Court Opinion

ID: 3219244
Source: CourtListenerOpinion
Date Created: 2016-06-30 23:01:05.711436+00
Date Added: 2024-06-11T14:30:41.378421
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                           File Name: 16a0355n.06

                                           Case No. 15-4127

                           UNITED STATES COURT OF APPEALS
                                FOR THE SIXTH CIRCUIT
                                                                                    FILED
                                                                              Jun 29, 2016
4218868 CANADA, INC., dba Pivotal Holdings,            )                  DEBORAH S. HUNT, Clerk
Ltd.,                                                  )
                                                       )
       Plaintiff-Appellee,                             )       ON APPEAL FROM THE
                                                       )       UNITED STATES DISTRICT
v.                                                     )       COURT     FOR      THE
                                                       )       NORTHERN DISTRICT OF
BARRY KWASNY,                                          )       OHIO
                                                       )
       Defendant-Appellant.                            )                OPINION

BEFORE: SUHRHEINRICH, McKEAGUE, and DONALD, Circuit Judges.

       McKEAGUE, Circuit Judge.              This action stems from an employment relationship

involving plaintiff 4218868 Canada, Inc., d/b/a Pivotal Holdings, Ltd., a Canadian corporation

(“Pivotal Holdings”), and defendant Barry Kwasny, a citizen of Ohio. Kwasny was originally

employed in 2003 by Pivotal Holdings’ affiliate, now known as Pivotal Payments, Inc., as

Director of Sales Operations. He was soon promoted to Vice President of Client Care, a capacity

in which he served for almost ten years, until his termination on February 19, 2014. The instant

dispute concerns whether Kwasny, as part of his severance package, is entitled to the value of

options to purchase company stock he had been granted during his employment but which he

failed to exercise prior to termination.
Case No. 15-4127, 4218868 Canada, Inc. v. Kwasny

       The district court awarded summary judgment, granting Pivotal Holdings’ claim for

declaratory judgment and denying Kwasny’s. The court concluded that the Options Grant

unambiguously created a condition precedent that was never fulfilled, rendering the promised

stock options unenforceable. We hold that the Options Grant is not unambiguous and that

extrinsic evidence must be considered to determine the parties’ intent. We therefore vacate the

summary judgment ruling and remand for further proceedings.

                   I. FACTUAL AND PROCEDURAL BACKGROUND

       The relevant facts are fairly summarized in the district court’s opinion as follows:

              Plaintiff 4218868 Canada, also known as Pivotal Holdings, Ltd., is the
       holding company of Kwasny’s former employer, Pivotal Payments, Inc. (“PPI”).
       Kwasny, an Ohio resident at the time, was originally hired in July 2003 as the
       Company’s Director of Sales Operations. On May 3, 2004, Kwasny accepted a
       promotion to serve as PPI’s Vice President of Client Care, working in Montreal,
       Quebec on a regular basis.

             On September 30, 2004, five months after starting the new position,
       Kwasny received a signed document from the President and CEO of 4218868
       Canada, Philip Fayer, reading:

              4218868 Canada Inc. (“4218868") is pleased to provide you with a
              grant of options representing 1% of the fully diluted value of
              4218868 subject to the execution of a definitive options agreement
              outlining the terms and conditions under which such options may
              be exercised. The options will have an exercise value of $0.01 per
              share. 4218868 owns 100% of the issued and outstanding common
              shares of Pivotal Payments Corporation and Payment Systems
              Merchant Services, Inc.

               Kwasny worked in this role until February 19, 2014, when his position
       was eliminated and he was terminated. On that same day, as part of the
       termination, Plaintiff offered Kwasny a severance package, which would require
       Kwasny to sign a detailed Severance Letter of Agreement, including a release of
       “all claims to any ownership interest in the Company, contractual or otherwise,
       including but not limited to claims to stock or stock options.”

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Case No. 15-4127, 4218868 Canada, Inc. v. Kwasny

               On February 25, 2014, Kwasny’s attorney sent a letter to 4218868 Canada,
       stating that he wanted to initiate a discussion on Kwasny’s behalf regarding the
       options 4218868 Canada granted to Kwasny and Kwasny’s employment
       termination. On March 3, 2014, Kwasny’s attorney sent an e-mail to 4218868
       Canada stating that Kwasny was “unable to execute any termination agreement
       without addressing the exercise of options granted to him by Mr. Philip Fayer on
       September 30, 2004.” On March 7, 2014, counsel for 4218868 Canada replied,
       stating that no definitive options agreement had been “discussed or prepared,
       much less executed, by the parties[,]” and thus, “[i]n light of the lack of a
       definitive options agreement and the failure of the Options Grant to specify
       necessary essential terms for any such grant, there is plainly no valid or
       enforceable agreement regarding a grant of options in Pivotal.”

               Plaintiff filed a Complaint for Declaratory Relief on March 17, 2014,
       asking the court to declare “that no valid or enforceable contract was ever formed
       regarding a grant of options to Kwasny, and that Kwasny is not entitled to
       purchase any interest in Pivotal Holdings or any affiliate of Pivotal Holdings.”
       On May 8, 2014, Kwasny filed his Answer and Counterclaim, requesting the
       court to hold that “Kwasny has an enforceable agreement and is entitled to
       purchase 1% of the fully diluted value of 4218868 Canada, Inc. for $.0.01 per
       share,” and asserting state claims for breach of contract, promissory estoppel, and
       fraud.

               Plaintiff filed its Motion on June 10, 2014, seeking summary judgment on
       both its own Complaint for Declaratory Relief and Kwasny’s Counterclaim. On
       August 12, 2014, Kwasny filed his Motion for Summary Judgment Regarding
       Count IV of his Counterclaim for Declaratory Relief.

R. 35, Order at 1–3, Page ID 521–23 (emphasis added; citations omitted).

       The district court stayed discovery for a year before granting plaintiff 4218868 Canada’s

motion for summary judgment and denying Kwasny’s. In essence, the court held the Options

Grant was unambiguous and the “subject to” language created a condition precedent under Ohio

law. The court therefore refused to consult extrinsic evidence of the parties’ intent. Because the

unambiguous condition precedent required execution of a definitive options agreement and no

such agreement was executed before Kwasny was terminated, the court concluded that the

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Case No. 15-4127, 4218868 Canada, Inc. v. Kwasny

Options Grant never became a binding and enforceable obligation. The court awarded judgment

in favor of 4218868 Canada on its claim for declaratory relief and on all of Kwasny’s

counterclaims.

       The issues raised in Kwasny’s appeal are limited to the reciprocal declaratory judgment

claims.1 Kwasny contends the language of the Options Grant is subject to two reasonable

interpretations and is therefore ambiguous. Contending the ambiguity should be construed

against the drafter, Kwasny argues the judgment should be reversed and he should be awarded a

declaratory judgment that the Options Grant is enforceable.

                                         II. ANALYSIS

       A. Standard of Review

       We review the summary judgment ruling de novo. Smith v. Perkins Bd. of Educ.,

708 F.3d 821, 825 (6th Cir. 2013). Under Rule 56, summary judgment shall be granted “if the

movant shows that there is no genuine issue as to any material fact and the movant is entitled to

judgment as a matter of law.” Fed. R. Civ. P. 56(a). The reviewing court must view the

evidence in the light most favorable to the non-moving party and draw all reasonable inferences

in its favor. Smith, 708 F.3d at 825. Not just any alleged factual dispute between the parties will

defeat an otherwise properly supported motion for summary judgment; the dispute must present

a genuine issue of material fact. A dispute is “genuine” only if based on evidence upon which a

reasonable jury could return a verdict in favor of the non-moving party. Id. A mere scintilla of

evidence or some metaphysical doubt as to a material fact is insufficient to forestall summary

judgment. Sierra Club v. ICG Hazard, 781 F.3d 281, 284 (6th Cir. 2015). A factual dispute

concerns a “material” fact only if its resolution might affect the outcome of the suit under the

       1
        The court’s ruling on Kwasny’s breach of contract, promissory estoppel, and fraud
claims is not part of this appeal and those claims are given no further consideration.
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Case No. 15-4127, 4218868 Canada, Inc. v. Kwasny

governing substantive law—in this case, Ohio law. Crouch v. Honeywell Int’l, Inc., 720 F.3d
333, 338 (6th Cir. 2013).

       Questions of contract interpretation that form the basis for a summary judgment ruling

are likewise subject to de novo review. Royal Ins. Co. of Am. v. Orient Overseas Container Line

Ltd., 525 F.3d 409, 421 (6th Cir. 2008). The role of the court is to ascertain and give effect to

the intent of the parties, as shown by the plain language of the contract. Yellowbook Inc. v.

Brandeberry, 708 F.3d 837, 844 (6th Cir. 2013). If a contract is clear and unambiguous, there is

no issue of fact to be determined and the court should give effect to the plain language without

resort to extrinsic evidence. Royal Ins., 525 F.3d at 421. Whether language is ambiguous, i.e.,

susceptible to two or more reasonable interpretations, is a question of law.             Id.   This

determination is made with reference to the contract as a whole, giving contract language its

ordinary and natural meaning. Id.

       If contract language is ambiguous, then extrinsic evidence may be consulted to aid in

interpretation.    Id. at 422.   Such extrinsic evidence may include (1) the circumstances

surrounding the parties at the time the contract was made, (2) the objective the parties intended

to accomplish by entering into the contract, and (3) any acts by the parties that demonstrate the

construction they gave to their agreement. PNC Bank, N.A. v. Springboro Med. Arts, Inc.,

41 N.E.3d 145, 153 (Ohio Ct. App. 2d Dist. 2015). But the court may not use extrinsic evidence

to create an ambiguity. Id.; Savedoff v. Access Group, Inc., 524 F.3d 754, 763 (6th Cir. 2008).

The ambiguity warranting resort to extrinsic evidence to determine the parties’ intent must be

apparent on the face of the document. PNC Bank, 41 N.E.3d at 153. If the extrinsic evidence

creates a genuine fact dispute, the parties’ intent is for the trier of fact to resolve. Royal Ins.,
525 F.3d at 422.

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Case No. 15-4127, 4218868 Canada, Inc. v. Kwasny

       Kwasny argues that the Options Grant language is ambiguous, but that the extrinsic

evidence creates no genuine dispute as to the parties’ intent and the court should therefore

resolve the ambiguity against the drafter, 4218868 Canada. Indeed, where a construing court

must choose between two reasonable interpretations, per the rule of contra proferentem, the

court should choose the construction that operates against the drafter. Savedoff, 524 F.3d at 764.

However, this rule of construction comes into play only if the extrinsic evidence fails to show the

parties’ intent. Cline v. Rose, 645 N.E.2d 806, 809 (Ohio Ct. App. 3d Dist. 1994) (noting that

where parol evidence makes meaning of contract clear, secondary rule of strict construction

against drafter is not applicable); Raphael v. Flage, 1989 WL 109122 at *2 (Ohio Ct. App. 9th

Dist.) (same).

       B. “Subject to” as Condition Precedent?

       Kwasny first argues that the district court misapplied Ohio contract law when it held the

“subject to” language in the Options Grant unambiguously created a condition precedent. The

district court acknowledged the term could be defined as meaning “contingent on” or “under the

influence of” some later action. R. 35, Order at 7, Page ID 527. That is, the court acknowledged

that “subject to,” as the term appears in the Options Grant, could be plausibly given one of two

different constructions. In choosing the former of these two definitions, the court cited Purdin v.

Hitchcock, 1993 WL 19508 (Ohio Ct. App. 4th Dist.). In Purdin, the court observed that

“subject to” generally means “contingent or conditional upon.” Id. at *4. In the contract context,

the Purdin court noted that “subject to” usually signifies intent to create a particular kind of

condition, a condition precedent. Id. “A condition precedent is a condition which must be

performed before the agreement becomes effective; it calls for the happening of some event, or

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Case No. 15-4127, 4218868 Canada, Inc. v. Kwasny

the performance of some act, after the terms of the contract have been agreed upon, before the

contract will be binding on the parties.” Id.

       Yet, the Purdin court also acknowledged that “[w]hether a provision in an agreement is a

condition precedent is a question of intent, and intent is ascertained by considering not only the

language of a particular provision but also the language of the entire agreement and its subject

matter.” Id. That is, the parties’ intent determines whether a contractual provision is, on the one

hand, a condition precedent, such that the duty of performance does not arise until the specified

condition occurs; or, on the other hand, a promise presently giving rise to a duty to perform, the

performance of which is subject to the influence of the specified condition when it occurs. See

Campbell v. George J. Igle & Co., Inc., 3 N.E.3d 219, 223 (Ohio Ct. App. 4th Dist. 2013);

Evans, Mechwart, Hambleton & Tilton, Inc. v. Triad Architects, Ltd., 965 N.E.2d 1007, 1013

(Ohio Ct. App. 10th Dist. 2011); Adkins v. Bratcher, 2009 WL 44822 at *6 (Ohio Ct. App. 4th

Dist.). Under Ohio law, “[c]onditions precedent are not favored by the law, and whenever

possible courts will avoid construing provisions to be such unless the intent of the agreement is

plainly to the contrary.” Campbell, 3 N.E.3d at 223 (quoting Adkins, 2009 WL 44822 at * 6);

see also Evans, 965 N.E.2d at 1013–14; Marine Max of Ohio, Inc. v. Moore, 2016 WL 3032748

at *4 (Ohio Ct. App. 6th Dist.). Conditions precedent are disfavored because the courts prefer to

avoid forfeiture and unjust enrichment, but ultimately the parties’ intent controls. Evans, 965
N.E.2d at 1014; Restatement (Second) of Contracts § 227, Cmt. b (1981).

       In holding that the Options Grant unambiguously constituted a promise to perform in the

future if the condition precedent is met, rather than a present promise to perform when the

condition is met, the district court relied on the “usual” meaning of “subject to” in the contract

context. However, the court did not refer to the entire employment agreement or its subject

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Case No. 15-4127, 4218868 Canada, Inc. v. Kwasny

matter in attempting to determine the parties’ intent. Nor did the court give any reason for

rejecting the “under the influence of” definition of “subject to” that would have rendered the

Options Grant a promise to perform a presently arising duty.           In relying on the Purdin

observation that “subject to” are “usual words” for creating a condition precedent in the contract

context, the court relied on a presumption in favor of the “usual,” a presumption at odds with

Ohio law’s preference for avoiding construction of provisions as conditions precedent unless the

parties plainly so intended. Kwasny thus correctly contends that the district court neglected to

examine the parties’ intent and ignored the preference under Ohio law for not construing

conditions as conditions precedent. The district court’s reasoning is thus flawed as a matter of

law.

       Yet, we may affirm the award of summary judgment on any grounds supported by the

record, even if different from the district court’s grounds. Holloway v. Brush, 220 F.3d 767, 772

(6th Cir. 2000). Even though the district court’s analysis is lacking, we may uphold the decision

if the result is otherwise correct. We therefore consider the language of the parties’ agreement as

a whole and its subject matter to determine what they disclose about the parties’ intent.

       C. Agreement as a Whole

       The Options Grant language quoted above represents the entirety of the Options Grant

document, addressed to Barry Kwasny from President and CEO Philip Fayer. But the Options

Grant is not the entirety of the parties’ contractual agreement. No one is suggesting that Pivotal

Holdings intended to make a gift to Kwasny. The Options Grant did not arise in a vacuum; it is

part of an overarching employment relationship that spanned some eleven years. By way of

background, Kwasny contends, supported by his affidavit, that the Options Grant was an element

of increased compensation to induce him to stay on as Vice President in September 2004 even

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Case No. 15-4127, 4218868 Canada, Inc. v. Kwasny

though his duties imposed hardship, requiring him to spend approximately half the year in

Montreal, away from family. Kwasny contends he accepted the Options Grant and continued to

work as Vice President “because of the potential financial gain created by the ‘Options Grant’ if

I could assist in turning around the 4218868 Canada Inc.’s business and help it prosper.” R. 26-

1, Kwasny Aff. at ¶ 14, Page ID 299.

       Pivotal Holdings has not directly rebutted these assertions, but points out that Kwasny

had accepted promotion to the Vice President position in May 2004, over four months prior to

the Options Grant letter. Still, the correspondence initially memorializing the promotion is

consistent with Kwasny’s explanation. Dated May 6, 2004, the letter from Fayer to Kwasny

provides in relevant part:

       Your remuneration will remain unchanged at the present time. However, we will
       review your remuneration in three months, and any adjustment will be retroactive
       to the effective date of this promotion.

R. 20-5, New Position Letter, Page ID 121. Thus, the timing of the Options Grant was roughly

consistent with Fayer’s earlier assurance that Kwasny’s remuneration would be re-evaluated in

three months. The timing is also consistent with Fayer’s declaration, explaining that Kwasny’s

promotion “came with an annual salary increase of $30,000 within four months, from $85,000 to

$115,000.” R. 30-3, Fayer Dec. at ¶ 3, Page ID 452.

       But even if it is undisputed that the Options Grant represented part of Kwasny’s

compensation package as he continued performing the duties of a new position that required him

to frequently work in Montreal, this background information does not indicate whether the

parties intended the “subject to” language to create a condition precedent. It does not help

determine whether the anticipated “definitive options agreement outlining the terms and

conditions” represented a condition precedent or simply a mutual acknowledgement that the

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Case No. 15-4127, 4218868 Canada, Inc. v. Kwasny

grant of the options would be executed under the influence of terms yet to be defined. The

fundamental question remains unanswered; the ambiguity in the language of the Options Grant is

not resolved by reference to the language and subject matter of the employment agreement as a

whole. It follows that extrinsic evidence may be consulted to aid in interpretation. See Royal

Ins., 525 F.3d at 422.

       C. Extrinsic Evidence

       Relevant extrinsic evidence may include (1) the circumstances surrounding the parties at

the time the contract was made, (2) the objective the parties intended to accomplish by entering

into the contract, and (3) any acts by the parties that demonstrate their interpretation of the

agreement. PNC Bank., 41 N.E.3d at 153. Although Fayer filed a declaration and Kwasny filed

an affidavit, neither statement of the only two persons who were privy to the Options Grant

sheds much light on the precise meaning of “subject to.” As indicated above, there is no dispute

that the Options Grant was part of Kwasny’s compensation package, in consideration of which

he continued working as Vice President for almost ten years. Nor is there any dispute about the

fact that, after the Options Grant was given to Kwasny in September 2004, Fayer and Kwasny

had no further discussion about executing “a definitive options agreement outlining the terms

and conditions under which such options may be exercised” until after Kwasny’s termination.

But neither Fayer nor Kwasny has stated specifically how he understood the “subject to”

language or whether they reached a meeting of the minds on its meaning. The statements they

have given suggest diametrically opposed understandings.

       Fayer’s declaration contains the following paragraph:

              With regard to Mr. Kwasny’s claim that he was granted options to
       purchase stock in Plaintiff, among the terms and conditions I never discussed with
       him are when such options would vest, when they had to be exercised, whether
       some event might occur by which he would forfeit the options despite their being

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Case No. 15-4127, 4218868 Canada, Inc. v. Kwasny

       vested, whether some or all of the options would be effective after his termination
       for cause and, if so, for what period of time. This is among the reasons why my
       correspondence to Mr. Kwasny of September 30, 2004 made the creation of a
       binding options contract contingent upon the execution of a definitive options
       agreement outlining the terms and conditions under which such options could be
       exercised. These are also standard terms contained in options agreements.

R.30-3, Fayer Dec. ¶ 4, Page ID 452–53 (emphasis added). Not unexpectedly, Fayer professes

belief that the “subject to” language created a condition precedent.        His declaration also

acknowledges, however, that the several identified “terms and conditions” not discussed by him

and Kwasny are “standard terms” that would have been included in the definitive options

agreement. He says he understood that until those terms were supplied, no “binding” options

contract was created.     But Fayer’s declaration offers no support for the notion that this

understanding was discussed or agreed to by Kwasny. Nor does Fayer offer any explanation for

the lack of further discussion about the definitive terms.

       Kwasny’s affidavit is no more conclusive and no less self-serving. He acknowledges that

the parties never entered into a definitive options agreement. Yet, he avers that his rights under

the “Options Grant vested at the time I received it and did not have any future contingencies.” R.

26-1, Kwasny Aff. at ¶ 12, Page ID 298. Kwasny says he relied on the Options Grant as part of

the compensation package that induced him to remain as Vice President for ten years, during

which time, the “business and earnings grew substantially” and “I played a role in said

successes.” Id. at ¶ 14, Page ID 299. Though no time limit had been placed on his ability to

exercise his rights options, when he attempted to do so after he was discharged, on February 25

and March 3, 2014, his request was denied. Id. at ¶¶ 19–21, Page ID 299–300. Kwasny offers

no explanation for his delay in exercising the options until after he was discharged. Nor does the

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Case No. 15-4127, 4218868 Canada, Inc. v. Kwasny

record indicate whether Kwasny had advance notice of his impending discharge, such that he had

a knowing opportunity to exercise the options before it was “too late.”

       As summarized above, the extant record leaves genuine fact questions regarding the

lynchpin issue, the parties’ intent. Because the district court stayed discovery after the motions

for summary judgment were filed, the factual record is truncated. Neither Fayer nor Kwasny

was deposed; neither of their respective different understandings of the Options Grant language

was subject to testing in cross-examination.      Nor does the record reveal much about the

“standard terms” referred to by Fayer that would have been included in the definitive options

agreement. The Options Grant itself does include several essential terms and defines them

specifically. Kwasny was given the option to purchase up to 1% of the fully diluted value of

4218868 Canada shares at an exercise value of $0.01 per share. But the Options Grant left open

such terms as whether and when the options vested, as well as the exercise period.

       Yet, the only ruling before us now is the premature conclusion that the Options Grant

created a condition precedent. The ruling is premature because “subject to” is ambiguous and

the under-developed factual record leaves material questions regarding the parties’ intent

unanswered and ostensibly disputed. The extrinsic evidence presently available includes Fayer’s

acknowledgement that the missing terms are commonly supplied as “standard terms.”

Additional discovery or trial proceedings could yield evidence supporting a reasonable jury

finding that the Options Grant did not create a condition precedent, but a simple promise to

perform. Additional proceedings could yield evidence supporting a finding that the “standard

terms” under which Pivotal Holdings has allowed other employees to exercise options include,

for instance, the right to exercise the options up to 30 days after termination. The Options Grant

could thus conceivably be deemed to memorialize an enforceable obligation.

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Case No. 15-4127, 4218868 Canada, Inc. v. Kwasny

       Given that conditions precedent are disfavored by the law and contract provisions will be

construed as conditions precedent only if the parties plainly so intend; and given that “subject to”

is ambiguous; and given that the available extrinsic evidence does not resolve the ambiguity, we

conclude the parties’ intent must be developed in further proceedings and eventually determined

by the trier of fact. Royal Ins., 525 F.3d at 422.2 The district court’s summary judgment ruling

must therefore be vacated and the case remanded for further proceedings.

       D. Instructive Case Law

       The parties’ briefing focuses on three unpublished decisions they contend are instructive.

The reasoning used in these cases confirms the appropriateness of the above result. First, Pivotal

Holdings cites Bisbee v. Grogan, 1992 WL 158935 (Ohio Ct. App. 6th Dist.), for the proposition

that the Options Grant is too indefinite to be an enforceable contract. Bisbee is materially

distinguishable.   Here, because discovery was stayed before completion, the factual record

needed to determine whether, in the mutual contemplation of the parties, the Options Grant

constitutes an enforceable promise rather than a contingent promise, is incomplete.

       Pivotal Holdings’s reliance on Imbrogno v. MIMRx.COM, Inc., 2003 WL 22707792

(Ohio Ct. App. 10th Dist.), is similarly unavailing. In Imbrogno, the asserted contract was

deemed illusory for lack of sufficiently definite essential terms. Imbrogno is distinguishable in

that the terms set forth in the instant Options Grant, albeit incomplete, are much more definite

than the general, open-ended representation made in Imbrogno. And further development of the

record in discovery could supply the facts needed to render the contract enforceable.

       2
        Because the factual record is not complete, we cannot say that further discovery will not
uncover additional extrinsic evidence indicating the parties’ intent. The rule of contra
proferentem cannot therefore be invoked to resolve the ambiguity at this stage. See Cline, 645
N.E.2d at 809.
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Case No. 15-4127, 4218868 Canada, Inc. v. Kwasny

       Finally, the parties take conflicting positions on the significance of McGonagle v.

Somerset Gas Transmission Co., 2011 WL 5353089 (Ohio Ct. App. 10th Dist.). The McGonagle

court reversed as premature the trial court’s summary judgment for the employer on

McGonagle’s claim for enforcement of a stock option. The court held that although some

essential terms were lacking from the writing evidencing the parties’ agreement, extrinsic

evidence was admissible to supplement, without contradicting, the written terms of a partially

integrated contract. Id. at *5. Because the lower court had refrained from considering extrinsic

evidence, the matter was remanded for further proceedings.           Here, analogously, it is the

ambiguity of the “subject to” language that opens the door to extrinsic evidence, which may or

may not substantiate Kwasny’s claim.        McGonagle thus represents sound support, not for

outright reversal of the summary judgment, as preferred by Kwasny, but for vacating and

remanding for further proceedings.

       In sum, these three cases say little if anything about construing “subject to” as a condition

precedent. In relation to the dispositive rationale of the ruling challenged in this appeal, the

cases are beside the point. Yet, because the factual settings and breach-of-contract theories are

comparable, the reasoning employed by the Ohio courts is instructive. All three serve to buttress

our reasons for vacating the district court’s summary judgment ruling in this case and remanding

for further proceedings on both parties’ claims for declaratory judgment on the enforceability of

the Options Grant.

                                      III. CONCLUSION

       Accordingly, we hold that “subject to,” viewed in the context of the whole employment

contract and the parties’ long-term relationship, is susceptible to two reasonable and materially

different constructions; that extrinsic evidence must be considered to determine the parties’

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Case No. 15-4127, 4218868 Canada, Inc. v. Kwasny

intent; that the extant record leaves genuine fact issues that forestall summary judgment at this

point. Accordingly, the district court’s summary judgment ruling on each party’s claim for

declaratory judgment is VACATED and the case is REMANDED for further proceedings

consistent with this opinion.

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