Opinion ID: 2310123
Heading Depth: 1
Heading Rank: 1

Heading: Third Party Beneficiary Contract Claim

Text: Section 302 of the Restatement (Second) of Contracts provides: (1) Unless otherwise agreed between promisor and promisee, a beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and either (a) the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary; or (b) the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance. (2) An incidental beneficiary is a beneficiary who is not an intended beneficiary. In order to prevail on their third party beneficiary contract claim, the plaintiffs have to demonstrate that the promisee, Woodman, intended to give the plaintiffs the benefit of the performance. Martin v. Scott Paper Co., 511 A.2d 1048, 1049-50 (Me.1986). Such an intention is gathered from the language of the written instruments and the circumstances under which they were executed. Forbes v. Wells Beach Casino, Inc., 307 A.2d 210, 216 (Me. 1973). When contract language is ambiguous or uncertain, its interpretation is a question of fact to be determined by the factfinder, but when the language is clear, it is a question of law and can be resolved by the court. Hopewell v. Langdon, 537 A.2d 602, 604 (Me.1988); Hare v. Lumbermens Mut. Cas. Co., 471 A.2d 1041, 1044 (Me.1984); Portland Valve, Inc. v. Rockwood Sys. Corp., 460 A.2d 1383, 1387 (Me. 1983). It is not enough for plaintiffs to show that they benefitted from the contracts between Ledgewood and Woodman to improve the Middle Street property, part of which F.O. Bailey occupies. An incidental beneficiary cannot sue to enforce third party beneficiary rights. In order to proceed as third party beneficiaries on a contract theory, plaintiffs must generate a genuine issue of material fact on the issue of Woodman's intent that they receive an enforceable benefit under the contracts. The intent must be clear and definite. Ball Corp. v. Bohlin Building Corp., 187 Ill. App.3d 175, 134 Ill.Dec. 823, 824, 543 N.E.2d 106, 107 (1989). The Superior Court correctly determined that no such intent is expressed in the contracts or the circumstances surrounding their execution. In Paragraph 6(D)(3) of the Declaration of Condominium, the Piscopos gave up their rights to control, develop, and renovate the building and to participate in that process. Declarant [the Piscopos] hereby assigns, transfers and grants to General Properties, Inc., its successors and assigns, all special Declarant rights, under this Paragraph 6 [right to improve, renovate, modify, replace, construct, repair, alter and change], the Act and easements through common elements and other Declarant rights arising under the Act as reserved in this Declaration. The contracts between Ledgewood and Woodman are standard American Institute of Architects bilateral contracts. The Piscopos are not mentioned in the contracts and, although the building is referred to as the F.O. Bailey Building, F.O. Bailey itself is mentioned only incidentally, appearing on sketches and plans depicting the different condominium ownership in the building. The only direct reference to F.O. Bailey is Ledgewood's promise to schedule and coordinate the work so that F.O. Bailey and Kayo's, another commercial enterprise, could remain open during their normal operating hours. [5] The procedure for resolving disputes specifically limits dispute resolution to the parties to the contracts, with arbitration being expressly designated to resolve disputes between Woodman and Ledgewood, and excluding other parties such as the plaintiffs. The architect is designated as Woodman's representative and is authorized to approve or reject work of the contractor and to resolve disputes between Woodman and Ledgewood. The language of the contracts does not generate a fact issue as to a clear intent to create in plaintiffs enforceable rights as an intended beneficiary. [6] There is no question that Carmine Piscopo showed great interest in the project and spent time following its progress. That fact, however, does not generate a genuine issue as to the intent of Woodman at the time the contracts were entered into to create enforceable contract rights in the plaintiffs.