will honor the parties' agreement and apply Georgia Law to the dispute.
2. Georgia Law of Contract.
Under Georgia law, "the interpretation of the language in [a] contract is generally a question of law for the court unless it is so ambiguous that the ambiguity can not be resolved by the ordinary rules of construction." Club Associates v. Consolidated Capital Realty Investors, 951 F.2d 1223, 1229 (11th Cir. 1992) (quoting Hardman v. Dahlonega-Lumpkin County Chamber of Commerce, 238 Ga. 551, 553, 233 S.E.2d 753, 755 (1977)). See also Kohlheim v. Glynn County, 915 F.2d 1473, 1480 (11th Cir. 1990) (interpretation of a contract is a question of law for the Court that is properly subject to disposition by a motion for summary judgment); Sims' Crane Service, Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd 667 F.2d 30 (11th Cir. 1982).
Whether a given contract that is governed by Georgia law is ambiguous is also a matter to be determined by the court. Club Associates, 951 F.2d at 1230 (citing Stern's Gallery of Gifts, Inc. v. Corporate Property Investors, Inc., 176 Ga. App. 586, 593, 337 S.E.2d 29, 35 (Ga. Ct. App. 1985); Georgia R.R. Bank & Trust v. Federal Deposit Insurance Corp., 758 F.2d 1548, 1551 (11th Cir. 1985).
In construing a contract under Georgia law "the cardinal rule of construction is to ascertain the intention of the parties. The courts are to afford greater regard to the clear intent of the parties than to any particular words which they may have used in expressing their intent." Georgia R.R. Bank & Trust, 758 F.2d at 1551 (citing Georgia law). However, notwithstanding this cardinal rule of construction, "where the language of a contract is clear, unambiguous, and capable of only one reasonable interpretation, no construction is necessary or even permissible." Club Associates, 951 F.2d at 1230 (quoting Stern's Gallery, 176 Ga. App. at 593, 337 S.E.2d at 35). Thus, under Georgia law, "contract language that is capable of only one logical interpretation is accorded its literal meaning, but terms that are susceptible of more than one reasonable interpretation are uncertain of meaning or expression and, thus, ambiguous." Club Associates, 951 F.2d at 1230 (citing United States Fidelity & Guarantee Co. v. Willis, 164 Ga. App. 278, 281, 296 S.E.2d 253, 255 (Ga. Ct. App. 1982).
Significantly, "merely because the parties disagree upon the meaning of contract terms will not transform the issue of law into an issue of fact," Club Associates, 951 F.2d at 1230 (emphasis in original), and "interpretation of unambiguous contract terms is for the court solely." Id.
In this Court's view, the contractual provisions governing the "Put Date" are clear and unambiguous and, accordingly under the principles of Georgia law explained above, do not require further construction or inquiry into the parties intent.
Section 1.10.20 of the contract provides that Put Date "shall refer to the fifth (5th) anniversary of the Plant 1 Opening Date [namely, November 30, 1993]; provided, however, that if BioWaste's obligation to make the Plant 2 Loan pursuant to Section 3.3.3 is delayed pursuant to the second paragraph of Section 3.3, then the Put Date shall be delayed by a like number of days."
Both sides agree that BioWaste's obligation to make the Plant 2 Loan never came into effect because the Plant 2 Target Date was not met; that is, the requisite amount of income from Plant 1 was not generated by the time specified in section 3.3.3, namely eighteen months from November 30, 1988 or June, 1990. Therefore, there not being any obligation for BioWaste to make the loan under section 3.3.3, there was no "obligation" that could have been delayed pursuant to the second paragraph of 3.3, which provides for delaying BioWaste's obligation to make the loan in the event more time is needed to get permits and/or licenses with respect to the partnership's business and Plant 1. That being the case, the Put Date could not have been extended beyond November 30, 1993 by the number of days equal to the period of delay needed to obtain the requisite permits.
BioWaste's contention that the Put Date was indefinitely extended because BioWaste never became obligated to make the Plant 2 Loan is contrary to the clear language of the contract. The definition of Put Date provides that the Put Date shall be extended only in the event BioWaste's obligation to make the Plant 2 Loan pursuant to Section 3.3.3 is delayed pursuant to the second paragraph of Section 3.3, namely, is delayed because BioWaste requires more time to get the necessary permits. The definition of Put Date does not say, or can even be reasonably construed to say, that the Put Date can be indefinitely extended in the event BioWaste never becomes obligated to make the loan on account of the Plant 2 Target Date not being met. Indeed, in this Court's view such a construction of the contract is contrary to the risk-allocation intended by the parties, because it prevents BioSystems from ever exercising its put right in the event the business venture fails to generate the required income.
Moreover, BioWaste's contention that the Put Date was extended by eighteen months until June 13, 1995, because the required permits and licenses for the business and Plant 1 were not obtained until June 13, 1990 is without merit. Since the income agreed to by the parties was not being generated by June, 1990, and thus the Plant 2 Target Date was not met, the fact that the required permits and licenses were not obtained until that time is irrelevant. Significantly, BioWaste did not have any obligation to make the Plant 2 loan by June, 1990 and the failure to obtain the permits by that time does not independently operate under the terms of the agreement to extend the Put Date.
Accordingly, the Court declares that the "Put Date" under the agreement was exercisable on November 30, 1993.
Having reviewed the documents submitted by the parties, having heard oral argument on December 16, 1994, and for the reasons stated herein, it is hereby
ORDERED, that the plaintiff's motion pursuant to Fed. R. Civ. P. 56 (a) for summary judgment in its favor on the complaint is granted in its entirety; it is further
ORDERED, that the defendant's motion pursuant to Fed. R. Civ. P. 56(b) for summary judgment in its favor on the complaint is denied; and it is further
ORDERED, that the defendant BioWaste is directed to comply with the various contractual terms involving the purchase of the plaintiff's partnership interest, and that a sale of the plaintiff's interest in the partnership is to take place within thirty days of a determination of the Put Amount, according to and as provided by the terms of the contract.
The Clerk of the Court is advised that this action closed the case.
Dated: Uniondale, New York
December 17, 1994
ARTHUR D. SPATT
United States District Judge
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