Court Opinion

ID: 9478727
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:56:39.485254+00
Date Added: 2024-06-11T17:46:35.529427
License: Public Domain

CLARK, Circuit Judge,
dissenting:
Because my review of Shipner’s “golden parachute” agreement with Eastern indicates that both Eastern’s and Shipner’s interpretations of the Agreement’s key provisions are equally reasonable, I conclude that the district court erred in granting Eastern’s motion for summary judgment because a genuine issue of material fact existed. I therefore dissent.
I. Ambiguity Issue
The ambiguity issue in this appeal involves the interpretation of the phrase “termination of your employment” contained in one portion of the Agreement. Eastern argues it means “termination of your employment as an Eastern employee” while Shipner urges it means “termination of your employment as an officer.” A review of the entire Agreement, however, makes it plain that Eastern created the lucrative “golden parachute” packages at issue in this case for its officers and key management officials, not for its pilots or other employees. These agreements were crafted for the purpose of retaining these officers and other key management officials who could be terminated or demoted following a change in Eastern’s control.
Both the majority and the district court, however, have little difficulty in upholding Eastern’s interpretation of the golden parachute Agreement as a matter of law despite acknowledging that Eastern drafted the Agreement to specifically apply only to its officers. The district court stated that the preamble to the Agreement makes it “clear that these severance agreements were intended only for officers who filled critical management positions. The agreements were not to be offered to lower level *408employees who had no voice in the management of Eastern.” Memorandum Opinion, at 5. The district court further interpreted the preamble to mean that the Agreement’s clear purpose “is to induce [Shipner and other officers] to remain in the employ of the company.” Id. at 6. The district court conceded that the Agreement was intended only for officers and senior management yet held that the Agreement’s use of the phrase “termination of your employment” unambiguously means “termination of your employment as an employee” rather than “termination of your employment as an officer.” The district court further conceded that extrinsic evidence supports Ship-ner’s interpretation. Id.
My interpretation of the provisions in the Agreement is contrary to the district court’s and majority’s views. Because the Agreement fails to specify the meaning of the phrase “termination of your employment,” an inquiry into the “four corners” of the entire document is necessary. Ship-ner argues that the phrase is unambiguous or, alternatively, that it has the two equally reasonable interpretations the parties advance. He further argues that a court may consider extrinsic evidence to explain a latent ambiguity. In support of his position, Shipner also asserts that the following intrinsic factors indicated that the phrase was intended to mean “termination of your employment as an officer” rather than “termination of your employment as an Eastern employee.”
First, the Agreement’s purpose, as indicated in its preamble, was to induce Ship-ner and other officers to remain with Eastern as officers during the pendency of a friendly or hostile takeover attempt. The “golden parachute” packages became effective only if an officer remained with Eastern but was subsequently terminated following a change in control. Shipner, however, argues that he needed no inducement to remain with Eastern as a pilot because his pilot position was protected by a collective bargaining agreement that required a grievance and arbitration procedure for termination. Thus, Shipner contends that the Agreement applies only in the situation where Eastern terminates his employment as an officer following a successful takeover attempt.
Second, the Agreement was a standardized form contract that Eastern drafted to provide golden parachutes to Shipner and twenty other key management officials none of whom had an entitlement to an Eastern pilot’s position. Shipner argues that this factor also indicates that the Agreement applies only in his capacity as an officer and does not explicitly or implicitly contemplate Shipner’s unique situation.
Third, the Agreement erroneously states that Eastern could terminate Shipner at any time. Although Eastern had the power to terminate Shipner from his officer position, it did not have the power to terminate Shipner from his pilot position due to the collective bargaining agreement. In addition, another termination provision in the Agreement states that Eastern may terminate Shipner for cause (such as the commission of a felony). Again, Eastern cannot terminate Shipner as a pilot except through the grievance and arbitration procedures under the collective bargaining agreement.
Fourth, the term retirement as used in the Agreement is defined as termination of employment based on having reached the age of sixty-two which is retirement age for Eastern officers. Eastern pilots must retire at age sixty. Finally, the Agreement prohibits Shipner from “disclosing proprietary processes ... or other confidential information.” Shipner argues that he is likely to possess such information as an Eastern officer but not as an Eastern pilot.
Under Florida law, the interpretation of a contract is for the court when the contract is unambiguous; when a contract’s term is reasonably susceptible of more than one interpretation, however, it is ambiguous and the resolution of its meaning is for the jury. Fabrica Italiana Lavorazione Materie Organiche, S.A.S. v. Kaiser Aluminum & Chemical Corp., 684 F.2d 776 (11th Cir.1982); Laufer v. Norma Fashions, Inc., 418 So.2d 437, 439 (Fla.Dist.Ct.App.1982) (a contract phrase is ambiguous when it is uncertain of meaning *409and disputed; its meaning must be determined as an issue of fact). A true ambiguity, however, does not exist merely because a contract can possibly be interpreted in more than one manner. Amer. Med. Intern, Inc. v. Scheller, 462 So.2d 1, 7 (Fla.Dist.Ct.App.1984), review denied, 471 So.2d 44 (Fla.1985), cert. denied, 474 U.S. 947, 106 S.Ct. 345, 88 L.Ed.2d 292 (1985).
Shipner’s recitation of factors intrinsic to the document raises a factual issue regarding which of the two competing interpretations must prevail. Because Shipner’s interpretation of the phrase at issue is not just merely a possible interpretation but an equally reasonable interpretation, an ambiguity exists which a jury must resolve. Furthermore, because an ambiguity exists, extrinsic evidence is also admissible to resolve the latent ambiguity. Ace Elec. Supply Co. v. Terra Nova Elec., Inc., 288 So.2d 544, 547 (Fla.Dist.Ct.App.1978) (latent ambiguity arises where language employed is clear and intelligible and suggests a single meaning but some extrinsic evidence creates a necessity for interpretation among two or more meanings).
Ironically, the majority supports its holding by citing Fabrica Italiana, a case in which this court upheld the trial court’s submission to the jury of an issue regarding the meaning of a contract term that had two reasonable interpretations. Because it is abundantly clear to me that the phrase “termination of your employment” is ambiguous as a matter of law, I similarly cite Fabrica Italiana in support of my conclusion. The district court erred in deciding that the Agreement was unambiguous and summary judgment was inappropriate. I would therefore remand the case to the district court for a trial on the merits.
II. The “Good Reason” Clause
My disagreement with the majority also extends to its consideration of the so-called “Good Reason” or “Demotion” clause which provides that following a takeover an officer may voluntarily trigger termination with Eastern for “Good Reason” and still receive the severance package. “Good Reason,” in pertinent part, means:
a change in your status or position(s) as an officer of the Company which, in your reasonable judgment, does not represent a promotion from your status and position^) as was in effect immediately prior to the Change in Control of the company or the assignment to you of any duties or responsibilities which, in your reasonable judgment, are inconsistent with this status or position(s), or any removal of you from or any failure to reappoint or reelect you to such position(s), except in connection with the termination of your employment for Cause, Disability or Retirement or as a result of your death or by you other than for Good Reason.
Agreement, at 4. The clause requires at a minimum that Eastern demote or reassign an officer to some employment position that arguably represents a detrimental change in his status or position.
The majority agrees with Eastern’s argument that the inclusion of this “Good Reason” provision was presciently inserted into the Agreement to apply in the situation at hand. In the majority’s view, the “Good Reason” clause requires that Shipner terminate all employment with Eastern by voluntarily renouncing his right to return to his safeguarded pilot’s position to receive his “golden parachute.”
I disagree with the majority’s view that Shipner must voluntarily invoke the “Good Reason” or “Demotion” clause in order to receive benefits under the Agreement. Eastern could not nullify Shipner’s right to return as a pilot and the record and the Agreement are devoid of any indication that Shipner bargained away or renounced his valuable right to remain as an Eastern pilot by accepting the Agreement. In fact, the majority recognizes that the contrary is true — Shipner maintained his right to his pilot position during his tenure as an Eastern officer. Consequently, Eastern exercised the total extent of its power by terminating Shipner from his position as an officer; it could not further deprive him of his pilot position. Thus, Eastern did not demote or reassign Shipner, it terminated *410him within the meaning of the Agreement.1 The majority’s reliance on the “Good Reason” or “Demotion” clause is, therefore, unnecessary.
The majority, however, goes on to misconstrue the purpose of this clause which is to protect officers from successful corporate raiders who could deprive incumbent management of their “golden parachutes” by shifting (i.e. demoting) these officers from their current positions to less desirable ones without incurring the costs of the severance packages. The clause, therefore, protected Shipner from Eastern’s new management demoting him from his position as an officer to some less desirable position following a takeover. This situation contrasts with what actually occurred.
Prior to the Eastern takeover, Shipner was entitled to both his officer and pilot positions. After the takeover, Eastern terminated Shipner from his officer position. Shipner, however, retained his rights in his formerly-established pilot position. Thus, Eastern did not “demote” Shipner to his pilot position because Shipner already was entitled to the position. A demotion would have necessarily required Eastern to voluntarily retain Shipner in a position from which it could have terminated him. Instead, Eastern terminated Shipner as an officer of the company and did not re-appoint him to another position.
Had Eastern demoted Shipner after the takeover from his senior officer’s position to a mid-management position, Shipner could have invoked the “Good Reason” clause and argued that there was a change in his status or position. In this situation, he is “demoted” because Eastern shifted him from his position as an officer to another less-desirable position and one to which he was not previously entitled. Instead, Eastern terminated Shipner in his officer’s position and he returned voluntarily to his safe-guarded pilot position. The “Good Reason” clause simply does not apply in this instance.
III. Summary
Finally, I would follow the principal tenet of contract law that a provision in a contract is construed most strongly against its drafter. Sol Walker & Co. v. Seaboard Coast Line R. Co., 362 So.2d 45, 49 (Fla.Dist.Ct.App.1978). The Eastern officials that drafted these agreements intended that the company’s incumbent officers have a safe landing following a successful takeover attempt. Although it is not surprising that Eastern’s new management does not want to honor the agreements and advances an interpretation of the Agreement to support its position, I believe the law requires that any ambiguity should be resolved against Eastern in Shipner’s favor. I would remand to the district court for further proceedings on the merits.

. Notably, the majority agrees that Eastern did not reassign Shipner to his pilot position but that Shipner reverted to the position.