Opinion ID: 2371419
Heading Depth: 1
Heading Rank: 8

Heading: Contract Ambiguous

Text: Whether Motorola's or Amkor's interpretation of the parties' intent is correct is dependent on the meaning of the terms license and assignment. Amkor argues that the plain meaning of those terms show that they are separate and distinct. Conversely, Motorola argues that a license is subsumed within an assignment. Thus, under Amkor's reading of the contract, the PLA precludes a license but allows assignment. Under Motorola's reading, by prohibiting Citizen from licensing the BGA Package Patents to current licensees such as Amkor, the PLA necessarily precludes an assignment as well. Both Motorola's and Amkor's interpretations of the PLA contract language may be reasonable. Where more than one plausible construction of a contract exists or the contract is ambiguous because two or more key provisions conflict, an issue of material fact arises and summary judgment must be denied. [21] A provision is key or material if a reasonable person would attach importance to [it] ... in determining his choice of action in the transaction in question.... [22] The Superior Court held that the specific licensing restrictions of Section 4.1 do not modify the general assignment provisions of Section 5.5, with the result that as long as the requirements of Section 5.5 are met, the assignment is valid. To reach that conclusion, the Superior Court relied upon Black's Law Dictionary 's definitions of the terms license and assignment. The Superior Court held that, as long as the assignment provisions of Section 5.5 are met, the licensing prohibitions of Section 4.1 are irrelevant. The Superior Court concluded that although Motorola may not have intended to allow Citizen and Amkor to circumvent [Section] 4.1 by assigning the patents to Amkor via [Section] 5.5, that is what is permitted by the clear meaning of the Motorola/Citizen PLA. As a general rule, whenever it is possible, a court must preserve the reasonable expectations that form the basis of the parties' contractual relationship. [23] In this case, contrary to that legal principle, the Superior Court held that the language in Section 5.5 bound Motorola to what may have been the unintended consequences that Section 4.1 prohibited. The Superior Court's construction of Section 5.5, in apparent isolation from Section 4.1, was contrary to the law of Illinois. [24] Contract terms are controlling when they establish the parties' common meaning so that a reasonable person in the position of either party would have no expectations inconsistent with the contract language. [25] When the provisions in controversy are fairly susceptible of different interpretations or may have two or more different meanings, there is ambiguity. [26] In those circumstances, the interpreting court must look beyond the language of the contract to ascertain the parties' intentions. [27] In this case, the Superior Court should have, but did not, look to parol evidence to interpret the PLA. To the extent that the parties' intent cannot be determined from the plain terms of the PLA or the parties' intent is open to more than one interpretation, the Superior Court should have considered parol evidence to resolve the ambiguity. [28] The ambiguity in the meaning and the application of the contract language in the PLA created material issues of fact that required the Superior Court to admit and consider parol evidence. Those material issues of fact must be resolved by the trier of fact, and cannot be resolved by a summary judgment procedure.