Opinion
Civil Action No. 99-4904
September 27, 2002
MEMORANDUM ORDER
Plaintiff has moved for reconsideration of the court's memorandum and order granting defendant's motion for summary judgment in this breach of contract case. Plaintiff's motion is essentially a two-pronged assault on the court's decision.
Plaintiff first selectively parses or, in defendant's words, "attempts to nitpick" the court's opinion and recasts it to contrive an appearance of an endless chain of errors reflecting an impermissible weighing of evidence. Whether plaintiff has "grossly misrepresented," as suggested by defendant, has taken advocacy to the point of mischaracterization or has simply misconstrued the record, the court did not inappropriately weigh the evidence.
As with any motion for summary judgment, the court examined and discussed the pertinent evidence of record. Its decision was based on an analysis of the competent evidence as viewed in the light most favorable to plaintiff.
The court will touch upon a few examples of the techniques employed by plaintiff but will not engage in a lengthy line by line rejoinder.
Plaintiff claims that the court credited testimony of defense witness Robert Britton. The court did no such thing. It simply referred in a footnote to Mr. Britton's testimony in the context of underscoring the absence of evidence of any mutual understanding by the parties of the meaning plaintiff sought to ascribe to the contract.
Plaintiff complains that the court considered or "weighed" language deleted from a draft agreement proffered by plaintiff to defendant. What the court did was to note the proposed language as a pertinent part of the bargaining history. The point made was simply that plaintiff contemplated the question of the application of administrative fees to the aggregate policy limits and proposed language to preclude the reduction of primary policy limits by the amount of such fees while proposing no parallel provision for the like treatment of such fees under the excess policies in a manner consistent with the respective underlying policies.
Plaintiff contends that service fees cannot reasonably be considered defense costs. There is, however, uncontroverted evidence that the fees were used to pay the costs of gathering information which was used in the investigation and defense of claims against plaintiff.
Plaintiff asserts that the court should not have considered the testimony of defendant's director of asbestos claims, J. Scott Walters, as it was "incompetent and inadmissible" because he assumed his duties after the pertinent settlement agreement was executed. Mr. Walters did not testify to the intent of the parties at the time they contracted. He is competent to testify about the way in which the pertinent agreement was implemented under his aegis. Moreover, the testimony of Mr. Walters regarding the interplay between the agreement and underlying policies, the only point for which it was considered, is entirely consistent with the testimony of Messrs. Britton and Reeder.
Plaintiff faults the court for not reiterating lengthy contract language in the context of a discussion to which it is immaterial and pounces on a transcription error which affected not at all the court's analysis.
Plaintiff then recites boilerplate hornbook principles of contract construction to contend that having allowed for the possibility of contract ambiguity, the court was required summarily to deny defendant's motion and leave to a jury the task of determining what the parties meant. This contention is somewhat curious, if not disingenuous, in that plaintiff too moved for summary judgment. In any event, plaintiff ignores the posture of this case at the time the summary judgment record was closed.
The court found no patent ambiguity in the parties' agreement which on its face did not preclude the allocation of service fees to aggregate excess policy limits. The court viewed the silence of the agreement on the question of allocation as fairly giving rise to an apparent latent ambiguity and gave plaintiff an opportunity to produce extrinsic evidence to support its claim that the parties intended to foreclose such allocation. As the proponent of the interpretation by which defendant would have breached the parties' agreement, the burden was on plaintiff to present competent extrinsic evidence which could reasonably support that interpretation. This is particularly apt where an apparent ambiguity arises from the parties' lack of expression.
An ambiguity can arise through silence or indefiniteness of expression. See Carpenter Technology Corp. v. Armco, Inc., 800 F. Supp. 215, 219 (E.D.Pa. 1992), aff'd, 993 F.2d 876 (3d Cir. 1993); Edward E. Goldbeg Sons, Inc. v. Jersey Central Power Light Co., 1990 WL 76476, *2 (E.D.Pa. June 6, 1990).
Plaintiff failed to present competent evidence from which one could reasonably find a mutual understanding that defendant would not apply the required service fees to the aggregate limits under the excess policies. The subjective uncommunicated understanding or intent of plaintiff's negotiators on which it relies is irrelevant. See Haeberle v. Texas International Airlines, 738 F.2d 1434, 1440 (5th Cir. 1984) (applying Pennsylvania law); Brokers Title Co. v. St. Paul Fire Marine Ins. Co., 610 F.2d 1174, 1181 (3d Cir. 1979); Lyons v. Cantor, 70 A.2d 285, 287 (Pa. 1950); Celley v. Mutual Benefit Health Accident Ass'n, 324 A.2d 430, 435 (Pa.Super. 1974).
The existence of ambiguity in an agreement does not per se preclude summary judgment. When the competent evidence of record will not reasonably support the interpretation of an agreement on which a plaintiff predicates a breach of contract claim, the defendant is entitled to summary judgment. See Teamsters Industrial Employees Welfare Fund v. Rolls-Royce Motor Cars, Inc., 989 F.2d 132, 137 (3d Cir. 1993); United Refining Co. v. Jenkins, 189 A.2d 574, 580-81 (Pa. 1963). See also Den Norske Bank AS v. First Nat. Bank of Boston, 75 F.3d 49, 55 (1st Cir. 1996) (question on summary judgment in case of contract ambiguity is "whether [plaintiff] adduced enough competent extrinsic evidence of the contracting parties' intent to support a rational verdict in its favor"); Mellon Bank, N.A. v. United Bank Corp. of New York, 31 F.3d 113, 116 (2d Cir. 1994); Allen v. Adage, Inc., 967 F.2d 695, 702-03 (1st Cir. 1992); World-Wide Rights Ltd. v. Combe Inc., 955 F.2d 242, 245 (4th Cir. 1992); Farmland Industries, Inc. v. Grain Bd. of Iraq, 904 F.2d 732, 736 (D.C. Cir. 1990). ACCORDINGLY, this day of September, 2002, upon consideration of plaintiff's Motion for Reconsideration (Doc. #31) and defendant's response thereto, IT IS HEREBY ORDERED that said Motion is DENIED.
These cases were all governed by the law of jurisdictions which employ the same basic principles of contract law as Pennsylvania.