Opinion ID: 1559317
Heading Depth: 2
Heading Rank: 1

Heading: Whether it was error to find the contract unambiguous.

Text: ¶ 10. We find the contract clauses, standing alone, are unambiguous. Giving the words their plain and ordinary meaning does not generate an ambiguity. See Miss. Farm Bureau Cas. Ins. Co. v. Britt, 826 So.2d 1261, 1266 (Miss.2002). However, when the clauses are read together, the clauses conflict. A conflict within the whole meets the very definition of ambiguity. An ambiguity is defined as a susceptibility to two reasonable interpretations. Amer. Guarantee & Liability. Ins. Co. v. 1906 Co., 129 F.3d 802, 811-812 (5th Cir.1997) (citing Ins. Co. of N. Amer. v. Deposit Guar. Nat'l Bank, 258 So.2d 798, 800 (Miss.1972)). A widely-quoted judicial definition of ambiguous is as follows: An ambiguous word or phrase is one capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business. Walk-In Med. Ctrs., Inc. v. Breuer Capital Corp., 818 F.2d 260, 263 (2d Cir.1987) (quoting Eskimo Pie Corp. v. Whitelawn Dairies, Inc., 284 F.Supp. 987, 994 (S.D.N.Y.1968)). A contract is ambiguous if it contains conflicting clauses when the contract is read as a whole. This contract is capable of more than one reasonable interpretation as to when and how the contract can be terminated. This contract fails to provide clear direction as to which termination clause applies, without consideration of extrinsic evidence. Once a contract is found to be ambiguous, resolution of any uncertainties will be against the drafter of the contract. See Pursue Energy Corp. v. Perkins, 558 So.2d 349, 352 (Miss.1990). ¶ 11. Courts may use a three-tiered approach to contract construction, if required. See Perkins, 558 So.2d at 351. The Perkins Court construed a deed, but this analysis has been followed by this Court in the construction of various types of contracts. See id. at 350. See also One South, Inc. v. Hollowell, 963 So.2d 1156, 1158, 1162-63 (Miss.2007) (lease); Gatlin v. Sanderson Farms, Inc., 953 So.2d 220, 221-23 (Miss.2007) (contract to grow broiler chickens for processor); HeartSouth, PLLC v. Boyd, 865 So.2d 1095, 1097, 1107-08 (Miss.2003) (employment contract); Royer Homes of Miss., Inc. v. Chandeleur Homes, Inc., 857 So.2d 748, 751-53 (Miss. 2003) (sales and distribution contract). In the first tier, the court will attempt to ascertain intent by examining the language contained within the `four corners' of the instrument in dispute. Perkins, 558 So.2d at 352. The Perkins Court stated the following: In cases in which an instrument is not so clear ( e.g., different provisions of the instrument seem inconsistent or contradictory), the court will, if possible, harmonize the provisions in accord with the parties' apparent intent. A cursory examination of the provisions may lead one to conclude that the instrument is irreconcilably repugnant; however, this may not be a valid conclusion. If examination solely of the language within the instrument's four corners does not yield a clear understanding of the parties' intent, the court will generally proceed to another tier in the three-tiered process. This entails discretionary implementation of applicable canons of contract construction. For example, one rule espoused by this Court suggests that uncertainties should be resolved against the party who prepared the instrument. Application of canons of construction may provide a court with an objective inference of the parties' intent. But if, at this step in the process, intent remains unascertainable ( i.e., the instrument is still considered ambiguous), then the court may resort to a final tier in the three-tiered process of construction. This final tier entails consideration of extrinsic or parol evidence. Id. at 352-53 (internal citations omitted). ¶ 12. The contract at issue contains termination clauses that lack clarity and that are not harmonious. Clause 3.1 calls for a one-year term and restricts the right of CSI to terminate the agreement as to a successful AGENT and a successful Agency relationship. Clause 3.3 allows for automatic one-year renewals. Clause 3.5 allows either party to terminate at will. Clause 3.4 and the unnumbered paragraph following clause 3.5 allow CSI to terminate with cause under certain circumstances. Thus, reasonable minds could reach different conclusions after reading the whole contract, in discerning the intent of the parties, while giving effect to each separate clause. We find that the conflicts among the clauses create an ambiguity. Perkins establishes the next tier of canons of construction, i.e., resolution of ambiguities shall disfavor the drafter of the instrument. Id. However, resolving the ambiguity to give Dalton the most favorable interpretation does not end the inquiry. ¶ 13. The language of the contract requires the use of parol or extrinsic evidence to determine if Dalton is eligible for 3.1 consideration, as 3.1 applies only to a successful AGENT with a successful Agency relationship, which cannot be determined within the four corners of the contract. A court cannot complete the third tier of analysis without parol or extrinsic evidence. In the case sub judice, this evidence was provided by CSI, whose president attested, Dalton's agency was a successful agency.... However, that finding begs the question as to whether CSI terminated the contract for the reason it originally furnished to Dalton or whether CSI terminated the contract for the reasons offered after litigation began. That determination is a material fact and is in dispute. Whether CSI honored or breached the contract is a task for a jury, which leads us to Issue II. See Royer Homes, 857 So.2d at 752 (If the terms of a contract are subject to more than one reasonable interpretation, it is a question properly submitted to the jury.); Burton v. Choctaw County, 730 So.2d 1, 9 (Miss. 1997).