Opinion ID: 203976
Heading Depth: 3
Heading Rank: 2

Heading: AICCDC and BCC

Text: We turn next to the relationship between AICCDC and BCC. The Finance Agreement is nominally separate from the Program Agreement and the Insurance Policy. We construe the three documents together because they were part of the same transaction. [16] See This Is Me, Inc. v. Taylor, 157 F.3d 139, 143 (2d Cir.1998) (noting that [u]nder New York law, all writings forming part of a single transaction are to be read together and approving jury instruction that New York law requires that all writings which form part of a single transaction and are designed to effectuate the same purpose be read together, even though they were executed on different dates and were not all between the same parties). The relevant provision of the Finance Agreement is § 14, entitled Termination. Most of the language in § 14 explicitly covers termination for cause. It is clear that the first sentence authorizes termination by either side without cause given ten days notice, similar to the Program Agreement. And, similar to the Program Agreement, § 14 of the Finance Agreement also contains a continuation proviso: in case of termination without cause, this Agreement shall continue in full force and effect with respect to Leases which remain subject to Coverage at the time of termination of this Agreement (Continuation Proviso). The parties disagree about the effect of the lengthy final sentence of the paragraph which provides as follows: Whenever any party notifies the other party of the termination of this Agreement, upon the effective date of such termination ...: (a) AICCDC shall pay in immediately available funds to Insured Lessor the unearned portion of the Insurance Charges remitted by Insured Lessor to AICCDC for all then existing Coverage, and (b) Insured Lessor shall pay to the AICCDC in immediately available funds to the extent that Insurance Charges are earned prior to such date: (i) all such Insurance Charges, less Subcontractor Fees, collected from Lessees prior to such date and not previously remitted, and (ii) all such Insurance Charges, less Subcontractor Fees, collected on or after such date, which shall be remitted to AICCDC promptly upon such receipt. That is, each party will return any unearned money and will be entitled to any money earned up to that point. BCC argues that, the Continuation Proviso notwithstanding, the language of the final sentenceWhenever any party notifies the other party of the termination of this Agreementcontrols in this case because the Agreement has been terminated, and therefore both parties must reconcile their finances in accordance with the rest of the final sentence. Thus, BCC argues, § 14 clearly contemplates a clean and simple termination of the agreement. Arguing against this reading, AICCDC contends that the Continuation Proviso would be rendered meaningless under BCC's reading of the final sentence. However, AICCDC argues that the Continuation Proviso can be reconciled with the final sentence by noting that the final sentence has effect only upon the effective date of such termination. Because the Continuation Proviso states that this Agreement shall continue in full force and effect with respect to Leases which remain subject to Coverage at the time of termination of this Agreement, there never is a termination with respect to leases covered at the time of the overall Agreement's termination, and the provisions of the final sentence are never triggered. That is, AICCDC sees termination without cause under § 14 as prospective only, covering new leases but leaving undisturbed existing leases. We agree with AICCDC's reading of § 14. In construing a contract, one of a court's goals is to avoid an interpretation that would leave contractual clauses meaningless. Two Guys from Harrison-N.Y., Inc. v. S.F.R. Realty Assocs., 63 N.Y.2d 396, 482 N.Y.S.2d 465, 472 N.E.2d 315, 318 (1984) (internal citations omitted); see also Galli v. Metz, 973 F.2d 145, 149 (2d Cir. 1992) (noting that [u]nder New York law an interpretation of a contract that has the effect of rendering at least one clause superfluous or meaningless ... is not preferred and will be avoided if possible and that an interpretation that gives a reasonable and effective meaning to all terms of a contract is generally preferred to one that leaves a part unreasonable or of no effect) (internal citations and quotations omitted); God's Battalion of Prayer Pentecostal Church, Inc. v. Miele Assocs., LLP, 6 N.Y.3d 371, 812 N.Y.S.2d 435, 845 N.E.2d 1265, 1267 (2006) (A contract should be read to give effect to all its provisions.) (internal quotations omitted). BCC's reading of § 14 would render the Continuation Proviso meaningless surplusage and would call its inclusion in the document into serious question. AICCDC's reading leaves the Whenever clause with meaning: it applies in cases of termination for cause. AICCDC's reading is also consonant with our interpretation of the Program Agreement. Moreover, when general language, such as the Whenever clause (which on its face covers termination for or without cause) is in conflict with more specific language, such as the Continuation Proviso (which on its face applies only in case of termination without cause), the specific language controls. See Muzak Corp. v. Hotel Taft Corp., 1 N.Y.2d 42, 150 N.Y.S.2d 171, 133 N.E.2d 688, 689 (1956); Bank of Tokyo-Mitsubishi, Ltd., New York Branch v. Kvaerner a.s., 243 A.D.2d 1, 671 N.Y.S.2d 905, 910 (N.Y.App.Div. 1998) (same); see also William Higgins & Sons, Inc. v. New York, 20 N.Y.2d 425, 284 N.Y.S.2d 697, 231 N.E.2d 285, 286 (1967) (A specific provision will not be set aside in favor of a catchall clause.).