Cole v. Valley Ice Garden

William Martel (defendant) owned the Bozeman Ice Dogs (club) junior hockey team. In June 1997, Martel, through Valley Ice Garden, L.L.C. and Valley Ice Garden Management, L.L.C. (collectively, VIG) (collectively, defendants), hired David Cole (plaintiff) to coach the club. Martel asked Cole to draft an employment agreement, which Cole did. That agreement provided that if Cole were to be terminated “for other than cause,” he would be entitled to severance in the amount of at least one year’s salary. The contract did not define the word cause. The club struggled in Cole’s second season as coach, losing far more games than it won. At Cole’s suggestion, Martel made a substantial investment in the team to try to improve its performance. Nevertheless, the club started the next season by winning one game and losing six, leading Martel to fire Cole. Martel asserted that he fired Cole for cause (i.e., the team’s losing record) and thus that he did not owe Cole any severance under Cole’s contract. Cole sued Martel and VIG for breach of contract. Per Cole, the club’s losing record could not constitute good cause because the contract did not set forth a minimum win-loss record that the club had to achieve. VIG and Martel responded that although the contract did not define cause, (1) any ambiguity should be construed against Cole because he drafted the contract and (2) Montana’s Wrongful Discharge from Employment Act (WDEA) provided guidance as to what constituted good cause. The WDEA defined good cause as reasonable job-related grounds related to the failure to perform job duties in a satisfactory manner or other legitimate business reasons. Per VIG and Martel, this definition embraced Cole’s losing record as the club’s coach. VIG and Martel further argued that Cole’s concession that Cole was fired because of the club’s losing record (rather than for an arbitrary reason) showed the presence of good cause. The trial court ruled that because the contract did not specify a required winning percentage, firing Cole for the club’s losing record did not constitute good cause. VIG and Martel appealed.