Opinion ID: 2230374
Heading Depth: 1
Heading Rank: 9

Heading: ambiguity of agreement

Text: The majority premises its disposition of this appeal on its conclusion that it is apparent that the district court, through its July 14, 2003, order and instruction No. 9, effectively concluded that the Non-Competition Agreement was ambiguous and supplied terms to the Non-Competition Agreement which the parties had not included. The majority then concludes that the district court did not err in determining that the Non-Competition Agreement was ambiguous, but that the court erred in not submitting the meaning of the Non-Competition Agreement to the jury. However, I see no support in the record for the assertion that the district court, even implicitly, found that the Non-Competition Agreement was ambiguous. At the pretrial hearing held on July 14, 2003, the court engaged in the following colloquy with Seller's counsel, memorializing for the record a discussion held in chambers prior to jury selection: THE COURT: Let's see. I think I said something else, didn't I . . .? [Seller's counsel]: Yes, Your Honor. THE COURT: Go ahead. [Seller's counsel]: I think you reacted to your  the Court's responsibility to interpret the contract. You noted that there had been no allegations that the contract was ambiguous on behalf of either [side]. That being the case, I think, Nebraska law is quite clear in terms of if contracts are clear . . . the Court may not resort to the rules of construction simply to interpret the contract as a matter of law. With regard to the issue of antiques, you look particularly at page 3 of the covenant not to compete, THE COURT: I think it was 5A. [Seller's counsel]: I think it's with regard to page 2 of the covenant not to compete that says specifically  and I wanted to quote that language for you, Judge. Here it is, page 2 of the non-compete clause, particularly paragraph no. 5 that Notwithstanding any other provision to the contrary, this Non-Competition Agreement shall not restrict the following actions of seller and/or Phillips: a. The purchase and sale of antique (1961 and prior year) vehicle or machinery parts. I think you determined that you are going to find as a matter of law that because of the language notwithstanding any other provision to the contrary, that, in fact, that provision also contemplated that [Gary] Phillips and Gary's Implement could salvage antique parts as long as they were 1961 or prior. THE COURT: That is the finding of the Court. At the conclusion of the hearing, the court accepted two exhibits into evidence: the Agreement and the Non-Competition Agreement. Significantly, other exhibits were received solely for the purposes of Buyer's offer of proof, but apparently were not considered by the court. These events are reflected in the court's pretrial order, rendered on July 14, 2003. The court's order specifically noted that there were no allegations that the contract was ambiguous. The court found that the language of the Non-Competition Agreement quoted above contemplated that [Seller] could salvage parts as long as they were 1961 or prior. The court received the Agreement and Non-Competition Agreement into evidence for purposes of this order, but only received the remaining exhibits for the purpose of the Offer of Proof. My reading of the foregoing portions of the record is that contrary to the majority's assertion, the district court expressly did not conclude that the Non-Competition Agreement was ambiguous. The court noted the absence of any argument that the contract was ambiguous and determined the meaning of the contract as a matter of law, basing its determination solely on the language of the Agreement and Non-Competition Agreement  the only evidence the court received for purposes of making that determination. I recognize the quandary faced by the majority, because the district court's reasoning in making its determination is not crystal clear. The plain language of the Non-Competition Agreement, even when considered in conjunction with the Agreement, does not indicate as a matter of law that the parties contemplated Seller could continue to salvage parts from 1961 and before. However, I believe it is a fairer reading of the record to conclude that the court simply erred in its reading of the contract, rather than to assume that the court overlooked the basic proposition that the meaning of an ambiguous contract is a matter for the trier of fact. See, e.g., Kropp v. Grand Island Pub. Sch. Dist. No. 2, 246 Neb. 138, 517 N.W.2d 113 (1994). No matter how the majority gets to the question, however, I agree with the majority's conclusion that the Non-Competition Agreement is ambiguous. While each of the parties contends that the contract is unambiguous and supports their respective positions, we are not bound by their arguments. See Younker Brothers, Inc. v. Westroads, Inc., 196 Neb. 168, 241 N.W.2d 679 (1976). Whether a document is ambiguous is a question of law, and an appellate court considering such a question is obligated to reach a conclusion independent of the trial court's decision. Union Ins. Co. v. Land and Sky, Inc., 247 Neb. 696, 529 N.W.2d 773 (1995). Therefore, this court's decision about the ambiguity of the contract does not depend on its characterization of the district court's determination. Considering the Agreement and the Non-Competition Agreement together, see Norwest Corp. v. State, 253 Neb. 574, 571 N.W.2d 628 (1997), it is apparent that the parties intended for Buyer to purchase some aspects of Seller's business enterprises, but reserve other aspects for Seller. Buyer was to acquire Seller's salvage business, but the parties also contemplated that Seller's trade in antique tractor parts would be reserved. What is unclear, from these agreements, is whether Seller was to be precluded from the act of salvaging parts, to the extent that activity was being performed in support of Seller's purchase and sale of antique parts. This represents, at the very least, a latent ambiguity in the Non-Competition Agreement. See Plambeck v. Union Pacific RR. Co., 244 Neb. 780, 509 N.W.2d 17 (1993). Stated another way, the agreements, considered together, are ambiguous on whether the salvage of antique tractor parts was part of the salvage business, acquired by Buyer, or the antique business, retained by Seller. I agree with the majority's ultimate conclusion that the Non-Competition Agreement is ambiguous.