Court Opinion

ID: 8915449
Source: CourtListenerOpinion
Date Created: 2022-11-27 04:49:35.754411+00
Date Added: 2024-06-11T17:08:56.290861
License: Public Domain

POOLE, Circuit Judge,
concurring in part and dissenting in part:
I concur in part I of the majority opinion because the evidence in support of the Labs’ claim of mutual mistake is not clear and unequivocal so as to justify reformation of the Agreement.
I dissent, however, from part II in the belief that the magistrate erred in concluding that the Plan could sue to enforce Part B of the Agreement while repudiating Part A and then invoking the underlying claim for rents. In my view, the Agreement is governed solely by the severability clause *1331which clearly and unequivocally expresses the parties’ intent that the Agreement is to be implemented in its entirety and is to be divisible only if one or more of its provisions “cannot be implemented.” Paragraph 5 of Part A, upon which the majority relies, is not probative, let alone controlling, on the question of the parties’ intent in this regard.
As noted by the majority, Part A was designed to settle the Plan’s claim for rents owed by the Labs. Paragraph 5 of Part A is concerned with the time when the claim will be considered released. Specifically, it provides that the underlying claim is to be released only upon performance by the Labs of its obligations under Part A, thus preserving the Plan’s right to sue on the claim in the event of default. It is utterly silent as to whether the Plan must repudiate the entire Agreement in order to sue on the underlying claim. Nothing in paragraph 5 sheds any light on the parties’ intent concerning this question.
The magistrate’s decision therefore stands or falls on the validity of his interpretation of the severability clause, a question the majority does not reach. In my view, the magistrate is in error in concluding that, because of the Labs’ default, Part A was incapable of implementation and was thus severable from Part B. First, Part A could have been implemented by a suit for breach of contract. This is precisely what the Plan chose to do with respect to Part B as to which the Labs was also in default. Second, severance clauses of this type more likely are intended to preserve the remainder of a contract when one of its provisions is found to be unenforceable because it is illegal, impossible to perform, or against public policy. In other words, the provision is severable when it cannot be performed for some reason beyond the volition of the parties, rather than because one of the parties simply refuses to perform.
For these reasons, I would reverse and remand to the district court for further proceedings.