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Rothenberg v. Lincoln Farm Camp Inc.

February 25, 1985

WILLIAM ROTHENBERG, PLAINTIFF-APPELLANT ,
v.
LINCOLN FARM CAMP, INC., DEFENDANT-APPELLEE



Appeal from a judgment of the United States District Court for the Southern District of New York, Mary Johnson Lowe, Judge, dismissing, on summary judgment, complaint alleging breach of employment contract. Vacated and remanded.

Author: Kearse

Opinion

KEARSE, Circuit Judge:

Plaintiff William Rothenberg appeals from a final judgment of the United States District Court for the Southern District of New York, Mary Johnson Lowe, Judge, dismissing his complaint seeking damages for the breach by defendant Lincoln Farm Camp, Inc. ("Lincoln" or the "Camp"), of his one-year contract of employment with Lincoln. The district court granted Lincoln's motion for summary judgment on the ground that Lincoln had terminated the contract pursuant to a clause that the court construed to permit Lincoln to terminate Rothenberg's employment at any time, with or without cause. On appeal, Rothenberg contends (1) that the court misinterpreted the clause, and (2) that even if that clause purported to allow Lincoln to terminate at will, the termination was impermissible because tha law of the State of New York requires just cause for the early termination of an employment contract for a stated term. We conclude that summary judgment was improperly granted, and we vacate the judgment and remand for further proceedings.

I. BACKGROUND

In July 1983, Rothenberg and Lincoln signed an agreement ("Agreement") for the employment of Rothenberg as the Camp's assistant director from May 2, 1983, through May 1, 1984, at an annual salary of $30,000. The Agreement contained a provision ("Clause 4") stating that

if for unforeseen [ sic ] condition, circumstance, war, epidemic, governmental restriction, administrative decision, Act of God or any other reason the Camp should find it advisable to terminate this agreement before n.* (Footnote Omitted) the contract expiration date, either party shall provide the other party with two weeks' notice salary for which period shall constitute severance [ sic ] pay in full discharge, release and settlement of any and all claims.

The portion of Clause 4 preceding the asterisk was part of the preprinted form supplied by Lincoln; the asterisk and the portion following it were added by hand. Clause 5 of the Agreement gave the Camp the right to terminate the Agreement for cause, and made no provision for notice or severance pay. On or about August 16, 1983, Lincoln gave Rothenberg notice that it was terminating the Agreement effective August 21, 1983, and on August 20 it gave Rothenberg a check apparently designated as severance pay.

Rothenberg promptly commenced the present diversity action, contending that the August 1983 termination constituted a breach of the Agreement and seeking payment of the remaining $19,000 due for the agreed term of his employment. Lincoln moved for summary judgment dismissing the complaint, contending that Clause 4 gave it the right to terminate the Agreement for any reason, and that in any event it had terminated the Agreement because Rothenberg's services had been unsatisfactory and detrimental to the Camp. Rothenberg cross-moved for summary judgment in his favor, asserting (1) that Clause 4 could not be construed as broadly as Lincoln would have it, since the phrase "for any reason" should be read, in accordance with the principle of ejusdem generis, as allowing termination only for any unstated force majeure reason, and (2) that he had consistently been informed that his services for the Camp were satisfactory.

The district court granted Lincoln's motion, finding that Clause 4 clearly and unambiguously allowed Lincoln to terminate the Agreement "for any other reason," and that the rule of ejusdem generis therefore did not apply.

II. DISCUSSION

On appeal, Rothenberg contends that summary judgment should have been granted in his favor because (1) the district court should have applied the principle of ejusdem generis to conclude that Lincoln was not entitled to terminate the Agreement on its whim, and (2) where, as here, the employment contract was for a definite term, New York law does not permit the employer to terminate the contract prior to the agreed termination date without just cause. Although we do not agree that Rothenberg was entitled to summary judgment, we conclude that summary judgment could not properly be granted against him.

The Meaning of Clause 4

As a general matter, the objective of contract interpretation is to give effect to the expressed intentions of the parties. E.g., Hartford Accident & Indemnity Co. v. Wesolowski, 33 N.Y.2d 169, 171-72, 350 N.Y.S.2d 895, 898, 305 N.E.2d 907 (1973); Mallad Construction Corp. v. County Federal Savings & Loan Association, 32 N.Y.2d 285, 291, 344 N.Y.S.2d 925, 930, 298 N.E.2d 96 (1972); Airco Alloys Division, Airco, Inc. v. Niagara Mohawk Power Corp., 76 A.D.2d 68, 77, 430 N.Y.S.2d 179, 184 (4th Dep't 1980); 4 S. Williston, Williston on Contracts § 600 (3d ed. 1961). Where the language of the contract is unambiguous, and reasonable persons could not differ as to its meaning, the question of interpretation is one of law to be answered by the court. West, Weir & Bartel, Inc. v. Mary Carter Paint Co., 25 N.Y.2d 535, 540, 307 N.Y.S.2d 449, 452, 255 N.E.2d 709 (1969); Bethlehem Steel Co. v. Turner Construction Co., 2 N.Y.2d 456, 459, 161 N.Y.S.2d 90, 141 N.E.2d 590 (1957); Heller & Henretig, Inc. v. 3620-168th Street, Inc., 302 N.Y. 326, 330, 98 N.E.2d 458, 459 (1951); 3 A. Corbin, Corbin on Contracts § 554, at 222 (1960). However, "where contractual language is susceptible of at least two fairly reasonable interpretations, this presents a triable issue of fact, and summary judgment [is] improper." Heyman v. Commerce & Industry Insurance Co., 524 F.2d 1317, 1320 (2d Cir. 1975) (quoting Aetna Casualty & Surety Co. v. Giesow, 412 F.2d 468, 471 (2d Cir. 1969)); see M. O'Neil Supply Co. v. Petroleum Heat & Power Co., 280 N.Y. 50, 56, 19 N.E.2d 676, 679 (1939); Holgerson v. Swan Lake Poultry Co., 30 A.D.2d 591, 592, 290 N.Y.S.2d 21, 23 (3d Dep't 1968). Since an interpretation that gives a reasonable and effective meaning to all the terms of a contract is ...


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