Court Opinion

ID: 9702790
Source: CourtListenerOpinion
Date Created: 2023-08-25 23:23:59.396068+00
Date Added: 2024-06-11T18:21:41.613038
License: Public Domain

*328EAKIN, Judge,
dissenting:
This appeal argues the trial court should not have granted an injunction. The court did so based on a record that included “extrinsic evidence,” which was admitted on a finding that the 1994 Affiliation Agreement, specifically Paragraph 11 thereof, was ambiguous. If that evidence was properly considered, the injunction issued properly. Because I agree that the terms “net payment” and “net amount” are ambiguous, I am constrained to dissent from the majority’s compelling position.
Temple University sought a preliminary injunction, asserting that it was not in violation of Paragraph 11; SCHC countered that such a violation was clear. As the trial court was charged with determining what these “net” figures were, in order to determine whether the parties complied with their payment obligations, and as the Agreement itself does not say how the “net” is derived or how it is calculated, how else, except through extrinsic evidence, could the court determine what the terms encompassed?
Paragraph 11 twice uses the term “net” to modify a term representing money flowing from SCHC to Temple. In using the term “net,” the parties obviously meant to distinguish “gross” payment. “Net” means after charges or deductions, be it income, payments, assets, amounts, or earnings. If “net” means “net,” something is to be deducted from the negotiated “level” set forth; otherwise the term “net” is improperly used in Paragraph 11 and connotes to the parties something different from its dictionary meaning. We cannot presume the erroneous inclusion of such a commonly understood term. The clause is therefore facially incomplete, because it demands unknown calculations. As there is no realistic explanation apparent within this paragraph or the remainder of the agreement, I find the term ambiguous.
In Maguire v. Osborne, 384 Pa. 430, 121 A.2d 147 (1956), the issue revolved around the term “net profits,” which were used to calculate certain compensation. Our Supreme Court wres-*329tied with what deductions from the gross income of the company were intended, and noted:
It has long been established in this State that, where a contract is susceptible of two different interpretations, the one that the parties themselves put upon it is the one that the courts will adopt and enforce. In Gass’s Appeal, 73 Pa. 39, 46, Mr. Justice Agnew said that ‘when a contract is capable of two different interpretations, that which the parties themselves have always put upon it, and acted upon, especially as here for a long series of years, a court will follow, because it is the true intent and meaning of the parties * * That statement has since been cited and applied a number of times down to Foulke v. Miller, 381 Pa. 587, 595, 112 A.2d 124; see, also, Restatement, Contracts, § 235(e).
Id. at 439-40, 121 A.2d at 152.
Similar cases have required the admission of extrinsic evidence to determine just what “net” means. See, e.g., Lohmann v. Piczon, 338 Pa.Super. 485, 487 A.2d 1386 (1985) (remanded “so that parol evidence may be admitted to clarify the term ‘net income after taxes’ ”); DeWitt v. Kaiser, 335 Pa.Super. 258, 484 A.2d 121 (1984) (abuse of discretion to disallow evidence of intended meaning of “income”).
If the parties meant “gross payment,” they would have said so. They said “net,” and if one cannot tell what comprises the net, extrinsic evidence must be looked to for the explanation. As there is no means by which the learned trial court could make this determination from the agreement alone, the consideration of extrinsic evidence was justified in my judgment, and I would find no abuse of discretion in it doing so. Therefore, with all due respect to my colleagues’ cogent analysis, I am constrained to dissent.