Opinion ID: 6928644
Heading Depth: 2
Heading Rank: 1

Heading: Contract Ambiglhity

Text: Both parties contend the language of the Retirement Agreement is clear and unambiguous, yet urge opposing interpretations of it. According to Sayers, the Retirement Agreement Rider stipulated what the meaning of inimical conduct was under the Plan with regard to competitive activity. In his view, Rochester Tel can terminate his pension benefits under the Plan for competitive activity only if he engaged in that activity within two years of retirement. That is to say, only if he violated § 2 of his Retirement Agreement. In contrast, Rochester Tel insists the Rider merely clarifies that Sayers could engage in telephone business that was either outside Rochester Tel's territory or not competitive with the company's products and services at any time after retirement without being bound by either the Retirement Agreement's noncompete clause or the Plan's inimical activity clause. Under this reading the Plan's three-year ban on inimical activity still embraces competitive activity undertaken in Rochester Tel's territory, and Sayers, the company asserts, violated that clause. Faced with these conflicting views, the district court held the contracts unambiguously supported Rochester Tel's interpretation because it is reasonable, is consistent with the rest of the [default] Section and with the [Retirement] Agreement, and does no violence to the [Plan] which it references. In the alternative, the district court held that Rochester Tel's unrebutted affidavit testimony concerning the parties' intent amply supported the company's view. Sayers disputes both reasons advanced by the trial court in support of its grant of summary judgment. Our review of such a grant is de novo, employing the same tests as those applied at the district court. See Taggarl v. Time Inc., 924 F.2d 43, 45-46 (2d Cir.1991). We of course may not resolve disputed issues of fact, but instead must determine whether there are genuine issues of fact to be resolved at trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The legal principles governing this dispute are familiar and well settled. The primary objective in contract interpretation is to give effect to the intent of the contracting parties as revealed by the language they chose to use. Seiden Assocs. v. ANC Holdings, Inc., 959 F.2d 425, 428 (2d Cir.1992); accord, Care Travel Co. v. Pan American World Airways, Inc., 944 F.2d 983, 987 (2d Cir.1991); W.W.W. Assocs. v. Giancontieri, 77 N.Y.2d 157, 162, 565 N.Y.S.2d 440, 566 N.E.2d 639 (1990); Hartford Accident & Idem. Co. v. Wesolowski, 33 N.Y.2d 169, 171, 350 N.Y.S.2d 895, 305 N.E.2d 907 (1973). In a contract dispute a motion for summary judgment may be granted only where the agreement's language is unambiguous and conveys a definite meaning. See Seiden, 959 F.2d at 428; see also Rothenberg v. Lincoln Farm Camp, Inc., 755 F.2d 1017, 1019 (2d Cir.1985). If the language is susceptible to different reasonable interpretations, and where there is relevant extrinsic evidence of the parties' actual intent, then the contract's meaning becomes an issue of fact precluding summary judgment. Seiden, 959 F.2d at 428; see also Hartford, 33 N.Y.2d at 172, 350 N.Y.S.2d 895, 305 N.E.2d 907. Ascertaining whether or not a writing is ambiguous is a question of law for the trial court, W.W.W. Assocs., 77 N.Y.2d at 162, 565 N.Y.S.2d 440, 566 N.E.2d 639; see also Metropolitan Life Ins. Co. v. RJR Nabisco, Inc., 906 F.2d 884, 889 (2d Cir.1990), and we review the trial court's determination de novo. See Two Guys from Harrison-N.Y., Inc. v. S.F.R. Realty Assocs., 63 N.Y.2d 396, 403, 482 N.Y.S.2d 465, 472 N.E.2d 315 (1984); see also Garza v. Marine Transp. Lines Inc., 861 F.2d 23, 27 (2d Cir.1988). Contract language is ambiguous if it is “ ‘capable of 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.’ ” Walk-In Medical Centers, Inc. v. Breuer Capital Corp., 818 F.2d 260, 263 (2d Cir.1987) (quoting Eskimo Pie Corp. v. Whitelawn Dairies, Inc., 284 F.Supp. 987, 994 (S.D.N.Y.1968)); accord, Care Travel, 944 F.2d at 988; Garza, 861 F.2d at 27. No ambiguity exists when 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.” Breed v. Insurance Co. of North America, 46 N.Y.2d 351, 355, 413 N.Y.S.2d 352, 385 N.E.2d 1280 (1978); accord, Seiden, 959 F.2d at 428; Metropolitan Life, 906 F.2d at 889. Although the parties dispute the meaning of specific contract clauses, our task is to determine whether such clauses are ambiguous when “read in the context of the entire agreement.” W.W.W. Assocs., 77 N.Y.2d at 163, 565 N.Y.S.2d 440, 566 N.E.2d 639; see also Williams Press, Inc. v. New York, 37 N.Y.2d 434, 440, 373 N.Y.S.2d 72, 335 N.E.2d 299 (1975). By examining the entire contract, we safeguard against adopting an interpretation that would render any individual provision superfluous. See Two Guys, 63 N.Y.2d at 403, 482 N.Y.S.2d 465, 472 N.E.2d 315; see also Rothenberg, 755 F.2d at 1019; Muzak Corp. v. Hotel Taft Corp., 1 N.Y.2d 42, 46, 150 N.Y.S.2d 171, 133 N.E.2d 688 (1956). Parties to a contract may not create an ambiguity merely by urging conflicting interpretations of their agreement. See Seiden, 959 F.2d at 428; accord, Metropolitan Life, 906 F.2d at 889; Garza, 861 F.2d at 27. But, if ambiguity exists, then extrinsic evidence of the parties’ intent may be looked to as an aid to construing the contractual language. See Curry Rd. Ltd. v. K Mart Corp., 893 F.2d 509, 511 (2d Cir.1990); accord, Care Travel, 944 F.2d at 988; Hudson-Port Ewen Assocs. v. Kuo, 78 N.Y.2d 944, 945, 573 N.Y.S.2d 637, 578 N.E.2d 435 (1991); O’Neil Supply Co. v. Petroleum Heat & Power Co., 280 N.Y. 50, 55-56, 19 N.E.2d 676 (1939). With these principles in mind, we hold that the Rider to the Retirement Agreement is susceptible to more than one reasonable interpretation. Thus, it is ambiguous. Both parties offer interpretations with a sound basis in the language of the two instruments. The Rider language supports Rochester Tel’s position because it does not explicitly mention the time period of either contract. The Plan itself further supports this interpretation because it states that consent from Rochester Tel’s Board of Directors is required to suspend the three-year ban. The Board’s consent was not sought prior to the execution of the Retirement Agreement or at any time before Sayers decided to accept a position with ACC Corp. Sayers’ assertion that the company’s interpretation would render the Rider meaningless is misconceived because the Rider at a minimum somewhat clarifies the meaning of “inimical activity” in the Plan. On the other hand, appellant’s construction of the contract’s meaning finds strong support in the contract language. The Rider specifically states that Rochester Tel may not terminate Sayers’ pension benefits “so long as Sayers does not ... violate the provisions of Section 2 of this [Retirement] Agreement,” and § 2 expressly provides for only a two-year ban on competitive activity. Sayers contends that the term “inimical activity” in the Plan is broader than the Retirement Agreement’s noncompete clause. According to this view, the Rider lifts the ban on competitive activity in the third year after Sayers’ retirement, but it leaves intact the three-year ban on other kinds of inimical activity, such as business torts, defamation, or crimes directed at the company. Looking beyond the contract language, Rochester Tel argues that appellant’s position is undermined fatally by his asking the company for permission to take the ACC Corp. post. Rochester Tel believes this request constitutes an admission by Sayers that the Rider did not alter the Plan’s three-year ban on inimical activity. We disagree. Appellant’s equally plausible explanation of his behavior is inconsistent with such an admission. At the time he requested permission to take the ACC Corp. position — before this lawsuit began — Sayers infonned the company that he requested approval simply to avoid conflict because he had “no desire to spend additional financial resources on legal haggling.” Therefore, we believe that the plain language of the Retirement Agreement and Plan, when considered together, lacks “a definite and precise meaning, unattended by a danger of misconception.” Breed, 46 N.Y.2d at 355, 413 N.Y.S.2d 352, 385 N.E.2d 1280. Since the language is ambiguous, summary judgment was improperly granted.