Opinion ID: 534795
Heading Depth: 3
Heading Rank: 2

Heading: Extrinsic Evidence of Intent

Text: 17 Summary judgment normally is inappropriate when a contractual term is ambiguous because a triable issue of fact exists as to its interpretation. Leberman v. John Blair & Co., 880 F.2d 1555, 1559 (2d Cir.1989); see Curry Road, 893 F.2d at 512; Long Island Airports Limousine Serv. Corp. v. Playboy-Elsinore Assocs., 739 F.2d 101, 103 (2d Cir.1984) (citing Heyman v. Commerce and Indus. Ins. Co., 524 F.2d 1317, 1320 (2d Cir.1975)). If there is conflicting extrinsic evidence regarding the parties' intent, the district court may only identify the issues at the summary judgment stage, not resolve them. See Schering Corp. v. Home Ins. Co., 712 F.2d 4, 9-10 (2d Cir.1983). Thus, the district court's grant of summary judgment was proper only if the evidence of intent that Burger King presented does not conflict with Horn & Hardart's evidence. 18 We conclude that the extrinsic evidence of intent before the district court does conflict, and that summary judgment therefore was inappropriate. The conflict arises primarily from the affidavit of Donald Schupak, Chairman and Chief Executive Officer of Horn & Hardart, from the affidavit of Philip Evans, formerly in-house counsel for Burger King, and from the deposition testimony of Lee Abrams, outside counsel for Burger King. Schupak states in his affidavit that the dates on Schedule 1 have no significance, and that the parties had no understanding that the dates on Schedule 1 were in fact the expiration dates of Horn & Hardart's franchises. Affidavits of other Horn & Hardart officials contain similar statements. Philip Evans' affidavit, however, directly contradicts Schupak as to Burger King's understanding of Schedule 1. 1 Also, Lee Abrams' deposition testimony, although marked by a general lack of recall, contains a definite no to the question whether anyone ever suggested that Exhibit B would control the franchise terms. 19 In addition, there is a factual issue as to what physically makes up the Settlement Agreement. After the parties had signed the Settlement Agreement, Horn & Hardart discovered that Schedule 1 incorrectly listed three properties that it no longer owned and omitted three properties that it did own. Donald Schupak asked Burger King to confirm the mistake right away, and Philip Evans sent a mailgram listing the affected properties, but omitting any reference to expiration dates. What happened after this point is a source of controversy. Burger King contends that Gary Forst, outside counsel for Horn & Hardart, requested a revised Schedule 1, which Evans prepared and sent, complete with expiration dates for all properties. Horn & Hardart disputes both that it ever agreed to insertion of this revised Schedule 1 in the Settlement Agreement and that Gary Forst had any authority to act for it. 20 Revised Schedule 1 obviously is relevant to the issue whether the parties intended the Schedule 1 dates to have any significance. Horn & Hardart maintains that the absence of expiration dates in Philip Evans' mailgram means that Schedule 1's only significance is to identify the fourteen franchises referred to in the Settlement Agreement. If Burger King intended to prepare a revised Schedule 1, however, the only function of the mailgram was to acknowledge the error in the original Schedule 1. Thus, factual questions exist concerning the circumstances behind the preparation of revised Schedule 1 and the parties' agreement (or lack thereof) to replace the original Schedule 1, all of which are material to the parties' intent regarding the franchise terms.