1The court notes that IC has filed its Memorandum of Law in

Support of Partial Summary Judgment separate from its Statement

of Undisputed Material Facts. This is a violation of L.R.

7.2(b)(1). In doing so, IC’s filing is more than twenty-five

pages, which also is a violation of L.R. 7.1(a)(3). The court

expects IC to comply strictly with the local rules in the future. 

UNITED STATES DISTRICT COURT FOR THE 

DISTRICT OF NEW HAMPSHIRE

Israel College-Educational

Horizons, Ltd.

v. Civil No. 05-cv-392-JD

Opinion No. 2008 DNH 011

Southern New Hampshire

University

O R D E R

Israel College-Educational Horizons, Ltd. (“IC”) brings

breach of contract and breach of the implied duty of good faith

and fair dealing claims against Southern New Hampshire University

(“SNHU”), arising from the schools’ efforts to affiliate for

purposes of providing SNHU courses and degrees at IC campuses. 

IC filed a motion for summary judgment on liability only.1 SNHU

filed an objection to IC’s motion for summary judgment,

contending that factual issues exist about the parties’ agreement

which preclude summary judgment. IC filed a reply to this

objection.

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 1 of 33
2

Standard of Review

Summary judgment is appropriate when “the pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party

is entitled to a judgment as a matter of law.” Fed. R. Civ. P.

56(c). On a motion for summary judgment, the moving party has

the burden of showing the absence of any genuine issue of

material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323

(1986). If the movant does so, the court must then determine

whether the non-moving party has demonstrated a triable issue. 

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986). In

ruling on a motion for summary judgment, the court must view the

facts in the light most favorable to the non-moving party,

drawing all reasonable inferences in that party’s favor. E.g.,

J.G.M.C.J. Corp. v. Sears, Roebuck & Co., 391 F.3d 364, 368 (1st

Cir. 2004); Poulis-Minott v. Smith, 388 F.3d 354, 361 (1st Cir.

2004).

At the outset, the court notes that “[w]here, as is the case

here, the party moving for summary judgment bears the burden of

proof on an issue, [the party] cannot prevail ‘unless the

evidence that [it] provides on that issue is conclusive.’” EEOC

v. Union Independiente de la Autoridad de Acueductos y

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 2 of 33
3

Ancantarillados de P.R., 279 F.3d 49, 55 (1st Cir. 2002) (quoting

Torres Vargas v. Santiago Cummings, 149 F.3d 29, 35 (1st Cir.

1998)). Evidence is conclusive if: "(1) the moving party

initially produces enough supportive evidence to entitle the

movant to judgment as a matter of law (i.e., no reasonable jury

could find otherwise even when construing the evidence in the

light most favorable to the non-movant), and (2) the non-movant

fails to produce sufficient responsive evidence to raise a

genuine dispute as to any material fact." Murphy v. Franklin

Pierce Law Ctr., 882 F. Supp. 1176, 1180 (D.N.H. 1994)(citing

Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115-17 (11th Cir.

1993)). Summary judgment will not be granted as long as a

reasonable jury could return a verdict in favor of the nonmoving

party. Liberty Lobby, Inc., 477 U.S. at 248. 

Background

SNHU, a university located in Manchester, New Hampshire,

offers both graduate and undergraduate degrees. IC, a college

located in Israel, partners with American institutions to provide

courses at a branch campus in Israel, leading to degrees from

American institutions. 

Beginning in 1994, IC partnered with New England College to

provide undergraduate business courses at a branch campus in

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 3 of 33
4

Israel and also partnered with Clark University, offering

master’s level curriculum in several fields. In 1998, IC

partnered with Northeastern University, offering master’s level

course work and with the University of New England, offering

undergraduate classes in business administration. 

By 2001, New England College and IC were dissatisfied with

their relationship. In late 2001 or early 2002, IC sought a new

American institution to replace New England College. For this

reason, in early 2002, Yigal Ne’eman, president of IC, contacted

Paul Schneiderman, dean of SNHU’s business school, to ascertain

SNHU’s interest in establishing a branch campus in Israel. In

early 2002, Schneiderman toured IC’s campus and informed Richard

Gustafson, president of SNHU, that he thought there was potential

for an affiliation. Schneiderman also spoke with other

institutions, including Clark University and New England College,

to ascertain their experiences with IC. 

In March of 2002, Ne’eman and members of his management

staff visited SNHU in order to discuss a potential affiliation

between the two schools. At this time, the two schools began

drafting the documents required for an affiliation. Ultimately,

Gustafson decided not to go forward with the affiliation. The

two schools did not communicate between March of 2002 and

February of 2004.

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 4 of 33
5

As of February of 2004, IC still had not found a new partner

institution to replace New England College. At this time,

Ne’eman heard that SNHU had a new president, and consequently,

emailed Schneiderman to determine if SNHU was interested in

resuming discussions regarding an affiliation between the two

schools. Schneiderman forwarded Ne’eman’s inquiry to Paul

LeBlanc, the new president of SNHU. Schneiderman briefly

described to LeBlanc the 2002 discussion between the two schools

and SNHU’s original rationale for not pursuing an affiliation

with IC. LeBlanc agreed to meet with Ne’eman. 

In early March of 2004, Ne’eman traveled to SNHU and met

with LeBlanc and Schneiderman to discuss a potential affiliation

between the two schools. At this time, they discussed the

requirement that an affiliation needed the approval of two

regulatory agencies: (1) the Israel Council of Higher Education

(“Israeli HEC”) and (2) the New England Association of Schools

and Colleges (“NEASC”). 

According to LeBlanc, Ne’eman explained that the Israeli HEC

application process was very lengthy, and for this reason, IC

needed two documents to begin the procedure: (1) an agreement

between IC and SNHU and (2) a letter from NEASC indicating that

it authorized the affiliation. LeBlanc told Ne’eman that

“providing those two items immediately was not the usual course

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 5 of 33
6

and that [SNHU] would need to conduct due diligence on the

collaboration and have a full look at [Israel College’s]

operations before [SNHU] could commit to a partnership.” SNHU

Objection to IC Motion for Summary Judgment (“SNHU Obj.”), Ex. G,

¶7. He also told Ne’eman that there were “many, many other

internal steps that needed to be taken before SNHU could agree to

a partnership.” Id. LeBlanc testified that SNHU agreed to sign

the necessary documents to “begin our process” but only “as a

favor” to IC. SNHU Obj., Ex. F, at 50 and 164. In an affidavit

submitted with SNHU’s objection to summary judgment, LeBlanc

stated that “to accommodate [Ne’eman], we agreed at the meeting,

that we would sign the documents necessary to begin the process,

but that they would not be final, binding agreements. Instead,

they would be subject to SNHU’s satisfactory completion of due

diligence and, of course, NEASC approval.” SNHU Obj., Ex. G, ¶9.

LeBlanc explained that “due diligence would consist of, at a

minimum, conversations with other schools, and the drawing up of

budgets and enrollment projections, and a site visit.” Id.

 Ne’eman has a different recollection of the March 2004,

meeting with LeBlanc and Schneiderman. Ne’eman testified that

LeBlanc asked, “what should we do in order to go ahead?” IC

Motion for Summary Judgment (“IC Summ. J.”), Ex. A, at 87. 

Ne’eman responded, “we have to do two things in parallel, one to

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 6 of 33
7

work up the agreements and then to make the preparations for the

petition for the [Israeli] Council for Higher Education because

it takes between, around twelve months, maybe fifteen months.” 

Id. Ne’eman also stated that “the idea was that [the schools]

will finalize the agreement within a month and [the] preparation

[of] the petition will take three to four months” and “that it

was clear that the agreement will be signed beforehand.” Id. at

88-89. According to Ne’eman, after Ne’eman explained the process

for going forward, LeBlanc responded, “[l]et’s go ahead” but said

nothing further. Id. at 89. 

Schneiderman testified that as a result of the meeting,

there was “a general agreement to move ahead with the prospect.” 

IC Summ. J., Ex. G, at 49. He also stated that the next step

after the meeting was “that documents would have to be prepared

by the university in conjunction with Israel College, and that

work on those documents had to begin.” Id. Both schools agree

that no contract was signed at the meeting. 

After the meeting, the two schools began drafting an

agreement. Schneiderman asked Elizabeth Elwy, an assistant dean

at SNHU, to work on the agreement. LeBlanc provided Elwy with a

form of an agreement, which he had used previously at another

college where he had worked, to “look at and use.” IC Summ. J.,

Ex. U, at 29. On March 10, 2004, Elwy wrote in an email to IC

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 7 of 33
2At LeBlanc’s deposition, he noted that Elwy misspoke and

actually meant the Academic Supervision Agreement, described,

infra.

8

that, “[t]he President [LeBlanc] has requested that we use a new

format of [the] Articulation Agreement. The content will remain

the same but the format is quite different. I will do my best to

fill in the blanks and send it along for you to review and

comment on soon.” IC Summ. J., Ex. W.2 

In April of 2004, Ronit Mlynarsky from IC traveled to the

United States to meet with several colleges and universities,

including SNHU. According to Mlynarsky, while she was visiting

SNHU, Ne’eman instructed her to end her visit early because there

was not yet an agreement between the two schools. Mlynarsky then

went to visit another university. While she was visiting this

school, LeBlanc invited her to a dinner meeting in Natick,

Massachusetts, with NEASC officials and another college

administrator. On April 21, 2004, Mlynarsky, LeBlanc, Sandra

Featherman, the president of the University of New England, and

NEASC staff members, including Barbara Brittingham, had dinner in

Natick, Massachusetts. 

Mlynarsky testified that she met with LeBlanc for a drink

before dinner and LeBlanc asked her “lots of questions about

Israel College and how it operates, tons, tons of questions and

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 8 of 33
9

[she] felt like [she was] under investigation.” IC Summ. J., Ex.

T, at 58. LeBlanc also asked her about IC’s partnerships with

other schools. As a result of this discussion, Mlynarsky

believed that “LeBlanc was interested. He was asking questions

that were really showing interest in the program.” Id. at 66. 

According to Mlynarsky, during dinner, LeBlanc asked Featherman

about IC’s relationship with the University of New England. He

asked Brittingham many questions, including ones about obtaining

NEASC approval. After dinner, LeBlanc escorted Mlynarsky to her

car and said “that he’s happy with what Barbara [Brittingham]

said, that it can be done, [was happy] with what Sandra

Featherman said, and that he’s going to sign the contract.” Id.

at 73. 

LeBlanc has a different recollection of the April 2004

dinner. LeBlanc stated in his affidavit that “during dinner, the

topics of conversation, other than social banter, included a very

general discussion of Israel College. I did not, however, engage

in extensive questioning or discussion of Israel College’s

operations, programs, or management.” SNHU Obj., Ex. G, ¶¶13-14. 

He testified at his deposition that the goal of the dinner

meeting was to “try and understand the problem we had with

[Ne’eman’s] need to get a letter of approval to the appropriate

Israeli approving parties or licensing parties,” and “to

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 9 of 33
10

understand how we might best proceed.” SNHU Obj., Ex. F, at 41. 

According to LeBlanc, he did not speak with Mlynarsky after

dinner, he did not tell Mlynarsky that he “would sign the

agreements,” and “he did not escort Mlynarsky” to her car. SNHU

Obj., Ex. G, ¶¶16-17. 

Two days after the Natick dinner, on April 23, 2004, LeBlanc

signed the agreement and sent it to Ne’eman for his signature. 

On April 25, 2004, Ne’eman emailed the president of New England

College informing her that the agreement with SNHU was a “done

deal.” IC Summ. J., Ex. TT. On May 2, 2004, Ne’eman signed the

agreement. 

It is undisputed that the parties’ agreement was expressed

in two documents: the Affiliation Agreement (“AA”) and the

Academic Supervision Agreement (“ASA”), (collectively “the

Contract”). The ASA outlines the responsibilities of each party

with respect to curriculum, faculty, admission criteria, and

other program details. The AA outlines the parties’ contractual

obligations, including warranties, representations, and

consideration. Clause 1.1 of the AA states that “[t]his

agreement is effective from July 1st 2005 and unless terminated

earlier pursuant to the provisions of Clauses 7.1, 7.2, and 7.3

continues on a rolling basis with annual review and termination

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 10 of 33
3Clause 7.1 defines the default events for early termination

of the Contract. Clause 7.2 states that if either party commits

a default event, “the other party may terminate the agreement”

within 30 days. IC Summ. J., Ex. Y. Clause 7.3 of the AA states

that the AA will continue in force unless either party gives the

other at least twenty-four months notice. 

11

at twenty four months notice and a four year teach out period.”3

IC Summ. J., Ex. Y. The AA states that “implementation of these

programs require [sic] approval both [sic] NEASC and the Council

for Higher Education in Israel.” Id. ¶7.7. The AA includes an

integration clause which reads:

Entire Agreement: This Agreement (together with annexures)

constitutes the entire agreement between the parties and

save as otherwise expressly provided no modification,

amendment, or waiver of any of the provisions of this

Agreement shall be effective unless made in writing and duly

signed by both parties hereto. 

Id. ¶10. A choice of law clause states that the Contract “shall

be governed by and construed in accordance with the laws of the

State of New Hampshire and the United States of America.” Id.

¶13.1. 

 After the Contract was signed, the two schools continued

work on obtaining regulatory approval. In order to obtain

Israeli HEC approval, IC needed to submit a letter from NEASC

stating that it had approved the affiliation. On June 9, 2004,

LeBlanc emailed Ne’eman, explaining that NEASC could not approve

the program until the parties submitted a document titled,

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 11 of 33
4The two schools were able to work around the “Catch 22"

when Barbara Brittingham of NEASC told LeBlanc that NEASC would

issue a letter indicating that SNHU was accredited and that SNHU

was “exploring a relationship with Israel College.” IC Summ. J.,

Ex. CC. IC could then apply to the Israeli HEC using this

letter. On July 1, 2004, Ne’eman emailed SNHU that the “Catch

22” had been solved. 

12

“Notice of Substantive Change” (“Notice”). NEASC also would not

approve the affiliation until the international program was

underway and approved by the Israeli HEC. In the June 9, 2004,

email, LeBlanc referenced this problem as the “Catch 22” — “that

NEASC wants to know we have licensure or authority to operate and

[the Israeli HEC] wants to know we have NEASC approval.” IC

Summ. J., Ex. BB. Ne’eman wrote back, agreeing that the

regulatory approval process “really is a Catch 22 situation.” IC

Summ. J., Ex. EE. On June 10, 2004, after speaking with Barbara

Brittingham of NEASC, LeBlanc emailed Ne’eman a potential

solution to the “Catch 22,” which both parties agreed to follow.4

 Later in June and into July of 2004, Martin Bradley, the new

dean of SNHU’s business school, submitted several documents and

letters to the Israeli HEC. In two letters dated June 30, 2004,

Bradley referenced an agreement between the two schools. In

letter B-6, he wrote, “[t]he Israeli programs are governed by a

contractual agreement with Israel College signed by the

Presidents of both institutions.” IC Summ. J., Ex. GG, at 2. In

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 12 of 33
13

letter B-8, he wrote, “Southern New Hampshire University signed a

letter of agreement with Israel College-Educational Horizons,

Ltd. to jointly sponsor a Master of Business Administration

program in Israel.” Id. at 3. The Israeli HEC application was

completed in early August of 2004.

In August and September of 2004, the two schools continued

work on NEASC approval and prepared the Notice which was the

document required for NEASC approval. On September 21, 2004,

LeBlanc emailed Ne’eman the final version of the Notice and told

Ne’eman that he would draft a cover letter to send to NEASC. The

final version of the Notice begins: “Southern New Hampshire

(SNHU) proposes a contractual relationship with Israel College[.]

. . . The proposal is supplemented by two other documents: the

actual Academic Supervision Agreement (ASA) and the draft legal

contract (which also has the ASA contained in it).” IC Summ. J.,

Ex. MM, Notice at 1, ¶¶1-2. The Notice also states, “[t]he SNHU

Board of Trustees has approved going forward with the proposed

partnership at its January 23, 2004 meeting. The Israel Board of

Directors did the same. We now seek NEASC approval to move

forward.” Id. at 4, ¶7. 

Also during September of 2004, Bradley spoke with other New

England schools that were affiliated with IC. Those

conversations caused Bradley to have reservations about IC. 

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 13 of 33
14

Bradley sent LeBlanc a series of emails summarizing his

conversations with the New England schools. In one email,

Bradley outlined particular concerns based on a conversation with

Clark University. In response, LeBlanc wrote, “[d]o we need to

revisit the ASA and contract to address some of Clark’s

experiences?” IC Summ. J., Ex. LL. 

While Bradley investigated IC’s relationship with other New

England schools, LeBlanc spoke with officials from NEASC. 

According to LeBlanc, NEASC officials expressed a concern

suggesting that IC targeted “weaker institutions.” SNHU Obj.,

Ex. F, at 72. When LeBlanc told the executive director of NEASC

that he had “serious doubts” about the affiliation with IC, the

NEASC official told LeBlanc that “the proposed partnership would

not enhance the quality of [SNHU’s] international programming and

[he] agreed that [SNHU’s] decision not to go forward was probably

for the best.” SNHU Obj., Ex. F, at 175, Ex. G, ¶23.

In late September, LeBlanc, Bradley, and SNHU’s vice

president of academic affairs met to discuss IC. At this

meeting, SNHU decided not to go forward with the affiliation with

IC. On the same day as the meeting, LeBlanc emailed various

personnel at SNHU, stating that “Marty [Bradley] and I are poised

to pull the plug on the Israel College opportunity (see email

below; please keep that confidential.)” IC Summ. J., Ex. II. 

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 14 of 33
15

According to LeBlanc, SNHU could not go forward because SNHU

could not “provide an honest submission” to NEASC and because

SNHU could not fully endorse IC based on a set of “grave

concerns.” SNHU Obj., Ex. F, at 138-139. As of late September

of 2004, the affiliation between IC and SNHU had not been

approved or denied by either the Israeli HEC or NEASC. 

On September 29, 2004, LeBlanc sent an email to Ne’eman

stating that:

As we completed our review work and due diligence, we began

to question the value of the proposed partnership with

Israel College. Please understand, people spoke highly of

your integrity and desire to provide solid quality programs

to your students. However, as we came to understand how the

programs work and tried to map them to our aforementioned

programming goals, the proposed partnership seemed

increasingly ill suited to us and we have finally decided to

not go forward with you[.]

I am sorry that we had to proceed as far along [in] the

process as we did before making this decision, but this is

the kind of thing that happens in complex relationships and

a process that calls for careful analysis and due diligence. 

IC Summ. J., Ex. PP.

Ne’eman responded via telephone, and the two presidents

spoke regarding SNHU’s decision. LeBlanc wrote again on

September 29, 2004, following a SNHU management group meeting. 

He told Ne’eman that SNHU had not changed its decision and that

“[t]he group shares my sympathy that this has not served you well

and that such processes in the future must be better structured

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 15 of 33
16

and due diligence needs to happen sooner. For those

shortcomings, I am sorry, though better to discover the ill-fit

now than once we have signed a contract.” IC Summ. J., Ex. QQ. 

Ne’eman responded via email, reminding LeBlanc that, “we already

have a signed contract . . . are not you aware of it?” IC Summ.

J., Ex. RR. LeBlanc replied, also via email, “we have a memo of

understanding that outlined intent.” Id.

Discussion

IC argues that the undisputed facts show that SNHU breached

the Contract when it refused to go forward with the affiliation

between the two schools. SNHU, relying on both the express terms

of the Contract and parol evidence, claims that there are genuine

issues of material fact regarding the parties’ agreement, making

summary judgment improper. Specifically, SNHU argues that: (1)

the Contract was not effective in September 2004 when it

withdrew; (2) the schools agreed that the Contract was a draft

subject to SNHU’s completion of due diligence; and (3) the

Contract was a sham, signed only to initiate the lengthy review

process. IC responds that the expressed conditions in the

Contract relate to performance obligations under the Contract and

not to whether the Contract was in effect. IC also argues that

the parol evidence rule applies, barring evidence of any

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 16 of 33
17

agreement other than the Contract. If parol evidence were

allowed, IC contends that the surrounding circumstances show that

the Contract was not a draft subject to due diligence and that

the Contract was not a sham. 

A. Contract Terms

SNHU argues that it did not breach the Contract because it

was not in effect in September of 2004, when SNHU informed IC

that it would not go forward with their affiliation. In support

of its argument, SNHU relies on an effective date provision,

referenced in both the ASA and the AA, and on a clause in the AA

that conditions implementation of the programs on regulatory

approval of the parties' plans. IC contends that those

provisions governed the parties' obligations to perform under the

Contract but did not affect the formation of the Contract. 

1. Effective Date

LeBlanc signed the agreements on behalf of SNHU on April 23,

2004, and Ne'eman signed on behalf of IC on May 2, 2004. The ASA

states that the agreement was "made the 2 day of May 2004" and

that it "is made pursuant to an Affiliation Agreement made

between the parties of even date and takes effect from the same

date as the Affiliation Agreement." IC Summ. J., Ex. X. The AA

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 17 of 33
18

includes a clause titled "Duration," which states that "[t]his

agreement is effective from July 1st 2005 and unless terminated

earlier pursuant to the provisions of Clauses 7.1, 7.2 and 7.3

continues on a rolling basis with annual review and termination

at twenty four months notice and a four year teach out period." 

IC Summ. J., Ex. Y, ¶1.1. 

SNHU argues that the Contract was not binding until the

Duration clause's effective date, July 1, 2005, so that it was

free to withdraw from the affiliation process in September of

2004. Alternatively, SNHU contends that the Duration clause is

ambiguous and offers extrinsic evidence to show that the parties

did not intend to be bound by the Contract until the effective

date. IC asserts that the parties were bound by the Contract

from the date it was made, May 2, 2004, and that the Duration

clause unambiguously provides the date for performance under the

Contract.

Under New Hampshire law, the interpretation of a contract,

including whether the contract is ambiguous, is a question of law

for the court to decide. Behrens v. S.P. Constr. Co., Inc., 153

N.H. 498, 500 (2006). The language used by the parties in the

contract is given "its reasonable meaning, considering the

circumstances and the context in which the agreement was

negotiated, and reading the document as a whole." Carleton v.

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 18 of 33
19

Edgewood Heights Condo. Owners' Ass'n, --- N.H. ---, 2007 WL

3306948 at *2 (Nov. 8, 2007). Terms are construed to give effect

to all provisions in the contract and to avoid rendering any

provision meaningless. West v. Turchioe, 144 N.H. 509, 516

(1999). "A clause of an agreement is ambiguous when the

contracting parties reasonably differ as to its meaning." 

Behrens, 153 N.H. at 503. 

 Neither agreement explains the relationship between the

date the agreements were made and the effective date in the

Duration clause. The AA refers to the "effective date" as the

date when SNHU warranted it would have "the capacity to accredit

all courses offered on the campuses in Tel Aviv, Haifa, and

Jerusalem . . . and to grant accredited degrees to students

enrolled by IC." IC Summ. J., Ex. Y, ¶2.1.4. That provision

suggests that the Duration clause's effective date was intended

to be the date of the parties' performance under the Contract. 

In Schwenk v. Auburn Sportsplex, LLC, 483 F. Supp. 2d 81, 86

(D.Mass. 2007), the court considered a contract that was “made

and entered” on June 23, 2003 but also included a “closing date”

of August 20, 2003. In that case, the plaintiff argued that the

contract was not effective until the “closing date.” Id. The

court disagreed, holding that such an interpretation “would

render the ‘made and entered’ date entirely superfluous, and thus

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 19 of 33
5In addition, SNHU's interpretation would allow either party

to withdraw from the Contract unilaterally for more than a year

20

violate the principle that agreements are to be interpreted so

that every word is given force and meaning.” Id. The court

reasoned:

the contract clearly and unambiguously sets forth dates for

two different events: (1) the date on which the contract was

“made and entered” and (2) the date on which the closing was

to occur-that is, the date on which the parties were to

fulfill their principal obligations under the contract (for

the plaintiff, delivering the purchase price, and for the

defendants, delivering the ownership certificate). The

clear language of the contract thus provides that it became

effective on June 23, 2003.

Id. 

As in Schwenk, the Contract at issue here has two dates: 

the date the Contract was made and the "effective date" in the

Duration clause. SNHU's interpretation, that the parties were

not bound until the effective date, ignores the date the Contract

was made, giving that provision no effect at all, which is not a

reasonable interpretation of the Contract. IC's interpretation,

that the parties were bound by their agreements on the date the

Contract was made but were not obligated to implement the agreed

provisions until the effective date, gives meaning to both dates

and is supported by the Contract taken as a whole. Therefore,

because only IC's interpretation is reasonable, the Duration

clause is not ambiguous.5

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 20 of 33
after the agreements were signed, which would likely violate both

the rule that agreements are not to be construed to put one party

at the mercy of the other and the implied covenant of good faith

and fair dealing. See Holden Eng’g and Surveying, Inc. v.

Pembroke Road Realty Trust, 137 N.H. 393, 397 (1993); Centronics

Corp. v. Genicom Corp., 132 N.H. 133, 143 (1989).

21

2. Regulatory Approval

Clause 7.7 of the AA states that the “implementation of

these programs require [sic] approval both [sic] NEASC and the

Council for Higher Education in Israel.” Relying on this clause,

SNHU contends that because an express condition to the Contract,

NEASC approval, did not occur and could not occur given what SNHU

learned about IC in September of 2004, SNHU’s performance was

excused and no breach occurred. In effect, SNHU is arguing that

NEASC approval was a condition precedent to the formation of the

Contract. IC responds that regulatory approval relates to

“implementation of the Contract and not to formation of the

Contract.” IC Summ. J. at 15. At issue in this case, therefore,

is whether Clause 7.7 is a condition precedent to performance or

a condition precedent to formation. 

 “Conditions in contracts are construed in accordance with

their ordinary meaning.” In re Estate of Kelly, 130 N.H. 773,

781 (1988). In New Hampshire, conditions precedent to

performance “‘are those facts and events, occurring subsequently

to the making of a valid contract, that must . . . occur before

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 21 of 33
22

there is a right to . . . performance.’” Id. (quoting 3A A.

Corbin, Corbin on Contracts § 628, at 16 (1960)). A condition

precedent to performance does not affect the underlying validity

of a contract. See id.; see also Renovest Co. v. Hodges Dev.

Corp., 135 N.H. 72, 78 (1981). When a condition relates to

formation, however, “the contract itself does not arise unless

and until the condition occurs. This means each party is free to

retreat from the transaction until the condition occurs and a

contract is formed.” J. Calamari & J. Perillo, The Law of

Contracts § 11-5 at 415 (5th ed. 2003). The court will not

construe a clause as a condition precedent to formation “unless

required by the plain language of the agreement.” Holden Eng’g,

137 N.H. at 396 (internal citations omitted). 

 Clause 7.7 states that implementation of the planned

programs required regulatory approval. In other words,

regulatory approval was an event that had to occur before the 

parties could begin their joint program for educating students in

Israel. The clause does not say that the formation of the

Contract was contingent on regulatory approval. As such, Clause

7.7 is not a condition precedent to formation, but instead,

imposes a condition precedent to performance under an existing

agreement. Therefore, although regulatory approval had not yet

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 22 of 33
6In addition, SNHU's interpretation, allowing either school

to withdraw prior to regulatory approval, would likely violate

the implied covenant of good faith and fair dealing because each

party to a contract must make reasonable efforts to ensure the

fulfillment of conditions precedent to performance. See

Centronics Corp., 132 N.H. at 143; see also 13 Richard Lord,

Williston on Contracts § 39:4 (4th ed. 2000) (A party who

“prevents the fulfillment of a condition precedent or its

performance by the other party to the contract[,] cannot rely on

the nonoccurrence of such condition to defeat his or her

liability.”). 

23

occurred in September of 2004, SNHU’s decision to withdraw from

the Contract at that time is not excused by Clause 7.7.6

B. Unwritten Agreements

SNHU argues that at the March 2004 meeting, the two schools

agreed that the Contract was “conditioned on SNHU’s satisfactory

completion of due diligence and an investigation of the

collaboration with Israel College.” SNHU Obj. at 12. SNHU also

contends that the two schools agreed at this meeting that the

Contract would not bind the parties but was signed as a sham,

only to allow the regulatory process to begin. SNHU offers parol

evidence to prove the existence of these agreements, which are

not expressed in the Contract. IC contends that parol evidence

is not admissible because the Contract was completely integrated

and because these unwritten agreements contradict the plain terms

of the Contract. IC also argues that if parol evidence is

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 23 of 33
24

admissible, the surrounding circumstances prior to, during, and

after the signing of the Contract demonstrate that the Contract

was a final, binding agreement. 

1. Parol Evidence

New Hampshire recognizes exceptions to the parol evidence

rule. Parol evidence is admissible to “establish that the

writing itself does not reflect the actual agreement reached by

the parties.” Sommers v. Sommers, 143 N.H. 686, 690 (1999). 

Another exception allows parol evidence to prove that the parties

agreed that the formation of their contract was subject to a

condition precedent, even if the contract is integrated and

unambiguous. LaPierre v. Cabral, 122 N.H. 301, 307 (1982); cf.

J. Calamari & J. Perillo, supra, § 3.7 at 144 (5th ed. 2003). 

 The New Hampshire Supreme Court has not had occasion to

consider whether an exception to the parol evidence rule exists

to prove that an agreement was a sham. See, e.g. LaPierre, 122

N.H. at 307 (listing recognized exceptions). “In the absence of

controlling state law, a federal court should choose the rule

that it believes the state's highest court is likely to adopt in

the future.” Amherst Sportswear Co., Inc. v. McManus, 876 F.2d

1045, 1048 (1st Cir. 1989). The majority of courts that have

considered the issue have concluded that parol evidence is

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 24 of 33
7The minority view does not allow parol evidence to prove a 

sham agreement that would deceive a third party because it would

be offensive to public policy. Kergil v. Central Oregon Fir

Supply Co., 323 P.2d 947, 948 (Or. 1958) (“The difficulty with

[the majority view] is that it overlooks the moral aspects of the

situation. It permits the law to be used to lend its aid to

those who would mislead or defraud third parties without

providing any restraining penalty upon their immoral actions.”);

see also Gagnon v. Fleury, 92 A.2d 470, 471 (Vt. 1952) (to allow

such evidence would be “morally beyond sanction”).

25

admissible to prove a sham agreement.7 E.g. Herzog Contracting

Corp. v. McGowen Corp., 976 F.2d 1062, 1067 (7th Cir. 1992)

(internal citations omitted) (“It is well-settled that whatever

the formal documentary evidence, the parties to a legal

transaction may always show that they understand a purported

contract not to bind them; it may, for example, be a joke, or a

disguise to deceive others.”). An allegation that a contract is

a sham relates to a defect in contract formation, making it

similar to recognized exceptions to the parol evidence rule in

New Hampshire. See LaPierre, 122 N.H. at 307. Therefore, New

Hampshire would likely adopt the majority view. 

 In this case, parol evidence is admissible to show that the

formation of the Contract was subject to the condition precedent

that SNHU complete due diligence. Under the majority rule, parol

evidence is also admissible to show that the Contract was really

a sham, signed only to initiate the regulatory process. 

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 25 of 33
8IC also contends that if the two schools agreed that the

Contract had no binding effect at the March 2004 meeting, as

suggested by SNHU, LeBlanc would have signed the Contract during

the meeting, not one month later. 

26

2. Surrounding Circumstances

IC argues that even if parol evidence is admissible, “the

surrounding circumstances clearly show that the Contract was not

a ‘sham’ and was not conditioned on further due diligence at the

time it was signed.” IC Reply at 5. To support this argument,

IC offers evidence from the period of time prior to, during, and

after the signing of the Contract. SNHU offers conflicting

evidence from each of these periods. 

IC contends that as a result of the March 2004 meeting,

there was a general agreement between the schools that they would

move ahead with the affiliation. IC claims that the schools did

not enter into any other oral agreements at the March 2004,

meeting. According to Ne’eman, at the March 2004 meeting,

LeBlanc asked “what should we do in order to go ahead?” IC Summ.

J., Ex. A, at 87. After Ne’eman explained the process, LeBlanc

said, “[l]et’s go ahead” but nothing further.8 Id. at 89. As

further support that there were no additional oral agreements, IC

points to Schneiderman’s deposition testimony that he did not

recall many details of the March meeting besides remembering that

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 26 of 33
27

there was a “general agreement to move ahead.” IC Summ. J., Ex.

G, at 49. 

IC also argues that the Contract was not subject to the due

diligence condition because SNHU completed its investigation of

IC just prior to signing the Contract. Specifically, IC contends

that SNHU began its research of IC in 2002 when Schneiderman

visited IC. IC claims that SNHU completed its investigation in

April of 2004 at the Natick dinner because LeBlanc extensively

questioned Mlynarsky, Featherman, and Brittingham and then told

Mlynarsky, when he walked her to her car, that he was satisfied

with the information that he learned at dinner and wanted to sign

the agreement with IC. Because LeBlanc signed the Contract two

days later, IC contends that “LeBlanc had done enough due

diligence to satisfy himself that SNHU could enter into this

Contract with Israel College.” IC. Summ. J. at 15. 

SNHU offers a conflicting version of the March 2004 meeting

and the April 2004 dinner. LeBlanc stated in his affidavit that

he told Ne’eman at the March 2004 meeting that SNHU would have to

“conduct due diligence on the collaboration and have a full look

at [Israel College’s] operations before [SNHU] could commit to a

partnership.” SNHU Obj., Ex. G, ¶7. According to LeBlanc,

Ne’eman was eager to get a signed agreement in order to begin the

Israeli regulatory review process. LeBlanc stated in his

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 27 of 33
28

affidavit that “[t]o accommodate [Ne’eman], we agreed at the

meeting, that we would sign the documents to begin the process 

. . . [but] they would be subject to SNHU’s satisfactory

completion of due diligence[.]” Id. ¶9. In addition, LeBlanc

testified at his deposition that SNHU agreed to sign the

necessary documents at the March 2004 meeting to “begin our

process” but only “as a favor” to IC. SNHU Obj., Ex. F, at 50

and 164. 

 SNHU also argues that it did not complete its investigation

just prior to signing the Contract. SNHU claims that

Schneiderman’s 2002 visit was not typical of rigorous due

diligence because he only visited for a single day, took a brief

tour of the facilities, and listened to a presentation. As to

the April 2004 dinner, LeBlanc stated in his affidavit that

“during dinner, the topics of conversation, other than social

banter, included a very general discussion of Israel College. I

did not, however, engage in extensive questioning or discussion

of Israel College’s operations, programs, or management.” SNHU

Obj., Ex. G, ¶¶13-14. According to LeBlanc, he did not speak

with Mlynarsky after dinner, he did not tell Mlynarsky that “he

would sign the agreements,” and “he did not escort Mlynarsky” to

her car. Id. ¶¶16-17.

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 28 of 33
9Elwy’s original statement was unsworn, and SNHU challenged

the statement as not competent under Federal Rule of Civil

Procedure 56(e). In its reply, IC submitted an affidavit from

Elwy that incorporated the unsworn statement by reference and

attested to its truth based on her personal knowledge of SNHU's

relationship with IC. SNHU has not challenged the affidavit. 

Elwy's affidavit provides a basis for her personal knowledge of

the matters in her statement and certifies that the statement is

true and correct under the pains and penalties of perjury. SNHU

has not challenged the affidavit. Therefore, the affidavit is

deemed to satisfy Rule 56(e) and is considered in support of IC's

motion. See 28 U.S.C. § 1746; OneBeacon Am. Ins. Co. v.

Travelers Indem. Co., 465 F.3d 38, 44 (1st Cir. 2006); Perez v.

Volvo Car Corp., 247 F.3d 303, 315-16 (1st Cir. 2001).

29

IC also argues that when the Contract was signed, and in the

period of time afterwards, both schools considered the Contract

to be a final agreement. IC offers the following evidence to

support this argument: (1) a statement from Elizabeth Elwy (a

former assistant dean at SNHU who was involved in the drafting

process of the Contract) that SNHU considered the Contract was a

formal agreement when it was signed9; (2) Ne’eman’s April 25,

2004, email to the president of New England College that the

agreement with SNHU was a “done deal”; (3) the correspondence

between the schools in the months after the Contract was signed

that does not reference any agreement the Contract was

conditional or a draft; (4) the extensive effort displayed by

both schools in completing applications to NEASC and the Israeli

HEC; (5) the references in the Notice of Substantive Change that

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 29 of 33
10IC argues, without citation, that these statements and

writings cannot be used to show SNHU’s intent at the time the

Contract was signed because they occurred after it was signed. 

Extrinsic evidence related to the subsequent understandings and

conduct by parties to a contract is admissible. MacKay v.

Brealt, 121 N.H. 135, 140 (1981) and Restatement (Second)

30

the SNHU board had approved going forward with the proposed

partnership with IC; and (6) Bradley’s letters submitted as part

of the Israeli HEC submission stating that the two schools

entered into an agreement. 

 SNHU counters that Elwy’s statement is directly

contradicted by LeBlanc’s affidavit and deposition testimony that

he considered the Contract to be a draft, conditioned on SNHU’s

completion of due diligence. SNHU also offers conflicting

evidence from the period of time after the document was signed

suggesting that the parties considered the document was a draft. 

For example, SNHU points to a clause in the Notice of Substantive

Change that states: “Southern New Hampshire (SNHU) proposes a

contractual relationship with Israel College[.] . . . The

proposal is supplemented by two other documents: the actual

Academic Supervision Agreement (ASA) and the draft legal contract

(which also has the ASA contained in it).” IC Summ. J., Ex. MM,

Notice at 1, ¶¶1-2. Also, SNHU points to its email to IC after

the signing of the Contract that it was merely “explor[ing] . . .

a partnership.”10 IC Summ. J., Ex. AA. Because IC did not

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 30 of 33
Contracts § 202 cmt. g (1981). IC also argues these

communications were insufficient to put it “on notice” that the

Contract was not final. Whether IC was “on notice” is a dispute

of material fact because SNHU has offered evidence that LeBlanc

told Ne’eman at the March 2004 meeting that any agreement between

the two schools would not be a final, binding contract. 

31

correct these references, SNHU contends that IC considered the

Contract to be a draft. 

It may be, as IC urges, that a jury would disbelieve

LeBlanc’s account of the March 2004 meeting and the April 2004

dinner and credit Elwy’s, Mlynarsky’s, and Ne’eman’s testimony

and the other evidence that IC has presented. Taking the facts

in the light most favorable to SNHU, however, disputed facts

remain about the March 2004 meeting and the April 2004 dinner,

and there are inconsistent references to the Contract in the

regulatory filings and other correspondence in the period of time

after the Contract was signed. These disputed facts and

inconsistencies are material to whether the schools orally agreed

in March 2004 that the Contract was conditioned on SNHU’s

completion of due diligence and to whether the Contract was

really a sham signed only to initiate the regulatory review

process. Therefore, IC has not shown that it is entitled to

summary judgment. 

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 31 of 33
32

Conclusion

 For the foregoing reasons, the plaintiff’s motion for

partial summary judgment on liability (document no. 15) is

denied. Although summary judgment on liability is not granted in

the plaintiff's favor, certain matters are now resolved as a

matter of law. As construed in this order, the Contract's

effective date, Clause 1.1 of the AA, is the date when the

parties would have been obligated to perform and, therefore, does

not affect the parties' agreement to affiliate for the purposes

described in the AA and ASA. The condition requiring regulatory

approval, Clause 7.7 of the AA, is a condition precedent to

performance, not a condition precedent to formation of the

Contract and, therefore, does not affect the parties' agreement

to affiliate for the purposes described in the AA and ASA.

The issues that remain unresolved are:

(1) whether the parties agreed, despite the written and

signed agreements, that the Contract was an unenforceable draft

unless and until SNHU completed its due diligence investigation,

and 

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 32 of 33
33

(2) whether the parties agreed that the Contract was merely

a sham to allow the regulatory process to move forward.

SO ORDERED.

______________________________

Joseph A. DiClerico, Jr.

United States District Judge

January 17, 2008

cc: Kristina H. Allaire, Esquire

Christopher Cole, Esquire

John P. McMorrow, Esquire

John O. Mirick, Esquire

John-Mark Turner, Esquire

Case 1:05-cv-00392-JD Document 26 Filed 01/17/08 Page 33 of 33