Opinion ID: 2530632
Heading Depth: 1
Heading Rank: 8

Heading: Prefatory Language

Text: Even though the CSA incorporated the CSG's Description section by reference, the majority's interpretation is untenable because the first sentence of the Description section is unenforceable prefatory language. Under New York law, prefatory language to a contract is not part of the operative agreement. See, e.g., Burr v. Am. Spiral Spring Butt Co., 81 N.Y. 175, 178 (1880) (Recitals in a contract are not strictly any part of the contract....); Jones Apparel Group, Inc. v. Polo Ralph Lauren Corp., 16 A.D.3d 279, 791 N.Y.S.2d 409, 410 (N.Y.App.Div.2005) ([R]ecitals... are not part of the operative agreement.); Ross v. Ross, 233 A.D. 626, 253 N.Y.S. 871, 882 (N.Y.App.Div.1931) (The recitals in a contract form no part thereof....), aff'd sub nom., Hutchison v. Ross, 262 N.Y. 381, 187 N.E. 65 (1933). Courts have treated clauses that are analogous to the Description language at issue here as the functional equivalents of recitals. See, e.g., United States v. Hamdi, 432 F.3d 115, 123 (2d Cir.2005) (Sotomayor, J.) (finding that the introductory section of a plea agreement was a general prefatory statement, even though it used a promissory phrase); Olander v. State Farm Mut. Auto. Ins. Co., 317 F.3d 807, 811 (8th Cir.2003) (finding that hortatory language in the preamble to an agreement was effectively a recital); Aramony v. United Way of Am., 254 F.3d 403, 413 (2d Cir. 2001) (finding that a Purpose of the Plan provision of a contract is analogous ... to a contract's `whereas' clause); Devan Motors of Fairfield, Inc. v. Infiniti Div. of Nissan N. Am., Inc., 579 F.Supp.2d 294, 313 (D.Conn.2008) (The description of a contract's purposes is analogous to a `whereas' clause.); Sengillo v. Valeo Elec. Sys., Inc., 536 F.Supp.2d 310, 312 (W.D.N.Y.2008) (noting that, under New York law, a clause which is functionally a recital does not, `by any other name,' or even in the absence of a clarifying heading, comprise an enforceable contractual term), aff'd, 328 Fed.Appx. 39 (2d Cir. 2009). The enforceability of prefatory language depends on whether it serves an operative purpose. In general, prefatory language merely provides context to explain the purpose of the agreement. See, e.g., Ross, 253 N.Y.S. at 882 (stating that recitals at most indicate ... the purposes and motives of the parties); see also Black's Law Dictionary 1385 (9th ed. 2009) (defining the term recital, or whereas clause, to mean [a] preliminary statement in a contract ... explaining the reasons for entering into it or the background of the transaction, or showing the existence of particular facts). Although a statement in a `whereas' clause may be useful in interpreting an ambiguous operative clause in a contract, it cannot create any right beyond those arising from the operative terms of the document. Grand Manor Health Related Facility, Inc. v. Hamilton Equities, Inc., 65 A.D.3d 445, 885 N.Y.S.2d 255, 256 (N.Y.App.Div.2009); see Trump Vill. Section 3, Inc. v. N.Y. State Hous. Fin. Agency, 292 A.D.2d 156, 739 N.Y.S.2d 37, 38 (N.Y.App.Div.2002) (holding that the recital clause did not impose contractual obligations ... beyond those specifically set forth in the contract); Musman v. Modern Deb, Inc., 56 A.D.2d 752, 392 N.Y.S.2d 24, 26 (N.Y.App.Div.1977) (Where a recital clause and an operative clause are inconsistent, the operative clause if unambiguous, should prevail.). In this action, the first sentence of the Description section is prefatory language to the specific terms of the CSG. The majority insists that this sentence is an operative contract term. See Maj. Op. at 1205-06. However, this sentence merely defines the UCC as a monthly charge to Customers to recover amounts AT & T must pay into a federal program called the Universal Service Fund (USF). Aplt. App. at 1665. This sentence explains that the purpose of the UCC is to enable AT & T to recover its USF contributions through the specific amounts collected under the Rates and Charges section of the CSG. It has no operative contractual effect.