Opinion ID: 2530632
Heading Depth: 1
Heading Rank: 11

Heading: Specific Contractual Terms

Text: Under New York law, a basic principle of contractual interpretation is that specific terms override general language. See, e.g., Bowmer v. Bowmer, 50 N.Y.2d 288, 428 N.Y.S.2d 902, 406 N.E.2d 760, 762 (1980); accord John Hancock Mut. Life Ins. Co. v. Carolina Power & Light Co., 717 F.2d 664, 669 n. 8 (2d Cir.1983) (New York law recognizes that definitive, particularized contract language takes precedence over expressions of intent that are general, summary, or preliminary.); see also Restatement (Second) of Contracts § 203 (1981) (In the interpretation of a promise or agreement or a term thereof,... specific terms and exact terms are given greater weight than general language.). If the general and specific provisions are inconsistent, the specific provision controls. Muzak Corp. v. Hotel Taft Corp., 1 N.Y.2d 42, 150 N.Y.S.2d 171, 133 N.E.2d 688, 690 (1956); accord Aguirre v. City of New York, 214 A.D.2d 692, 625 N.Y.S.2d 597, 598 (N.Y.App.Div.1995); see also 11 Williston & Lord, supra, § 32:10 (Where general and specific clauses conflict, the specific clause governs the meaning of the contract.); 5 Kniffin, supra, § 24.23 (If the apparent inconsistency is between a clause that is general and broadly inclusive in nature and one that is more limited and specific in its coverage, the more specific term should usually be held to prevail over the more general term.); cf. Israel v. Chabra, 12 N.Y.3d 158, 878 N.Y.S.2d 646, 906 N.E.2d 374, 380 n. 3 (2009) (noting that `the more specific clause controls the more general,' if the contractual provisions are irreconcilable) (quoting 11 Williston & Lord, supra, § 32:15). In this action, the specific terms of the Rates and Charges section override the general language of the Description section. The Rates and Charges section prescribes that the UCC is a specific percentage of the consumer's interstate and international bill. See, e.g., Aplt.App. at 1666. By contrast, to the extent the Description section is a promise, it uses general language to limit the UCC to the amount that AT & T must pay into the USF. Id. at 1665. Although the sections address the same subject matter, viz., the amount of the UCC rate, they are inconsistent because they provide different methodologies to calculate the UCC. Thus, the specific terms of the Rates and Charges section trump the broad language of the Description section. The majority claims that it has not violated this principle because its interpretation reconciles these two sections. Maj. Op. at 1206-07. Under New York law, we must interpret a contract so as to give full meaning and effect to the material provisions. Excess Ins. Co. v. Factory Mut. Ins. Co., 3 N.Y.3d 577, 789 N.Y.S.2d 461, 822 N.E.2d 768, 771 (2004); accord Beal Savings Bank v. Sommer, 8 N.Y.3d 318, 834 N.Y.S.2d 44, 865 N.E.2d 1210, 1213 (2007) (A reading of the contract should not render any portion meaningless.); see also Restatement (Second) of Contracts § 203(a) ([A]n interpretation which gives a reasonable, lawful, and effective meaning to all the terms is preferred to an interpretation which leaves a part unreasonable, unlawful, or of no effect.). The majority interprets the Description section to require AT & T to limit its UCC collections to amounts it was required to pay into the USF and to provide[ ] a mechanism for changing this rate. Maj. Op. at 1207. On the other hand, the majority interprets the Rates and Charges section simply to define[] the mechanism for collecting funds. Id. at 1207. Thus, the majority concludes that these two sections are not irreconcilable because they impose separate obligations. The majority errs because, in giv[ing] full meaning and effect to all of the provisions, it fails to give the specific term greater weight than the general language. Under New York law, if the specific and general provisions of a contract are reconcilable, the specific provisions tend to restrict the general. Bowmer, 428 N.Y.S.2d 902, 406 N.E.2d at 762; accord Muzak Corp., 150 N.Y.S.2d 171, 133 N.E.2d at 690 (holding that the specific provision trumped the general provision, even in the absence of any inconsistency between those provisions); accord Aramony, 254 F.3d at 413-14; see OBG Tech. Servs., Inc. v. Northrop Grumman Space & Mission Sys. Corp., 503 F.Supp.2d 490, 515 (D.Conn.2007) (applying New York law); see also 11 Williston & Lord, supra, § 32:10 (Even absent a true conflict, specific words will limit the meaning of general words if it appears from the whole agreement that the parties' purpose was directed solely toward the matter to which the specific words or clause relate.). In direct contrast to this basic principle, the majority seeks to harmonize these provisions by giving greater weight to the general language and finding that AT & T would be in breach of the CSA, even though it charged the specific UCC listed in the CSG. [9]