, the district court correctly dismissed this claim.
Passholders also asserted that the district court erred in dismissing their unjust enrichment claim by not recognizing that the Federal Rules of Civil Procedure allow for pleading in the alternative. However, the district court did not dismiss passholders’ unjust enrichment claim because it was pleaded in the alternative. Rather, passholders failed to plead any facts at all that would plausibly state a claim for unjust enrichment.
Passholders further argued that they pleaded sufficient facts to show that their contracts with Vail may be illusory if Vail had sole discretion to decide when the 2019–20 ski season ended. A contract is illusory when it grants one party sole discretion regarding whether or not to perform. However, passholders did not allege that Vail had discretion over when the ski season ended. Further, Vail acknowledged that if the meaning of “ski season” was when Vail decided to open and close its resorts in its sole discretion, this discretion would be constrained by the covenant of good faith. Accordingly, the contracts are not illusory, and the district court correctly dismissed this claim with prejudice.
Passholders also challenged the dismissal of their money had and received claim. However, all of passholders’ allegations stem from the contract between passholders and Vail, and passholders did not allege that Vail violated any independent common-law duty or plead any facts plausibly showing that their contracts with Vail were illusory. Accordingly, the district court correctly dismissed this claim with prejudice.
Lastly, passholders maintained that the court erred when it dismissed their six state consumer protection law claims. For these causes of action to survive a Fed. R. Civ. Proc. 12(b)(6) motion to dismiss, passholders needed to plead facts plausibly demonstrating that Vail engaged in either an unfair or deceptive act or practice. Here, although a reasonable jury could find that Vail acted unfairly or deceptively by advertising Epic Passes as providing access to its resorts for the entire 2019–20 ski season, passholders sought only refunds as a remedy for these claims, which remedy was expressly prohibited by their contracts. Accordingly, the district court correctly dismissed these claims.
The dismissal of passholders’ implied covenant of good faith and fair dealing, unjust enrichment, and money had and received claims were affirmed. The dismissal of passholders’ breach of contract, breach of warranty, and state consumer protection claims were vacated and remanded for the district court to modify the dismissal of these claims to be without prejudice so that passholders may refile seeking relief not expressly barred by the contracts.