counterclaim was legitimate or not, the fact remains that this amount has now been paid in full, as admitted by [BTC] in its May 26, 1995[,] and June 4, 1996[,] letters to the [Bankruptcy] Court." Id. at 11 (emphasis omitted). Because "all of [Bonnie & Co.'s] obligations have been repaid to [BTC] in full, there is no justifiable reason for [BTC] to retain its hold on Boerer's $ 1[,000,000] side-collateral, and release of the collateral is required" under both the New York UCC and the Security Agreement. Id.
In opposition to plaintiff's argument for the release of the collateral, BTC does not challenge plaintiff's evidence that Bonnie & Co.'s $ 127,608 factor account debit has been satisfied by the Allied/Federated bankruptcy settlement. As noted above, on summary judgment, if the moving party satisfies its burden of production by establishing the absence of a disputed issue of material fact, the burden shifts to the non-movant, who must come forward with evidence to establish such a factual dispute. Fed. R. Civ. P. 56(e); Matsushita, 475 U.S. at 587, 106 S. Ct. at 1356. In the instant case, plaintiff has carried her burden of establishing that the factor account debit has been paid, and BTC has not carried its burden of establishing a material dispute to plaintiff's showing in this particular instance. However, because defendant argues that its attorneys' fees are secured by that collateral, this Court must consider that argument before ultimately determining whether summary judgment is appropriate on plaintiff's claim for the release of the collateral.
2. BTC's Argument That the Collateral Secures Plaintiffs' Liability for BTC's Attorneys' Fees
BTC opposes Boerer's motion for summary judgment on Count Four by asserting that "BTC as a matter of law is entitled to retain the collateral as security until plaintiffs' continuing liabilities and obligations due to BTC are fully reimbursed to BTC." (BTC Opp. Memo at 1.) Rather than contesting Boerer's assertion that BTC's $ 127,608 counterclaim against plaintiffs has been satisfied, BTC contends that the Treasury Bill was pledged as collateral for all of Bonnie & Co.'s liabilities to BTC, including BTC's attorneys' fees in this litigation under the Factoring Agreement, the Limited Guaranty and the Security Agreement. Id. at 2. Until plaintiffs reimburse BTC for its attorneys' fees, BTC argues that returning the collateral is inappropriate. Id.
In her motion for summary judgment, Boerer asserts that BTC's argument that "it can retain Boerer's side-collateral on the ground that the Factoring Agreement, Limited Guaranty, and [Security] Agreement allegedly require [Bonnie & Co. and Boerer] to pay [BTC's] legal expenses incurred (and to be incurred) in this lawsuit" is "based on a grossly distorted--and downright absurd--reading of these agreements." (Pltf. Memo at 12.) The remainder of Boerer's argument, however, pertains to the amount of BTC's legal expenses for which she is liable, not to the issue of whether plaintiff's liability is secured by the $ 1,000,000 collateral, and thus, prevents the collateral's release. Boerer failed to correct this oversight in her reply memorandum in support of her motion for summary judgment. Although she titles a heading "Boerer is entitled to the release of her collateral, because [BTC] is not entitled to charge any of its legal expenses to [Bonnie & Co's] factor account," (Pltf. Reply Memo at 6), as in her initial submission, each of the arguments under that heading concerns the extent of Boerer's liability for BTC's legal expenses, not whether the collateral secures that liability. Id. at 8-26.
Whether plaintiff's liability for BTC's attorneys' fees is secured by the $ 1,000,000 collateral is a question to be determined by reference to the text of the Security Agreement, pursuant to which Boerer pledged the collateral to BTC. As such, whether summary judgment is appropriate on this issue is a matter of contractual interpretation.
The Second Circuit's standards for considering a summary judgment motion in a contract dispute are firmly established. "In a contract dispute, summary judgment may be granted only where the language of the contract is unambiguous." Nowak v. Ironworkers Local Pension Fund, 81 F.3d 1182, 1192 (2d Cir. 1996) (citation omitted). Under New York law, whether a written contract is unambiguous is a question of law for the trial court whose determinations will be reviewed de novo." Id. (citing W.W.W. Assoc. Inc. v. Giancontieri, 77 N.Y.2d 157, 163, 565 N.Y.S.2d 440, 566 N.E.2d 639 (1990)). Contract terms are ambiguous if they are
capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire integrated agreement and who is cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business.
Nowak, 81 F.3d at 1192 (citation omitted). Conversely, "no ambiguity exists when contract language has 'a definite and precise meaning, unattended by danger of misconception in the purport of the [contract] itself, and concerning which there is no reasonable basis for a difference in opinion.'" Sayers v. Rochester Tel. Corp. Supplemental Mgt. Pension Plan, 7 F.3d 1091, 1095 (2d Cir. 1993) (quoting Breed v. Insurance Co. of N. America, 46 N.Y.2d 351, 355, 413 N.Y.S.2d 352, 385 N.E.2d 1280 (1978)).
Even when parties dispute the meaning of specific contract clauses, a Court's task is "to determine whether such clauses are ambiguous when 'read in the context of the entire agreement.'" Sayers, 7 F.3d at 1095 (quoting W.W.W. Assoc., 77 N.Y.2d at 163, 565 N.Y.S.2d 440, 566 N.E.2d 639); see also Williams Press, Inc. v. New York, 37 N.Y.2d 434, 440, 373 N.Y.S.2d 72, 335 N.E.2d 299 (N.Y. 1975). By examining the entire contract, courts "safeguard against adopting an interpretation that would render any individual provision superfluous." Sayers, 7 F.3d at 1095 (citing Two Guys from Harrison-N.Y., Inc. v. S.F.R. Realty Assoc., 63 N.Y.2d 396, 403, 482 N.Y.S.2d 465, 472 N.E.2d 315 (N.Y. 1985); see also Rothenberg v. Lincoln Farm Camp, Inc., 755 F.2d 1017, 1019 (2d Cir. 1985); Muzak Corp. v. Hotel Taft Corp., 1 N.Y.2d 42, 46, 150 N.Y.S.2d 171, 133 N.E.2d 688 (N.Y. 1956). However, "parties to a contract may not create an ambiguity merely by urging conflicting interpretations of their agreement." Sayers, 7 F.3d at 1095 (citations omitted).
The Security Agreement provides in relevant part:
The undersigned [Boerer] herewith deposits and pledges with [BTC], a New York corporation (hereinafter called the "Bank") as security and every liability, direct or contingent, joint, several, or independent, of Bonnie & Company Fashions, Inc. (hereinafter called the "Borrower") now or hereafter existing, due or to become due to, or held or to be held by, the Bank, whether created directly or acquired by assignment or otherwise, the following property (hereinafter called the "hypothecated property") belonging to the undersigned: Treasury Bill in the amount of $ 1,000,000.00 together with all funds due or to become due thereon and the undersigned empowers the Bank to demand and receive any monies due or to become due or to apply for redemption or repurchase the same or other investment securities.