Opinion ID: 1664562
Heading Depth: 1
Heading Rank: 3

Heading: Motion for a JML

Text: The trial court denied IP's postjudgment motion for a JML, in which IP claimed that the contract was not ambiguous and that there was insufficient evidence indicating that IP had breached the contract. The trial court found the contract to be ambiguous when it evaluated Madison's and IP's pretrial motions for a summary judgment. The trial court issued its order holding that the contract was ambiguous on November 2, 2004. IP argues that its failure to provide the volume of paperboard for coating that was agreed to in the contract was not a breach of the contract because, it argued, provision had been made in the contract for the eventuality that IP might not provide that volume. One such provision, section 3, established graduated pricing at lower volumes than the minimum monthly volume promised in section 2. [4] The other section, section 1.2, bases IP's right to exclusivity on IP's meeting the volume requirements specified in section 2. IP argues that the three sections  1.2, 2, and 3  taken together unambiguously construct a contract that permitted IP to provide less than the minimum volume to Madison without breaching the contract. Madison argues that [i]f the trial court determines that a contract `is ambiguous or uncertain in any respect, it becomes a question for the fact-finder to determine the true meaning of the contract.' Ex parte Harris, 837 So.2d [283, 290 (Ala.2002)]. Madison's brief at 28. The trial court determined that the contract was ambiguous, and it referred the breach-of-contract claim to the jury. It is from this decision that IP appeals. ``A judgment as a matter of law is proper only where there is a complete absence of proof on a material issue or where there are no controverted questions of fact on which reasonable people could differ and the moving party is entitled to a judgment as a matter of law.' Southern Energy Homes, Inc. v. Washington, 774 So.2d 505, 510-11 (Ala. 2000), quoting Locklear Dodge City, Inc. v. Kimbrell, 703 So.2d 303, 304 (Ala. 1997). In reviewing the denial of a motion for a judgment as a matter of law, this Court is required to view the evidence in a light most favorable to the nonmovant. Kmart Corp. v. Kyles, 723 So.2d 572, 573 (Ala.1998).' Wood v. Phillips, 849 So.2d 951, 957 (Ala. 2002) (quoting Liberty Nat'l Life Ins. Co. v. Daugherty, 840 So.2d 152, 156 (Ala. 2002)). See also Cochran v. Ward, 935 So.2d 1169 (Ala.2006); Thompson Props. 119 AA 370, Ltd. v. Birmingham Hide & Tallow, 897 So.2d 248 (Ala.2004); and Alabama Dep't of Transp. v. Land Energy, Ltd., 886 So.2d 787 (Ala.2004). The nonmovant in this case is Madison. As discussed below, we conclude that the trial court did not err in denying IP's motion for a JML. The contract, which the parties executed after extensive negotiations, addresses volume in three different sections. Section 1.2 of the contract, entitled Territory, Uses and Restrictions, provides, in pertinent part: The exclusive rights and privileges granted to International Paper by Madison Oslin within the Territory shall be for paper and paperboard materials for the manufacture of corrugated containers used for the red meat and poultry products described below.... Such exclusivity shall be conditioned upon International Paper meeting the quantity volume requirements contained in Section 2 below for the coating of its paper and paperboard materials. In the event the quantity volume requirements are not met by the first anniversary date of this Agreement, the parties will negotiate in good faith as to exclusivity and pricing.... Section 2 of the contract, entitled Volume Requirements, provides, in pertinent part: International Paper agrees to begin providing Madison Oslin with paper and paperboard materials onto which to apply EvCote coatings (as herein described) as soon as possible after the commencement date described in Section 14 hereof. International Paper's monthly requirement for Madison Oslin's application of these coatings on its materials shall reach a level of no less than 75,000 msf of its paper and paperboard materials on or before June 1, 2002, which minimum level shall be maintained by International Paper for the remainder of the term of this Agreement as described in Section 14 herein. Section 3 of the contract, entitled Price, provides: The price to be paid to Madison Oslin by International Paper for the monthly volume of application described in Section 2 above shall be: $6.75 per msf for MAP bodies if total monthly volume is between 0 and 25,000 msf; $6.50 per msf for MAP bodies if total monthly volume is between 25,001 and 50,000 msf; $6.25 per msf for MAP bodies if total monthly volume is between 50,001 and 75,000 msf; $6.00 per msf for MAP bodies if total monthly volume is in excess of 75,000 msf; and $5.75 per msf for lid stock for all lid stock orders; provided, however, that such prices shall be renegotiated between the parties in the event that International Paper does not meet or exceed the volume requirements contained in Section 2 herein. In its postjudgment motion of February 25, 2005, and in this appeal, IP again argues that the contract did not require it to provide Madison with a minimum volume each month. IP argues that it is entitled to a judgment as a matter of law on Madison Oslin's claim of breach of contract because the contract is unambiguous and by its plain terms does not require [it] to pay for uncoated volumes. IP's brief at 25. A patent ambiguity is one that is apparent upon the face of the instrument, arising by reason of inconsistency or uncertainty in the language employed. See McCollum v. Atkins, 912 So.2d 1146, 1148 (Ala.Civ.App.2005) (quoting Jacoway v. Brittain, 360 So.2d 306, 308 (Ala.1978)). Meyer v. Meyer, 952 So.2d 384, 391 (Ala. Civ.App.2006). Section 1.2 deals with exclusivity. It states that exclusivity shall be conditioned upon International Paper meeting the quantity volume requirements contained in Section 2.... In the event the quantity volume requirements are not met by the first anniversary date of this Agreement, the parties will negotiate in good faith as to exclusivity and pricing.... This section is limited by its terms to a remedy of renegotiation only for a breach occurring before the first anniversary of the contract. The first anniversary of the contract was January 1, 2003, and Madison sued on March 18, 2003, so the remedy provided by section 1.2 was not available for damages from the continuing breach incurred after January 1, 2003. Section 2 deals with volume. It states that volume shall reach a level of no less than 75,000 msf ... on or before June 1, 2002, which minimum level shall be maintained... for the remainder of the term of this Agreement as described in Section 14 herein. This section makes no provision for a remedy for IP's failure to meet the specified volume. Section 3 deals with pricing for the contract, but finishes with a renegotiation clause that provides that prices shall be renegotiated between the parties in the event that International Paper does not meet or exceed the volume requirements contained in Section 2 herein. Section 1.2 provided for renegotiation of the exclusivity agreement and pricing in the first year of the contract if volume requirements went unmet; section 2 unequivocally requires IP to meet certain specified volume requirements; and section 3 allows for renegotiation of pricing in the event the volume requirements were not met. No provision in any section of the contract permits IP to provide a lower volume than the volume required [5] by the contract in section 2. Yet, the sections dealing with exclusivity and pricing include provisions for remedies for failures to meet the volume requirements, while no such remedy is provided in the section specifically devoted to the volume that shall be reached and maintained. The contract is unclear as to whether IP's failure to achieve the volume requirements of section 2 is permissible by virtue of the price-related remedies of sections 1.2 and 3 or prohibited by the mandatory language employed in the volume provision, section 2. A term is ambiguous only if, applying the ordinary meaning, one would conclude that the provision containing the term is `reasonably susceptible to two or more constructions.' [ State Farm Fire & Casualty Co. v. Slade, ] 747 So.2d [293] at 309 [(Ala.1999)]. Safeway Ins. Co. of Alabama, Inc. v. Herrera, 912 So.2d 1140, 1144 (Ala.2005). The special writings to this opinion present differing, but reasonable, constructions of the contract. Based on the uncertainty and inconsistency in the various provisions of the contract, the trial court did not err in determining that the contract was ambiguous. Reviewing the evidence most favorably to the nonmovant, we conclude that the contract unequivocally established a minimum monthly volume and simultaneously provided remedies when that required minimum volume was not met. This inconsistent language introduced such uncertainty that there was an ambiguity in the contract that could not be resolved within the four corners of the contract. We therefore hold that the trial court did not err in denying IP's motion for a JML, and we affirm its judgment for Madison on the breach-of-contract claim.