Opinion ID: 63385
Heading Depth: 3
Heading Rank: 4

Heading: Express Obligations

Text: Innovative further claims that the same actions that allegedly violated the agreement’s “implied obligations” also violated the agreement’s express terms. This argument, too, is unavailing. The first paragraph of the InnovativeNorthwood agreement sets forth Innovative’s territory as follows: The territory for Innovative Sales, L.L.C. is bordered on the North by the Mississippi state line that is south of Alexandra [sic], La.; the Eastern limit is the Mississippi state line; the South limit is I-10 at the I-55 intersection & North of the I-12 & I-10 which is North of Lake Ponthartrain [sic]; the West limit includes Lafayette, LA & New Iberia. The second paragraph restricts Northwood, in certain circumstances, from establishing a new dealer in “New Orleans”: No new dealer shall be established in New Orleans, LA before 10-30-2004 or after with an initial stocking order of less than 10 units. Furthermore[,] Innovative Sales, LLC will have an opportunity to preclude a New Orleans dealer from opening by making a stocking order which will match the order of a prospective 7 No. 07-30598 New Orleans dealer. Meanwhile, the Northwood-Bourget’s agreement sets forth Bourget’s territory as follows: beginning at a point south of intersection of I10 & I55 (LaPlace) East to Chalmette, South to Boothville, West to Houma, Northwest to Jeanerette thence East to the point of beginning. This territory shall exclude the Parish of New Orleans. Based on this language, and on the map exhibit derived from it, we agree with the district court that “it is clear . . . that [the territorial descriptions] do not overlap,” and that as a result, Northwood did not breach the contract by selling trailers to Bourget’s within Innovative’s alleged “exclusive” territory.3 Innovative attempts to avoid this straightforward reading by offering parol evidence that allegedly evidences an intent that the term “New Orleans” dealer includes the “the Greater New Orleans area” or “the metropolitan area of New Orleans,” which is defined by the United States Census as “including the seven surrounding parishes of Orleans.” As this court has noted, however: In general, under Louisiana law, extrinsic evidence cannot be used to “negate or vary” the unambiguous terms of a written contract. See Patterson [v. City of New Orleans], 686 So. 2d [87, 90 (La. Ct. App. 1996)]. “When the words of a contract are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the parties’ intent.” La. Civ. Code Ann. art. 2046; see also Steier v. Heller, 732 So. 2d 787, 792 (La. Ct. App. 1999) (“When the terms of a written contract are clear, unambiguous, and lead to no absurd consequences, parol evidence cannot be used to vary or explain the contract terms, and the parties’ meaning or intent must be determined from the four corners of the contract”); Patterson, 686 So. 2d at 90. Only where a contract is ambiguous can a court base its interpretation on extrinsic evidence. See Patterson, 686 So. 2d at 90. A contract is ambiguous only if its terms are unclear or susceptible to more than one interpretation, or the intent of the parties cannot be ascertained from the language employed. See McDuffie v. Riverwood Int’l Corp., 3 Correspondingly, Northwood owed no opportunity to Innovative to match Bourget’s order. 8 No. 07-30598 660 So. 2d 158, 160 (La. Ct. App. 1995). Gebreyesus v. F.C. Schaffer & Assocs., 204 F.3d 639, 643 (5th Cir. 2000). Applying these principles here, we (like the district court) hold that the Innovative-Northwood agreement is clear and unambiguous: Innovative’s territory does not encompass the City of New Orleans, and notwithstanding Innovative’s argument to the contrary, “New Orleans” plainly means “the City of New Orleans.” If a seasoned dealer like Innovative meant to secure a larger coverage area, it should have said so in the contract; it cannot ask this court to vary the explicit territorial provisions after the fact. Innovative’s parol evidence is thus inadmissible, and given that the territory granted to Bourget’s in the Northwood-Bourget’s agreement specifically excludes the Parish of Orleans, it is likewise clear that Northwood did not breach the Innovative-Northwood agreement by selling trailers to Bourget’s. As for Innovative’s misrepresentation-of-facts (regarding the availability of FEMA trailers) and price-coercion arguments, the terms of the InnovativeNorthwood agreement do not require Northwood to sell a certain number of trailers to Innovative over a specific period of time, nor do they mention anything about pricing or pricing negotiations.4 Consequently, Northwood did not breach the express terms of the agreement in those respects, either.