Kosher Ski Tours Inc. v. Okemo Limited Liability Company

Background

Kosher Ski Tours Inc. (KST) organizes group ski tours and primarily serves Orthodox Jewish customers. Okemo Limited Liability Company operates a ski resort in Ludlow, Vermont. The parties had regularly worked together since 2014.

In October 2019, the parties entered a standing agreement providing discounted lodging and ski-lift-ticket rates through April 2022. That agreement did not reserve rooms or tickets for particular dates. In December 2019, they entered a separate agreement reserving 159 rooms for KST’s December 10–14, 2020, trip. KST paid a $300 deposit and committed to spending $107,831. The agreement included a force-majeure clause, meaning a provision that can excuse performance when events beyond a party’s control cause delay or nonperformance.

As the COVID-19 pandemic continued, the parties discussed travel restrictions, occupancy limits, and whether KST’s guests could quarantine before arriving. On September 17, 2020, Okemo told KST it would not accommodate the trip and released KST from its room-revenue commitment. KST later sought group lodging and ticket bookings for March 30 to April 1, 2021, under the standing agreement. Okemo ultimately said it could not book groups because of applicable regulations and requirements.

KST sued, alleging breach of contract, breach of the implied promise of good faith and fair dealing, and race discrimination under Sections 1981 and 1982 of federal law and the Vermont Fair Housing and Public Accommodations Act. Okemo moved for summary judgment, which asks the court to rule before trial because the moving party claims there is no genuine dispute about any important fact.

Breach of Contract

Okemo argued that KST had rejected the holiday agreement before performance was due. The court ruled that KST’s statements about putting a contract in place and blocking off the lodging did not clearly and unmistakably show that KST would not perform the existing agreement. Okemo’s internal summary of an oral conversation also was not an unambiguous written rejection by KST. Whether KST had repudiated the agreement therefore remained a factual question for trial.

Okemo also argued that the force-majeure clause excused its performance because of COVID-19 and that performance was impossible. The court found factual disputes about whether COVID-19 actually caused Okemo’s nonperformance or whether discriminatory motives caused the cancellation. The court also found a factual dispute about whether Vermont’s occupancy restrictions made performance objectively impossible, given the agreement’s language about the location of the rooms and Okemo’s discussion of alternative room arrangements. KST’s breach-of-contract claim may proceed.

Implied Covenant of Good Faith and Fair Dealing

The implied covenant requires parties to a contract not to act in a way that deprives the other party of the agreement’s benefits. KST claimed Okemo denied or delayed its later requests for group lodging and lift tickets under the standing agreement.

The court found a factual dispute about whether Okemo acted arbitrarily or irrationally. KST relied on an Okemo employee’s statement that she had no plan to respond to KST, as well as evidence that Okemo approved other group bookings during the same ski season. The claim may proceed.

Federal Discrimination Claims

Sections 1981 and 1982 prohibit certain private race discrimination involving contracts and property rights. The court found factual disputes about whether Okemo intended to discriminate against KST and its Orthodox Jewish clientele and whether race was a necessary cause of KST’s alleged injuries.

KST presented internal Okemo communications referring to Orthodox Jewish customers and expressing concerns that kosher families would not follow Okemo’s rules. KST also presented evidence that Okemo approved bookings for other groups while refusing group bookings for KST. The court concluded that a reasonable jury could find discriminatory intent and causation, so the Section 1981 and 1982 claims may proceed.

Vermont Discrimination Claim

The Vermont Fair Housing and Public Accommodations Act generally prohibits a public-accommodation operator from denying its facilities or privileges because of race, creed, color, national origin, or other listed characteristics. The law allows denial of access to a person who poses a direct threat to health or safety, but it requires an individualized assessment considering the nature and likelihood of the risk and possible reasonable modifications.

The court found a factual dispute about whether KST itself was denied access to Okemo’s facilities. It also ruled that Okemo had not shown that it made the required individualized assessment before releasing KST from the holiday agreement and refusing group bookings. KST’s Vermont discrimination claim may proceed.

Lost Future Profits

The court granted summary judgment to Okemo on KST’s request for lost future profits as damages for the breach-of-contract claim. Under New York law, such damages must be caused by the breach with certainty, proven with reasonable certainty, and within the parties’ contemplation when they made the contract.

The court found that KST provided no evidence that the parties contemplated lost future profits when they entered the holiday agreement. The court therefore ruled that KST cannot recover lost future profits on its breach-of-contract claim.

Disposition

The court granted Okemo’s summary-judgment motion in part and denied it in part. All of KST’s claims may proceed, except that KST cannot recover lost future profits for its breach-of-contract claim. The court directed the Clerk to terminate the motion and scheduled a case-management conference.