Opinion ID: 1312305
Heading Depth: 2
Heading Rank: 1

Heading: Contract and Summary Judgment Principles

Text: Under New York law, which the parties agree is controlling here, the initial question for the court on a motion for summary judgment with respect to a contract claim is whether the contract is unambiguous with respect to the question disputed by the parties. International Multifoods Corp. v. Commercial Union Insurance Co., 309 F.3d 76, 83 (2d Cir. 2002) ( International Multifoods ); see, e.g., Beth Medrash Eeyun Hatalmud v. Spellings, 505 F.3d 139, 146 (2d Cir.2007) ( Beth Medrash ); Walk-In Medical Centers, Inc. v. Breuer Capital Corp., 818 F.2d 260, 263 (2d Cir.1987). The matter of whether the contract is ambiguous is a question of law for the court. See, e.g., International Multifoods, 309 F.3d at 83; Bailey v. Fish & Neave, 8 N.Y.3d 523, 528, 837 N.Y.S.2d 600, 603, 868 N.E.2d 956 (2007) ( Bailey ); Greenfield v. Philles Records, Inc., 98 N.Y.2d 562, 569, 750 N.Y.S.2d 565, 569, 780 N.E.2d 166 (2002) ( Greenfield ); W.W.W. Associates, Inc. v. Giancontieri, 77 N.Y.2d 157, 162, 565 N.Y.S.2d 440, 443, 566 N.E.2d 639 (1990) ( W.W.W.Associates ). An ambiguity exists where the terms of the contract could suggest 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. International Multifoods, 309 F.3d at 83 (internal quotation marks omitted). Evidence as to such custom and usage is to be considered by the court where necessary to understand the context in which the parties have used terms that are specialized. See, e.g., Fox Film Corp. v. Springer, 273 N.Y. 434, 8 N.E.2d 23 (1937). When the parties have used contract terms which are in common use in a business or art and have a definite meaning understood by those who use them, but which convey no meaning to [t]hose who are not initiated into the mysteries of the craft, the parties, in order to have the court construe their contracts, must furnish [the court] with the dictionaries they have used. Id. at 436, 8 N.E.2d at 24. In such circumstances, the court must be informed of the meaning of the language as generally understood in that business, in the light of the customs and practices of the business. Id. at 437, 8 N.E.2d at 24. Proof of custom and usage does not mean proof of the parties' subjective intent, for [e]xtrinsic evidence of the parties' intent may be considered only if the agreement is ambiguous, Greenfield, 98 N.Y.2d at 569, 750 N.Y.S.2d at 569, 780 N.E.2d 166; see, e.g., Bailey, 8 N.Y.3d at 528, 837 N.Y.S.2d at 603, 868 N.E.2d 956. Rather, proof of custom and usage consists of proof that the language in question is `fixed and invariable' in the industry in question. Hutner v. Greene, 734 F.2d 896, 900 (2d Cir.1984) (quoting Belasco Theatre Corp. v. Jelin Productions, Inc., 270 A.D. 202, 205, 59 N.Y.S.2d 42, 45 (1st Dep't 1945)). The trade usage must be so well settled, so uniformly acted upon, and so long continued as to raise a fair presumption that it was known to both contracting parties and that they contracted in reference thereto. British International Insurance Co. v. Seguros La Republica, S.A., 342 F.3d 78, 84 (2d Cir.2003) (quoting Reuters Ltd. v. Dow Jones Telerate, Inc., 231 A.D.2d 337, 343-44, 662 N.Y.S.2d 450, 454 (1st Dep't 1997)). Thus, the proffered custom or usage must establish that the meaning of the term in question was general, uniform and unvarying. Belasco Theatre Corp. v. Jelin Productions, 270 A.D. at 206, 59 N.Y.S.2d at 45. A custom, in order to become a part of a contract, must be so far established and so far known to the parties, that it must be supposed that their contract was made in reference to it. For this purpose the custom must be established, and not casual, uniform and not varying, general and not personal, and known to the parties. Id., 59 N.Y.S.2d at 46 (internal quotation marks omitted) (emphases added). In sum, [e]vidence outside the four corners of the document as to what was really intended but unstated or misstated is generally inadmissible to add to or vary the writing, W.W.W. Associates, 77 N.Y.2d at 162, 565 N.Y.S.2d at 443, 566 N.E.2d 639; evidence as to custom and usage is considered, as needed, to show what the parties' specialized language is `fair[ly] presum[ed]' to have meant, British International Insurance Co. v. Seguros La Republica, S.A., 342 F.3d at 84 (quoting Reuters Ltd. v. Dow Jones Telerate, Inc., 231 A.D.2d at 344, 662 N.Y.S.2d at 454). No ambiguity exists where the contract language has `a definite and precise meaning, unattended by danger of misconception in the purport of the [contract] itself, and concerning which there is no reasonable basis for a difference of opinion.' Hunt Ltd. v. Lifschultz Fast Freight, Inc., 889 F.2d 1274, 1277 (2d Cir. 1989) ( Hunt ) (quoting Breed v. Insurance Co. of North America, 46 N.Y.2d 351, 355, 413 N.Y.S.2d 352, 355, 385 N.E.2d 1280 (1978)). Language whose meaning is otherwise plain does not become ambiguous merely because the parties urge different interpretations in the litigation, Hunt, 889 F.2d at 1277, unless each is a reasonable interpretation, Seiden Associates, Inc. v. ANC Holdings, Inc., 959 F.2d 425, 428 (2d Cir.1992) ( Seiden ); see, e.g., K. Bell & Associates v. Lloyd's Underwriters, 97 F.3d 632, 637 (2d Cir. 1996); Readco, Inc. v. Marine Midland Bank, 81 F.3d 295, 299 (2d Cir.1996) (no ambiguity exists where the alternative construction would be unreasonable). Thus, the court should not find the contract ambiguous where the interpretation urged by one party would strain [ ] the contract language beyond its reasonable and ordinary meaning. Bethlehem Steel Co. v. Turner Construction Co., 2 N.Y.2d 456, 459, 161 N.Y.S.2d 90, 93, 141 N.E.2d 590 (1957). Where the parties dispute the meaning of particular contract clauses, the task of the court is to determine whether such clauses are ambiguous when `read in the context of the entire agreement,' Sayers v. Rochester Telephone Corp. Supplemental Management Pension Plan, 7 F.3d 1091, 1095 (2d Cir.1993) (quoting W.W.W. Associates, 77 N.Y.2d at 163, 565 N.Y.S.2d at 443, 566 N.E.2d 639); and where consideration of the contract as a whole will remove the ambiguity created by a particular clause, there is no ambiguity, Readco, Inc. v. Marine Midland Bank, 81 F.3d at 300; see, e.g., Hudson-Port Ewen Associates, L.P. v. Kuo, 78 N.Y.2d 944, 945, 573 N.Y.S.2d 637, 637, 578 N.E.2d 435 (1991). For example, in W.W.W. Associates, which involved a dispute as to whether a sales contract provision stating that either the purchaser or the seller could terminate the contract at a certain time conferred that right only on the purchaser, the New York Court of Appeals noted that the contract, negotiated by sophisticated businessmen, contained other provisions that expressly bestowed certain options on the purchaser alone. The Court concluded that any ambiguity in the disputed provision was resolved by consideration of the contract in its entirety and recognition of the contrasting provisions adopted by the parties. See 77 N.Y.2d at 162-63, 565 N.Y.S.2d at 443-44, 566 N.E.2d 639. As a general matter, the objective of contract interpretation is to give effect to the expressed intentions of the parties, Hunt, 889 F.2d at 1277 (emphasis added); [t]he best evidence of what parties to a written agreement intend is what they say in their writing, Greenfield, 98 N.Y.2d at 569, 750 N.Y.S.2d at 569, 780 N.E.2d 166 (internal quotation marks omitted). Thus, a written agreement that is complete, clear and unambiguous on its face must be [interpreted] according to the plain meaning of its terms, id., without the aid of extrinsic evidence, International Multifoods, 309 F.3d at 83 (internal quotation marks omitted); see, e.g., Network Publishing Corp. v. Shapiro, 895 F.2d 97, 99 (2d Cir.1990) ([w]e must consider the words [of a contract] themselves for they are always the most important evidence of the parties' intention (internal quotation marks omitted)); Bailey, 8 N.Y.3d at 528, 837 N.Y.S.2d at 603, 868 N.E.2d 956 ([w]here the language is clear, unequivocal and unambiguous, the contract is to be interpreted by its own language (internal quotation marks omitted)). The court should read the integrated contract as a whole to ensure that undue emphasis is not placed upon particular words and phrases, Bailey, 8 N.Y.3d at 528, 837 N.Y.S.2d at 603, 868 N.E.2d 956, and to safeguard against adopting an interpretation that would render any individual provision superfluous, International Multifoods, 309 F.3d at 86 (internal quotation marks omitted). Further, the courts may not by construction add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing. Bailey, 8 N.Y.3d at 528, 837 N.Y.S.2d at 603, 868 N.E.2d 956 (internal quotation marks omitted). [I]f the agreement on its face is reasonably susceptible of only one meaning, a court is not free to alter the contract to reflect its personal notions of fairness and equity. Greenfield, 98 N.Y.2d at 569-70, 750 N.Y.S.2d at 570, 780 N.E.2d 166; see, e.g., Breed v. Insurance Co. of North America, 46 N.Y.2d at 355, 413 N.Y.S.2d at 355, 385 N.E.2d 1280 (court[s] may not make or vary the contract ... to accomplish [their] notions of abstract justice or moral obligation). We review de novo both the district court's determination of whether a contract is ambiguous, see, e.g., Beth Medrash, 505 F.3d at 145; Seiden, 959 F.2d at 428; Walk-In Medical Centers, Inc. v. Breuer Capital Corp., 818 F.2d at 263, and, as to an unambiguous contract, the district court's interpretation of its terms, see, e.g., Beth Medrash, 505 F.3d at 145; Seiden, 959 F.2d at 429; Network Publishing Corp. v. Shapiro, 895 F.2d at 99. We also review de novo the grant or the denial of a motion for summary judgment, drawing all reasonable factual inferences in favor of the party against which summary judgment is sought. See, e.g., SR International Business Insurance Co. v. World Trade Center Properties, LLC, 467 F.3d 107, 118 (2d Cir.2006); British International Insurance Co. v. Seguros La Republica, S.A., 342 F.3d at 81; International Multifoods, 309 F.3d at 82. When both sides have moved for summary judgment, each party's motion must be examined on its own merit s, and in each case all reasonable inferences must be drawn against the party whose motion is under consideration. Morales v. Quintel Entertainment, Inc., 249 F.3d 115, 121 (2d Cir.2001); see, e.g., Schwabenbauer v. Board of Education, 667 F.2d 305, 314 (2d Cir.1981).