Court Opinion

ID: 9470915
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:20:21.048788+00
Date Added: 2024-06-11T17:42:10.801083
License: Public Domain

BAUER, Circuit Judge,
dissenting.
The overriding purpose of canons of contract construction is to ascertain and implement the intention of the parties. North Gate Corp. v. National Food Stores, Inc., 30 Wis.2d 317, 323,140 N.W.2d 744, 747 (1966).
When interpreting a contract, words unquestionably should be attributed their common and ordinary meanings. And when the contract provision is unambiguous, the plain meanings of words used control over the construction placed on them by the parties. When a contract provision is ambiguous, however, the plain meaning analysis is neither the exclusive nor the conclusive device for interpretation.1 Instead, great weight is placed on the practical construction given to the contract by acts of the parties to it. Martinson v. Brooks Equipment Leasing, Inc., 36 Wis.2d 209, 219,152 N.W.2d 849, 854 (1967). Moreover, a court normally should adopt that interpretation of the contract which the parties themselves have adopted. Zweck v. D P Way Corp., 70 Wis.2d 426, 435, 234 N.W.2d 921, 926 (1975).
A contract provision is ambiguous if it is “reasonably and fairly susceptible to more than one construction.” Jones v. Jenkins, 88 Wis.2d 712, 722, 277 N.W.2d 815, 819 (1979). And when interpreting an ambiguous provision in a contract, the court may have to look beyond its language for a construction which gives a fair meaning to the provision. Farley v. Salow, 67 Wis.2d 393, 401, 227 N.W.2d 76, 81 (1975).
I
I believe that Section 4.5 of the Declaration of Trust is reasonably and fairly susceptible to more than one construction. Section 4.5 states that “if the Manager ... shall receive any commission or other remuneration in connection with the purchase or sale by the Trust of any of its investment assets ..., the amount of such commission ... shall be deducted from ... the compensation payable to the Manager for its services in such capacity.”2 The district court declared Section 4.5 ambiguous. I agree. The simple approach employed by the majority — that is, ruling that “any” cannot be defined as “only secret” — is unsatisfactory. Simple phrases do not always have plain meanings. In fact, the issue is not the definition of “any,” but rather whether this section was designed to encompass the “special fees” or “commissions” paid — and not challenged at the time — by the plaintiff to the defendants.
I construe Section 4.5 reasonably to mean either what the majority holds or what the defendants argued: that the section could not mean that the trust was forbidden from paying the trust advisor fees in addition to its compensation; it applies only to prevent the trust advisor from profiting from third parties at the expense of the trust. See Wisconsin Bankers Ass’n, Inc. v. Mutual Savings & Loan Ass’n, 96 Wis.2d 438, 450, 291 N.W.2d 869, 875 (1980) (“A statute, phrase, or word is ambiguous when capable of being interpreted by reasonably well-informed persons in either of two or more senses.”); see also Foerster, Inc. v. Atlas *1103Metal Parts Co., 105 Wis.2d 17, 22, 313 N.W.2d 60, 62-63 (1981).3
Discovering the ambiguity is more difficult than properly interpreting the ambiguous provision. The plaintiffs former trustees, independent auditors, and general counsel all interpreted Section 4.5 as inapplicable to payments from the trustees. The general counsel opined that Section 4.5 “has no application with respect to the payment of additional compensation payable to the manager by direct action of the Board of Trustees.” Such an interpretation of the contract does not render Section 4.5 surplusage, and is reasonable, fair, and just— not unusual or extraordinary. Jones v. Jenkins, 88 Wis.2d at 722, 277 N.W.2d at 819.
II
The majority, in my opinion, also misinterprets Section 3.1 of the Declaration of Trust, which establishes a good faith defense for the trustees. The first sentence of that section states that the trustees “shall have ... full, absolute and exclusive power, control and authority ... over the business and affairs of the Trust,” subject only to the “specific limitations contained in this Declaration.” This sentence establishes control of the trust in the trustees, and states that the trustees cannot act beyond the powers expressed in the Declaration. The second sentence of Section 3.1 states, “Any determination made in good faith by the Trustees of ... the existence of any power or authority hereunder shall be conclusive.”4 The second sentence clearly is not directly modified by the phrase which begins the first sentence. Thus, Section 3.1 limits the trustees to the powers contained in the Declaration, but grants the trustees the authority to determine in good faith what those powers are by interpreting the trust provisions.5 This is far different from the majority’s characterization of Section 3.1. The trustees acted in good faith when determining the scope and application of Section 4.5; the defendants should not be liable to repay money they received from the trust.
Ill
Because proper resolution of the above issues and the others raised by the plaintiff dictate affirmance of the district court ruling, I respectfully dissent.

. The majority implies that the “plain meaning” analysis applies in every instance, even to defeat the intention of parties to the contract when the contract is reasonably susceptible to differing constructions. See In re Watertown Tractor & Equipment Co., 94 Wis.2d 622, 637, 289 N.W.2d 288, 295 (1980); Patti v. Western Machine Co., 72 Wis.2d 348, 351, 241 N.W.2d 158, 160 (1976); State ex rel. Siciliano v. Johnson, 21 Wis.2d 482, 487, 124 N.W.2d 624, 626-27 (1963).

. I note In passing that the majority recognizes that the term “Manager” in Section 4.5 doesn’t mean “Manager” at all, but rather means “Trust Advisor.”

. The Wisconsin Supreme Court has deemed ambiguous provisions seemingly as concrete as the one before us. For example, in Patti v. Western Machine Co., 72 Wis.2d 348, 241 N.W.2d 158 (1976), the plaintiff sued under a deferred compensation agreement which stated in part: “Upon termination of Employee’s employment by Company, whether by reason of his death, disability or retirement, Employee or his designated beneficiary ... shall be entitled to receive from Company deferred compensation payments____” The court ruled that the word “retirement” was patently ambiguous because “it may mean anything from voluntary, unilateral termination to involuntary, forced termination.” Id. at 352, 241 N.W.2d at 160. The court ruled that “retirement” in that agreement meant “voluntary termination of employment at age sixty-five or at an earlier age upon the consent of the employer corporation’s Board of Directors.” Id.

. Section 3.1 also states that, in construing provisions of the trust, “presumption shall be in favor of the grant of powers and authority to the Trustees.”

. Other sections of the Declaration of Trust bolster this interpretation, especially Sections 7.8 and 7.9.