Commercial Division Blog

Posted: November 22, 2021 / Written by: Jeffrey M. Eilender, Samuel L. Butt, Christopher R. Dyess, Joshua Wurtzel, Hillary S. Zilz / Category Commercial

Summary Judgment on Breach of Contract Claim Not Appropriate Where Contract is Ambiguous

On October 1, 2021, the Fourth Department issued a decision in Dunn Auto Parts, Inc. v Wells, 2021 NY Slip Op 05185 holding that where a contract’s terms are ambiguous, it is not proper for the court to grant summary judgment because only a finder of fact can determine the intent of the parties, stating:

It is well settled that " '[i]nterpretation of an unambiguous contract provision is a function for the court, and matters extrinsic to the agreement may not be considered when the intent of the parties can be gleaned from the face of the instrument' " (Chimart Assoc. v Paul, 66 NY2d 570, 572-573 [1986]; see Greenfield v Philles Records, 98 NY2d 562, 569 [2002]). The determination whether a contract is ambiguous "is an issue of law for the courts to decide" (Greenfield, 98 NY2d at 569; see Ames v County of Monroe, 162 AD3d 1724, 1725-1726 [4th Dept 2018]). "A contract is unambiguous if the language it uses has 'a definite and precise meaning, unattended by danger of misconception in the purport of the [agreement]itself, and concerning which there is no reasonable basis for a difference of opinion' "(Greenfield, 98[*2] NY2d at 569; see Ames, 162 AD3d at 1726). "A contract is ambiguous, however, when on its face it 'is reasonably susceptible of more than one interpretation' "(Matter of Wilson, 138 AD3d 1441, 1442 [4th Dept 2016], quoting Chimart Assoc., 66 NY2dat 573).

We agree with defendant that the contractual provisions regarding who was obligated to maintain property taxes after the initial six-month period are ambiguous and cannot be resolved by the courts inasmuch as the " 'determination of the intent of the parties depends on the credibility of extrinsic evidence or on a choice among reasonable inferences to be drawn from extrinsic evidence' " (id. at 1443).

Inasmuch as "a contract generally incorporates the state of the law in existence at the time of its formation" (Travelers Indem. Co. v Orange & Rockland Utils., Inc., 73 AD3d 576,577 [1st Dept 2010], dismissed 15 NY3d 834 [2010]), defendant, as the titled owner, would have been responsible for the property taxes, absent a contractual provision to the contrary. Here, however, the contract was not truly silent on the issue of property taxes. It specificallyprovided that defendant would pay property taxes in one situation but then failed to address who would pay the property taxes in another situation (see generally Reiss v Financial Performance Corp., 279 AD2d 13, 21 [1st Dept 2000], mod on other grounds 97 NY2d 195[2001]). Based on the maxim expressio unius est exclusio alterius, which applies to contracts as well as statutes (see Quadrant Structured Prods. Co., Ltd. v Vertin, 23 NY3d 549, 560[2014]), "[w]here a [document] describes the particular situations in which it is to apply, an irrefutable inference must be drawn that what is omitted or not included was intended to be omitted and excluded" (Village of Webster v Town of Webster, 270 AD2d 910, 912 [4th Dept2000], dismissed in part and denied in part 95 NY2d 901 [2000] [internal quotation marks omitted]; see McKinney's Cons Laws of NY, Book 1, Statutes § 240; Town of Aurora vVillage of E. Aurora, 32 NY3d 366, 372-373 [2018]). Inasmuch as the determination of the intent of the parties depends on a choice among reasonable inferences, we conclude that resolution of the third counterclaim should be left to a trier of fact. We therefore reverse the order insofar as appealed from and reinstate the third counterclaim.

The attorneys at Schlam Stone & Dolan frequently litigate issues related to breaches of contract.

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