Mammoth Real Estate Sales Report – July 18, 2021

A recent decision by the Colorado District Court will continue the class-action lawsuit against the Alterra Mountain Company. I poked around and found the 30-page court decision. It is full of the typical legal jargon and cited numerous case law precedents, but it an interesting read. Especially since I might be one of the plaintiffs. Many of my readers may be too. Reading through the document helped pass the time while I waited for some signed documents to come back (the magic of electronic signatures).

The suit stems from the closing of the Alterra owned resorts on March 15 of 2020 due to Covid and the stay-at-home orders. These resort closings happened right here in Mammoth as well as Alterra’s other resorts. The plaintiffs are claiming that Alterra has failed to offer a refund or credit for the balance of the season.

(As an aside, I will never forget that March 14 here in Mammoth. It was a dark, creepy, rainy, windy Saturday with most of the Ski Area shut down and people wandering all around town. The shuttle buses were full of passengers and the windows were completely fogged-up. All on the verge of a surging pandemic. And oddly, the condo I showed to a young couple late that afternoon I ended up selling to them several months later. When I read about the Ski Area closure that afternoon I had the same relief I had months later on Labor Day weekend when they closed the forest.)

The plaintiffs of this class-action lawsuit are being represented by a prominent consumer protection law firm (Fortune Magazine says the firm is “feared by corporate America”). The firm has previously sued Vail Resorts for similar causes as well. Some may see the irony of Rusty’s company being pestered with what might be considered a nuisance, yet very expensive lawsuit.

And there is no doubt this coming season’s IKON Pass “I Agree” clauses will contain extensive language giving Alterra the right to close their resorts at any time at their discretion with no refunds or credits due to the Pass holder. The legal provisions protecting Alterra will now be extensive. It will be far more than “wind and weather permitting,” which alone could be a good argument for closing — winter ski weather isn’t conducive to a pandemic.

The judge’s recent decision dismisses many of the plaintiff’s claims but retains what are probably the most critical claims; breach of contract, consumer fraud, deceptive trade practices, violation of California Consumer Legal Remedies Act, etc. The judge curiously states that the arguments in the party’s’ briefs are like “ships passing in the night.”

One of the more interesting aspects to the case is simply the concept of how long a ski season is suppose to last. The judge states “based on Defendants’ acknowledgement that the 2019/20 season ended sooner than other seasons due to the pandemic, it may reasonably be inferred that Defendants have metrics by which to evaluate when any given season should end – due to ski conditions.” But I wonder if this is true? We know the way Dave McCoy ran the show — ski until the snow is gone, whether May or August. And his philosophy has been substantially carried on by the subsequent MMSA owners. It is the Mammoth tradition. But is it true at all resorts? Many simply close when the customers are gone regardless of how much snow there is. At some point there is likely to be evidence introduced that many resorts close before the snow completely melts. It’s their economics.

The Defendants (Alterra) argue that they never stated how long the ski season would last, and furthermore they did not cause the resorts to close earlier. This was rejected by the judge. His opinion is the ski season is a period (length) of time “during which snow conditions allow for skiing and when people typically go skiing.” Again, I would question whether this is true in all resorts. We all know business drops off significantly in spring. At some point it isn’t when “people typically go skiing,” it is when people go the beach, or the River.

There is also contention about the non-refundable provision in the IKON Pass. The Court agrees with the Plaintiffs that “it does not apply to allow a seller who cancels or revokes the Ikon Pass to cancel and keep the consumer’s money.” And “the contract’s no-refund clause does not apply to bar a passholder’s claim for a refund where Defendants allegedly failed to fully perform.”

There is also debate about what the consumer is actually purchasing with a Pass. “Defendants contend, the passes are “temporary licenses” to access Defendants’ resorts and the “services” which Plaintiffs rely on are “ancillary” to such licenses. Plaintiffs counter that Defendants are not merely selling access to land; they are selling extensive ski-related services as well.” This appears to be a “ships in the night” issue for the judge. But he certainly leans towards the Pass as “services.”  He states “Plaintiffs purchased Defendants’ services such as providing groomed trails and ski lifts and gondolas to reach such trails. These services are not ancillary to but, instead, are at heart of what a ski pass holder purchased.”

Then there is the question of misrepresentation. The judge writes “Defendants contend that the statement – misrepresentation – was not deceptive when made because they could not have known about the pandemic or ensuing governmental closure orders. But, as Plaintiffs counter, they are alleging they were misled by what Defendants would do if their resorts closed – for whatever reason: that they would keep all of the passholders’ money.”

Ultimately it will be interesting to see how this plays out in a trial. Us IKON Passholders may someday see a small refund for the balance of the 2020 season. But you can be sure it will be tacked-on to a subsequent season. So once again the only winners will be the attorneys.

I’ll be back in three weeks.